How to Make a Budget for Separation
Need to figure out how to make a budget for separation? You might be dreading this moment, or it just seems so darn complex that you’ve put it off as long as possible. If you and a partner are separating, it’s no secret that money can be a thorny and painful issue. This post will guide you some basics on how to budget for separation including:
But first, one long, deep breath. Got it? Holding it there? And exhale. Right, we know this topic can feel super heavy or overwhelming, and just one nice deep breath gives us a little push forward. Ok, let’s dive in. Step One: Get OrganizedEarmark a couple hours on the next rainy day to get everything consolidated. It might require some password summoning and a few frustrated treasure hunts to find account statements, but hang in there, keep the fidget spinner nearby, and the good news is that this is usually a one-and-done activity. 1. Make a List of Your Finances All in One PlaceYou’re gearing up to separate your finances, and a good place to start is knowing what’s in the pile in the first place. This list should include:
Whether you do this step with your partner or on your own is up to you and your situation. Depending where you are in the separation process, these financial accounts might be closed or about to be closed (and it’s a good idea to download statements and open your own bank accounts, and definitely talk to a lawyer earlier rather than later). Splitting up assets is for the court to decide, but for now, you want your records neat and tidy. To illustrate how this all works, we’re going to take a look at a hypothetical couple—Tanya and Mark Scissors—as they prepare for financial separation. Tanya and Mark have one elementary-school child, own a house, and they both work and make similar salaries. (Go Tanya! Slay that wage gap!). First things first, all their accounts and loans are listed out in one place, shown here in their YNAB budget. Like many folks, the Scissors have a little bit of credit card debt, a handful of car loans and student loans, some retirement savings, and some liquidity in their home. If you’ve never seen your finances in one spot, this is a strangely comforting activity to see it all in one place. Who knew. 2. Get Granular With Your ExpensesAfter creating this big-picture financial view, it’s time to drill down into your current bills and expenses. This granular list will give you a clear and tangible picture of how much your current life costs each month and help you plan out the next few months’ of cash flow. Create a guesstimate of your current expenses, including things like your rent or mortgage, loan payments, bills, and both your monthly and non-monthly expenses. For Mark and Tanya, their list of expenses totalled about $5,500/month. That includes the money needed to pay their bills on time, cover the payments on their loans, buy food and gas, any childcare expenses, and it includes non-monthly expenses too like car insurance and software subscriptions. It’s easy to forget those last few, but this is key to getting the true cost of expenses for a month. 3. Determine Each Person’s Split of Current BillsFor expenses they shared, like the mortgage payment and the monthly bills, the total of shared bills was $2,500. This is an important number—this means if they split current bills evenly, each person is responsible for $1,250. We’ll come back to this number. Step Two: Split Your Immediate Financial ResponsibilitiesThis is the hairy part that can sometimes become a monster with teeth. We’re not lawyers, nor are we financial planners, so those details of “who gets what” will be hashed out by those professionals. However, between now and then there are some financial questions leading up to the official divorce you need to figure out. Although nothing decided becomes official until a judge makes it so, the bills don’t get put on hold just because of divorce proceedings. Questions to consider: from now until the divorce is finalized,
Between now and the finalized divorce, the Scissors divided bills and expenses like this: Tanya:
Mark:
Step Three: Make Your Budget for SeparationFinancial health is yours for the taking. Even when it feels like everything else is out of control, your current money management is within your control. First up: add your expenses operating independently from your partner and on your single income. Whether you’re anticipating child support or alimony, the best step is to operate only under your current reality. That means if you’re not getting those payments now, don’t make your budget including those payments until they start hitting your account (which could take many months). For the Scissors, Tanya set out creating a budget (who knows what Mark is doing), and she made a list of her expenses for the next few months that looked like this: She added the bills she’s responsible for paying for (the full amount), added in costs she knows are coming for the divorce and lawyer, and even included some fun money for some guilt-free and much-needed treats. Thanks to her list of expenses together, she has an idea of the cost of her current standard of living and can make any adjustments needed. Add Your AccountsNext, tally up the money that is currently in your possession (in which you’re the sole owner) by adding current account balances. For Tanya, it looks like this: Since the credit card is in Mark’s name, she’s taken out a new credit card and has no balance currently (the credit card debt will be sorted out in the divorce proceedings. For now, Mark is just paying the minimums). Add Any New InflowsTanya’s paycheck from work clears the bank, and Mark has (thankfully) just Venmo’d her for his half ($1,250) of the bills. Give Every Dollar a JobNow we’re about to start really budgeting, and it’s about to get kinda fun. YNAB’s first rule of budgeting is to Give Every Dollar a Job. What does that mean? Picture this: you have a pile of cash and a bunch of little paper envelopes with category names written on them. You’re going to divvy up the money you have into these envelopes. In YNAB, we do that all digitally. Let’s take a look at Tanya’s budget. With all her cash combined, she’s got $7,430 to start with. One big important note: Tanya isn’t budgeting any money she doesn’t have: that means no upcoming paychecks, no anticipated alimony or divorce payout. Just the dollars she currently has, and that’s what gives her the clarity she wants to make decisions. Here’s a look at Tanya’s budget before she assigns money to categories. Next, see how she allocates the dollars she has and see what her budget looks like next: Now Tanya’s budget is filled with happy green bubbles which means each category is fully funded for the month. This even includes earmarking $1,600 for divorce expenses and already saving $80 toward an emergency fund. Budget to ZeroNow, to fill up all her expenses for the month, she didn’t need to allocate the full $7,430—her monthly expenses cost less than that. That means she’s got $1,520.66 to go. Give Every Dollar a Job is YNAB’s Rule Number One of budgeting, and that means we’re not done yet! From here, Tanya can either:
