Change Jar Savings » PF – Debt

Tracking your Finances? What Works?

Jim — Mon, 12 Jan 2009 23:25:29 +0000

I used to track our finances very closely. However the last few years I have had problems keeping up. With my finances a mess I had to try something.

I used Quicken from about 1995 through 2001. Starting out with a version that came with a Macintosh, I then bought a PC and bought a PC version. I even upgraded once or twice.

Then I started having troubles. My kids were teenagers and on the computer all the time. I saw a Pocket PC. I thought I would switch to MS Money. Money for Pocket PC was free, Quicken was not.

I justified the Pocket PC by saying I could balance the checkbook when the kids were on the computer. Just sync it up later. I also would not be spending $50.00 a year buying day planning calendars every year. So I bought it for $250.00. I still have it 7 years later. So I did save money but it did not help.

The problem that I was experiencing is that as good as all of the off the shelf programs are they have become too bloated and more cumbersome to use. Back when I first started using Quicken it was basic checkbook program. It offered some loan tracking and reports. Every upgrade added cool new features. Downloading data seemed great but it never worked quite the way I expected it to. I would have to edit the data every time. I gave up downloading. Then it seemed to reach a point that you had to be an expert to decipher everything available in home financial packages.

Frustrated by bloat I decided to use a spreadsheet on my thumb drive. I created a basic checking sheet. It worked but was still difficult to get the data entry required. I tried sophisticated formulas that would create a budget. My own worksheets were getting to be too much too.

Computer time, having receipts/checkbook when I needed was still a problem. I would have the checkbook and my wife would need to write a check and would grab another book of checks. So now I was missing transactions entirely. (I was guilty of this too.)

Then about two years ago, our finances fell apart. I cannot pin point what went wrong. Last year I started using GNU Cash on a thumb drive. I liked it because it was free. It is a pretty basic program and not bloated. I still do not download any thing from the bank. But it still is not perfect. Time is still the main issue. The secondary issue is too many bank accounts with debit/credit cards.

What I am releasing that simplicity is what is missing. I am more likely to balance one checkbook than five. Then add in credit cards and there are even more accounts to reconcile.

Last summer we had an experiment. We were going to be using only cash. I loved it but the cash was in an envelope in a drawer at home and not with us when we needed it. While it did cut down on impulse shopping, it was a problem when you forgot to grab gas money as you were heading out of town. We also did not like the idea of all that cash sitting around. To this day, we think a $20 was stolen by someone that was at our house but cannot prove it as we were missing receipts.

With the simplicity of cash with no receipts to enter, the idea that if the power would go out for a day or two, we would have cash. ATMs do not work without power. Bank failure is another reason to keep some cash on hand.

There is no great system that I have found. It is a matter of how much detail and how much time you want to spend with a finance tracking system. For us, less is what we are leaning towards. I would love to be able to close all of our accounts and just use cash. But this will not happen in today’s cashless society. All we can do is minimize and simplify. This is my goal.

How do you track your finances?

Just my 2 cents. Jim @ ChangeJarSavings.com

99 Days to Christmas

Jim — Tue, 16 Sep 2008 18:19:00 +0000

Years ago banks used to have Christmas clubs. It was a special savings account that you could start in summer and put a little money in each week until Thanksgiving. Some would let you keep donating till about December 15th. Then at the designated time you could pick up your money for buying Christmas presents. Most banks have given up on these accounts. Most people have too. The Christmas Club account earned very little in interest.

No More Christmas Club Accounts. I just cursed, didn’t I? Yes only 99 days till Christmas. How are you going to pay for it this year?

Most people now just whip out the plastic and do this in reverse. They buy all their presents and then make the lowest payment they can and hope by next Christmas the card has enough room for more presents. They pay interest to the bank for letting do this too. And guess who is not complaining. The banks and credit card companies are not. They are charging people interest and have a great revenue stream.

99 Days till Christmas

IDEAS!

1) You could hope the plastic has enough room and pay the high interest rates for another year.

2) You could start buying presents and store them.

