The Money Journal Challenge
Are you left with more month than paycheck? Are you trying to stick to a budget, but can’t understand where all your discretionary income is going? Do you always end up searching the couch cushion and car seats for extra change to make everyday purchases?
My husband and I had all of these problems and more.
We are middle-aged newlyweds. When we got married a year and a half ago, we pooled everything together, including our finances. Fortunately, neither of us had a huge amount of debt, but we had debt nonetheless. About six months into the marriage, we went on a money diet.
We vowed to pay off our few debts and start saving for a house. But first, we had to learn where our money was going. We sat down and did a budget. That part was easy. Rent, electric, water, Internet, phone, cell phone, cable TV, car payment, food, gas, tobacco, medical bills — all the basics. We had that covered with no problem.
According to the budget, we should have had quite a bit of money left over to put into savings or use toward paying down our debt. But we didn’t. Where was the money going? It’s one thing to write down everything on paper and another, to actually understand what your money is doing.
I had recently gone on a diet to lose a few, extra stubborn pounds. I read something about keeping a record of everything I ate. Hmm, I wondered if that would work with our finances?
So, we decided to make a money journal. We wrote down every single penny that we spent for two weeks. I gave my husband a little black notebook to keep track of his daily expenses while I kept the main money journal at home. At the end of each day, we put everything from his little black book into the main one and totaled up the day’s spending.
We found out where our money was going and what it was doing.
What we found out surprised us. In our case, our money was like a naughty teenager, always sneaking around and going to places it shouldn’t have. Keeping a money journal made us very much aware of our spending habits and helped us to change what needed to be changed. Thanks to the money journal, we’ve paid off our car, several other bills and are on our way to saving for our first house together.
Creating a money journal is not difficult and will only take a few extra minutes of your time. You don’t have to keep receipts or try to keep track in your head. Get a small notebook, one that you can keep in your pocket or purse and jot down what you spend. Be honest and write down every penny. Also write down what you spend the money on. In this way, you can see where your money is really going.
You need to do this for at least two weeks. In the first week, you will be very conscious of what you are buying. Allowing a second week lets you relax back into old spending habits.
The money journal will make you aware of your spending habits. Habits are funny little things we don’t tend to notice. It can help you stop taking advantage of your pocket change. Believe it or not those dimes, quarters and stray dollars can add up. Let’s say you only waste $10 a month in change. Multiply that by 12 months and you have $120. To some, $120 doesn’t seem like enough to worry about, but consider that you could pay an electric bill or buy a tank of gas or apply it toward the principal on your mortgage.
A money journal can help you set goals and stick to your financial resolutions. It will help you focus. In today’s harried world, it’s hard to attain focus on anything for any amount of time. If you are serious about taking control of your finances and getting out of debt, a money journal, when used as the valuable tool it is, will shine a light on the rocky road of financial recovery.
Image courtesy of tracitodd
Cash or Debit Card?
How does using cash or a debit card influence our spending?
About a month ago, I watched a video on Yahoo about an ordinary couple who were challenged to use cash for everything they bought for one week. The idea was to find out if they would spend less when using actual paper money.
How do you feel about using cash versus using a debit card? If someone said you could have your choice of ten $100 bills or a debit card with $1000, which would you choose?
Imagine the feel and the smell of all those greenbacks. Now mentally lay each $100 out on the counter and savor the idea that they are all yours. Yours to spend however you want.
Now take a look at that debit card. Cold hard plastic. It just sits there staring back at you.
Cash is governed by emotion. You can count it, caress it, smell it, spend it, save it or savor it. You can flaunt it, hide it, bank it, give it or burn it. The point is that we have an emotional attachment to cold, green cash. Think about how you feel when your wallet is full. You have to admit to feeling a sense of accomplishment and pride, an inflated sense of well being, when you have a fistful of bills.
A debit card, though worth the same as the cash, doesn’t elicit the same response. We know the money is there. We know the money is ours to spend or do with as we wish, but there is a distance, a lack of emotion.
Who hasn’t kept a $100 bill in their wallet for weeks at a time, just because they were reluctant to break it? Why? Because once it is changed to smaller bills, it’s gone. Would you be so worried about using the last $100 on your debit card? No, I don’t think so. Using a debit card causes no emotional reaction.
