A New Year's Tradition - the Personal Balance Sheet

Every New Year's (it may be on the Eve) for the past 20+ years, I've created a Personal Balance Sheet (AKA Net Worth Statement). Comments:

• We aren't Karen and Bill (this is a sample only)
• Excel or Google Docs is the tool of choice for this
• I don't include cars in our balance sheet / nor house furnishings
• Not in this spreadsheet but it's good to assess how "liquid" the assets are.
• Having a savings account (very liquid) for an emergency fund and more is highly recommended. Ask yourself: "If the transmission failed, how would we pay for the repair?"
• Interested in a cabin up north? A cool website.
• How does your Net Worth compare with other's your age? A helpful calculator

The following from the Scriptures is very good:

Depression and Debt Linked

Does credit card debt lead to depression?

Excerpt:

Credit cards can carry more than high interest rates—they actually might increase your chances of depression. It's common sense that high levels of debt can stress you out. Now researchers have found a statistically significant link between short-term household debt, such as credit card debt and overdue bills, and increases in symptoms of depression. The link between depression and debt was strongest among unmarried people, people near retirement and those who are less educated, according to the new study by researchers at the University of Wisconsin-Madison. The study also found that, on average, people's depressive symptoms tend to increase as their short-term debt rises. "Our results suggest that taking on unsecured debt may adversely influence psychological well-being," said Lawrence Berger, the study's lead author and director of the University of Wisconsin-Madison's Institute for Research on Poverty.

Comment: Image details:

  by  SalFalko

Non-Savers "don't see a correlation between where they are now and where they will be"

Guess what? America's best savers aren't wealthy

Excerpt:

A quarter of middle-class households (those earning between $50,000 and $75,000 annually) set aside more than 15 percent of their income, according to a survey that accompanied Bankrate's March Financial Security Index. That money is rerouted from their daily expenses to fund long-term goals such as a retirement investment plan or an emergency savings account. Comparatively, 8 percent of lower wage earners contributed this much. And only 17 percent of the highest earners in the survey (households making $75,000 and above) elected to put the same amount of their salaries away for a rainy day. "Middle-class Americans (have) to do the saving, because nobody is going to do it for them," says Greg McBride, CFA, Bankrate's chief financial analyst. "They don't have the six-figure income to fall back on" for expenses, including household emergencies, long-term health care, children's education or their own retirement. In contrast, people between 18 and 29 years old -- the youngest group in the survey -- were the most likely to save relatively little: 37 percent said they save 5 percent or less. Another 18 percent said they save nothing at all. "They don't see a correlation between where they are now and where they will be," independent budgeting expert Tiffany Aliche says.

Comment: Image source: The origin of the Piggy Bank. Jim's simple savings tips:

• Eat out less
• Travel less (we've had great times just going to a neighboring state!)
• Less clothes
• Older cars
• Simpler gifting. 
• Enjoying the simple things of life 

Money Advice

9 Basic Pieces of Money-Saving Advice No One Follows -- But Should
Excerpt:

1. Run your financial life like a business.
2. Make saving part of your lifestyle.
3. Save the difference.
4. Automate the process.
5. Seek advice on your 401(k).
6. Save your spare change.
7. Fill a need.
8. Live like a student.
9. Trick yourself.

Comment: Image source.  I always find articles like this interesting. One thing we do well (but haven't always) is "automate the process". Upon paydays we have automated withdrawals to savings and then live on the rest.

Am I on track?

Am I on track to retire right?

Excerpt:

In his book Your Money Ratios, for example, financial planner Charles Farrell estimates that to retire by age 65 someone should have roughly 1.4 times their annual salary tucked away by age 35, 3.7 times by age 45 and 7.1 times by age 55.

Comment: I was able to find the book, used, on ABEBooks for $ 3.65. Top image is from CNN's Retirement Calculator (Goes without saying the the numbers above are not mine!)

