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[Audiobook] Personal Development | Managing Personal Finances
Is financial stress taking a toll on your well-being and relationships? Join us on a transformative journey as we navigate the often-overwhelming world of personal finance and budgeting. We begin by addressing the daunting challenges many face, such as debt and the anxiety it induces, and paint a vivid picture of how budgeting can serve as a crucial roadmap to achieving financial freedom. Through the poignant story of Jack and Sally, we reveal the profound impact financial strain can have on family dynamics and mental health, emphasizing the necessity of a personalized approach to managing money.
Ever felt like you're constantly living beyond your means? We hear you. Our discussion dives into practical solutions for stabilizing your finances, starting with the perils of high-interest credit cards and the importance of tracking both fixed and fluctuating expenses. With the relatable story of Jan and Abe, who found financial clarity through diligent expense tracking, we offer actionable advice on categorizing and managing expenditures. You'll learn effective strategies for budgeting and saving, including how to set aside funds for personal enjoyment without compromising your financial goals, as illustrated by Holly and Bridget's inspiring journey.
Ready to cut costs and stick to your budget? You'll love our practical tips on reducing everyday expenses, from slashing utility bills to enjoying entertainment on a budget. We share Marvin and Dina's success story of conquering student loan debt through small but impactful lifestyle changes. Plus, discover a variety of budgeting tools and techniques that cater to different preferences, demonstrated through the experiences of Taylor and Kevin. Finally, we provide insightful advice on overcoming debt and building credit, featuring real-life examples from Jimmy, Paul, Molly, and Cheryl. As we conclude, remember the wisdom of Steve Borkolda and Thomas Jefferson on the importance of saving and prudent financial decisions for securing your future.
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Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Managing Personal Finances Module 1. Getting Started. For many people, finances are an unsolvable Rubik's cube filled with anxiety. There are millions of Americans who live with the shackles of debt each day. We don't teach children when they are young the value of a good credit score. Many people have a hard time formatting and sticking to a budget. You can easily solve the finance puzzle with a little hard work, self-control and the right tools. Today is a new day. You are taking the first steps to reclaiming your financial freedom.
Speaker 1:Module 2. The Benefits of Budgeting. When going on a road trip, most people have a map which tells them how to get from point A to point B. The map is important because it tells them how to get from point A to point B. The map is important because it tells you how to get to your desired destination. A well-developed budget is just like a map to help you reach your financial goals. You start at point A and the budget helps you go the distance, get to point B. Let's discuss some of the benefits to budgeting.
Speaker 1:Having a budget can be very beneficial to get the hardship of debt off of your plate. Debt is money that is owed by one person to another person or company. Many people these days struggle with the burden of debt. The Pew Charitable Trusts reported in 2015 that 80% of Americans were in debt. The median is almost $68,000 for Americans. Talk about stressful Debt can take many different forms. Here are just a few Mortgage, credit card, medical bills, personal loans, car loan, bank overdraft charges, student loan.
Speaker 1:A well-crafted budget could help you create a savings. In this context, savings means money that a person has saved, usually through a financial institution, but not always. Having a savings is critical and often overlooked. You never know when lightning is going to strike, the car is going to break down or you're suddenly needing to have an emergency appendectomy. The Boy Scouts have a motto always be prepared. We don't always know what is coming our way in life, but a little foresight and preparedness can help. Saving a small emergency fund could mean the difference between saving the day or total disaster. Here are a few different types of events you could save for Car repairs, housing repairs, medical costs, retirement, unexpected unemployment.
Speaker 1:When a person is weighed down by their financial situation, it can cause a lot of stress and anxiety. Stress and anxiety can make it hard to function in life. Feeling the overwhelming pressure can be debilitating for some people. Stress and anxiety can also manifest in the following ways Heart attack, high blood pressure, depression, gastric conditions such as stomach ulcers, substance abuse, Eating disorders, weight loss or weight gain Insomnia. Financial stress and anxiety can be curbed by having a properly developed budget in place. A budget can help you manage your monthly spending. Your budget can even help you get out of debt, if that is one of your goals. Your monthly spending, your budget can even help you get out of debt, if that is one of your goals.
