3 Things to do Every Payday

Friday’s are paydays for a lot of people.  The influx of cash in your hand in the form of a check or the increase in your online bank account is exciting.  Some follow proper protocol on payday.  They take the necessary financial steps to ensure their financial well-being.  There are three things you should focus on each payday to ensure your financial life is on the right track.

1) Pay Bills:  

Each time you get paid, whether it’s every week, two weeks or monthly you need to meet your liabilities.  More specifically you need to pay any bills that are due before you get paid again.  This could mean rent, a credit card statement or a car payment.  Avoiding these payments will be a costly mistake to your credit score and will ultimately cost you more money in the long run with accrued interest.

2) Automatically Invest:

Each time you receive payment from your employer you should be investing in your financial future.  This could be in the form of a 401k contribution with an employer match.  It also could be an automatic withdrawal from your bank account every pay period.  Brokerage firms have made it easier than ever to make investing a seamless process for the investor.

3) Have an Indulgence:

After you have met the first two objectives you can move on to this third.  Whether it is a nice dinner, a night out with friends or a small purchase, enjoy the fruits of your labor.  Of course you should still make sure this indulgence fits into your monthly budget.  Still a nice reward.

So there you have it, three things that you should do each time you get paid.  These steps allow you to not only take care of your financial future, but also ensure you will enjoy the journey along the way.

Budget Smart, Invest Wise


Video Series: How to Invest

We’ve heard it time and time again from arguably the best investor of all time.  Warren Buffett has simple advice on how Americans should invest.  You can try to beat the market, and some of your investments might do just that.  Most, probably not.  Heed Warren’s advice.

From one king (of investing) to another king (of the court) the way to build wealth is simple.  Own America, invest in a low-cost index fund, invest regularly, and give it time.

Budget Smart, Invest Wise

Video Series: Eye Opening World of Personal Finance

Today’s video is one that is almost two years old; however, the facts provided and insights suggested are timeless.  I honestly believe that the majority of people who follow my blog are in a better financial position than 90% of people throughout the world.  It is mind boggling to see how some do struggle.  We get caught up in a spend spend spend trend that we forget how important it is to save save save.  Maybe you know someone who isn’t in as good of a financial position as yourself.  Help teach them responsible personal finance and don’t let him or her become another statistic.

Budget Smart, Invest Wise

How to Save a Quick $250 in Your Yearly Budget


Save a Quick $250

In theory, budgeting should be pretty simple.  You make money, you spend money.  Sometimes you make more than you spend (Good budgeting!), and other times you spend more than you make (Digging yourself into debt).  Once you have downloaded the free budget spreadsheet: Monthly budget example.

For some budgeting income is pretty simple, it used to be for me.  I was a full-time salaried employee who made the same amount each month.  For others, budgeting income is not all that simple.  If you are in a commissioned sales role, your money could fluctuate every month.  Not having a guaranteed income every month means that you have a further responsibility to budget your income correctly.

Budgeting expenses can be tricky in certain instances as well.  Some expenses will stay the same every month: rent, mortgage, cellphone.  While others will fluctuate depending on the time of year: utilities, gas, travel.  Although these “fluctuating” expenses can be hard to determine, in the big picture of things your monthly expenditures SHOULD (and for your financial sake NEED) to be less than your monthly income generated.

So how did I save a quick $250 a year in the expense portion of my budget?

All I did was… Shop around for automobile insurance.  This doesn’t sound fancy at all, but having an extra $20 a month freed up in my budget was something to get excited about.  Say you’ve been with the same car insurer since you first started driving; chances are you have a discount for that.  However, calling other insurance companies to get free quotes is not only easy, but it is a simple way to cut your expenses.  I was with the same car insurer since I turned 16.  I thought I was getting a great deal all along.  However, when I called a few other insurers, I found a much cheaper rate.  So cheap in fact, that it allowed me to save over $250 a year just on my car insurance (FYI, USAA has the best insurance rates and customer service).  That savings freed up an additional $20 a month in my budgeted expenses.  I could use that extra $20 any way I like.

You can save with almost every expense you have.  Whether it is renegotiating your cable bill, or shopping around for car insurance.  Find one expense category in your budget where you can chop out a little change.  The extra money can be used to pay off debt, go into savings, or fund a weekend getaway.  When it comes to budgeting, your expenses are half of the battle.  Lowering your monthly expenses is a great way to make your income go further.

