Monday, March 13, 2017

10 ways to add more Green to your Pot of Gold

I fully acknowledge that this is a lot of information, feel free to scan for what works for you now and bookmark/Pin it to come back to it later! Also, please note that I've used a few referral links. They are clearly noted. If you use my links I'll get a kickback. Thanks in advance for helping me to save some extra cash!

Money, money, money. It's tax season in the U.S. and home buying/selling season for us. I feel like I've constantly got my mind on my money and my money on my mind! Actually, I've been a bit obsessed lately, especially because we sold our house in November, but haven't been able to buy anything. That means we've got the profit from our home sale sitting in the bank and I want to keep it safe. I don't want to lose any of it, because that's what we've got to make sure we can buy a new home. It needs to be protected. I'd also like to grow that money by being as smart with it as I possibly can. Today you get to benefit from my research!

1. First of all, if you don't already have one, make a budget! Ideally you should have a very concrete understanding of all the money that comes into your household and all the money that goes out of it. The best kind of budget is a "zero based budget" That means income equals outcome every month. When I first heard that it sounded scary. At first glance, that sounds like someone living paycheck to paycheck, but it's not. Zero based budgeting means assigning a place to all of your money and the first/best place to assign your money is to yourself. Obviously, you've got living expenses you'll need to assign some of your money to, but you should also assign some of your money to a savings account, some to investing (you might not be quite there yet, that's okay), some to an emergency fund, and some to fun money. Yep, fun money! Life's meant to be enjoyable. You are allowed to budget yourself some fun money every month: a guilt-less fast food trip, some new makeup, new pair of shoes, new video game or book, etc. Whatever makes you happy. And as you get a better handle on your money, you can increase this amount too. Here's a budget template in Google Drive that you can use. Download your own copy and save it. I didn't create this, but the person who did has made it available for sharing.

2. Once you've got your budget made, you need to keep track of it and make sure your money goes where you tell it to. Lots of people use a cash envelope system. In this system, you would take cash out of the bank and put it in a physical envelope each month. When the money runs out, it runs out. If you use up all the food money, you'll have to survive on the groceries already in the house. If you spend all your fun money, you have to wait until next month to replenish. I personally don't care for this method, but it works really well for lots of people. I use Mint to keep track of my budget categories. You can link your bank accounts to it and they will update automatically. There's a desktop version and an app.

Mint will categorize your transactions and give you a graph that shows where all your money goes.
3. My other best practice tip for assigning money and saving more is to have money automatically diverted to your savings account each paycheck. I started an online savings account with Ally bank about four years ago and I assigned 5% of my paycheck to that account. That money never showed up in my regular bill-paying account, so I essentially didn't miss it. Slowly, little by little, I bumped that 5% up to the current 23%. And I don't miss it because I never saw it! I've also made a point to put money in my kids' savings accounts. Ben is 6, so he get $6 of each paycheck, Henry gets $9 and Frances gets $13. Again, all this money gets put where it belongs before I see it, so I don't have to think about it and I don't forget it. Also, Ally has a 1%APR on savings, which is one of the highest rates around, so I'm putting that money to good use. And if there was an emergency, I can get to it within 3-4 days. (You can get an Ally checking account with a debit card, but I haven't. I want that money to be difficult to access. I find it to be safer that way.)

4. If you are one of the 38.1% of Americans who carry credit card debt or the 40 million who owe for student loans, you'll be familiar with paying interest. Paying interest is no fun because it just seems like wasted money. If you are paying interest, you should be working hard to pay off your debt. That means a good portion of what you earn should go towards servicing that debt. In fact, if you are paying interest, most money experts say you should not be making investments. The money you waste on interest is more than the money you make on investments. So get rid of your debt first!!

That can be a hard thing to do and it seems very overwhelming when you first start out. Do this: take a deep breath and look at your budget. Collect all your credit information: How much is your interest? What's the minimum payment? What (if any) extra do you have that you can put towards this debt? Now take those answers over to  Click "enter a loan" and enter your first loan with all the required information (principal balance, interest, minimum payment). Do this for each loan that you have. You'll get a graph that shows how long it will take to pay of each loan, making only the monthly payments. It will tell you how much to pay towards each debt each month. This might look scary! That's okay!! Keep reading.
By making minimum payments, it will take you 12 years to pay off these loans!

