Saturday, October 15, 2016

Finance Basics - Lesson 5.2

It's Friday night and I'm writing to you from Peter Piper Pizza, waiting for the pizza I've ordered for Mom and I.

I'll be gathering some items for my City's Home Hazardous Waste dumping day tomorrow morning, then gathering the stuff that is still good to take to donation in the late morning.  Because of where I donate, I can get a receipt towards a tax deduction.

A few pieces of pizza later, I'm now home.

In the book, The Millionaire Next Door, it starts off describing who the typical millionaire is.  They live on an average of 7% of their wealth and pay an average of around 12% of their wealth in taxes.

Part of their strategy is to not only make a decent income, but to live in such a way that they are able to save, save, save.  The more you save, the less amount of your total wealth is subject to income tax. Why?  Because besides what income is actually generated from a paycheck, even more is generated in investments that do not pay taxes until the money actually gets spent.  In other words, the more you spend, the more of your money will be subject to taxes.

So now that we have spent a few weeks talking about how you are spending your money, what can you do to reallocate that money towards getting out of debt?

Saturday, October 8, 2016

Finance Basics - Lesson 5

How is the spending log coming along?  Have you tried the calendar out yet?

Here are a few tips:

Start with making a working copy of your own.  Since you have viewing privileges, you will probably need to download the pages given last week to your Google Drive.  You may need to click on the Make A Copy option.

From there, you will want to save the original sheet and duplicate it to do your work on.  Rename the tabs at the bottom for the duplicates, I listed them by month.

From there, you will want to start typing!

Color coding based on whether the transaction is a deposit (meaning it has a + in the + or - column).  Deposits are where money is added to the account.  The transactions with a - in the column will be charges against the account.  For me, some of the charges were direct transactions at stores, while others were online or on an automatic deduction.

Once you are done, you can then use the space on the side to look at the categories of the spending transactions to see where cutting the fat out of the monthly spending can be done.

This is what I came up with for my copy:

I then filled out the calendar for the (R)egular expenses (those are mostly utility expenses that are paid monthly and will not end once all debt is paid) and I used the same color codes on the calendar to keep it consistent.

Keep going, you're doing great!

Saturday, October 1, 2016

Finance Basics - Lesson 4

I will begin this by saying I'm not a financial expert, please consult with a professional for your personal questions and needs.

How was your week?  Mine has been crazy, particularly considering how late this post is.  My apologies for that.

How far did you get with tracking your spending?

Did you find any surprises?

If you still have not done this yet, don't worry, don't stress.  Go through these posts at your own pace, just make sure you are actually progressing.

If you were having trouble getting things listed in one place, I'm linking a little something I cam up with using Google Sheets.

Google Sheets is free to use, however to get the most out of it you will want to create an account (you can still use a previous email, I believe, you don't have to create a new one in order to create a Google account).  This is so you can get full access to the free applications, such as Google Sheets for finances, Google Docs for letters and resumes and Google Slides for any of your slide show needs.  They don't come with all of the bells and whistles of the Microsoft counterparts, however the Docs and Sheets do come with add ons to specialize those apps to what you want out of them.

Spending Log

Continue to fill this out to track your spending.

The next thing to do, in addition to a spending log, is to list your debt.  The first part was a bit painful, but this is the one place where people like me tend to hide from.  Trust me, it won't kill you.

Here are some helps:

Family Finances - The Church of Jesus Christ of Latter-day Saints
Go to Chapter 8 on page 19 to get an explanation regarding listing your debt, and what order is the best to use.

Another resource is from Oprah's Debt Diet - it's called DOLP.


These are some great resources to help you look at your debt, and list it in a way that will help you get successes fast.

I'm going to give you another help, though, and this one stems from a classmate in the Family Finances class that I took.  Their family was paying ALL of their monthly bills on the first of the month - and then ultimately getting hit with overdraft charges.

