Who's doing your taxes?

We went and had our taxes done today and it was a great experience!  We were with our tax preparer for a total of 45 minutes and everything was done.  This was the first time we had someone do our taxes because we always were too cheap, and did it ourselves online with TurboTax.com or TaxAct.com.  There was something nice about getting in, getting our taxes finalized, learning our refund or amount owed, and being out of there.  What will you do?  How will you do your taxes?  This depends on the type of person you are and if you even want to do your taxes.

Here are a few questions to ask yourself:

• Do I want to do my own taxes or will I be able to make enough time to do them?
• Am I comfortable with numbers and my financial situation that I'll be successful doing them?
• Do I want to pay someone else to do my taxes when there's software and websites to help me do them?

I found a couple of articles online that may give you some more in depth knowledge and information to assist you in making a sound tax decision:

7 Reasons to do or not do your own taxes

http://money.msn.com/tax-preparation/should-you-do-your-own-taxes-2

Effectively managing the Miscellaneous Category

Many of you keep a budget or a spending plan; or at least I hope you do.  Some keep it pretty strictly and others maybe not so much.  I hope this works as a guide to your financial life to keep you focused on your financial goals.  One item that you may have in your spending plan is the miscellaneous category.  Depending on how you manage the miscellaneous budget could be the difference between staying under budget or not.  The question I would ask is what is the purpose of your miscellaneous category?

Some may have a miscellaneous budget item to throw everything in there that they don't have another category for or if they've overspent on other budget items this may give them an excuse to say, "I'll throw it in  miscellaneous.". This allows them to get what they want now instead now and not have to wait.  So instead of being patient, saving up for the item, and purchasing the item they buy it now, put it on a credit card, and start paying interest on the item.

Does this sound like some of you?  Here are some tips to help you keep track of your miscellaneous spending and staying under budget

• Make sure you fund the miscellaneous budget - Make sure you don't get to the end of your money for the pay period and want to purchase something and say, "I'll put that under the miscellaneous budget" if you haven't funded it adequately.  You'll go over your budget.
  
• Keep track of what you are using your miscellaneous budget for - The key to keeping a budget intact is to keep it intact.  Keep track of what you're putting in your miscellaneous budget.   There are items that should have their own budget item.  For example, recreation or eating out should have their own category.

• Make sure you balance your miscellaneous expenses and retirement preparation - Just because you have extra money in your budget don't increase your budget by all of it.  Keep your retirement accounts in view and establish a regular contribution into a retirement account.  If your company has a matching program make sure you are contributing to it.  That's free money!
• Some use the miscellaneous budget item for unexpected expenses - it's really comforting to have an item with which you can place unexpected expenses, for example, the car needs repaired, you have to take an extra trip out of town, or your dryer goes on the fritz.  Once again, the key is to keep it funded by putting a percentage of your budget into this item each month.

• The Miscellaneous budget adds flexibility to your budget - While cutting a miscellaneous budget, or moving its spending to more clearly defined categories, can help achieve financial stability and better spending analysis, miscellaneous budgets are also useful for increasing flexibility. If your income rises and you have no need to increase the amount of money you save each month, you could reduce savings as a percentage of income and devote the additional percentage to miscellaneous spending. This leaves room for covering overages in other areas of the budget and creates the freedom to make occasional purchases without special planning.
  http://wiki.fool.com/Percentage_of_Income_and_Miscellaneous_Budget
   
• Keep your eye on the budget amount so you don't go over - Whether you're talking about the miscellaneous, grocery, or eating out budget item keep a cell or a location for how much is remaining in that item.  This will help you manage your spending especially towards the end of the pay period.

How do we break down and resolve financial infidelity?

Good Morning!
A couple of weeks ago I posed a situation that might be close to some of you-a case of financial infidelity.  The premise of the story was that someone, without their spouse's knowledge, signed up for a credit card, and racked the debt up to 20,000 or $25,000 in debt.  When the credit card company started calling because payments were late or incomplete it broke open and there was much hurt and distrust, and even thoughts of divorce.

How do we overcome financial infidelity?

