Hope the below article from USNews helps a member like
`Space & others.....Maybe it will help keep your Monte or save for `Mod's Isn't it just amaz'in what you will
find on the MCF....It's our Educational Post to help you
with your FUnds.....No Funds = No `Fun

8 Questions for the Constantly Broke



Kimberly Palmer, On Tuesday April 27, 2010, 11:38 am EDT
If you find yourself nervously checking your bank account balance before payday, then perhaps it's time to make some changes. Before swearing off restaurants or cutting up your credit card, ask yourself the following 8 questions, which are designed to help get you back on top of your finances.


Do I know where my money is going? Beyond a quick glance at our credit card statements each month, most of us don't bother tracking how we're spending money. That means we might not realize that our grocery expenses have suddenly skyrocketed, or our utility bills have doubled. Using an online personal financial management tool to automatically track your spending - http://www.Mint.com/ and http://www.Wesabe.com/ are among the most popular - allows you to figure out where money is going with minimal effort. The programs can also warn you once you get close to your target budget for the month.

Am I focusing too much on the month, instead of the year? Research suggests that people often fall victim to forgetfulness when budgeting by the month. They tend to overlook unexpected and one-time expenses, such as car repairs or gifts, so underestimate how much they'll need to spend. But when people budget by the year, they tend to factor in those costs. Research by University of Southern California's Gulden Ulkumen, Cornell's Manoj Thomas, and New York University's Vicki Morwitz found that college students were about 40 percent off-target when budgeting by the month, but only three percent off base when thinking by the year.

[See Benefits of Budgeting by the Year, Not the Month]

Do I do something everyday that wastes money? It might be a cab ride, lunches, or a six-pack of beer. These types of small, daily expenditures add up, and by the end of month, you could be out $100 or more. (In the case of a $10 lunch on each weekday, that's $200.) Finish Rich author David Bach famously coined the phrase "Latte Factor" to capture this idea. He argues that if you invested the money instead of spending it, you could eventually become a millionaire.

Do I know my own weakness? Almost everyone has one. It might be a golf habit, fancy jeans, or nice dinners. Perhaps it's simply buying more than you need when you're out running errands. Gwyneth Paltrow's budgeting expert for her GOOP newsletter, Lynnette Khalfani-***, offers the following advice: Carry a stopwatch with you on shopping trips. She also suggests bringing a loyal friend on shopping trips to remind you not to overspend.

Am I saving too much? This question might sound counter-intuitive - how could anyone be saving too much? But if you're going into debt to fund your lifestyle and you've already cut back wherever possible, then it's time to look at how much money you're funneling into your 401(k). While it always makes sense to take advantage of matching programs from your employer, it doesn't make sense to save additional pre-tax dollars at the expense of a hefty credit card bill that comes with a 10 percent or higher interest rate.
Is my relationship hurting my bank account? Even if you're on top of your own finances, your bank account won't reflect it unless your significant other is also on board. If you share credit, in the form of credit cards, auto loans, or a mortgage, then any late payment from your partner can also ding your own credit report. Marriage can intertwine your financial lives even further. Before tying the knot, be sure to review each other's credit histories, talk about whether you prefer joint or separate accounts, and make sure you are familiar with each other's long term financial goals. Couples also often get tripped up when it comes to handling money requests from needy family members. Make sure you're on the same page to prevent tension later.

[See 6 Money Talks to Have Before You Marry]

Are the big items dragging me down? According to Elisabeth Leamy, Good Morning America's consumer correspondent and author of Save Big: Cut Your Top 5 Costs and Save Thousands!, it's the big items, not the small ones, that hurt people's finances the most. She suggests focusing on minimizing your mortgage, car, health, debt, and grocery payments. Buying a used car instead of a new one, for example, can save drivers tens of thousands of dollars. Plus, she says, since "cars these days are really well built, the risk is lower than it used to be."

Am I wasting money by carrying debt? If you're paying down a $10,000 credit card bill with a 15 percent interest rate, then you're paying about $1,500 a year to carry that debt. If you're paying off a $10,000 car loan at 6 percent, then you're wasting $600 a year on interest. If you can find the extra cash, consider paying off those loans so you can stop throwing money away on debt payments.
Get more tips at http://www.usnews.com/money/blogs/alpha-consumer/index.html.

 

I for one am VERY against cutting up credit cards. First off, they are great for backup funding in case you are stuck somewhere and have no cash on hand in an emergency; secondly they offer tons of buyer protection (read the packet that comes with the credit card)- you get far more protection on most purchases than with cash, and if someone steals it- you're not liable; third is many offer rewards of some type- even if you don't pay them interest.

Personally I put almost all of my monthly expenses on credit cards- pay them off at the end of the month, and every few months, I can either get a gift card or a check in the mail. The key is to not let balances roll over. Use the credit card like its a debit card, don't spend more than you have to pay it off. If you start holding a balance- that ~20% interest that many cards jacked up to last year will kill you in interest charges.

I still think if you're just starting off budgeting, that its better to look at one month. Write down ALL bills you pay (average ones that are only paid yearly by dividing by 12)- and come up with a figure for exactly how much has to go out every month (bills, card payments, gas, average food costs, etc), then figure out how much you actually take home each month. If you're running broke each month- you're wasting the difference.

Unfortunately, I see a lot of people over extend themselves, rack up big credit card payments, tons of loans, too big of a house- and by the time they look at a budget- they're left with very little between required payments each month and what they take home from work. If you're already in this trap, I'd suggest trying to cut some of those on the bills list that aren't really a necessity (cable, etc)- and putting the money straight towards paying off the highest interest loans first. The other option would be to do something else to make more money (which should all go towards loans)- sidework, a part time job, etc.

The best bet for those who are still young on here, is to not fall into the trap to start with- don't rack up big credit card bills you can't pay off- don't take out the maximum the bank will let you on a house- don't buy the best car you can afford to make payments on, etc etc. Live within your means, and life will be much easier.

IMO, this is a great idea- particularly for those who are having a hard time with money. I bought Quicken software a few years ago, and I'm now far more conscious of where my money goes. I can make all kinds of charts to show where I'm wasting money, how much I'm wasting, etc etc. All of my bills and credit card transactions go through there, and each gets categorized into what it was spent on.

It lets you track spending month to month, and get a much better picture of what happens to your money. For example, I realized a massive hole in our bank was our addiction to fast food and eating out- we were spending $300-500 a month on fast food an eating out (on top of the groceries we bought at home). Since then we have started eating heathier, and have saved a bunch of money from not eating out so much.

 

`Hi Chad, I alway enjoy reading your posts. Thanks for your detailed input on Topic Thread. Good Information 4-Sure.
Thank you for taking the time to share your experience/knowledge.
We appreciate...

I hope the thread helps a member, or makes then think about how they are spending their money....Hopefully, they can save for Mod's , or another awesome Monte Carlo.....Peace/Happy ~> `Out...