3) You could start your own Christmas Club account. Open another ssvaings account and set up a direct deposit or automatic transfer each time you get paid. You will have the bank pay you interest. It still not a lot but better than you paying them. (I would open an account at ING Direct for higher interest rate.) If you put in $20 a week for 12 weeks, and take out the funds on December 15th, you would have $240.00 for Christmas. Continue to put $10 a week in after December 15th and on December 15, 2009, you could have $520.00 for Christmas 2009.

Don’t Spoil the Kids and Your Budget

The big thing is to spend only what you save. The way I do this is to make a list of everyone I need to buy for and what I will spend for each person. Then I have a maybe list for people I will buy for if and only if I have money left over.

No matter how tempting it is to blow everything on the kids, do not bring out the plastic. Just remember last years flurry of paper and asking the kids what they got for Christmas and they could not remember because they got so much. Buy less and they will remember more. I still remember the Christmas I got an electronic football game. Back before video games consoles. That was 30 years ago and I remember the excitement.

Just my 2 cents. Jim @ ChangeJarSavings.com

Friday Roundup

Jim — Fri, 25 Jan 2008 21:54:00 +0000

Need a will? How about online wills?

Virgin gets into banking in the US by putting it between you and your friends/relatives.

Married people need to make sure this does not happen to them.

Just my 2 cents. Jim @ ChangeJarSavings.com

Time and Interest Rates

Jim — Wed, 23 Jan 2008 11:30:00 +0000

For most people that I talk with about finance, especially interest, they start to have the deer in the headlights look almost with the second word. It is not that they cannot understand but do not want too.

When it comes to interest, they as you have indicated you just simply take the interest times the amount borrowed. This is fine as long as there is no time.

Time is the key here. It is what makes your money work for you or against you. But in the instant gratification world, time is ignored.

MrsMicah tries to explain it all.

Just my 2 cents. Jim @ ChangeJarSavings.com

Paying on time

Jim — Thu, 03 Jan 2008 17:26:00 +0000

I get paid twice a month, the 15th and the last day. Back in September We ran across a clearance on polo shirts at Kohl’s. Polo shirts are my uniform at work and at$4.80 each. It was too good to pass up. But it was September 10th. My wife said to put it on the Kohl’s charge card. We put $35.41 on the charge account. And this is where the problems started.

My wife had a couple of doctor appointments so we pushed the payment off. And then we had a point that work demands just made our personal life non-existent. Then our financial life exploded.

Fast forward 3 months. The original charge was $35.41. Now on January 3rd I finally paid the bill. YIKES! What were you thinking??? I know. I goofed big time. Not only did I not pay the October billing cycle but I completely forgot about it until they called wondering about payment.

The end result $4.03 in interest AND $75.00 in late fees. The total for a great deal was $126.54! My fault entirely.

THE LESSON? 1) Pay my bills on time. 2) Write myself a bill (Sales Receipt) and put it with the bills to be paid on payday.

Just my 2 cents. Jim @ ChangeJarSavings.com

Found Money is “Fun” No make that “Zen” Money

Jim — Wed, 02 Jan 2008 19:26:00 +0000

Several years ago my wife and I had some unexpected cash. I do not remember where it came from but that does not matter. She said that it was found money so it is “fun” money and should be spent on something we want but could not or would not buy normally. While this does sound fun, it just encourages us to buy more things.

My new thought is found money should be Zen money.

What do you think of the word Zen? The guy in a diaper going ooommmm? Practicing relaxation?

Well Zen money should be this way. It should help you to relax. For some it could be buying a game or craft item that they want but would not normally buy like my wife told me years ago. But for me it is paying off that one creditor that is calling us because we missed a payment last month. It is having on less bill hanging over our heads and being a little more relaxed.

Just my 2 cents. Jim @ ChangeJarSavings.com

Paper or Plastic?

Jim — Sat, 08 Dec 2007 19:44:00 +0000

Years ago you only had one choice, paper. Then grocery stores started to ask paper or plastic. Today most stores just offer plastic bags. Even the big grocery stores primarily use plastic.

