How to make a simple Budget

Budgeting is the easiest way to find out where your money is going, and for the future, to know where your money is going to go.
To prepare you budget, you're going to need to know a few things:
1. Your household income
2. The average amount of all of your monthly bills, to include rent/mortgage, electric, gas, water, garbage, debts, etc.
3. The amount of money you need to survive.

I attached a simple spreadsheet that will help you create a budget.

MONTHLY BUDGET
INCOME
	TOTAL	PAYCHECK 1	PAYCHECK 2
SPOUSE 1 MONTHLY INCOME	$       5,000.00	$       2,500.00	$            2,500.00
SPOUSE 2 MONTHLY INCOME	$       3,000.00	$       1,500.00	$            1,500.00
OTHER INCOME:	$          200.00		$               200.00
TOTAL:	$       8,200.00	$       4,000.00	$            4,200.00
EXPENSES
	MONTHLY	PAYCHECK 1	PAYCHECK 2
MORTAGE
RENT	$          950.00	$           475.00	$               475.00
GROCERIES	$          400.00	$           200.00	$               200.00
RESTAURANT	$          200.00	$           100.00	$               100.00
ELECTRICITY	$          250.00	$           125.00	$               125.00
WATER & GAS	$             50.00	$             25.00	$                  25.00
GARBAGE	$             24.00	$             12.00	$                  12.00
CHARITABLE GIVING	$          800.00	$           400.00	$               400.00
CELL PHONE	$          180.00	$             90.00	$                  90.00
TELEVISION	$             50.00	$             25.00	$                  25.00
INTERNET	$             40.00	$             20.00	$                  20.00
RENTER/HOME INSURANCE	$             15.00	$               7.50	$                    7.50
HOME SECURITY SYSTEM	$             50.00	$             25.00	$                  25.00
CLOTHING PURCHASE	$          200.00	$           100.00	$               100.00
CAR REPAIRS	$          100.00	$             50.00	$                  50.00
VEHICLE FUEL	$          400.00	$           200.00	$               200.00
VEHICLE INSURANCE	$          180.00	$             90.00	$                  90.00
CAR SAVINGS	$          600.00	$           300.00	$               300.00
HOLIDAY/BIRTHDAY GIFTS	$             40.00	$             20.00	$                  20.00
ENTERTAINMENT MONEY	$          200.00	$           100.00	$               100.00
REGULAR SAVINGS	$          800.00	$           400.00	$               400.00
SPENDING MONEY	$          240.00	$           120.00	$               120.00
SCHOOL LOANS	$          450.00	$           225.00	$               225.00
EXTRA DEBT PAYMENTS	$       1,600.00	$           700.00	$               900.00
CAR LOAN	$          250.00	$           125.00	$               125.00
CREDIT CARD DEBT	$             50.00	$             25.00	$                  25.00
TOTAL EXPENSES	$       8,119.00	$       3,959.50	$            4,159.50
TOTALS
	MONTHLY	PAYCHECK 1	PAYCHECK 2
TOTAL INCOME:	$       8,200.00	$       4,000.00	$            4,200.00
TOTAL EXPENSES:	$       8,119.00	$       3,959.50	$            4,159.50
REMAINDER:	$             81.00	$             40.50	$                  40.50

Turning your Craft or Skill into Money

I'm sure you've seen this before, but I'm going to say what everyone else says.  If you want to make extra money but you don't want to do something you don't enjoy, turn your hobby or craft into money.  There are three basic "crafts" you can turn into money: Services, Arts,  and Art Services.

Services: Services include anything you would do for someone else, such as cutting the grass or giving tennis lessons.  It could include anything that you offer your time to directly help the customer.  When you do a service for another, you have to make sure you are doing it correctly, safely, and legally. If you want to make money in an industry that requires a special certification, make sure you have proper documents stating that you have completed the proper training.  For example, you cannot Notarize something without being an officially licensed Notary Public.  Also, when you offer a service, such as some type of lessons, you are advertising yourself correctly.  A new guitar player cannot offer advanced guitar lessons.

Here are a few more services that one could offer:
Personal Cook
Delivery Person
Give Lessons
Mystery Shopper
Grass Cutter/Lawn Care
Notary Public
Tutor

If you can think of any more, feel free to comment and share your knowledge.

Arts: Arts are something you make and sell.  This can range anywhere from a homemade Greetings Card to a Kitchen Table.  You can sell your homemade items on websites such as Ebay, Etsy, or Amazon.  Note, that these websites take a cut of your profits, so make sure you add that in to your selling costs. If you have the proper FDA approvals, you can sell food items and soaps.

Here are a few more Arts you can offer to sell:
Soap
Candles
Handcrafted furniture
Crocheted items
Knitted Items
Sewed Items
Clothing

Pictured above is an old lawn chair that was modified.  Take off the plastic rope and used colored rope to make this design.  It only costs about $30 to make, and I know of people  offering to buy it for $75-$100. 

If you can think of any more, feel free to comment and share what you think.

Services and Arts: Serviced Arts are custom ordered items that you can offer on websites.  An example of this would be custom embroidered Christmas Stockings or a custom handcrafted kitchen island.  The world is the limit when it comes to this type of product.

Some examples of Services and Arts:
Custom wood projects
Custom fabric projects
Custom Ordered Food
Custom soaps and candles

Please share in the comments if you can think of anymore items.

Maintaining a Debt Free Lifestyle

Personal Finance Cheat Sheet posted a pretty interesting article: "6 Ways to Maintain a Debt-Free Lifestyle" Click here to read the article.  Below is a review of their 6 Suggestions to maintain a debt free lifestyle.

