What you should know about a Credit Report
How do lenders determine who is approved for a credit card, mortgage, or car loan? Why are some individuals flooded with credit card offers while others get turned down routinely?
Credit Reports
Because creditors keep their evaluation standards secret, it is difficult to know just how to improve your credit rating. It is important, however, to understand the factors and to review your credit report periodically for any irregularities, omissions, or errors. Reviewing your credit report annually can help you protect your credit rating from fraud and ensure its accuracy.
Many factors determine your credit. Here are some of the major factors considered:
Evaluation Factors
These factors may be used, and weighted, in determining credit decisions.
Credit reports contain much of the above information.
Credit reports are records of consumers’ bill-paying habits. Credit reports are also called credit records, credit files, and credit histories and are collected, stored, and sold by three credit bureaus, Experian, Equifax, and TransUnion.
Recent changes to the Fair Credit Reporting Act (FCRA) require that each of the three credit bureaus provide you with a free copy of your credit report, at your request, every 12 months.
Get Your Credit Reports
If you have been denied credit or believe you’ve been denied employment or insurance because of your credit report, you can request that the credit bureau involved provide you with a free copy of your credit report – but you must request it within 60 days of receiving the notification.
The Fair Credit Reporting Act (FCRA) protects consumers in the case of inaccurate or incomplete information in credit files. The FCRA requires credit bureaus to investigate and correct any errors in your file.
If you find any incorrect or incomplete information in your file, write to the credit bureau and ask them to investigate the information. Under the FCRA, they have about thirty days to contact the creditor and find out whether the information is correct. If not, it will be deleted.
Be aware that credit bureaus are not obligated to include all of your credit accounts in your report. If, for example, the credit union that holds your credit card account is not a paying subscriber of the credit bureau, the bureau is not obligated to add that reference to your file. Some may do so, however, for a small fee.
The Fair Credit Reporting Act FCRA
This federal law was passed in 1970 to give consumers easier access to, and more information about, their credit files. The FCRA gives you the right to find out the information in your credit file, to dispute information you believe inaccurate or incomplete, and to find out who has seen your credit report in the past six months.
You need to understand Your Credit Report
Credit reports contain symbols and codes that are abstract to the average consumer. Every credit bureau report also includes a key that explains each code. Some of these keys decipher the information, but others just cause more confusion.
Read your report carefully, making a note of anything you do not understand. The credit bureau is required by law to provide trained personnel to explain it to you. If accounts are identified by code number, or if there is a creditor listed on the report that you do not recognize, ask the credit bureau to supply you with the name and location of the creditor so you can ascertain if you do indeed hold an account with that creditor.
If the report includes accounts that you do not believe are yours, it is extremely important to find out why they are listed on your report. It is possible they are the accounts of a relative or someone with a name similar to yours. Less likely, but more importantly, someone may have used your credit information to apply for credit in your name. This type of fraud can cause a great deal of damage to your credit report, so investigate the unknown account as thoroughly as possible.
I recommend an annual review of your credit report. (I do mine around July- date has no significance)It is vital that you understand every piece of information on your credit report so that you can identify possible errors or omissions
Some Calculators to help you:
Roll-Down Your Credit Card Debt! 
This calculator applies two simple principles to paying off your credit card debt.
Credit Card Pay Off
Find the best repayment options to pay off your credit card balance.
Investment – Capital for a new business
Anyone who’s ever lent a chunk of money to a relative or friend knows it can be a murky proposition fraught with sticky questions and daunting problems. If you have been trying to secure a loan and have been turned down by banks, you have an alternative.
You can borrow money from other individuals at competitive terms, and without having to put up any collateral to secure the loan. These loans are called peer-to-peer loans.
Peer to peer lending (or social lending) allows individuals to obtain a loan from other people who are willing to loan money. Enter the so-called peer-to-peer lending business, an emerging amphitheater of financial Web-sites that help arrange and manage loans between family members, friends and {as strange as it may sound} total strangers. Borrowers are turning to the sites as an attractive alternative to high-rate credit card loans, payday loans and other small unsecured loans that many banks won’t offer.