Speaker 1:Financial strain can affect more than just your physical health. It can affect your relationships also. When you're stressed out, that always has a way of leaking into your relationships with your spouse, family and friends. A major cause of divorce in America is related to financial issues. When financial stress is at the forefront of your mind, it can cause you to be distant and irritable towards your loved ones. Sometimes we have to borrow money from a loved one, which can add even more tension to an already strained relationship.
Speaker 1:Jack and Sally have been married for three years and were blessed with a baby Together. They decided that Sally would leave her job and stay at home with their newborn for the first two years. They understand that this will have a significant impact on their income, but feel it is best for the baby. They feel that Jack makes enough money to cover all of the bills and necessities. Even though Jack makes enough money for the bills, they often have to pay for expenses with their credit cards. Jack feels like Sally shops too much and doesn't understand that they don't have the financial flexibility they use too. He often becomes irritated and they start to argue about their financial situation. Sally feels like Jack doesn't share with her his frustrations about their financial situation, unless they are arguing.
Speaker 1:Module 3. What to consider before creating a budget. A budget is a very personal tool and is tailor-made for each individual. Module 3. What to consider before creating a budget. A budget is a very personal tool and is tailor-made for each individual. What works for some people may not work for others. Your budget can depend on your income, your goals, your expenses, etc. There are some basic items to contemplate before creating a budget. In this section, we will explore the different elements that you should consider before creating your budget.
Speaker 1:Oftentimes, people have a tendency of living beyond their means. Everywhere you look, there are credit cards and loans available to help you sink further into that hole called debt. People charge items to credit cards that can have interest rates as high as 29.99%. When the bill comes in, oftentimes just the minimum balance is paid. This type of financial behavior means filling the pockets of the credit card companies with your hard-earned money. If you are able to understand what your income is and live within your means, you can climb your way out of your debt. Your income consists of the money that you and your spouse make each month from your jobs. It could also consist of any side work or at-home business that you may be involved in. When considering your income, you want to only budget for the money you consistently earn. If you have a side business that doesn't consistently earn a certain amount of money, you will not want to include that in your budget. The extra income can be invested in additional savings, paying down debts or entertainment.
Speaker 1:When you are developing your budget, the duration is important to factor in. You can make your budget as simple or complex as you wish. You could create a budget for a year and create sub-durations per pay period or per month. Your budget duration could be determined by your goals. Also, if your goal is to pay off your credit card within the next two years, then you can make a budget reflecting that. The most common budget duration is a yearly budget that is broken up into monthly periods. There is no right or wrong way to determine your budget duration. It completely depends on your needs. Anything goes, as long as it works for you.
Speaker 1:Of course, with any budget, you need to know your expenses. You can build a great budget, but if your expenses are not accounted for, it will be a wasted effort. There are two categories of expenses fixed expenses and fluctuating expenses. A fixed expense is an amount that stays the same each month or period. A fluctuating expense is an expense that varies in its costs. We will explore these two categories more in the next two sections.
Speaker 1:Often, people will create a budget and not consider all of their expenses. Not understanding what is being spent is the first step to failure in a budget. When determining your expenses, you want to include items like housing costs, medical costs, transportation costs, etc. Take the time to write it down and make a list of what you think your expenses are. Take the time to write it down and make a list of what you think your expenses are. Give yourself time to really think about your monthly or yearly expenditures before committing to what you've written. Often expenses that you hadn't thought about at the time will come to you later on, even though you have made a list of your expenses. Sometimes what we write down as an expense is different than what we are actually spending our money on.
Speaker 1:A great resource in weight loss is to have a person write down what they eat each day. This record allows them to be accountable for their food choices and allows them to see what their nutritional intake really is. Keeping a record of what is being spent will allow you to really evaluate what you are spending your money on. A lot of times, the small items are overlooked. But those small items are overlooked. But those small items can build into a large amount of debt for some. I suggest that you keep a log for at least a month of everything that you spend money on. With this log, you can see where your money is really going. If you are able, continue to keep the log after you start your budget, then you can see the progress you're making.