Financial Accounts one should regularly check

5 Financial Accounts You Should Check Every Week
The five most important accounts to examine every week are:

1. credit card
2. cell phone bill
3. online checking account
4. retirement account
5. budget account software (such as Mint.com)

Comments: My recommendation:

1. Credit cards(s) - Check daily. See Fraud: Nip it in the bud.
2. Cell phone bill - I don't have a personal cell phone but checking frequently seems like a good idea
3. Online checking account(s) - I check daily
4. Retirement account - I check on the Saturday after our bi-weekly paycheck (sometimes less often but probably at least once a month)
5. Budget account software - we use Yodlee (which having used Mint, I recommend over it!). I check this weekly to validate categorizations
6. Credit score: I check quarterly using MyFico. There are other free services ... check right hand column of this blog for one source.
7. HSA(s): I check monthly to validate

The Personal Balance Sheet

Calling the Shots: How to Be the CEO of Your Own Life

Personal Balance Sheet

Comment: Be sure to see the 2nd link for a sample. (This is not mine ... I would never publish this for the world!). We keep the following documents:

• A running table of our checkbook with cleared items checked. Future items (2 months out) are projected. I update the checkbook registry daily and balance the checkbook monthly
  
• A spreadsheet with upcoming large projects. Eg we have on there some dental work for me in the Spring and some maintenance on my truck (tires and battery) for the Summer. (This is actually a second tab on the checkbook spreadsheet)
  
• A balance sheet. I update this monthly. What I don't include: value of cars, value of furnishings, value of timeshare (which we regard as essentially of zero value).
  
• A yearly tracking of the balance sheet with values as of approximately January 1st.
  
• A house upgrade tracking sheet with a separate tab for major appliances. Like we bought a new washer earlier this year. For the house upgrades, we track past upgrades (like a replaced window or a room painted (with the brand of paint and color code). For future upgrades we have tentative dates for various items like replacement of the bedroom carpet.
  
• We also have a spreadsheet with projected stock purchases. For example I anticipate buying 5 shares of IBM next week. I use Macro*World Investor to track our portfolio. Our brokerage account (Wells Trade) does a super job as well for tracking but I use the other site to augment.
  
• All documents are on a Google shared site that both Kathee and I have access to.
  

60 and broke?

5 steps when you’re 60 and broke

Excerpt:

A study from The Hartford Financial Services Group has found that more than 28 percent of people between the ages of 60 and 69 have "no idea" when they will be able to retire, and more than 33 percent 70 and older are in the same boat.

[the list]

1. Find a job.
   
2. Cut your housing costs.
   
3. Reduce the cost of owning a car.
   
4. Don't be too proud to apply for whatever help you can get.
   
5. Keep your health insurance.
   

Comments: When I was 38, I feared being handicapped, 60 and broke. I've learned to live with the handicap and we took definite steps to make sure we wouldn't be broke. My own additions to "the list"

1. Find a job. Get a second job.
   
2. Do you have stuff in a storage compartment? You probably don't need most of that - sell it!
   
3. If you cannot afford insurance, maintenance and keeping it safe (good brakes and tires), you cannot afford a car at all. Consider public transportation and really save some money!
   
4. Can't afford your house. Sell it. Get the smallest apartment you can live with.
   

"Being debt-free is the new rich!"

Filing bankruptcy in retirement may not be such a bad idea

Comment: Love the quote! Last sentence in the above article. Bankruptcy is not the path to "debt-free"!

One Phrase Financial Advice

The One Phrase A Client Needs To Remember

Excerpt:

Ted Jenkin, of OXYGen Financial says, “You must always pay yourself first.”

George Papadopoulous, a CFP from Michigan chimes in, “Nobody knows.” (We’re sure he wasn’t referring to this blog though.)

LLBH Private Wealth Management’s Jim Pratt-Heaney adds, “Develop a detailed financial blueprint.”

And the USAA’s June Walbert says, “Know how much you’re spending and on what.”

Comment: While none of these reflect a Christian world-view (eg "pay yourself first"), I think all have value. Of the above the fourth (in my view) is the most valuable - "how much you’re spending and on what"

I'll add some of my own (all at least touch on finances):

• "But seek first the kingdom of God and His righteousness, and all these things shall be added to you." (Matthew 6:33)
  
• "Take heed and beware of covetousness, for one’s life does not consist in the abundance of the things he possesses" (Luke 12:15)
  
• "Honor the LORD with your possessions, And with the firstfruits of all your increase;" (Proverbs 3:9)
  
• "For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows" (I Timothy 6:10)
  
• "For men will be lovers of themselves, lovers of money, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy ... (2 Timothy 3:2 (context end times!))
  