The sites all work a little differently, but were founded on a common principle of cutting out the middle man, which helps borrowers get a lower interest rate than they might through traditional sources such as a bank or credit card issuer. A lot better.
Lenders {basically anyone with a spare $50} are attracted by the prospect of earning higher returns than they may get elsewhere, such as in a bank CD.
At one site borrowers go through a credit check and get guidance about what to put in their listing, which must include their credit rating. For example, they may want to note any colleges they attended, which could sway a fellow alumnus to offer a better interest rate.
Lenders and borrowers are given market benchmarks to help them set and choose rates.
People can chose to lend to only the most highly rated borrowers and accept a lower interest rate, or make riskier loans to boost their returns.
There’s no limit on the amount someone can lend, but it is recommended to people to minimize risk by lending in $50 to $100 increments to a diversity of borrowers.
Instead of making money on the interest rate spread, the sites take their cut solely through fees for arranging and servicing the loan. Borrowers post how much money they’re seeking (from $1,000 to $25,000 usually) and the top interest rate they are willing to pay. Potential lenders bid to finance an entire loan, or more typically, pieces of loans. The bids with the lowest rates win.
One site collects an origination fee from the borrower ranging from 1 percent to 2 percent of the loan and an annual servicing fee from the lender of between 0.5 percent and 1 percent of the outstanding balance.
The company (site) collects and disburses monthly payments on the loans, which are all made for three years.
These loans are similar to signature loans or payday loans in that they are unsecured. But they differ and have three distinct advantages over those types of loans:
(1) You Avoid Banks – Peer to peer loans allow borrowers to bypass the banks by obtaining your loan from other individuals. Provided that the borrower’s credit score is satisfactory, they will likely be able to borrow money more easily through peer-to-peer lenders than from a bank.
(2) You get a Better Interest Rate – By avoiding banks and borrowing from a peer-to-peer lender, you will be able to obtain a loan at a lower interest rate. This is because social lenders have lower overhead costs than banks do. Lower overhead results in better terms for borrowers.
(3) A Three Year Repayment Schedule – Most peer-to-peer lenders schedule their loans with three-year repayment schedules. This means that your monthly loan payments are more affordable. Equally, most signature loans and payday loans have very short repayment schedules. Typically, those loans are due to be paid in full by your next payday. Longer repayment schedules take a lot of the pressure off of the borrower to repay the loan quickly.
Obtaining an unsecured loan via one of the peer-to-peer lending companies is an excellent alternative to traditional banks. You stand a better chance having your loan application accepted. You will likely get a loan at a lower interest rate. You will have ample time to repay the loan. Peer-to-peer loans are an excellent option for those people seeking an unsecured loan.
Now, why have I written a post on a Wednesday, and above all, why about all this? Hummm.
In today’s rapidly changing competitive environment, the most successful accounting firms are agile, adaptable, and capable of rapidly seizing new opportunities. I know you’ve heard of it: “The Learning Organization” — the kind of business that’s always learning… always improving… always achieving new milestones. Well I have come to a point.
I have come to a point in my practice where it is time to expand and grow accordingly. A business plan has been made. A perfect location has been found and is available. A working model has been established, and now is the perfect time. All cost have been established and verified. Employment for 16 accountants the first year and with expansion, over the next ten years up to 100.
I am however missing funding. So I am seeking out a silent partner or partners. I would utilize the means above, alas they fall short of the need funding to kick it all off. Calculations have been made for all construction, furniture, utilities, equipment, operating supplies, salaries, and the proverbial oddities necessary to maintain the tax, payroll and accounting firm.
So to you, perspective lender/s and/or silent partner/s. Provide the funding as described in the business plan. We build a strong growing firm and you get 6.5% interest on the loan payment. Also, as described by the sites above, a three year payment plan will be established. Monthly payments will be made accordingly to you over no more than thirty-six months. {Although preliminary estimates show that the total (All interest as well) would be re-paid in less than one year.}
So there is no mistake, this is a loan to a business, not an individual. The business is a new tax preparation and payroll service company. I will disclose no more than I feel I absolutely have to. Interested parties please contact me personally.
