budgets http://www.wisebread.com/taxonomy/term/10208/all en-US Hate Budgeting? How a Percentage-Based Budget Might Work for You http://www.wisebread.com/hate-budgeting-how-a-percentage-based-budget-might-work-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/hate-budgeting-how-a-percentage-based-budget-might-work-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/office-work-183612960-small.jpg" alt="office work" title="office work" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>I've heard just about every excuse in the book for not making a budget. I've even excused my own way out of budgeting more times than I care to admit. What I've learned in the process is that just like diet and exercise plans or productivity goals, budgets aren't one-size-fits-all. In other words, the style of budgeting that helps you get your personal finances on track might be a disaster for someone else. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso">Build a Better Budget in 5 Minutes Flat</a>)</p> <p>One very simple and easy-to-follow budgeting style is percentage-based budgeting. Is it a fit for you?</p> <h2>First, What Is a Percentage-Based Budget?</h2> <p>Before we get into who a percentage-based budget is best suited for, let's take a look at how this type of budget works. That'll be easy, because percentage-based budgets are ultra simple. You earn a certain amount of money each month. You set percentage targets for how to divide that money up toward your current expenses, savings, debt repayments, fun, and any other category that's important to you.</p> <p>So what does that actually look like?</p> <p>One very common example of percentage-based budgeting is the 60/20/20 budget, in which 60% of your income is devoted to necessary expenses, 20% is devoted to savings and the remaining 20% can be spent on non-essentials (so, the fun things you want but don't really need). That's just one example though; you can break up your income in any way that works for you. The key is to prioritize your expenses (including debt repayment, if that's an issue for you) while still leaving something for yourself.</p> <p>So is this type of budget right for you? Here are five signs that percentage-based budgeting might just have your number.</p> <h2>1. You Earn a Variable Income</h2> <p>One of the biggest excuses against budgets I've heard is from people who earn a variable income. After all, if you don't know how much money is coming to you each month, how can you decide ahead of time how much to put toward various financial goals and obligations?</p> <p>The answer might just be a percentage-based budget. If you budget by percentages instead of fixed amounts, you help ensure that money always goes toward some long-term financial goals, rather than disappearing to discretionary purchases. The biggest plus, though, is that if you set aside a percentage for fun purchases, you'll always get to enjoy some of your money. And, the more you earn, the more you'll get to enjoy. How's that for motivation?</p> <h2>2. You're a Bit ... Anal</h2> <p>Do you eat the exact same breakfast or lunch every single day? Do you correct other people's grammar? Do you always follow the exact same routine at the gym? Then a percentage-based budget might be for you. Percentage-based budgets are for people who like rules. You don't have to think about it. You don't have to decide. You just divide your money out the same way, each and every month. For some people, that act, in itself, is very satisfying.</p> <h2>3. You're Into Instant Gratification</h2> <p>Some people are minimalists. They don't really feel the need to spend money on a lot of new things, they don't get much of a kick out of eating at restaurants and, overall, the things they enjoy don't tend to cost money. Saving money tends to come pretty easily to people like this.</p> <p>On the other side of the coin are the people who are really invested in going out for dinner with their friends, taking vacations, going to concerts, shopping, and doing whatever else makes them feel they are enjoying their money in the right here and now. Unlike the minimalists, they tend to see their money as a way to enjoy life, and for them, saving money can often take a backseat. If this sounds like you, consider a percentage-based budget. It will ensure that you'll get to spend a percentage of your income on whatever makes you happy every single month. Maybe you're already doing that anyway. The only difference is, with a percentage-based budget, you get to do it guilt free. (See also: <a href="http://www.wisebread.com/lifestyle-inflation-the-ultimate-financial-trap?ref=seealso">Lifestyle Inflation: The Ultimate Financial Trap</a>)</p> <h2>4. You Have a Lot of Financial Goals and Obligations</h2> <p>It's easy to just divide your money up and put it toward expenses and savings and then splurge on the rest, but many of us have financial lives that are much more complicated than that. There are credit card debts and student loans and taxes and mortgages and 401(k)s and IRAs and college educations to think about, right? As it turns out, the more complicated your financial life, the better a percentage-based budget might work for you.</p> <p>So, let's say you have devoted 20% of your income to savings. You can then subdivide this to cover retirement savings and an emergency fund, or saving for your kid's college and saving for a vacation. You can also adjust how much money is going into each account based on your needs. As you approach retirement, for example, you might want to make your retirement account a bigger priority. The great thing about using percentages is that they allow you to be flexible while still holding you accountable.</p> <h2>5. You Want to Live Within Your Means</h2> <p>In the world of personal finance, percentages are important, and percentage-based budgets don't just help to adjust your spending and saving, they also help you analyze it. After all, if you go to setup a percentage-based budget and discover that your expenses are equal to or exceed your income, you'll know that either your income isn't great enough to meet your needs, or that you're living way beyond your means. Either way, setting up a lifestyle that allows you to devote a percentage to savings each and every month is essential to long-term financial stability. Creating a budget based on percentages will help you see whether you need to practice more conscious spending, live on less, or earn more.</p> <p><em>Do you use a percentage based budget? How has it worked for you? Please share in comments.</em></p> <a href="http://www.wisebread.com/hate-budgeting-how-a-percentage-based-budget-might-work-for-you" class="sharethis-link" title="Hate Budgeting? How a Percentage-Based Budget Might Work for You" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Personal Finance budgets percentage-based budget spending Mon, 14 Jul 2014 13:00:07 +0000 Tara Struyk 1157261 at http://www.wisebread.com These 5 Apps Can Fix Your Finances http://www.wisebread.com/these-5-apps-can-fix-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/these-5-apps-can-fix-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/finance-app-160888117-small.jpg" alt="finance app" title="finance app" class="imagecache imagecache-250w" width="250" height="137" /></a> </div> </div> </div> <p>They say money has wings and that it tends to fly away before we even realize it. That's a product of the time we're living in, unfortunately. The good news, however, is that some wasteful spending can be curtailed and prevented, and a great way to do that is to use something else that's a product of our time: Smartphone apps. (See also: <a href="http://www.wisebread.com/the-i-knew-it-benefit-of-expense-tracking?ref=seealso">The &quot;I Knew It!&quot; Benefit of Expense Tracking</a>)</p> <p>Our phones do a lot of things that we don't really need on a regular basis, but one thing that they're capable of that we'd do well to take advantage of regularly is tracking our expenses. There are a lot of great apps (free and paid) that allow us to do this without having to sit down at a computer or write in a checkbook. These are the ones worth looking at.</p> <h2>1. Mint</h2> <p><a href="http://www.mint.com/how-it-works/"><img width="130" height="230" align="right" src="http://www.wisebread.com/files/fruganomics/u5123/Mint.jpeg" alt="" /></a>Mint is one of the most popular and widely used apps available for tracking spending, and it's completely free.</p> <p>The data itself is stored in a cloud account where it can be accessed by a number of different supported devices. Either your phone, Internet browsers, and even a Linux application can be used to access your data and track your spending.</p> <p><a href="https://www.mint.com/how-it-works/">It works</a> by keeping all your transactions and balances in one spot and can even pull data from your respective financial institutions.</p> <h2>2. Quicken</h2> <p><a href="http://quicken.intuit.com/personal-finance-software/quicken-mobile-app.jsp"><img width="130" height="230" align="right" src="http://www.wisebread.com/files/fruganomics/u5123/Quicken.jpeg" alt="" /></a>Originally one of the more popular desktop applications for tracking your spending, Intuit's Quicken provides a <a href="http://quicken.intuit.com/personal-finance-software/quicken-mobile-app.jsp">mobile version of their software</a> as well.</p> <p>Some of the more helpful features include the ability to snap and store receipts, syncing with the desktop application, graphical GUI with tablet versions, and secure password protection with encryption.</p> <p>The mobile app is perfect if you're already familiar with Quicken's software and would like to use your smartphone to manage it.</p> <h2>3. iSpending</h2> <p><a href="http://itunes.apple.com/us/app/ispending-expense-tracker/id484100875?mt=8"><img width="130" height="230" align="right" src="http://www.wisebread.com/files/fruganomics/u5123/iSpending.jpeg" alt="" /></a>Graphical reports and a sleek UI give this <a href="https://itunes.apple.com/us/app/ispending-expense-tracker/id484100875?mt=8">free app</a> a lot of appeal for the more casual user.</p> <p>Though it lacks some of the features that you'll find with other apps like receipt snapping or a desktop counterpart, iSpending is ideal for someone who primarily keeps data on their phone with no need to sync with other devices.</p> <p>It handles all the basic spending and expense tracking the average person needs, including custom spending categories, summaries and adding income/expense transactions.</p> <h2>4. Visual Budget Expense Tracking and Management</h2> <p><a href="http://itunes.apple.com/us/app/visual-budget-expense-tracking/id458571562?mt=8"><img width="130" height="230" align="right" src="http://www.wisebread.com/files/fruganomics/u5123/Visual%20Budget.jpeg" alt="" /></a>Assigning budgets to individual categories, managing multiple accounts, accessing overview tools, and taking advantage of easy-to-read pie graphs can all be done with the free version of <a href="https://itunes.apple.com/us/app/visual-budget-expense-tracking/id458571562?mt=8">this awkwardly named app</a>, though it does limit you to 10 transactions per account.</p> <p>Purchasing the unlimited version is $5, which lifts the transaction limit and gives you full use of the app.</p> <p>It's also compatible with iTunes file sharing if you want to import spreadsheets.</p> <h2>5. Spending Tracker</h2> <p><a href="http://www.mhriley.com/spendingtracker/"><img width="130" height="230" align="right" src="http://www.wisebread.com/files/fruganomics/u5123/Spending%20Tracker.jpeg" alt="" />The interface</a> is pleasant, intuitive, and easy to use, offering all the essential features for tracking your spending.