Speaker 1:Jan and Abe are really struggling financially. They have tried really hard to save money, but it all seems to fly out of their pockets. As soon as they get it, they shop at thrift stores and try to use coupons, shop the sales and clearance racks. No matter what they do, they just can't seem to get ahead. Jan decides that they need to start writing down the money that they get from their jobs. They see that they earn more money than they thought they did, but they are still struggling financially. Abe decides that he will start writing down everything that they spend their money on. He soon discovers that they are spending a lot of money on items they don't necessarily need because they are on sale. Together they decide that they need a budget to get back on their financial track.
Speaker 1:Module 4. Types of Fixed Personal Expenses. Fixed expenses are expenses that do not change. An example would be your newspaper subscription at $25 a month. You know that every month you are going to be paying $25 for that subscription. Since it's the same amount every month, it is classified as a fixed expense.
Speaker 1:Fixed expenses could be utility bills, housing bills, transportation bills, etc. Your household utility bill is a fixed expense. A utility bill reflects public services that are associated with a legal residence. If that utility bill is the same every period, month or year, then it can be considered a fixed expense. Here are some examples of a fixed utility bill Telephone, cable, internet, sewer, electric. Some electric companies offer averaged rates for customers Water, trash, gas.
Speaker 1:Your housing bills can also be included in your fixed expenses. A housing bill relates to the actual dwelling, not a utility bill. An example of a housing bill would be your rent. If you rent an apartment for $1,000 each month, it's a fixed housing expense. You know that every month you are going to have to pay your $1,000 rent. Some fixed housing expenses, such as house taxes, can be calculated annually. Here are some examples of housing bills Rent, mortgage, neighborhood association dues, house taxes, home or rental insurance.
Speaker 1:Most transportation expenses are considered fixed expenses. A fixed expense could be your car payment. Since most people pay the same amount every month for their car payment, it would be considered a fixed expense. Your automobile insurance is another example of a fixed expense. Your car's gas bill is not a fixed expense because that can fluctuate depending on where you travel in your car. Here are just a few more examples of fixed transportation expenses Bus pass, quarterly oil change, car payment, monthly parking in a garage facility, subway pass, car insurance. Another example of a fixed expense would be your debt payments. Debt payments could consist of loan payments or payments for past due debts. If you have past due medical expenses that you make payments on, this could be included as a debt payment. Since these payments are the same each month, they are considered fixed. If you are lucky or financially savvy enough to not have any debt, then this section may not be applicable when determining your budget.
Speaker 1:Jessica is very good with her money because she is very faithful to her budget. Her sister, marcia, is not very good with money and is tired of struggling to pay her bills. She asks Jessica for help with her finances. Jessica tells Marcia that she needs a budget to help her with her financial situation. She asks Marcia to come over with all of her bills and receipts so that they can start development of her budget. Jessica separates the expenses into two categories fixed and fluctuating expenses. Jessica tells Marcia that she is separating the bills into these two categories to see what bills they know for sure are going to stay the same and what may vary in cost Module 5.
Speaker 1:Types of Fluctuating Personal Expenses. Fluctuating expenses vary. In this section we will discuss some of the fluctuating expenses that you may encounter when creating a budget personal care, non-fixed transportation costs, meals and entertainment costs. Personal care expenses are a broad category in any budget. Personal care can include food, toiletries, medical expenses and clothing. These expenses could be weekly expenses, like groceries, while others, like prescription medications, could be monthly, and you may not need new clothing every month. Most of these expenses will have to be estimated. When doing so, it is strongly suggested that you estimate on the high side so you don't cut yourself short. Once you are able to project the expenses you have and their estimated time frame, you can add them to your budget.
Speaker 1:As you continue to embark on your budget exploration, you will notice that you have some non-fixed vehicle costs. As mentioned earlier, gas is an example of a non-fixed vehicle costs. What you spend in gas one week may not be exactly the same as what you spend the next week. Gas prices change constantly. Other examples of non-fixed vehicle costs could be paid parking, toll, road fees, cab fare, car wash.
Speaker 1:It is unrealistic to make a budget without having an entertainment category. It may not be a necessity for life, but it is important to your quality of life. Obviously, if the choice is paying a utility bill or paying for entertainment, you would choose the utility bill. Entertainment expenses could be small depending on the flexibility of your budget. Here are some examples of entertainment expenses Movie tickets, going dancing, concerts, renting a movie, putt-putt, golf, bowling. We may all have moments where we think I am not spending money on eating out anymore. I will cook all of my meals, like that New Year's resolution to work out every day. Your plans to eat at home more often quickly fall by the wayside. Try to realistically evaluate how much you eat out and budget accordingly. It is better to have extra money in the budget for these types of expenditures so you're not tempted to squeeze it out of your gas budget. Keep in mind that there are ways to stretch a dollar. Perhaps there are used coupons available to use or special deals to take advantage of.
