Tag Archives: budgeting

New Year, New You

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There’s something refreshing about the start of a new calendar year and a new semester.  A lot of people make New Year’s resolutions.  But I think most people go about their resolutions in the wrong way.  And doing that makes it easier to fall off the wagon.

Possibly the most popular of all resolutions is the vow to lose weight.  I’ve made and broken this resolution multiple times.  Because it’s easy to break a promise to yourself to do something.  So this year I resolved to live like a healthy person.  Healthy people make better food choices.  Healthy people exercise.  Healthy people take the stairs instead of the elevator.  I’m not going to DO something.  I’m going to BE something.  I’m going to be a healthy person.  As a result of that behavior, I will likely lose some weight (I hope, I hope, I hope).  And if I have a bad day of living a healthy lifestyle, I won’t feel like I have failed the whole project.  I can wake up the next morning and still live like a healthy person.

Many folks also resolve to spend less money.  Or to build a budget.  Or to save more.  This is always on the top of my mind as well.  This year I’m choosing to be someone who makes smart money decisions.  I’m not going to DO.  I’m going to BE.  People who are smart with money pay themselves first.  This means I’ve got an automated savings deposit scheduled for every month….and what is left after that is the amount I have to live on.  Financially savvy people know where their money goes.  This means I am tracking my spending.  I can easily look up how much I spend each month on various budget items.  And if an area of expenditure seems to be getting out of control (as so often happens in the month of December), I know that I need to make adjustments going forward.  And most importantly, people who are smart with money don’t spend on things that are not important to them.  Live music is important to me.  My home is important to me.  My camper van (or home away from home) is important to me.  I don’t feel bad about spending money on indulging these three things.  Clothing is not important to me, so I always buy secondhand.  Cars are not important to me, so I drive a 13 year old Subaru.  Fancy coffee is not important to me, so I brew at home and carry it to work in my travel mug.  There are a lot of places in my budget that I could easily spend more money on things that are not of importance to me.  But that’s not who I want to BE.

Have you made any resolutions for the new year?  Who are you planning to be?

What is Your Goal?

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I almost never mention my first husband.  It was a short marriage that ended decades ago, so it somehow seems like part of a different lifetime.

He and I differed on one very important issue, and I think that is what ultimately drove us apart.  We had different financial goals.  Or at least a different order in which we wanted to pursue them.  All of my life I had two primary goals: earn enough money that I don’t have to be dependent on anyone else, and own my home.  When we married, I had finished my Master’s degree and was started on my career as a financial aid professional.  I had achieved goal number one.  But I was living in a rental apartment.  A year after we got married, we moved to Chicago.  I continued working as a financial aid advisor (this time at a law school—I found my niche!).  He started attending law school.  Within a year of our move to Chicago I was looking at condominiums.  I still wanted to own a home.  He didn’t agree.  He claimed he didn’t want to make that kind of commitment to Chicago.  And that was the beginning of the end.

Ultimately, we divorced.  And a year later I bought a condo in Chicago. A studio was all I could afford, but who needs a bedroom when you have a 27th floor lake view?  It was all mine. And I loved it.  My home, my mortgage, and my rules. After only three years, I sold that condo at a 25% profit.  I moved back to Pennsylvania and started working for Penn State.  And as soon as I was able, I bought a townhouse.  I’ve bought and sold my home two more times since then, and now I know that I’m in the home where I plan to stay for a very long time.  I’ll probably even manage to pay off the mortgage in full.

What I learned over the years is that when the real estate market is strong enough, you don’t have to commit to a home forever unless you want to.  It is possible to sell a home after only a few years without taking a loss on it.  Real estate is more than just a place to live…it’s an appreciating investment.

My first husband still lives in the suburbs of Chicago with his wife and kids.  Ultimately, he did make that kind of commitment to Chicago. We just didn’t have the same goal at the time when it really mattered.  Everyone has their own financial goals. And before you too far into a relationship, it’s important to be clear with your partner what your goals are, and hopefully they will match up with each other’s.

Owning a home and being self-supporting were my goals.  My current goal is retirement at age 60.  Some people have a goal of saving a certain amount of money.  Some have a goal of being debt-free.  Others have a goal of starting their own business.  Your goal is the thing that is important to you.  And everyone’s goal will be a bit different. What is important is that you have a goal and you set your sights on working toward it.