She opts to get a head start on bills and puts the money towards next month’s bills. With the money she has right now, she’s able to fund almost half the mortgage and almost all her bills for next month. She’s budgeted to zero and now has a plan for her money! If you can’t fund your full month yet, absolutely no worries—most people can’t when they start. Just ask yourself: “What does this money need to do before I get paid again?” and fill up your categories according to that mantra. When your next inflow arrives, budget it by asking the same question. Step Four: The Next Few Months of Your Budget for Separation (What to Expect)Financial and marriage separation is a tangled process, and this budget will give you a plan all the way to the divorce, and it’ll adjust and grow as you do too. When Tanya gets paid again, or gets another inflow from Mark, she’ll repeat the same exercise and just keep budgeting down her categories until she gets to zero. If you go through divorce proceedings, there will be divorce-related expenses like retainers and court fees. If you need to shuffle money around, then you’re doing it right. When overspending occurs on a category, or an unexpected expense comes up, just move money from one category to another to cover it. This is another one of YNAB’s core rules: Roll with the Punches. No need for a broken budget, just dip, dive, dodge, and duck and keep going! It also might feel like your life is in a holding pattern, but there’s no reason you can’t start building a strong financial foundation right now. Ask yourself, what can you do so your finances are better a year from now, five years from now? Better yet, be inspired by one woman who called it quits on her marriage, then traveled to 26 National Parks (some multiple times), lost 60 pounds, and got herself the best financial shape she’d been in for years, all the while waiting for her half of the house payment to come through. Read it now. Step Five: Survive and ThriveYou’re taking it one day at a time, and before you know it (ok, maybe you’re aware of every step of the way), it will be behind you. When things feel confusing financially, just keep following the YNAB Method and it’ll serve as your helpful compass through bogs and fogs and financial swamps. You’ll start seeing your progress compound, and you’ll have your independence, your freedom, and the chance to thrive financially, better than you ever have before. Want to take a trip to Fiji? Put it in the budget. Make it happen, pay for it in cash. Send your kids to private school? Buy a cottage in the country? Maybe you just want to make it through today, feeling just a little more in control of your money. And that is a worthy enough goal in and of itself. Find clarity in financial chaos: organize your money in a YNAB budget—try it free, no credit card required. This post is not meant as legal advice and is to be used for educational purposes. We recommend you talk to your lawyer or financial advisor about the details of your financial separation during divorce. The post How to Make a Budget for Separation appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/how-to-make-budget-for-separation.html October 22, 2021 at 10:42AM
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You Need A Separate Business Budget
You Need a Separate Business Budget (YNASBB—nope, that doesn’t work. Let’s let it die here.) YNAB will serve your small business well. It has mine. It gave me what I call, “pile-of-money clarity.” Several years ago, YNAB was profitable with a very small team, and I couldn’t have been happier. Then I moved YNAB from Quickbooks to YNAB. That move was a game-changer for me. I suddenly had clarity surrounding the business checking account balance. I no longer had to wonder if we could hire, because I could see that our category for payroll was doing just fine. I saw I could be more aggressive with advertising, because I saw that we had advertising dollars where they were supposed to be. We went from a company with seven part/full-time team members, to a company with 27 over a two-year period. All because I used YNAB, where it settled my stomach, and helped me conquer the natural risk aversion I had to hiring people, and growing the business. Yes, I believe YNAB (the software) will serve your small business very well. It will help the risk-avoider take calculated, comfortable risks. It will help the risk-taker pull back a little bit, and be more calculated in his or her risks as well. How to Use YNAB for Your Business BudgetIn order to do this right though, you need to set up a separate business budget. Unless you have the teeniest of tiny little side operations (where a separate master category for the entire business suffices), you need to set up a separate business budget. Go to File -> Create a New Budget… and get started. Keep your business budget separate. It will make everything easier (taxes, reconciliation, personal vs. business expenses, etc.) Wait a Minute, YNAB Won’t…YNAB won’t send your invoices for you (though you can actually track them pretty well in YNAB). YNAB won’t track your time for you. YNAB won’t track your mileage for you. YNAB won’t handle your asset depreciation. It won’t print checks. It won’t integrate with your accountant’s tax software. YNAB won’t run your payroll for you. YNAB won’t track your inventory for you (it could, and maybe I’ll write about that later). Well sheesh Jesse, what will YNAB do? It will add value to your business by giving you the insights you