If you get paid more than once per month, be strategic with your money.  Don't pay everything all at the same time, split it out between paychecks.

The classmate didn't understand this until I handed them a blank calendar template from Excel and had them fill out the calendar for the current month and then write down when they were getting paid and which bills were due when.

Then it hit them.  They could plan for paying their bills with specific paychecks.

That template is what I'll post on here, I've added it to my Google Drive in order to share it.  Perhaps Google will make a template of their own like this for their Google Sheets?  BTW, this can be filled out directly on Google, you'll need to make a copy of it digitally to save it.

Blank Calendar Excel Template

Good luck, deep breaths.

Here is a little inspiration from Oprah:

Saturday, September 24, 2016

Finance Basics - Lesson 3

I will start by saying I'm not an expert in Finance.  Get a qualified CPA or Financial Planner to provide professional assistance.

Lesson 3 is probably going to be a short one to read, however a long one to actually do.

Lesson 3 is on tracking on what you spend.

This can be done two ways, however given that we are in back to school mode/ upcoming holidays mode, this can be a great time to truly track how much you spend.  These will not be normal spending months, but it does give you an idea as to where you are spending your money during seasonal times that you will need to make space in your spending plan (aka budget) to save up for during those months when the seasonal spending isn't needed.

In other words, this will tell you how much you are spending for back to school, Halloween, Thanksgiving, Christmas, New Years, Hanukkah, Kwanzai, or any other special time you are celebrating between September 1 - December 31.  Understanding how much you are spending during this time period will allow you to save during the rest of the year for this time period.

Tracking what you spend can be done three ways:  either with a notebook and pen or pencil, or accessing your account online each month to write down on paper and see where you're money is going.  The third way is the techie way:  Use Quicken.  I've used Quicken since the 1990's when it first came out and I highly recommend it.  If you have a computer and access to the internet, a less expensive alternative is Mint.

If you do not have a bank account due to low finances, create a filing system with envelopes and cash.  Write on the back of the envelope where the money went and then copy it onto a notebook.

Another resource is on

Once you have seen how much you are spending, look for ways to earn additional income to handle any shortfalls or increase any savings.

Saturday, September 17, 2016

Finance Basics - Banks vs. Credit Unions

For years, the only way to handle your money was through a traditional bank.

These days, we have a multitude of different avenues to meet our financial needs.  One of those is a Credit Union.

Credit Unions are non-profit, depositor-owned financial institutions.  Let's break that down.

Credit Unions are non-profit.  Because of the structure of a Credit Union, they do no generate profits, but rather any earnings that are not earmarked for their operating budget are given back to the depositors by way of dividends.  Some give these dividends on an annual basis, others give them on a monthly basis.

Credit Unions are depositor owned.  This means the only qualification to own shares in a Credit Union is to have money in an account with them.  Your checking and savings account balances make customers shareholders in the Credit Unions.  This means the employees should be looking out for the customer's best interest - not someone who owns actual stock or bond shares in the financial institution.

Credit Unions are smaller, and, depending on their size, have the opportunity to get to know you better.

One major drawback of  Credit Unions is there must be, by law, a means of limiting the scope of membership with the credit union.  Some larger companies or a combination of school districts have their own Credit Union for their employees.

Others, however, have branched out, which means it allows for more people to be able to join the Credit Union, move their money over, and enjoy the benefits associated with it.  For instance, Motorola Employees Credit Union changed to TruWest and now covers a geographic range using zip codes.  Anyone living within the zip code they cover is now allowed to move their money over and join the Credit Union.

TruWest also has a relationship with LPL Financial which can provide additional assistance with regards to investing and IRA needs for a reduced fee.

The only really big drawback I've found is if you want to purchase U.S. Savings Bonds - or redeem them, you still need to go through a bank.  Also, international currency is another drawback that is not covered at Credit Unions.  However, if you are looking for somewhere to stash your money, you may want to look into the local Credit Unions to see if you qualify for any of them.

