Share Your Resolutions, Past and Present (Whatever They Are!)

The New Year is often a time of reflection for people, and New Year's resolutions are an attempt for us to take control of our lives just a little more, in order to make the next year better than this one.

We here at UMassFive like focusing on New Year's resolutions because, whether they are stuck to or not, we feel that they teach us something about ourselves. This annual reflection period is one of the few times many of us challenge ourselves to improve in such ambitious ways.

Personally, I've found that sometimes the easiest resolutions for me to keep are the ones that are small but meaningful. When I was a teenager, I remember resolving to be nicer to my sister. Lo and behold, by the end of the year, my sister and I had a much better relationship. I wasn't trying to climb the highest mountain or completely transform my life. Still, that one small goal had a profound impact on my life (and probably didn't hurt my sister either).

The nice thing about actually staying true to that resolution is that it made me feel more confident that I could achieve other goals. After all, as a sixteen year old, if I could be nice to my sister, what else was I capable of? The world was my oyster, and I gained confidence that, no matter when I set my mind to accomplish a goal, I could in fact accomplish it. This has even helped me in budgeting, where accomplishing small things like saving $20 every pay check became good reachable goals and gave me a foundation to build on.

Can you remember your most succesful resolutions? What about this year's resolution? Don't be shy, share them here. They don't have to be about money, but they certainly can be!

3 Ways to Save Money On Gifts During the Holidays

I know that to some this may sound like an impossible feat. Beyond the challenge of gift giving, there are countless other opportunities to spend money, like in bringing a dish for a holiday party, or giving money to a charity of your choice. It seems like a time of year when money just burns through my pocket.

These last few years, I've tried to become more careful with where I spend money and how.

1. "Beauty is in the eye of the beholder" - Oliver Platt.
If you are a regular reader then you have heard me bang on this drum a few times. The point is that just because you like a gift doesn't mean the gift receiver is going to like it, and studies back up the concept that the gift receiver cares a lot less about the cost of the gift than the gift giver. That even goes for a gift costing hundreds of bucks. If you're short on affordable gift ideas, take a look at our 53 Easy-on-the-Wallet Gifts. The most important thing is to set a price point that is within your reach. In the end, you can come up with a thoughtful gift at any dollar figure.

2. Start a Holiday Club Savings Account.
OK, this one won't actually help you this year. But if you start it now, by next year, gifts and other expenses will be taken care of and there will be no need to whip out a credit card. If you have charitable donations you regularly give over the holidays, make sure you factor that in to your budget somehow... Your Holiday Club could be a good place!

3. Offer Skills
We all bring something to the table in our skillset. If a friend or family member is in need of help moving, with yard work, gardening, or pet-sitting, this is a way to give a gift that is based on spending your time rather than your money. Times are hard, and for many of us, we have more time than money. Looking for something tangible to give? A thoughtfully picked out (or hand crafted) card could be a great pick. If you're not the creative type but still want a personal touch, try websites like Shutterfly. You can even design a gift certificate if you have a computer and a printer.

What have you found to be great ways to save money on gifts? Please share them, I'd love to get more tips!

Baby Steps to Better Financial Health

I began “budgeting” in 2010. I put the word in quotations because, to a hardcore budgeter, what I did wouldn’t look like budgeting at all... Not even close. Today, I am slightly closer to that goal, but I may never be a budgeting savant. I mean, there are some people that don’t spend a single penny they haven’t set aside for budgeting purposes. I don’t quite know how to do that, because it seems like every time I get close, some unexpected expense pops up, or a friend comes up to visit and they want to go to their favorite restaurant, or a new bar. My point is that budgeting is hard.

It doesn’t help that half the literature out there is about how “easy” budgeting is and how all you have to do is the exact thing that seems so impossible to do. I can look back to not very long ago, and think about how I used to handle my finances. That person would look at what I’m doing today and think, “There’s no way I could do that.” Shows what he knows…

The funny thing is that every time I made a slight improvement on my system, I actually had one less thing to worry about. The truth is that worrying about money is exhausting. Ironically, when I spent virtually no time checking my accounts or tracking spending, I felt more stressed out about money than I do now that I am checking my accounts regularly. After all, my money was being spent one way or another, and every time I swiped my card for a sorta-big purchase, every time I got a loan payment notification in the mail, I was reminded.

I will tell you a couple of things that have helped me, but I also want to ask you what you have done, or will do, as far as baby steps go, to improve your financial health.

Small steps I made:

-          Figuring out my regular expenses, and putting money aside into a savings account I don’t touch except in emergencies.

-          Making financial goals to make sure I’m saving up for things I want to be saving up for.

