How to Create a Budget in 6 Easy Steps

Who needs a budget anyway?

If you’re always wondering how you’re going to pay the next bill, feel guilty when you indulge in overpriced treats and you can’t seem to find money to put into savings, then you probably need a budget.

A budget is not a magic potion that will automatically solve all of your money problems, but it will help you gain financial awareness. That, in turn, will help facilitate more responsible decisions.

Lots of people think budgeting is overly tedious, and that living within a budget means never indulging in a $6 latte or a pair of designer jeans again. The reality, though, is almost the complete opposite. A well-designed budget may initially take time to create, but once it’s up and running, it shouldn’t take you long to maintain. You’ll then sleep better at night knowing you can comfortably cover all your expenses. And, perhaps most shockingly, a good budget allows for the occasional treat—without the guilt.

Here’s how to create a budget in 6 easy steps:

Step 1: Gather all your financial information

Collect all of your financial documents and receipts for three consecutive months. This includes all account statements, bills, pay stubs, receipts and more. You can save all these documents over the three months, or you might be able to access this information online, especially if you’re a heavy card user who rarely uses cash.

Step 2: Tally up your totals

Divide your documents into expenses and income. Then, list the corresponding numbers on a spreadsheet. As you work through these lists, include occasional and seasonal expenses, dividing these expenditure groups by 12 to spread them evenly throughout the year.

When you have your numbers, take a look at how they match up. In the best-case scenario, your income will exceed your expenses. If the numbers are too close for comfort, or your expenses outweigh your income, you’ll need to trim your spending and/or look for ways to boost your income so you don’t end up deeply in debt. You can also review your fixed expenses to see if there’s any way to bring those values down, such as refinancing your mortgage to a lower rate, switching to cheaper car insurance policy or cutting out a monthly bill you don’t really need.

Step 3: List all your needs

Take a look at how you’ve spent your money in the recorded time and weed out all the actual needs from your list. This will include fixed expenses like mortgage/rent payments, savings, insurance premiums, car payments, minimum loan payments and childcare costs; as well as fluctuating but necessary expenses, like groceries, clothing and other dry goods. To keep it simpler, list your fixed expenses first, followed by your non-fixed expenses.

Separating your needs from your wants can get a bit tricky, and you’ll need to use your common sense. For example, you need to eat, but do you really need to eat organic? If this is an important value to you, the answer may be yes, but if it’s something you’d only prefer if possible, it may be more of a want.

As you list each need, write down its corresponding cost. When you’ve finished creating this list, add up the total.

Step 4: List your wants

Your next step is going to be all about the stuff you love to spend money on but can really live without. Include entertainment costs here, as well as eating out, gifts, expensive hobbies and anything else that costs money, but is not an absolute necessity.

Here too, jot down the monthly cost of each item on your list and tally up the total when you’re done.

Step 5: Assign dollar amounts to your expenses

You’re now ready to do the nitty-gritty work of budgeting. Open up a new spreadsheet and copy your lists of expenses, starting with the fixed-cost needs, then your non fixed-cost needs, and finally listing your wants. Remember to include your occasional and seasonal expenses here as well. Assign a fixed amount to each of these costs and plan to have that amount automatically transferred into a special savings account. This way, when you need to meet that expense, you have the money on hand to cover the cost.

There are several schools of thought when it comes to creating a budget. To keep things simple, we’ve outlined just two of the most popular budgeting methods for you to choose from.

The traditional budget involves assigning a specific dollar amount to each expense category. If your budget allows, simply use the average amount you’ve spent in each category for the last three months to set the cap for that expense. For example, if you spent an average of $600 on groceries, jot down that number near this category in your budget. Continue until every dollar is accounted for and you have enough money in your budget to cover every need, want and occasional expense. If your expenses outweigh your income, you’ll need to trim some expenses for your budget to work.

The 50/30/20 budget is simpler but requires more discipline. Set aside 50 percent of your budget for your needs, 30 percent for your wants, and the remaining 20 percent for savings. If you want to use this kind of budget, divide up your numbers accordingly to see if it can work for you. Does 50 percent of your income cover the total amount you listed for your needs? Is 30 percent enough for your wants? If it can work, this type of budget allows for more individual choices each month and less accounting.

Going forward, be sure to spend only the assigned amounts for each expense category.

Step 6: Review and adjust as necessary

Review your budget each month to see if you’re staying on track. If you consistently overspend in a category, move some numbers around and spend less in another area so you have more money available to meet your needs. Remember: A budget should be freeing, not restrictive. If yours is not working for you, adjust and tweak it until you can stick to it easily.

Your Turn: Do you stick to a strict monthly budget? Share your best budgeting tips with us in the comments.

How to Make Your Career Choice Fit Your Budget

As you prepare for graduation and begin scouting different employment opportunities, woman studying bills for budgetingbe sure to look at the larger picture before you accept a position.

Hopefully, you’ve chosen a career path that will bring you joy and gratification. Equally important, though, is a job that can support your lifestyle choices. While the positions you consider for your first post-college job will likely offer the opportunity for growth, you’ll still need to pay your bills—and make your student loan payments—as soon as you graduate. A job that brings you satisfaction and a pleasant working environment will not last long if the salary it offers causes you to sink into debt.

How do you determine what kind of salary will be large enough to support your desired lifestyle?

To get this information, you’ll need to create a mock monthly budget for your post-college self.

