Next week starts Spring Break for my kids.  One full week of no school and if we're lucky maybe a trip for a night or two a few hours away. What to do with all that free time so there is no blood shed by the following Monday? Here is some ideas that I will be implementing during next week. Keeping my fingers crossed the kids will be as excited about them as I am.

• Movie Day:  With Netflix, Hulu, and Redbox there is no excuse not to enjoy a day filled with nothing but PJs, popcorn and movies. If you want to get out to see a movie, check to see if there are any dollar theaters in your area or any Spring Break specials.

• Game Day:  Break out the board games  and deck of cards. Have a friendly marathon and competition with the winner either getting to pick what's for supper or the next day's frugal activity.

• Craft Day: This one will require lots of glue, markers, Popsicle sticks, fuzzy pom poms, googly eyes, old t-shirts, clay, etc.  All of which can be purchased at a Dollar Store. Let your kids' creative juices run wild for the day. Display their artwork through the rest of Spring Break for all to see.

• Park/Museum Day: Spend a day at the park if weather permits. Have a picnic lunch, kick back and relax while the kids burn off some energy playing and exploring. If the weather is yucky take the fun inside to either an inside play area or check out your local museums.

• Cooking Day: Let each kid pick out a recipe or two and spend the day baking.  Great teaching moment as well for smaller ones to learn fractions and kitchen safety.

• Water Day: If it's nice weather, spend the day running through sprinkler and having water balloon fights.

• Day Trips: If your budget permits, check out some of the neat attractions 2-3 hours from your home.  You might be surprised what you will find.

I hope that at least some of the ideas can save someone their sanity during the Spring Break vacation.

Brought to you by: Lifeway Personal Financial Coaching

No matter what a financial guru you are, these mistakes can happen to anyone. I even have to watch falling prey to a couple of them still.

1. Impulse Buying: We all have done it from the candy bar at the check out counter to even a car (yes that's why I drive a Fuchsia Challenger). The best way to keep this from happening is to make a list when you go shopping, then make yourself a promise to stick to the list.  Some of you may even need a shopping buddy (and I'm not talking about the kind that will tell you how cute you look in that sweater that's on sale). Take along a partner that will help you keep your shopping in check.  Still can't do it? Then stay out of the problem store and either shop somewhere else or enlist someone to do the shopping for you. If you are using the cash envelope system then just put enough cash in the envelope to cover the needed items and leave your debit cards & checkbook at home.
2. Not Doing Research: When you make big purchases, you should always research the product before you buy it. I'm not talking about walking around the showroom floor looking at the other items on display, but rather in depth research on the computer, books, magazines, friends, etc. Even though my Challenger was an impulse buy, I had actually been researching them for a couple of years.  It just happened that the dealer got a rare color in I had been dreaming of owning and before I knew it, I was driving it off of the lot.
3. Going into debt: When you have to go into debt to purchase an item (house excluded) then chances are you probably don't need the item.  If it's something you do need, then that's a perfect example of why you should have an emergency fund in place. We live in a society of "hurry up and have it". Most of people's money problems could be lessened if they would practice a little self control (me included).
4. Not Having A Plan: When you don't have a plan, a budget, you have no idea how much money you have, how much you need, or how much you've spent.  When you have a plan, then you know where you were, where you are, and where you need to be. A budget will tell you where you need to cut back or spend more. It will show you where your problems areas are and where you are doing good. If you don't already do a budget every month, you need to start.  Visit me over at Lifeway Personal Financial Coaching and I can show you how.
5. Cosigning On A Loan: Think about this for a minute.  If the bank doesn't think that this person is worthy of the loan on their own, it's because they don't think they will get their money. What makes you think they will pay if you cosign for them? Because it is your child? Your parents? If anything, that will make them even more likely to default and leave you holding the bag for the payments. By cosigning you are telling the lender when (not if) this person doesn't pay on the loan, you will pay off the loan for them. Do you really want another bill to pay?
6. Not Having an EF: If you don't have an emergency fund then you need to start one NOW!!  Ready, Set, Go!!!!  Almost all debt for middle class America could be eliminated with just a simple $1000-2000 emergency fund. This would cover most car repairs, most household repairs, medical emergencies, etc. I'm not talking about a total overhaul of the engine, a new roof, or a heart transplant.  I'm talking about every day stuff like, the fuel pump, water heater, or broken arm. Think about how many times you've laid plastic down to pay for these types of items and how long it took you to pay it off.  I've used my EF many times.  If I have to use it, I stop all debt repayment until it's built back up again and then restart debt reduction.  Doesn't have to be anything fancy.  Even hiding $1000 somewhere in your house will work......so long as you don't consider the pizza delivery an emergency!!

