Beating Broke

It’s Not Too Early to Make Your Holiday Spending Plan

October 16, 2023 By MelissaB Leave a Comment

Did you overspend last holiday season? When January rolled around, did you face credit card debt with no real plan to pay it off? If so, don’t despair—you’re not alone. My husband and I had one holiday season like that, and we quickly learned to make a holiday spending plan that we stuck to.

If you want to rein in your spending, now is the time to make that plan and talk to your loved ones. Although the conversation might be awkward, you’ll feel much better in January 2024 when you’re not facing new debt from the holidays.

How to Make Your Holiday Spending Plan

Christmas is about ten weeks away, so don’t waste time implementing a plan.

Decide How Much You Have to Spend

The first step is deciding how much you have to spend on gifts. If you only have 100 dollars to spend on gifts this year, that’s all you have, and you’ll need to plan how to maximize that money or make more money before Christmas.

Once you have your holiday spending plan, you can find creative ways to stretch those dollars.

Make Some Gifts

If money is tight, plan to make some gifts. If you’d like to give a gift to your mail person and your child’s teacher, but you don’t have cash, consider making something like a yummy dessert or a canning jar filled with the ingredients for bean soup, cookies, or brownies.

Make a Plan for Extended Family

Likewise, if your extended family typically exchanges gifts, now is the time to talk to them about that tradition. Some families decide not to give gifts to the adults, but if you still want a gift exchange, consider drawing names and putting a price limit on the presents.

I come from a large extended family (I have over 30 cousins on my mom’s side), so we would draw names every holiday. Each person was responsible for only one gift, and the price limit was 10 dollars. Talk with your family about a cap on the gifts at an amount everyone in the family is comfortable with.

Have a Talk with Your Immediate Family about Fewer Gifts

Once you determine how to handle gifts for the outsiders in your life and your extended family, it’s time to look at your immediate family. If your kids are older, reducing their gifts may be difficult. Instead, you may need to tell them that you must cut back this year and why.

If the kids are still young, this is the perfect time to start a tradition of only giving a few gifts. Many families give four gifts—something to wear, something to read, something you need, and something you want. I haven’t gone that minimalistic, but over the years, we have gradually reduced the number of presents the kids receive.

If you don’t want to cut down on the number of gifts your kids receive, remember, there’s no shame in buying secondhand gifts. You can often find items in a secondhand store that haven’t been opened yet, but their price is much lower than retail.

Final Thoughts

Each of us would like to give our family members everything they want for the holidays, but that isn’t realistic. Instead, develop a holiday spending plan, then make a Christmas buying plan based on your budget. Although you might give fewer gifts, you’ll be happy to be in the black in January rather than facing credit card bills.

What Christmas Expectations Are You Setting for Your Children?

How I Plan to Have a Low-Cost Christmas

Make Improving Your Finances Your Part-Time Job

October 15, 2023 By MelissaB Leave a Comment

Imagine you give all the money you make in a month to an accountant and ask him to manage the money for you. However, at the end of the month, he can’t tell you where the money went, just that it’s gone. You’d likely be highly upset and fire the accountant. Yet, that’s how millions of people handle their money. You can’t fire yourself, but you can educate yourself and make improving your finances your part-time job.

Are You Like Most Americans?

When is the last time you took a vested interest in your own finances? Do you make a budget every month? Do you track how much you spend each month and on what? If you don’t, you’re not alone. In fact, approximately 60% of Americans don’t have a monthly budget (Business Insider).

How much time have you spent reading personal finance books and articles in the last year? Learning about investing? If you’re like the average American, the answer is not much.

Instead, many of us spend time doing activities that really don’t help us much in the future—scrolling through Facebook and Instagram, watching our favorite tv show, having a Netflix binge, talking on the phone or texting.

Make Improving Your Finances Your Part-Time Job

What if you used just a fraction of that time to improve your finances? How different would your financial situation be a year from now? Five years from now? Ten years?

If you’re finances aren’t in the shape you’d like, why not challenge yourself to make improving your finances your part-time job?

What Is the Weekly Time Commitment?

Don’t worry, improving your finances isn’t going to take a lot of time. I’m just asking you to set aside two to four hours a week to improve your finances. You won’t be sorry.

Make Improving Your Finances Your Part-Time Job — Photo by Kelly Sikkema on Unsplash

What can you do in that amount of time? Plenty.

Set up a budget
Track your spending
Pay your bills
Call your credit card company to get your interest rates reduced
Investigate refinancing your student loans, and if doing so will save you interest, actually refinance them
Read a personal finance book
Call your internet and cable provider to get your monthly bill reduced
Investigate house and vehicle insurance costs and change companies if you’ll save money and get the same coverage
Get an assessment on your home to potentially lower your property tax bill
Learn about investing
Take free online personal finance classes
Invest some of your money
Sell some of your unused items on Craigslist or Facebook
Listen to personal finance podcast
Start building passive income (stocks are good for this)

This is only a small list of things you can do when you start your part-time job of managing your money, yet you can reap serious financial rewards.

Tools to Use

If you’re new to taking an educated, methodical approach to improving your finances, there are many places to go to learn more. There are also many tools available.