Let’s suppose you are trying to stay on a budget or keep your spending under control. You go into the local, buy everything you need here, department store. You have a certain amount of money designated to spend on only what you need. If you have a set amount of cash in your wallet, you will be very careful not to spend over that amount. If you do, you know you won’t have the money to pay for it, and it’s embarrassing to have to put something back.
If you have a set amount of cash in mind and you plan on using your debit card, you wouldn’t have to be so careful. You know there is money in the account to cover anything extra you might want. So those little sales that the store puts up to tempt you, do just that. Before you know it, your buggy is full and you’ve blown the budget yet again.
Remember the ordinary couple who took the challenge to use cash for a week? They found it inconvenient to use cash for everything, especially at the gas station. They also saved a considerable amount of the good green stuff and that was a surprise to them. They didn’t realize how easy it was to swipe a debit card and go on with little thought to the money spent. Nor did they expect to have to plan for every dollar when they used cash.
Perhaps the question is, can using cash help you save money?
Image courtesy of Joshua Davis (jdavis.info)
Payday loans in Georgia and the laws
Payday loans in Georgia and the laws
Weekend Money Reading
Weekend reading is a round-up of personal finance and money related stories that caught the eye of our forum members this week:
- 43 Mortgages Within Same Family
- What really killed WaMu?
- What Are the Economic Collapse Indicators to Watch For?
- An odd welfare story
- The Power of Negative Thinking
- 5 percent on CDs may not be a thing of the past…
- Bailout
- How to deal with mooching friends
- Student, car debt quietly added to bailout plan
- White House Opposes “Deceptive Credit Card Practices” Bill
- Can 16 senators solve the health care crisis?
- Sleepless nights, compliments of Wall Street
- The 6 Most Horrifying Ways Anyone Ever Got Rich
- Bankruptcy judge orders victim to pay back thief
- Healthcare crisis
- The Wall Street Bailout Plan Explained
- Why do rich athletes go broke?
This Week’s Money Carnivals
Blog carnivals are always a great place to see the best writing from a wide variety of blogs from around the blogosphere:
Image courtesy of phunkstarr
Batter Up! Eight Things to Consider when Your Child Plays Youth Sports
If you have kids, you have probably endured seasons of organized youth sports. Baseball, basketball, football, hockey, lacrosse, swimming, volleyball – the list of options for kids is seemingly endless and can keep them occupied from January to December. If your kid wants to play a lot of different sports, it can be both a very expensive proposition for you and a very time-consuming obligation for your entire family. That is why you really need to have a plan when it comes to scheduling sports for your children.
Start Young
Exercise is good. You should encourage your children to get exercise every day and support them when they tell you that they want to play a sport. If you wait until your kids are old enough to know about team sports, they will be behind the learning curve and you will likely find your child has fallen behind his or her peers. To remedy this, you really need to start your child in youth sports as soon as you feel that he or she is mature enough to handle an organized sport.
The YMCA has a great youth sports program for younger children. Regardless of the sport, kids will typically play one game per week and have one practice per week, neither of which will last more than 60 minutes. Our local Y offers basketball, tee-ball, flag football and soccer on a rotating basis throughout the year, at a cost of less than $50 for Y members (per season) and usually less than $100 for non-members. Y sports tend to emphasize teamwork and team values while giving players a basic understanding of the sport that they are playing. They also give your child (and you) exposure to several different sports so that your child can decide what he or she actually likes and you can assess where your child may actually have talent.
Let your Child Play
Many parents sign their kids up for youth sports because they believe that their child is going to be a star some day. The odds of your child being a star in any sport are slim. You need to accept that at an early age. There is nothing wrong with dreaming or working toward a dream, but chances are that your child will not even make the high school team in his or her chosen sports. That means that if your child decides to give up a sport or try a new sport, you should not be concerned about his or her chances to get a college scholarship just because he or she gave up tennis at age 9. If your child hates a sport or prefers another sport, they should not have to suffer through season after season just because you think it is good for them. That will only make them resent you and can increase the likelihood that they will be injured playing the sport that they hate.
