Budget Schmudget...

Budgeting sounds like the absolute worst, but it doesn't have to be! I have found that taking control of my finances through budgeting has really helped me feel more secure in where my paycheck is going.  The four simple ways to take control over your budget do not include extreme couponing or a ramen noodle diet. They also don't include never going out or splurging on a new outfit.  But they do require consistency and self-control.

Here are the Top 4 Ways to Take Control Over Your Budget: 

1. Direct Deposit: If you don't direct deposit yet, you are wasting valuable time and possibly costing yourself over-draft fees. This seems simple, but add one more step. I suggest not only direct depositing your paycheck but setting up a savings/retirement deduction before your paycheck even hits your account. Contact your bank or insurance agency to see what Money Market, Savings Accounts or ROTH IRA's they offer, and the have at least $50/month out of your paycheck directly deposited to this savings or retirement account.

2. Auto Pay:  Let's face it bills are just going to keep coming in, but now that your parents have relinquished control over your car insurance, rent and utilities you need to be on top of how these are paid.  Having these payments set up on auto-pay through the company or bill-pay through your bank will save you time and money.  Often times you can save a $1 or $2 monthly fee by auto-paying and eliminating your physical bill that comes in the mail.  Don't worry, if your bill amount changes, most companies send you written notification.
Watch David Bach's (financial guru featured on the Today Show) best tip for budgeting:  David Bach's #1 Financial Mistake to Avoid

3. Track Expenses:  Now, I know not everyone actually enjoys balancing their check book or bank account like I do, but there are so many tools out there to make it super easy for even the most unorganized budgeter. Let's face it, we forget about those little "swipes" we do multiple times a week for a snack at the gas station, a Starbucks latte or sub sandwich. If you want to actually write it down (experts say writing it down will make it more real!), then I suggest using a Budget Organizer. I bought my Meade Budget "Organizher" at Target and you can download free inserts and make your own notebook, using their website: Mead Home Manager
If you hate writing down every little swipe, then use a site like www.mint.com  which automatically pulls information from your bank account, credit cards, retirement accounts, and loans to analyze where your money is going.  It also guides you to set a budget each month for individual expense categories along with tips for each of these categories.

4. Review at the end of the month:  At the end of the month you want to see where your paycheck has gone.  How much did you spend on eating out? Could you cut back to just twice a week?  Are your bills being paid on time? Could you negotiate a lower rate on your credit card? Have you checked your credit report lately?  These are the questions you should ask yourself, and you will be surprised at what your budget tells or even screams to you at the end of the month.  If you aren't or can't save any of your paycheck then focus on paying down debt with the highest interest credit cards first, and you will be on your way to saving for retirement.

So you may be asking: Why is she talking about retirement to a bunch of 20-somethings who are just getting out of college and still trying to find a good paying job? Well, I will address the "why" in the next posting, but for starters NOW is the time to start thinking about retirement.  Don't go blow your budget on weekend partying and trips to see your buddies in Colorado that are still just coasting through.  If you want to be serious about working hard and setting up your future to be financially stable, the next steps you make during the rest of this decade of life are going to play a crucial role in how your paycheck gets spent no matter how big or small it is or will be.

References: Image location www.louisville.com

Need vs. Want

Do you ask yourself at the end of every month:  
Where in the world did my paycheck go?
Well, I know the answer.
It was divided up among your needs and your wants. When I was little I told my parents I needed an Easy Bake Oven.  They said, "No, you want an easy bake oven. You don't need it."  I clearly thought this was absurd since the cute little cakes and brownies you could make seemed pretty much a necessity in my 7-year-old mind. But like many lessons this makes much more sense now that I'm older.

So what are some basic things that us Millennials

 (20-somethings, post graduate, under employed and fabulous) NEED?

1.  Housing: Obviously we need a place to live, but many of us are moving back home or taking on roommates when we are 28 and vowed never to go down that road again. This is nothing to be ashamed of. Unfortunately, this is just a reality of the housing market fall out and now the renting market is raising prices on us as well.  So not only can we not qualify for a decent mortgage, but we are being gauged for rent too.