You Need a Budget (YNAB)

For the last four years, I’ve been budgeting using You Need a Budget (YNAB). I’ll admit, there’s a bit of a learning curve to using this software, but there are many free online trainings you can watch that cover every aspect of how to use the software. There’s also an active Facebook group, YNAB (You Need a Budget) Fans, where you can find quick answers to many of the questions you might have about the software.

If you’re interested in trying YNAB, you can sign up for a 34-day trial for free.

Morningstar Free Investing Classes

Don’t know the first thing about investing? Don’t worry. That’s how everyone starts. When you make improving your finances your part-time job, investing is an important concept to master. Morningstar offers a number of free classes that cover a wide-range of topics:

Stocks,
Funds,
Portfolios,
Bonds,
ETFs,
Retirement, and
Planning

To access these free courses, simply sign up for a free Morningstar account.

The Library

Another excellent, free place to learn more about money management and investments is the library. You can find so many books there that will teach you about improving your finances! Some of my favorite money management books include:

I Will Teach You to Be Rich by Ramit Sethi,

The Money Book for the Young, Fabulous and Broke by Suze Orman,

How to Make Your Money Last by Jane Bryant Quinn, and

Is Your Child a Money Master or Money Monster by Sunny Lee (excellent book for teaching your children in a natural way about money management)

All of these are available on Amazon, and if you get a copy of the book, the site will get a small commission that will help keep the lights on.

YouTube

You can find many money management and investment videos on YouTube. Just be sure to first check the credentials of the person offering advice. Anyone can put up a YouTube video.

I sometimes enjoy watching Dave Ramsey videos (though not when he goes on tangents).

If you’re new to budgeting, there are people on YouTube who share their budgets every month. One person that many people find inspiring is The Budget Mom. She shares her budget each month and also does a recap at the end of the month.

Make It Fun

If the idea of spending a few hours a week on personal finance makes your eyes glaze over with boredom, try to make the time fun. Set aside a certain time, maybe Saturday morning, or a few minutes every day. Get comfy and make your favorite drink and settle in to work.

Investing Time Now Means You’ll Save Time Later

Remember, as you increase your financial education, you won’t need to spend as much time on your finances. Maybe initially you’ll spend four hours a week or 16 hours a month, but a year or two down the line, when your finances are better and you know more, you may only need to spend two hours a week or eight hours a month.

As your financial situation improves, you’ll likely have more incentive to keep spending a little time each week working on your finances.

Try it. What do you have to lose except a better financial future?

How much time do you spend every week working on your finances and growing your financial knowledge?

Are You Teaching Your Kids to Follow Your Financial Habits?

September 18, 2023 By MelissaB 9 Comments

My oldest is 10, and he does chores around the house to earn an allowance. He works hard, and we’ve taught him to set aside a percentage for investing (10%), for saving (20%), and for giving (10%). That leaves him to spend 60% of everything he earns.

And spend he does!

He finds it extremely difficult to let his spend money sit and grow so that he can buy something bigger. Instead, as soon as the money hits his hands, he wants to spend it even if it’s a fairly insubstantial amount and can’t buy him much.

He just can’t seem to save up for the things he wants.

Instead, he’s enticed by advertisements. He reads the newspaper and magazines to find free catalogs to send away for, and then he wants to spend his money on any little thing.

It’s driving me crazy.

His money, his life. I should let him spend the money and be disappointed when he has no money to spend later.

Actually, that’s already happened. When we first moved to Arizona, he saw a 2015 calendar at Costco for $15. This calendar had scenic landscapes of Arizona and was quite pretty. I told him to wait because as 2014 came to a close, he could get calendars cheaper. But he couldn’t wait, and then in December and January, he was disgusted to find how cheap calendars got.

Still, his behavior hasn’t changed.

As a parent, I wonder how much I should interfere.

You see, when I was young, I was just like my son. I spent every Saturday at the mall, my money burning a hole in my pocket. I HAD to buy something, even if it was just a pair of socks I didn’t need. Every week, I walked through the same stores, buying stuff I didn’t need, just like my son buys the stuff he doesn’t need now.

However, my mom never stepped in. She gave me a wide amount of freedom. Whatever money I earned was mine to spend how I liked. She didn’t even ask that I set aside a portion of it for savings.

I was a responsible kid and bought my own car, paid my insurance, paid for gas, and also bought my own clothes. I think she figured that I was handling my money well, so it was up to me to decide what to do with the rest.

When I was a teenager, my friend and I used our money from our job to go out to eat and see a movie every Friday. Sometimes we’d go out to eat on the weekdays, too.

What a waste!

Imagine if I had instead invested just a small portion of that in a Roth IRA. Or if I had saved it to pay for part of my college education. Maybe I wouldn’t have graduated with $25,000 in student loan debt.

Even now, I have a hard time saving, though I am getting much better. I’m finally able to stick to a budget and make saving a priority. It’s taken me 40 years to break bad spending habits that I learned in childhood. Let’s be honest, getting a hot deal isn’t really a deal if you don’t need the item and it robs you of the ability to save.

I want to teach my son this lesson now, so he can be more financially responsible than I was for many years. But that lesson is oh so hard to teach.

How much do you guide and interfere in the way your child chooses to spend money?

For More Great Reads, consider checking out Kidwealth.com and kidsaintcheap.com.