Speaker 1:Holly and Bridget have been friends for years. Holly always seems so put together to Bridget and it seems like she always has the funds to do fun things. Bridget feels like she is always struggling for money and never has any left to have fun. Lately Bridget has been declining Holly's invitations to hang out because she doesn't have the money. Holly sees that her friend is pulling away from her and finally asks Bridget what's wrong. Bridget tells Holly about her financial stress. Holly tells Bridget that she has been in her position. She told Bridget about her budget and how she started setting aside money for entertainment opportunities, dining out options and other personal expenses. She told Bridget that she used to just budget her utility bills and rent and was always too broke to do any activities. They start working immediately on a livable budget for Bridget.
Speaker 1:Module 6. Establish your Goals. It is important that you have a goal or goals in mind when you start a budget. Your goal can be simply to not have any of your utilities turned off due to non-payment. Your goals could be more complex to pay your utilities on time so that your credit score improves enough for you to get a car loan. Be they big or small, many or few goals are important. There are two types of goals to keep in mind when creating your budget short-term goals and long-term goals. Short-term goals can be achieved fairly quickly. Long-term goals are achieved over a longer period of time. Some of your short-term goals could even be steps to achieving your long-term goal. Here is an example Long-term goal Buy a car. Short-term goals Pay bills on time so that credit is good. Spend less money on fast food by cooking more at home. Rent movies instead of going to the movies. Start saving extra money for down payment.
Speaker 1:Another important factor when creating a budget is to be realistic. Making a budget means taking a real look at your spending. You can use your budget to cut some of the frivolous purchases that you might be making in haste, but you want to make sure you are making smart cuts that you're going to stick to. We talked earlier about that new year's resolution to work out every day. A more realistic goal would be that you work out once or twice a week. You can always increase your workout routine, but you want to make it a realistic goal that you can achieve. Don't make your budget a New Year's resolution. Make it a good habit. Give yourself wiggle room and money to splurge with occasionally. Otherwise, you will stop using what might be the best tool in your belt.
Speaker 1:If you are over the age of 20, you probably have achieved some level of debt. It is very seldom that someone doesn't have any debt. A budget can help you start paying off some of the debt that you have accumulated throughout your life. Paying off your debt can not only improve your credit score, but also your quality of life by reducing stress in your life. Here are a few types of debt Credit cards, bank overdraft fees, past due medical bills, payday loans, student loans, gambling Mortgage, car loans Everyone needs a little nest egg.
Speaker 1:Having an emergency fund is one of the benefits of having a budget. You can save small amounts of money each week, every two weeks or monthly for emergencies. You never know when your vehicle or home will need repairs or if your employment will be terminated. It's comforting to be able to face the disasters head-on, knowing that you have the ability to take care of yourself thanks to your good financial planning. Another important type of savings is retirement savings.
Speaker 1:People are living longer these days. This newfound longevity does create a financial problem, though. When the Social Security Administration was started in 1935, the average life expectancy was 61 years old. Now, the average life expectancy is 81 years old. According to the Social Security Administration, the trust fund reserves are estimated to be depleted by the year 2031. So as we get older, we are no longer able to depend on the Social Security payments to be depleted by the year 2031. So, as we get older, we are no longer able to depend on the social security payments to be enough to cover our living expenses. We have to take the opportunity now to save for a future or risk being financially destitute.
Speaker 1:Michael has decided he is going to make a budget to help him save up for a house. He knows that he needs to get his credit score up and start making some good credit choices. He talks to his brother, tim, who reminds him also of the importance of having a nest egg, also to fall back on. Michael decides to start making a list of the short-term goals that he needs to achieve in order to reach his long-term goal of being a homeowner. First, he gets his credit report and starts paying off the debt that he has. He also starts making a habit of throwing all of his coin change in a jar. Each time the jar is filled, he cashes it and puts it in his saving account. He also starts putting $30 out of each check to add to his savings. After a year of hard work and being faithful to his budget, he is able to put a down payment on a house of his own.