Here is a Rent vs. Buy calculator if you are considering making the BIGGEST purchase of your life:
Rent or Buy?
The down low: If you stay somewhere for more than six years and you have good enough credit to qualify for a low rate mortgage, then buying is better. If you have an unstable career path or family situation, then I would seriously consider renting a home or apartment.  

2. Insurance: I'm going to talk about insurance A LOT.  So get used to it! I am an insurance agent, and I have certain feelings about what's worth it and what's not from seeing claims and hearing my client's frustrations.

Here is a link from Yahoo! Finance about the
 4 Types of Insurance Everyone Needs
The down low: You need 1- Life 2- Health  3- Disability Income 4- Auto.  I would add to this Renters/Home Owners.  You have to have Auto by State law and if you have a mortgage or an apartment complex/landlord who requires it, then you need the homeowners or renter's policy.  The renter's is super cheap and should provide you with a multi-line discount from your auto insurance provider.

3. Cell phones:  We wanted these next two things so bad when we were in our early teens, but now that we have them we also have the bills that come along. To save money on your cell phone bill see if your company is on the business discount plan at your cell phone provider (I save about 15% with this discount!).  Add a relative, friend or boyfriend to your plan that you trust to share an unlimited plan and split the bill.  Or if you are not on a contract, try  Straight Talk for six months and see if the service is worth the savings.
The down low: You don't need the newest iPhone (but buy the insurance for at least a year if you do splurge) or an unlimited data plan (a small minority ever use more than the standard 2GB of data). Choose a low limited minutes (I go with 700 and use about 100-300/month) with roll over plan and unlimited texts. Train yourself to text simple messages rather than wasting minutes during weekday/daytime hours. 

4. Car:  Working with auto insurance, I see people spend BIG money on the worst investment of their lives, a car that drops 20% in value the second they drive it off the lot.  You will NEVER make money on a car, but it is necessary to get to work so that paycheck comes in.  Choosing an apartment closer to where you work will help at the pump, but also telling your insurance agent that your daily round trip is less than 20 miles can help with your classification.  You don't NEED a Land Rover, BMW, or a Hummer. You will just look ridiculous to your friends and won't be able to afford the insurance coverage you really need. While shopping for a car make sure to use an App like Progressive or State Farm Pocket Agent to shop auto rates instantly on your phone. Make sure you SPEAK to an agent before putting a plan in place since they will be able to suggest the best coverage.

If you are considering leasing vs. buying, check out this website:
Smart Money: Buy-or-Lease A Car

What you WANT is basically everything else! Duh. Determining a budget will help you distinguish the two categories where our paychecks are disbursed.

**Check out the next blog where I will discuss HOW to budget your needs vs. your wants.

Where is My Pay Check?
I ask myself this question every month on the 14th and 25th as well as the 1st, 31st, 12th and just about every three days when I balance my bank account to make sure I don't receive the terrifying "over draft" notification from my bank.  Now, you are probably thinking that I am a big "shopper" or just another underpaid recent college grad, but that's not the case.  I make a decent salary and I still live on a college student budget (six years of undergrad plus grad school makes this seem normal). Even my boyfriend says I  never splurge and should loosen my vice grip on my check-book balancing daily ritual.

But you see, it's not that I can't pay my bills or spend too much on mani/pedi's and Target shopping trips.  It's not that I don't have a job. I have one and a decent one at that with some benefits and even bonuses! It's that today's world for Millennials (this is what they are calling us 20-somethings with a degree and no paycheck to match) is just not living up to what our parents said it would be like.  Our paychecks don't get us all the way through the month without some sacrifices and those dreams of owning a home before 30 with two kids are starting to become more of a fairy tale than a reality. The fact is that we need to make some changes and break away from the financial guidelines our parents have lived by.

So this blog will be for all those Millennials like me who are working hard but still worry that the money we are making just won't cut it.  With gas, groceries, insurance, clothing, and everything else on the rise, we need to starting making smart money moves. There is a lot of information out there, but sometimes we hear so many voices that we tune them all out and do nothing hoping all the noise is just hype. It's likely to be a bumpy ride, but hopefully the bottom won't fall out on us like it has on many of our parents who had everything to lose if we start planning now.

Check out my first link from the Today Show dearly titled:
3 Big Career Mistakes Millennials Make