The new site

The new web domain is giving me some difficulty in how I want to set everything up so for the time being I will continue to post here.

Oh, and if you are looking for a safe investment, try CDs or Certificates of Deposit, especially if you don't have a high tolerance for risk.

Why?

I just met a person who actually invested lottery winnings $120,000 worth after taxes. She has set it up in a CD a month laddered situation. In other words every month she opens a new 12 month CD for $10,000. All her money is insured because she shops for the best rates at every bank in town. I'm not sure what her tax situation is like, but when her interest becomes her income (She'll be retiring in 11 years) it will net her $855.17 a month, which isn't astounding, but if she needs it she will have access to over $17,000 a month.

Meanwhile the winnings haven't changed her lifestyle one bit in any other way, she loves her job and will do it for as long as she can (probably won't really retire for another 20 years).

Learn to do without.

One of the best ways I’ve found to get an edge on finances is keeping myself consistently under budget. I do this by learning to do without. For example, there was a time when I would drink 3 fancy shmancy coffee drinks a day. Each one would cost me $2.00 so I was spending $6.00 a day just on coffee. That’s $42 a week, $128 a month.

And that’s just a cup of coffee.

Do you go out to eat with your spouse once a week? Going out every other week could save you $60 a month.

Do you buy name brand groceries? Trying some generic products could save you $10-$40 a week on shopping.

One big expense that saves people when they go without is alcohol. Depending on what you drink, you could save anywhere from $14-$200 a month by not buying alcoholic drinks, or even cutting consumption in half.

So how does one find out what they can cut?

This goes back to Knowing what you Spend. Save your receipts and really take a count of what you buy, what you use, and what just sits there. Does someone buy a magazine from the supermarket counter every month? It may be cheaper to get a subscription. I personally buy tools I don’t need and probably won’t use, but by making a rule that all tool purchases are a two-party decision, my wife and I save money by doing without.

I am interested in learning what other people have been able to do without, reuse, save money on, etc. If you have a good tip, post it in the comments below.

Know What You Want

This is the fun part about budgeting, especially for the new family. Knowing what you want will give you your big goal that will drive the rest of your budget.

Sit down and have a chat with your family:

• What do you like to do?


• Where would you like to go?


• Do you want to buy a house?


• Do you want to have children?


• If you have children, do you want to pay for them to go to college?

The Written Word is key

The possibilities are as unique as every person, and this should be a discussion where all ideas are open for consideration and get written down. Dad wants a new Porsche? Write it down. Little Jimmy wants a bicycle? Write it down. Everyone wants to take a trip to Six Flags? That's great! Write it down. New couple wants to know the joys of home ownership? WRITE IT DOWN.

So let's drum up a sample list of different financial goals.

• Jimmy's new bike


• New House


• Porsche


• Ice Cream every Sunday


• Go out to eat twice a month


• Retire at age 60 and be able to live to be 160


• Put Jimmy through college

Now these are 7 general goals (this is an example, you could come up with hundreds fairly easily). Obviously some of them are more pricey than others, some are more specific, some are very general. Now it's time to prioritize.

Break the goals up into short-term and long-term.

Short-term

• Jimmy's Bike


• Ice Cream every Sunday


• Going out to eat twice a month

Long-term

• New House
  
• Porsche


• Retirement


• Jimmy's education

Now you just need to use the short-term goals to drive your long-term ones. I'll use the Porsche for an example.

Let's say that it costs $60,000 (I have no clue what a Porsche costs)

$60,000 becomes your big savings goal, your short-term goals should motivate you to continue to save. Just make milestones in your savings. So, if Ice cream for the family costs $30, set a goal that everytime $130 is added to the savings account, everyone gets ice cream. The result is that everytime you've saved another $100 you get rewarded for saving.

That about sums up this article, anyone want to clue me in on how to post an excel document I could chart this for you.