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Friday, June 12, 2015

Help with building a budget

A good budget is the number one tool to helping a person pay off debt, build their retirement accounts, and plan for their financial future. A budget is a road map to help you with your everyday finances. A person should not look at a budget as being a negative item, but a helpful tool. When you take a vacation you use a road map or google maps in order to map your way from point “A” to point “B”, well a budget is the same thing, a map to help you manage your finances.
Many Americans have troubles with their bank accounts and other finances because many of us lack the skills to manage their accounts and their debt. There are many tools out there to help us with skills but most people do not know where to look or what to look for. Many financial tools  are free of charge if you know where to look.
Before putting together a budget the first thing you need to do is track all your expenses for a month. There are mobile apps that can help you record all of your purchases. Every purchase, from small ones to large ones need to be recorded for this month. Even ATM fee’s and bank fees need to be recorded in order to get a good picture of you spending habits.
Take this data after a month of tracking and sit down and you will probably be surprised to see where your money has gone. This is best way to get an overall picture about how you allocate your funds and spend your hard earned money..
When you finally sit down to put together your first month’s budget the number one thing you do not want to do is cut out all the fun things you do. Don’t make this a punishment and take all the fun out of your life. If you are too strict on yourself you will probably fail in a short time period. You will find yourself cheating and eventually you will stop following your budget and you find yourself back in the same boat your are trying to leave. Instead learn to limit yourself. Example would be, “if you stop every morning for a starbucks coffee or eat out for lunch everyday, don’t stop doing these things you enjoy all together. Just set yourself some limits, instead of doing these things daily, cut yourself back to once or twice a week, you will see the benefits add up in your wallet at the end of the month.
Now take your bills for the month and separate them into categories. The first category should be your fixed expenses, such as your mortgage or rent, your utilities, car payment and any sort of membership fees that you pay monthly. Hopefully this does not go over fifty percent of your monthly take home pay.
The next category would be savings. Experts recommend putting away ten to twenty percent of your take home pay into a auto deposit savings account that earns interest. They recommend an auto deposit, this is where the money comes out of your check before you notice it is missing so these funds will not be seen, “out of sight out of mind” kind of thinking.
The third category would be flexible spending. Your monthly budget should not exceed thirty percent of your take home pay for this category. This would consist of eating out, morning Starbucks coffee runs, groceries, gas, entertainment, hobbies, and etc. This category is called flexible because these items can be adjusted. For example, when shopping for groceries, try cutting coupons and look at adds in the paper to save yourself some money. Shopping for clothes, is another area that you can compare prices in order to save money. Filling the car with gas, shop around the area for cheaper prices for fuel. Cut back to once or twice a week for going to Starbucks instead of going daily. These are just a few examples of where you can be flexible and save money.
So if you see, fifty percent of your money goes toward your large ticket items like rent or mortgage, twenty percent goes to savings of some kind, and thirty percent goes toward your more flexible items.
Here is a list of tools to help you build your budget. These tools are online so I have put the links here for you to click on.

Wednesday, June 10, 2015

What is a budget?

I find that a lot of people live from paycheck to paycheck every week, then I come across others that run out of money before their next paycheck comes in. When this happens they have to charge items to their credit card in order to carry them to the next paycheck. I find that most of these people don't have any sort of budget they live by and this is the reason why they are run out of money by midweek. Using your charge cards to make ends meet is a very dangerous way to live. If you keep doing this week in and week out your only going to cause your debt to increase and eventually you will have more debt than you can pay back. This is why you need a budget to live by.

When I ask people if they have a budget they seem to get scared and want to change the subject. Most people don't even know what a budget is. So we come to the question, What is a budget? 

A budget is nothing more than a written down plan of how you are going to use your money this week, or month. A budget helps to make sure that you are going to have enough money to pay for all your needs and bills and not run out of money before your next paycheck. A budget is simply a financial road map to personal success.

There are some really good software programs out on the market that will help you set up your own personal budget. One of my favorite web based programs is called, you cannot beat this program since it is totally free. offers some really nice financial tools to help you get on your way to setting up your budget.

We will take a look in our future post of how to set up a successful budget. Financial Tool

Mint Personal Financial Tool

Many of you have probably never heard of, this simple to use software program is a great web based financial tool that is totally free to the user and it only takes minuets to add your personal accounts to the program.
This program is mostly about helping you budget and track your expenses. Every time you use one of your accounts the software program will sync your transactions and then send them to a category that you and the system setup. This will help you find out where your money is going from week to week, it is an eye opener to see what your spending habits are. This will assist you with your budgets and make sure your spending habits are managed.