First, we need to know the definition of financial infidelity. Wikipedia defines financial infidelity this way:

Financial infidelity is the secretive act of spending money, possessing credit and credit cards, holding secret accounts or stashes of money, borrowing money, or otherwise incurring debt unknown to one's spouse, partner, or significant other.[1] Adding to the monetary strain commonly associated with financial infidelity in a relationship is a subsequent loss of intimacy and trust in the relationship. Financial infidelity appears to be on the rise, with a 2005 study showing that 30% of respondents had lied about financial information and 25% had withheld information,[2] whereas a 2008 study showed that half the respondents had committed some form of financial infidelity.[3]

Come clean

The first step on the road to repair is to come clean with all your financial activities.  Share all the activities as well as all the money that was spent on these activities.  Write them down so you don't forget.  This may hurt, especially if there are many incidents, but push through it and get it out on the table.  Together, you may find that there are deeper issues like a gambling or spending problem and if you catch it now it could save you more heartache, and possibly your marriage, in the future. Make a commitment to never hide any important financial activity again.

Practice financial transparency

Practicing financial transparency is the first step to rebuilding trust.

• This means following a spending plan agreed upon by both of you.  This means you both have a vote and you don't move forward unless you both agree.
• Freeing up a little bit of spending money so you both can have some money to call your own and are not required to share.

Have regular "money meetings"

Once you've come clean and agreed to practice financial transparency you'll want to keep yourselves accountable. This is the purpose of money meetings.
Pick a time that works for both of you, not late at night when you're both tired, or when you're on the go and are focusing on many other things or when each of you are at work. Pick a time and even put it on the calendar if necessary so you don't forget.

Here are some of the topics you may discuss during this time:

• How is each of you doing overall?  This is a general question that may take some time.  Enough time spent here may be more important than the other items combined.
• Keep in mind your spouse's mindset on financial matters. I love spreadsheets and getting down to the nitty gritty of financial matters whereas my wife likes to look at money issues from the 10,000 foot level, without a lot of numbers.
• If available do you need to free up or cut some more money for a particular budget item? Groceries, Recreation, Transportation, Savings, etc.  If you are living tightly you may not have this luxury, don't be tempted to increase the budget item if you don't have the money.  Remember that each person has a vote in this process, resist the tendency to think your spouse is stupid for thinking the way he/she does.  Also, as Dave Ramsey has said that, and I agree with, any spending outside the spending plan is financial infidelity.

Be humble and apologetic

The final step and one that should be present throughout the process is to be humble and apologetic.  Realize you've made a mistake or several mistakes and work hard to make it right. This will allow you to rebuild trust in your marriage and work towards complete trust.  This will also get you started on the path of financial healing.  This may take a while but sticking with it will be worth it in the long run.

Listen to and/or read this case of Financial infidelity from Dave Ramsey 

I want to promise as you follow these steps and come clean, practice financial transparency, have regular meetings, and are humble and apologetic you'll feel the walls come down, trust enter back into your marriage, feel love and peace return to your home and lives.

Thank you for taking the time to read this blog, let me know if you have any comments or experiences that you'd like to share.

Thanks,
Greg and Jody 

A "case" of financial infidelity...What would you do?

One of the topics that has been on my mind lately has been one of financial healing.  There are several financial issues we need to be healed from including unhealthy money scripts from our youth, financial trauma, and recovering from financial infidelity, etc.  I did a google search on Financial Healing and the main topic that came up was indeed, financial infidelity.  This seems to be the one item that affects a lot of people, especially married couples.

Consider this...
The budget is tight due to an economic downturn, overspending, or economic hardship; and you are a spender.  Your spouse is a saver so you feel confined, restricted, and sometimes frustrated because you can't get the latest gadget, redecorate your bathroom, or go out to eat more often.  Instead of operating within your parameters, understanding your financial situation, and living within your means, because that's no fun, you figure out ways to "feed the beast" and buy things you cannot afford.

...Enter "my own" credit card.

You and your spouse have credit card debt but your accounts are in good standing.  Without your spouse's knowledge you sign up for a credit card with a small balance.  It's only a small balance, maybe $500 or so; besides, my spouse will never find out, I've got this all under control.  I'll get the mail before my spouse or have the bills mailed to the office.  This will be great, I'll be able to get what I want, and there won't "appear" to be any extra expenses that affect our budget.  Life will be smooth sailing!  After all, I'm making minimum payments on my account and keeping it in good standing so I should be good right?  It's only a "little indiscretion."

Then something incredible happens, or so you think!  You get a notice in the mail asking if you want a balance increase.  The balance increases from $500 to $1000.  "Excellent! I was almost at the end of my limit, I'll take the increase", and little by little you overspend more on items you may not need,  not using, or just irresponsibly spending out of control.  You're spending out of control because there is no control.