need to clarify your priorities, cut wasteful spending, boost spending where profitable, and maybe even show you that you can take a steady salary. It will give you peace of mind, as it relates to your business’ cash flow. Besides finding great people to hire these past several years, the best business decision I made was to move YNAB to YNAB. A P.S. Regarding YNAB’s “Won’ts”YNAB, strange as it sounds, is a multi-million dollar company now. Here’s how a multi-million dollar company handles all of the things that YNAB won’t do. (Hint: an end-all-be-all software package can, many times, be harder to use than approaching your software needs a la carte.) Bookkeeping.We do our books with YNAB. As a result, YNAB has a healthy buffer, keeps spending in check, and the entire team gets to spend a week in Costa Rica this year (Rule Two applied over an 18-month period!) Invoicing.We don’t send many invoices, but when we do, we use Freshbooks. Time-tracking.YNAB has just started tracking time on a new project, and we’re using Harvest (Adam, our CPO, likes them.) Mileage tracking.I track mileage for the four months after taxes are due, and then give up. When I do track mileage, I use an app on my iPhone. Come tax time, had I faithfully recorded the year’s mileage, I would send my tax accountant the mileage report. Depreciation.YNAB has a few assets that require depreciation. Our tax accountant tracks that for us each year. (Any accountant worth their salt will do that. As most of you probably know at this point, Casey Murdock handles YNAB’s taxes, and a bunch of the team’s personal taxes as well.) Check-writing.We have a book of (free) checks, and when we need to write one, Chance (our COO) grabs a pen from his desk and fills out the check. I sign it, then enter the check in YNAB. If we need to send a lot of checks at once, we use the free business bill pay service of our bank. Tax filing.YNAB doesn’t integrate with our tax accountant’s tax software, so do you know what we make him do? We send him a spreadsheet of all of our inflows/outflows of the year, and we make him do “accountant-y things” and build a pivot table to aggregate category spending and manually enter the numbers into his software. It takes him a few minutes, and he checks for accuracy along the way, instead of checking the accuracy of an import after the fact. (I re-read this and admit that I sound quite snarky here. It’s a pet peeve of mine, letting your accountant’s two hours of work for your taxes dictate your entire year’s financial workflow.) Payroll.We run our payroll through Paychex. I pull up the monthly payroll report and enter the outflows into YNAB. It takes me a few minutes. I like hand-entering all of our team’s pay, because it makes me happy they’re on the team. Inventory.We don’t have any inventory to track, but if we did, I’d buy a separate piece of software to track inventory (if it was a lot), or I’d use YNAB to do it (if it was just a small bit of inventory tracking). Cash outlays for inventory would be entered in YNAB, obviously, because YNAB handles your cash. The post You Need A Separate Business Budget appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/you-need-separate-business-budget.html October 21, 2021 at 04:42AM
Budgeting Lessons Learned From My Six-Year-Old Temporary Blinds
Question: How long will a set of temporary paper blinds (the kind you first put up in a new home before you install the permanent window coverings) last? Answer: At least six years. I’ll let you know when they fall down or disintegrate, but they appear to be going strong. The paper blinds hanging in my bedroom (that happen to be about a year older than my almost-kindergartner) perhaps could’ve been replaced a long time ago. Instead, we keep them. Why We’ve Kept Our Temporary ShadesI’ve had this conversation a couple dozen times with my wife as we’re headed to bed: Do we have the money to get some permanent window coverings in here? I don’t know – probably? How much do they cost? They’re pretty expensive. $800 – maybe more. Well, do what you have to do. That’s a pretty good chunk of cash – wouldn’t hurt to wait a while. So, we waited a while. Because temporary blinds are pretty cheap. And permanent window treatments are not so cheap. And while we waited, $800 passed through our hands many times. But we never bought permanent window coverings. Window Treatments Just Didn’t Seem That Important to UsAll because every time we considered the purchase, it just didn’t seem all that important. It didn’t really line up with our priorities, there were other things we’d rather spend the money on, and the temporary blinds were working just fine. And this frequent decision wasn’t just a hypothetical floating around in our heads. We use a zero-based budgeting system that clearly lays out everything we need and want to spend money on. So that $800? It literally got earmarked somewhere else every time. I don’t know about you, but purchases in the $200 to $1,000 range always trip me and Kate up. They seem too big to just run out and buy, but too small to save up for. So they get pushed off until we finally give up and just buy them. Or, in the case of the long-living temporary blinds, we stand our ground. Neither makes sense. A Solution That I Can Live With for Window ShadesI’ve figured out a way to have my cake and eat it too when it comes to getting new window shades. After all, those temporary blinds will need to get replaced eventually. In my budget, I set up a category called Home Repairs & Improvements. I set aside $50 a month, and eventually we’ll have however much money we need to buy permanent window coverings. Even better than having the money, we’ll have given ourselves permission to make the purchase. And until then, our six-year-old temporary blinds are working just fine. Start setting your mind at ease for those big purchases that feel too small to save for with your own budget in YNAB, an award-winning budgeting app. In the meantime, enjoy those temporary blinds and see if you can outdo me. Six years people…let’s see if you can set a new record. The post Budgeting Lessons Learned From My Six-Year-Old Temporary Blinds appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/budgeting-lessons-learned-from-my-six.html October 20, 2021 at 04:42AM
How Do I Handle My Savings Account In My Budget?
