Tag Archives: discretionary income

MOOLAH MONDAYS: Workin’ the System Part I

November 20, 2014Budgeting & Moneybills, budget, budgeting, checkbook, debt reduction, discipline, discretionary income, earning, expenditures, expenses, finances, money, paycheck, receipts, saving, spending, stress reduction, system, tracking, want list, wantlistKurt Kirton

budget, system, spending — Photo by Annafur

Ok. So after the last post you know why it’s nirvana to live 1 month ahead and why you should create 2 Budgets, a Wantlist, and a list of Regular Yearly Expenses. Well, “What now?” you may say.

Buy what you need. Don’t go too crazy buying leisure stuff (clothes, eating out, drinks–whatever is “fun” to you.)
Keep any item receipts, ATM receipts, or paycheck stubs in a drawer or on a spike until you process them.
Have a section on your Tracking Budget called “Credit Card.” When you process credit card purchases using the aforementioned receipts, subtract the amounts from the respective section of your budget and add them to the “Credit Card” section. This way, you’ll have the cash to pay that credit card bill off when it arrives. Then, each time you pay your credit card bill, simply subtract the amount you paid (ideally the full amount!) from the “Credit Card” section.
In the “Pay” section of your Tracking Budget, log your paychecks (if you’re depositing that money into your checking account.) In the Pay” section, you’ll also log any other income you receive throughout the month and deposit. Of course, write anything you deposit in your checking account into your checkbook register as well.
Use your checkbook register and your Tracking Budget to log what you pay for out of your bank account—be it by check or debit card. For example, paying your electric bill or buying things at a flea market.

Next time, I’ll go over what to do at the end of each month to process your receipts and prepare the money you earned in one month for use the next month. There will also be a video tutorial so you can see me using this system and get a real-world visual.

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MOOLAH MONDAYS: Getting Ahead of Yourself (in this case, it’s a good thing!)

November 6, 2014Budgeting & Moneybills, budget, checks, debt reduction, discipline, discretionary income, earning, expenditures, expenses, finances, loans, money, overspending, paycheck, receipts, saving, spending, stress reduction, trackingKurt Kirton

money, expenses, income — Photo by 3Peaker

Kind of a side-note blog post here…if you really want to take full advantage of this system, get 1 month ahead. In other words, everything you earn in November is your money for use in December. You may need to have a really lean month or two to accomplish this, but it is SO worth it. Here’s why:

Self loans – Let’s say you just found out that the leather jacket you’ve always wanted just went on sale big time. You won’t have finished saving for it until next month, but you don’t want to miss out on the $50 you can save now. Knowing you’ve got a little cushion since you’re using this handy dandy system, you go ahead and buy the jacket on your credit card (we’ll talk more about these later) at a great price today, logging the cost on your Tracking Budget. Then you can just “pay yourself back” (absolve that negative) next month. This cushion can also serve you well for unexpected circumstances (like that $800 of repair work you had to have on your car or getting laid off next week) if you don’t have a rainy day fund to cover such surprises. NOTE: Don’t abuse the cushion. This takes self control. You can do it. If you’re not so good at that, practice, practice!
Bills – Oh shoot, your cell phone bill is here! But, no problem. You already set aside that money and can pay it right away.
Bounced checks – …are over! I can’t remember bouncing a check since I was a freshman in college—and that was due to losing my checkbook. Since you’ve got a month’s worth of pay in your checking account at the beginning of the next month, you don’t need to sweat each expense, check your balance online every other day, or worry if your checkbook total is a little short of the actual balance.
Ready for block payments – Let’s say you’ve got a $500 car insurance payment due twice a year. Since you’ve been saving a monthly amount for this in your checking account, you’re ready to write the check (or even better yet, put it on your credit card, and get the points!) right away with no scraping up the dough in a mad panic!

In the next post, we’ll look at how to use the tools we discussed in the first post. If you live a month or more ahead, what’s your opinion of it? What benefits can you add to those above, or why would you recommend a friend do this?

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MOOLAH MONDAYS: 5 Tools You Can Easily Create to Improve Your Money Management

October 23, 2014Budgeting & Moneybills, budget, debt reduction, discipline, discretionary income, earning, expenditures, expenses, finances, money, overspending, paycheck, receipts, saving, spending, stress reduction, tracking, vacation, want list, wantlistKurt Kirton

budget, money, finances, vacation, spending, saving, earning, paycheck, discipline, tracking, stress reduction, debt reduction, overspending, discretionary income, expenses, bills, receipts, wantlist, want list, expenditures — Photo by eric731

They say sex and money are the top two things couples fight over. So let’s talk about money. Managing your money well can do several things for you:

Reduce stress
Pay off debt
Avoid new debt
Help you save for things you want like a vacation, new car, a child’s college fund, or Christmas gifts

Several months ago my post about 7 things you need to do right after a layoff touched on budgeting. Budgeting is so important whether you are in transition or not—and can be fun! In this new series, Moolah Mondays, I’m going to share the system I came up with and have used for years to successfully budget and manage my finances.

First, make a Planning Budget (click the link to download a template in MS Word). This will show your regular expenses/recurring bills. The fun part is you’ll end up knowing how much discretionary income (leftover money you can use for things you want) you have when you’re done. The Budget is based on your total net (after taxes, withholdings, benefits, etc.) income from all sources each month—Just use a best guess estimate if you are on commission or have income that varies. This will be a simple table and look something like this:

Second, make a paper Tracking Budget. This is like a Checkbook Register but better! Here, you’ll enter what you’ve made (have to spend) and spent (subtracting what you bought) We’ll go into more detail on this tool later in this series, but here’s a sample in use.

Rent: $500 -$500 (Nov.)
Tithe: $200
Utilities: $200 -$100 (cell) -$60 (internet) -$15 (water)
Food: $150 – $75 (Nov 1)
Gas: $100 -$35 (Oct 1) -$35 (Oct 8)
Car Insurance: $200 + $200 + $200
Homeowers Insurance: $100 + $100 + $100
Me (spending): $300 -$20(ATM) -$25 (dogfood) -$35 (watch) -$5 (lunch)
Car Payment: $300
Retirement: $400 + $300 + $400
Vacation: $100 +$200 +$150
Credit Card: +$100 + $60 + $35 + $35 + $25 + $35

Next, let’s do a fun one…keep a Wantlist. Here you can plan to make dreams a reality. I like to keep mine in Google Drive as a Google Document. Your Wantlist could look something like this:

$1500 – Trip to 20th Class Reunion
$500 – 50” flat panel TV
$800 – Cindy’s prom dress
$200 – My birthday party

Last, keep a list of Yearly Expenses; sample below. I recommend a Google Document for these too. With this, you can keep an eye on things that you regularly expect (or might forget!) during the year for which you’ll need money. You can use things like your discretionary income, tax return, work bonuses, airbnb.com earnings, or 5^th week paychecks to cover or get ready in advance for these expenditures.

Jan – Property tax
Feb – Vacation (final bit of funds)
Mar – Cindy’s birthday gift
Apr – Mothers Day gift
May – Fathers Day gift
Jun – Wash/Wax/Detail the car
Jul – Car alignment
Aug – (nothing/TBA)
Sep – Car emissions inspection and license plate
Oct – Christmas gifts
Nov – Parent’s anniversary gift
Dec – Termite treatment

Now that you’re armed with the right tools, next we will talk more about how to use them.

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