What are your financial goals?

You Can’t Always Get What You Want

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This has been a long and fraught week for Americans as we waited through the vote counting for the determination of the Presidential election.  Not everyone is happy with the results.  And this highlights one of the most important money lessons there is to learn:  You can’t have everything you want.  If it were possible to have everything you want, I would be retired and living in a 26-foot long Airstream travel trailer towed by a brand new SUV while I tour the United States.  Instead I am working full-time from my guest room in a job that I love and I tow a tiny teardrop camper with an 8-year-old Subaru on weekends when I am able to get away.

You can’t have everything you want.  You have to accept what you have and do the best you can with it.  I have a job that I love (I get to help people achieve their dreams!!).  I’d rather have a job I love and make less money than I would if I had a job I didn’t love.  My life isn’t extravagant.  But it’s comfortable and offers me what I need.  I’ll never have an Airstream camper or a brand new SUV.  But I will someday have a good quality camper that I can stand up inside of….and likely a used SUV or pickup truck to tow it with.  And until then I have a teardrop camper and a Subaru that take me on a lot of adventures.  I can’t have everything I want.  But I can make the best of what I have got.

If you try to have everything you want you’ll end up in a financial nightmare.  The struggle with debt is a very real thing for a lot of people.  A mortgage payment or car payment that stretches the budget can cause sleepless nights as you try to figure out how to also pay for food and utilities.  Add credit card debt or medical bills on top of that, and suddenly you’re sinking so fast you don’t know how to get out.  The best way to manage debt is not to fall into it.  Do you need a place to live and a mode of transportation?  Yes!  Do you need it to be exactly the one you have always wanted?  No!  It’s better to start with what is financially manageable and move your way up over time.

Sometimes making the best you can with what you’ve got is easy, like when you choose store-brand products over brand names at the grocery store, or when you buy clothing at second-hand stores or at big-box discount stores rather than at boutiques.  Sometimes it’s more disheartening, like when you take the bus instead of owning a car.  Sometimes it’s ridiculously frustrating, like when you have to accept that you just can’t afford a trip to Disneyworld so you staycation instead.

You can’t always get what you want.  But you can make the choice to be happy with what you do have and make the most of that.

The Attention It Deserves

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Shhhhhh!!  Leave me alone!  It’s exam time!  I’m trying to study!

It’s definitely that time of the semester.  Everyone is hunkered in their own preferred way…cramming in last minute knowledge (and coffee and chocolate) for the dreaded law school exams.  You give it that much attention because it’s simply that important.  It seems like your entire future rides on every single exam question.

Your money deserves that same level of attention.  Because your entire future really does ride on how you manage your finances.  If you are lazy and sloppy with your money, you will end up paying a price.  Late payments, overextended credit cards, overdrawn bank accounts, and bounced checks are more than just an embarrassment.  These things can hurt your credit score.  And a bad credit score comes with consequences.  If you have bad credit, you may have trouble getting a Grad PLUS Loan or a private educational loan to help you pay your living expenses while you are in school.  When it’s time to buy a car, you may not be able to secure a loan.  You may not be able to rent an apartment without getting someone to co-sign for you.  You may pay more for car insurance.  You may have to pay a deposit in order to have utilities connected.  You’ll pay much higher interest rates on credit cards, private educational loans, car loans, and home mortgages…if, in fact, you are able to get approved for them at all.  And worst of all, if your credit history is challenging enough, you may run into trouble with the character and fitness portion of the bar exam application.  That’s a lot of scary consequences for simply not giving your money the attention it deserves.

Think of managing your money as an extra class you are taking.  Give it a certain amount of time each week.  Use a spreadsheet or some other program to manage your budget.  Write down when your bills are due so you don’t miss any deadlines.  Read your mail and email—it could actually be something important.  Check your accounts online regularly so you aren’t facing any surprises.  Something as important as the funding that makes your life work deserves the same attention you would give an exam or a paper.

Shhhhhh!  Leave me alone!  I just got paid!  I have to work on my budget and my bills!