Now that you have your loans entered, you can slide the minimum payment bar up to pay more than the minimum payment on your loans. You can see the graph change and your "debt free date" get closer! You can also choose from two different ways of paying off your debt: the avalanche method or the snowball method. They both have their merits, so think about what suits you better. The avalanche method is a very math-oriented method. You simply pay the most money to the largest interest rate because that saves you the most money in interest. That's a great way to do it. However, the snowball method has some good points too. The snowball method tells you to pay the most money on the smallest balance first. There are great psychological benefits to paying off a debt. It gets you excited about paying off the rest of the debts you have. Once that loan is paid off, you'll take all the money you were using for that one and pay it towards the next lowest balance. Either way, you spend the same amount each month towards paying off your debt. Then, when you are debt free (PAY ATTENTION; THIS IS IMPORTANT!!) keep paying that same amount somewhere important to you: your savings account, an investment account, etc. Don't let that money go straight to your fun money account, let it work for you!
By finding just $100 extra each month, you can be out of debt 4 years sooner!

5. So you've got your money figured out and it's working for you. Now what? Well, if you want more money, you've either got to make more or spend less. Ken and I have good, solid jobs, but they are state jobs, so making more is difficult to do. We could try to get new jobs that pay more money, but for our own personal reasons, that's not what we want to do right now. We have chosen to focus on spending less, but there might be some easy ways to make more that you aren't thinking about!

This time of year I hear lots of people who are really excited about their tax refunds. There are ads all over the radio and newspaper, as well as in my email: "How will you spend your tax refund!?!" The problem is, you don't really want a big refund. That might sound crazy, but here's why: Your tax refund is based on how much money the government takes out of your paycheck each pay period. If you get a refund, that's because they took too much. The government isn't giving you free money; it's giving you back your money that they borrowed FOR FREE! If you find yourself continually getting large refunds, then you need to adjust your withholding (the amount of money taken out of your check each pay period). Ideally, when you file your taxes, the difference between what you paid and what you owe should be very minimal. In fact, if you're looking at just the numbers, it would be better to owe taxes every year. That would mean you had borrowed money, interest free, from the government! Of course, that also means, you might have to cough up a couple thousand dollars all at once to pay it back, so do what works best for you.

6.  Speaking of ads for how to spend your tax refund, I'll bet you'll be surprised that I'm going to tell you not to use coupons to save money. Sorry, Karen, your highlighted grocery list has no place here!! LOL! I really don't use coupons very often. Why? Because I found that I was frequently buying things I wouldn't have bought otherwise. If I save 25 cents to buy a name brand item, when I would normally buy the generic, I haven't actually saved money, have I? So I guess I won't tell you not to use coupons, but I will tell you to use them carefully.

7. Instead of using coupons, we choose to purchase generic for most products. In most cases, the taste is the same and they are often even produced in the same factories. There are a few things I prefer to buy name brand, but buying most other things generic allows me to do that. My peanut butter has to be Jif, my syrup has to be Log Cabin, and my mayonnaise has to be Miracle Whip. Other than that, I often don't care!

8. We also avoid paying full price for meat. This goes against the other popular idea to meal plan before you go to the store. We actually rarely carry a list, in fact. If you get to know your local grocery store, you'll get an idea of when they mark down their meat for a quick sale. We are lucky in that ours is often done on Sunday mornings, which is when I do the shopping. Instead of meal planning before our trip, I will scan the meat department to see what is marked down for a quick sale. I can usually pick up a variety of beef, chicken, and pork. And my hubby loves it when the pork chops are marked down! As long as you use (or freeze) the meat within a week, it will still be safe to eat. We actually got into such a habit of buying marked down meat, that we have too much in the freezer and we haven't actually bought new meat in about two months!