Speaker 1:Module 7. Determine where cuts can be made. Not all budgets require you to make cuts to your spending, but a lot of budgets do. Determining where cuts can be made can sometimes be a little difficult, especially when you are giving up something you really enjoy. Just keep in mind that the cuts you make need to be realistic and something that you can follow through on.
Speaker 1:One great way you can cut costs is to cut out some bad habits. If you are a smoker, you could cut out cigarettes. The average price for a pack of cigarettes is anywhere from $5 to $10. According to the American Cancer Society, a light smoker smokes about 10 cigarettes a day. Usually there are 20 cigarettes in each pack, which is a pack every two days. If you take that into consideration, a light smoker is smoking an average of $1,000 a year in cigarettes. Think of how much money could be saved in a lifetime. If you can't quit or you don't think that's a realistic goal, maybe just try reducing your consumption. Another bad habit to cut could be alcohol, or maybe you have a daily donut fix. The bottom line is we all have habits that are not good for us. They are habits that take money away from your bright future and could be cutting our life short.
Speaker 1:Sometimes our car can squeeze out a little more change than just what's fallen between the seats. One excellent way to cut costs costs is to reduce your transportation bills. Consider carpooling. Not only will it save you money and gas, it helps the environment and offers a sense of camaraderie between co-workers. You might also consider using public transportation. Most cities have bus stops all over town. Maybe you live close enough to work that you could consider riding a bike. What a great workout and zero gas expense. When you own an enough to work that you could consider riding a bike. What a great workout and zero gas expense. When you own an automobile, keeping it running well can help keep costs down.
Speaker 1:While we don't relish paying for car maintenance, preventative maintenance can prohibit impending doom from happening. Flushing out your radiator every 30,000 miles or 5 years can reduce rust and scale buildup. Rust and scale buildup is one of the leading causes of cooling system component failure. This could cause the engine to overheat and possibly lock up. Preventative vehicle maintenance helps save money in the long run.
Speaker 1:Another way to cut costs is to try to reduce some of your utility bills. Maybe you don't need to have the 596 channels that you currently have from the cable company. You can reduce the amount of water used by taking showers instead of baths. You can also try limiting the length of your showers to save water, or water your lawn less frequently. By switching your light bulbs to LED, you could reduce your electric bill. Sometimes something as simple as turning off the lights when you leave a room can save a few dollars. You might consider purchasing electronics that have the energy saver symbol on them. There are many ways to reduce your utility bills. You just have to figure out which ways work best for you.
Speaker 1:While you do need to have some room in your budget for entertainment, there are some cuts that can be made to this category. Having an entertainment section of your budget is great in moderation. You don't want to go out every night. That's a big expenditure. Going out occasionally is great and can be just as satisfying. Check and see if your town has any special events with free admission. A lot of cities will offer free movies in the park on certain nights. You can bring your own picnic and make a date out of it. Sometimes you can find coupons in the newspapers for deals on activities in your city. Maybe the cut you are making is as simple as only going out three days a week instead of five.
Speaker 1:Marvin and Dina have been married for six years now. They met in college and had instant chemistry. While they are very happy together, they are weighed down by student loan debt for both of them. They decided that they needed to make some cuts in their budget to get this debt off of their plates. Marvin decided that he was going to quit buying bottled water and would start drinking tap water. He was drinking six bottles of water a day and it could get expensive. He also decided that he would start carpooling with his neighbor to work, because he works at a building down the street from his job. They are both going to roughly the same area, so they might as well go together. Dina told Marvin she was ready to make some cuts. Also, she cancelled all of her magazine subscriptions and started taking showers instead of baths. She also has decided that she would stop buying her daily coffee from the coffee shop and just bring some from home. Together, they are able to strengthen their financial situation.
Speaker 1:Module 8. Tools. You wouldn't trust a plumber to do his job without having some handy tools. There are a plethora of tools available to help anyone with a budget. In this section, we will discuss the different types of tools that you could use to create and manage a budget. There are tools available for people of all types, from the technically advanced to the technophobic.