Paying Off Debt the Smart Way
Being in debt isn’t necessarily a terrible thing. Between mortgages, car loans, credit cards, and student loans – most people are in debt. Being debt-free is a great goal, but you should focus on the management of debt, not just getting rid of it. It’s likely to be there for most of your life – and, handled wisely, it won’t be an albatross around your neck.
You don’t need to shell out your hard-earned money for exorbitant interest rates, or always feel like you’re on the verge of bankruptcy. You can pay off debt the smart way, while at the same time saving money to pay it off faster.
Know Where You Are
First, assess the depth of your debt. Write it down, using pencil and paper, a spreadsheet like Microsoft Excel, or a bookkeeping program like Quicken. Include every financial situation where a company has given you something in advance of payment, including your mortgage, car payment(s), credit cards, tax liens, student loans, and payments on electronics or other household items through a store.
Record the day the debt began and when it will end (if possible), the interest rate you’re paying, and what your payments typically are. Add it all up, painful as that might be. Try not to be discouraged! Remember, you’re going to break this down into manageable chunks while finding extra money to help pay it down.
Identify High-Cost Debt
Yes, some debts are more expensive than others. Unless you’re getting payday loans (which you shouldn’t be), the worst offenders are probably your credit cards. Here’s how to deal with them.
- Don’t use them. Don’t cut them up, but put them in a drawer and only access them in an emergency.
- Identify the card with the highest interest and pay off as much as you can every month. Pay minimums on the others. When that one’s paid off, work on the card with the next highest rate.
- Don’t close existing cards or open any new ones. It won’t help your credit rating.
- Pay on time, absolutely every time. One late payment these days can lower your FICO score.
- Go over your credit-card statements with a fine-tooth comb. Are you still being charged for that travel club you’ve never used? Look for line items you don’t need.
- Call your credit card companies and ask them nicely if they would lower your interest rates. It does work sometimes!
Save, Save, Save
Do whatever you can to retire debt. Consider taking a second job and using that income only for higher payments on your financial obligations. Substitute free family activities for high-cost ones. Sell high-value items that you can live without.
Do Away with Unnecessary Items to Reduce Debt Load
Do you really need the 800-channel cable option or that dish on your roof? You’ll be surprised at what you don’t miss. How about magazine subscriptions? They’re not terribly expensive, but every penny counts. It’s nice to have a library of books, but consider visiting the public library or half-price bookstores until your debt is under control.
Never, Ever Miss a Payment
Not only are you retiring debt, but you’re also building a stellar credit rating. If you ever move or buy another car, you’ll want to get the lowest rate possible. A blemish-free payment record will help with that. Besides, credit card companies can be quick to raise interest rates because of one late payment. A completely missed one is even more serious.
Do Not Increase Debt Load
If you don’t have the cash for it, you probably don’t need it. You’ll feel better about what you do have if you know it’s owned free and clear.
Shop Wisely, and Use the Savings to Pay Down Your Debt
If your family is large enough to warrant it, invest $30 or $40 and join a store like Sam’s or Costco. And use it. Shop there first, then at the grocery store. Change brands if you have to and swallow your pride. Use coupons religiously. Calculate the money you’re saving and slap it on your debt.
Each of these steps, taken alone, probably doesn’t seem like much. But if you adopt as many as you can, you’ll watch your debt decrease every month.
Related articles
- Are you sure you want to do a debt consolidation (cascadesatstluciewestblog.wordpress.com)
- Credit cards and your business – what you need to know (simplybusiness.co.uk)
- What’s More Important: Saving or Paying Down Debts? (dailyfinance.com)
Credit Reports: What You Should Know
How do lenders determine who is approved for a credit card, mortgage, or car loan? Why are some individuals flooded with credit card offers while others get turned down routinely? Because creditors keep their evaluation standards secret, it is difficult to know just how to improve your credit rating. It is important, however, to understand the factors and to review your credit report periodically for any irregularities, omissions, or errors. Reviewing your credit report annually can help you protect your credit rating from fraud and ensure its accuracy.
