I spend a great deal of time every day reading, writing, and thinking about personal finance. In reality, you probably do too, at least the thinking part (and probably the reading part too). Pretty much every decision we make has an impact on our bottom line. Going out or staying in. Pizza or steak. Generic or name brand. If you are reading this then you already know personal finance is important. But personal finance is more than just how you spend your paycheck. It’s also about protecting and growing what you have.

There are five categories that go into financial planning.

1. Insurance. Disablilty, life, homeowners/ renters, car, malpractice, did I get them all? Probably not. Are you properly insured? Do you have all the policies you need? Do you have the proper coverage on those policies? Are you paying too much? Are you sure? It can be confusing. We currently have life, homeowners, and car insurance. And even with those basic everyday policies I’m still not sure that we have what we need. If anything we are probably over insured (in those areas at least), but I guess I would rather err on the side of caution.

2. Investments. If you are like most people, the world of stocks is a murky place. Filled with weird lingo and funny graphs. You know you want to buy low and sell high, but how you do those things is a mystery. I’ve taken intense classes on the stock market and I still don’t feel comfortable talking about stocks. While I could probably blather on about a stock and sound like I know what I’m talking about, I wouldn’t really. This is largely because I have no real world experience with them and I don’t think that book learnin’ is the same as street smarts. Just because I can use the term correlation coefficient properly in a sentence doesn’t make me an expert.

3. Taxes. This is a topic everyone has some experience with, and yet, in my opinion, it’s even more confusing than the stock market. So many decisions we make affect our taxes. Do I have to pay taxes on that? At what rate? Is this a deduction? Do I need to keep this paper? What if I’m audited? Not only is it confusing, it’s important to get it right. Overpay and your wasting money. Underpay and you could go to jail.

4. Retirement Planning. You’re not going to work forever right? If you are not currently saving for retirement, get on it! Seriously. Even if you’re not an expert in retirement planning you need to get started. I would rather you pick the wrong investment than pick nothing at all. I know setting up your 401(k) seems like a daunting task but it must be done. And I promise it’s not as hard as it seems. If you are saving for retirement then good for you. Are you making the most of your money? Invested in the right fund? Are your funds properly diversified?

5. Estate Planning. What is going to happen when you die? Do you have a will? Do you need a trust? Who is going to handle your estate? What will happen to your kids or spouse? It gets even more confusing when if you have a blended family, like I do. You don’t want your loved ones to have to deal with who gets what after you’re gone. Be nice to the them and make sure this stuff is handled.

Phew… feel helpless? Just writing that made me aware of many many holes in our financial plan. Some holes I know we need help closing. Like estate planning for instance. Having a blended family brings up a lot of unique issues. I need professional help here. You can certainly get a different professional for each area. And if you only need help in one area then that might be the way to go. But if you are like most of us you need help in most, if not all, of the above categories then you might want to consider a financial planner. A financial planner can take a look at your finances as a whole. They will coordinate the other professionals to make sure that your plan is right for you. They can take your needs and wants into account and create a comprehensive financial plan.

If you are interested in getting a financial planner I highly recommend, no I insist, that you get a fee only financial planner. Yes, you have to pay them. But then you can be sure that they are working for you. They will be making recommendations based on your needs, not their wallet. You can find a fee only financial planner in your area here.

I’ve talked recently about my new American Express card. We just got the first statement and it’s interesting to see all our charges listed out in one place like that. We put everything we could on the card, including our bills, so it’s a pretty complete look at where we spend our money. Nothing I didn’t already know, but it’s weird to see it all laid out day by day.