Speaker 1:Budgeting software is a program that you install on your computer that will help you create and maintain your budget. There are thousands of software choices when it comes to creating and maintaining a budget. Depending on your needs, you can get free software or pay for the software. Sometimes, your bank may offer budgeting software to help you. Here are a few of the more popular software options Microsoft Excel. Microsoft Excel offers free budget templates QuickBooks, intuit, quicken, moneydance, common Sense. Why not put your smartphone to work and have it help you stay on budget? There are smartphone applications that can assist you in formatting and maintaining your budget. Some of the applications will address all facets of your budget, while others will assist you with tracking your spending. Here are a few of the higher consumer-ranked applications that can help with your budgeting needs Good Budget, mintcom, wall-e, debt Tracker Pro by SnapTap. Home Budget with Sync Budged.
Speaker 1:The envelope system is an oldie but a goodie. You take the expenses that you've budgeted, add up the total and withdraw the money from your banking account. Then you label envelopes with your budget categories. This can be fun if you're creative. Here are some examples categories this can be fun if you're creative. Here are some examples Utilities, food, gas, spending money, entertainment, rent. You put the money for those expenses in the envelopes. When the envelope for that category has no more cash, then that's the end no more. That means that if your spending money envelope is empty, you are not allowed to take additional funds from another envelope. It just means that you are going to have to not buy anything additional.
Speaker 1:There are several benefits to using this system. Most people will spend more money using a debit or credit card. Having the cash on hand makes you more accountable for your spending. You will notice that you will start having cash left over. Sometimes you can get a discount for paying cash, no overdraft fees. Another option for any financially savvy person is an expenditure notebook. With this it's simple you write down all of your purchases. Just like keeping a food diary helps people who are tracking caloric intake and output, this notebook will help you when you are spending money. If you are faithfully writing down your purchases, you will be able to easily see where your money is going each month. With that data, you can see where you are wasting money and make more informed decisions about what cuts to make to your budget.
Speaker 1:Taylor has just started crafting her budget for the new year. She has set some hefty goals for herself and believes that she has the tools to achieve them. She downloads a phone app that helps her keep her budget on track. It seems to be working for her because she is always on the go and she is able to keep her phone with her at all times. Her friend, kevin, is not as technologically savvy. He has his own goals that he wishes to achieve using the envelope system and an expenditure notebook. He has talked to Taylor a few times about the phone application she uses for her budget, but feels like he would do better with having the cash in hand. He feels like using his expenditure notebook and the envelope system gives him more accountability. At the end of the day, the year passes quickly and both Taylor and Kevin have managed to stick with their budgets, even though the tools they've used are so different.
Speaker 1:Module 9. Stick with your budget. Henrietta C Mears was once quoted with. Time cannot be saved. It can only be spent, and if not spent wisely and well, it is wasted. Don't waste your time building a budget and not sticking to it. By now you have the tools. There's no excuse. Build your budget and stick with it. You will be greatly benefited in the end. Giving yourself a weekly allowance in cash is a great way to stick to your budget. When you're out of money, then that's it no more spending. You will eventually learn how to stretch your dollar and be satisfied with just staying in some nights. What you need to do is determine what your allowance will be and pull the cash out of the bank. On average, after six months, you will notice that you are able to make it last longer and you will be able to save more money in your bank account.
Speaker 1:Sometimes, when something is tough, we need the support of our family and friends. Sticking to a budget can be a complete lifestyle change and sometimes it can be hard to stick with. At times we can be impulsive. We have all had those moments of weakness where the sale signs were beckoning too loudly. Having the support of family and or friends to reel us back in comes in handy. Sometimes we need to have someone nudge us and say hey, you're doing so well sticking to your budget. Stay on course. Sometimes that gentle reminder from your friend or family member is just enough to snap you back into your senses. Some banks will offer their customers a separate savings account free of charge.
Speaker 1:If you are saving for different goals, it might be useful to have more than one savings account. It creates an out-of-sight, out-of-mind scenario. When you're not actively seeing that money, you forget that it is available. Having it out of your reach when impulse kicks in can help you save that money. If you have the money immediately available to you, it could be tempting to spend it without much thought. It is very useful to have family and friends remind you to stay on track, but at the end of the day, you are in charge of yourself. It's your job to keep yourself on track and be positive about your budget. Reminding yourself often of the benefits of your budget is important. Also, reminding yourself of the goals that you will achieve will be helpful in sticking to your budget. Just remember, keep a positive attitude and take it one day at a time.