Credit Evaluation Factors
Many factors determine your credit. Here are some of the major factors considered:
- Age
- Residence
- “Authorized user” payment history
- Checking and savings accounts
- Bankruptcy
- Charge-offs (Forgiven debt)
- Child support
- Closed accounts and inactive accounts
- Jobs
- Payment history
- Recent loans
- Collection accounts and charge-offs
- Cosigning an account
- Credit limits
- Credit reports
- Debt/income ratios
- Department store accounts
- Payment history/late payments
- Finance company credit cards
- Income/income per dependent
- Mortgages
- Revolving credit
- Name/alias
- Number of credit accounts
- Fraud
- Inquiries
These factors may be used, and weighted, in determining credit decisions. Credit reports contain much of this information.
Obtaining Your Credit Reports
Credit reports are records of consumers’ bill-paying habits. They are collected, stored, and sold by credit bureaus.
Credit reports are also called credit records, credit files, and credit histories. Under federal law, you are allowed access to free credit reports. There are three major credit bureaus and thousands of smaller ones where you can obtain a credit report.
These credit bureaus offer free credit reports, as well as monthly credit reports and services for a fee.
- Experian Credit Bureau: 888-397-3742 (cost: free or $14.95 monthly)
- Equifax Credit Bureau: 800-685-1111
- Trans Union: 877-322-8228 (cost: $11.95 monthly)
If you have been denied credit, you can request that the credit bureau involved provide you with a free copy of your credit report – but you must request it promptly. Otherwise each of the bureaus will provide you a copy of the report for a fee. You can request a copy from their websites (see links above) or toll-free numbers (also listed above).
Disputing Errors in Your Credit File
The Fair Credit Reporting Act (FCRA) protects consumers in the case of inaccurate or incomplete information in credit files. The FCRA requires credit bureaus to investigate and correct any errors in your file.
Tip: If you find any incorrect or incomplete information in your file, write to the credit bureau and ask them to investigate the information. Under the FCRA, they have about thirty days to contact the creditor and find out whether the information is correct. If not, it will be deleted.
Be aware that credit bureaus are not obligated to include all of your credit accounts in your report. If, for example, the credit union that holds your credit card account is not a paying subscriber of the credit bureau, the bureau is not obligated to add that reference to your file. Some may do so, however, for a small fee.
Fair Credit Reporting Act (FCRA)
This federal law was passed in 1970 to give consumers easier access to, and more information about, their credit files. The FCRA gives you the right to find out the information in your credit file, to dispute information you believe inaccurate or incomplete, and to find out who has seen your credit report in the past six months.
Understanding Your Credit Report
Credit reports contain symbols and codes that are abstract to the average consumer. Every credit bureau report also includes a key that explains each code. Some of these keys decipher the information, but others just cause more confusion.
Read your report carefully, making a note of anything you do not understand. The credit bureau is required by law to provide trained personnel to explain it to you. If accounts are identified by code number, or if there is a creditor listed on the report that you do not recognize, ask the credit bureau to supply you with the name and location of the creditor so you can ascertain if you do indeed hold an account with that creditor.
If the report includes accounts that you do not believe are yours, it is extremely important to find out why they are listed on your report. It is possible they are the accounts of a relative or someone with a name similar to yours. Less likely, but more importantly, someone may have used your credit information to apply for credit in your name. This type of fraud can cause a great deal of damage to your credit report, so investigate the unknown account as thoroughly as possible.
We recommend an annual review of your credit report. It is vital that you understand every piece of information on your credit report so that you can identify possible errors or omissions.
If you have any questions about how to obtain your credit report or how to interpret what’s in your report, contact me.
Tax for Truckers
Truck-driving is a vital industry to our economy. I have been a part of that industry for 24 years and know I will always be a part of it. I even maintain a Class A CDL. As such I am very familiar with the ins and outs of the trucking industry and its related tax issues.