Using a spreadsheet or paper and pen, create two columns, one for expenses and one for actual dollar amounts. In the expense column, list your typical monthly expenses, including housing costs, transportation costs, health insurance, groceries, entertainment costs, clothing costs, dining out, savings, etc. In the dollar column, list the amount of money you expect to pay every month for each expense.

Your budget should look something like this:

Expense – Monthly Cost

Housing $1200
Transportation $300
Health insurance $250
Groceries $350
Student loan payments $350

It will take some research and some hard, honest thinking to come up with these numbers. For housing costs, take a moment to think about where you see yourself settling down after college. You don’t have to know the exact neighborhood you’ll live in, but it’s good to know the city that will work best for you in terms of lifestyle, career path, and family plans. You can narrow this down to a few choices so long as you keep it reasonable. Once you’ve chosen your desired location, research the median rental prices in the area on real estate sites like Zillow and Redfin.

Next, work on transportation costs. If you already own a car, you’ll have an idea of what it costs you each month. Otherwise, spend some time thinking about what kind of car you want to drive. You can find listings on Carfax.com. Include costs like auto insurance, gas, and upkeep, in this category.

Or, if you plan on living somewhere with reliable public transportation, you might choose this route instead. Make a calculation of how much you’ll spend on bus and/or train rides, along with the occasional cab or ride-share ride.

Complete your budget using your best estimates for each category. Once you’ve filled out each expense amount, add up your total and multiply it by 12 to give you the amount of money you’ll need each year for supporting the lifestyle of your choice. (This number will increase with inflation, but since current salaries will likely increase along with the inflation rate, this exercise can still give you an idea of the annual salary you’ll need.)
Now that you have these numbers, you’re ready to go ahead with your job search. When considering possible positions, you don’t have to choose the one that pays the highest salary if there are other things about the job you don’t love. However, it’s best to pursue positions that can actually support you.

Your Turn: Are you choosing your first job for the salary or for other factors? Share your take with us in the comments.

Sources:
http://knsfinancial.com/career-path-choosing/
https://money.usnews.com/money/blogs/outside-voices-careers/2010/12/06/how-to-choose-a-career-thats-best-for-you
https://money.usnews.com/careers
https://www.brazen.com/blog/archive/career-growth/5-questions-that-will-help-you-choose-the-right-career/

7 Ways To Save Money On Camping Costs

Q:  I’m planning a camping trip for the summer, and I’d love to keep the trip as low-cost family around a campfireas possible. How can I cut down on camping costs?

A:  It’s great that you’re looking for ways to trim your vacation expenses. We can help! Read on for seven ways to save on camping costs.

  1. Save on location

Nightly rates for camping sites can cost a pretty penny during peak camping season. But why pay the fee when you can camp for free? You can find a campground where you can pitch your tent or park your RV at no cost, on Freecampsites.net or Campendium.com.

Another great option is to camp at a national forest. You’ll be charged an entrance fee as well as an amenity fee, but you’re free to stay anywhere on these grounds as long as you follow park guidelines. If you’re a frequent camper, consider purchasing a National Parks and Federal Recreational Lands annual pass. For just $80 a year, or $20 for individuals age 62 and older, you’ll have access to more than 2,000 national parks and national wildlife refuges. The pass covers entrance fees, parking fees, amenity fees and more. If you’re currently a member of the U.S. military, you and your dependents are entitled to a free annual pass.

Finally, if your schedule allows, consider mid-week camping. Lots of campgrounds offer lower prices on off-peak days.

  1. Consider “workamping”

If you don’t live near a national park and you’d love a free stay, “workamping” can be a terrific option. Lots of campsites and RV parks are now offering this choice: For a bit of hard work, you’ll be granted free access to the campgrounds. You might even walk away with some extra cash in your pocket!

  1. Rent or borrow camping gear

High-quality camping gear such as tents, sleeping bags, camping stoves and camping clothes can cost a pretty penny. In fact, according to the American Camper Report from Coleman Company, adult campers spent an average of $546 on camping gear in 2016.

You can have your gear and your budget, too, by double-thinking the purchase of brand-new gear. Are you a frequent camper? If not, does it really pay to spend big bucks on specialized equipment you’ll only use once or twice a year? If you have friends who practically live in a tent or RV, ask about borrowing their equipment for your trip. Otherwise, consider renting the gear you need from companies like REI Co-op. If you’d rather have your own equipment, check out sites like Switchback Gear Exchange for gently used camping paraphernalia at terrific prices.

  1. Skip the prepackaged meals

Yes, they might be super-convenient, but they’re also super-expensive. Save a ton on food costs this trip by ditching the prepackaged meals. You can find loads of ideas for easy camping meals you can cook over a fire by doing a quick Google search. Often, all you need is some basic food supplies and a roll of aluminum foil!

  1. Share meal prep

If you always camp as a group, take full advantage by sharing the meal prep. Divide the meals completely, having each family be fully responsible for several meals. Alternatively, you can create a master list of supplies and food and then divide and conquer. This way, only one of you needs to bring small packets of ketchup and a jug of maple syrup, while another one brings the coffee and salt. The packing and meal prep are a whole lot easier when they’re shared!

  1. Pack like you’re being marooned on an island

Don’t set out on your trip until you’ve checked that you’ve packed everything on your list at least three times. It will take a few extra minutes, but it’s worth the time and effort. You don’t want to be forced to pay inflated small-town convenience store prices for forgotten items like bandages or batteries.

