EXCITING NEWS: I was selected to deliver a national training in San Francisco this November entitled: Personal Finance Solutions for Busy Mental Health Professionals. This 3 hour workshop includes material from my upcoming eBook. Stay tuned to get first crack at the NEW EBOOK. And it’s FREE to my readers.

“Fun is good.” Theodore Geisel

If anyone knows fun it is the author of The Cat in the Hat, Green Eggs and Ham, and countless other classics. Just thinking about his books makes me smile. Think about it, don’t you just FEEL BETTER smiling and thinking about something fun?

FUN

MAIN TOPIC: SPEND MINDFULLY

I was asked to guest post at Budgeting in the Fun Stuff (BFS). Before agreeing on a topic, I decided to write about her blog name. So away I went writing about how to pay for fun stuff in addition to the necessities.  After a couple of emails, Crystal at BFS requested an article about investing, so lucky for me (and you); I get to publish this “FUN” article at BarbaraFriedbergPersonalFinance.

In the mental health/psychology field there is movement towards mindful living. Mindfulness is simply living in the NOW and focusing on whatever you are doing presently. This premise works great with money; spend on activities and expenses that you deliberately choose.

Spend mindfully and enjoy completely.

Much of your spending was decided a long time ago; your mortgage/rent, insurance, car payment, savings (if you’re smart) etc. Next you pay a certain amount for food, utilities, charity etc. Yet life is more than just the necessities.

A lot is written about saving and cutting expenses (especially by me). Check out Saving without Sacrifice for some helpful tips in this area. Unfortunately, much less focus is placed on paying for fun and pleasure activities. These rejuvenating activities have very real importance in life. Without time for fun and relaxation you have less energy and focus for work activities. Furthermore, if all you do is work, then what is the point?

 Life is about balance and on the flip side of work is leisure and fun!

 PRACTICAL APPLICATION; BUDGET IN THE FUN STUFF

Step 1: Brainstorm-What activities do you do for fun and recreation?  After all, you don’t want to spend your hard earned cash on “fun” activities that don’t really give you A LOT of pleasure!

For example, El Carino (my hubby) and I LOVE TO TRAVEL. When we were just married with no cash (and lived in California) we satisfied our lust for travel with a CHEAP VACATION to Las Vegas. Back in the olden days, you could have a terrific week-end for 2, complete with buffets, souvenirs, a couple of blackjack hands at the $1.00 table, and souvenirs for under $250.00. We milked the coupon books, sat through timeshare presentations for free show tickets, & visited the incredible lobbies of the exclusive hotels. The memories are still with us! And we will never forget cooling ourselves with ice cubes as we drove through the desert without air-conditioning in the summer.

Here are some ideas to get you started, most are low cost, but don’t hesitate to include passions that cost a bit more:

• Lots of folks love hiking, picnics, and outdoor activities; low cost & beautiful.
• Museums frequently have FREE days.
• Discount movies are a fun evening.
• I love television and we budget in the complete cable package (it’s worth the cost for us).
• Don’t skip eating out, if you enjoy it. Try lunch on the week-end instead of dinner! (2 for 1 coupons are everywhere)
• Board games are hours of fun. Or what about a family videogame night. Make it a competition with prizes (from the dollar store) and popcorn!
• Like to entertain-host a pot luck with a theme. Guests love it because they have ownership in the evening.
• Wiffle ball, frisbee, soccer, tennis, mini putt are all great family fun and LOW COST. Why not get the neighborhood involved?
• Like to ski? Skip the downhill and try cross country.
• For you crafters out there, forget the expensive supplies, use your creativity to pick up remnants in the fabric store, supplies in the bargain bin at the craft store, or make something from stuff you already have.
• Rent a canoe and go boating one week end.
• Take the kids to laser tag or paint ball; everyone gets out their hostility!
• Visit a local small town and enjoy a new experience.
• Enjoy the thrill of the hunt while shopping at garage sales (see what you can snare for $5–$10)
• Help-I can’t stop myself…. There are so many fun activities!!!

Step 2: Look over the “fun list” and put a DOLLAR AMOUNT next to each activity.