-          Using Debt in Focus to help me make the most of my debt payments and get a financial overview/help me think about good budgets.

-          Making debt repayment a priority

-          Using Credit Karma to track my credit score for free.

-          Refinancing high interest debt with low interest debt.

These steps in and of themselves were pretty small, but they had big impacts, and they helped me get on the path towards keeping a regular budget. Now that I’m budgeting regularly, it feels like just another baby step. Now for more baby steps towards even better financial health!

Help me, and other readers out and share yours now!

Why I chose to use my savings account

Around three years ago, when I began working at UMassFive as a teller, I had a checking account. That was just about all I cared about. Granted, I did have my basic savings account, which everyone has, but I didn’t use it, and I didn’t care about it. Why would I? I loved the interest rate Co-op Advantage Checking gave me, and I wanted to squeeze every penny out of it.

Then, not two months into my new job, my car broke down.

The funny thing is, it wasn’t actually my car. I was twenty two, working two jobs, and just barely out of college. My mother let me use her car at all times, because she lived in New York, and it helped her not have to deal with owning a car in New York City. It also helped her convince me to run errands for her on my days off. And for me, it was a free car. My mom paid for the insurance, and I had no car payments. My responsibility started and ended with paying for gas and repairs. At the time, that was a lot, but I didn’t know how good I had it until I didn’t have it anymore.

So there I was, with no car, two jobs and about $300 to my name. It was also the winter, and I lived nowhere near the bus route. I got by for about a couple of days, but quickly realized I’d need to buy a new car. Desperate times called for desperate measures.

At 60 hours a week, with budgeting, I was making enough money to save without car payments. With car payments and insurance, I didn’t want to give up my savings, but in order to do that and make sure I was making my payments in time, I had no choice but to put money into a savings account. That, along with a loan savings account, turned a hectic heap of bills into a manageable stream. I began to appreciate that my savings account was there for me to build my savings, and that I couldn’t touch it very easily. And I began to really appreciate it when my savings account grew. It not only helped me build savings, but it also helped me pay my loans down more quickly… Happy days!

Since that time, I’ve moved to being a full time employee of the Credit Union, and I’ve begun leading workshops on budgeting. The practice what you preach mantra has helped me make a more convincing case for separating savings accounts from spending accounts. In that time, I’ve picked up a Holiday club savings account, and am considering a secondary savings account for more transparency.

Still, it’s not easy to work out an organizational plan, especially when you’re concerned with making a high rate of return on the money in your checking account. For those who are resisting a savings account, I have one suggestion: Look at how much interest you’ve earned over the last year. If you feel like you couldn’t have saved more money by keeping your savings separate from your checking, then you should keep doing what you’re doing. If not, it might be time for a change.

How about others? How has organizing your accounts differently helped you save (if at all)?

Freeze Your Credit Card?

This post was originally published on the blog at www.getintheloop.coop

You didn't misread the tagline. This tip comes from a member who found a slightly unconventional, but brilliant, way to quit credit:

She froze her credit card in a block of ice.

According to the member, she's always had a hard time resisting the allure of credit cards, but knew how important they were in times of need. How, then, could she avoid the impulse spending while having relatively quick access to the card in an emergency? Freezing the credit card seemed to do the trick.

On three separate occasions, the member felt an impulse to make a purchase on credit. She opened her freezer to pull out the block of ice and let it thaw. Under hot water, she said it took around 45 minutes to thaw. Within twenty minutes, as she saw the block of ice shrink, some restraint would return to her, and the credit card would be re-frozen.

She hasn't used it in a year.

This is not for everyone. This member had AAA (at $54 for a basic membership, it pays for itself the first time you use it), so she didn't need her credit card for roadside emergencies. She also wasn't traveling abroad frequently (it is a good idea to have a few backup payment methods when traveling abroad!). Also, it is worth noting that this doesn't work very well if you have your credit card information saved at online merchants. Still, for many of us, this could be a great way to get into the habit of not relying on credit, to help kick-start the repayment process and help get out of credit card debt for good.

Share your methods for lowering debt on your credit cards here! No idea is too wild: All that matters is that it works.