To keep it simpler, create a master list of everything you need to bring on a camping trip. Make a digital and physical copy of the list. When you return from your trip, review the list and edit it according to how it all went down. Do you need to bring more paper cups next time? Did you overdo it on the ice? Adjust as necessary. Before your next trip, use the list when packing so that you don’t forget a single item.

  1. Check out free camping activities on your campsite

Many campgrounds feature boat rentals of all kinds, but they can be pricey. Enjoy every minute of your camping trip by exploring walking trails, fishing and bike riding along a forest path. Don’t forget to pack some board games and books for rainy days.

Use these tips when planning your trip and you’ll save big on costs without compromising on the camping experience. Here’s wishing you the camping trip of a lifetime, from all of us here at Destinations Credit Union!  And, if you decide to make camping a way of life, don’t forget that we finance recreational vehicles!

Your Turn: Have some camping hacks that save on costs? Share your best tips with us in the comments!

SOURCES:
http://bargainbabe.com/20-quick-tips-to-save-money-camping/}

https://www.google.com/amp/s/www.thepennyhoarder.com/smart-money/camping-on-a-budget-how-to-save-money-on-your-next-trip/amp/
https://www.google.com/amp/s/www.budgettravel.com/article/save-money-camping/amp
https://axleaddict.com/rvs/CampingForCheapskates

7 Signs You’re Living Beyond Your Means And How To Fix Them

In the age of plastic spending and mobile payments, it’s easier than ever to buy stuff you couple looking at billscan’t pay for right away while supporting a lifestyle you can’t really afford.

Let’s take a look at seven red flags that might mean you’re living beyond your means and the steps you can take to get back on track.

1. You’re carrying a credit card balance from month to month

Credit cards are a great way to earn rewards, pay for emergency purchases when things are extra-tight and build a strong credit history. Unfortunately, though, they also make it far too easy to fall into the spending trap. It’s a lot harder to feel like you’re spending money when all that stands between you and a purchase is a plastic card.

If you have an outstanding balance on one or more credit cards and you’re only paying the minimum payment each month, you can end up carrying this balance for years while paying hundreds of dollars (or more!) in interest. You might also be tempted to make more purchases on this card since you already have an open balance.

The fix:  Try to double down on your monthly payments and/or make one extra payment each month instead of paying just the minimum amount. Stop using your card until the debt is paid off.

2. You stress about paying your bills

No one likes paying bills, but if you’re losing sleep over your bills, you need to take a step back to review your monthly budget and spending habits. Bills should be fixed into your budget and you should be able to pay them easily without any stress or nail-biting involved.

The fix: Take a long look at your monthly budget to find ways at cutting back. Cancel a subscription you never use, trim impulse purchases, start brown-bagging it at work more often or tighten the belt in any other way possible.

3. You can’t save 5% of your monthly income

Financial experts recommend putting 20% of your monthly income into savings, or even more if you can swing it. At the very least, you’ll want to sock away 5% of your monthly take-home pay to fund your retirement and any other expensive purchases or events you might need to pay for in the future. If you can’t possibly do that now, and you’re left with little or no money at the end of the month, you’re living beyond your means. Savings aren’t an extra; they are a necessity that should be a fixed part of every budget.

The fix: Again, you’ll need to trim your expenses and restructure your budget to include a minimum of 5% for savings.

4. You don’t have emergency and rainy-day funds

Unexpected expenses, like a household repair or extra tutoring for your child, can disrupt your monthly budget and really set you back-unless you have some way to pay for them. Ideally, you’ll want to have an emergency fund to cover major unexpected expenses, like a job loss or a medical emergency, and a rainy-day fund for small expenses you can anticipate, like replacing an aging appliance and sending your child to summer camp.

The fix: Start building your funds now by putting away as much as you possibly can each month.

5. Your mortgage payment eats up more than 30% of your monthly income

Most financial experts agree that your monthly mortgage payments should not exceed 30% of your take-home pay (that’s after taxes). Take a few minutes to do the math. If your mortgage is more than 30% of your income, you’re in over your hea

The fix: You have two choices here:

  1. Find ways to boost your income. You can seek a raise or promotion at your current job, freelance for hire or find another side hustle to bring home extra cash.
  2. Scale back your mortgage payments by considering a refinance. [Speak to a home loan counselor at (credit union) to see if this is the right choice for you.] If your mortgage is really crippling your budget, you might want to consider downsizing to a smaller and cheaper place.

6. You lease a car you can’t afford to buy or finance

Leasing lets you live the life of a high-roller without the huge bills. The problem is that many people can’t really afford their leases either. You might be covering your monthly payments, but if you can’t do that while also putting money into savings and meeting your other expenses, your car is too expensive.

Can you afford to pay for or finance your car? If the answer is no, you’re in financial trouble.

The fix: Downgrade your vehicle to one you can actually afford.

7. Your financial decisions are influenced by your friends’ spending habits

Thanks to social media and the hyper-sharing culture it introduced, the pressure to keep up with the Joneses is stronger than ever. If you find yourself making financial decisions-from what kind of footwear to buy to where you vacation-based on your friends’ choices, you’re likely spending more money than you can afford.