Learn the Sport that your Child Loves
If your child loves baseball and you know nothing about it, start learning. There are a host of books available which can teach parents how to coach their kids in just about every subject. Youth sports coaches are usually volunteers and they may know even less than you do about a sport. It is painful to watch a child struggle with a sport, especially when the reason for the struggle is due to poor coaching. If you take the time to learn the basics of a sport – and coaching the sport – you will have the basis for filtering out the bad coaching that your child receives and your child will appreciate you all the more as he or she gets older. If you are spending money on a sport, your child should at least be able to enjoy it, regardless of his or her talent.
Learn the Physical Risks Associated with a Sport
If your child is playing basketball, does he or she wear a mouth guard? If your child is playing baseball, do you know how to buy a helmet or how to show him how to put on an athletic cup? Do you make your child wear a helmet when he cycles? Regardless of the sport, and regardless of the amount of caution that we employ, anyone can be injured when playing a sport.
Learn what kind of stretching your child should be doing before and after a practice. Learn how many pitches your child should be allowed to throw each week. Listen when your child complains of a persistently sore muscle and take him to the doctor when he does. Your child may resist a lot of the preventive medicine that you prescribe, whether it is the requirement that he or she wear protective equipment or the requirement that he or she stretch, but you will be doing the right thing as a parent. You will also be saving money in trips to the doctor and hospital that you will not have to take.
Do Not Overspend on Equipment and Do Not Buy the Wrong Equipment
If your child is 8 eight years old, you do not have any reason to spend $300 on a baseball bat, but I have known parents who have done just that. If your child is an 11 year old runner, you do not need $250 running shoes, but I have known parents to spend that much. Price and quality – even utility – do not always go hand in hand. If you do not know how to choose a helmet (bike, football, batting or whatever), if you do not know how to purchase a baseball bat or a pair of running shoes, thoroughly research those items before you even consider buying them. Talk to a lot of other parents on your child’s team to gain their perspective and experience. Talk to sales people at specialty stores that cater to the specific sport that your child plays. Read up on the subject on the Internet. Take a few days to digest the information and then decide on what you will buy your child.
Even after you have decided on the product you want to buy, make sure you also know how to properly size it. I’ve seen seven year old baseball players trying to swing bats that would be too big for high school players. When I have told parents that their child needs a new bat because it is too large (or too small), they have reacted with anger because they “just spent $275 on that bat.” I’ve then politely changed the subject, but always thought that it is a shame that parental largess, ill-conceived and unnecessary, will cause the child to struggle for an entire season.
Do Not Pay Needlessly for Professional Lessons
A lot of parents I know have spent thousands of dollars so that their kids can have professional lessons. Casual players do not need professional lessons. Unless your child is old enough to know that he or she really wants to pursue a sport competitively and is really enjoying the sport, you should not spend a lot of money adding professional lessons to your child’s routine. It only adds pressure to your child’s day and cost to your wallet. If your child has shown truly amazing potential in a sport, you can discuss professional training with your child and with various coaches, but paying for training for a recreational player is not a good use of time or money, at least until the player is closer to high school age and able to make a commitment to a sport.
Do Not Over-extend
You cannot be in ten places at once. Neither can your child. Do not sign your child up for more sports (or other activities) than you and your child can handle. Similarly, do not sign your child up for sports that will conflict with school work or act as a drag on your child’s studies.
We always told our children that they could play one sport per season. Even with that limitation, my wife and I often found that our kids had conflicting sports on the same nights and we each would have to miss one of the kids’ events. Even that was manageable for us, but we noticed that many parents did not share that approach. I coached baseball and basketball for many years. I cannot count the number of times my teams had players missing games because they had other sports to attend. One year, even though I had 12 kids on my team, I never had a full team for any game during the entire 20 game season. Apart from being unfair to the team, why would a parent want to spend money to sign a child up for a sport that they would not really have the time to play?
