Home » Frugal Finance Management

Category: Frugal Finance Management

A custom debt-reduction budget that fits your own family’s size, needs, etc., is crucial to debt reduction success.

4 Ways to Create a Budget Without a Fight

I don’t know about you, but we are always trying to do better with our finances. One of the best ways we’ve found to do this is by creating a budget together. And having a weekly budget meeting where we discuss every aspect of our budget helps keep us on track and speaking the same financial language. Just these few things have really helped us in our financial journey towards getting out of debt and, hopefully, retiring early.

Of course, this doesn’t mean that we always see eye to eye on everything in our budget. Therefore, here are 4 ways to create a budget without a fight.

#1. DETERMINing YOUR WHY

Determining the main underlying reason why you both want to create a budget is extremely important. While you and your spouse may not be on the same page regarding every aspect of finances, discussing your main reason WHY can really help get you more in sync. Ultimately, if you don’t have a strong reason to create a budget in the first place, then there really isn’t any point in doing so. And it may just cause undue stress on your relationship instead.

When it comes to most common reasons why couples choose to begin a budget, here they are:

  • Debt pay off
  • Build an emergency fund
  • Save to retire early
  • Fund travel
  • Home improvements
  • Purchase a house
  • Grow a family

While you and your spouse’s WHY may not fit into these categories, it really doesn’t matter what it is. As long as you both have on and discuss it in depth. You and your partner’s WHY will become your driving force to not only create a budget, but stick to it.

#2. CREATe THE VISION

Once you have determined both of your WHY‘s, then it’s time to discuss the best action plan to get to each of your goals. This can be both together, as a couple, and also separately. After all, you can’t do everything together all the time!

At this point, some great questions to pose are:

  • What is the ideal timeline for both of your goals to be reached?
  • How much do you both ideally want to save each month?
  • How much can you actually save a month with your current income?
  • Where are areas that you feel you both can cut back on?
  • What areas does your partner think you can both cut back on?

These questions are great jumping off points to create your budget because they are setting the foundation for all future budgetary discussions and goals.

#3. BUDGET CATEGORIES

The next step in this process is setting up the budget categories. Categories really help you see, on a monthly basis, what you are ACTUALLY spending on things, as opposed to what you THINK you are spending. Most of the time, what we think we are spending on things ends up being completely different than what we are actually spending. Therefore, this is a very important piece to any budget.

The categories I suggest to start with are:

  • Income
  • Recurring Expenses
  • Automobiles/Transportation
  • Food/Drinks
  • Household
  • Travel
  • Clothing
  • Gifts
  • Luxury
  • Savings
  • Investments
  • Misc.

These are the basic categories that we use, personally. However, if you want to break them down further to really dig into what you are spending on every little thing, then I highly suggest that also.

#4. BUDGET COMPROMISE

Once the budget categories are set up, then it’s time to determine how much of your income goes into which category. This can actually be the most difficult part of the whole process because it’s the most in depth. And due to this, it can create the most friction among couples. So going into it with an open mind and patience is really key to making your household budget a success.

The first year you do this can be the most difficult because you don’t have as much past data to pull from. While part of it is a guessing game, most of the big categories can be fairly easy to determine. These categories usually include:

  • Income
  • Recurring Expenses
  • Automobiles/Transportation

Once you have these categories figured out, you’ll need to take what’s left of your income and and divvy it up among the remaining categories. This can be much easier said than done though!

You and your partner should discuss how each of you thinks the remaining dollars should be appropriated. And this is where disagreements can come into play. So talk through each category calmly and in as much depth as possible to come to the best budgetary compromise on spending.

Create a BUDGET without a fight summary

My partner and I may not be on the same page with everything all the time (and who is, really?). However, we both respect each other’s point of view. We also both want to be financially independent by the time our youngest leaves the house, so we have a major goal.

Therefore, we talk weekly about our budget and change things accordingly when we feel like we are off track, if things change, or if one of us voices a concern. Sometimes, we decide that we want to pivot and reallocate our funds to one category more than another. This works well for us because we communicate well with each other. And we’re always careful to be respectful of each other’s opinions about where we would like to see the budget going.

Ultimately, good clear communication is the most important part when trying to create a budget without a fight.