Speaker 1:Clive and Luke have both formatted and begun using a budget. The first two months all goes well. At the third month, they both begin to waver. Clive enlists the help of his friends and the resources at his bank to stick with his budget. Luke decides that he can splurge here and there. By month five, clive is still on track and is able now to see a sizable saving. Start to a mess, luke has completely thrown out his budget and is back to spending more money than he makes. He feels bad about himself, that he couldn't or wouldn't stick with the path that he'd set out on Module 10.
Speaker 1:Additional Ways to Make Money. Having a budget is a great way to reach your goals, but sometimes our budgets need a little extra income. There are lots of ways to make a little extra money that take little effort. Why not beef up your savings or pay off your debts quicker by making some additional cash? In this section, we will discuss just a few different ways you can make some additional money to help with your budget goals. Do you have a talent? Why not use your talent to make some extra money?
Speaker 1:These days, there are plenty of venues in which handcrafted items can be sold. Most cities have some sort of an open market, like a trades days or a flea market. These are great avenues in which to sell handmade items, because the overhead is usually low, which leaves you more profit. Don't think that you have the personality to make it in a public arena. Luckily, in this day and age, an introvert can make and sell items too, using the internet. There are plenty of arenas to sell handmade wares on the internet. Here are just a few examples of those websites Etsy, ebay, artfire DeviantArt Personal website. Ebay, art Fire DeviantArt Personal website. Facebook marketplace, craigslist. Make a few extra bucks doing what you love Sounds like the life.
Speaker 1:We all have junk laying around the house that needs to go somewhere else, so why not sell it? You know the saying one man's trash is another man's treasure. For all you know, you're sitting on a gold mine. Go through your house and get rid of all of that stuff that's been collecting dust. You can sell your items online via websites like eBay or Craigslist. You can also just have an old-fashioned garage sale. Sometimes it's helpful to coordinate with your neighbors and have a neighborhood-wide garage sale. Getting your neighbors involved can help build a sense of community and a neighborhood-wide garage sale. Getting your neighbors involved can help build a sense of community and a neighborhood wide garage sale will attract more customers. You can post your garage sale in the newspaper, usually for a reasonable fee. Selling your old items can help you more than financially. It helps declutter your living space.
Speaker 1:Either way, you are making money on items that were doing nothing for you, but giving you something to clean. If you don't have an artistic side or the heart of a true salesperson. You might try taking on a part-time job. Many stores will hire part-time personnel, especially during peak holiday seasons. Don't have your heart set on a regular job. Why not try babysitting or dog walking? If you have friends that go out of town a lot, you could offer your house sitting services. Or, if you're fond of animals, be a pet sitter. If you have the will to earn it, there is money out there to be made. All it takes is a little effort and creative thinking.
Speaker 1:Another great idea for making some additional money is recycling. This is a great way to make extra funds because it gives you cash and it's great for the environment. You can recycle your own cans and metal that you use throughout the month. You can also partner with businesses that use cans and other metal items that need to be recycled. If you have a good work ethic and a truck, you can pick up people's discarded metal items like old washers and dryers, refrigerators, bed springs, etc. Recycling will help you make a little bit of extra cash, but this avenue is not a get-rich-quick scheme.
Speaker 1:Jimmy and Paul have worked together at Sandy's Shake Shack for a few years now and are good friends. Jimmy has been trying to get Paul to help him with his extra jobs, because Paul is always saying he needs some extra money. On Mondays and Tuesdays before work, jimmy scours the city collecting cans for recycling. On Wednesday, he donates plasma before work. On Thursday, he babysits his neighbor's kids while she is at her class. She takes classes on Thursdays and is studying to be a nurse. Fridays and Saturdays, jimmy takes off and spends time with his family and friends. Sundays, it's off to the farmer's market to sell his delicious tomatoes that he grows in his garden. Paul sees how busy Jimmy is and is intimidated by the amount of work that Jimmy does in a week. Jimmy exclaims that he loves what he does, so it's not work.