• "For a bishop must be blameless, as a steward of God, not self-willed, not quick-tempered, not given to wine, not violent, not greedy for money," (Titus 1:7 (Context ... qualifications for church leadership))
  
• "covetousness ... is idolatry" (Colossians 3:5)
  
• "The ants are a people not strong, Yet they prepare their food in the summer" (Proverbs 30:25)
  
• "Let him who stole steal no longer, but rather let him labor, working with his hands what is good, that he may have something to give him who has need." (Ephesians 4:28)
  
• "whereas you do not know what will happen tomorrow. For what is your life? It is even a vapor that appears for a little time and then vanishes away" (James 4:14)
  
• "But this I say: He who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully. So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver." (2 Corinthians 9:6-7)
  
• "Moreover it is required in stewards that one be found faithful." (I Cor 4:2)
  

OK ... enough of the Bible verses for me ... if you have one to add, leave a comment. Other off the cuff financial advice (and frankly I have made so many financial mistakes in life that I could probably write a book about it!)

• The ultimate possession is eternal life in Christ. The ultimate gift is salvation. The ultimate safety is salvation!
  
• Don't buy it unless you need it! (Broken this rule many many times!)
  
• If you buy something, buy quality (something that lasts)
  
• Save every pay period (broken this rule many times)
  
• Give without expecting anything in return (not Quid pro quo giving)
  
• Know where your money goes (We don't have a budget per se, but of late (for the last 10 years or so) we know where we spend it). We used Quicken for many many years. Now we use Yodlee (which is free and web based). I highly recommend this!
  
• If married, share all financial things (joint accounts, joint tenancy, etc)
  
• If married, have regular conversations about money! (Not a preoccupation with it! But set aside time (away from the kids!) to review finances. We do this every Tuesday night. Only takes about 15 min!)
  
• Budget and save for big things: The next car, Christmas next year, etc. (Buying a new car with cash is so much fun. The salesman is completely disarmed!)
  
• Pay off credit cards (if you use them) at the end of every month. (We have done this consistently over our marriage. There have been exceptions - like the sudden death of Kathee's mother that involved a trip to Florida (airfare, hotel, rental car, etc. It's good to have credit for emergencies!)
  
• Have an emergency fund that is liquid (like a savings account). Emergencies happen. Eg transmissions fail (we've done this twice), washing machines die when you don't expect it, etc
  
• If married and have children, have adequate life insurance. Ask yourself the question: if I died today, how would my wife pay the bills over the next 3 years (or more). Term insurance is the best option (in my view).
  
• Have a current will (both husband and wife need one!)
  
• Don't look to the government, your church or your children to provide for you!
  
• Sounds morbid, but plan for the funeral. We haven't bought a pre-paid plan, but we know what we want the funeral to "look like": not cheap but not ostentatious.
  

Anything you might add?

Retirement: Doesn't hurt to plan

Comment: Obviously our days are but a vapor. A man's days are limited and we are to be reminded of that. I personally don't view retirement as a time of doing nothing but rather a time when I can redirect my energies for the Lord without the pressures of full time employment. I found this article helpful.

Four Ways 60-Year-Olds Can Save Their Retirement

Excerpts:

You should be doing at least four things now:

1. Build a Bigger Nest Egg: "if you need $30,000 per year indexed to inflation starting at age 65 until age 95, then you need $900,000 in your portfolio at age 65"
   
2. Check Your Asset Allocation: "avoid the temptation to take too much, or too little, risk in equities"
   
3. Delay Retirement: "a delay in retirement of, say, just two years means two years more of savings, two years more, potentially, of earnings, and two years less of drawdown"
   
4. Delay Taking Social Security: "every year a pre-retiree can wait to start taking benefits, the initial amount received will increase about 8%, in addition to being adjusted for inflation. This could result in the initial dollar amount from Social Security more than doubling by waiting from age 62 to 70 to begin taking benefits"
   

Comments:

• We prayerfully are aiming to retire August 31st, 2015. I will be 66 and K will be 64½
  
• We hope to commence my SS then and wait until K is 66 to take hers. I am planning to not have to rely upon both SS incomes (use one for living expenses and the other to save)
  
• Back in March 2010 the WSJ had a good article on financially planning for retirement. I mentioned it in my blog here: Do You Have Enough to Retire? Do the Math
  
• I've mentioned John Piper's article on retirement several times. Here it is again: Should I invest for retirement?
  