What are some of the best ways you have found to create a budget without a fight with your partner?

7 Ways to Help Your Teen Build Credit

When it comes to having teenagers, there are a lot of things we as parents need to teach them. And nowhere is this more important than when it comes to to their financial education. Teaching our teens about money, finances, credit scores, etc. is extremely important to do before they leave the nest. There are many different ways we can go about this, of course. But, one of the most important things I feel that we can teach our teens is what a credit score is and how it impacts every aspect of their future financial lives. Therefore, before they leave the nest to fly on their own, helping a teen build credit is high up on my list of important lessons.

1. Get a job

One of the first things I told my teens when they turned 16 was that getting a job would be a good first step into the adult world. Not only does this give them some idea of what to expect in the work world, but it also gives them a first taste of managing their own finances usually. As a bonus, getting a job helps a teen begin to build their own credit.

2. open a checking account

Once your teen has a job, opening a checking account for them is the next best step to help them build credit. Most banks won’t let a child open a checking account on their own, so you’ll need to be a co-signer on the account until they are 18. This is also helpful when it comes to monitoring their spending, as it gives you a way to see everything that’s happening with their money. And it gives you good talking points to discuss with them about budgeting, when they get off track. Which my teens have done more times than I’d like to admit!

3. open a savings account

Whether your teen has a job and/or checking account, they can still get a savings account. We started savings accounts for our kids when they were much younger, just to put money into for them that relatives gave them for holidays. Having a savings account is a good way for them to watch a nest egg grow. And we have found it’s also a good place to put excess money they earn from their jobs is a savings account. This has helped rein in and regulate their excess spending on random junk they don’t need and help them save for bigger goals at the same time.

4. Open a Roth ira

When our kids started working for me, I opened Roth IRA accounts for them. These types of accounts can only be funded by earned income. So they can’t be opened until your teens have earned income that will be taxed. But, once they have some earned income to work with, you can open a custodial Roth IRA for them that will roll over directly into their name solely once they turn 18. This not only gives them a good first taste into investing, at much lower risk than when they do it as an adult, but also helps your teen build credit.

5. get a prepaid credit card

The next option is to help them get a prepaid credit card in their own name. Typically, you’ll have to be a co-signer on the account, as with all of the other accounts. But, with these types of credit cards you determine how much is put on the card to begin with, so that is all they have to spend. This works out really well if they have a job already also. You can tell your teen to set aside $100 – $500 to put onto the prepaid card and then use this card for all of their purchases. This way they are building credit while only spending the money they already have.

6. credit card authorized user

As another option to the prepaid credit card, you can add your teen to one or more of your existing credit cards as an authorized user. I did this for my two older teens just recently with one of the credit cards we never use that also has a high credit limit. I chose to put them on this one since we don’t use it because it’s easier for me to track who is spending what. Plus, since it has a really high limit, it helps boost their credit that much faster due to the amount of credit used versus the credit available. So far, they’ve both been paying off what they spend before the bill even closes, which is awesome!

7. teach them about credit scores

After all of these other options, the most important thing to teach them about is their credit score. Since they are trying to build credit, understanding how their credit score impacts their financial future is integral to overall financial health. If they have any of the aforementioned accounts opened, they can begin to see how their saving and spending are affecting their credit score. Which is a fantastic way to give them an early taste of how the whole system currently works. And don’t forget to show them how to pull their annual credit report each year so they can run through it for any discrepancies.

Teen building credit summary

Overall, there are a lot of great ways to start helping your teen build their credit score early on. While I don’t use the prepaid credit card method, I have used every other option to help my teens build their credit now. And, they’ve been doing awesome so far with the learning curve. So my hope is that by the time they are out on their own, they won’t have nearly as many issues as a lot of young adults do with their first taste of financial independence.

What are your favorite ways to help your teen build credit early?

The Benefits Of Minimalism From Health To Finances and More

For over a decade now, the concept of living a more minimalist lifestyle has been at the forefront of many people’s minds. The world is much more fast-paced now than it ever has been throughout human history, and sometimes this can leave people feeling stressed out and leave their bank accounts drained? How’s that, you may ask? Well, the overstimulation of such a fast-paced environment can give us too much to think and stress over; and the constant advertisements and pressures we feel through things like social media lead us down a dangerous path of overspending and living outside our means. 

