Beating Broke

Personal Finance from the Broke Perspective

Make Sure You Set Aside Money for These March Expenses

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One of the hardest parts of trying to develop and maintain a budget is the irregular expenses.  You might have a $600 car insurance payment that is only due twice a year.  Some people budget for these by setting aside a little money each month for each irregular expense, while others choose to face them as they come.  If you use the latter strategy, make sure you set aside money for these March expenses.

Make Sure You Set Aside Money for These March Expenses

Bookkeeper and Accountant

Ah, tax time.  The procrastinators among us have less than a month to get our taxes filed.  If you own your own business, you will likely have bookkeeping expenses.  Then, you’ll need to pay the accountant to file your taxes.  This can quickly add up to several hundred dollars.  Many people forget to budget for this expense because it only happens once a year.  (And let’s face it, for the rest of the year, many of us want to forget all about filing income taxes.)

Taxes

And then there are the taxes themselves.  Sure, many individuals break even or get a refund, but for those of us who don’t, we’ll need to pony up and pay anywhere from a few hundred to a few thousand dollars to the federal government.  As tax situations vary yearly, there’s really no way to adequately estimate how much these taxes will be ahead of time.

Easter

Make Sure You Set Aside Money for These March
Photo by Tim Gouw on Unsplash

Easter is in April this year, and it brings with it many small expenses.  You may need to buy new clothes for the Easter religious service, and then, of course, there’s all the candy to fill the Easter baskets.  Although Easter never seems like it should be an expensive holiday to me, I’m always surprised by how much we spend on this holiday.

High School Special Expenses

Spring brings so many expenses for high school students, especially upper classmen.

Prom

Make Sure You Set Aside Money for These March
Photo by Tai’s Captures on Unsplash

Prom will be fast approaching.  Now is a good time to determine how much money you will contribute to your child’s prom.  Will you buy the tickets?  Buy the dress or rent the tux?  Pay for the dinner out?  How much do you expect your child to pay for, or will you pay for everything?

ACTs and SATs

If your child is college bound, she will likely be taking either the ACT, SAT or PSAT this spring.  You’ll likely be paying between $20 and $60 for each of these tests.  You’ll want to have money set aside for these expenses.

College Visits

If your child is a senior, he has likely received his college acceptance letters, and if you haven’t already done so, you may want to take a trip to visit the college to see if it’s a good fit.  That’s fairly inexpensive to do if the college is within a few hours of your home, but if it’s farther, it will likely cost a couple hundred dollars at least.

Final Thoughts

To make sure your budget stays balanced, make sure you set aside money for these March expenses.  You’ll be glad that you did, and you’ll head into April with a healthy budget.

Living Costs to Calculate Before You Sign a Lease

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You’ve found the perfect apartment or house to rent, and you’re ready to sign on the dotted line and move into your dream home. Not so fast! Before you sign the lease, make sure you’ve calculated all your living costs, including unexpected expenses, so that you aren’t blindsided with bills you didn’t plan for.

The only thing worse than not moving into that dream space would be losing it because you can’t afford to live there anymore. Here are the expenses you need to consider.

  1. Add-Ons

In addition to your rent, you’ll have a variety of add-on expenses, depending on the lease agreement. This section might include water, sewer, trash removal and heating and cooling costs. Many landlords cover items such as water and sewer because if these bills aren’t paid in some localities, a lien may be placed on the property.

Ask before you sign whether or not trash pickup is included. It typically is in apartments, but not as often in homes and smaller units. It’s rare for a rental to include your heating and cooling. If any of these items aren’t included, ask for a typical range per month so that you know what to expect.

  1. Parking

Not all rentals, especially if in the city, come with free parking. You’ll need to either make a decision to park on the street — which is challenging when events are going on and may make your car less safe — or pay for parking, which adds to your monthly expenses.

Ask your potential landlord what the deal is when you’re touring, and look up street parking rules (if applicable) to learn more about permits, street cleaning, and winter snow removal. You may even try to use this information to negotiate the overall cost of your rent or parking fees.

That one-bedroom that was $700 per month becomes $775 per month when you factor in the cost to pay for a nearby parking lot space. Trust me, I know the pain — it’s a sacrifice I ended up making to live in a downtown center.

  1. Insurance

Keep in mind that you’ll need renter’s insurance to cover your personal belongings. While most rentals do have insurance to cover the structure itself, it won’t cover the items you own. You must secure a separate policy. Rates will vary depending on the area where you live and how much coverage you need.

The average cost of renter’s insurance varies by state, but nationwide is about $187 per year. While that isn’t a huge amount of money, if you’re on an extremely tight budget, it could make or break you.

  1. Unplanned Expenses

Don’t forget to budget in a miscellaneous or emergency fund. Things will happen that you didn’t plan for. Perhaps you got a parking ticket because you didn’t realize you couldn’t park in that spot (I made this mistake too many times when I first moved). Maybe your car needed a repair unexpectedly.

A good rule of thumb for those getting their first apartment is to first save up a $1,000 to $2,000 emergency fund. This amount should cover most minor repair bills or the little things that happen that you didn’t plan for. Of course, you’ll also need all the typical deposits and first and last month’s rent on hand as well as money to pay deposits for utilities.

  1. Pets

If you have a pet or plan to get one, you should know that most apartments charge a pet deposit and small monthly fee to cover any damage potentially caused by that pet. Occasionally, you’ll find a rental that doesn’t charge this fee, but it’s rare.