  

Final comments:

1. For the Christian there is no "retirement". There is an opportunity to redirect one's efforts in the final years one has on this earth. While there may be greater opportunities to travel and relax a bit, one needs to remain engaged in the service of the Lord and in fellowship with his local church.
   
2. Kathee and I have agreed (not a new thing ... this is the way a good marriage works!) to agree together in whatever direction we should go. We seek to follow the Lord together as we surrender to Him.
   
3. We are open even to full time vocational service (well not quite "vocational" ... I doubt we would need any church income!)
   

How to squander $ 10,000,000

Family’s Fall From Affluence Is Swift and Hard

Comment: A morality tale! Might be some lessons in there for readers.

Excerpts [slightly reordered]:

How it started:

[Their ]luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.

...

Mrs. Martin recalled the summer night in 1998 when the family was having a spaghetti dinner at home in Paso Robles, in central California, and a bank representative called to ask where to wire the money. “It seemed like an unbelievable amount,” she said regretfully.

How they spent it:

Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.

...

First, the Martins bought a house in Somerset, England, near the home of Mrs. Martin’s parents, and he decided to write a novel. At about the same time, they spent $250,000 on the 3.5-acre camp with four structures on Tupper Lake, deep in the Adirondacks, as a summer home. They began extensive renovations at the lake, adding a stunning three-story boathouse and two other buildings.

..

They managed their expenses for a while, but the costs mounted and mounted some more as they worked at refurbishing the Adirondack property — eventually totaling a staggering $5.3 million, Mr. Martin said. He poured another $600,000 into the Vermont property, he said.

Their current situation:

[He] he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.

...

Mr. Martin’s current salary [is] $51,000. Their household income is down from $250,000 four years ago.

Comment: Read their story and leave a comment.

Tracking one's spending

Where’s the Money, Honey? Why You MUST Track Your Spending

Excerpts:

If you’re determined to live a financially stress-free life, the first question you must answer is, “Where’s the money, honey?” Do that, and you’re well on your way to becoming conscious about your money and how you’re using it.

...

Don’t even know where to start? Grab your last month’s bank statement(s), credit card statement(s), and line of credit statement(s). Now, break every transaction into one of the following categories:

• Shelter (mortgage, rent, hydro, heat, taxes, maintenance)
  
• Services (cable, telephone, security, home-cleaning, cell, internet, childcare, health, pets)
  
• Food (everything you put in your mouth and swallow, including restaurants)
  
• Shopping (any Stuff you bought for yourself and anyone else — everything)
  
• Transportation (car payment, gas, repairs, highway tolls, taxis, bus, train)
  
• Entertainment (movies, books, magazines, hobbies, gym, club, sports)
  
• Bank fees (service charges, ATM fees, NSF fees — don’t include interest)
  
• Interest costs (from everywhere)
  
• Debt repayment (don’t worry about splitting out interest and principal, just add all your debt repayment amounts together)
  
• Savings
  

In the best of all worlds, you’d do this for six months’ worth of your paperwork. Why? Well, a half-year is just about enough time to catch all the things that only pop up periodically. Less than six months will give you some insight, but not clearest picture.

Comments:

• If you've never watched Til Debt Do Us Part, I highly recommend it!
  
• My 90 year old Mother, a trained bookkeeper, keeps a detailed accounting of every penny spent. She does this month by month - MANUALLY! It can be done! (I've encouraged her to use Excel but some habits are hard to change!
  
• We use an account aggregator service called Yodlee. Our little process is that we have a weekly meeting (Tuesday nights) where we review all of our finances. It only takes about half an hour. We view our online banking account, our INGDirect account, our three credit cards, and Yodlee. I maintain a spreadsheet of our checking account showing the last time the checkbook was balanced, activity up to today's date, and anticipated bills going out 3 months.
  
• We are basically "pay-as-you-go" (the practice of paying debts as they are incurred.). Plan, save for, execute, pay. For example
  
  • We just returned from a 10 day vacation to Dallas (to see my Mother). This involved three nights in a hotel, approx 2000 miles driven, meals on the road, some entertainment, etc. We saved for this. Now have returned. And all bills paid
    
  • Christmas is coming up. We have it budgeted and saved for. (We are modest in Christmas gifting!)
    