The fix: Stop looking over your shoulder and keep your eyes on your own life and your own wallet. If your friends have expensive tastes, try to be the budget-conscious influence in the group. You may just start a new, financially responsible trend!

If you’re in over your head, Destinations Credit Union can help! Stop by today. Our HOPE Inside Financial Wellbeing Counselor will be happy to help.

Your Turn: What’s your personal red flag that your spending has gotten out of control? Share it with us in the comments.

SOURCES:
https://www.google.com/amp/s/www.hermoney.com/invest/financial-planning/warning-signs-of-living-beyond-your-means/amp/

https://www.investopedia.com/articles/pf/08/in-over-your-head.asp
https://rockstarfinance.com/7-signs-that-you-might-be-living-well-beyond-your-means/

Should I Sign Up For Budget Billing?

Q: My steep utility bills in the winter and summer months always throw my budget for awoman looking at bill loop. Should I sign up for budget billing?

A: Budget billing can simplify your utility payments by making each month the same fixed amount, but it’s important to understand all the facets before signing up.

Read on for all your questions on budget billing, answered.

What is budget billing?

When you sign up for budget billing, the utility company will add up the total amount you paid for their service over the last year, include a small percentage for inflation and then divide that number by 12. This value becomes the amount due for your monthly bill. This way, you pay the same amount of money for your gas or electric bill whether you’ve had freezing weather that month or you’ve had the central air running full blast for days.

What happens if I use more or less energy than the company estimated?

If your energy usage exceeds the company’s estimate, you’ll need to pay the difference at the end of the year.

If you’re careful about conserving energy and use less this year than was estimated, most companies will give you a credit toward next year’s bills. Some will offer you a lower monthly budget based on your most recent usage for next year, and others will actually issue you a refund at the end of the 12 months (think, no amount due for the next 1-2 months!).

Do I have to pay for this service?

Fees for budget billing vary by company, so be sure to read the contract carefully before you sign up for this service. Some companies offer this service free of charge. Many will collect a small fee for budget billing, which shouldn’t be enough to deter you from signing up. However, if a company is asking for $3 or more a month just to work out a budget for you, it’s probably not worth the price.

What are some pros of budget billing?

The most obvious benefit of budget billing is a fixed monthly utility bill. Without that, you’re facing super-high bills during months of extreme weather. And that can make it difficult to stick to your monthly budget. The more fixed expenses you have each month, the easier it is to work out a budget and actually keep it.

Budget billing also helps offset the high costs of summer and winter bills. Lots of people, such as those who live in places that see extreme weather, can find it difficult to pay the doubled or tripled bills these times of year. Averaging the energy costs of the entire year and spreading it over 12 months makes it a lot more manageable.

What are some cons of budget billing?

Many people who sign up for budget billing end up using a lot more energy than they did when they paid for each month’s actual energy usage. When you know your bill will be the same no matter how high you crank that thermostat, it’s harder to be disciplined enough to keep it down. Of course, this means a higher bill at the end of the year.

Also, while budget billing may make it easier to pay your monthly bills, it can be hard to cover the balloon payment at the end of the year.

Is there a way to create a budget-billing plan myself?

If you don’t want the hassle, fees or restrictions of a budgeting plan, you can easily do it on your own.

It’s best to start your own budget during off-peak seasons, like autumn or spring, when bills are typically lower. To find your magic monthly number, simply total up your utility bills of the last year, add .03% for inflation and divide the amount by 12. Work this fixed amount into your monthly budget. During the cheaper months, you’ll need to set aside the extra money to cover your higher bills during the more expensive times of year.

If your numbers are right and you’re mindful about your energy usage, your budget can work perfectly and serve you well throughout the year. If you’re super-careful, you may even end up with some extra cash at year’s end.

How can I save on my energy bills?

Whether you choose to sign up for budget billing, work out your own plan or deal with fluctuating bills each month, it’s always a good idea to cut down on your energy usage.

Here are some tips to get you started:

  • Only use LED bulbs. You’ll need to spend more on each bulb when you make the change, but the payoff is 75% less energy usage than a traditional bulb and a lifespan that is 25 times longer than their counterparts.
  • Get rid of air leaks. Don’t let the cold air into your home! Seal all drafty areas and hang curtains on your windows for an extra layer of warmth.
  • Adjust your thermostat. Changing your “comfortable” thermostat number by just a couple degrees can save you 1-3% off your heating and cooling bills each month. Dress warmly in the winter instead of turning the thermostat higher. During the summer, use your outdoor grill on blazing hot days to keep the house a little cooler without turning down the A/C.
  • Keep your units well-maintained. If your HVAC system is not functioning optimally, you can be paying more money just to keep it going. Replace your filters as necessary, keep your units clean and consider calling in an expert at the start of each season to determine if everything is in proper working order.

Don’t let soaring utility bills get you down this winter! Consider signing up for budget billing or creating a billing budget on your own and do all you can to lower those bills.

Your Turn: Are you signed up for budget billing with your utilities? How is it working out for you? Tell us all about it in the comments, below.

SOURCES:
https://clark.com/personal-finance-credit/should-you-use-budget-billing-for-your-utilities/

https://www.google.com/amp/s/m.huffpost.com/us/entry/9578004/amp
https://www.thebalance.com/what-is-budget-billing-2385943

Don’t Drink Your Wallet Dry!