</p> <p>Budget mode, spending categories, and reports are all available to you without the pro upgrade, which is only $2.99 regardless.</p> <p>If you do upgrade, you'll have the app ad free and will be able to set up repeat transactions and export transactions. Otherwise, the app is completely functional without you having to pay any money.</p> <p>It's available for iOS, Android, and Windows phone.</p> <h2>Making It a Habit</h2> <p>Expense-tracking apps are valuable tools in your hand, but they'll only make a difference if you make a habit of using them. Work it into your daily routine to either download or manually input your income and expenses of the past 24 hours. (See also: <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget?ref=seealso">10 Sites and Apps That Help You Track Spending</a>)</p> <p>If you keep it up, you'll eventually be able to use reports and graphs to get a clearer picture of how you're spending your money and where you need to cut back or where you could save. It's a time commitment, for sure, but it won't get much easier than being a few swipes away in your pocket. And, let's face it, it's still easier than writing everything down in your checkbook. All hail technology!</p> <p><em>Do you have an expense-tracking app that you like to use? Has it changed the way you handle your finances? Let me know in the comments below.</em></p> <a href="http://www.wisebread.com/these-5-apps-can-fix-your-finances" class="sharethis-link" title="These 5 Apps Can Fix Your Finances" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting Productivity Technology apps budgets expense tracker expenses spending Tue, 01 Jul 2014 13:00:03 +0000 Mikey Rox 1150925 at http://www.wisebread.com How to Have an Above-Average Life for Below-Average Prices http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-have-an-above-average-life-for-below-average-prices" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/wine-shopping-87333040-small.jpg" alt="shopping" title="shopping" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>The average person is stuck paying the average price for everything. But you're not an average person. You're a unique person. Your choices can boost you above average.</p> <p>A while back, I happened across a chart of &quot;average apartment prices&quot; for different cities, and I was surprised to find that I was living in an apartment that cost quite a bit less than average (and it was a great apartment). (See also: <a href="http://www.wisebread.com/studio-apartment-living-a-5-point-survival-guide?ref=seealso">Studio Living: A 5-Point Survival Guide</a>)</p> <p>It wasn't a matter of great bargaining either &mdash; I have no particular skill at bargaining at all. My wife and I found our great apartment by investing some time and effort. The main things we did were:</p> <ol> <li>Think about what we wanted in an apartment.<br /> &nbsp;</li> <li>Research how those features &mdash; and the features we <em>didn't</em> care about &mdash; affected the price of an apartment. Because everything affects the price of an apartment &mdash; size, floor plan, whether it allows cats, is on a bus line, has washer/dryer hookups, covered parking, a balcony, and so on.</li> </ol> <p>Once we had some data, we were able to pick an apartment that lacked some features that we didn't care about, but that other people are willing to pay more for. Since our apartment didn't have those features, it was a &quot;below average&quot; apartment that rented for a below average price &mdash; even though it had all the features <em>we</em> really cared about.</p> <p>This strategy doesn't work for everything. It only works for things that are unique. Things that are all the same &mdash; a gallon of fuel, a pound of sugar, a month of basic cable &mdash; are going to cost whatever they cost. Things that are unique &mdash; a house on the beach, a used car, a painting by a local artist &mdash; are going to have wildly different prices.</p> <p>You can take advantage of this fact to get a much better standard of living than the average, because while the average person has to pay the average cost for an average item, all that matters to you is the price of the <em>cheapest one you really like</em>.</p> <p>Here are two strategies to focus on.</p> <h2>Emphasize Unique Items</h2> <p>The more of your budget that goes for ordinary mass-market items just like everybody else, the more of your budget you're going to be spending on average (and averaged-priced) goods.</p> <p>Where the mass-market item is cheap, this is okay &mdash; you're not getting an above-average standard of living, but at least you're getting low costs.</p> <p>But the more of your budget where you can satisfy your needs with unique choices that are <em>better</em> than the mass-market choices, the more opportunity you have to live at an above-average standard of living for a below-average cost.</p> <h2>Emphasize Long-Lived and Expensive Items</h2> <p>The extra time and effort involved in finding the above-average choices really pays off when you find something that you can use for a long time.</p> <p>Anything that you can buy once and keep for years is a great candidate for the extra effort of finding one that's above average.</p> <p>Our apartment, that I used as an example above, was a great deal the very first year. But the real win for us has been that it continued to be an above-average apartment at a below-average cost year after year. The effort we put into finding it really paid off.</p> <p>Other things don't justify the effort. Of course, sometimes you'll find an above-average item at a below-average price without a lot of extra effort. We once found some locally grown organic stone-ground whole wheat flour for about <em>half</em> of what ordinary flour cost. We bought all we could carry, and we really enjoyed the bread we baked with it &mdash; but it only raised our standard of living for a few weeks.</p> <p>Of course, making your things last is great even if you didn't get an above-average deal on them.</p> <p>So, get strategic. Look at the things you buy and identify the ones that are unique. From within that list, start with the items that you're going to keep for a long time, and the high-dollar items. That's where the extra investment is going to have the most impact on both your standard of living and your cost of living.</p> <p><em>How have you made strategic purchases to boost your standard of living without boosting your costs? Please share in comments!</em></p> <a href="http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices" class="sharethis-link" title="How to Have an Above-Average Life for Below-Average Prices" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting Lifestyle budgets spending standard of living strategic spending Fri, 30 May 2014 08:24:25 +0000 Philip Brewer 1141050 at http://www.wisebread.com Why You Need a Time Budget — and How to Create It http://www.wisebread.com/why-you-need-a-time-budget-and-how-to-create-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-need-a-time-budget-and-how-to-create-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/clock-483264955.jpg" alt="clock" title="clock" class="imagecache imagecache-250w" width="250" height="147" /></a> </div> </div> </div> <p>Stretched for time? Nowadays, who isn't?! Successful time management isn't as elusive as it might seem. Creating a &quot;time budget&quot; can help.</p> <p>Why a time budget? Just like a regular budget helps us track and manage a limited resource &mdash; our money &mdash; a time budget can help us track an even more precious resource &mdash; our time. If we go over one of our spending categories in our money budget, we borrow from another account, such as entertainment or food (or from a credit card). And if we go over a time budget account &mdash; such as spending too much time at work, we have to borrow some time from elsewhere, like family time, or sleep time. (Fortunately, so far, there's no credit card for time.)</p> <p>A time budget can help us plan how we use our time, so we are sure to spend it as wisely as possible. Let's spend a few moments creating one. (See also: <a href="http://www.wisebread.com/the-single-greatest-key-to-managing-your-time">The Single Greatest Key to Managing Your Time</a>)</p> <h2>1. Take Stock of Your Time</h2> <p>The first step of any budgeting process is to take inventory. For one week, try to keep a detailed time log, noting &mdash; as precisely as possible &mdash; how you spend your hours. You can use a plain old spiral notebook, a calendar, or download a free time tracking app for your smartphone, like the <a href="http://www.wonderapps.se/atracker/">ATracker</a> (the full version is available for a fee). It doesn't matter which tool you choose, just that you faithfully use it.</p> <p>At the end of the week, step back and analyze your time inventory. Take a look at how your activities fit into categories relevant to your life &mdash; work, family, school, fitness, religious practice, community, leisure, or other areas.</p> <h3>Fixed versus Discretionary Time</h3> <p>In addition to categories, look at &quot;fixed&quot; versus &quot;discretionary&quot; time expenses. Time is no different than money when it comes to the dividing line between the &quot;musts&quot; (fixed) and the &quot;wants&quot; (discretionary). Whether you are the parent of a young toddler, or a high level corporate executive &mdash; or both &mdash; there are certain things that you likely <em>must</em> do, sometimes as part of a daily routine, but often on an ad hoc basis (a visit to the dentist, a meeting with the sales team, or attending a teacher conference).</p> <p>You might be surprised to find that you spend way more time than you think on tasks that are relatively low on your priority list, and vice-versa.</p> <h2>2. Create Your Budget</h2> <p>Once you have a better understanding of how you currently use your time, you're ready to move on to creating a time budget designed to maximize the hours of your day. There are a few different ways to go.</p> <h3>1. Use the Mayo Jar and Two Beers Method</h3> <p>The <a href="http://www.biz.colostate.edu/mti/tips/pages/MayonnaiseJarandTwo-Beers.aspx">Mayonnaise Jar &amp; Two Beers</a> method illustrates the importance of filling your days in line with your priorities. Standing in front of a lecture hall, a professor shows his students that you can fill a jar with golf balls &mdash; it's as full as it can get, right? But then he squeezes some pebbles into the jar, and then sand. The point is that as busy as you think you are, you can always make more room for the things that matter most in your life, including taking time to enjoy your relationships (hence the two beers).</p> <p>What are your &quot;golf balls?&quot; For some, the most significant priorities revolve around work, while for others, it may be family, fitness, or religion. Prioritize the things you value most in your life, and allocate the hours in your day accordingly.</p> <p>If building your career is most important to you right now, then the biggest (or most productive) time slots in your day should be allotted to work.</p> <h3>2. Use the Envelope System</h3> <p>Replicate the &quot;<a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">Envelope System</a>&quot; of budgeting, substituting time for money.</p> <p>The envelope budget system involves literally dividing cash into envelopes for each spending category (household expenses, food, transportation, clothes, etc.). This system works for time, too. You do not need envelopes (seven columns on a sheet of paper might do the trick), but it might be a fun exercise to help you visualize your time commitments per category:</p> <ul> <li>Lay out seven envelopes on a desk or table, one for each day of the week.