Know When it is Time to Change Sports
One of my sons loved baseball. The love started to fade when he was about 10 and by the time he was 13, we knew he was playing the sport only because he did not want to leave the sport he had been playing for so long. My wife and I had a long talk with him and pointed out that he was an accomplished runner and would soon be starting high school. Perhaps he should take a season off from baseball and run on his middle school track team?
After about a week of painful debate (a debate which the track team won after my son realized that the track team had 45 girls on the squad and his baseball team had none), my son decided to take a season off from baseball. My son never played baseball again, but he did go on to run on his high school’s varsity cross country team as a freshman, a source of pride for him unlike anything he had ever really experienced as a baseball player.
It is your job as a parent to help your child to make the tough decisions that they confront. Many times you will find that a child is playing a sport not because they like it, but because they do not want to let you down or because they are afraid of losing their friends. You need to make sure that your child feels that you will be proud of them regardless of what sports and activities they pursue and that they understand that the point to playing is to have fun and to learn. If they are not having fun, they are just throwing away a lot of priceless pieces of their childhood, along with your money. You need to do your best to make sure that does not happen.
Image courtesy of Ozone Ferd
Where Does Money Really Come From?
Given current events, it might be good idea for the average citizen to better understand our modern banking system. Reader Rick submitted this following video which tries to help us so in an accessible way using animation. It is about 45 minutes long, so you might need to find a chunk of time to watch it, but I thought it was worth it.
The first part explains our fractional-reserve banking system very well. One might think that for every $1 we put in a bank account, that is $1 that can be lent as a mortgage loan. In actuality, it is more like $100 that can be lent. (Wonder why banks want our money so bad?) So where is most of the world’s money coming from? In effect, it is created by the act of borrowing itself. Money is created by debt!
However, in the end, it draws some controversial conclusions. The creator contends that this system is unsustainable, and because banks control the credit in our society, they effectively control the society. Thus, it would be better if the government took over such transactions. I have been unable to find a good rebuttal by a financial professional or economist online, so please drop a comment if you have.
(Best viewed in full-screen mode. Takes a while to start.)
Face it: Eating Healthy Does Cost More
What do you usually have for a snack? Do you choose something healthy like fruit or veggies? Or is it more like a bag of chips or your favorite candy bar? How about dinner? Do you make dinner from scratch, or do you heat up something that is premade?
If you are like many people, you go the prepackaged high-calorie route. Why? Well convenience is a big part of it. We all lead what seems like lives that are more hectic every day and we choose the easiest route when it comes to food. But there’s another reason, and I think it’s becoming more evident than ever and that is eating healthy not only takes more time, but calorie for calorie, it costs more.
Now on a blog about saving money, am I suggesting we should go with unhealthy foods to save bucks? No, but I think the subject deserves examination into what it takes to eat healthy and why some just give up trying.
Availability
Grow a garden and get your own produce? On many personal finance and productivity blogs and sites, this is the advice we are given. This sounds like a good idea, but there are problems. If we are looking for healthier options that don’t require any more time commitment than usual, this is a no go. It takes a lot of time to set up a garden and maintain it. Moreover, there is a learning curve for some of us without green thumbs because the rules are different depending on where you live in regard to insects, soil, etc.
In addition, depending on where you live, your access to fresh fruits and vegetables may be limited. Sunny California or Florida can supply a lot of fresh produce almost year around, and since it is locally available, its expense from farm to market is low. On the other hand, large urban areas and colder climates must have their produce delivered, driving up the cost. Also, the quality and taste are affected as the produce must be picked sooner, or the process diminishes the taste. Ever compared a fresh from the garden tomato and one from the grocery store and you know what I mean.
Taste
I don’t know about you, but when I snack, I think naughty. I’ll eat veggies, but it won’t be my first choice. I’ll also need some dip like ranch dressing or caramel for apples. And as mentioned above, during Midwest winters, tomatoes and other produce taste terrible.
Time is Money
As I mentioned at the beginning of the post, many times our meal and snack choices are based on time. Are you going to make your own spaghetti sauce or open a jar? Most will do the jar. Unless you have the storage space, money for fresh ingredients, and the time, your family will hear that familiar “pop” of opening a jar of sauce when it’s spaghetti night. Eating healthy takes effort and time. No one ever said, “This is easy as a garden” or “That will be a piece of broccoli.” You get the idea.