Step 3: Next to the cost of the activity, give it a FUN RANKING from 1 (not much) to 10 (most fun ever).

Step 4: Mindfully choose your FUN activities. Next month make sure your “SPENDING PLAN” includes activities with the best value for the FUN. That way, you deliberately spend your cash on the HIGHEST VALUE leisure FUN!

Give it a try and let me know how it works out for you! Mix it up, include some low cost fun along with a bit higher priced fun-just make sure that you choose activities with a high FUN RANKING.

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.  

Gather the family around and list ALL THE FUN ACTIVITIES YOU CAN THINK OF. Go wild, don’t hold back. Then go through and price and label each one with a FUN RANKING.

image credit: Cuba Gallery

YAKEZIE PERSONAL FINANCE BLOGS 

After every article for the next several weeks, you will be introduced to several Personal Finance web sites in the Yakezie network. Each one has their own unique voice and style. The consistency in all is their desire to help others. Consider visiting a few each day! 

Saving Money Today
Single Guy Money
Single Mom, Rich Mom
Smart On Money
Smarter Spend
Squirrelers

EXCITING NEWS: I was selected to deliver a national training in San Francisco this November entitled: Personal Finance Solutions for Busy Mental Health Professionals. This 3 hour workshop includes material from my upcoming eBook. Stay tuned to get first crack at the NEW EBOOK. And it’s FREE to my readers.

“Life consists not in holding good cards but in playing those you hold well.” Josh Billings

Build skills in all areas. Set goals. Success will follow.

MAIN TOPIC: Pay attention to your Spending

Esmerelda  is a college student with lots of money trouble; ATM fees, overdrawn account fees, credit card late and interest fees, rescinded credit card, late fee on tuition account, and overspending in general. Hundreds of dollars in fees and interest ate up her meager savings and caused her LOTS OF STRESS!!

I want to save you from Esmerelda’s troubles.

At the beginning of the school year, you college students are on your own for the first time with worries about friends, school and MONEY. I’ll leave the friends and school worries to someone else. But I CAN TEACH YOU WHAT YOU NEED TO KNOW ABOUT MONEY MATTERS while you are in college.

IT IS YOUR RESPONSIBILITY TO HANDLE YOUR OWN MONEY whether you get cash from mom & dad, loans, jobs, or any combination. Follow these steps and you’ll have LESS MONEY STRESS NOW & LATER.

PRACTICAL APPLICATION: Get Control of your Cash

1. Open a checking account and savings account with NO FEES, for college students.

2. Arrange with employer to have check AUTOMATICALLY deposited in your savings account.

3. Use an on line account or bricks and mortar bank or credit union.

4. Ask these questions and only open if they say NO FEES in writing:

Do you have an account for college students with no fees at all?

Does this account offer free ATM withdrawals?

5. If you need a loan for school expenses, go straight to the Financial Aid office for HELP. Work with them as long as it takes to get the money you need. That’s what they’re there for!

6. TOTAL ALL YOUR INCOME- Estimate income from job, loans, parents, scholarship, and aid. WRITE DOWN YOUR INCOME IN A NOTEBOOK or chart like this one. Categorize by month or lump sum.

7. Complete a chart like the following and write down every expense you are responsible for; cell phone, tuition, rent, utilities, car payment etc.; include amount; date due; how paid. These are charges that are FIXED and don’t have much flexibility.

8. Add up your expenses write in the last line of the chart.

9. Next, add any expenses that you control; beer, restaurants, entertainment, etc. These are your DISCRETIONARY EXPENSES. These are the easiest places to cut spending.

10. TOTAL ALL YOUR EXPENSES.

11. If you have a credit card, use only for emergencies. If you don’t have the cash, don’t spend it!

12.  If you have a credit card, PAY THE BALANCE DUE IN FULL AT THE END OF EVERY MONTH.

13.  The money that is not due monthly, like your tuition or insurance, should be in your savings account. Make sure that the amount you will need for these infrequent payments stays in the savings account until you need it.