There ya go! Are you guilty of any of these? If so, just recognizing you need to work in that area is a major step. Think about what action steps are needed in order for you to correct the problems and then just start doing it. Don't expect to be perfect all the time because nobody is, but if you slip up pick yourself up and start at it again!



Brought to you by Lifeway Personal Financial Coaching

Nothing makes a house feel like a home more than putting your personal touch on it.  I was so excited when we purchased a brand new home last fall because it gave me a chance to put our mark on it right from the start.  The challenge? Trying to do it without going into debt or emptying out our bank account.  You see, we had a 3000+ sq ft modular home placed on an acre of land that was a mess (putting it kindly) and had to be cleared first.

We still have major landscaping to do, but that's all in time & with cash.  We will do the majority of the work ourselves.

 How I was able to decorate stylishly and keep it cheap while we also had the costs of cleaning up the land?

We moved from a 1400 sq ft home to one that was over 3000 sq ft PLUS we were blending our families together by having my husband's three kids come live with us as well.  Can you say "freaking out"?

I had to take what I already had and make do or update but I also had to find new furniture as well.  I put my Sherlock Holmes attire on and set to work.

Here is the living room before:

Remember when everyone paid with cash and very few had credit cards?  Me neither. My parents actually paid cash for everything & not once did I ever see them use a credit card until after I graduated high school.  Sure they had the mandatory car & home loan, but other than that; it was cash.


In today's society it's the norm to pay with plastic. Since 2008 more people have started paying closer attention to their finances and spending habits. Unfortunately, most people are still spending more than they are bringing home and those pesky plastic cards are most of the problem.


It's not entirely the credit cards that are at fault, but debit cards can be just as bad for some people.  It's been proven that when you swipe plastic at the checkout, your brain doesn't register the transaction.  In other words, it doesn't hurt to spend money.  On the contrary, you get a high from it.  A feeling of power.  A feeling that you are special.  That is until you get the overdraft notice in the mail.  How special are ya feeling now?



This is why for those who are just starting out taking control of their finances, I suggest using the cash envelope system. Want a real feeling of power and control??  Try handing the cashier cash for your purchase. That right.  Just plop down those greenbacks and enjoy the feeling of power that you have cash to pay for your purchase.  Not only do you know you have the money for the purchase, but so does everyone else standing close to you. Here are some pointers to using a cash envelope system.

Budget:

“Budget” can be a four-letter word for most people, but a budget is really nothing more than deciding  how you’ll spend your income before you actually spend a dime of it. If you’re not sure how much you spend in each budget category, track your expenses for a month and get an idea of the amount you'll need. 

Choose Your Categories:

From your budget, go through and decide what you can pay cash for.  The most common categories are: grocery, gas, personal care, clothing, entertainment, blow money, birthday & Christmas,etc.

These categories can vary and can be personalized to your families needs.  Don't worry about setting up envelopes for bills you normally mail in or pay online.  We are only worried about items that you could potentially overspend on if you use plastic.

Prepare Your Envelopes:

You've got your budget and decided on your envelope categories, now take out some regular paper envelopes and label one envelope per category. At the beginning of the month (or your pay period), withdraw your budgeted cash from the bank and separate it into the appropriate envelopes (i.e. $250 in the “gas” envelope).

As you get the hang of the envelope system, there are some really cool wallets that have envelopes in them.  One such wallet is from Dave Ramsey.  This is the one I use.  Very stylish plus has a place for your checkbook and you can order envelope refills. You can view them here.

Use Your Envelopes

Going shopping? Better take your envelope. Forgot your envelope? Better drive back home!

Whenever you spend money from one of your envelope categories, use the money from that envelope and replace it with your receipt. This will help you keep track of where your money has gone for the month.

Once It’s Gone…It’s Gone

Once you’ve spent all the money in your envelope, that's it.....you're done...no more....don't even think about it. It’s very tempting to pull out your debit card and keep right on spending. Make up your mind beforehand that once you’ve spent all the money in an envelope, you can’t spend any more money in that category until next month. That’s what makes the whole system work. It forces you to follow your budget.

This is why it's important to plan your spending, especially on groceries and gas. It really sucks to have a week left in the month and need groceries, but no more cash in the envelope.  If this happens, it means you probably need to go back and rethink the amount of money you need in that envelope.  It also means that money is gonna have to come out of another category.  You have to BUDGET.  You need more in one category means another category gets less.