So the same way, it’s essential to have health hacks to keep costs low in our lives and live more frugally; it’s just as important to have lifestyle hacks to keep costs to not just our bank accounts but our health low as well. One path towards that goal is minimalism.  Read more

Are you considering whether you should rent or buy? If you have bad credit, here are some things to consider before buying.

Buying a House When You Have Bad Credit

If you find yourself having to move you might be asking yourself, “Should I rent or buy a house?” Of course, both renting and buying usually mean a credit check so you’ll want to know your credit score before submitting an application to a landlord or to a lender for a mortgage loan.

When purchasing a home, a good credit score of at least 760 will get you the best interest rate, as CNBC reports. Anything under 670 is typically considered “subprime” while 579 or less is generally “bad.” If you’re in that category, it’s going to make both renting and buying difficult, but if you’ve got your heart set on purchasing a home, there might still be some options. Read more

Essential Tips for Full-Time Farmworkers

Agriculture is vital to the survival of humanity. Providing the basis for food security, farming has been, and always will be, a viable occupation. Farming provides large quantities of food and materials at relatively low costs and ensures the meat dispersed throughout the country is harvested by healthy animals. Modern farming began around the 18th century and continues to be a highly profitable business for many people. Like any occupation, farming comes with its own set of challenges.

 

Despite its contributions to the stability of the food chain, farming can be extremely dangerous. In fact, farming ranks as one of the most dangerous industries in the United States. Due to this, farms and ranches must follow strict safety guidelines when it comes to handling animals and equipment. This will protect owners and their employees from unexpected mishaps. Here are a few helpful tips for farm and ranch workers. Read more

Eliminate These Things From Your Wallet for Healthier Finances

Samuel L. Jackson and company never seem to tire of interrogating you about what’s in your wallet. They do this while pressing you to add a product that almost certainly shouldn’t be there. It is not just to cure your hopeless case of Costanza wallet. It is to help you gain better financial hygiene. Not only that, but it is remarkable how much better your situation can get by eliminating the things you carry with you. That is not to imply that removing a few things from your wallet will magically fix everything. But it is the beginning of a solution.

There are two major problems that have to be addressed in every financial crisis:

  1. You don’t have enough money to cover your expenses regardless of what you do.
  2. You are spending the money you have in a way that is contributing to the crisis.

Just about every financial problem has its origin in one of those two buckets. They are both buckets of hurt. The first problem cannot be easily addressed. You will need to increase the amount of money you make or decrease your lifestyle to fit the budget you have. The second problem can be addressed. Let’s take a look at a few of the things we can remove from your wallet that will help to address the problem: Read more

As a parent, your children are looking to you for advice, guidance, and modeling. Here are some time tips on helping your children succeed.

How To Boost Healthy Financial Habits In Your Family

How can you prepare your children for financial health? How can you give your children and teens a head start towards financial success?

 

As a parent, your children are looking to you for advice, guidance, and modeling. Young children model spending, saving, and earning habits. Teens learn financial literacy by watching what they do. You can set the course for financial success by practicing smart financial habits.

 

In the United States, only 17 states require high schools to offer at least one course in financial literacy. Many teenagers never really learn the basics of budgeting, managing money, communicating about finances, and assessing risk.

 

You can help your young children and teenagers develop good financial habits.

 

Here are 8 tips to get started right away.

Read more

5 Tips To Reach Your Financial Goals For 2021

Financial goals seem to be one of the most challenging to achieve. As a result, many succumb to debts, loans, and other financial aids. These means may help you with your current needs but may not help your future finances unless you use them for business ventures and other income-generating investments. 

One reason why many find it hard to reach their financial goals is not knowing how to do it. To get you started, here are the following tips that might help with your financial journey: 

Read more

Why Equipment Loans Are Important for Startup Businesses

Starting your own business is not an easy feat. You will need a lot of patience, a lot of filled paperwork, a great idea, and a lot of money. Of course, you will also need equipment for whatever you want to do or produce. Equipment means that you will need even more funds, which can quickly get overwhelming for your budget. Luckily, there are equipment finance options you can choose to make it all a bit easier. 

 

Read on to find out everything about equipment finance and why it is a great choice for startup businesses.  Read more