When you’re setting up a budget and trying to get specific on your long-term financial goals, you might wonder how to treat your savings account in your budget. Well lucky for you, it’s actually pretty simple to start saving. Here at YNAB, we think about things a little differently—especially how something like your bank account fits in with your budget. We’ve got a proven method, and the reason that it works so well is because it helps change the way you think about your money, which leads to real behavior change. The thing is, change can be hard sometimes! And, one of the more confusing issues for new budgeters is how to handle savings. They worry about including their savings account(s) in their budget for fear that they’ll accidentally—or not so accidentally—spend it. But nothing could be further from the truth. Let me tell you why and give you a tour of how to manage your saving account with a zero-based budget like YNAB: Saving is Not The Same as Savings AccountIf you asked the regular Joe what it means to save money, what would they say? Probably something like “Putting money into a savings account.” YNAB’s method teaches you to give every dollar a job, and that includes your savings dollars—pretty much the opposite of letting your dollars lounge around in a cushy savings account without purpose. Right? So, here’s a new definition of saving: “Deferring the use of your money for a later time, for a specific purpose.” Your dollars just breathed a happy sigh of relief—nobody’s happy without a purpose. Your Savings Account Doesn’t Matter … MuchWith our new definition of saving, the question of location is moot. As far as your budget is concerned, it doesn’t matter if your dollars are in your primary checking account or a savings account. Confused? You’re not alone. If you’ve never used a zero-based budget before, you’ve probably come to view a savings account as a safe space. Tuck your dollars away in savings, and they’ll be out of sight, out of mind (and still in your possession because you won’t accidentally spend them!). So, it’s no wonder that you’re nervous about including your savings in your budget. The thing is, your budget is actually how you can protect, and even grow, your savings! Once you’re using a zero-based budget like YNAB, you’ll use your budget to inform your spending (not your bank balances, which can lead you the wrong way). That big number, your bank balance, doesn’t tell you the full story. It can’t tell you how much cash you have to spend on groceries because it isn’t aware of your obligations and priorities. But your budget? That’s it’s job! Your budget can tell you, down to the cent, exactly how much money you can spend at the store. It knows, because you told it! So, forget your bank balances, forget that balance on your savings account. Trust your budget. And, that brings us back to your savings account. It’s completely unnecessary to hold your dollars in a separate account because your budget will identify what each of your dollars is supposed to do, including being saved for some future purpose. Keep in mind, too, that more accounts means more moving parts to keep track of. The more you use YNAB, the more you’ll see that having more accounts only adds unneeded complexity. For now, just remember that the location of your money doesn’t matter as much as the purpose you assign to your dollars. So How Should I Save Money?There’re a lot of folks out there (not me) who are natural savers. Even non-budgeters can be pretty good at saving money. But, often, they don’t save with a purpose. Non-budgeters typically save because they’ve been told they should. So they sock away money in a savings account because it feels like the right thing to do. Putting money in a savings account makes them feel like they’re protecting those dollars. But that’s an illusion. When they see a shiny, exciting thing on Amazon, there’s nothing stopping them from taking that money and spending it. Why? Because that money didn’t have a purpose. It didn’t have a job. So, give your savings dollars a real job, and be specific! Don’t just create a category called “Savings,” create a category group! And, under that group, set up categories with clearly-defined purposes like “Hawaiian Vacation,” “New Jeep,” “New Android Phone,” “Big Christmas Donation” or whatever gets you excited. Why be so specific, you might be asking? Because it’s a lot harder, emotionally, to pull money out of your Hawaiian vacation fund than it is to take it from your savings account. You’ll think twice about if the purchase is really worth it to you. That’s why. You might choose to take the money out, but only after you’ve carefully weighed your decision and Hawaii, for whatever reason, didn’t take priority. Every Category Is a Savings CategoryAnd how’s this for mind-blowing: your budget is your savings account! Think about it, every category is a savings category. Referring back to our new definition of savings, each dollar in your budget is given a specific purpose for a future use. … the only difference between your everyday dollars and your savings dollars is how long you plan to save them. For example, the electric bill’s due on Monday, and you plan to buy that new TV in six months. And, then there’s your emergency fund. All of the dollars have a job, but some will hang around longer in your account. (In the case of your emergency fund, hopefully it will be a very long time!) The bottom line is that you’re intentional with every dollar. Give them a purpose, keep them happy, and I think you’ll be a lot happier, too! (It’s hard not to be when you’ve got total control of your money.) Want to get your finances organized? Get started with a free 34-day trial with You Need a Budget, no commitment required. What have you got to lose? The post How Do I Handle My Savings Account In My Budget? appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/how-do-i-handle-my-savings-account-in.html October 19, 2021 at 10:42AM
Social Security Robs From The Poor and Gives To The Rich