(Something our government can't seem to grasp!)

Give It Time

It will take a few months to get your envelope system down. Don’t give up after a month or two if it’s still not working just right. You’ll get the hang of it and it will be so worth it once you see your debt go down and your go up…not to mention the peace of mind you’ll experience knowing you are controlling your money!



Brought to by Lifeway Personal Financial Coaching.

I started cleaning up my desk this morning and as I was organizing everything into piles (yes I'm a pile person), I realized I had TONS of debit card receipts, invoices, my tax documents, etc just sprawling all over my desk.  It was like attack of the Blob, but with paper and tons of numbers!

In deciding what to keep and what to shred, I did some research. I figured with Spring Cleaning just around the corner, what better time to clean up your financial pile (or drawer......you know you have one or the other).

(Remember whatever papers you get rid of be sure to shred them and don't just throw them in the trash.  That's a sure fire invitation for identity theft!!)

This is what I discovered (taken from Suze Orman site):

"Keep till warranty expires or can no longer return or exchange

• Sales Receipts (Unless needed for tax purposes and then keep for 3 years)

What to keep for 1 month

• ATM Printouts (When you balance your checkbook each month throw out the ATM receipts)

What to keep for 1 year

• Paycheck Stubs (You can get rid of once you have compared to your W2 & annual social security statement)
• Utility Bills (You can throw out after one year, unless you're using these as a deduction like a home office --then you need to keep them for 3 years after you've filed that tax return)
• Cancelled Checks (Unless needed for tax purposes and then you need to keep for 3 years)
• Credit Card Receipts (Unless needed for tax purposes and then you need to keep for 3 years)
• Bank Statements (Unless needed for tax purposes and then you need to keep for 3 years)
• Quarterly Investment Statements (Hold on to until you get your annual statement)

What to keep for 3 years

• Income Tax Returns (Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. If you omit 25% of your gross income that goes up to 6 years and if you don't file a tax return at all, there is no statute of limitations.)
• Medical Bills and Cancelled Insurance Policies
• Records of Selling a House (Documentation for Capital Gains Tax)
• Records of Selling a Stock (Documentation for Capital Gains Tax)
• Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return (Keep 3 years from the date the return was filed or 2 years from the date the tax was paid -- which ever is later)
  
• Annual Investment Statement (Hold onto 3 years after you sell your investment.)

What to keep for 7 years

• Records of Satisfied Loans

What to hold while active

• Contracts
• Insurance Documents
• Stock Certificates
• Property Records
• Stock Records
• Records of Pensions and Retirement Plans
• Property Tax Records Disputed Bills (Keep the bill until the dispute is resolved)
• Home Improvement Records (Hold for at least 3 years after the due date for the tax return that includes the income or loss on the asset when it's sold)

Keep Forever

• Marriage Licenses
• Birth Certificates
• Wills
• Adoption Papers
• Death Certificates
• Records of Paid Mortgages

* These documents should be kept in a very safe place, like a safety deposit box."

Let me add this point: When you totally pay off a debt, keep the canceled check along with the letter from the company stating the debt has been settled FOREVER!!  If you don't, you can be sure that it will come back and bite you.  Trust me cause I've been there and done that. I had to pay a $600 credit card bill because I didn't keep the original paperwork showing the card had been settled and was canceled. Only took me one time to learn that lesson!!

For this reason, I invested in a small 2 drawer filing cabinet. So much easier......now if I'll just start using it more.

I also keep IRS returns longer than 3 years.  I'm pretty sure I have all the returns I've filed since about 97.  I know for fact I have them since 2000.  In 2000 I started filing using TurboTax.  Because I don't trust little electronic disks to keep track of all my information, I still keep the hard records just in case.  The IRS is one organization I'd rather not but heads with.

I have found a small fireproof safe is perfect to keep warrantied and copies of Marriage Licenses, Birth Certificates, etc.  Plus in an emergency, it's easy to grab and take with you.

So there you have it.  Now you know what should be shredded and what should be kept! 

Happy Sorting!!

This blog is brought to you by: Lifeway Personal Financial Coaching

What is compound interest and why do I need to be taking advantage of it's power?

Yes, I'm talking about the same type of interest in which every credit card company uses to rob you blind.  Every auto & home loan also use compound interest to squeeze every last penny out of your pockets. What a lot of people don't realize is, you can also use compound interest in your favor.  Banks use compound interest on most savings accounts.  That means you can apply the same principals the loan sharks use and use it to help build your personal wealth!

