Christmas Leftovers

 

That $1000 Christmas bill that showed up in January could keep on giving. Imagine being in a position to pay it off when it arrives; now, that is a true gift.

First, what do you value more than anything? For me that would be time with the people I love the most. Christmas is about many things, but the most important is sharing our love for each other.  This may not be family; it can be anyone.  My question to you is, of that $1000, how much did you spend out of love and how much out of obligation.

I can love my daughter with a $100 gift and time, or I can feel obliged to spend this or more because I have in the past and she expects it now. If you purchase a gift, purchase one that you can afford and that you know the person would like.  I could buy my daughter $100 perfume that I know she loves and wants but I cannot afford, or the $24 pair of merino wool socks that she will love and I can afford.  With the gift of wool socks, she is happy and I am not stressed.

There is another type of obligation that we face at this time; the gift we give because we must.  You have always given your sister a gift so you continue to do so.  You are now both in your 50’s and neither of you really needs anything.  It is so hard to find the right thing.  First, let her know that you are no longer giving her a Christmas gift.  If she lives out of town, then send her a very nice hand written card.  If she lives in town, then continue to spend the day together but skip the gift.

These are a couple of ways to help make those bills smaller.  Start now and save for this event all year round.   By saving just $50 per month, you will have $600 by next Christmas.  The hole you create in your budget at Christmas, will be smaller or none at all.

A year in review

January

$1000 credit card bill; Wow!  Did I really spend that much?  Who and what did I spend the money on?  Better get down to paying that off.

February

We need to get away from this cold weather.  We should go somewhere warm - $3000 for the family.  Not bad; we will pay for it later.

March

Two family birthday gifts, food and fun - $200.  We really need to get a handle on this spending.

April

The fence needs some repairs and the brakes on the car need replacing - $2000.  Ouch!

May

Summer is here and I want to spruce up the flowerbeds - $100 for garden supplies. We really need to get a handle on this spending!

June

Our anniversary was a very special night out; a great climax to a very successful year - $200.

July

City taxes; forgot to prepay them over the year - $2000.   Family in town - $300 for extra food and wine. 

August

One week family camping vacation - $400 for the gas, site rental, water toys.

September

School starts; clothes, supplies and fees - $100 x 2 kids = $200

October

Free and easy.  Oh yeah, those bills!

November

New winter tires - $500.  Forgot they need replacing.  Better get on top of the bills.

December

Christmas parties, new dress, tickets to events - $300.  Oh well, it was a good time.

Are you prepared for the unexpected and the annual events?

Hello!  I’ve been away for a while.  I haven’t been out of the country, just busy doing other things.  Money will always be an important part of life so we cannot forget about it.  I haven’t forgotten about money or you.

Sometimes we have major events in our life that change our direction. These events can change our values, or help us discover what our values really are.  When was the last time you looked at some of your basic values?  Have they changed over the last few years?   Last year I took a job in a new town.  I knew I would miss my daughter and my close friends, but I didn’t realize how much until I was in my new home.

Over the last year I’ve spent money and time to be with the family and friends I left behind, and both have been well spent.  I haven’t used extra money to make this happen; instead I’ve directed money from other things.  I do this because I truly value their love, friendship and support.   This past summer I made a trip to a music festival to hear the performers, but mostly to spend time with two friends.  Because of forest fires, there were closures on my regular route.  The alternate highway was busy and slow moving, and now included a ferry ride.  The additional traffic resulted in a three-ferry wait in 34^oC weather - with no shade.  During the last stretch of highway, the weather changed dramatically, and I was now driving through a hailstorm.  Nine hours after leaving home, I finally arrived at the music festival.  I could have turned back at any time, but I wasn’t willing to give up spending the weekend with friends. 

This is the type of effort we’ll make for something that we value. Take a look at your values; is that where you’re spending your time and money?

Make a commitment to live your values.

HAPPY NEW YEAR  

Toxic Money Habits

1 pack of Cigarettes per day = $70 a week   

1 bottle of wine per week $15

1 latte per day = $25 a week

Total $110

All three of these have a negative effect on you. Too much coffee, too much wine and smoking have associated health issues. I believe that a coffee out now and then and a glass of wine is OK too. If they are a part of everyday life, then they may have an impact financially or physically. Where are you with these habits?

A $110 in one week can lead to financial stress for some. What could you do with $5000 to save or pay off debt this  next year?

Pop Quiz part 4

The opportunities  are wide open

Here is the answer to the last question; how much disposable income do you have?

It’s straight forward.  Remember…… net income is the amount you bring home.  Disposable income is net income, minus all the fixed bills. In most cases this would include:

·         Rent/mortgage

·         Property taxes

·         Utilities … just the basic ones not the cell and internet

·         Car insurance and car payments... if you have one

·         Medical insurance/life insurance… if you have them

·         Other fixed payments you may have

Once these fixed bills are paid, the remaining balance is disposable income.  From this disposable income, you should plan to save between 10-15% of your net income for retirement.  

For example:

If your net income is $2000, and your disposable income after paying the fixed bills is $1200, plan to save $200-$300.  You then live off the remaining $900-$1000. This should cover food, clothing, gas, entertainment, internet, cell, medical expenses, vacations and other things that may occur.

Now you know the difference between gross income, net income and disposable income. You will want to know all three of yours - they will tell you how well you are doing at staying on budget.