It’s hot out, so make sure you’re drinking up! In fact, the Food and Drug AdministrationMan pouring water from filter pitcher (FDA) recommends that adult males drink at least 11 cups of fluid a day and females drink 9.

What’s in your glass today? You might be a true coffee-crazy, cola-loving American, but water is your best beverage choice for your health and for your money.

However, did you know that bottled water may be draining your wallet dry?

It’s true. Many people pay huge amounts of money for bottled water without even realizing how inflated the price is. So, let’s take a look at the costs of bottled water when compared to ordinary tap water.

Although service charges, state taxes, and other fees may vary, 1,000 gallons of tap water will typically cost you about $11. With that amount of water, you could fill approximately 7,570 bottles of water at 16.9 fluid ounces each, with each bottle costing you less than a penny. It’s $0.0014 to be exact!

Assuming you drink three 20-oz bottles of water a day, you’ll need 1,095 bottles a year. If you’d fill those bottles with tap water, it’ll cost you just $1.53 a year. This means that, as soon as you’ve bought a day’s worth of bottled water, you’ve already spent nearly double of what an entire year’s worth of tap-water drinking would cost you!

Is that water starting to lose its taste yet?

This doesn’t mean you need to start chugging down awful-tasting tap water just to save on some costs. Luckily for you, there are many ways to get sweet-tasting water without busting your budget.

Here are some options you may consider:

DIY chilling

If you love the taste and convenience of bottled water, you can save big just by buying your bottles in packs of 24 and refrigerating them at home instead of buying them cold while on the go. Instead of $1 a bottle, you’ll pay just $0.16. If you drink three bottles a day, you’ll pay $175 a year. It’s still a lot more expensive than tap water, but it’s also a lot less than paying for cold bottled water.

If you’re out of the house for a while each day and you like your water freezing cold, you can freeze the bottles you’ll be using later in the day or invest in an insulated bag that keeps beverages cold.

Water coolers

They’re not just for catching up on the latest office gossip; water coolers can help you fill all your water needs at home. Of course, you’ll need to spring for the machine itself, but after that one-time cost ($170 on average), you’ll only be paying for refills.

Prices vary by companies, but a 5-gallon refill of spring or purified water will run you approximately $7. Stockpile your refills in the garage and order multiple bottles at once, and you can get discounts as steep as just $5 a bottle. That’s only $1 a gallon, for cold, delicious-tasting water. With each gallon filling 7.5 water bottles, you’re getting more than 37 bottles worth of bottled water for the price of 5 purchased bottles!

Pitcher filters

These handy contraptions snap right onto your pitcher of water and filter it on the spot. You can also purchase a pitcher with the filter already attached. Either way, you’ll have your bottled water needs met with just a one-time purchase that averages only $20.

The downside here is the minimal amount of water a pitcher filter can purify for you in one shot. If you drink large amounts of water or have lots of thirsty people around, this might not be the best option for you. If your water needs are modest, though, a pitcher filter can be a great way for you to get sweet-tasting water inexpensively.

Water treatment system

If you want to be able to get purified water straight from the tap, this is the way to go. Having an indoor water treatment system installed in your faucet will filter your water before you even turn on the faucet. The obvious benefits here are easy access to unlimited amounts of filtered water whenever you need it, plus purified water to cook with and to use for washing your dishes.

These filters run about $250 to $400 and usually work with one faucet only. Some companies will actually install a purified water tap alongside your existing faucet instead of filtering it. There are also companies that offer a purification system for all the water in the house, but those will costs several thousands of dollars to install.

Take the tap challenge!

There are many ways to drink up, but tap water still holds its place as the cheapest option. Are you up for a challenge? If it’s a safe option in your area, try drinking only tap water for a month. You’ll save huge on drinking water costs and it may just become a lifelong habit!

Here are some ways to make tap water more palatable:

  • Slice citrus fruits and let them float in your pitcher to give your water a tasty zing.
  • Soak some pineapple chunks in your water for several hours and remove before serving.
  • Invest in a SodaStream to add some sparkle to your glass.
  • Freeze pureed blueberries and strawberries and use them as ice cubes.
  • Add some Crystal Light or another calorie-free flavoring mix.
  • Steep fresh mint leaves in your pitcher before drinking.

Don’t let your hard-earned money get washed down the drain. Drink wisely this summer and save big!

Your Turn: How do you hydrate? Share your own cost-effective water sources with us in the comments!

SOURCES:
https://20somethingfinance.com/cost-savings-drinking-water/

https://www.google.com/amp/s/www.thepennyhoarder.com/food/bottled-water-cost/amp/
https://www.shape.com/healthy-eating/healthy-drinks/20-tips-make-drinking-water-taste-better
http://all-about-water-filters.com/top-easiest-diy-water-filters-you-can-make-at-home/
https://www.deerparkdelivery.com/_mobilecmsviewer.cfm?id=3
https://www.fixr.com/costs/water-purification-system

How To Use The Money Envelope System

If you’re like many of us, you’ve been trying to stick to a budget for a while, but by the man putting money in envelopetime each month is over, you’ve busted your budget – again.

Because of this recurring pattern, you’re probably wondering if there’s a better way. Fortunately, the answer is yes!

The money envelope system has been around for years, and it’s an incredibly motivating and powerful way to keep spending in check.

Destinations Credit Union is proud to bring you this handy guide to understanding and implementing the money envelope system in your household.