Here We Go!
For example, you open a savings account that pays 5% interest. You in put $1,000 and let it sit for future emergencies. (AKA: THE EMERGENCY FUND)  To keep it simple, we’ll say it compounds annually (meaning you only figure up the interest on it once a year).
At the end of the first year, that account has $1,050 in it. You have your original $1,000, plus you have 5% interest on it – $50. You just earned $50 for just keeping your hands off your Emergency Fund!!

At the end of the second year, the account now has $1,102.50 in it. You have the $1,050 you had in it after the first year ($1000 deposit + $50 interest earned), but this year it earned more interest – $52.50.

Why?
The interest earned during the first year is now earning interest. WHAT????  You didn’t just earn interest on the first $1,000. You also earned it on the $50 in interest from the first year – an extra $2.50! THAT'S AWESOME!!!

Confused?  Let's try it one more time!
At the end of the third year, the account now has $1,157.63 in it. You have the $1,102.50 ($1000 original deposit + $50 first year interest+$52.50 second year interest), but this year it earned $55.13 in interest.
Now, from the first year to the second year, your interest grew from $50 to $52.50 – an increase of $2.50. From the second year to the third year, your interest actually grew even more – jumping from $52.50 to $55.13 is a $2.63 increase in interest!!!  All this for just leaving your money in the savings account and not taking it out to buy useless stuff!

At the five year mark, you’d have $1,276.28 in the account.
At the ten year mark, you’d have $1,628.90 in the account.
At the twenty year mark, you’d have $2,653.30 in the account. Your money has more than doubled without you lifting a finger, and every single year, the money has grown more than it did the year before.  That’s the power of compound interest!!!


Just imagine what could happen if you keep depositing money in the account or have a larger initial deposit???


Compound Interest Is Great, But There’s a Catch
What’s the catch?
In order to really enjoy the power of compound interest, you have to let your money sit for a long time.
In the example, the money has doubled, but it took fourteen years for it to happen. That’s a long time....  BUT!! 


This is where the tortoise outsmarts the hare! Good things come to those who wait!  Patience is a virtue! 
All the other sayings on waiting apply here.  Those who are smart with money, not just "book smart", know that there is no sure bet.  There is no magic plan.  There is no quick fix.  Building true wealth takes time and you have to stick with it!

There it is!! 
Compound Interest in a nutshell.  Not too bad really once you get the hang of it.  This is one of the reason's God made Financial Calculators!!!!! Here is a link to an online calculator that will figure it for you.  Go on and start playing with some numbers!

This blog is brought to you by:
Lifeway Personal Financial Coaching

Just because you are trying to cut down on expenses, doesn't mean you have to go without on Valentine's Day.  Below is a collection of different ideas for an inexpensive, yet magical night with the one you love.

Have a picnic in front of a fire &some champagne. For an extra touch, serve strawberries to bring out the champagne's flavor. If you don't like to cook or don't have the time, you can order out from your favorite place. Be sure to replate the meal on nice plates. Put some great music on the stereo or watch a romantic movie after the meal!


When your sweetie gets home, draw a hot bath filled with rose petals. (Roses are expensive around Valentines Day, so you can ask your florist for a package of plain rose petals, short stemmed roses, or for "seconds" -- ones that are slightly bruised since you won't be giving them in a traditional way.) Have a glass of wine and some chocolates to nibble on by the side of the tub.

Meanwhile, prepare the bedroom. Line the bed with towels fresh out of the dryer so that they're warm.  Massage the stress away with a sensual smelling massage oil or your sweetie's favorite lotion. There are several videos on YouTube that can show you how to give a great massage. Afterwards the two of you can enjoy takeout in bed while you watch a romantic movie.

Want a little extra sexy effect in the atmosphere. Turn the lights down low or set the mood with several candles placed around the path from the door to the bedroom. Sprinkle rose petals & chocolate kisses like a trail of bread crumbs leading from the front door and into the bedroom. Put on something sexy and lay out a sexy outfit for your partner.  Prepare some sexy foods that you can feed each other, such as almonds, chocolates, dates, raspberries, strawberries and wine. (For that extra touch, a few hours before your date, dip the strawberries in melted chocolate and chill in the fridge.) Fill the bedroom with tons of candles and turn the lights out. Then just wait for your sweetheart.

Whatever you do, I hope you have a very special Valentine's Day!!