1. Build a Large Savings.  Makes sense to me.  If you have a large enough savings, you won't have to pull out the pesky credit card or go to the bank to request a loan to purchase an expensive item.  It also talks about saving money to pay for your children's education or new home. 

2. Pay off Credit Card Transactions Immediately. If you have a credit card, pay it off right away when you use it.  You can collect points to use in the future.  Be aware though, if you don't pay off your credit card immediately, you'll get hit by those enormous interest rates and the debt will add up.

3. Buy a cheap used car.  New cars depreciate in value the second you take it off the lot. If you purchase a new car with cash, it won't depreciate as much and you'll outright own the car and you can trade it in more easily in the future.

4. Go to Community College. Furthering your education will improve your hireability and desireability to an employer.  You can go to community college for a lot less money and get some education that can really help you in the future.

5. Rent. I don't really agree with this one. Sure it'll keep you out of debt, but where is that money really going? It's going to pay off someone else's mortgage and you only get temporary housing that you cannot modify yourself to make it more personable.  I say, if you have a steady job in a steady location, purchase a house you can afford.

6.  Buy only what you need. I'll add 'and what you can afford'.  My wife and I rarely follow this rule.  We are very impulsive when it comes to shopping.  I do believe we've gotten a lot better though, since we sat down and really talked through our finances.  With large purchases, we generally wait a day and talk about it before acting on buying something large. 



Source:
http://www.cheatsheet.com/personal-finance/6-ways-to-maintain-a-debt-free-lifestyle.html/?a=viewall, Chloe Della Costa, March 2015, Personal Finance: Cheat Sheet

Best Ways to Utilize your Tax Return to the Fullest

It is tax season. Tax season is the time of year where you might be expecting to receive a nice lump-some check to do with what you please.  If you're unsure of what to do with your check, here a few great ideas!

1. IF YOU HAVE DEBT, USE YOUR TAX REFUND TO PAY OFF YOUR DEBT!!
     The last 3 years I have used my tax refunds to make large payments towards my school loans.  I have paid off over $10,000 worth of school loans. Paying off loans not only reduces your overall debt and increases your net worth, but it also frees up more money for you to use throughout the year (if you have more debt, I'd suggest putting the extra money toward that)

2. Make a payment toward your Retirement Account. 
     You can put up to $5,500 if you're younger than 50 and $6,500 if you're older than 50 towards your IRA per year.  If you put it all in from your tax refund, you can use the rest of your wages in other places. Click Here for details about federal guidelines for IRA Contributions.

3.  Invest your money.
     After filing your taxes, you're might receive a nice big check. You've lived without that money for the past year, you can live without it for longer.  Invest your money to make it grow.  There are many companies that offer financial advice, money management, and investment opportunities.  By investing your money and waiting just a little bit longer, you can increase your tax return and use it to get something even bigger.

4.  Invest in your children
     College is expensive. I'm sure you came out of College with some debt.  You can help out your children by investing in their future education.  Start a 529 plan for your children, which is pretty much an interest building savings plan for your childrens' tuition payments.  Click here for IRS restrictions and FAQ about 529 plans.

5.  Buy a Car or Start Saving for a Car.
    Notice how I didn't say "make a large down payment on a car".  I said "buy" a car or "start saving" for a car. These days, it seems like everyone feels like they need to have a car loan.  I admit it, I'm guilty of this at this very minute. I have a car payment and I regret that I bought that car just about every time I think about it.  Lets say you currently drive a 2004 Pontiac Grand Prix with 130,000 miles on it. Your car is worth approximately $2,400 for a trade-in.  You received $2,000 for your tax refund. You can afford a $4,400 car, which still wouldn't get you much at all.  However, if you plan on getting a car and making $400 a month payments. After 1 year you would have enough money to purchase a $10,000 car.  That greatly opens up your opportunities AND you WOULD NOT INCUR MORE DEBT!

6.  Use it to buy something nice for yourself or family
     Anything can really fall into this category.  You can take your family on a nice vacation, purchase that new big screen TV the kids want. What ever you do with your tax refund, I suggest not taking on any debt.

#taxreturn #savingmoney #debtfree




**Please note I am not a certified personal finance manager, I am speaking from personal experiences and research conducted. I am not responsible for any financial decisions you make in the future**

What I did with my Tax Refunds

Since graduating college, I have filed my taxes three times.  All three times I have made significant payments to debt.

2012 Tax Return:
Our 2012 Tax Return was the largest of them all. The reason....I got married in December 2012 and received credit for being married.  A majority of our 2012 tax return went to pay-off our 2 small college loans, worth a total of $5,000.  The rest of the money went towards paying off the credit card I was using to pay for our Honey Moon to St. Lucia.  Paying off these two small loans reduced our monthly loan payments from $1,410 to $1,304. That would save us $104 a month to pay our monthly bills without dipping into our savings.

2013 Tax Return:
2013's Tax Return was quite a bit smaller.  We received back approximately $4,000.  Half of the money went to repay a small loan from my wife's parents (which I would never suggest doing again, they didn't bother us about it, but in the back of my head I hated every minute of it).  The rest went to payoff a loan with a remaining balance of $1,800.  Paying off this loan reduced our monthly loan payments from $1,304 to $1,268.

2014 Tax Return:
2014 was our smallest tax return yet.  We received $3,002 dollars.  We paid off our smallest loan, worth $2,324. The rest of the tax return went to purchasing new tires for our car, which were down below 2/32" tread. Paying off this loan saves us $50 per month.  Our monthly payments are now $1,218.

2015 Tax Return:
2015 is going to be our smallest tax return yet.  Since I will be deployed, I believe that our tax return will only be around $1,000 - $1,500.  But I already know where that money is going to go.... Loans.