Speaker 1:Module 11. Paying off debt. What they don't tell you when you're young is that your credit score plays a big role in your life. Having a lot of debt puts stress on all of your relationships and your sense of self-worth. A bad credit score can prohibit you from buying a house, renting an apartment, getting a car or even a job. Having a budget helps you gain control again of your life and credit score.
Speaker 1:There are three different types of credit reports that you need to obtain in order to fully view your credit situation. There may be debt reported on one report that isn't on the other reports. The three different credit report agencies are Experian, equifax and TransUnion. According to federal law, a person is entitled to a copy of their credit report each year from all three agencies. It is advised that a person check their credit reports annually. Checking your credit score will let you see that the debts you are paying are being credited to your account. Checking your credit lets you make sure you are not the victim of identity theft and ensures the accuracy of the debts listed in your name. It also lets you see the progress you're making.
Speaker 1:When you have debt from several different sources, it can be overwhelming. Once you have seen what is on your credit report, you can prioritize what needs to be paid off. Sometimes, starting with the biggest debt can make it feel like you're not getting anywhere. It can make your progress feel stagnant. Sometimes, starting with the smaller debts can help alleviate this feeling. You pay the smallest debt off first. After a few months, you will see all of those little debts paid and then you can focus on the biggest. For last.
Speaker 1:Credit cards are convenient, important for your credit score and dangerous. Credit cards are great if you use them properly. They supply you with funds that you may not have on hand and offer you the ability to pay those funds back a little at a time. What a lot of people forget is that you should be using your credit card sparingly. It is not a bottomless bag full of money free for the taking.
Speaker 1:Credit cards, while convenient, have a cost a high interest rate. A lot of time, people who have credit card debt are in their predicament because they are unable to pay more than the minimum balance on the bill. Just paying the minimum balance is basically paying little more than the interest rate. If at all possible, it is best to only charge what you can afford to pay back in full when the bill comes. If you have a credit card that you use for gas, you pay the bill off in full at the end of each month. This raises your credit score and saves you from creating huge credit card debt. If you are not able to pay the card in full, you will want to pay as much as you can over the minimum so that you start paying on the debt portion. It's also a good idea to remember that you don't have to wait for the bill to be due to pay it If you are able to making mid-cycle payments can actually increase your credit score. Another useful tool when dealing with credit cards are balance notifications. Many credit cards offer balance notifications or alerts. The company can text or email you when a purchase has been made so that you can make sure to keep your spending in check.
Speaker 1:There are so many people struggling with the burden of student loan debt. In 2019, experian Credit Bureau reported that 44 million Americans have one or more outstanding student loans. There may be ways to help pay off your student loan debt. There are a lot of resources out there for people who are willing to put the effort and time into researching them. One essential step is to contact your loan provider and talk to them about the different repayment options they may have. If you have multiple loans, you can talk to the providers about consolidating them. Some loan providers will allow you to earn student loan debt forgiveness. There are two ways to earn student loan debt forgiveness if you're employed in a public service position or through income-based payment plans. While this is not a quick or easy avenue, it is an option for some.
Speaker 1:Molly and Cheryl are both police officers in Springfield, ohio. They graduated together from the academy six months ago. Recently, cheryl has noticed that Molly has been stressed and has been asking for a lot of overtime. She decided to talk to her friend and co-worker. Molly tells Cheryl that she has been having a lot of financial difficulty. She used credit cards while she was in school and has obtained a huge amount of debt. Now that they have been out of school for six months, the student loan companies are wanting payments. Also, she didn't realize the hole that she had dug herself into and now she is paying for it. Cheryl tells Molly that she will help any way she can. Together they contact Molly's student loan providers and they work out a payment plan that fits into Molly's budget. They also organize all of Molly's bills and she starts to pay them off one by one. Molly is so grateful for Cheryl's help and level-headedness.
Speaker 1:Module 12. Wrapping Up. Although this workshop is coming to a close, we hope that your journey to managing personal finances is just beginning. We wish you the best of luck on the rest of your travels. Words from the wise Steve Borkolda If you're saving, you're succeeding. Thomas Jefferson Never spend your money before you have it. Bob Hope A bank is a place that will lend you money if you can prove that you don't need it.