Oh, and there is insurance from the Federal Government to cover your deposits.  Another bonus.

Finance Basics - Lesson 2

I will start by saying I'm not an expert in Finance.  Please see an accredited CPA or Financial Planner for assistance with your personal financial situation.

Principle #2 in the Family Finance workbook states:  "When you track your money, you control it".

This is where we start to move beyond the very basics and start to get into some work.

For this lesson, I'm going to deviate a little from this book and go to a course that can be found online from BYU.  There are also accompanying videos on YouTube you can also view.

Keeping with a principle found in The Seven Habits of Highly Effective People, I would like to start with the end in mind. 

Why do you want to get out of debt?  What purpose would it serve?

Here is one response from one of my favorite YouTube vloggers:

Have you reached rock bottom yet?

I have.  I reached rock bottom in 2012 when I could no longer afford food.  For Thanksgiving.

I was working at a school making wages that were in the poverty level range, and I was doing everything I could to not have to go on food stamps, but the money was running dry.

I had already cut the cable years before as I couldn't afford it.
I had already gotten rid of my smartphone and the Verizon bill that came with it as I couldn't afford it.
I was coupon shopping and reducing what I bought, buying the cheapest foods I could, as I couldn't afford anything else.
I had already been working seasonal jobs in order to bring in extra money, but even that was cutting it close.

Depression was setting in big time, all I wanted was to be dead.  Then I would be with my husband again.  I felt like I was in a tunnel of despair and there was no way out.

Yep.  That's rock bottom.

I owed everyone and wasn't sure how long I was going to be able to handle all of the bills I had on a monthly basis.

Thankfully, I had some great people from my Church, including a very patient man who is a CPA and has seen others in this boat.

That's when the light started to come, although it was still a long way off.

At that point, I wasn't looking at what goals I wanted for myself, I just wanted to be able to afford to eat at Christmas.

We started at ground zero, looking for any wiggle room we could find, but there wasn't very much there.  I began looking for other jobs, in the meantime emergencies hit me, forcing me to use money from my IRA to cover, which left me with a tax bill with the IRS.  I was doing everything I could to stay away from payday loans as those are basically walking into whirlpool where you have to file for bankruptcy to get out.

Thankfully, a job within the school district came up, I applied for it, passed the tests required and interviewed.  When I found out I had gotten the job, I literally sobbed at my desk.  That was November 2013.

The new job doubled my take home pay, plus the job was year round - so there were no more unpaid holidays that would always set me back.

I was able to catch up on bills that were past due.
I was able to buy food.
I was able to put a little bit of a buffer on my checking account, rather than counting every penny.

I was able to breathe again.

Then I was able to take a second look at where I was financially.

I pulled out the Oprah Winfrey Debt Diet DVD I had purchased years before, and began watching it repeatedly, to start planning, to start doing.

I saved up as much money as I could and got the IRS paid off.  That was the big debt I paid off (interest and penalties and all) in 2015.

In March 2016, I paid off my car loan early.  This freed $300 per month.

By summer 2016 (a few months ago), I had saved up $1,100 in my savings, and was adding to the buffer in my checking.  I was also starting to pay down the next debt, which stemmed from $9,000 worth of emergency dental work from 2014.


Then I got hit with another whammy, my home was invaded with bed bugs.

Double ouch.  It wiped out the savings, but at least I could cover the extermination bill paying cash.

Yes, I'm so thankful.

I'm still going through the extermination process (I'll save that for other posts), however things are looking up, and the changes this is forcing me to make will benefit me in the long run.

I the meantime, I'm re-building my emergency savings and looking towards getting back into paying off the debt.