Congress has designed numerous tax benefits designed specifically for truck drivers. However, I have always conceded that there is not nearly enough information available to truck drivers concerning taxes. So here, I plan to shed some light on the issue. To help truckers across the country, I have compiled the following information for Drivers, to give them/you a better idea of what could be important towards your taxes.
Trucking Tax Deductions
Keep Immaculate Records
Remember, records are the key to getting all the deductions you are entitled to and in the event of an audit are required to back up the deductions you claimed. Get receipts for everything when you are on the road and if no receipt is available make your own receipt for the expense. Keep your receipts together and record them somewhere, in a journal, a notebook or a computer so you can total them up at the end of the year. While an audit is never a “good” thing, as long as you have your financial information organized then you should not have anything to worry about. Throughout the year, keep your receipts and financial records together and safe in a box. When its time to get your taxes done, take the whole box in so that you have all the information you need for your preparer. I have my clients who are drivers bring them in or by as they are in town and I keep them safe for them.
People always seem to lose something; they should do accounting work themselves every month or deal with a bookkeeper to get this stuff done all year long. The income statement should be reviewed throughout the year. We can’t consult people when we see them once a year.
Track the little things
As an independent owner/operator you have the ability to claim a portion of your rent or mortgage as office space. You can also claim office expenses ranging from pencils to logbooks things you may pay cash for and forget about. Tools such as tire chains should also be claimed. Keep receipts for everything that’s work-related and to stay organized throughout the year, even if that means visiting your accountant on a regular basis.
Meal Allowances
The Standard Meal Allowance (per diem) is different for truckers than it is for other people. Taking the standard deduction relieves you of the responsibility of keeping records and receipts for all your meals, and most will find that the $36.00/day allowance will cover your actual expenses. There are special rules that apply to the meal deduction that you should also be aware of. If you get home, or pass by the house during the day you will have to pro-rate your deduction for that day.
For example,
you’re out on the road and decide to pass by the house to collect your mail and check out the homestead. You arrive home at 6:00 am and stay for 3 hours.
Divide the day up into 4, 6 hour periods (Note: IRS rules state you can use any period that you consistently apply and that is in accordance with reasonable business practice.), so you would have the following 4 periods in a day –
-
Midnight to 6 am
-
6 am to Noon
-
Noon to 6 pm
-
6 pm to Midnight
Since you arrived home at 6 am and stayed till 9 am you would be eligible for the standard deduction for the other 3 periods which is $27.00 ($36.00 times 75% -3/4-.75) for that day. If you arrived home at 10 am and stayed till 1 pm then you would be eligible for 2 periods or 50% of the daily deduction. This same system would also apply to days when you arrived home for a few days off or left home to go back out onto the road. In the event of an audit your log book would be used to validate your time at home and on the road, so hang on to those old log books. Keep a logbook with dates and amounts that you eat while on the road or it will be very difficult to come up with an accurate number.
Travel Expenses
According to the IRS, travel expenses are ordinary and necessary expenses that you pay while traveling away from home for your business or profession. An ordinary expense is one that is common and accepted in your field of business, trade or profession. A necessary expense is one that is helpful and appropriate to your business. An expense does not have to be indispensable to be considered necessary. However, you cannot deduct expenses to the extent they are lavish or extravagant.
Anything you spend on, in or around the truck would normally be considered a deduction.
For example:
Antennas, batteries (for the flashlight as well as the truck), binders, blankets, boots, briefcase, calculator, CB repairs, CB’s, cellular phone, chains, checking account fees (atm fees for the extra charge because you’re away from your home bank), chrome things, cleaning supplies, com check charges, coveralls, Federal Express (UPS, Postage for business mail or other mail which is necessary because of your absence from home), flashlights, gloves, hand tools, ice box, insurance, laundry, legal fees (not fines, but the cost for legal fees to defend yourself and court costs), lights, log books, luggage, lumpers, maps, motels, office supplies, pens, permits, pillows, radio, repairs, ropes & equipment, safety equipment, safety glasses, scales, scanner, sheets, showers, signs, smelly stuff, special clothes, special equipment, stapler, staples, stereo, storage, sun glasses, tarps, taxi, tires, tolls, tool boxes, truck organizations, truck parking, truck wash, truckers newspapers & magazines, TV, and uniforms.