Social Security is our national pension fund that is underfunded by about 22%. With a massive cost-of-living adjustment in 2022, Social Security actually robs from poorer generations to give to the wealthiest generation of all time! Let's discuss why Social Security is actually turning out better than expected and how we should change our retirement planning. Posts mentioned: Social Security Cost Of Living Adjustments $3 Million Is The New $1 Million The New Three-Legged Stool In Retirement Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/social-security-robs-from-poor-and.html October 19, 2021 at 02:42AM
YNAB Widgets Now on Mobile
You’re about to go by your favorite coffee shop. But wait, how much do you have left in your coffee budget? You only have seconds to make the decision. You open your phone, scroll, tap, tap tap tap, scroll, scroll. Alas! The moment has passed. It took too long. No coffee for you. But now…BUT NOW! Imagine this: the urge for a coffee strikes. You open your phone, and right there on the home screen you see your coffee category: $14 remaining. Instant feedback. Grande for me! And you shimmy into the coffeeshop for a guilt-free spending extravaganza. Yes. That day can now be a reality. Welcome to widgets for YNAB. Wait…YNAB Widgets? What?If you’re a mobile user, you now have the ability to view categories right on your home screen. They may seem like a little thing, but trust me friends, they are not. You have not fully lived your best budgeting life until you’ve tried these. Widgets are available in iOS 14 and Android 7 or higher and come in multiple sizes. They mirror important information from the app so you have quick and easy access to it. How to Add a Widget for YNAB on iOS
In the example below, you can see this user has opted for two small widgets (one category each) and one medium widget (three categories). How to Add a YNAB Widget on Android
In the Android example below, you can see this user has opted for two small widgets (one category each) and one large widget. Add widgets to quickly see the categories you use most often on your home screen. Now, let’s say I don’t need to see your Vacation balance, but would rather see money available for gas in that widget. No problem. Just press and hold the widget, then tap “Edit Widget” (iOS) or “Reconfigure” (Android). Just tap on the category you want to remove and select a new one. Use the hamburger menu to drag them into any order you want. Tip: If you don’t have an edit or reconfigure option, to make a change, delete the widget and re-add it with newly selected categories. What Widget Size to UseYNAB Widgets give you quick access to category balances you use a lot and a quick way to enter spending from those categories.
These Large widgets show seven categories of your choosing on the home screen. Tap a YNAB Widget to Enter SpendingJust tap the category you’re spending from in the widget, and YNAB opens up and ready to go–the category is already selected for you—and it’s just waiting for the amount from you! What’s Better than One Widget? Stacked Widgets!On your iOS device you can have more than one widget stacked on top of each other to save space on your home screen as long as they are the same size. Just add another widget then drag and drop it on top of your first one. You can customize the categories in each widget and a simple swipe will change which one you’re viewing. This is really convenient if you’re short on home screen space—just use the smallest widget with as many as you’d like stacked underneath! Our Favorite Uses for YNAB Widgets in the Wild1. Widgets for Your Not-So-Budgety PartnerOne of my favorite uses for widgets is to get my not-so-budgeting husband on board. We’ve been using YNAB for years but it’s only in the last few months that he’s actually opened the app. But it can be overly complicated to him, and he really only cares about one category: his fun money. So…widgets to the rescue! He can now add just his fun money as a small widget and always know the information that matters to him (and nothing more). 2. Widgets to Keep Your Eyes on the PrizeYou’re railing hard toward a financial Target, maybe that’s a down payment, a new puppy, or a new couch. Add that category as a widget and all of a sudden you’re seeing that reminder front and center on a daily basis. You want a little nudge to hit your Target faster? Well here it is. Add it as a widget and watch your progress build. 3. Widgets for Your KidgetsIf your kids have a category in the budget and you are the go-between every time they want to know the balance, reduce that friction/annoyance by adding a widget to their phone that will always show them their balance without immediately seeing the rest of your budget. Widgets for YNAB give you even tighter visibility into the information you want to know. What categories are you adding to your widgets? What are your favorite uses? Let us know in the comments below! The post YNAB Widgets Now on Mobile appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/ynab-widgets-now-on-mobile.html October 15, 2021 at 07:42AM
How to Go Grocery Shopping Once a Month
I do meal planning and one primary grocery trip a month, and I’ve been doing this since 2014. Grocery shopping once a month has a ton of benefits for our family and helps us in the following ways:
I do pop into the store to pick up some produce (because I haven’t yet figured out how to make lettuce last a full month), but I don’t consider that “grocery shopping” as it requires no planning and doesn’t take more than 5-10 minutes (compared to hours). Want to make your meal planning and grocery shopping more efficient? Pull up a chair, I’ll tell you all of my secrets. Why I Started Grocery Shopping LessThis all started out of sheer necessity when my twins came along. Any mom of twins (or really anyone with eyeballs) could understand the logistical nightmare of two newborns accompanying you on a shopping trip. Two car seats take up the entire cart—there’s no room for food! When I would go grocery shopping, I’d end up pushing a cart full of children and pulling a cart full of food. It didn’t take me many rounds of this real-life game of Tetris to realize it was time for a better solution. I tried grocery delivery after I’d been given a gift certificate, and I was determined to make those groceries last as long as possible. I started doing grocery delivery regularly (and then grocery pick-up when it became available). Each time, I’d get a little better at making a meal plan for the month and using up all the food we bought. I’ve learned a few things since