14.  Pay every bill early. At least a week before the bill is due, pay it.

15.  Bunch up bill paying into 2 times per month.

16.  Look at your income and expenses-Are you spending on things or experiences that are worthwhile to you? REALLY THINK ABOUT THIS ONE. If not, curb your spending.

17.  Read The Secret to Saving without Sacrifice here.

18.  Studies come first, but if you have extra time, consider partying less and get a part time job.

19.  Every month, put your discretionary money from each category in an ENVELOPE and label it. For example, $80.00 cash goes in an envelope at the beginning of the month. After you spend that $80.00 you are done with entertainment for the month!!!

20.  At the end of the month, analyze your income and spending. Complete another Income and expense tracking sheet. Make changes according to the info from the prior month.

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

1. Read the entire article again.
2. Choose one or two steps to begin immediately.
3. Write in your planner the steps to take.
4. After completing the first steps, repeat until all are completed.

Write in with your questions and experiences.

YAKEZIE PERSONAL FINANCE BLOGS

After every article for the next several weeks, you will be introduced to several Personal Finance web sites in the Yakezie network. Each one has their own unique voice and style. The consistency in all is their desire to help others. Consider visiting a few each day!

 The Debt Hawk
The Millionaire Nurse Blog
The Saved Quarter
The Wealth Artisan
Ultimate Money Blog
Watson Inc

Categories: budget, life, saving, spending

Summary

Jacq at Single Mom Rich Mom had the audacity to challenge me to a spending challenge:

 Who can cut spending by the greatest percentage in “variable” spending categories?

Next Laura at Move to Portugal  joined in as well as Christine from Money Funk. Finally, Jacob from Early Retirement Extreme  decided to “keep the fight clean.” So, the month has passed and now it’s time to determine the WINNER!

We each had our own strategies, all very “hush hush” to nail the competition. Jacq was determined to win the grocery category by only bringing a $20 to the store. I was less systematic, although equally determined. My house was in chaos with the return from college of our daughter and I thought for sure I would be doomed. But not one to give up on a challenge, I decided to persevere and give the competition my best effort!

The variable expense categories for the challenge include:

• Auto
• Clothing
• Dining out
• Recreation/Entertainment
• Groceries/personal care/household items

The Methodology

I took the total spending in each of those categories for the past 12 months. Next, I divided by 12 for an average monthly spending. That was my baseline. Next, for the grand summation; I compared overall spending as well as individual category spending with the monthly average and calculated the difference.

AVERAGE MONTHLY VARIABLE SPENDING

7/1/2009- 6/30/2010 compared with June, 2010

Analysis

Auto-Down 76%, hooray! Got a $50 reward card from credit card company, walked more, and bunched errands.

Clothing-No one in the family bought any!! The $66 was for my hair, which I categorize in the clothing column. So now you know, I kind of splurge on my hair! You may wonder why I put it in the clothes column- but, it doesn’t really matter. What matters, is that I’m consistent, and every 8 weeks the hair salon cost goes in the SAME category.

As a side note, although I spend quite a bit at the hair salon, my husband, on the other hand, does not! In fact, he prefers that I cut his hair! Thus, we are saving 20 bucks a month on his hair care!

Dining out-Oops, up a bit over 2 ½%; included daughter home from college & FATHERS Day buffet!  But it was really worth it. The buffet was delicious, and I love to eat out!

Recreation & Entertainment-AMAAAAZING! In spite of my husband’s hobby, we are down 70%. As you may remember, we get the maximum enjoyment from our TV & cable.

And, incredible scenery, beautiful walking paths, and summer time gave us the opportunity to enjoy the FREE outdoors!

I TOOK A PAGE OUT OF Jacob’s Early Retirement Extreme strategy and put a 7 piece drum set and electric piano on Craig’s list to really slam the recreation/entertainment category….. Unfortunately, the only responses I got were from spammers. NO SALE!

Grocery etc.-Only fell  7.38 %, about 38 bucks. I confess, I am a fanatic about fresh fruits and vegetables and really healthy eating. Produce this year is very expensive. I think that’s what killed us here! But, all in all even with the food inflation over the year, we did spend $38 less than average. Hey, that’s more than enough for a nice dinner out!