  • I have to have oral surgery in December. We have an estimate of the cost. And a plan to save up for it by that time.
    
  • My middle son is getting married on January 1st, 2011 (exciting). We've budgeted the wedding gift and the rehearsal dinner. We have that already saved for.
    
  • We have planned to replace the battery and tires on my truck (2002 Chevy S-10) next Summer. We will save for that and when we have the money execute the plan we will purchase using a CC, and then pay off the CC at the end of the month
    
  • We have a short term saving account for the "pay-as-you-go" system.
    

Ways to Ruin Your Financial Life

44 Ways to Ruin Your Financial Life By Age 30

Excerpt:

It was not until I reached 30 that I started to turn my own financial life around. Unfortunately, by then, the damage was done. In retrospect, I often knew the decisions I was making were not-so-smart, but I did them anyway because I could always “pay it off later” or “just save more money when I’m older.” One of the cruel facts of life is that it gets harder when you get older.

Hopefully, by sharing a few of these bad money moves, it will prevent others from doing the same. And don’t worry, if you are over 30 and still doing these things, it is never too late to start living frugal.

Comment: Good read ... share with teens!

Coming: Rising interest rates

Consumers in U.S. Face the End of an Era of Cheap Credit

Excerpt:

Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates.

That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.

The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.

“Americans have assumed the roller coaster goes one way,” said Bill Gross, whose investment firm, Pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. “It’s been a great thrill as rates descended, but now we face an extended climb.”

The impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest level since last summer.

Along with the sell-off in bonds, the Federal Reserve has halted its emergency $1.25 trillion program to buy mortgage debt, placing even more upward pressure on rates.

“Mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market,” said Christopher J. Mayer, a professor of finance and economics at Columbia Business School. “It’s a really big risk.”

Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer.

The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year.

Another area in which higher rates are likely to affect consumers is credit card use. And last week, the Federal Reserve reported that the average interest rate on credit cards reached 14.26 percent in February, the highest since 2001. That is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical American household.

With losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to Dennis Moroney, a research director at the TowerGroup, a financial research company.

Comment: Click through to article for NY Times graphic

MORE

Impact on Federal Government

Washington, too, is expecting to have to pay more to borrow the money it needs for programs. The Office of Management and Budget expects the rate on the benchmark 10-year United States Treasury note to remain close to 3.9 percent for the rest of the year, but then rise to 4.5 percent in 2011 and 5 percent in 2012.

Thirty year trend

... steadily dropping interest rates have fed a three-decade lending boom, during which American consumers borrowed more and more but managed to hold down the portion of their income devoted to paying off loans.

Indeed, total household debt is now nine times what it was in 1981 — rising twice as fast as disposable income over the same period — yet the portion of disposable income that goes toward covering that debt has budged only slightly, increasing to 12.6 percent from 10.7 percent.

Investing

The long decline in rates also helped prop up the stock market; lower rates for investments like bonds make stocks more attractive.

Personal records retention policy

Retain Your Records No Longer Than You Must

Excerpt:

According to Catherine M. Williams, vice president for financial literacy at the credit counseling firm Money Management International, there are two main reasons to keep financial records. “It’s either for backup to a tax issue or for proof that you did something like make a payment,” Ms. Williams said.

The Internal Revenue Service requires that individuals be able to produce records proving any income, deductions or credit claimed for at least three years from the date of a return, the statute of limitations for how long the I.R.S. has to assess additional tax if all income was reported correctly. In addition, the I.R.S. requires that individuals be able to produce such records for six years if they fail to report income that is more than 25 percent of their gross income. There is no statute of limitation for failure to file or tax fraud.

Therefore, experts generally recommend keeping anything that verifies the information in your tax return for at least six to seven years. “My recommendation would be never throw away copies of your tax returns and checks made out to the government — anything else, I would say keep for at least six years,” said Jude Coard, a tax partner at accounting firm Berdon L.L.P.

Records that fall into this category include W-2 forms, 1099 forms, other tax reporting statements and end-of-year bank statements that show interest earned. As for brokerage statements, John W. Roth, a senior federal tax analyst with the tax information and software provider CCH, recommended keeping end-of-year statements as well as monthly statements and investment confirmation statements showing how much you paid for an investment and how much you earned for selling it. “The only time when you need to save the monthly ones is if that is where the confirmation is for a purchase,” he said.