Yet today we are again being asked paper or plastic. And plastic wants us to think paper is old fashion. I am no longer talking about bags. I am talking Paper (cash/checks) or Plastic (credit/debit cards).

But wait the manufacturers are adding to the hype. Visa wants you to believe paying with paper money takes longer. The Visa commercial of the busy restaurant or garden shop with all the people swiping their cards in fast motion and then some bumpkin is paying with cash and everyone frowns and the speed stops.

Think about the plastic bags again. They are made from oil, adding to higher gas prices. They are not biodegradable clogging up landfills. Do stores want you to know this? Of course not!

But this is far from reality. Most times when I have used my debit or credit card I have to either sign or enter my pin. I will give them the fact that writing a check does holds up the line. But are we in that much of a hurry that we should not think about money?

Think about money? Hmmm! Maybe this is the idea behind this. Spectrum Merchant Services is a credit card company specializing in Quick Service Restaurants (QSR). The following quotes are on their website:

1. By paying with plastic you are likely to spend more.
“QSR Customers using ATM or Debit Cards spend an average of 75% more than those paying with cash.”
2. People prefer not to deal with cash.
“When the option is given, more people use Debit and ATM cards than Credit cards or cash. (Visa, Nov. 2002)”
3. By making the transaction quicker you have less time to think about how much you are spending.
“Statistics show QSR sales increase 1% for every 6 seconds saved in transaction time. (MasterCard International, 2002)”
4. The less you think about how much you spend the happier you are.
“96% of customers who paid with a card at Quick Service Restaurants were completely satisfied with the speed and convenience of the service. (Visa, Nov. 2002)”

The truth is out! Step 1. Offer plastic as a choice. Step 2. Make people who use paper look bad. Step 3 Make more money off people by rushing them through the transaction.

Sounds like a nice racquet. Get people to not think about their money and come out smelling like a rose.

Then do they want you to think about how much you are spending?

So what will it be Paper or Plastic?

Just my 2 cents. Jim @ ChangeJarSavings.com

“The way you act today can affect the way you are tomorrow.”

Jim — Mon, 03 Dec 2007 16:55:00 +0000

I ran across the following quote today. “The way you act today can affect the way you are tomorrow.”

I was not planning on posting today but the powerful message this delivers inspired me. I would, however, change only one thing, the word “CAN” should be “WILL”.

“The way you act today” WILL “affect the way you are tomorrow.”

This is true of most things in life and especially in your financial life. Let’s change some more words to see the affect.

The way you SPEND today WILL affect the way you are tomorrow.
WHAT you BUY today WILL affect your finances are tomorrow.
How you SAVE today WILL affect your RETIREMENT tomorrow.
The way you HANDLE YOUR FINANCIAL LIFE today WILL affect YOUR DEBT tomorrow.

Powerful words. Every decision you make today affects your finances and your ability to do things later. Whether it is 5 minutes, a day, a week, months or years later.

- Buying a new car means you will have to make $x00.00 payments for the next 60 months.
- Having that latte may mean you cannot go to the movie with friends this weekend.
- Buying dvds, clothes, cigarettes today means you have less money to save for your emergency fund, retirement, kids education.
- USING your credit card today means you will have less money tomorrow to use.

The purpose of this quote is to stop us and make us think of the results of our decisions. Add to this the time value of money, “a dollar today is worth more than a dollar tomorrow due to inflation.”

Incurring debt today when we do not have the cash causes us to pay more later. Not only in interest and inflation but also less ability to do things later.

I know this is where I am right now. My wife and I made decisions that we thought we could afford with two incomes. Then my wife was no longer able to work. Now we are using one income to pay for things we bought a while ago. We sacrificed our savings. We sacrificed our enjoyment now for what was in the past. Yes you can say we enjoyed it then. But now we are paying for it.

So before you buy, think about this quote.

“The way you act today” WILL “affect the way you are tomorrow.”

Does this fit in with your plans? Will it make you better or worse off? What are the affects this will have? What if you become unemployed? Ill?