I first started, and I’ll tell you my best tips for how to grocery shop once a month. How to Go Grocery Shopping Once a MonthWe plan out four to five dinners a week. Sundays dinners are with my in-laws or parents, and on Friday we get take-out. Lunches usually consist of leftovers from the night before or we have a short list of regular lunch options stocked (salad, pasta, sandwiches, soups, and quick instant pot options). When we don’t feel like cooking, we’ll have a quick meal like pasta, salad, or cheese and crackers. We’ve found that planning out four to five dinners per week is the sweet spot for us. Here’s how I do it: 1. Plan Out the MealsOn the 25th of the month, I have a reminder set to plan my meals for the next month. This is my family’s chance to put in their requests (to stock up on or never make again). Then, I start by building a monthly list of meals that we want to eat, usually a mix of interesting things we’ve found throughout the month and of course some old favorites. We use Plan To Eat to store all of our recipes and meal plans, and there’s an easy drag-and-drop feature to do this—but you could also use any calendar of your choosing. I open my real calendar simultaneously and make sure that I don’t plan meals requiring a lot of prep on a day that we have swimming lessons, PTO, or other evening commitments. 2. Make the Grocery ListPlan to Eat has a built-in shopping list generator, but you could also do this manually. Also, I realize this is starting to sound like a sponsored post, but I promise you it’s not! A lot of us here at YNAB just swear by Plan to Eat and it comes up whenever we talk about grocery shopping. The shopping list generator is a great feature, because it puts the pieces together for you. Say you only need half an onion for one recipe and half for another, Plan to Eat keeps that tally. You can quickly see where your cost savings come into play—it’s quite magical when you see these efficiencies come together! We also use our favorite handy devices (Echo Dots) to add to our shopping list throughout the month for things that wouldn’t necessarily be on the recipe list like condiments, peanut butter, spices, and snacks. 3. Order OnlineOnce I’ve got my grocery list, I order online. I bring up the website of my online grocery store of choice, fly through the list, and add everything to my virtual cart (except for produce and the things I’ll pick up at Costco). Before I place my order, I’ll add in the produce for the first week or two, depending on the item (well-stored vegetables will last longer than you may think). 4. Pick Up GroceriesOn the first(ish) day of the month, we’ll pick up our groceries or get them delivered. The same day, we’ll run to Costco to supplement our dinner needs and pick up lunch and breakfast food. Here’s what a typical Costco list might look like. We have a pretty standard set of options we’ll eat for breakfast and lunch so this list stays relatively the same each month. These options are actually listed out on laminated menus that our kids choose from each night before bed to pick out their food for the next day. My husband then preps lunches before bed (or well, he did when they were still going to school). 5. Quick ReplenishingOnce our fridge is full, we usually wind up popping into our local market a couple times during the month for fresh produce, eggs, bread, and dairy. I don’t consider these stops as “grocery shopping” as they take a few minutes (rather than hours) and don’t require any of the pre-planning or mental decision making of true grocery shopping. These stops typically take no more than 5-10 minutes and cost around $20-$30 each. In our grocery budget in YNAB, we have three category lines:
Benefits of 1x/Month Grocery ShoppingI don’t love grocery stores, and I don’t love grocery shopping. I’m not a person who is relaxed by a stroll through the aisles, and I’m not a person who thrives with on-the-fly planning (as you can probably tell by this system!). For me, there are three huge benefits to grocery shopping once a month: FlexibilityI can easily swap one meal for another in my meal plan because I have so many choices! If the weather is nice and we want to grill, I can swap burgers with soup and be confident I have everything we need. Control Over Grocery SpendingWhen you grocery shop online, you see exactly how much your total will be. If things get a little crazy in your online cart, you can easily remove an item or rethink a meal to drop the total cost. You can also add a few treats (and not share with your family unless you want to) when you have a more budget-friendly month. Having a separate Costco line is really helpful for giving us a super clear framework for spending when we go. TimeI spend two to three hours total per month to meal plan, order, go to Costco (eat at the food court), and pop into a local market for milk. Many people might spend that much time each week on groceries and and meal planning. Here’s how it’s broken down per month:
Our SetupWe spend about $500/month for a family of five on groceries. We eat mostly vegetarian, and at the end of the month our meal options are a bit more limited, the fridge is empty, and our shelves are nearly bare. On the upside, we haven’t thrown away produce or stale/expired food in years and have virtually eliminated food waste in our family. We’ve found this setup to be smoother and tastier than frozen meals, and it doesn’t take up as much space in the freezer. My husband and I split the cooking half and half, and this method helps us share responsibilities (you just check the app for what’s on the menu). Reducing your grocery budget is a slow process. And, like we talk about all the time at YNAB, how you spend your money is truly unique to your family! The number of people you’re feeding, the area you live in, your personal eating habits, etc. will all factor into your grocery budget and you shouldn’t feel bad about that at all! While our setup might not be enticing to everyone or fit with your specific needs, we have found it useful for dialing in our grocery spend and freeing up time and mental space every month. Interested in more tips and tricks on spending and saving your money? Check out the Weekly Roundup. The post How to Go Grocery Shopping Once a Month appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/how-to-go-grocery-shopping-once-month.html October 14, 2021 at 07:43AM