<br /> &nbsp;</li> <li>Using colored index cards (each color corresponding to a time expenditure category &mdash; family, work, exercise, etc &mdash; write an activity and the time it takes to complete.<br /> &nbsp;</li> <li>Now fill each envelope with what you think will fit into each day of the week.</li> </ul> <p>If the amount of time represented on your cards in any of your envelopes adds up to more than the number of your waking hours you have in that day, you may need to do some shuffling.</p> <h3>3. Use the 50/30/20 Budget Rule</h3> <p>The <a href="http://money.msn.com/how-to-budget/how-much-should-you-spend-on-weston.aspx">50/30/20 budget rule</a> &mdash; which allocates percentages of your income to fixed expenses (50%), discretionary spending (30%), and saving (20%) &mdash; can also be adapted to create your time budget.</p> <p><strong>Fixed Time</strong></p> <p>Let's say it takes you an hour to walk the dog, shower, eat breakfast, and pack the kids' lunches. The hour you spend attending to your typical morning routine is one example of a fixed time expense. Other fixed time expenses include obligations, or &quot;musts.&quot; (See also: <a href="http://www.wisebread.com/15-essential-life-hacks-that-will-save-you-time-in-the-morning">15 Essential Life Hacks That Will Save You Time in the Morning</a>)</p> <p><strong>Discretionary Time</strong></p> <p>Discretionary time expenses might include lunch with a friend, getting a massage, or perusing Facebook. These times are the hardest to measure (who times a phone call with Mom?), but they can gobble up more time than you realize if not kept in check. One idea that works for some people is to bundle all social interactions &mdash; chatting with co-workers, Skyping with friends, using social media &mdash; into an hour at various intervals of the day. This way, it becomes a more predictable element of your time budget.</p> <p><strong>Saved Time (or &quot;Wasted&quot; Time)</strong></p> <p>Because time can't be banked and used at a later date, the savings part of the 50/30/20 equation is not as clear cut. But perhaps a good substitute might be unpredictable time wasters. Let's face it: It's not uncommon to get stuck in traffic &mdash; or stuck in a conversation with an overly chatty neighbor who is oblivious to the nonverbal clues that you are done listening to stories. These kinds of non-intentional time gobblers are fairly unavoidable; you may as well build them into your time budget. If you don't need all that allotted time, move it into the discretionary column!</p> <h2>3. Live it, Love it, or Revise it</h2> <p>A time budget is a guide. It only works if you stick to it. But it is not set in stone &mdash; and you're the boss!</p> <p>Time expenses &mdash; fixed and discretionary alike &mdash; need to be handled at time intervals that make sense in your life. For some people, it may be monthly, and for others, weekly, or even daily.</p> <p>Accept the fact that life changes &mdash; by season and by circumstance. Adjust your time budget accordingly.</p> <p><em>How do you manage your time? Take a moment and share in comments!</em></p> <a href="http://www.wisebread.com/why-you-need-a-time-budget-and-how-to-create-it" class="sharethis-link" title="Why You Need a Time Budget — and How to Create It" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/mardee-handler">Mardee Handler</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Productivity budgets productivity time management Tue, 20 May 2014 08:36:26 +0000 Mardee Handler 1139919 at http://www.wisebread.com 25 Dumb Habits That Are Keeping You in Debt http://www.wisebread.com/25-dumb-habits-that-are-keeping-you-in-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/25-dumb-habits-that-are-keeping-you-in-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/pockets-4386297-small.jpg" alt="empty pockets" title="empty pockets" class="imagecache imagecache-250w" width="250" height="175" /></a> </div> </div> </div> <p>&quot;A hundred wagon loads of thoughts will not pay a single ounce of debt&quot; goes an Italian proverb.</p> <p>You need to take action to tame your debt monster. Let's put your financial house in order by kicking out these 25 dumb habits that are keeping you in debt.</p> <h2>Lack of Strategy</h2> <p>Without a strategy, you never know whether or not you are doing things right. Start by assessing how bad the situation is.</p> <h3>1. Not Having a Monthly Budget</h3> <p>One of the top reasons for having too much debt is living well beyond your means. You need to sit down, list of all your monthly expenses on spreadsheet, and put a number next to those expenses. How much you are spending per month may actually shock you. Once you have those numbers, go about creating a budget that will allow you to pay down your debts.</p> <h3>2. Ignoring How Much Debt You Owe</h3> <p>Ignorance is bliss. But bliss won't pay down your debts! On that same spreadsheet, list all of your total balances from store cards, credit cards, student loans, car loans, and mortgages. Seeing how much you really owe may be just the motivation you need.</p> <h3>3. Not Calculating Your Debt-to-Income Ratio</h3> <p>Financial advisers suggest keeping your debt-to-income ratio below 36%. If your DTI is 50% or higher, then you may actually need professional help to bring down your level of debt. Here's how to calculate it:</p> <ul> <li> <p>Add up your total monthly debt payments (e.g. $1,000).</p> </li> <li> <p>Add up of all your monthly income, such as wages, tips, and alimony payments (e.g. $2,500).</p> </li> <li> <p>Divide the debt payments by the income and multiply it by 100%. From our example, we get a ratio of 40%.</p> </li> </ul> <p>This would mean that 40% of your monthly income is going to cover debt. Is the remaining 60% of your monthly income enough to cover your monthly budget?</p> <h2>Mismanagement of Monthly Bill Payments</h2> <p>Now that we have your attention, here are some dumb things that you need to stop doing so that you can lower your monthly bill payments, too.</p> <h3>4. Paying Bills Past Due Date</h3> <p>Paying your bills late is a triple whammy. First, you get slammed with a late charge that can go all the way up to $35 per month. Pay a bill late for 12 months, and that's $420. Second, you miss out on benefits, such as getting your deposit back from utility companies or getting a lower monthly payment for paying on time. Third, your payment activity determines about 30% of your credit score. Paying bills late lowers your credit score.</p> <p>lf you're having problems meeting your due date, then adjust those dates to match those of your paychecks. It only takes a phone call to your creditor, but keep in mind that it might take one to two billing cycles for the change to take effect.</p> <h3>5. Breaking Up Payments Into Installments</h3> <p>If you're breaking up payments into installments, you're likely paying more. For example, a car insurance company may charge you a &quot;convenience fee&quot; of $4 per installment payment. If you break down a 6-month payment into monthly payments, that is $24 per 6-month period or $48 per year. Not to mention that if you make each monthly installment late, then there is an additional charge.</p> <h3>6. Not Reviewing Your Monthly Bills</h3> <p>The convenience of getting your bills online often allows companies to sneak in charges. If you signed for electronic billing with AT&amp;T, you might know what I am talking about. Some of my bills were 50 pages long, so I stopped reading them online for a while. A couple months later I noticed that I had been paying about $9.99 more each month. Turns out that somehow an additional feature had been activated four months prior. Without catching the error, I could have paid up to $119.88 extra per year.</p> <h3>7. Spending Money Ear-Marked for Bills</h3> <p>Thou shall not spend your bills money. Period.</p> <p>Let this become your newest commandment for debt reduction.</p> <h2>Poor Credit Card and Banking Skills</h2> <p>Now, you are ready to improve your credit card and banking skills. This section focuses on the dumb habits that are letting your debts get plump. It is time to get them skinny.</p> <h3>8. Using ATMs Outside Your Network</h3> <p>You work hard for your money. So, why are you letting somebody take $2 to $4 every time you need some cash? Get in the habit of keeping a spare $100 bill in your wallet so that you are never in a cash crunch again. Also, use your smartphone to find the nearest ATM within your bank's network.</p> <h3>9. Getting Credit Cards Without Cashback</h3> <p>If you are going to use a credit card, you might as well get some <a href="http://www.wisebread.com/5-best-cash-back-credit-cards">cash back for doing that</a>. One important reminder: To truly take advantage of the cash back feature and save money, you need to pay down the balance in full and on time every month.</p> <h3>10. Paying Only the Minimum Required Payment</h3> <p>If you keep on just paying the bare minimum payment, it may take years for you to get rid of those balances. And you will end up paying a fortune in interest.</p> <p>By paying more than the required minimum, even if it is $50 per month, you are improving your chances of getting rid of those debts. Also, whenever you get a windfall (e.g. tax refund, birthday present in cash, bonus at work), use it towards your debt.</p> <h3>11. Keeping High-Interest Credit Cards</h3> <p>Nobody can force you to stay with a credit card; you always have the option to transfer your balances to other companies. Especially if they offer you <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">a lower interest rate</a>.</p> <p>Once you find the right choice and you are ready to do a balance transfer, first check with your current card provider to see if they are willing to match the other company's offer. Some card companies prefer to match an offer rather than lose a customer. If your current card provider doesn't budge, then go ahead with your balance transfer.</p> <p>Note that some interest rates are lower only temporarily, so you need to pay off as much debt as possible while the interest rate is low.</p> <h2>Out of Control Monthly Budgets</h2> <p>Show your monthly budget who is boss by kicking these bad spending habits.</p> <h3>12. Shopping for Groceries While Hungry</h3> <p>The hungrier you are, the more groceries you buy. The next time you plan to go out for groceries, have a meal before you head out the door.</p> <h3>13. Shopping for Groceries Without Coupons</h3> <p>Stop paying full price. While you may not become the next guest on &quot;<a href="http://www.wisebread.com/extreme-couponing-5-reasons-why-i-ll-pass">Extreme Couponing</a>,&quot; it is not a bad idea to look for coupons. Once you have your list of groceries, do a quick search online to see if you can find coupons for the items on your list. <a href="http://www.coupons.com">Coupons.com</a> is also a good site to look for savings. (See also: <a href="http://www.wisebread.com/the-only-5-grocery-shopping-techniques-you-need?ref=seealso">The Only Grocery Shopping Techniques You Need</a>)</p> <h3>14. Impulse Buying</h3> <p>Some coupons do more harm than good. For example, a $10 coupon shouldn't force you to have to spend $50 right now. When shopping, you have to stick to your list.