But what does this statement say about me? If a stranger were to look at this, what would they think? First off, they would probably think that we eat out way too much. And they’d be right! But what would they infer about us as people? That we are unorganized? That were fat? (Nope, and maybe a little) If I were looking at this statement I would think that both my husband and I work full time and that we don’t take our lunch to work. That would be my first piece of advice to us, start brown bagging it! Which isn’t terrible advice. But I don’t work, and going to lunch is something I like to do with the kids to get out of the house. Yeah, there are other things to do besides eating out. But I still have to feed them, and going out kinda kills two birds with one expensive stone. There are 38 charges from restaurants. Yowza! (The cheapest being $1.72 and the most expensive being $48) A person might get the idea that we aren’t careful with our money.

This peeking stranger might also know that we own our home. ($102 charge to home depot) and they might also have an idea about how big it is based on our utility bill. Which based on the size of our house might tip them off that we have kids. That fact would probably be confirmed by all our Costco purchases. In fact, they might think we have more kids than we do.

What is kinda weird is that they would know just about exactly where we live. Since the vast majority of the charges come from our city, and our favorite pizza place puts the cross streets right on the statement.

But I think what speaks louder than what is on our statement is what isn’t on our statement. There are no movie theaters, no mini golf, no nail salons, no fancy stores (mostly Walmart and Target). Really not much of anything except bills, food, and gas. I think that in itself speaks volumes.

pic by: mlinksva

Can you really help someone? That’s always been a big question for me. I mean, beyond medical things, it seems people’s situations are usually their own doing. I’ve talked about a friend of mine who misses opportunities to improve her situation. I don’t think giving her money would be any kind of help. But if money doesn’t help someone who is struggling financially, what will? Education?

It’s the whole teach-a-man-to-fish conundrum. When is giving a man a fish appropriate? Recently I read about the Harpers from Extreme Home Makeover who received a brand new home and a boatload of cash, but they are still getting foreclosed. So what could have helped them? What on earth could ABC have done for them? I don’t know their particular situation but maybe if they had spent the week at some kind of self improvement workshop rather than Disneyland they could have improved their situation. You know, if ABC had taught them to fish as well as giving them a fish.

It seems like a pretty cold perspective to say that it’s impossible to help people. But in a way it kinda gives me hope. If people’s situations are based on their own doing then that means my situation is based on my own doing. And I like my situation. I like my life. I, apparently, did this all by myself. That gives me security. When hard times come (as I’m sure they will) I don’t have to worry if someone is going to be there for me. Because I can’t be helped! I will be there for myself and that’s all I need.

pic by: Poagao

I have a friend who always is complaining about not having any money. Always. And yet she is constantly misses opportunities to change her situation. I don’t get it. It makes me a little crazy.

When I first met her I was impressed by their financial situation. Not because they have fancy things, quite the opposite in fact. She is a full time student but takes all her classes on line so she can be home with her son. She also babysits part time for a child with special needs. They live in old army barracks that have been turned into student housing for students who have children. And they only have one car, which her husband takes to work. She’s a smart girl, it seemed to me that they really had their stuff together. They were making sacrifices and doing what they had to do to get by while she finished school. I was impressed by that.

Come to find out that isn’t really the whole story. First off, she takes more student loans than she actually needs and they live on the excess. That kinda rubs me the wrong way, but I know lots of people do that. In a perfect world everyone would only finance their books and tuition, not their groceries. I found this out because she had planned a huge blow out birthday party for her son. And then told me she couldn’t have it because she wasn’t getting as much in her student loan as she wanted. I cringed. She wanted to finance a birthday party for a two year old.

The reason they only have one junker car is because their credit is horrible and they won’t save enough money to buy another one with cash. Horrible credit means more financial irresponsibility in the past. I don’t know the story here, but I have a feeling if I asked she would tell me a story about why it’s not her fault.

She was telling me recently that the dentist advised her to start saving up for braces for her son. She told me she can’t possibly save any money. “Maybe when we are making more.” She said. But two minutes before that she was telling me about her son’s third birthday party. And how you can rent the whole bouncy place for “only $400″. Gulp! What! She can’t save for braces but she can spend over $400 on a party? This is what I’m talking about. Another missed opportunity. When the day comes and her son needs braces she will again complain about how expensive braces are and how she can’t possibly afford them. Will she remember that 10 years earlier she was told to start saving?