Note: If you already have a workable monthly budget, you can skip to step 2.

1. Determine your monthly income and expenses

For the next few months, track all of your expenses. Hold onto every receipt or record each purchase you make, being sure to indicate which category of expense it falls under. Hold onto every pay stub, too. When a three-month period has passed, you’ll sit down to figure out exactly how much discretionary income you’re left with each month. This will not include fixed amounts, like insurance premiums, mortgage payments, savings and investments.

2. Create a budget for every expense category

Now, divide your discretionary income into different categories. The categories you need and the amounts you’ll set aside for each will depend on your individual lifestyle and habits, but you’ll likely need categories for food, gas, entertainment, transportation and clothing costs.

Review the way you’ve been spending your money in the last few months for an idea of how much you’ll need to set aside for each category. If you see you’ve been overspending in a certain area, this is a great time to resolve to cut back.

3. Create your envelopes

This is where the money envelope system differs from a regular budget. Instead of having money set aside for each category in your head, or even scribbled on a paper somewhere, take one envelope for each expense category and mark it clearly. Now, put the exact amount of cash for this month in the envelope for each category.

Do this with every expense category, and voila! You’ve created your new budgeting system!

4. Stick to your budget

As in any budget, following through on a plan is the hardest part. With the envelope system though, it’s a whole lot easier.

Say you need to make a grocery run. You’ll peek inside your “groceries” envelope, take note of how much cash is inside, and figure out how much you can afford to spend. Take that amount of money to the store with you, and only use that cash. No cheating! There’s absolutely no card-swiping allowed and no sneaking money from another envelope to beef up a skimpy cash supply in another. You need to work with what you have.

Instead of walking out of the store with a dozen items in hand that weren’t on your list, you’ll be forced to stick to your budget. And, if you find yourself running low on grocery money one month, you’ll have to make do. You can take the pantry challenge and dream up a menu created around the ingredients you have on hand, or you can shop the sales and cook according to what’s cheapest this week.

Do whatever it takes – but no cheating!

5. Reward yourself!

If you find yourself with extra money in any category at the end of the month, it’s OK to celebrate. Dave Ramsey recommends rewarding yourself with a dinner out or an expensive drink. Alternatively, you can treat that money as “rollover cash” and use it to enjoy a roomier budget next month.

Tips and tricks

Here are some variations and different approaches to this ingenious system:

  • Use a small accordion file folder instead of individual envelopes. It’ll be easier to keep track of your envelopes when they’re all in one place, and it’s sturdier than paper envelopes.
  • Go cashless! Love the idea but hate the thought of only using cash? You can still use the envelope system with some minor adjustments. There are apps designed to create virtual envelopes for you to use, such as Mvelopes. You can also use a cost-free budgeting app that allows you to divide and track your spending into different categories, such as Mint, Quicken and Monefy.
  • Trim your fixed expenses. If you’re finding it difficult to stick to your self-created budget, try to cut back on your non-discretionary spending. Search for a cheaper auto insurance plan. Ditch your cable. Find ways to trim your electric bill and gas expenses. Use the money you save to add to the envelopes that never seem to have enough to get you through the month.
  • Create an emergency envelope. Set aside $20 or $50 to use in case another envelope runs out of money.
  • Use Destinations Credit Union “You Name It” accounts as your envelope for larger expenses, like emergency savings, gift-giving or vacations.

Congratulations! You’ve got the money envelope system down pat! Here’s hoping it helps you on your journey toward financial wellness.

Your Turn: Have you tried the money envelope system? Has it worked for you? Why, or why not?

SOURCES:
https://www.moneycrashers.com/envelope-budgeting-system/  

https://www.daveramsey.com/blog/envelope-system-explained  
https://www.thebalance.com/how-to-budget-using-the-envelope-system-1389001  
https://www.pennypinchinmom.com/cashless-cash-envelope-system/  

Financial Preparation For 2018

2018 is almost here. Are you ready?

Clock nearing midnight

New year clock on abstract background

Remember the Boy Scout motto: Be prepared! A brand-new year, always ripe with resolutions, is the perfect time to reassess your financial attitude, improve, and vow to do more.

“It’s a time of planning for going forward,” shares Sallie Krawcheck, co-founder of Ellevest. “We see a lot of people, often over the Christmas holiday, but certainly in the new year, taking stock of where they are on their personal finances and investments.”

Have you taken any steps to prepare for the financial realities of the coming year?

Here are some tips to get you started.

Tune your budget

It’s a great idea to begin the new year with a plan. A budget is just that-a plan that starts with the income you expect, along with your fixed expenses, such as rent or mortgage costs, homeowners association fees, insurance, utilities and transportation costs. The plan also incorporates your savings goals.

Then, the money remaining is designated for your other expenses. A realistic budget will help you set your financial goals and remind you to stick to them. These last few days in December, as the year draws to a close, is the perfect time to assess last year’s budget or to create a new one if you don’t yet have one in place.

Reviewing where you spent last year’s money will help you make better choices in 2018. If you did not save money for retirement, for example, this can be a new budget item.

While planning for the coming year, make sure to include a method for tracking your spending. You can do this on a spreadsheet or you can simply tag items in your financial account.

Even with a solid strategy in place, there will always be surprises along the way. Losing a job, a leaking roof or an illness can throw off your entire plan. Be sure to build an emergency fund into your budget.