This list is by no means all conclusive, but it should give you the idea. If you’re not sure about a particular item, check with the IRS or your accountant on it, especially if it’s a large expense. If you take an expense and it’s later ruled invalid you can be charged penalties for any additional tax now due from the time the tax would have originally been due. There are also a few other items worthy of more specific mention.
Lumpers
If you use lumpers and are not reimbursed by the company for the amount you pay the lumper, or are only reimbursed for part of the cost of the lumper you can deduct the amount you paid or the difference if you were partially reimbursed. Get a receipt from the lumper that includes his name, address, social security number, and the company at which you used his services, the date and the total amount you paid him. Make sure you get the information before he loads or unloads your trailer. If he won’t, chances are you don’t want him in your trailer at all.
Truck Weight
If you drive a truck with a large gross weight (over 55,000 pounds) you will need to pay the federal highway use tax by August 31st every year. If you have not already purchased a truck with this weight, be aware that if you do, this tax will be due for the first time at the end of the month in which you make your truck purchase. After you have paid it for the first time, you can decide to pay it every year in August, or in quarterly payments to reduce the burden.
Fuel Taxes
Luckily for truckers, most states appreciate your purchase of their fuel and will give you specific tax breaks. Therefore it is imperative that you keep good track of your mileage and your fuel purchases.
Hire a specialized accountant
That brother-in-law whose been filing your income tax for the last 10 years may be cheaper than an accounting firm that specializes in trucking, but does he really understand the ins and outs of the business? Chances are he doesn’t and chances are it’s costing you money.
Dealing with a specialized accountant that deals specifically with the trucking industry (spicifically drivers), allows you to maximize your claim and minimize the taxes you’re forking out each year. I think specialization means you should be getting a more knowledgeable tax return and more insight into expenses and how to handle them properly. A general accountant probably won’t get it all right, especially when it comes to things like meals. It’s important to sit down with an accountant who knows the trucking industry and discuss the intricacies of your business. An accountant who specializes in trucking will then be able to determine how you can maximize your claim.
If you have questions please let me know, With over 20 years in the trucking industry myself I will be clad to answer your questions. Contact me at L & R Tax Preparation.
Personal Finance 101: Budgeting – it doesn’t have to hurt
With the economy as it is and all that’s happening in our country and around the world, most people are looking for ways to save money, cut out waste, spend less, tighten their purse strings -whatever you want to call it. We all are trying to survive on less, to make more money or figure out ways to make what we have go further. I thought this post especially timely as the holiday season is upon us and many of us are wondering how Santa is going to make it all work this year.
There are a couple of basic things involved with managing your personal finances successfully; know how much money is coming in and how much money is going out; then make sure more is coming in then going out. It sounds easy enough but actually requires some careful planning.
A budget plan is a chart that shows you the flow of money in your everyday life. A budget can help you determine where you are overspending as well as help you adjust bad spending habits. Usually by making slight adjustments to your budget, you can create the ability to save more or free up money to make larger payments on your debts or at this time of year, buy presents for your family and friends. YAY for presents & smiles & fun & good food & egg nog!! Oops, I got a little carried away, back to the budgeting plan.
The first thing needed to create a successful budget plan is to know exactly the amount of net cash you have coming in each month. So start by gathering your paystubs, deposit slips, if you have reoccurring monthly bank deposits (alimony or child support pmts, SSA, pensions, etc). It’s a good idea to have either a monthly budget book or even an online planner. Even something as simple as an excel spreadsheet works, but you need something where you can record your expenditures and income. Start by keeping track of all your monthly living expenses and other monthly bills. There’s really no need to spend money on fancy budgeting software – you can go online and Google “budget plans” and you’ll find some great household budgets you can download, copy or print for free that are pretty good and will get you started. You can “tweak” it to fit your own expenses – there’s usually a couple miscellaneous categories already listed anyway. You can even do this on a piece of paper.
