Thursday, February 19, 2009

"It's only"

This is the phrase that is going to get you in trouble.

I have found in my experience teaching budgeting and also doing one on one budget counseling that people who say this the most during our conversations have the most trouble.

I had a situation where I was doing one on one counseling with a couple. I was going through the budget with this couple and they were really struggling. When we got done going through their monthly expenses, I started looking over the numbers. I said "are you sure this is all you spend each month?" "yes, yes" they said "that's it". I sat there looking at them. The husband had a McDonalds cup and a pack of cigarettes in front of him. These things, as insignificant as they may be, were not accounted for in the budget. I brought this up. Then I heard the phrase that makes me cringe..'it's only $x.xx".

This is how people get in trouble!!! Buying the small dollar things here and there throughout the day. Those days turn into weeks and the weeks turn into months.

Think about it.

If you spend $5 per day by stopping at the gas station to get cigs/soda/candy/whatever you are spending an extra $25 a week in junk that you probably can't account for. That's an extra $100 a month not accounted for or $1,300 a year!!!!!!! And that is just one area of the budget! What if you did this in say 3 different areas of your life (think Walmart trips, extra grocery trips during the week, lunches out) no wonder people are broke!!!!

If you find yourself thinking "it's only" before you buy something, take a second to stop and think about if you really need item x. Chances are you wouldn't miss it. After all "it's only $x.xx" right?

Saturday, February 14, 2009

When times get tough...

I know a lot of you are losing jobs these days, myself included. I have went through two job losses. In a row. In 2 years. So I guess that would make me at least somewhat qualified to talk about how to make it when times are tough!

If your over the shock of the situation and you've moved into action mode - trying to decide what to do about your income situation (unemployment just doesn't go that far) here are some things to consider:

  • You will be spending less with out really trying - since your not going to work, your gas expense, eating lunches out, bus fare etc.. will dramatically decrease
  • You will have more time to watch what you are buying. This may include paying more attention to the grocery store ads and having the time to clip and match coupons to the weekly sales
  • You will probably spend a lot of your time on the computer because you are looking for another job - spend some time in the 'etc' section of craigslist. I have found tons of odd jobs in there to make some extra cash (think focus groups that pay you for your opinion, helping people in your neighborhood move, yard work etc...)
  • You will have lots of time on your hands. More than you will know what to do with. If your feeling productive, you could start cleaning out closets and finding things to sell on ebay and craigslist for a little extra income.
  • You could consider cutting back on some things - in my classes I never tell people what they should or should not cut out. It's up to you, you have to do what works for you. Remember this is only temporary. It might not hurt to look at your expenses and see if there are some things you can cut back on or cut out entirely.
It might make you feel a little better if you sat down and wrote your income and your expenses. Thats all a budget really is anyway. To get through this time, some tough choices will need to be made. I know its not fun. Trust me, I'm living it too.

"What does not kill us makes us stronger" or something like that.

Friday, February 13, 2009

I teach budgeting

I made up a budgeting class about 3 years ago and presented it to the local community college as a continuing education class. I had no idea if the school would be interested in it. After a few phone calls, I got to the right person, she paused after I asked and then said "yes, we're interested".

So three years later I'm still teaching my same class. Its called "Basics of Budgeting". I teach my students how to build a basic budget, cut out some necessary expenses and how to read a credit report. I usually throw in some relevant consumer topics that are happening around the time of the class.

I don't know why but I can never bring myself to prepare for this class. I know what I want to say and the order I want to say it. So most of the time, I just wing it. And you know what? It usually works out.

If you are interested in learning how to build a budget and you live in the St. Louis area, come to my class! I'm teaching again in April '09. If you live out of the St. Louis area, leave a comment and we will see what we can work out.

Happy Saving America.