Plan ahead to meet your goals

Next, consider how you will accomplish your goals. You’ll have short-term goals, such as purchasing a new car or home, as well as long-term goals, such as saving for retirement. Each set of goals requires a different kind of planning and saving.

Financial planner, Rachel Rabinovich, recommends setting up a separate savings account for each goal. This way, you can easily track your progress.

Experts suggest working backwards to determine how much you need to save for a specific goal. For instance, if you dream of taking an expensive vacation two years from now, determine the total cost of the vacation and then establish a reasonable time-frame and the amount you’ll need to save each month to reach that goal. Make sure the amount you plan on setting aside each month is doable, or you may just have to move your goal over by six months or more.

Spend mindfully

You can also make your financial future more secure by identifying the difference between your needs and wants. Needs are necessary for your survival, and include items like food and shelter. Wants are things that are not necessary but you would like-such as a luxury car or European vacation.

First, tend to your needs. Then, based on what’s left to work with, consider your wants. This might sound obvious, but for many of us, the line between wants and needs is often blurred. This can lead to awfully tight financial situations, even prompting us to “borrow from Peter to pay Paul.” By clearly differentiating between what you want and what you need, you can avoid this outcome in 2018.

Maximize retirement contributions

Retirement plan contributions can be a valuable source of savings, especially if you have the option of employer-matched funds. If you do, be sure to take advantage of them!

Also, check with your HR contact and your accountant to make sure you are contributing the optimal amount to your 401K and IRA. For the coming year, you can contribute $5,500 to a Roth or traditional IRA, or $6,500 if you are making “catch-up” contributions.

Check your flexible savings account (FSA)

If you have unspent money in your FSA, now is the time to use it. These pre-tax dollars often have to be spent before the end of the year. Do you need a new pair of eyeglasses? Are your teeth in desperate need of a cleaning or repair? This might be a good time to spend that money on self-care and other needs you’ve been pushing off. You don’t want to lose this money, so be sure to use it if you can.

Put the brakes on holiday spending

Avoid going overboard on your holiday spending. Think three times before you pull out your credit card. Going over budget now can mean spending the first few months of 2018 playing catch-up with your credit card bills. Spend less, and start the year off with a clean slate!

Your Turn: What are some of the things you’re doing to prepare for 2018? Share them with us in the comments!

SOURCES:
https://www.cnbc.com/2017/11/20/ceo-sallie-krawcheck-3-ways-to-get-your-finances-in-order-before-2018.html

https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/2017-12-11/5-steps-to-building-your-2018-budget 
https://www.investopedia.com/articles/personal-finance/111813/five-rules-improve-your-financial-health.asp 
https://www.forbes.com/sites/markavallone/2017/10/01/10-quick-year-end-financial-planning-tips/#205a7f9b3a59 
https://www.cnbc.com/2017/11/20/ceo-sallie-krawcheck-3-ways-to-get-your-finances-in-order-before-2018.html

Do Your Kids Have Virtual Shopping Smarts?

Did you know that 73% of millennials questioned in a Bazaar Voice survey do all theirshopping kids shopping on their smartphones? It’s not surprising. The world of commerce is constantly becoming more digitized as retailers focus on improving their online presence to cater to cyberspace shoppers.

Online shopping has its downsides, though, mainly in the form of surprises when the item arrives, costly shipping expenses and impulse buys that are made too easily.

Fortunately, it has its upsides, too. Comparing prices between stores is a lot simpler when all it takes is clicking through a few sites instead of traipsing all over town. Couponing is now also just a matter of seconds, with no need for tedious clipping and saving.

Teach your kids to make the best of online shopping with this fun, educational activity. All you need is a computer!

Sit down with your child to brief them on the ups and downs of online shopping. Talk about comparing prices, checking for discount codes and being wary of overspending or buying items of inferior quality. Teach them about reading reviews and looking for reputable companies. Mention comparison-shopping engines like Google, and others they may have never used, like Nextag, Price Grabber, Shopping.com and Shopzilla.

When they have the information down pat, tell them they will now be tasked with buying an item online! The item should be something popular and one they’re interested in.

Give your child a debit or credit card, a fixed budget for the item and the following instructions:

The goal is to purchase the lowest-priced, yet best-made product. This will earn a minimum of 100 points. They will earn points for each part of the process, using the following guidelines:

  1. The purchase must be of decent quality. They can earn 25 points for this category.
  2. Shipping costs should not constitute more than 10% of the object’s price. The lower the shipping costs, the more they earn for this category, with free shipping earning the full 15 points.
  3. They must search for discount codes and coupons before making the purchase. This can be done by checking coupon sites like Retailmenot and Couponcabin, or by signing up for a store’s emails and earning a promotional discount. 5 points will be rewarded for every discount search/website visited in search of a coupon code. Actually finding and using a discount can earn them 15 points.
  4. If your child is ordering from eBay or another site with multiple sellers, they should be careful to only make purchases from sellers with excellent ratings. Buying from a badly rated seller can cost them 5 points and using a high-rated seller can earn them 5 points.
  5. Price is of utmost importance. If their object is of decent quality and very well-priced, they can earn up to 40 points. 5 points will be given for every search for a cheaper product.
  6. Points will be taken off for any random ad-clicks, failure to do substantial price-checks and comparisons, and for ignoring discount offers.
  7. Sit back and watch, being careful not to offer any advice as your child makes a purchase.
  8. Tally up the score and explain the points you gave, congratulating your child on their online shopping skills.