I always suggest that you start with the “known” or fixed expenses each month, like car payment(s), rent/house payment, car insurance, medical insurance, etc. and enter those. Then go to your bills that you need to get a 12-month average for, like your utilities. By looking back on your heating bills, phone & electric bills from the last year, you can get an average monthly amount and in many cases the utility companies will let you go on a monthly budget plan if that’s easier for you. If you don’t know or didn’t keep records of those bills for the last 12 months, most utility companies can get you those figures easy enough if you ask, in most cases at no cost to you, or a very minimal fee. Groceries are a little harder to determine as well as eating out so the best way for you to truly set an accurate budget is to track every single expense for at least one full month, usually two months in a row if you’re doing this for the first time or it’s been more than a couple of years since you’ve done a budget. I know it can be a pain in the behind but it helps you to get the most accurate picture of your finances and a place to begin and usually people find out they’re spending a lot more on things they don’t really need or didn’t know they were spending that much money on and it helps tremendously in giving you back control.
The other thing in creating an accurate budget plan is to remember to include all the little things most of us don’t think about, like buying a specialty coffee or latte on the way to work or a few lottery tickets a week or month, garbage pick-up, paper products, a drink or two out with friends, kids or adults lunch money each week. Lunch money can add up real quick as I found out in my house when my 3 daughters were all in 3 different schools and I was shelling out lunch money every morning. When I added it up, I had to add another category to my budget plan since it was over $150 per mth just for them! And yes sometimes I did pack their lunches but that still cost me on average $2-3 per day (about the same as hot lunch) so I still had to plan for and budget that in – and it wasn’t something I thought of at all at first.
You also really need to control your emotions and try not to “impulse buy”. I know…I know sometimes you just have to have that chocolate bar (ladies you know what I’m talkin’ about) or a Friday night beer or two after work, and by no means am I suggesting you cut out all those types of indulgences – after all, you work hard for your money and if you can’t buy a few frivilous fun things to relax or reward yourself once in awhile, then what’s it all for? I agree…but the point here is in order to make sure you have enough money at the end of a given month to be able to do those things while still paying all your bills and saving some money, then you have to first have an idea of what you’re spending and where. Most of the time people find they can save a substantial amount ($100′s per mth sometimes) by cutting out things that they really won’t even miss; like the morning latte. Or….still get a coffee on the way to work if that’s what you really like, but make it a regular for $1.50 instead of a specialty drink at $4. Or if you usually go out to lunch at work and you really enjoy it, try going out only 3 times per wk then pack some of the time. Or eat out where you know you’re likely to have leftovers. That way if it’s an $8 lunch but you can eat the rest the next day, then it now became a $4 lunch or give yourself a weekly “lunch out” budget. It might sound a bit silly but I know for me, as a single mother of 3, at times when things were so very lean, I had to do that to survive or be able to get birthday presents, and I still do the “weekly lunch out” thing – it just makes good sense to me. And none of this is complicated or has negatively impacted my daily life…I’m still feeling “fulfilled” each day whether I pack a sandwich and some fruit from home or got out with friends from work that day.
Remember to keep all receipts for 2 months and then you can go back and create an accurate budget plan. Then you can pick and choose for yourself where you want to cut things, change things in order to meet your financials goals. Whether it’s saving money for the future (which that’s a topic for another day) or coming up with money for Christmas or birthdays, a vacation fund or maybe it’s just being able to pay all your bills ontime and not feel so stressed. Whatever it is that you want to accomplish, ask yourself ”Do I really need to buy this? Can I cover it in my budget? Is it going to help me with my long term goals? Can I live without it today? We all hope to have discretionary income each month to have fun with but sometimes we have to learn to cut back temporarily (hobbies, entertainment, specialty clothes) to have more in the long run. I hope this helps – maybe even inspires you to get started today and hopefully add a few more presents under your tree this year.
Kimmer
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