Since this web based program is free one thing that you cannot control on the site is the advertising. Mint does target advertising, so some of the ads on the site may be beneficial to you.
A lot of people have asked me about the security of the site especially today with all the online hacking that is taking place. uses a bank-grade security software. According to the NY Times article all passwords and usernames are protected with the same level of security as a financial institution.
One of the newest features of has recently rolled out is a free credit score tracking option. With just a click of the mouse you can view your credit score, payment history, age of your credit accounts, and your spending habits.
I truly believe this to be another great free tool for people needing help with their credit and or budgeting.

Tuesday, June 9, 2015

The Advantages and Disadvantages of Credit Karma

I have been using and recommending Credit Karma for years. There are a lot of advantages to using this service to get a good look at your credit. One of the real nice advantage is that Credit Karma is a free service. They have large paid advertisers base that cover the cost of this service. What that means to you is that you will never have to give Credit Karma a credit card number to use this service. Some of the other credit services offer free credit information but you have to supply them with a credit card, some of these services only give you thirty days of free service and then they charge you a fee. With Credit Karma you do not have to worry about ever getting charged for the service they provide.

Here are a few of the services that Credit Karma offers you:

Credit Karma gives you a report card of credit. This is an analysis of your open credit card utilization, average age of open credit lines, hard credit inquiries, total debt, and of course the big debt to income ration.  This report is awesome because it shows you a grade of A through F for each area. If you use this information correctly you can fix these areas that you are scoring a C or worse to help improve your overall credit score.

You also receive for free is a snapshot of your credit score from TransUnion which can be updated as much as you like. Credit Karma keeps track of your score over a period of time and lets you know how you are coming along hopefully fixing any credit issues. The snapshot is a view of how lenders are viewing your credit as compared to the national scores.

A great tool that Credit Karma offers is a credit simulator. This tool gives you fourteen different simulations that you can run to see how they will affect your personal credit. One example I tried was, how raising my credit limits affected my overall score. The fourteen options are broken down into three categories: credit limit, payments, and records.

Other feature that Credit Karma offers are news articles dealing with finances, financial tools, financial calculators and forums and feeds pertaining to finances.

The only disadvantage of Credit Karma is that they don't give you a true "FICO Score". They do offer a real close to true score which is very helpful. This is the only thing I found to be a little disadvantage, but I can live with it since they do offer so many other beneficial tools to help a person with there credit issues.

Monday, June 8, 2015

Check your credit report and credit score regularly.

If you are like most people you probably have never checked or have not checked recently your credit report or at least your credit score. It is highly recommended that you check your credit report on an annual basis. There are many reasons why you should check your credit at lease once a year. Here are a few of the reasons that you should take this opportunity to check your report.

It is Free. Today there are not many things that are truly free with some sort of strings attached. But a yearly credit report from all three credit reporting agencies TransUnion, Equifax and Experian is free. Your credit report plays a large role in your day to day life. offers your credit report free of charge.

To Detect Identity Theft. Identity theft is a major problem for all of us today. If you have opened up a bank account or bought a car or house, filled out a application online then your identity has been corrupted one way or another. A lot of people think that they are free from identity theft because they pay for everything in cash or don't own a computer, that is a huge mistake. Identity theft is happening every day, you need to run your credit report annually just to check if your credit has been compromised without you knowing it. Scan over your report and check to see if any accounts that you have no clue what they are has been open in your name. You may be surprised of what you find, I myself have caught a couple huge accounts show up on my credit report, luckily enough I caught them early and was able to fix the issue with the credit reporting agencies before things got out of hand. But if you do not check your report regularly credit fraud can really put a damper on your credit report.

You Were Denied Insurance or a Job. If you have been denied any credit or insurance or even a job you can request a free copy of your credit report, this must be done within sixty days of being denied. The credit report will give you some insight to why you were denied. There could be something on your report that you have no idea what it is, this is a good sign of fraud. Or the report may open your eyes to some foolish spending habits that you may need to change. What ever the issue, if you have been denied then you need to take this opportunity to receive your free report and work on fixing what ever the issue is that caused you to be denied.

Public Records That Are Not Yours. One thing you need to look at closely on your credit report is judgement's, liens, bankruptcies, tax liens, and other civil judgments that do not belong to you. If you have hired any work done in the past for your home you may have a contractor lien on your credit report. The company that I work for, if we have a contract with a customer and they fail to pay us in ninety days we file a lien against their credit. These items you do not want to show up when someone like an employer pulls your credit.

These here are just a few reasons of why you need to pull your credit report annually, we will be looking at other reasons in the near future in order to help you get your finances in order.