</p> <h3>15. Researching for Travel Without Clearing Cookies</h3> <p>Online retailers love cookies &mdash; not the chocolate ones, but the digital ones that your browser keeps and tells retailers about all your Internet habits. Whenever you are shopping around for flights, car rentals, or hotels, clear the cookies from your browser. Otherwise, you will notice how prices mysteriously start going up the longer that you wait. (See also: <a href="http://www.wisebread.com/4-secrets-to-getting-the-lowest-rate-from-travel-websites?ref=seealso">4 Secrets to Getting the Best Travel Deals</a>)</p> <h3>16. Insisting on Only Buying Brand Name Drugs</h3> <p>You know what's often the main difference between brand name and generic drugs? Price! Check the list of ingredients on the label, if the list is exactly the same, go for the less expensive option. Buy a brand name drug if and only if the ingredients on the brand name drug are missing on the generic version.</p> <h3>17. Throwing Away Too Much Good Stuff</h3> <p>Remember that one man's trash is another man's treasure. Search online what things are worth before throwing things down the trash chute. Amazon, eBay, and Craigslist can help you cash in on items you no longer want.</p> <h2>Expensive Entertainment</h2> <p>Life is serious enough. You do need a break, but not one that breaks the bank.</p> <h3>18. Going Out With a Credit Card or Debit Card</h3> <p>Sometimes the only way to use your credit card less is to hide it from yourself. Whenever going out for the evening, take only cash. This forces you to stick to a budget and prevents you from hitting the ATM late at night, when your willpower may not be at its peak. Let's be honest &mdash; have you ever taken out cash at 3 a.m. for a good reason?</p> <h3>19. Paying More When Cheaper Alternatives Are Available</h3> <p>This one is open to debate, but do you really need to spend that much money on entertainment? Doesn't the same $2 beer bottle from your local grocer taste the same as the $8 one at the bar?</p> <p>Once you start thinking about it, you realize that the list of things with cheaper alternatives is endless. For example, you can skip the $10 to $12 movie ticket, by waiting until it comes out at the $1 dollar theater later or for about $1 on Redbox. If you need motivation to be thrifty, think about that big total debt number on your spreadsheet.</p> <h3>20. Keeping Unlimited Plans That Are Too Big</h3> <p>When it comes to movie streaming, you have many options: Roku, Amazon, Netflix, iTunes, and many more. Some people keep an unlimited plan with each one of these services, so that they can be always &quot;in the know.&quot; Slash redundant and underutilized services. For example if you have an unlimited rental plan with Netflix but only rent two movies or fewer per month, then you are better just renting from a movie kiosk at about a dollar per movie.</p> <h3>21. Smoking</h3> <p>Smoking is killing your finances in two ways. First, it is expensive. An average pack of cigarettes is around $7. Let's say someone buys two packs of cigarettes a week, that equals $56 a month. Multiply that by 12 and that equals $672 a year! Second, smoking increases the cost of your life insurance and may limit the coverages of your medical health plans. If you smoke &mdash; quit!</p> <h2>Bad Tax Planning</h2> <p>It happens every year, yet it always catches you by surprise. Stop these three dumb tax habits.</p> <h3>22. Missing Out on Tax Deductions</h3> <p>You can take deductions out of pretty much everything and here are three great lists to get you started:</p> <ul> <li> <p><a href="http://ptmoney.com/tax-deductions-commonly-overlooked/">10 Commonly Overlooked Tax Deductions for 2014</a></p> </li> <li> <p><a href="http://www.wisebread.com/get-a-bigger-refund-with-these-often-overlooked-tax-deductions">Often-Overlooked Tax Deductions</a></p> </li> <li> <p><a href="http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked">16 Great Tax Deductions You May Have Overlooked</a></p> </li> </ul> <h3>23. Withholding Too Little Federal and States Taxes</h3> <p>Another reason why you end up owing taxes to Uncle Sam is that you are withholding too little throughout the year. There are two ways to increase withholdings.</p> <p>If you are self-employed or a business owner, you can <a href="http://www.irs.gov/Businesses/Small-Businesses-&amp;-Self-Employed/Estimated-Taxes">pay estimated taxes</a> up to four times per fiscal year using <a href="http://www.irs.gov/pub/irs-pdf/f1040es.pdf">form 1040-ES</a>. If you receive wages from an employer, then you can update your <a href="http://www.irs.gov/pub/irs-pdf/fw4.pdf">W-4 form</a> in three ways: withhold at the higher single rate (box 3), claim zero allowances (box 5), and withhold an additional amount per paycheck (box 6).</p> <p>By withholding throughout the year, you avoid the lump-sum payment every April.</p> <h3>24. Contributing Too Little to Retirement Accounts</h3> <p>You need to start saving for retirement. Not only will your older self thank you, but you will be liable for less taxes each year. When contributing to retirement accounts, such as a 401(k) or IRA, you lower your current taxable income.</p> <p>The last dumb habit that is keeping you in debt is so important that it is a category of its own.</p> <h2>25. Lacking an Emergency Fund</h2> <p>Not having an emergency fund will always derail your finances. Life happens, so you need to plan ahead for those rainy days. If you don't have a cushion for emergencies, then you won't be able to keep up with debt payments, tax withholdings, and other good financial habits.</p> <p><a href="http://www.wisebread.com/figuring-the-size-of-your-emergency-fund">Figure the size of your emergency fund</a> and build it using this <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund">step-by-step guide</a>.</p> <p><em>What are other dumb habits that you think we should include in this list?</em></p> <a href="http://www.wisebread.com/25-dumb-habits-that-are-keeping-you-in-debt" class="sharethis-link" title="25 Dumb Habits That Are Keeping You in Debt" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Debt Management budgets debt debt elimination Mon, 05 May 2014 08:24:21 +0000 Damian Davila 1137745 at http://www.wisebread.com 7 Bizarre Ways to Stay on Budget (That Actually Work) http://www.wisebread.com/7-bizarre-ways-to-stay-on-budget-that-actually-work <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-bizarre-ways-to-stay-on-budget-that-actually-work" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/argument-155249744.jpg" alt="argument" title="argument" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Budgets fail for a number of reasons, but the most common one is that we simply do not follow through. Everyone's optimistic and driven during the initial planning stages, but actually putting the plan into action often decreases enthusiasm and motivation. If the traditional ways of staying on budget aren't working, you may have to resort to more drastic measures. Here are a few tips that are so crazy, they just might work. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso">Build a Better Budget in 5 Minutes</a>)</p> <h2>1. Argue With Yourself</h2> <p>Sometimes it seems like there's a whole 'nother person in your head telling you to do the exact opposite of what you're supposed to do. She's the one who tells you, &quot;It's only a one-time expenditure,&quot; or &quot;You've been doing good so far, surely there's no harm in a tiny splurge at the mall.&quot; It all sounds reasonable, but it's also dead wrong.</p> <p>One of the best ways to combat the little devil on your shoulder is to <a href="http://ideas.time.com/2012/05/23/talking-to-yourself-not-so-crazy-after-all/">talk to yourself</a>. It helps to refer to yourself by name or by saying, &quot;You.&quot; Remind her that you have goals you're trying to reach and catching that Super Nintendo complete with 50 games going for $100 on eBay is not a good enough reason to slack off on debt payments.</p> <h2>2. Gamify It</h2> <p>It may be hard to find the inherent fun in budgeting, but, if you make your budgeting endeavors into an actual game, you may find it easier to stay the course. Tools such as <a href="https://habitrpg.com/static/front">HabitRPG</a> and <a href="http://www.rexbox.co.uk/epicwin/">Epic Win</a> provide a comprehensive gaming adventure, complete with experience points, gold, and a multiplayer function. Just like in a real game, you level up when you achieve goals and take damage when you fall short. (See also: <a href="http://www.wisebread.com/8-cheap-ways-to-play-video-games?ref=seealso">Cheap Ways to Play Video Games</a>)</p> <h2>3. Lock It Up</h2> <p>If you're having trouble resisting the siren song of the credit cards in your wallet, you may need to rely on more than just your will power to stay on budget. A timed lock box such as the<a href="http://www.thekitchensafe.com/"> Kitchen Safe</a> can help you can stop unnecessary spending by sealing your cards away for up to 10 days. The Kitchen Safe is made of clear plastic, so you'll need to wrap up the cards or cover the numbers with a piece of masking tape to make sure you don't cheat.</p> <h2>4. Put Your Money in Someone Else's Hands</h2> <p>Much like the tip above, sometimes you just need to put a barrier between you and your money. Take the amount of cash you've budgeted for the week's lattes, fast food lunches, and other frivolities out of the ATM, then give your card to someone else (whom you trust!) for safekeeping. If you run out of money before the end of the week, not only will you need to ask for your card back, you'll have to tell the person why you ran out of money and what you'll be using the unbudgeted amount for. (See also: <a href="http://www.wisebread.com/5-ways-to-make-yourself-accountable?ref=seealso">Ways to Make Yourself Accountable</a>)</p> <h2>5. Freeze It</h2> <p>The idea of putting your credit cards in a block of ice to stop yourself from using them is an oldie, but a goodie. Fill a container halfway with water and freeze it overnight. The next day, place your cards on top of the ice and fill the container up the rest of the way, leaving a half inch or so at the top for the ice to expand. Put it back in the freezer for another night and, voila! Your cards are completely encased in ice. Using this two-part method ensures the cards they don't just sink to the bottom where you can read the numbers through the ice. If you do choose to simply drop your cards in, wrap them with opaque plastic or cover the numbers with tape. Remember, the bigger the container the more hassle it will be to melt the ice.</p> <p>In the same vein, you can bury your card in a large pot of dirt or even drop them down a hole in your backyard and plant a garden over top. Anything you can do to make retrieving your cards a giant pain in the butt will help you think twice about whether you really need to spend the money in the first place.</p> <h2>6. Put Your Money Where Your Mouth Is</h2> <p>You may be more inclined to keep up your budgeting efforts if you have some hard money on the line. Websites such as <a href="http://www.stickk.com/">Stickk</a> and <a href="https://www.beeminder.com/">Beeminder</a> work on the principle that the threat of losing money can be a positive motivator. You don't actually have to provide any money upfront, but if you fail to make progress on a goal, say putting a portion of your paycheck into your savings account every week, you'll have to pay up.