Are you willing to trade the long term goals/plans/dreams for the short term satisfaction?

Just my 2 cents. Jim @ ChangeJarSavings.com

What’s the Plan?

Jim — Fri, 30 Nov 2007 18:08:00 +0000

As I sat thinking about what to write about for this weeks post, I had several ideas. I want to continue to lay the ground work of what this blog is about, I also want to keep fresh ideas coming in. So, instead of working on this post I was looking at other personal finance blogs.

Let me tell you there is a lot of advice out there. —Save your money. Establish an emergency fund. Pay off debt. Snowball debt. Highest interest first. Live frugally. — But very little is written as a how to. And what should be done first?

So it comes to “What’s the Plan?” Do I keep searching for answers or do I start doing? You can look and look and look and be no further along than you started. The question that came to my mind is “What’s the Plan?”

Wanting to achieve anything starts with a dream. However this is where most people stop. A few will look around and say they just don’t know how to do it. Or it is just too big to accomplish. But a life of just dreams is not much of a life. And a life without dreams is giving up.

Here are my personal finance dreams:
• Get out of debt
• Get more income
• Save for an emergency
• Stop overspending
• Stop overdraft fees

So how do you take a dream and make it a reality? How do you start to dream even? With an overwhelming feelings and debt hanging over you, all you see is gray clouds. The first thing we need to do is to start to plan.

“PLAN? Plan what? If I do not have a dream what do I plan?”

Yes that is the point. Even if you don’t have a dream, you need to plan. I did not have a plan on what to write. While my head had ideas, the plan was not there. So I was stuck. Well you already have an idea. You would not be reading this if you were not looking for an answer. The dream or idea can be found by asking what is the problem you are looking to solve? Do you want to stop living payday to payday? Do you want to get out of debt? Answer this and now you know you have a dream.

“But I have many dreams. I want to do what you said but I need a new car. I want a better place to live that costs more. I want my kids to have a great Christmas.”

Just like I was sitting trying to figure out what to write, I was stuck because there were too many conflicts. My head was awash with ideas but not a clue about how to accomplish them. The next step is to start to record them. Write them down. Type them up.

But now you have conflicts. Which dream do you work on?

“Wait I can’t have it all? I want to accomplish all of them!”

Yes you can have it all but you have to decide which gets priority. Which idea or dream is more important to you? Which can have the fastest impact to change your life? Start prioritizing your ideas or dreams.

Here are my priorities.
1. Stop overspending
2. Stop overdraft fees
3. Save for an emergency
4. Get out of debt
5. Get more income

I will explain more about my priorities in a future post. My reasons may be different than yours and I want you to decide based on your reasons not mine. By the way – priorities can and do change. So do not be disappointed when you need to buy car tires rather than save for an emergency.

So “What’s the Plan?” Start working on it. If you want share your plan here in the comments.

Just my 2 cents. Jim @ ChangeJarSavings.com

Freezing Your Credit (aka Cold Hard Credit?)

Jim — Tue, 13 Nov 2007 18:30:00 +0000

Is having the credit card on you making to easy to use? And blowing your finances? Do you go to a store and find something you have to have but don’t have the cash? Do you then take out the credit card? Do you carry the credit card for emergencies and use it to buy a pack of gum? What about your debit card? Do you know what you used it for this week?

I have a suggestion, FREEZE THEM!

My wife and I actually froze our credit cards. It is easy to do. No you don’t have to call the bank or credit card company. Here is how you do it.

Get a plastic food container (Like a Ziploc or Glad). Yes the kind you use for leftovers.
Pour water to cover the bottom in the container.
Freeze it.

(Here is the fun part.)

Take your credit card or cards.
Put them on top of the ice.
Pour more water in the container.
Freeze the container.
You should check on them every 15 minutes the cards like to float. I even had to turn the block of ice over to have the ice hold it down.

Now you still have the cards. And you can use them for an emergency. But when an impulse (or a Want) comes along you have to wait it out until the ice thaws.

Giving yourself time to think is it a need or a want.

Just my 2 cents. Jim @ ChangeJarSavings.com