How I made money on the side (and how you could make more)

Just out of college, I had a tremendously hard time making ends meet. I had a wage and hours that, as a college student I found appealing but as a college graduate didn't work. I had a boat load of student debt, and some months had a hard time paying rent. I was acutely aware of two things:

• I needed to earn more money
• I was pretty good at computers

It's amazing what perspective can accomplish. Looking back, I wanted to make hundreds of dollars a week working with computers. However, I never put a great deal of effort into building a clientele. Even so, just by knowing that I wanted to make money working on computers, and sharing that with friends, co-workers, and acquaintances, I started getting gigs. Not bad at all! $50 here, $150 there, and my wallet began to feel a little happier. The jobs were infrequent, which concerned me, but that didn't matter so much when I had the opportunity to make relatively easy money in a short period of time, all for a skill as natural to me as riding a bicycle, but as foreign to others as Mars and the treks of the Curiosity rover. Not that I was the best at fixing computers, but when you're starting at less than zero, anyone who has half a clue is probably better. Now, in my current career, I have no need to do computer work for side money. Still, looking back, I would do some things differently when looking for side income. Whether you're looking at fixing computers or freelance writing, these are things you may want to keep in mind:

1.  Time is money: Never is this more true than in the world of the entrepreneur. The time spent working on improving your web presence, or reaching out to companies, should be counted along with the time spent actively earning money. If you devote a total of ten hours a week, and you earn $200 for two hours of work, you've just earned $20/hour, not $100/hour. Still a good hourly wage, while being more accurate. This theory also works for students applying for scholarships: Search and apply for 20 hours to five different scholarships, and win one for $500? You just earned $25/hr!

2.   Budget side income just like regular income: There may be a lot of things begging for your side income's attention: Bills, entertainment, birthday gifts, and more. However, if you're budgeting to make ends meet or take some of the pressure off, make sure you're including it as a source of income in your budget. That way you're keeping honest. It may not be the most fun way to go about things, but you can still budget for nice dinners and do so without regret. If you've tried it the other way, you know you'll thank yourself later. Trying to figure out how to budget income when it's unstable? The best way is to average out your income. It's probably better to be conservative in your estimates as well. If you have excess, save it so that when you have a shortfall you won't be struggling to make ends meet!

3.  It never hurts to work on self-improvement: It may cost a little bit of money, but take a class! There are many free classes or affordable online classes that won't take much time out of your schedule, but if you don't have much knowledge about marketing, that could be a great place to start. And, of course, adding knowledge within your field is a good thing.

There are no ­­­­­­doubts many people with far more knowledge than me about the ins and outs of managing a successful side-gig, but just because you earn good money and have a good clientele doesn't mean you're managing your finances wisely. By not neglecting your finances, you will truly make the most out of your side gig, and avoid the mistakes I made in my side-income foray.

That little savings jar of mine

It’s the last day of the month and you know what that means… it’s time to empty my coin jar! I actually have two jars, one on the kitchen counter and one in my bedroom. The one in the bedroom doesn’t get much action because I am pretty good about emptying my pockets the moment I get home.

You see several years ago I was interested in knowing just how much coin I accumulated in any given month. The best way I found was a jar on my kitchen counter. It says “golf money" on it but to be honest I am really bad at golf and have yet to use any of that saved money for that purpose. I just hate to waste it! Maybe that’s my problem I don’t play enough…

Anyway what began as a whim has turned into almost an obsession. Let’s just say I am very “diligent” in collecting every last penny I have.

I have to tell you those coins add up!  I usually bring the coins to the Northampton branch and use the coin machine in the lobby. It’s a great gizmo, takes about a minute, and I get a receipt to take to the teller line to make my deposit. Best part is there is no fee for using the service. Last month I had $33.07 in coin!  That’s just one month’s worth of just emptying my pockets, which is about average for me.  So far this year my highest month was $46.33 and the lowest month was $20.75. So far for the first six months of the year I collected $201.05!

So now I get to see how I did in July…its looks like we will be a good month from what I can see, but the coin machine will give me the official count. I can’t wait to find out.  If the second half of the year is as good as the first I could break $400 for the whole year and maybe even $500!  See what I mean when I said almost an obsession….but hey it works for me.  There are other ways to save money that you wouldn’t normally think of, check some of them out here.

The vacation game

"I need a vacation."

If you're like me, you've heard and uttered this sentence time and time again. That's why I developed a new workshop called "Budgeting - Planning Your Vacation". I can't tell you how many times I've spoken with people who have referred to budgeting as boring. See, that's the problem: Budgeting is a state of mind, and if you have the wrong state of mind, you will never be able to budget successfully.

When I ask people what their financial goals are, it's always Paying off Debt and Building an Emergency Fund. Great! These are very important goals, and listing them and working towards them is vital. However, very few people get a sparkle in their eye when they're talking about six month's worth of money saved in the bank. Important? Yes. Exciting? No. It's when I start pushing people to talk about fun things they want to do that I get the answers that people get excited about: Buying shoes or electronics, or traveling.