</p> <p>Beeminder keeps the money, but Stickk gives you the option of choosing the beneficiary of your forfeited funds. The default option is to send the money to one of the charities Stickk supports, although you can't know which one. The other option is to give it to someone you know, such as a friend or family member. You can even choose to surrender your money to an organization you oppose, providing you an extra bit of motivation. (See also: <a href="http://www.wisebread.com/6-surprisingly-simple-ways-to-motivate-yourself?ref=seealso">Surprisingly Simple Ways to Motivate Yourself</a>)</p> <h2>7. Have a Snack</h2> <p>The decisions you make when you're hungry can be heavily <a href="http://www.ncbi.nlm.nih.gov/pubmed/20424042">affected by starvation instincts</a>, which make you more likely to choose an option that has an immediate reward than one you have to wait for. This not only means you'll probably choose to hit the drive thru instead of sticking to that budget-friendly home cooking plan, you'll also be more likely to disregard the importance of saving money for your family reunion next summer over going on a bender at Macy's semi-annual sale.</p> <p>So if you find yourself craving a new pair of shoes or the latest electronic gadget, have a small snack and reconsider.</p> <p><em>Do you have a weird way of maintaining your budget? Share with us in comments!</em></p> <a href="http://www.wisebread.com/7-bizarre-ways-to-stay-on-budget-that-actually-work" class="sharethis-link" title="7 Bizarre Ways to Stay on Budget (That Actually Work)" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/lauren-treadwell">Lauren Treadwell</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting General Tips budgets gamify life hacks Tue, 15 Apr 2014 08:24:18 +0000 Lauren Treadwell 1135244 at http://www.wisebread.com Build a Better Budget in 5 Minutes Flat http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/build-a-better-budget-in-5-minutes-flat" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/calculator-149130158.jpg" alt="calculator" title="calculator" class="imagecache imagecache-250w" width="250" height="162" /></a> </div> </div> </div> <p>Do you have a budget?</p> <p>If not, you&#39;ve been meaning to get to it, right? According a survey conducted by Bankrate, <a href="http://www.bankrate.com/finance/consumer-index/household-budget.aspx">40% of Americans don&#39;t keep a budget</a>. But if you&#39;re dreading getting the job done, maybe you shouldn&#39;t be. Budgeting isn&#39;t so bad, and it doesn&#39;t have to be about spreadsheets and calculations and highlighter pens. In fact, at the most practical level, budgeting is really simple. And it only takes five minutes to get started, plus another five or so minutes for each of the follow up steps to really build your budget. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso">How to Build Your Budget in 5 Steps</a>)</p> <p>Ready? Here&#39;s how.</p> <h2>Step 1: Use Technology</h2> <p>It&#39;s 2013. Sadly, we don&#39;t have the flying cars and robotic housemaids I expected from this era, but life has gotten a lot better for budgeters. I&#39;m talking about all the software and websites and apps that do all the hard work of combing through your expenses. So, to get started with your budget, download an app like <a href="https://check.me/">Check</a> or<a href="https://www.mint.com/how-it-works/anywhere/"> Mint</a>. They&#39;ll connect to your financial accounts and allow you to see everything in one place. They can even categorize your expenses, remind you to pay bills, and track your savings goals. Staying on budget: Thank goodness there&#39;s an app for that. (See also: <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget?ref=seealso">Sites and Apps That Help You Track Your Spending</a>)</p> <h2>Step 2: Find Out What You Need and Remember the 50/20/30 Rule</h2> <p>The key point to making a budget is to ensure that you have the money you need to pay your bills and meet your basic expenses. Use your budgeting app to figure out how much all your bills &mdash; rent or mortgage, food, utilities, debt repayment, etc. &mdash; are costing you. You may be able to make some adjustments to reduce these costs. That&#39;s a smart move. (See also: <a href="http://www.wisebread.com/5-ways-to-save-money-on-everyday-expenses?ref=seealso">5 Ways to Save on Everyday Expenses</a>)</p> <p>But once you&#39;ve done that, you need to make sure you have that amount available &mdash; <em>in cash</em> &mdash; every single month. In theory, that&#39;s a simple solution, but it can be tricky in practice, especially for those who have a lot of debt to repay or who earn an inconsistent income. In fact, it can be difficult for just about anyone who doesn&#39;t keep track of the money that&#39;s coming in and where it&#39;s being spent.</p> <p>Many financial experts recommend the 50/20/30 rule for budgeting, where 50% of your income goes toward essential expenses, 20% goes to long-term financial goals, such as savings and debt repayment, and no more than 30% goes to discretionary expenses. That&#39;s a good guideline, but feel free to adjust the ratio to fit your needs and lifestyle.</p> <p>The key here isn&#39;t to fit your finances into some fancy chart, but to know what you&#39;re spending your money on and to use that awareness to redirect your spending in a way that&#39;ll help you meet your larger financial goals.</p> <h2>Step 3: Set Goals</h2> <p>Speaking of goals, if you don&#39;t have any for your money, chances are it&#39;ll disappear toward all the little things that tempt us every day &mdash; and that only provide short-term satisfaction. If you&#39;re like most people, however, you probably have some bigger aspirations, many of which tend to require big bucks. Whether it&#39;s traveling, having a family, buying a house or setting money aside for the future, it&#39;s important to continuously remind yourself of those goals and continue to contribute to them over the long term as part of your budget. Think big. It&#39;ll inspire you and give you something worth working (and saving) for. (See also: <a href="http://www.wisebread.com/saving-money-is-easy-if-you-set-the-right-goals?ref=seealso">Saving Is Easy With the Right Goals</a>)</p> <h2>Step 4: Look for Spending Sinkholes</h2> <p>Spending sinkholes &mdash; everyone has them. These are the quicksand expenses that pull you in and continue to drag down your budget. They also explain why it&#39;s possible to have a paycheck on Monday and be left with nothing but crumpled receipts and confusion by Friday.</p> <p>Maybe you&#39;re a sucker for coffee drinks or comic books or sparkly dog collars. For me it&#39;s the coffee, along with yoga pants and expensive treats from the farmers market. If I&#39;m not careful, a whole lot of money can disappear to these (seemingly little) luxuries. Fortunately, you don&#39;t have to cut them out altogether. Instead, use your budgeting app to set a spending cap that you can afford. That means you need to be able to pay for these things <em>with cash</em> and <em>after</em> you&#39;ve met your basic expenses. You can use the additional money you might have spent to pay down debt or contribute to savings. (See also: <a href="http://www.wisebread.com/8-little-luxuries-that-go-a-long-way?ref=seealso">8 Small Luxuries That Go a Long Way</a>)</p> <h2>Step 5: Repeat</h2> <p>Every month is a little different. Perhaps you earn more, or spend more, or run into unexpected financial trouble. Or maybe your expenses or goals have changed. That&#39;s why it&#39;s important to spend five minutes recalibrating your five-minute budget on a regular basis. The key to budgeting isn&#39;t to make things super complicated and technical, but to become mindful and aware of where your money goes. That part of the equation really only takes five minutes, but it has to happen often in order for it to be effective. If it doesn&#39;t, you&#39;ll probably push the whole idea back under rug with all that other stuff you&#39;ve been meaning to do. (See also: <a href="http://www.wisebread.com/actually-get-things-done-creating-a-reasonable-to-do-list?ref=seealso">Creating a Reasonable To-Do List</a>)</p> <p>If you have time to send a text message or compose an email, you have time to get started on budgeting your money. Making larger changes, such as boosting your savings account or paying down debt, can take years. Fortunately, you really can tackle these giants five minutes at a time. Or you can do nothing at all. Your choice.</p> <p>But do consider ditching the excuses. You&#39;ll be richer before you know it.</p> <p><em>What simple budgeting strategies do you use? Share them with me in the comments.</em></p> <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat" class="sharethis-link" title="Build a Better Budget in 5 Minutes Flat" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting budgets saving spending Mon, 30 Dec 2013 11:24:56 +0000 Tara Struyk 1103080 at http://www.wisebread.com 9 Ways Americans Are Spending Differently (but Not Less) http://www.wisebread.com/9-ways-americans-are-spending-differently-but-not-less <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-americans-are-spending-differently-but-not-less" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/shopping-2840209-small.jpg" alt="shopping bags" title="shopping bags" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Many Americans say they are spending less in this post-recessionary period. But their actions tell a different story as <a href="http://business.time.com/2013/08/08/turns-out-you-only-think-youre-spending-less-money/">formal reports indicate that consumer spending is rising</a>.</p> <p>We may think we are spending less because we are exercising frugality in one area of our lives. But in many cases, we are simply changing priorities and shifting expenses. So, just because we are spending less in one category doesn&rsquo;t mean that our budgets are perfectly balanced. (See also: <a href="http://www.wisebread.com/find-your-hidden-spending-habits-and-save">Find Your Hidden Spending Habits and Save</a>)</p> <p>It&rsquo;s useful to consider where Americans are spending less and where we are spending more:</p> <h2>1. Less on Apparel and Footwear</h2> <p>According to a <a href="http://www.bls.gov/news.release/cesan.nr0.htm">recent report from the Bureau of Labor Statistics</a>, spending on apparel, footwear, and related services was down slightly in 2012 compared to the previous year.</p> <p>The popularity of consignment and thrift shops, with their lower prices, may be behind part of the lower spending in this category. Fashion deal sites, such as <a href="http://www.jdoqocy.com/click-2822544-10949910" target="_blank">6PM.com</a> and <a href="http://www.shopittome.com/">ShopItToMe.com</a>, may also be contributing to this trend. (See also: <a href="http://www.wisebread.com/discount-designer-clothing-17-places-to-get-name-brands-for-less">17 Sites to Get Discount Designer Clothing</a>)</p> <h2>2. More on Jewelry and Appliances</h2> <p>Americans are <a href="http://www.reuters.com/article/2013/08/26/us-usa-retail-spending-analysis-idUSBRE97P0BX20130826">putting their money toward items with longer useful lives</a>, such as appliances and jewelry, rather than fashion clothing that may last just a few years.</p> <h2>3. Less on Housing and Mortgages</h2> <p>Young adults are <a href="http://www.pewsocialtrends.org/2013/02/21/young-adults-after-the-recession-fewer-homes-fewer-cars-less-debt/5/#chapter-4-decline-in-young-adult-home-acquisition">spending less on housing and mortgages</a>, according to PewResearch Social &amp; Demographic Trends. Many are renting rather than buying a home or <a href="http://online.wsj.com/article/SB10001424127887324906304579039313087064716.html">living with parents</a> rather than living on their own.