Who’s the Boss?

February 25, 2012 by / 6 Comments

This article was written by Ashley over at Money Talks. It’s her passion to help you get control of their money. If you like this article stop by her site or follow her on twitter.

Are you the boss of your money? Or is your money the boss of you?

Your money is the boss of you if:

  • you say “I can’t afford that right now”.
  • you say “I wish I could but I don’t have the money”.
  • you say “I get paid on Friday.” (People who boss their money around don’t worry about when the next check is coming because they aren’t living paycheck to paycheck)
  • you feel jealous of others when they get something new.
  • you worry that others will find out your true financial situation.
  • you pay late fees.
  • your financial situation keeps you from doing what you truly want to do
  • finances keep you up at night.
  • you stay in a job you hate for financial reasons.
  • you stay in a relationship you hate for financial reasons.
  • your debt is growing.
  • you don’t know how much money is in your account.
  • you fight with your spouse about money.

You are the boss of your money if:

  • you say “That’s not a good value”.
  • you don’t care what day of the month your bills are due.
  • you are debt free (or working on it)
  • you have multiple income streams.
  • you know exactly how much money you have in your account right now.
  • your bills are paid on time.
  • you haven’t paid a late fee in years.
  • you know how much you are saving each month.
  • you decide ahead of time how you are going to spend your money.
  • you could live for a while with no income if necessary.
  • you see the signs of financial chaos in others.
  • you discuss money with your spouse, but don’t argue.
  • you are proud of the financial decisions you’ve been making.
  • you sleep well at night knowing your money is there for you.

Which list do you identify with more? Are you the boss of your money or a slave to it? If you aren’t the boss there are some things you can do to change that. Believe it or not your money wants you to be the boss. You just have show it that you mean business and stop letting it get away with all the crazy stunts its been pulling.

Set a budget. I know you’ve heard that one a million times but a budget is the best tool out there for bossing your money around. If you have trouble working with budgets then start just by tracking your spending. Tracking your spending for a month will give you a very good idea of how you normally spend money. Use that data to set a budget. Decide at the start of each month exactly how you are going to use your money and track your spending during the month to make sure you are on track. If you start to go over in a particular category then you will have to adjust the budget mid month. Going over in one area doesn’t mean that the budget is no good. Just make the needed adjustments and move on.

Breaking the paycheck to paycheck cycle requires some savings. The experts say to have a baby emergency fund of $1,000 available for use. That will give you some wiggle room for your day to day bills. If a bill is due on the 7th but you don’t get paid til the 10th you have a back up plan. No more worrying about how your pay days and due dates fall.

Debt is the next target. Once you are used to living on a budget you will probably see some places you can cut spending. Send those cuts to debt and pay it off by focusing on eliminating one debt at a time.

Once you have a budget and debt elimination plan you will feel like the boss of money!

Filed Under: Finance  / Tagged:

Do you ever wonder where it went?

March 11, 2011 by / 12 Comments

Recently, I did my taxes.   I’ve been doing them on my own for years, and it’s always interesting when you fill out line 7 (For those that don’t have the form memorized like Amber from blonde and balanced, it’s the income line).  Back when I had a poor handle on my spending, I’d look at whatever number filled in there and wonder what the hell happened to it all.  Before I got to grad school, this number was about the same for 3 years in a row ($6,600) and during grad school it approximately doubled (12,000) and once I was finished with school (and looking for a job, then finding one), I still didn’t clear more than 20,000, so I didn’t have much to worry about.  This year, however, has been rather different.  I’ve made money (an amount that I consider a lot of money.  So, I’ve kinda been dreading this whole tax thing lately, but that’s for another day.

I remember when I used to do my taxes, I’d look back and say Holy crap, I made (some dollar amount) last year – and my savings account is still empty.  Where did it all go?  It seemed like every year I had this problem, and it took me forever to figure it out.  Then I’d make a promise to myself to save my tax refund, and the cycle would start all over again.  Finally, I decided that enough was enough, and it was time to get serious with my finances.  This is the first year that I’ve made quite a bit more than I spent, and for the first time this year, I can answer the question “where did it all go”.  Here’s where my money went in 2010.