Enter the vacation game. The premise is simple: If you don't plan to go on vacation, or do some other fun thing, you will end up taking a vacation from budgeting. The end result is that you don't accomplish your goals and you may end up racking up a nasty credit card bill in the process. However, if you do plan a vacation, you'll have the time you need to save up enough money to take a nice vacation without having to sacrifice your other goals. This leads to happiness, fun, and financial security. How could you ask for more?

For help planning your vacation, check out our Vacation Planning Checklist. It's never too late to start playing the vacation game, and winning!

Tips that help pay bills on time with ease!

When I have facilitated our Budgeting workshops at the Credit Union a frequently asked member question is “when and how often should I pay my bills during the month?”

My answer is simple; don’t do it randomly, but set up some type of schedule. What I mean is you should work out a schedule that best fits into your lifestyle and is easy enough that it becomes part of your routine. Here are a few things to consider:

What does my monthly cash flow look like?
Are there bills that need to be paid at a specific time of the month?
What other circumstances are in my life that could affect when I pay my bills?

Remember 35% of your credit score is based on paying your bills on time so having a solid routine for paying bills is critical to keeping a good credit rating.

For most people cash flow is the driving force when it comes to paying bills. The key is to match your cash flow to your bills so you have the cash when it’s needed. If you are the only one in the household with an income and you are paid the same amount every month on a weekly, bi-weekly or monthly schedule it becomes much easier. But if there is other income coming in from other sources you will need to coordinate that a little. Many folks match certain paychecks to certain bills using payment dates as a guide. That way you can ensure you will cover those big bills like a mortgage or rent, or other important payments like a car loan. Having a calendar showing when certain bills come due is a great way of mapping out your payment schedule.

It’s important to note that you should treat savings just like a bill…meaning “Pay yourself first”. So work in your regular savings into your bill paying equation. I find using payroll deduction into my savings account is the easiest way to ensure this is accomplished on a consistent basis.

One of the ways I have found to keep up with my bills is to find a set time to pay them each week. For some it might be every other week. I’m lucky because I have a paycheck each week so my cash flow is the same week to week. I have also found if I pay bills once a week they don’t pile up and I am never late. In the past when I would wait and randomly pay bills I would always open one up and realize it’s due TODAY! So paying weekly helps me avoid those late fees. Another good idea I found with paying credit cards is to have the minimum payment on auto pay and when the bill comes I make a second payment to lower the balance. I’m always on time and paying down the balance each month.

Financial Goals

Budgeting without goals is like driving without a destination: you feel like you’re going somewhere, but you don’t know where, and you’re not sure why. Sure, it can be nice, but how long are you going to stick with it before you wonder what the point is, go home, and order takeout?

On the flip side, budgeting with goals in mind allows you to keep your eyes on the prize. Are you going to shop ‘til you drop? Not unless you feel like pushing that winter trip to the Bahamas out until next year. Do you want to grab that second latte every day? You’ll think twice when you remember that loan you’re trying to pay off by the end of summer. A good financial goal makes short-term sacrifice easy, because it is for a purpose that brings you long-term satisfaction.

So what makes a good financial goal? The acronym “SMART” summarizes it well.

Specific: There is a big difference between a plan to pay off “A lot of debt” and a plan to pay off your car loan. Getting specific is the first step towards making a good goal.

Measurable: How much is your car loan actually valued at? Keep in mind that there are costs associated with interest, so make sure you use our loan calculator to figure out how much you’ll really need. Thinking of vacationing? Use our vacation budgeter to figure out how much you’ll be spending over the cost of hotels and lodging. You’d be surprised at how much it adds up.

Attainable: The easiest way to quit on a goal, and often to quit budgeting entirely for a time, is to set a goal that is unattainable. Meaning, if you want to be a millionaire, you might want to set a goal to save ten thousand dollars first. And if a goal you thought was attainable turns out not to be, don’t despair! You can always adjust your goals later to make them work.

Relevant: Is this something you really want? After looking through all of your goals, you may find that some don’t quite fit your needs at this time. If you’re saddled in debt and you have to make a judgment call about whether to pay down your debt or go to Hawaii, you may decide that paying down debt is more relevant to your financial wellbeing. A modest trip to Maine may be more up your alley, and you’re setting the stage for prosperity that will make your Hawaii trip more relevant in the future.

Time-bound: We have a saying, that a goal is a dream with a deadline. If you want to do something, you’re only making dreams, until you set a time frame. Setting a time frame not only allows you to make regular payments towards it every paycheck and every month, but it also helps you to figure out how attainable your goal is. Again, if it turns out that it’s unattainable, you can push the deadline further out!

Try our Financial Goals Planner today to help you get started. With automatic, detailed calculations that even allow you to determine how loan interest and savings interest rates help or hinder your goals, you’ll be up and running in no time!