</p> <h2>4. More Student Debt</h2> <p>Student loan debt is rising as more borrow to attend college and costs increase. According to a <a href="http://www.facethefactsusa.org/facts/student-debt-rising-degrees">research project of The George Washington University</a>, student debt has risen nearly 280% since 2003.</p> <p>Even as debt has declined in other categories (such as mortgages and credit cards), loans associated with education have increased.</p> <h2>5. More on Cars, Unless You Are a Young Adult</h2> <p>Automakers Ford, GM, Chrysler, Toyota, and Tesla Motors reported higher sales to retail buyers in August, <a href="http://www.forbes.com/sites/steveschaefer/2013/09/04/americans-still-spending-on-cars-august-sales-up-at-ford-gm-and-chrysler/">according to a Forbes article</a>. One auto executive points to pent-up demand as we may have delayed spending during the recession, only to purchase a vehicle now that our finances seem more stable. (See also: <a href="http://www.wisebread.com/7-websites-you-must-visit-when-buying-a-new-car">7 Sites You Must Visit When Buying a New Car</a>)</p> <p>However, car ownership and vehicle debt among young adults is falling. For starters, <a href="http://www.theatlantic.com/business/archive/2012/07/the-dramatic-30-year-decline-of-young-drivers-in-1-chart/260126/">fewer teens are getting their driver&rsquo;s licenses at 16</a>. Reasons for less interest in driving and consequently lower demand for a car include better availability and more acceptance of public transportation, easier access to rides and friends via social media, and the high costs of owning a vehicle.</p> <h2>6. More on Children</h2> <p>Spending on children among parents of all income levels has been rising over the last few decades, according to a <a href="http://journalistsresource.org/studies/economics/inequality/investing-children-changes-parental-spending-children#">2012 report on changes in parental spending on children</a>.</p> <p>Notably, teenagers were the prime recipients of parental spending prior to the 1990s. After that time, though, parents spent the most on children under age 6 and those in their mid-20s.</p> <p>Parents may not be spending on vehicles or funding college education for their teens but they are more likely to be paying expenses for their young adult children.</p> <h2>7. More on Entertainment</h2> <p>Americans are spending more on entertainment. <a href="http://www.whitehutchinson.com/news/lenews/2012_november/article102.shtml">Expenses in this category grew 58% from 1995 to 2011</a> according to the White Hutchison Leisure &amp; Learning Group. And this upward trend continued in 2012.</p> <p>The mix within this category has changed over time. While location-based entertainment and admissions to sporting events declined, mobile and in-home entertainment has increased.</p> <h2>8. More on Food</h2> <p>Over the past few years, Americans have been spending more on food according to a Mint.com <a href="http://money.cnn.com/2013/05/08/pf/consumer-spending/index.html">analysis of account holders&rsquo; spending habits</a>.</p> <p>Grocery spending is up 17%, most likely due to rising food prices in general as well as the popularity of premium items. Restaurant expenses have increased 11% with those under 36 years old spending nearly 40% more. For details on how people in your state spend, <a href="https://www.mint.com/blog/american-food-drink-spending-interactive/">see this infographic</a>.</p> <h2>9. More on Travel</h2> <p>Overall, travel spending is expected to increase by over $1.5 billion this year. Though fewer Americans planned to travel this summer, vacationers planned to spend more overall than last year, <a href="http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6170">according to a market research firm</a>.</p> <h2>But Is Different Better?</h2> <p>Many times, we consciously move spending from one category to another so that our habits are better aligned with our values and current needs. The danger comes when we believe we are being prudent because of lower expenses in certain areas when we are merely moving money around.</p> <p>For example, since mid-August, I have been spending less on groceries because my oldest son is away at college. Food lasts longer, nightly dinner portions are more modest, and my weekly trips to the grocery store carry a smaller bill. My lower grocery costs make me think that I am changing my spending habits overall for the better.</p> <p>However, a glance at our family&rsquo;s outlays indicates that these are merely shifts in spending, as expenses for my son&rsquo;s college tuition, books, and living expenses at school outweigh savings back at home. (See also: <a href="http://www.wisebread.com/how-to-score-free-or-almost-free-college-textbooks">How to Score Free Textbooks</a>)</p> <p>You may have also noticed a shift in your expenses, whether you are reacting to a change in economic conditions or personal circumstances. You may be dropping fewer dollars on entertainment out of the home while increasing your spending on baby-related supplies after your first child was born.</p> <p>Some shifts in spending can&rsquo;t be avoided, like the trade-off in groceries for tuition, but others ought to be noticed, monitored, and controlled.</p> <p><em>Are you spending less money? Does shifting expenses help you spend on what&rsquo;s most important to you? Or, do you scrimp in one area only to lose control in another?</em></p> <a href="http://www.wisebread.com/9-ways-americans-are-spending-differently-but-not-less" class="sharethis-link" title="9 Ways Americans Are Spending Differently (but Not Less)" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting budgets debt spending Mon, 14 Oct 2013 10:24:03 +0000 Julie Rains 1005347 at http://www.wisebread.com 10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/thinking-3030829-small.jpg" alt="woman using smartphone" title="woman using smartphone" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Tracking your spending can be one of the best things you can do to stay on course financially. By knowing where all of your money is going, you can more effectively budget and easily carve out what expenses can be cut. (See also: <a href="http://www.wisebread.com/8-ways-to-stop-spending-today">8 Ways to Stop Spending</a>)</p> <p>As recently as a few years ago, the Internet was flush with sites offering account aggregation, budgeting tools, and other similar services. Over the years, many of those sites went defunct, but the good news is that there are still a number of sites that allow people to see their full financial picture in one place, or at the very least track the money they spend. There's also an increasing number of standalone apps for iPhone, Android, and other platforms that can make it ultra-easy to log where you're money is headed.</p> <p>Here are 10 such sites and apps that can help you, and many of them are free to test out.</p> <h2>1. OneReceipt</h2> <p>There's a lot that <a href="http://www.onereceipt.com/">OneReceipt doesn't do</a>. It doesn't aggregate or link to your accounts. It doesn't allow you to set up budgets. It doesn't give you a broad picture of your finances. BUT, it does a great job of tracking every single purchase by allowing you to enter in receipts for the things you buy.</p> <p>All you need to do is take a picture of a receipt and upload it using a smartphone app or special email address. It will automatically track what you bought, and you get a nice online statement.</p> <p><strong>Pros:</strong> Free. Simple idea, succeeds in tracking spending. Good smartphone app.</p> <p><strong>Cons:</strong> Good at doing one thing, but doesn't help you see your full financial picture.</p> <h2>2. BudgetTracker</h2> <p><a href="http://www.budgettracker.com/">BudgetTracker</a> allows you to track all of your accounts and enter expenditures, create budgets and calendars, and even compile notes. It's important to note that everything must be entered manually, as there's no linking to online bank accounts. For some people, this could be annoying. But it could be the way to go for those that are security-minded.</p> <p><strong>Pros:</strong> Free, fully featured for tracking spending and budgeting. Available on smartphones and iPad.</p> <p><strong>Cons:</strong> No way to link and import data from online accounts (though some may see this as a positive).</p> <h2>3. ClearCheckbook</h2> <p>You can get a full picture of your spending on <a href="https://www.clearcheckbook.com/">ClearCheckbook's</a> rather elegant dashboard. You can enter expenses and income in a checkbook-like interface and get colorful charts and graphs. (See also: <a href="http://www.wisebread.com/6-quick-tips-for-organizing-your-finances">6 Tips for Organizing Your Finances</a>)</p> <p>It's also possible to set up bill pay reminders and budgets, all for free. A premium service allows for customizable reports, importing of CSV files, and multiple users.</p> <p>ClearCheckbook has apps for iOs, Windows, Android, and Blackberry, and anything you enter will sync in the cloud.</p> <p><strong>Pros:</strong> Comprehensive view of finances, robust roster of apps, cloud syncing.</p> <p><strong>Cons:</strong> Some features aren't free. (Premium plans run from $4/month to $42/year.)</p> <h2>4. The Birdy</h2> <p><a href="https://thebirdy.com/">The Birdy</a> free plan allows you to record purchases and see spending graphs, or for $4.95/month you can can also track income and set budgets. Entering purchases can be done via email or even Twitter (which seems a bit scary, frankly).</p> <p><strong>Pros:</strong> Ability to record purchases via email, text, or Twitter. Effective in tracking spending.</p> <p><strong>Cons:</strong> Only basic service is free. Budgeting and other services cost $4.95 monthly.</p> <h2>5. Check (formerly Pageonce)</h2> <p>The strength of <a href="https://check.me/">Check</a> is in its bill paying capabilities. The app will send a reminder when a bill is due, and then you can pay with one click or manually schedule a payment for later. Check just got another $24 million in financing, so don't be surprised if you see new features and capabilities down the road. (See also: <a href="http://www.wisebread.com/how-to-set-up-automatic-payments">How to Set Up Automatic Payments</a>)</p> <p><strong>Pros:</strong> Free, simple interface. Easy way to avoid late fees on bills.</p> <p><strong>Cons:</strong> No web-based or desktop version. Strength is in bill paying, not tracking spending.</p> <h2>6. TheExpenseTracker</h2> <p><a href="http://www.theexpensetracker.com/">TheExpenseTracker</a> is one of the slicker sites out there, boasting the ability to record transactions through a variety of means, including phone, text, debit card, and email.</p> <p>Once information is entered, you can get emailed reports and download data into Excel. It's definitely geared towards those operating small businesses, but it should work for your own personal finances. It's $19.95 a month, though, so you may find there are other sites that offer a better value.</p> <p><strong>Pros:</strong> Ease of entering purchases, slick interface and detailed reports.</p> <p><strong>Cons:</strong> $19.95 per month. Geared toward small business.</p> <h2>7. DailyCost</h2> <p>The minimalist <a href="http://dailycost.com/">DailyCost</a> app (just $1.99) for iPhone makes it easy to enter and track purchases. To enter a purchase, it's just a simple gesture, and items are easily categorized. The app then allows you to see your spending in colorful charts. It works with dozens of currencies, too. (See also: <a href="http://www.wisebread.com/3-steps-to-organize-and-track-your-finances-without-the-hassle">3 Hassle-Free Steps to Track Your Finances</a>)</p> <p><strong>Pros:</strong> Clean and simple interface, effective in tracking expenses you enter.