Your child is now cyberspace-savvy!

Your Turn: How do you teach your kids to avoid the pitfalls and make the most out of online shopping? Share your wisdom with us in the comments!

Newlyweds: Don’t Let Financial Stress Take The Cake

There are so many things to think about when you’re just married, or about to be, and no Wedding ceremonyone would rate finances as the most exciting of them. In fact, studies show that money (not relatives) is the number one reason couples argue. Those financial arguments (again, not relatives) are one of the top predictors of divorce.

So, how can you avoid becoming a statistic? Here are some tips.

Talk To Each Other

A poll by the National Foundation for Credit Counseling found that 68% of engaged couples held a negative attitude about discussing money. 45% considered it “necessary but awkward,” while 7% said it was “likely to lead to a fight.” Five percent said they thought it would cause them to call off the wedding.

The result? Couples just don’t talk about finances. A Fidelity survey said more than one-third don’t even know their partner’s salary. The irony is that 72% of those same couples said they communicate “very well” about financial matters.

It’s not surprising, when you think about it. What’s romantic or sexy about debt, budgets, taxes, wills, and the like? But, while there isn’t a plan to keep every newly married couple happy, experts agree: Don’t wait to talk about money.

Taxes, for example, are boring (and scary), but they may be important right now. If you and your spouse are employed, the “marriage penalty” may force you to pay more taxes when married than while you were single. So, think about marrying in January rather than December. But if one spouse earns most of the money, you’ll enjoy a “marriage bonus” and pay less than two singles; a December wedding might be wise in that scenario.

Speaking about money now is definitely important, but so is how. A 2004 study by SmartMoney found that more than 70% of couples talk about money at least weekly. So what’s the problem? “Most of us don’t know how to talk about money,” says Mary Claire Allvine, a certified financial planner. “People tend to be emotional and reactive, not strategic.”

Whether you talk about money weekly, monthly or on some other schedule, what matters is that you agree on a system and stay open to changing it.

Get Started

Taking the first step can be difficult, so start off easy, with questions like “What’s your first money memory?” or “How did you spend your allowance?” Then move on to some of these:

  • “Are you a spender or a saver?” – If one of you is a saver and the other a spender, create a budget that considers both styles. Studies show that men and women spend differently. Women often take care of daily expenses (groceries, utilities, clothes) while men make larger purchases, such as TVs, cars or computers. The amounts might be the same, but the perceptions are very different. About 36% of partners don’t talk to each other about big purchases, and that’s a recipe for disaster.
  • “Are you in debt?” – A TD Ameritrade survey found that 38% of couples were “only somewhat” or “not at all” aware   of their partner’s debts. When you get married, your spouse’s debt doesn’t automatically becomes yours, but what he or she owes will affect both your choices. For instance, heavy credit card debt could make it more difficult to buy a home. Make reducing debt a priority.
  • “What are your financial goals?” or “Where do you want to be five or twenty years from now?” – People who identify specific goals make faster progress toward savings and investing targets. But first, you need to agree on what those targets are: buying a home, starting a family, being debt-free? List your individual goals, then share them with each other and make a joint plan.

Know what’s important to each of you. What do you value more, things you can keep or experiences to remember?       Maybe one of you wants to buy a house while the other thinks saving for retirement is essential. Get these things out in the open early.

Trust Each Other

A recent Money survey revealed that couples who trust their partner with finances feel more secure, argue less, and have more fulfilling sex lives. That level of trust, though, isn’t common among newlyweds. “We’re intimate with our partners in so many ways before marriage, and yet money remains off the table,” says Paula Levy, a marriage and family therapist.

Be honest. If you made a purchase you shouldn’t have, own up to it. Some 40% of men and women confess they’ve lied to their spouse about the price of something they bought, and lying about money can have huge repercussions.
Support each other. Retreating doesn’t help, and neither does finger-pointing. Work together to come up with a game plan.

You’re Still Individuals

Celebrate the differences. If your partner is a bargain-hunter, put him in charge of the spending while you invest the savings. And decide on a monthly amount each of you can spend, no questions asked. The average amount couples say this should be, according to Money, is $150.

There are pros and cons to opening a joint bank account. SmartMoney found that 64% of couples put all of their money in joint accounts, while 14% kept everything in separate accounts. For many newlyweds, the ideal choice may be both: yours, mine, and our accounts. Once you’ve determined shared living expenses, both of you can contribute your portion of those costs to the joint account based on your share of household income.

Ask For Help

If you and your spouse find money conversations tough, you might want to bring in a financial planner or other professional. Your credit union can help – that’s why they’re there. Take steps now to ensure that money won’t put rocks on your path to wedded bliss.

SOURCES:
http://time.com/money/4776640/money-tips-married-couples/
http://www.moneycrashers.com/money-management-newly-married-couples/
http://www.oprah.com/omagazine/Personal-Finance-for-Couples
https://www.moneymanagement.org/Budgeting-Tools/Credit-Articles/Love-and-Money/Ten-questions-to-consider-before-you-commit.aspx
http://www.huffingtonpost.com/2013/06/05/financial-advice_n_3391292.html
https://www.thespruce.com/financial-advice-for-married-couples-2302874
http://www.wife.org/love-money-25-financial-tips-for-couples.htm