If you do want to save money on things you're already buying, I've got two recommendations:

9. Ibotta is a great app for your every day shopping. I use it every week for my groceries. The reason I like Ibotta is because it saves me money on things I would have bought anyway. They frequently have rebates for milk, carrots, onions, and pasta sauce. Some of the rebates are brand specific, but a lot of them are not. That means I can buy the store brand pasta sauce and still save money! And I've never seen coupons for milk and carrots anywhere else. Each week, usually Saturday night for me because I shop on Sunday, I flip through the app and see what rebates there are. Sometimes you can just tap the rebate, sometimes you might have to watch a short video or answer a question. I do my shopping at Food Lion, so the app is already linked to my MVP card. That means that as long as I enter my MVP card when I check out, Ibotta will give me the rebates automatically. Some stores, you might have to scan the barcodes of what you bought and take a picture of the receipt. If you sign up using my referral link, you'll get $10 in your account and I'll get $5.

Ebates is another way to save money on things you were going to buy anyway. I use Ebates when I do online shopping. First I sign in to my Ebates account, then I pick the store where I'll be making a purchase, for example or Then I shop as normal, and when I check out, I get a portion of what I spend back as a rebate. The percentages and stores allowed change on a regular basis, so it's always good to check before any online shopping trip. If you sign up for Ebates with my referral link, you'll get $10 extra back after your first purchase, and I'll get $25.

10. Saving money is great! What can you do with the money you've saved? Well, I'm not the best person to answer that question, because other than a retirement account, I've not done a lot of investing. I've got a suggestion for you in a bit, but first I'll mention one fun type of investing that I've seen. It's called CD Laddering. Again, trust Ally Bank if you want to try it out. They've got great rates, and I'm not getting anything out of telling you that! Here are the basics: Decide on your initial investment. Divide it by three. Invest a portion in a one year CD, a two year CD, and a three year CD.  When that first CD comes due, you can keep all the money, keep just the interest, or roll it all over into another 3 year CD. The first choice will break your ladder. Only do that if some emergency has come up that you can't cover any other way. You can keep just the interest and roll the initial investment back into a 3 year CD. That would give you some fun money to play with as a reward for investing. If you don't really need it, roll it all up and keep earning money! Once you've got the ladder set up, you'll have money come available to you once a year that you can use for a variety of different purposes. Obviously the best choice is to keep investing. CDs are probably best for investing between $1,000 and $5,000. With more money than that, I'd look into stocks, bonds, or mutual funds.

BONUS TIP: So, I'm not a financial strategist. I obviously don't just know most of this information off the top of my head. When I started looking for a safe way to hold on to our home down payment, I found Reddit. Now, depending on your level of internet savvy, that might be a scary sounding thing. And I'll admit, Reddit might not be the place to hang out for everyone, BUT the personal finance section is AMAZING and chock full of resources and advice.

Here are the basics for how to use their resources. First, you don't need an account to just browse. You can read all you want without anyone knowing you're there. If you want to ask a question or reply to something you'll need an account. Second, in the personal finance section you'll find a lot of impersonal advice. The best advice you'll get will be straight numbers and money. There are people who will advocate getting rid of a sick pet if you can't afford the treatment. You'll also see (possibly callous) advice for victims of identity fraud to turn their parents or siblings in to the police. My advice is to keep reading and take it with a grain of salt. This is all head advice, not heart advice. When it comes to money, that's really more of what I want to hear anyway. Thirdly, don't venture outside the thread I linked without caution. It's very easy to go to their "Bad Finance Advice" subreddit without noticing. Here you'll find people who get a laugh out of offering the worst possible advice for people. And, as long as you know that's what they're doing, it can be funny. Just don't follow internet advice blindly without using your actual brain first!

Did you make it through all that?! Well, I've got some more "green" to share with you! The theme for this month's Blog With Friends projects is green. I went with money, but other people cooked, baked, made artwork, and examined the word more closely. Keep reading for more about green.

Karen of Baking in a Tornado has green, egg, and ham.

Dawn of Spatulas on Parade has Green Bunny Poop.

Melissa of Heartfelt Sentiments has DIY: Nuggets of Fun.

Kia of Think in English as a study of the word green in other languages.

Eileen of Eileen's Perpetually Busy has a fun graduation cake.

Kristin of Little Mama Jama has Mint Mocha Cupcakes.

Lydia of Cluttered Genius has a project to use up all your old crayons.

Tamara of The Three Gerbers has an adorable Leprechaun craft you can make.

Didja make it all the way to the end? Good for you!

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