You should also budget for damages your pet might cause. For example, if your cat claws up the carpet, you’ll want to get it repaired so that you don’t have to live with frayed carpeting the entire time you rent. Plus, it will be cheaper for you to make the repair than trust the landlord to fix the problem for a reasonable fee.

  1. Flakey Roommates

Perhaps you’re ready to move out, but you need a roommate in order to afford living on your own. The problem is that some roommates are flaky and don’t pay their share of the bills in a timely manner or sometimes ever.

If your name is on the lease, you should protect your living situation by having the other person sign an agreement. If they don’t pay their share, you may have to ask them to leave so that you can get a roommate who will share the bills. Prepare for this scenario by setting aside extra funds to cover your roommate’s portion for a couple of months if needed.

Before You Sign the Lease

These issues are all factors to consider before you sign the lease and take the leap into paying for that place you’ve always dreamed of. Renting can be a positive experience or a horrendous one, and planning ahead helps smooth the edges to make it as good as possible.

Earning Extra Income vs. Cutting Expenses: What’s More Important?

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When it comes to saving money, there are two ways to skin the proverbial cat: Earn more income or cut expenses.

The option you choose depends on whether you’d rather reduce spending or work harder to pay for that spending. Both approaches will put you further ahead financially, and – if you’re serious about piling up some cash – you could buckle down and do both.

However, if you had to pick one, which is the better way to get ahead? Let’s look at the pros and cons of each to find out.

Pros of Earning Extra Income

Many people prefer the idea of earning more money as opposed to cutting they’re spending. After all, the idea of cutting back one’s lifestyle doesn’t appeal to most people. Plus, when asked if they spend money wisely, many people would agree that they already do.

  1. Most people want to earn more money – Who wouldn’t want to increase their income? Duh! Making more income means a person has more money to spend or save. Although getting a second job is always an option, you might want to consider trying one of the best work from home jobs instead.
  2. Plan B in case of a job loss – Taking on a side gig to earn extra income can also be a good fallback plan in case you lose your job. One never knows when they may be blindsided by a job loss, and having another way of bringing home some income is a great way to survive until you get back on your feet.
  3. Discover a better way to earn an income – Sometimes a side gig can turn into full-time gig. That’s what happened to us. The income that we make from our blog is far more than we ever made working a full-time job. Plus, we get to be our own boss and work on our own terms.
  4. Control over how much money you earn – Want to make an extra $100 a week? No problem! With a side gig, you get to decide how much extra income you want to make and when you want to earn it.
  5. Chance to try out a side hustle idea – Have you always wondered if you would like freelance writing or being a dog walker to earn extra income? Rather than quit your regular job, why not try the side gig you’ve always wondered about and see if it’s a good fit? You might find something you love doing without risking your day job to try it out. Who knows? It could even take your life in a whole other direction like it did for us.
  6. Wipe out some debt – Wouldn’t it be great to kill some debt with the extra money you earn? Or, maybe you need some extra cash for the home renovations or trip you’ve been dreaming of? Starting a side job could help you save enough money for those things before you know it!

Cons of Earning Extra Income

  1. Too burned out from your regular job – The idea of working more in addition to a full-time job can be overwhelming for some people. If you are already burned out from your day job, a side gig may be out of the question.
  2. No spare time – Let’s be honest: Working a side gig requires time which you may be unable (or unwilling) to give up. If you have children or other family commitments, such as caregiving for an ill family member, a side gig may not be feasible.

Pros of Cutting Expenses

One of the easiest ways to start saving money is to spend less of it.

  1. Control over consumption – If you’d like to gain some control over the consumption monster in your household and have more money left over at the end of the month, cutting expenses is definitely the way to go. Most people want to make more money because there’s always more “things” they want to buy. However, when is enough enough? People are often surprised to find that they are just as content spending less money rather than more.
  2. Less money wasted – Regardless of how much money you make, you work hard for it. So, letting it go to waste shouldn’t be acceptable. By taking a hard look at your expenses, it quickly becomes obvious where you’re spending well and where you’re basically flushing it down the drain on things that don’t really matter to you.
    Some of the most common spending traps are gym memberships you don’t use, cable TV, landline phones, huge cell phone bills and data plans, and eating out rather than cooking at home.
  3. More control and more time – The most important benefit of cutting expenses is that you need less money to live. Having fewer expenses may allow you to cut back to part time work, stay home with your children, or free up time to pursue a hobby. When you live on less, it frees up more time to do things other than work. You might even find that your time is much more valuable than making a few extra bucks to spend on junk you don’t really want anyway.

Cons of Cutting Expenses

  1. Nothing left to cut back on – If you’re already living on a bare-bones budget, cutting expenses even further may not be possible. Everyone needs a certain amount of money to live, and – if there’s no fat left to trim – you may have to look for ways to make more money instead.
  2. Unnecessary suffering – If you are already extremely diligent about spending your money wisely, cutting expenses even further may cause unnecessary discomfort. However, this is rarely the case. You must be honest with yourself. Are you struggling to meet legitimate expenses or are you simply spending too much? If you’re couch-surfing because you truly can’t afford a place of your own, cutting expenses may not help much. If you struggle to make the rent because you eat out 10 times a week, it’s time to change your habits.

So, is it better to earn more or spend less? Honestly, a combination of both is typically the most effective attack.

By spending less and making more, you’ll be able to quickly beef up your monthly savings. Your long-term savings will also improve because you’ll be able to live on less.

How do you prefer to save money? Which of these options do you think is best?