  1. Payments to Debt (Car, Student Loans, Credit Cards): $17,964
  2. Spending (On things other than debt: Rent, food, fuel, etc) $14,554

Even though this number doesn’t exactly add up to the number that I filled in on my tax form, It’s still something that I like to see.  One of my goals for 2011 is to pay off my truck, and currently the amount that I have left on the truck note is almost equal to what I was able to pay off in total in 2010.  I know that I’m also working on paying off my student loan and the balance of that and the truck is higher than what I was able to pay off last year, I hopefully will be making more money this year and working more in various capacities.  So, the goal will require a bit of work, but will be worth it.

The best part about 2010 is that I finally got a hold of my finances. I didnt look at my W2′s (there are plenty of  W-2 guides out there) this year and say where the hell did all that go?  And that is such a great feeling.  Instead of wondering,  I can just pop into mint or pull up my excel spreadsheet and see where my money went.  Keeping track of where your money goes is one of the most important steps to financial success.  If you dont keep track of it, you wont know where it’s going, and if you dont know where it’s going, how can you be sure that you spent it in the way that brought you the greatest satisfaction?

Readers:  Do you often wonder where all of your money went after tax season?  What helped you to hop in the saddle and grab the reins of your finances?

Filed Under: Finance  / Tagged: , ,

High Cost of Being a Moron: Round 2

February 21, 2011 by / 23 Comments

For those of you who have been around here for a while (thank you, I wrote very infrequently then), you probably remember my post the high cost of being a moron.  For those of you that don’t to make a long (and rather ill thought out) story short, I bought a car for a good price, had it all lined up to sell it for more than I bought it, and then it got towed, which basically ate up all my profits (and then some).  However, that was basically the last time that I really messed up my finances.  I’ve been doing a good job avoiding fees, making payments on time, and spending less than I earn since then.

Like all good things though, it didn’t last.  In 2010, I decided one of my goals for the year was to not get anymore overdraft fees.  Well, I was able to make it through a whole year without them, and to be honest, I didn’t miss them at all.  I was glad that I was able to keep my money, and because I was spending less than I earn, I got to keep even more of it.  This led to me paying down a lot of debt.  Pleased with my progress, I figured that overdraft fees were a thing of the past and moved on with my life.

Unfortunately, it did not last.  When I was in school, my dad often had interesting sayings that contained advice, and one of my favorites was “Don’t crap in your own mess kit“.  What this meant was that I basically needed to get out of my own way and stop making things hard for myself.  It’s good advice and I found that it works well when I follow it.  One would say that with my paychecks, I don’t.  Here’s how my system works: I have paychecks from both jobs deposited into my savings account at bank 1.  It’s the only account I have at that bank, and it links to my checking account.  After I get paid, transfer some money (but not all) into my checking account.  From there I pay bills, and it usually works out well. At the end of the month, I move more money into my checking account and make a debt payment.  Using this method, I’ve been able to build up some savings as well as pay off a lot of debt.  It’s worked well.

Last week, I made my usual transfer as I had my car, car insurance and student loan payments coming up.  After I signed off, I didn’t think anything of it, and just waited for the auto-bill pay to pull the money from my account.  Two days later (after my payments were supposed to be drawn) I went to check my account balance.  I had -350 or so in my account!  I was obviously stunned, and when I looked at my savings account, the reason was staring me in the face.  Apparently in my haste, I transferred the money from my checking to my savings, instead of the other way around.  There was not enough in my checking to cover the transfer, so the bank turned it down.

Once that happened, I was basically just going to hang there until I could get a new transfer set up and have it finish.  Between those two times I had 2 bills pulling.  The car payment came first, and because of my history (according to the girl at the counter) they decided to pay that and charge me $30 for it.  Then they did the same for my insurance.  The student loans had not drawn by the time I got my account back into the positive, so the damage stayed at around $60 bucks.

After being annoyed at the overdraft fees, I started to look at it another way – what if they had not paid it and I was going to be charged a higher rate over the life of the loan (5 more years)?  I think the rate would have gone up enough (it’s currently .9%) to make the $30 seem like small potatoes in the long term.

Obviously, I’m trying to look on the bright side here, but I’d rather just have my $30 back and have not made a mistake. Have you ever made a dumb financial mistake like this?  What did you do, and how did you rectify the situation? Unfortunately for me, there really was nothing that I could do, so I just had to wait it out.

Filed Under: Finance  / Tagged: , ,
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