In fact, for any asset or investment for which you one day could claim a gain or loss (a home or stock, for example), you need to keep records of how much you paid for the item, the costs of any improvements you made to it and how much you sold it for. Such information needs to be kept for at least six to seven years after the gain or loss is included in a tax return.

Comment: We have a folder in our desk called Current Taxes. The problem is that sometime stuff that is not tax related ends up in this folder. All of our statements are available on-line: 1099's, W-2s, etc. In the lead up to tax time I save all of these to PDFs and upload to Google Docs (and share with Kathee). Because we use Turbo Tax online our taxes (as long as we use this service) are stored by Intuit. After taxes are completed we print off all the documents to PDF and upload to Wells Fargo VSafe. One issue for us has been cost basis for stock purchases. We are closer to having all of this resolved by having all of our stocks at Wells Trade.

Doing a financial tuneup

Take a Few Hours and Unlock Some Cash

Excerpt:

How might you plan your own financial tuneup?

Today, we introduce an interactive checklist to give you some ideas. It includes things you should do each year, like rebalancing your investments, and others that you might have to do only once or, at most, once in a while, like raising your insurance deductibles. The checklist is a living document and one we hope to improve over time, so please send us feedback from the link on its home page.

And lest you think this is all drudgery, the tuneup period is as good a time as any to cash in all of your credit card rewards and frequent-flier miles. After all, they don’t get more valuable sitting around unused.

Not that many of you will need our help, as your own list of undone money tasks has probably been nagging at you for some time. Almost immediately after my first article about the tuneup concept ran last summer, I heard from readers who had set aside time to do their own.

Financial Tuneup Checklist


Comment: A really helpful checklist. We've done some of these. I recently met with my insurance agent (Allstate) to completely review our insurance.

15 Ways to Slash Spending in Retirement

15 Ways to Slash Spending in Retirement

Excerpt:

Bloomberg BusinessWeek received tips from more than two dozen financial advisers on how to spend less in retirement.

The list:

1. Adjust Your Health Insurance
   
2. Flexible Travel
   
3. Cut the Purse Strings
   
4. Curb Your Cars
   
5. Use Cash - "It feels more real—even painful—when you use cash"
   
6. Watch Those Investment Fees
   
7. Put Food Spending on a Diet
   
8. Seek Out Freebies and Discounts
   
9. Adjust Your Insurance
   
10. Downsize Your Home
    
11. Move to a Cheaper Locale
    
12. Refinance Your Mortgage
    
13. Don't Wait to Sell Your House
    
14. Do a Dry Run on Your New Spending Plan
    
15. Get a Handle on Monthly Expenses
    

Comment: We plan to do a combo on downsize our home and move to a cheaper locale.

"Should I Buy It?" Flowchart

"Should I Buy It?" Flowchart Helps You Make Smarter Purchases

Excerpt:

Over at personal finance weblog Get Rich Slowly, guest writer April Dykman explains how she curbs unnecessary spending with the flowchart you see here. It's a simple process that hinges on cost ("Can I afford it?"), need ("Is it something I need or lack?"), and quality ("Is there a less expensive/high quality option?"), and if you were to stick to this flowchart for all your purchases, chances are you'd make considerably fewer regrettable impulse buys.

Comment: Helpful "want" "need" flow chart - cllck link for chart

Cancer sticks over fiscal responsibility

Stressed, broke smokers struggle with habit

Excerpt:

As household budgets shrink, some smokers are forced to choose: Pay the bills? Or buy cigarettes?

“We had a light bill that needed to be paid, so we paid a third of it so we could have cigarette money,” said Leonard Perry, a pack-a-day Doral smoker from Elkhart, Ind. “We’ve done that a couple times. It kind of works out but it makes it rough for the next week.”

Perry, 55, worked at American Hauler, a cargo trailer manufacturer, before being laid off two years ago. Sometimes he collects scrap metal for cigarette money. "My woman’s workin’, so that helps me out there," he said. But his wife has her own pack-a-day Marlboro habit to support.

...

The national average price for a pack of cigarettes is about $6, and the average state cigarette tax is $1.27 per pack. But some local governments also have their own cigarette tax, including Chicago, New York City and Anchorage, Alaska. For smokers in both New York City and Chicago, a pack of cigarettes costs close to $10.

Comment: Addictive behavior is irrational behavior.