Outside Economics

How To Stay In The Black During The Last Quarter

Posted by Wendell Brock, MBA, ChFC on Fri, Jul 31, 2015

Back to School sales are already upon us – the kids are heading back to classrooms all across the country. Next, coming up fast, will be Halloween, and the holidays with the Christmas season and the wonderful spirit that brings to families and children. While RED is the typical Christmas color, it is not the favorite financial color! Certainly not the color of choice on how you want to end the year financially! For many people Christmas is a budget buster, they spend through their savings, only to end up putting the balance on credit cards; thinking “this will be easy to pay off during the next few months.”saving-tips_2245371b

Here is a suggestion: Begin now creating your gift list, pricing each item, then shop around for the extremes – highest and lowest prices for each item (the MSRP: Manufacturer’s Suggested Retail Price vs. sale price). Save/budget for the highest price and make the purchase at the lowest price, then actually put the difference into savings. You will discover two things, as you exercise the discipline of putting the difference into savings: 1. You will enjoy shopping for deals more, instead of paying the regular retail price. 2. You can make this a game with your children – teaching the value of saving and how to shop. They will become more savvy consumers and they will enjoy growing their new saving plan.

When you make the transfer to savings you can set up some simple rules to keep working right: make a daily transfer or a weekly transfer and simply keep track of purchases and the savings on a pad of paper. I like using something like PayPal where they simply draft the money from my checking account and forget about it. You can also make a limit that you don’t make transfers of less than $25.00 so at least weekly you are moving something to savings.

Successful savings is found strictly on the principle of self-discipline. Nobody makes you save money, you have to do it all on your own. Its 100% you! So make a weekly transfer of something to the account, develop the discipline and commitment to follow through, even if the amount is small. Frequent small deposits add up! This simple tip will help your finances stay in the black!

Everyone loves a good sale and sharing with their friends their great fortune, “I bought this pair of shoes for half off, saving $100.” Now you can really take control of your spending by putting that $100 in savings. With a Black Christmas (and other holiday shopping) – you will feel more security and peace of mind as you end the year in the Black!

Topics: savings account

The Envelope System

Posted by Wendell Brock, MBA, ChFC on Wed, Mar 26, 2014

If you have been working at living within your budget but struggle at times, here is an idea that you may consider implementing: the Envelope System.

Using the Envelope System can be a great support to ensure that the budget is being followed. This system, as it's name implies, uses envelopes labeled with different budget items that can be paid in cash. Basic categories may include groceries, eating out, clothing, and miscellaneous expenses.

Envelope System images

Each time you get paid, cash out the amount of money that you would need to fund each envelope. With the cash in hand, you then divide it into the envelopes named for the different categories. Once the cash is gone, then you know it is time to stop spending.

If you find yourself constantly needing to adjust a category throughout the month – or robbing other envelopes to make purchases, then you may need to rethink the allotted amount for that category. This is particularly true with the grocery budget. It is often wise to over-fund this category.Be careful not to rob the other envelopes when one envelope is empty. A common occurrence is to rob, say, the clothing envelope, after the grocery money is spent. That's fine if you do – things happen! But keep in mind, no new clothes until the clothing envelope is funded again!

This method also works well for things that are not normal monthly expenses. A Christmas envelope that is funded each month can take a lot of stress out of the holiday season. A vacation envelope can ensure that the family trip actually happens this year! These may actually be best done with separate savings accounts at the bank.

Other random envelope categories may include birthdays, house repairs, concerts or entertainment, sporting events, garden or yard care expenses, car repairs, or any hobbies you may have. They may even include saving for special goals, perhaps a new car, jewelry, or season tickets to your favorite sports team!

Another tip on using the Envelope System, is that you can write a date and amount on the envelope each time you remove money; this will help you keep track of the money spent. This is helpful because cash has a way of disappearing – not necessarily by the common thief – by simply spending too much too fast.

This is an easy way to put a check on your spending habits as well as a way to ensure that your goals and dreams come to life! As with budgeting this will take discipline to implement. 

Topics: Budget, Envelope System, savings account


Wendell W. Brock, MBA, ChFC

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