I guess what’s frustrating is that she is half way to being in a good position. Her living expenses are very low. All she needs to do now is plug the holes. It really wouldn’t be much of a lifestyle change. She just needs a budget and some goals.

Are you missing opportunities to turn your situation around?

I’ve talked a lot about my love for Costco. I’ve really been making a go of it for the last few months and I’ve seen a huge drop in my weekly shopping. I went to Costco on Friday and spent $149.11 plus tax, but look at all the stuff I got! Please excuse the total dorkiness of organizing my Costco booty so I can take a picture of it. It was a big trip because I had a bunch of coupons. Here’s the breakdown of what I bought and how much I saved. The prices listed for Costco include the coupon and the prices listed for Walmart are what you would pay for the same amount of stuff as I bought at Costco. For example, at Walmart paper plates are $3.44 for 50, so it would cost $15.30 to get the Costco amount of 225.

So I saved $50.19 over Walmart on this trip alone! Crazy! I had $25.50 in coupons. Plus I get 2% back from my executive membership and another 1% from my American Express card, which isn’t figured into the total savings. I did notice that the strawberries were the same price per pound at Fresh and Easy as at Costco, so I don’t need to buy the whole 4 lbs at once if I don’t want to. Although my kids can burn though some strawberries, I’m tellin’ ya. They were almost gone on the first day. But I did use one pound to make my super awesome Strawberry cake.

I took the kids to McDonalds the other day to play in the play area. While we were there two moms came in together with their kids. I don’t know what to say to describe them so I’ll just say that when they walked in, every episode of Jerry Springer flashed before my eyes, if you know what I’m sayin’.

Anyways, they were talking to each other and Mom #1 got up and went into the bathroom adjacent to the play area. I had my back to it so I can only assume the door was open, I don’t know, but Mom #2 kept right on talking (yelling really, since her friend was in the other room). When Mom #1 came back she said “I couldn’t hear a thing you were saying.” and Mom #2 said “Oh, I was just telling you the secret to becoming a millionaire” and they both laughed. I laughed too because I really do know the secret to becoming a millionaire.

Wanna hear it?

Are you listening? Get a little closer…

Ready? Here it is… Spend less than you earn. Shhh, don’t tell anyone ok. It’s our little secret.

pic by: VoxEfx

I started Christmas shopping this week. I hadn’t really planned it, but Target had put the toys from my son’s favorite show on clearance and I didn’t want to miss out. He loves the Little Einsteins on the Disney channel. They had put about half their Little Einsteins toys at 25% off. I couldn’t pass it up. I spent about $25. They have one big play set for $40 that he plays with every time we go to Target. I will be keeping my eye out for it to be marked down. I really want to get it for him. I know he will love it!

Every year I make the same mistakes when it comes to buying Christmas presents for the kids. I get them too much stuff! We make a budget and do perfectly fine sticking to it, but wow it still adds up to a ton of presents. I always want them to have a great Christmas. Logically, I know they can have a great Christmas with half the presents. But it’s so easy to get caught up in the Christmas spirit. I feel like I should tell you that we don’t buy Christmas presents. That we don’t get caught up in the commercialism of Christmas. That our Christmases are simple and consist of nothing more than sitting by the fire and drinking hot coco. But my tag line is “An honest look at family finances.” So that is what I have to be, honest. I think we are a pretty typical family. If this is something we are struggling with I know other families probably are too

In an effort to buy them less this year I’m going to keep a list of the presents I’ve bought. I think part of my problem is that the presents are spread all around the house in various hiding places and I forget about stuff. So I think having a list will help. That way I can easily see what I already have for them.