</p> <p><strong>Cons:</strong> Only available on iPhone. Does not link to credit cards or bank accounts or automatic tracking.</p> <h2>8. Cashbase</h2> <p>Another simple expense tracker with apps for iPhone and Android, <a href="http://www.cashbasehq.com/">Cashbase</a> allows you to track expenses and income, it publishes charts and graphs, and it even has customer support. For $5 a month, you can also get cash flow projections, budgeting tools, and a weekly report.</p> <p>This program doesn't link to your bank accounts or credit cards, but you can import statements in the form of a CSV file.</p> <p><strong>Pros:</strong> Good customer support, good smartphone apps.</p> <p><strong>Cons:</strong> Budgeting tools and some reports are $5 per month extra.</p> <h2>9. Moneywiz</h2> <p><a href="http://moneywizapp.com/">Moneywiz</a> is a well-rounded app designed for Mac, iPhone, and iPad. Entry of purchases and expenses is easy, and you can scan and attach receipts and bills. There are good budgeting tools, forecasting, charts and graphs, and the ability to schedule transactions. One of the slickest apps you'll find, but also one of the priciest.</p> <p><strong>Pros:</strong> A robust app with a smooth and minimalist interface, cloud syncing.</p> <p><strong>Cons:</strong> Only available on Mac and iOs. $24.99 for Mac app, $4.99 for iPhone/iPad.</p> <h2>10. Mint</h2> <p>Opinions of this site are mixed, but <a href="https://www.mint.com/">Mint</a> is my personal favorite, and the one I use most regularly. It's possible to track nearly every aspect of spending and income, from banks and credit cards to retirement accounts and loans. The program can easily find most financial institutions automatically, so you save time on entry when setting it all up.</p> <p>Setting up an unlimited number of budgets is easy, and spending is simple to track.</p> <p>If you buy things using a credit or debit card, most spending is categorized, and you can adjust the categories and add as many as you want.</p> <p>There are apps for iPhone and Android with full capability, and it's very easy to log in and enter a purchase, or check how you are doing compared to you budgets.</p> <p><strong>Pros:</strong> Totally free and full of features, allows you to see full financial picture, set budgets and goals. Great smartphone app.</p> <p><strong>Cons:</strong> Because it does so much, the site can often seem unwieldy. Product recommendations can seem intrusive. Not everyone is comfortable linking all account information online.</p> <p><em>What are your favorite spending trackers?</em></p> <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget" class="sharethis-link" title="10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting budgets expense trackers expenses financial apps spending Wed, 25 Sep 2013 12:15:13 +0000 Tim Lemke 990468 at http://www.wisebread.com Why You Should Reconsider Your Business Forecasting Strategy http://www.wisebread.com/small-business/why-you-should-reconsider-your-business-forecasting-strategy <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/why-you-should-reconsider-your-business-forecasting-strateg" target="_blank">http://www.openforum.com/articles/why-you-should-reconsider-your-business-foreca...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/why-you-should-reconsider-your-business-forecasting-strategy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/iStock_000015590028Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <a href="http://www.wisebread.com/small-business/why-you-should-reconsider-your-business-forecasting-strategy" class="sharethis-link" title="Why You Should Reconsider Your Business Forecasting Strategy" rel="nofollow">ShareThis</a><p>A standard best-practice for decades, the annual planning and resultant budget have become familiar <a href="http://www.openforum.com/idea-hub/topics/money/article/4-tips-for-an-easy-to-build-budget-and-strategic-plan-1" target="_blank">strategic tools</a> for businesses large and small. Yet small businesses and entrepreneurial ventures often struggle to find value in the process, with too much variability in their month-to-month performance to really project performance with any degree of accuracy.</p> <p><strong>Why the Static Budget Fails</strong></p> <p>Here&rsquo;s an example. A three-year-old company has struggled to generate a few hundred sales per month. They have carefully planned an annual budget, organized month-by-month, that reflects how they will utilize the resources from these sales to pay their staff, run their business, and have a little left over to invest in future products.</p> <p>Then, almost overnight, their monthly sales break 1,000 units and they never have a three-digit unit sales month again&hellip;ever. This company&rsquo;s annual budget became obsolete overnight, yet most businesses refuse to update their budget and try to analyze variances between their actual and budgeted performance. After one attempt, they realize this effort is futile and they abandon it altogether.</p> <p>Although this example is extreme, it highlights the point that forecasting the future of small and entrepreneurial companies is usually more difficult than forecasting much larger companies with more predictable sales. So, is there a way to make the budgeting process more meaningful for entrepreneurs?</p> <p><strong>Rolling Twelve-Month Budget</strong></p> <p>Rather than a static, locked-down twelve-month plan, what if business owners adjusted their forecast monthly based on everything they learned during the prior months? Some assumptions were likely validated, like the cost per lead. Other assumptions were likely invalidated, like the percentage of the leads that actually turned into paying customers. One important element of a rolling budget is the ability to change assumptions and outcomes along the way rather than be stuck with bad assumptions for an entire year.</p> <p><strong>Add a New Month as Each Old Month Passes</strong></p> <p>Another great feature of a rolling budget is that you always have twelve months forecasted with your most recent and valid assumptions, plans, strategies, and tactics. When most companies use a static budget, the forward-looking nature of their predictions get shorter as the year transpires. A calendar-year company, therefore, only has three months budgeted in October&mdash;not much of a forecast.</p> <p>As you update your budget each month, you also add another month on the end, meaning you always have at least twelve months planned into the future. It forces you and your team to constantly be thinking about the future implications of your actions today, how your products/services are accepted by paying customers, what competitive pressures will do to your sales, how you should staff your business, and so much more.</p> <p><strong>Once-a-Month Rather than Once-per-Year</strong></p> <p>So, does adding a new month to your budget every 30 days take more or less time than a once-per-year budgeting process? I haven&rsquo;t seen any empirical evidence to answer this specific question, but there are <a href="http://hbswk.hbs.edu/archive/5250.html" target="_blank">plenty of examples that cite improved results</a>, meaning if any extra time is required, it will likely generate a desirable return.</p> <p><strong>A Note About Software &amp; Drivers</strong></p> <p>Regardless of how you keep track of your budget, a monthly variance analysis is the catalyst to keeping the next rolling twelve months dynamic, relevant, and as accurate as possible. Many accounting and financial planning software packages exist, and this entire process can even be accomplished in a spreadsheet. No matter what tool you use, the basis for your month-by-month plan should be the key drivers in your business.</p> <p>A key business driver is an assumption about how different parts of the business will be affected by one factor. For example, a driver of business performance may be sales. Since sales determines the amount of variable costs, the assumptions we make about sales is a key driver for many of the expenses in the business. Other examples of key drivers include employee headcount, leads generated, attrition rates, working capital days, among others.</p> <p>The main point to remember is this&mdash;once you determine your key business drivers, or the best way to make assumptions about what will happen in your business in the future, allow the drivers to determine the outcomes. So, whatever software you use, make sure it will support your use of drivers to create and update your rolling forecast.</p> <p><strong>Bottom Line</strong></p> <p>Different versions of rolling forecasts have been around for quite some time in large organizations, but they are becoming more popular in small and medium-sized business (SMBs). Why? Because they are actually more valuable in companies with less predictable revenue streams and cost containment efforts. The rolling forecast is a powerful, forward-looking solution to help entrepreneurs spot key trends, make critical pivots, and maximize their performance and results.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/ken-kaufman">Ken Kaufman</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Small Business Resource Center budget planning budgets business forecast business planning rolling forecasts small business strategic planning Sat, 05 Nov 2011 21:22:20 +0000 Ken Kaufman 772755 at http://www.wisebread.com Where to Save and Where to Spend http://www.wisebread.com/small-business/where-to-save-and-where-to-spend <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/where-to-save-and-where-to-spend" target="_blank">http://www.openforum.com/articles/where-to-save-and-where-to-spend</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/where-to-save-and-where-to-spend" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/iStock_000016735317Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <a href="http://www.wisebread.com/small-business/where-to-save-and-where-to-spend" class="sharethis-link" title="Where to Save and Where to Spend" rel="nofollow">ShareThis</a><p>There's thrifty, and then there's cheap. Which one are you?</p> <p>When profits diminish by a little bit, you get concerned. When the economy rumbles and your entire market segment stops buying, you panic. Panic is not your friend.</p> <p>If you eliminate what you need in order to operate your business and produce what you sell, you won't be able to keep up when customers do start buying again. A smart savings approach is the answer. Get your heart rate back down to normal, then peruse the save/spend list below.</p> <table width="100%" cellspacing="0" cellpadding="0" border="1"> <tbody> <tr> <td valign="top"> <p>SAVE</p> </td> <td valign="top"> <p>SPEND</p> </td> </tr> <tr> <td valign="top"> <p>Traditional advertising</p> </td> <td valign="top"> <p>Online advertising/new media</p> </td> </tr> <tr> <td valign="top"> <p>Marketing/PR Firms</p> </td> <td valign="top"> <p>Outsourced freelancer or employee to do marketing work</p> </td> </tr> <tr> <td valign="top"> <p>Extraneous employee perks</p> </td> <td valign="top"> <p>Important employee benefits</p> </td> </tr> <tr> <td valign="top"> <p>Travel expenses</p> </td> <td valign="top"> <p>Professional accounting/tax services</p> </td> </tr> </tbody> </table> <h3>Save on Traditional Advertising</h3> <p>Advertising is dead! Long live advertising!</p> <p>Print publications, radio ads, and television ads are no longer the only, or even the best, ways to advertise. You know this already. Now act on it.