Storage
More and more of us are taking our lunch instead of buying it, trying to be both frugal and healthier, but there are problems. That lettuce you opened for your sandwich is already looking brown by the next day. Your apples don’t last the week and those cucumbers have squishy spots. Oh, I’ll just buy my lunch today and stop by the store again on the way home. How often has this happened? The problem of storage has people buying canned fruit in syrup or skipping fruit and veggies altogether.
So Now What Do You Do
What I want you to take away from this is that eating healthy is something you should strive to do, but do it with your eyes open. If you start out thinking it will be cheap and easy, you’ll throw your hands up in frustration before the week is out. Know what you are getting into. Don’t believe the hype of eating healthy can be affordable or easy to do. I’ve heard it said that if someone would invent salad on a stick, we’d eat healthier and I tend to agree mostly with this statement. In the end, it’s hard to beat the drive-through.
Image courtesy of TheFemGeek
Face it: Eating Healthy Does Cost More
What do you usually have for a snack? Do you choose something healthy like fruit or veggies? Or is it more like a bag of chips or your favorite candy bar? How about dinner? Do you make dinner from scratch, or do you heat up something that is premade?
If you are like many people, you go the prepackaged high-calorie route. Why? Well convenience is a big part of it. We all lead what seems like lives that are more hectic every day and we choose the easiest route when it comes to food. But there’s another reason, and I think it’s becoming more evident than ever and that is eating healthy not only takes more time, but calorie for calorie, it costs more.
Now on a blog about saving money, am I suggesting we should go with unhealthy foods to save bucks? No, but I think the subject deserves examination into what it takes to eat healthy and why some just give up trying.
Availability
Grow a garden and get your own produce? On many personal finance and productivity blogs and sites, this is the advice we are given. This sounds like a good idea, but there are problems. If we are looking for healthier options that don’t require any more time commitment than usual, this is a no go. It takes a lot of time to set up a garden and maintain it. Moreover, there is a learning curve for some of us without green thumbs because the rules are different depending on where you live in regard to insects, soil, etc.
In addition, depending on where you live, your access to fresh fruits and vegetables may be limited. Sunny California or Florida can supply a lot of fresh produce almost year around, and since it is locally available, its expense from farm to market is low. On the other hand, large urban areas and colder climates must have their produce delivered, driving up the cost. Also, the quality and taste are affected as the produce must be picked sooner, or the process diminishes the taste. Ever compared a fresh from the garden tomato and one from the grocery store and you know what I mean.
Taste
I don’t know about you, but when I snack, I think naughty. I’ll eat veggies, but it won’t be my first choice. I’ll also need some dip like ranch dressing or caramel for apples. And as mentioned above, during Midwest winters, tomatoes and other produce taste terrible.
Time is Money
As I mentioned at the beginning of the post, many times our meal and snack choices are based on time. Are you going to make your own spaghetti sauce or open a jar? Most will do the jar. Unless you have the storage space, money for fresh ingredients, and the time, your family will hear that familiar “pop” of opening a jar of sauce when it’s spaghetti night. Eating healthy takes effort and time. No one ever said, “This is easy as a garden” or “That will be a piece of broccoli.” You get the idea.
Storage
More and more of us are taking our lunch instead of buying it, trying to be both frugal and healthier, but there are problems. That lettuce you opened for your sandwich is already looking brown by the next day. Your apples don’t last the week and those cucumbers have squishy spots. Oh, I’ll just buy my lunch today and stop by the store again on the way home. How often has this happened? The problem of storage has people buying canned fruit in syrup or skipping fruit and veggies altogether.
So Now What Do You Do
What I want you to take away from this is that eating healthy is something you should strive to do, but do it with your eyes open. If you start out thinking it will be cheap and easy, you’ll throw your hands up in frustration before the week is out. Know what you are getting into. Don’t believe the hype of eating healthy can be affordable or easy to do. I’ve heard it said that if someone would invent salad on a stick, we’d eat healthier and I tend to agree mostly with this statement. In the end, it’s hard to beat the drive-through.
Image courtesy of TheFemGeek
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