A few years ago I came up with a method to fund our Christmas budget and it worked so well I’ve kept it up. You know how sometimes you get an extra check in a month? If you get paid weekly you will have 4 months where you get 5 checks rather than 4. If you get paid bi-weekly you will have 2 months where you get 3 checks rather than 2. My husband gets paid bi-weekly and I take one of those checks and put it aside for Christmas. It’s a pretty painless way to fund Christmas.

Pic: katie blanch

We had another no money day yesterday. I’ve really been thinking about this quite a bit since the other day. I think no money days are much easier on my soul than the no gas days I was trying to do. No gas days means that I can’t leave the house, but no money days are a totally different story.

My husband has been brining his lunch to jury duty so he didn’t spend any money. The kids and I went to visit a friend and then later we went to McDonalds to play in the play area. We didn’t get food, we just played. Here’s where it gets sticky. They have Transformers in the kids meals right now and my daughter really wants one. I let her take her allowance and buy one of the toys. As a family we did spend $2. But it didn’t come out of the household budget. Does that count as spending money? I didn’t want to tell her how to spend her allowance. That kinda defeats the purpose of giving her an allowance. She earned it, I think she should be able to spend it how she wants.

To me a no money day means just that, no money. Period. On my last no money post several people said that they go 3,4, or 5 days in a row every single week without spending money. I need more info about that. How you guys pull that off? I know you take your lunch to work, that’s fine. But you never stop for gas, or swing by the grocery store on the way home from work? You never run out anything during the week? Do we have different ideas of what it means to have a no money day?

One benefit you don’t give much thought to when reading through your benefit package is paid jury duty. But I’m telling you, it comes in handy when you need it.

My husband had jury duty on Monday and got on a trial. It is set to last two weeks. That is two weeks without working. I was kinda freaking out when he called on his way home and told me. He remembered that his company pays something, but he wasn’t sure what. Luckily his company pays for 10 days of jury duty and he can still work (and get paid for) over time. How wonderful. Oh man, I was relieved.

If his company didn’t pay we would have had a couple of options. He could have taken vacation days, we could have used our emergency fund, or he could have just refused to go which would cause a $500 fine (and some bad karma). I think we would have used vacation days. Or maybe a combination of emergency funds and vacation days.

But doesn’t jury duty pay? Yup! They pay a whole $12 a day. My husband said that isn’t even enough to buy lunch at their cafeteria.

But still, if/ when you are called for jury duty look into your company’s jury duty policy before you head to the court house. If you get picked to be on a trial it will be helpful to know ahead of time if you can afford to serve. You can be dismissed for financial hardship. But you will need to know ahead of time if your company pays or not. And financial hardship doesn’t just mean that you will lose pay. It means that if you serve on the jury you will not be able to pay your mortgage. So not making your savings goals, or just paying the minimums on your debt payments this month doesn’t count.

Pic by: FadderUri

I’ve discussed our budget here and there before, but basically we have an Excel spreadsheet that has a bunch of categories and each category is alloted a certain amount of money. We keep our receipts and at the end of the day we “put them in the budget”. That’s how it works in theory. In reality, I keep my receipts in my wallet until it’s so full I can barely close it, and then I hand my husband a big wad of folded up receipts and ask him to figure it all out. And he does.

This month I got a lesson in the fact that budgets really do work. I was especially bad about not putting my receipts in the budget. Because of this I didn’t really know how much I had spent. I thought I was doing so good on groceries. I thought I had hardly spent anything at all. I thought we were going to be way under budget. But then the day of reckoning came when I gave my husband so many receipts it actually made my purse lighter (I kid, it wasn’t that bad). I was over budget on groceries. OVER?! How could that possibly be? Apparently I made a ton of little trips, rather than just a few big ones. Those little trips tricked me because they are easy to forget about. And since I thought I was doing so good I think I splurged on some things I wouldn’t have purchased if I had known how close to the limit I was. That’s how it happened.

So that’s proof that, in this house at least, budgets work. So I’ve been trying to do better this month. So far so good.