Overall, we spent $866 in variable categories versus an average of $1,365 for an overall savings of $499, a decline of 37%. I AM THRILLED!! 

Summary and Conclusion

The competition pushed me to find low cost ways of living. I visited lower cost grocery stores, looked for inexpensive entertainment, still splurged on my hair-but didn’t buy any clothes in June and overall had a good month.

Did I feel deprived? Maybe a little…. but I made sure not to cut back too much, because then I would just go out and binge shop when the challenge was over, and that would totally defeat the purpose.

Was it fun? YES, it was great fun. I loved the camaraderie of the competition and the savings. Now our June spending was a bit slimmer than usual, which gives us a bit of a cushion. After all, with the recent drop in the stock market, our net worth took a bit of a hit in June. But after cutting spending back last month, the market decline is a bit less painful.

Try competing for your own goals with a partner or two and see if you find it as motivating as we did!

Image credit: Andriz 

Write in about your tricks to live large on a slim budget.

Categories: personal finance, budget, spending, time management, life, Yakezie

“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” Suze Orman

Suze Orman has created an industry from personal finance tips and common sense. Not only is she a powerhouse of money information, but a tremendous communicator. As Orman suggests, manage your finances and decrease worry!

Main Topic: Learn Personal Finance Step-by-Step

In addition to writing BarbaraFriedbergPersonalFinance, I am a student of money and finance. I read empirical literature, popular finance magazines, as well as blogs by my personal finance colleagues. There is lots of information out there. Sometimes it is REALLY DIFFICULT TO SEPARATE THE JUNK FROM THE VALUABLE INFORMATION.

I am committed to making the process of becoming financially literate fun, interesting, and simple. I like to break down complex finance concepts into understandable bites. Motivating and inspiring you towards financial independence is my passion!

Periodically, I include articles from around the web written by well respected personal finance bloggers that complement this philosophy.

Fun is really important in life and these Personal Finance; Week end Round ups add to your knowledge base in an entertaining fashion.

Relax, take your time, and check out what these bloggers have to say. Embrace what works for you and discard the rest.

PRACTICAL APPLICATION: Grab Some Tips & Improve Your Life

If you’ve read BarbaraFriedbergPersonalFinance previously, then you realize that I am a huge fan of persistence and tenacity.

Sam, founder of the Yakezie Network and Financial Samurai, is an incredibly gritty blogger. This guy is so determined, he barely sleeps! Sam wrote about how to use failures as a cue to get going again.

How do others spend their money? Little House in the Valley disclosed how she categorizes her spending and then relates it to norms. Find out how you compare. Let this post motivate you to track your own spending.

 Think about how to develop multiple income streams and compound your personal and financial resources in this “tip filled” Dividend Monk article. Of course you know that holding two jobs ups your income, but there are lots of ways to increase your revenue without the added stress and time involved in working two jobs.

This is an older post by Shawn Watson which bears reviewing. At Watson Inc., he hammers in the importance of avoiding the trappings of theoverextended. Read and remember this article! You never know who has the 7 figure net worth.

Every purchase, large and small requires additional funds for upkeep. Be aware of the regular maintenance & improvement costs for your home by Single Guy Money.

 Travel is one of those luxuries that many aspire to. There are some insightful tips for working a wonderful vacation into your budget. As usual, Engineer Your Finances takes an organized approach to the travel topic.

 The Amateur Financier tackles an often overlooked key to success – time management. I don’t know about you, but I can always use more hints on time management!

In his “no nonsense approach,” Punch Debt in the Face says, “You gotta put yourself out there to realize success.”  Apply these principals to your life and prosper.

 I hope you enjoy these Personal Finance articles and they bring you closer to wealth in money and life.

 ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Take one TIP from these articles and implement it TODAY.

Categories: budget, saving

 “A budget tells us what we can’t afford, but it doesn’t keep us from buying it.”  William Feather

Many of us get scared by the word budget, because we think it’s all about deprivation. As Feather implies, there is a degree of discipline involved in budgeting, but that’s only a small part of it. I asked some of my blogging colleagues from the Yakezie network to share their best budgeting tips. These wise individuals came up with some really comprehensive stuff!