How to Save $30,000 in One Year: Our 3-Step Plan
Jacob and Connor thought home ownership would never happen. They made good money, but it never seemed to accumulate into a pile big enough for a down payment. Then with a simple three-step plan to save $30,000 in one year, that all changed. The word “down payment” has always given me a tinge of fear when I hear it. It’s not that I don’t want to own a home—I do! It’s the seemingly-insurmountable amount of money I’d need to save before homeownership feels realistic. I would put off saving for it because, well, how will I ever get there?! If this sounds familiar, I’ve got good news: you don’t have to be afraid, and you don’t have to put off saving any longer. A year ago, my partner and I had $0 saved for a downpayment. I’d basically written off the idea of owning a home altogether. I had consigned myself to a life of renting, forever at the whim of a property manager and their temperature controls. Today, we’ve saved $30,000 in one year for a down payment, and we’re steadily saving more each month. We Saved $30,000 in One YearHomeownership feels more within reach than ever. The best part? We didn’t do anything particularly special. We just did a little bit of work, a little bit of budgeting, and we saved more than we thought possible. The Secret? Use a Budget to Save MoneyHow did we do it? How did we save $30,000 in one year? Well, first and foremost: we budgeted. We’ve been using You Need a Budget for years, and it’s helped us not only gain total control of our money, but now it gives us incredible focus on where we want our money to go and how much we managed to save. In our case: toward a down payment. Our Three-Step Plan to Save $30,000 in One Year
1. The Down Payment Was Our Top PriorityIf six years of using YNAB has taught me anything, it’s this: define your priorities and your life will follow. In early 2019 we had a lot of priorities—new furniture, fun new gadgets, traveling, dining out—and our money was spread thin to accommodate all of them. We decided that saving for a house should be the priority we focused on in 2019. Two important changes followed: We prioritized more money toward our house. In YNAB, we gave a bunch of our dollars new jobs.The old jobs they had weren’t priorities for us anymore, so we took them out of their old categories and moved them to the house down payment category (picture the money moving from one virtual envelope to the other). That expensive gaming computer? Turns out I don’t want it that bad. New furniture? Maybe the house should come first.
By reallocating money we already had, we were able to set aside a few thousand dollars immediately. That felt awesome, and it was a huge boost to our momentum right off the bat. We went through every category and adjusted our goals.Our income is predictable and we know exactly how much is coming in each month (we both work and have good jobs). Our plan: allocate less money for things like clothing, home goods, and technology, then hike up the goal for our house downpayment category. We ended up with a really healthy savings goal—we aimed to set aside $2,000 every month for our house down payment. This was all reflected in our budget category for a house down payment, but in addition you could choose to physically store this in a high-yield savings account to take advantage of the interest rates on that chunk of money. Granted, it’s not exactly a high interest rate, but with a .5% interest rate, you’d have just over an extra $100 by the end of the year. 2. We Saved Our Tax RefundHave you ever received a big bonus or a fat check from the IRS? Those oft-unexpected windfalls can feel so exciting. Yet, more often than not, they’re gone before they hit your checking account. Having a pile of “extra” money can cloud your judgment, leading you to spend it on things that aren’t really a priority. Do you even remember what you bought last time? I sure don’t. Because saving for a down payment was our number one priority, our money followed suit. When extra money showed up in our budget, we immediately sent it to the house down payment category. We tried to do this with everything—gifts, tax returns, bonuses, salary increases, etc. We missed the mark a couple times (I really wanted that new Kindle), but that was okay. Saving 90% of our windfalls felt so much better than saving 0% of them. And turns out when you want to really start building wealth, this mindset goes a long way. 3. We Increased Our Fun MoneyThe third and most impactful change we made happened mid-year. We weren’t saving as much as we thought we would be—that $2,000 we were setting aside each month had a habit of disappearing when we overspent in other areas. Overspending happens—it’s unrealistic to expect it won’t. But if your dining out spending is eating into your down payment (like ours was) it’s time to do something about it. My partner and I started brainstorming. We realized it was a mental game—we were being too restrictive! Our budget wasn’t realistic and we were feeling the effects. To get back on track we decided to start budgeting more to our Fun Money categories (like…a LOT more. We more than quadrupled the amount in each of our fun money allotments). I have one and my partner has one. We put the same amount of money in each, and it can be used for anything, no questions asked. The one caveat—all overspending would be covered with dollars from our “fun money” categories, taken equally from both. This change had an immediate and dramatic effect. The next time I wanted something (like that Kindle) I was able to buy it without overspending another category—I’d just use my Fun Money. And if I didn’t have enough, I could easily save for a month or two. The real win, though, arrived at the end of the first month, when we were deciding if we should go out to eat. Our dining out category was empty, and $40 of overspending didn’t feel that bad. Then I remembered that $40 in overspending meant I’d lose $20 from my Fun Money. I was faced with a choice: buy that thing I’ve been wanting or go out to eat because I don’t want to cook. That choice was ridiculously easy—we ate at home. Since we made that change, we’ve saved $2,000 every month, without