Chasing the Bull

Does Christmas sneak up on you every year? Once it is over, do you wonder where your money went and why you spent so much? If you are working on becoming debt free, the holiday season can seriously set you back a few months. It is extremely easy to ruin months of hard work in a single afternoon. Here is a a few things we plan on doing this year so that next year our budget will not be hit as hard.

1. Determine how much we plan on spending - This year I am tracking all of our gifts in a simple spreadsheet. I am documenting such items as who the gift is for, what the gift is, and how much it cost. In late December, my wife and I are going to sit down and determine how much we are going to spend next year. By reviewing my spreadsheet, we should be able to determine where we spent too much, or too little, and make changes accordingly.

2. Add gifts to our budget - Over the past year, we have done pretty well in sticking to our budget. Since this was our first year using one, we left off a number of important things. The most obvious being Christmas gifts (I cannot believe I forgot that). Since we will have determined how much we want to spend in step one, we now must simply add it to the budget. If we plan on spending $500 on gifts, our monthly budget should include $19.25 per paycheck. I honestly have no idea what the real number is going to be this year. I am hoping that it is not much more than this!

3. Start saving now - Now for the hard part! After completing steps 1 - 2, I will now know how much I need to save each paycheck. I use online banking so it should be a simple thing to transfer $20 from my checking account to my savings account. I should be able to do this every two weeks without fail. This is where I will need to focus on my goal to become debt free.

4. Stay Focused - If I have learned anything about myself over the past six months, I have learned that I need to constantly revisit my goals and objectives. If not, it is extremely easy to get into the mindset that $20 is not that much money and that I can start saving next week. We all know how that will turn out.

5. Stay on Target - Whenever I get distracted, I think back to a epic scene in Star Wars - A New Hope. In case you haven’t seen this movie (and shame on you if you haven’t) Luke Skywalker and his fellow X-Wing pilots are mounting an attack on the Death Star. There are lasers and enemy ships flying everywhere, trying to distract the good guys from attacking. One of the Rebel Commander keeps repeating “Stay on target! Stay on Target”. This is what I need to do! I need to ignore the noise and confusion around me, and focus on successfully completing my mission to become debt free.

Following these steps will, hopefully, ensure that next year’s budget will be more realistic. If I plan a bit better during the year, I will be one step closer to realizing my debt free goal.

What steps do you take to ensure you stick to your budget during Christmas? Do you budget money all year, or simply wing it?

Please consider subscribing to my feed!

Popularity: 20% [?]

I stopped by a local grocery store on the way home from work tonight. I did not realize that the Salvation Army started ringing their bells so early. Hearing the sound of those bells brought back bad memories of avoiding eye contact with the volunteer and going in the exit door to avoid their polite “hellos”. It is not that I did not want to give, I just did not have the money to do so.

During my crusade to become debt free, I have learned how to implement planned giving as part of my overall financial plan. Now that I have a plan, I know when and where I can give, which allows me the freedom to say no.

The following are my top five tips to consider when using planned giving.

1. Budget - I truly cannot stress the importance of a good budget enough. Just as you would budget for your monthly power bill, you should budget your charitable contributions. When you receive a request for a donation that falls outside of your planned giving, it becomes increasingly easy to say no. Tonight I was able to give freely and not worry about the consequences to my overall budget.

2. Be Informed - Ask plenty of questions about your chosen charity. How much of your gift will be used for administration costs? How much will actually be used supporting the organization’s stated mission? Ask them for their 990 tax form. This form provides a wealth of information. If they will not provide this information, it should be a red flag and you may want to consider giving elsewhere.

3. Keep Detailed Records - For the most part, a canceled check will suffice for any gifts under $250. If you give an amount greater than $250, it is wise to obtain a receipt from the charity specifying the amount and description of the gift. Planned giving works best is you stay organized.

4. Understand basic tax laws - While most qualified donations can be deducted from your Adjusted Gross Income (up to approximately 50% of your AGI), you need to be aware of anything that may affect the extent of the donation. If, for example, you receive a premium (dinner, shirt, etc) as a result of your donation, the amount of the donation that can be deducted from your AGI is reduced by the Fair Market Value of the premium received.

5. Learn to Say No - Realize that you can say no to anyone requesting donations. You need to set your own standard for what is acceptable. Many churches recommend that you tithe (which literally means a tenth). In some circumstances, 10% may not be enough to satisfy your standards (ie Bill Gates, Warren Buffett, etc). In others, giving 1% of your income may be currently impossible. When you learn to become debt free, planned giving becomes much easier.

Please consider subscribing to my feed.

Popularity: 46% [?]

If you are new here, please consider subscribing to my feed.

I spend a good deal of time reading personal finance and investing blogs. It is always interesting to get read the opinions of so many intelligent people, even if I disagree with some of the things that are posted.

I ran across an interesting challenge at Aching Debts. The concept is simple; list 5 things big or small that bust your budget, then tag 3 other people and invite them to join the challenge. Since this blog is so new, I really do not expect to get invited to participate, so I thought I would invite myself (Anyone is invited to participate, by the way).

Without any further ado, here are the 5 things that always “bust” my budget.

5. Diet Coke - No matter how hard I try to slow down or quit, I still buy 4 to 6 12-packs of diet coke a week. Every month I leave this out of the budget thinking that I will be able to quit this week. So far, no luck.

4. Fast Food - My wife is great about preparing a good lunch and dinner for me. Breakfast, however, is my responsibility. As such, I would say about 7 times a month, I wake up late and I am forced to stop at Burger King, or starve. I am such a slacker sometimes.

3. Snacks - Do you see a theme here? I think food completely runs my life. Maybe I should think about this some more.

2. Dogs - I have two wonderful dogs; a Scotty and a Silky. Don’t get me wrong, I love them, but they are so expensive. Both dogs are sensitive to whey protein, so we have to buy really expensive food so they don’t scratch themselves all night. The Scotty eats like she will never get another meal and the Silky has to have a few teeth pulled every couple years (he refuses to let us brush his teeth and won’t chew a bone).

1. Books - I love to read. Currently, I am reading about 5 books, which I will probably have completed next weekend. I always joke with my wife and say that when I retire, I am going to open a used book store, then lock myself in and read 12 hours a day.

The rules of the challenge are that now I have to tag 3 people to carry on the challenge. Here are the people I’ve decided to tag:

Hank @ MyInvesting Blog
LPKitten @ The Debt Defier
Saving Money Bug

Please consider subscribing to my feed.

Popularity: 50% [?]