Just like losing weight means taking in fewer calories than you are expending; gaining wealth means spending less than you are earning. In both cases, there is more to it than denial. Read on and get some creative ideas for gaining wealth in money and life through budgeting.

 Craig at Free from Broke writes:

• My tip would be to just get started.  A budget doesn’t have to be too complex.  At its core, a budget’s purpose is to say “I have this much money and this is where it needs to go.”  If you don’t have a perfect budget in the beginning that’s OK! 
• Budgets are estimates and are meant to be fluid.
• Get started on one and you will find that you have an instrument that can vastly improve your finances.

 Craig writes more about simple budgeting in the article Excuse Busters for not Having a Budget.

 Jason at RedeemingRiches takes a unique approach with 3 tips:

• Put “charity” into your budget and don’t negotiate it.  You’ll be amazed at how joyful you become when you put giving into your budget and you’ll be excited to know you’re making a difference in people’s lives.
• Put “fun stuff” into your budget so that it’s not just drudgery.
• Celebrate milestones.  If you’ve done a great job on your budget for two months?  Celebrate!  Managed to save some money into your emergency fund?  Celebrate!  It’s so important to celebrate the small victories and build momentum.

Read more from Jason on budgeting here.

Len at LenPenzodotCom writes:

• Respect your budget as you would respect your wife (or husband, as the case may be). Temptation to break the budget is going to pop up now and then, especially if you have only recently started implementing a regimen of financial discipline.
• Speaking of your wife (or husband) be sure to involve them in the process. It is a lot easier to keep to a budget if both parties are “on board” with the process.
• Remember to set aside a small portion of your budget allocation for building up your savings. Use direct deposit from your paycheck.

Visit Len’s site  for a unique twist on personal finance.

 Joe from Personal Finance by the Book writes about a tried and true budgeting method; THE ENVELOPE SYSTEM.

• The budgeting tip that has helped my wife and me the most is using envelopes. The envelope system absolutely forces our budget to work because we use them for every variable expenditure (groceries, eating out, gasoline, fun, gifts and clothing). 
• The amount of cash we put in the respective envelopes dictates how much we can spend.  When the envelopes are empty, we are done spending. 
• Simple and effective…we have been using envelopes every single month for years and love the way we feel we are in control of our money without having to micromanage it. 

Read more about Joe’s effective system in Budgeting without Bean Counting.

You know Crystal will have something worthwhile to contribute since her website is titled, Budgeting in the Fun Stuff.

• Remember to update your budget regularly. When I first made our budget, I forgot a few things.  It took about 2 months to work out all the little kinks.  I also update it every 3 months anyway since some regular expenses can change and new ones are added.  An updated budget is much easier to keep up than an incomplete one.
• I’d also suggest being patient.  You may go over your budget once in a while or forget a big annual expense.  Don’t let that deter you.  Even an imperfect budget is a useful tool to understand your money.

Read more of Crystal’s finance musings at her site.

Jacqueline at Single Mom Rich Mom offers a creative take and healthy perspective on the budget:

• My most used budgeting tip is to not budget everything but to budget only in the areas that you tend to overspend or unconsciously spend – my personal areas that I try to control are eating out, groceries, travel, and book purchases.  Everything else just is what it is.
• I would also recommend that you budget some fun or other things that you really value into your plan.  I think we can focus too much on saving money and forget that one of its purposes is to allow us to get a little more enjoyment out of life in meaningful ways.  I set my fun budget at $300/month and never seem to manage to spend it.  Something to work on!

Get more of Jacqueline’s clever insights here.

Finally, Shane from Beating Broke closes with two tips for all to remember:

• Budgeting can absolutely save your financial life.  But, be careful that it doesn’t strangle the life out of you at the same time. 
• Leave some wiggle room for small splurges now and again.

In his article about Creating a Simple Budget the Beating Broke Way he gives a detailed account of a system that may work for you.

Follow these personal finance bloggers’ advice, have no fear, and get on with a budget, NOW!