And I'm starting to make goals.

what I've come up with so far:

Long Term Goals

- A comfortable home (condo)

- An emergency home in Snowflake (I need to purchase Mom's property)
     - Emergency Preparedness
     - Location for a personal time out
     - Set up the home with provisions for an older person (Mom and eventually me)

- Travel
     - Places in Arizona
     - Amtrak train rides
     - Alaskan cruise
     - visiting temples
     - Church History sites
     - UK
     - France
     - Italy
     - Other parts of Europe - including Sweden, Switzerland, Denmark, The Netherlands
     - Solo road trip
     - See General Conference live
     - BYU Education Week

- Mom
     - Continued support - physically and financially (get out of debt)
     - Buy Snowflake property
     - Furniture and renovations in the condo
          - Couch and chairs
          - Bed
          - Bathtub/shower
     - Savings to cover medical expenses
     - Vehicle?
     - Will, living will, powers of attorney

- Employment
     - 10 years at work (this has now been reached)
     - Get out of debt
     - 1 year of savings
     - Start my own business?

- Finance Degree - pay cash for this

Here is a video from that finance class at BYU to cover this lesson:

What are your goals?

Long Term (including retirement)

Bucket List

10 year goals

5 year goals

Saturday, September 10, 2016

Finance Basics - Lesson 1 - Money And Emotions

If you missed the introduction to this series, click here.

Let me start by saying I'm not an expert in Finance.  Be sure to seek professional assistance with questions and specific needs when getting your financial house in order.

The coverage of the emotional side of finance is actually found in the introduction of the Family Finance Workshop book, however it's a subject that needs more than just a brief mention.

So much of what we do in life evolves around our emotions.

Even our perceptions of things can be shaped by emotions.  (See The Seven Habits of Highly Effective People)

It should be no surprise that in order for us to get our "house" in order (Isaiah 38:1).  This isn't just a spiritual commandment, but also a temporal one as well.

As a widow of 16 years, I experienced with gratitude the preparations my husband had made in the event he should die.  We had financial goals as a couple and were in the process of becoming debt free in an effort to be financially self reliant.  We were also getting food storage, water storage and other items to be self reliant in the event of emergencies.  The biggest piece of self reliance, however, came in that we were working as a couple on all of this.  I wasn't leaving it up to my husband to take care of everything, and because of this, I knew exactly where we stood when his unexpected death occurred.

I've seen other widows with the opposite, widows where the communication was breaking down, where secrets were being kept, and where both spouses were not handling all of the finances.  This can lead to more heartache and stress than what is needed.

For me, my parents were fantastic role models.  They were frugal (my widowed Mother still is), and when my older brother was killed in 1990 by a drunk driver, I watched as they sat down to discuss together how arrangements for my brother's funeral were going to be paid.  

Later, when my Mother had a mini-stroke, once Mom was home and her blood pressure stable, Dad insisted they pick out a cemetery and get the arrangements made for both of them.  This was because my Father and Mother both didn't want the rest of the family to be saddled with decisions and expenses when the time came.  As it happened, Dad was the first to go in 2006 from lung cancer.  I drove Mom to the cemetery (by then my husband was buried in the same cemetery and I now have a plot with him) and the only needed funds were for the program for his service and the cost of opening and closing the grave.  Everything else had been selected and paid for back in the 90's.

There are going to be times in everyone's lives when things are at a point where some action must be taken, however prearranged plans can help with the finances during a time when the emotions are all over the charts.

Along the same lines, saving money for a rainy day (or an emergency fund as will be referenced later), can assist in making sure small emergencies don't become bigger messes when trying to handle finances during stressful times.

The other part of emotions and finances is looking at what triggers spending, as well as what triggers saving.  If spending needs to be cut, knowing where the emotional triggers are for spending will assist in staying away from temptation to accomplish the saving.

In the last decade, there have been studies made on emotions and finance, here are a few examples.

A different way of looking at it:

So, the assignment for today is:

Where do you spend money that isn't budgeted?  Do you have a particular weakness at a specific store are type of store?

Mine are bookstores and iTunes.  I'm getting better with both.