Budget Smart, Invest Wise

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The 5 Keys for a $100 a Month Grocery Bill

$100 a month grocery bill

How do I eat on $100 a month?  I will tell you some tips for how I manage my grocery bill.  This $100 a month category includes all of the food I purchase at grocery stores along with some occasional household supplies, laundry detergent, toilet paper, etc.  I have a separate row in my budget for “eating out”.  I eat breakfast, lunch, dinner and a couple of snacks throughout the day.  I do not starve myself or eat Ramen and PB & J’s.  I am able to eat healthily and consume items such as chicken, pork, fish and beef.  Lastly, I am only supporting ONE person with this grocery budget, no kids or anyone else.

Here are my 5 Keys for a $100/month grocery bill:

1) Make a list: I make a list with all of the items I need beforehand.  This prevents impulse shopping or the purchasing of WANTS instead of NEEDS.  Always make a list!

2) Only buy items on sale: If chicken is on sale for $1.99/lb, I buy many pounds of it and place it in separate Ziploc bags in the freezer.  Additionally, I buy fruits and veggies that are on sale.  It might be apples and carrots one week, strawberries and cucumbers the next week.

3) Go generic: I will be the first to agree that some generic products do not taste as good as the original (i.e. Hershey’s Chocolate Syrup), but find out what generics are the same for you.  Whether it is nuts, chips or cereal, find out where you can save that extra dollar.

4) More prep time equals more food: I can buy a box of dry brown rice for the same price I can buy four microwaveable pouches.  The difference is that the box of dry rice yields twice as many servings as the “convenient” pouches.

5) Don’t waste food: This is a big one for me.  Whatever I buy, I eat.  I never let food go bad.   Google a recipe for food close to its expiration date or something that didn’t taste as good as you thought.  Any food that you throw away is harmful to your budget.

These are 5 things I do to keep my grocery bill low every month.  See if you are able to incorporate any of these into your shopping trips.  If you have any additional tips, leave them in the comments section below.

Budget Smart, Invest Wise

Book Review: The 3 Takeaways from The Richest Man in Babylon

book review

I recently finished reading George S. Clason’s The Richest Man in Babylon.  I heard the recommendation of this book on a Podcast I had listened to.  If you haven’t read the book then I suggest you buy it on Amazon.  A Kindle edition can be purchased for $1.99 and used copies cost less than a dollar plus shipping and handling.

This book is a great example of how the importance of handling one’s finances has been around for thousands of years.  I won’t give away too many details, but I will list and discuss briefly my 3 main takeaways.

1)  Debt follows you wherever you go: If you get yourself into debt, it is your responsibility to get yourself out.  Own your debt and create an actionable plan to attack it head-on.

2) Saving is important, but allowing your savings to grow is what truly matters: Saving 10, 20 or 50% of your income is important, but you need to have that money continually growing whether it’s with an index fund, a financial advisor or in rental property.  Having your savings in accounts earning 1-2% will never make you financially independent.

3) Don’t let misfortune define you, let it build you: Some are born into poverty, others encounter tragic life events, no matter what difficulties you have faced or might be facing you have the potential to create the financial feedom you desire!

I hope these 3 takeaways I got from the book inspire you to go out and read it for yourself.  Nobody cares more about your finances than you!

Budget Smart, Invest Wise

The 52 Week Savings Challange

money saving challenge

Many have heard of this savings challenge before, but if you haven’t or if your mind is a bit hazy let me remind you.

There are 52 weeks in a calendar year.  At the end of each week, you put in an extra dollar into a glass jar then you did the week prior.  You start with a dollar in the jar at the end of week 1.

For example, and we’ll put the money in on Sunday’s for simplicity reasons.  On Sunday, January 4, 2015, you put your first dollar into the jar.  The following Sunday, January 11, 2015, you put $2 in the jar, you know have a total of $3.  You continue this process every Sunday throughout the year.  If you were to complete the 52-week challenge, then at the end of the year you would have saved up $1,378 in the jar.  Quite astonishing really!

The whole point of this is not only to save up the money but to get your mind wrapped around living off one less dollar per week.  If I said to you, “Hey Mike, you have to spend one less dollar this week.  You think you can do it?”  Mike, or you, would probably respond with a resounding “DUH”.  Each week of the year you basically have to find out how to live on one less dollar than you did the previous week.  When you break it down like that it seems mighty simple.

So give it a shot.  Save up for a vacation at the end of the year, or maybe open a trading account.  This challenge has a two-fold purpose.  It helps you save money, and it also allows you to think about how to live on less.

Here is the chart for you to paste on the jar.  Good Luck!