</p> <p>Take the leap of faith that, after all, those <a href="http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/online_retail_sales.html" target="_blank">statistics about millions of people</a> doing their research and shopping online are accurate. Then cancel your Yellow Pages ad, your newspaper ad, and all other advertising in traditional media sources. At the very least, cut that budget by 50%.</p> <h3>Spend on Online Advertising and New Media</h3> <p>Build up your business website; pay for some SEO consulting. Set a monthly budget for <a href="http://www.openforum.com/articles/how-social-media-lets-small-businesses-poke-big-competitors-in-the-eye" target="_blank">online advertising</a>, which can cost much, much less than traditional advertising.</p> <h3>Save on Marketing/PR Firms</h3> <p>Since most of your advertising can be done via social networking, switch your whole marketing and public relations strategy to online venues. If you're not sure about how to do this, then hire a consultant for a specific task. For example, hire someone to help you set up an appropriate online profile and a social media strategy. Don't, however, spend money on open-ended objectives like &quot;get us more publicity.&quot;</p> <h3>Spend on a Freelancer or Employee for Marketing Work</h3> <p>Pay an employee or <a href="http://www.openforum.com/idea-hub/topics/managing/article/10-tips-for-landing-the-right-freelancer-1" target="_blank">outsource to a freelancer</a> to do the actual work of marketing your business online. This work could include ongoing SEO research, creating content for your website and blog, keeping up with social networking, writing press releases, and finding (free) opportunities for publicity online.</p> <h3>Save on Extraneous Employee Perks</h3> <p>Perks are great; who doesn't like a free lunch, or free coffee, or free bagels on Friday mornings, or valet service, or a gym membership? But these perks, small as they are, add up quickly. Given the choice, your employees would probably choose job security and continued wages over a couple of small perks. If you're not sure, ask them.</p> <h3>Spend on Important Employee Benefits</h3> <p>Health insurance tops the list. Allowing employees to have flexible hours or telecommuting options is also an important benefit that can improve employee productivity and give them more control of their lifestyle. It can also save you money on overhead costs (less office use).</p> <p>And while &quot;wages&quot; aren't exactly a benefit, keeping employee salaries at a livable level allows you to keep the good employees who will help your business survive.</p> <h3>Save on Travel Expenses</h3> <p>First question: does anyone actually need to travel to X event or Y client meeting or to make Z presentation? With all the options <a href="http://www.openforum.com/idea-hub/topics/technology/article/5-tools-to-take-your-business-meetings-online-1" target="_blank">to connect via the Internet</a>, travel itself might be extraneous. Don't go or send your employee unless it's actually necessary. You'll save money for your business and time for everyone involved.</p> <p>Second question: if the travel is necessary, skip the expensive upgrades. Get there, get the job done, get home. You can accomplish these things without traveling business class, hiring a limo service, or staying in a suite.</p> <h3>Spend on Professional Accounting Services</h3> <p>Business taxes can get complicated, and small business owners who don't specialize in tax law can spend a lot of time trying to figure it all out... and still end up paying more than they had to on taxes. Spend some money on a professional CPA to do this work for you and you can save even more than you spend.</p> <p>Remember, cheap doesn't mean smart. Cheap means cheap. Smart means making good decisions, spending where you need to and saving where you can without sacrificing the quality of your business.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Entrepreneurship Small Business Resource Center budgets business costs saving small business spending spending priorities thrift Fri, 08 Jul 2011 19:41:36 +0000 Annie Mueller 601183 at http://www.wisebread.com Ask the Readers: Budgets - Are They "Hot" or Not? (Your Chance to Win $10!) http://www.wisebread.com/ask-the-readers-budgets-are-they-hot-or-not-your-chance-to-win-10 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-budgets-are-they-hot-or-not-your-chance-to-win-10" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/hot%20chili%20peppers.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>In a past life, I had a circle of friends that were were more &quot;poser&quot; than &quot;investor.&quot; The common argument against socking a little cash away for a rainy day was, &quot;That's no fun!&quot; or &quot;How can you get ahead when your money's collecting dust.&quot;&nbsp; The allure of a concert ticket far outshone that of a certificate of deposit, and while I did my best to save, I did it in secrecy.&nbsp;</p> <p>Unfortunately, the girls were a bit worse than the boys.&nbsp; They used every spare penny for manicures, highlights, low-lights, and gym memberships.&nbsp; The reason?&nbsp; To land the guy that would (hopefully) someday pay for the manicures, highlights, low-lights, and gym memberships.&nbsp; They claimed that they invested -- in themselves.&nbsp; But budgets were not only ridiculously lame -- they were horribly unsexy.&nbsp; Luckily, I grew out of those friends, and saving is a goal that my Western Nebraska husband and I share together.&nbsp; Consequently, we think the other one is plenty &quot;hot&quot; -- budgets and savings goals, included. &nbsp;</p> <p>So what do you think? Was a firm financial goal something that drew you to your significant other?&nbsp; Was it even discussed?&nbsp; Did appearing to &quot;keep up with the Joneses&quot; have any influence on what finally brought you together? &nbsp;How does money, the cliches that surround it, and finding that someone special all get along in today's past-paced, make-more society?&nbsp; Do you even care?</p> <p>We'd love to hear whether you think budgets, savings, and personal finance topics are hot -- or not.&nbsp; Tell us why, and you will be entered to win a $10 Amazon gift card.&nbsp; (That's enough for a few club mixes -- if you're into that sort of thing.)</p> <p>Those of you who aren&rsquo;t familiar with the &ldquo;drill,&rdquo; read below for full details:</p> <h2>Win a $10 Amazon Gift Certificate</h2> <p>We're doing two giveaways -- one for random comments, and another one for a random&nbsp;<a href="http://www.twitter.com/">tweets</a>.</p> <h3>How to Enter:</h3> <ol type="1" start="1"> <li class="MsoNormal">Post your answer in the comments below, or</li> <li class="MsoNormal"><a href="http://www.twitter.com/">Tweet</a>&nbsp;your answer.&nbsp; Include both &quot;<a href="http://twitter.com/wisebread" title=" @wisebread #moneytippers">@wisebread</a>&quot; and &quot;#WBAsk&quot; in your tweet so we'll see it and count it.</li> </ol> <p>If you're inspired to write a whole blog post, please link to it in the comments or tweet it.</p> <p>At the end of the drawing, we'll update this post to include (and link to) all of your helpful responses.</p> <h3>Giveaway Rules:</h3> <ul type="disc"> <li class="MsoNormal">Contest ends Thursday, August 27th at 11:59am CST. Winners will be announced after August 27th on the original post and via Twitter. Winners will also be contacted via email and Twitter Direct Message.</li> <li class="MsoNormal">You can enter both drawings -- once by leaving a comment and once by tweeting.</li> <li class="MsoNormal">Only tweets that contain both &quot;@wisebread&quot; and &quot;#WBAsk&quot; will be entered. (Otherwise, we won't see it.)</li> </ul> <p><strong>&nbsp;Good luck!&nbsp;</strong></p> <a href="http://www.wisebread.com/ask-the-readers-budgets-are-they-hot-or-not-your-chance-to-win-10" class="sharethis-link" title="Ask the Readers: Budgets - Are They &quot;Hot&quot; or Not? (Your Chance to Win $10!)" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Giveaways Ask the Readers budgets giveaway trivia Tue, 25 Aug 2009 14:09:32 +0000 Linsey Knerl 3538 at http://www.wisebread.com Five More Tips For Eating In Restaurants And Sticking To A Budget http://www.wisebread.com/five-more-tips-for-eating-in-restaurants-and-sticking-to-a-budget <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/five-more-tips-for-eating-in-restaurants-and-sticking-to-a-budget" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/sharing%20meal.jpg" alt="sharing meal" title="sharing meal" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Even if you are working hard to keep your discretionary spending to a minimum, you can still enjoy a restaurant meal once in awhile. In <a href="http://www.wisebread.com/tips-for-eating-out-cheaply"><span style="text-decoration: underline;">Tips for Eating Out </span>Cheaply</a>, Xin&nbsp;Lu shared five ways she and her husband eat in restaurants often without spending a lot. Here are five more tips for eating in restaurants and still sticking to your food budget:</p> <ol> <li>Eat earlier. Almost every restaurant charges more for dinner than they do for breakfast or lunch. Go earlier in the day and pay reduced prices for similar meals. The breakfast and lunch portions may be smaller than the dinner portions, but considering you get far more than you should eat in a single meal at most restaurants anyway, this shouldn't be a problem! <br /> &nbsp;</li> <li>Order from the kid's menu. Some restaurants allow adults to order from the kid's menu. The prices are about half of what is charged for the adult version and typically the portion sizes are not much smaller!&nbsp; Look for the fine print on the menu to see if they specify age limits for the kid's menu and if not, chances are you can order and save both money and extra calories.<br /> &nbsp;</li> <li>Appetizers as meals. Often, the appetizer portions are large enough to be a meal in themselves, so why not plan it that way? Find an appetizer you really like, like Boneless Chicken Wings or a sampler platter &ndash; and eat it as your main course.<br /> &nbsp;</li> <li>Bring your own wine.&nbsp; There are many restaurants that have a &quot;bring your own wine&quot; policy.&nbsp; You can buy a bottle of your favorite wine at the beverage center, or bring one you've got at home and save money on the cost of eating in a restaurant.&nbsp; This is perfect for people who really enjoy a glass of wine with dinner but not the high price tag associated with restaurant wine.<br /> &nbsp;</li> <li>Get take out and enjoy a family style meal.&nbsp; If the point of going to a restaurant is to avoid having to cook once in awhile, you could always order your restaurant meal ahead of time and bring it home with you to share with your family.&nbsp; Ordering two entrees is more than enough to feed the typical family of four, especially if they are italian pasta dishes!&nbsp; Grab a chicken parm and a lasagna dinner and you're likely to have enough for your family (and some leftovers), and most restaurants include salad and bread with their dinner even if you get it to go.<br /> &nbsp;</li> </ol> <a href="http://www.wisebread.com/five-more-tips-for-eating-in-restaurants-and-sticking-to-a-budget" class="sharethis-link" title="Five More Tips For Eating In Restaurants And Sticking To A Budget" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/debbie-dragon">Debbie Dragon</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Frugal Living Budgeting Food and Drink budgets Food restaurants saving money Sun, 28 Dec 2008 06:39:56 +0000 Debbie Dragon 2674 at http://www.wisebread.com