fail. There’s something about that approach that helped us see our priorities even more clearly. Overspending still happens, but much less frequently. And when it does, we have a plan to cover it that doesn’t hurt our progress toward our down payment. Month after month we saved. There were still times when it felt like the cash we were setting aside would never be enough, but we persevered. Despite my fears, the quality of our life didn’t have to change that much. And we didn’t miss the things that did change—they weren’t priorities after all. Let Your Budget Be Your GuideA year later we sat down for a monthly budget meeting. I happened to glance at the house downpayment category and I was shocked to see $30,000! It’s not a category we touch, so months would go by without paying much attention to it. That’s the true power of your budget—when you decide what’s important to you and commit to it realistically, you might just wake up one day and notice you’ve saved $30,000 without even realizing it. Spring is (almost) in the air and we’ve started popping around to open houses in some of the neighborhoods we like. I’ve got Zillow bookmarked on my computer, too. A year ago home ownership felt impossible. Today it feels like something that’s right around the corner. We’ll keep saving, month after month—every time we sit down to budget we’ll be just a little closer to our new home. This post was originally written in March of 2020. Since that time, Jacob and Connor made their homeowner dreams come true and just moved into their first home! Want to make your homeowner dreams a reality? Supercharge your savings today with the help of You Need a Budget. You’ll be able to line up your spending with your priorities like never before. Try it free for 34 days, no credit card required! The post How to Save $30,000 in One Year: Our 3-Step Plan appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/how-to-save-30000-in-one-year-our-3.html October 12, 2021 at 10:42AM
A Roth IRA Conversion Is Probably A Waste Of Time And Money
I've thought a lot about doing a Roth IRA conversion lately given it might go away in 2022 and beyond. But I've come to the conclusion that for most people, converting to a Roth IRA won't save you any taxes. Instead, contribute to a Roth IRA when you can and just keep your traditional IRA and other retirement vehicles. Here's the analysis. See post for more: A Roth IRA Conversion Is Probably A Waste Of Time And Money Opening A Roth IRA For Your Kids Is A No Brainer Living A Middle Class Lifestyle On $300,000 A Year Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/a-roth-ira-conversion-is-probably-waste.html October 12, 2021 at 10:42AM
How to Separate Your Finances
We’re all raised to believe that sharing is caring, and in a general sense, that’s a good lesson to live by. In a kindergarten classroom, sharing is almost always a solid plan—not only are there a limited number of resources, sharing is a great way to learn the importance of working together and helps practice patience and compassion. However, real life is rarely like a kindergarten classroom. And that’s unfortunate, because the world would be a better place if everyone had a nap, story time, and recess daily. Sometimes keeping separate finances in a relationship becomes necessary for a wide range of reasons, and not all of those are negative. Whether you’re keeping separate finances as a couple in an effort to keep the peace or separating your finances to prepare for a new independent beginning, un-sharing can serve as yet another good lesson in the importance of working together, even if you’re moving forward separately. How to Separate Finances as a Couple“Happily ever after” doesn’t have to follow one set path. Maybe your happily ever after involves not having conversations about how much you spent on video games this month or why the stuff you bought at Target was essential. Maybe your happily ever after has evolved to enjoying your solitude as an individual instead of as half of a couple. The reason for keeping your money separate doesn’t matter, but creating a plan for separating your shared money is important. Let’s cover the two most likely scenarios when it comes to the decision to split up your money: Keeping Finances Separate in a RelationshipMoney can be an emotional subject and a significant source of stress. In some relationships, maintaining separate bank accounts and budgets ends up being the most financially responsible choice, but how do you do it fairly? Your best bet may be to keep separate accounts and budgets for personal use and spending money and to establish a shared budget and a joint account where you combine finances to pay household bills and save for shared long-term goals. So, let’s say that Jack and Jill tie the knot (because they love each other, sure, but also, because their names inspired so many hilarious wedding hashtag options.) Jill was the kindergartner who kept her pencil box pristinely organized and Jack was the kid who ate Play-doh. Their spending habits are reflective of those past behaviors (but Jack almost never eats Play-doh anymore.) To keep the peace, they do the following:
Read more about budgeting together with separate accounts. How to Deal with Finances During SeparationNow, let’s say that getting married because you had a clever idea for a wedding day hashtag doesn’t end up being a good idea and Jack and Jill decide to call it quits. Separating your finances during a break-up or prior to a divorce is a more daunting task—not only is it likely that both parties are emotional, but the decisions being made now could potentially have legal ramifications. Talk to your lawyer or financial advisor for the best advice, but here are some preliminary steps to consider:
Ready to build more control into a chaotic time? Try YNAB for free for 34-days and make as many budgets as you need with a supportive community along the way. Learn how to set up your budget with the Ultimate Get Started Guide. *This is meant for educational purposes and should not be interpreted as legal advice. The post How to Separate Your Finances appeared first on You Need A Budget. Via Finance http://www.rssmix.com/via Blogger http://shandradotson.blogspot.com/2021/10/how-to-separate-your-finances.html October 08, 2021 at 05:42AM |