This pattern happens over and over, and before too long, you are $25,000 in debt, and it's becoming more and more difficult to make even the minimum payments.

Does this sound like some of you?  The details may be a little different.  Are you keeping your spending in check?

...A few months ago your spouse has started getting a little suspicious and asking you questions about where you're getting new items and why you're able to eat out so much.  Before you were able to cover them up with a quick comment or no response at all.  Now, your spouse is getting a little more direct and expecting answers.  You start losing control of your "little indiscretion" and you begin to feel guilty, not because of what you're doing but that you may get caught.  What should this person do?

Let us know if this applies to you or you have a solution for the person that may be in this situation.

Solutions will come out in the next posts

Thanks,
Greg and Jody Roche

What can I do to keep my family busy this summer?

What are you going to do this summer?  Are you going to take a big vacation or are you going to take some short trips, or a stay-cation?
Kids and parents are counting the days before school gets out, perhaps for different reasons.  Kids are looking forward to being a little freer and not having to get up early or worry about homework, and taking a vacation to see family and friends.  Parents are also looking forward to a more relaxed schedule, but they are sometimes wondering what can I do to keep my kids busy this summer.
Well, whatever you choose here are some ways to cut down on the cost of your vacations:

• Go to a local pool
• Take a picnic lunch and go to the park or the beach
• Make a plate of brownies and take them to a neighbor shut-in or someone who needs encouragement
• Go on a nature hike and identify as many native plants as possible
• Play hide and go seek
• Go on a bike ride
• Get as many people as you can and play Ultimate Frisbee
• Have a bonfire and make smores and share stories
• Play in the sprinkler
• Find some old wood and make a bird house and watch the birds occupy it
• Have a book club with your family

I asked my kids, who are 17, 14, and 11 what their favorite things to do when the money is short and here's what they said:
The 17-year old said she likes to take a walk in a watershed or at a park near our home
The 14-year old said she likes to go to a 2$ movie theater that we have in town
The 11-year old said she likes to have a pool party

http://www.crystalandcomp.com/2011/05/80-inexpensive-or-free-summer-activities-for-kids/

And if you have teenagers in your house here are some cool ideas...

http://parentingteens.about.com/od/teenculture/a/funteenstodo.htm

It's one thing to seek for ways to do fun things for cheap but another way to make your money last longer is to increase your income.  There are several ways to do this; here are a few:

http://www.wikihow.com/Get-Rich-Quick-if-You%27re-a-Kid

Another way to increase that gap between income and expenses is to spend time over the summer and earn some extra income.  Here is a way for educators to get some extra income:

http://teaching.monster.com/finance/articles/8587-10-ways-to-make-extra-summer-income-for-educators?page=11

10 ways to make extra money this summer

http://www.splashlife.com/article/10-ways-make-extra-money-summer

If you look for less-expensive fulfilling activities a couple of things will happen.  You'll have more money in your pocketbook and for your future, and the kids will appreciate the "smaller" activities and be able to find fun and excitement in them.  Comment on our blog and let us know if you have other activities that work well for your family.

Thanks, and Have a Great Summer!!!

Greg and Jody
www.befrugallivewealthy.blogspot.com

What if you set a goal to Live within your means?

We were over at a friend's house the other night and he said something that you don't hear very often.  He had gone to see our Bishop seeking for a little monetary assistance to help him over a hump.  He realized that instead of seeking more money, i.e. charity, if you will, he realized he should do the best to live with what he had.  He said, "I should live with what money I have".  Later, his comment hit me like a ton of bricks and I thought, what if all of us made that commitment to live within our means and do our best to make wise purchases and live a little simpler?

I know we set many goals from losing weight to stopping smoking to having a certain amount of money in the bank by a certain time.  What about setting a goal to Live within your means.  You could start with a week, move to two weeks, a month, and so forth.  Here are some benefits of living within your means:

• You learn how and keep a spending plan...and stick to it
• You become more diligent at keeping money in your pocket
• You make sure you pay your bills on time and avoid late fees
• You keep track of money that comes in and goes out
• You look for ways to acquire things cheaper, for example, getting movies from the library instead of renting them
•  You tend to be more conscious about money matters

Are you avoiding your most important financial task?

As I was doing some research I came across this article on your most important financial task that I really enjoyed.  Take a look and let me know what you think.  Take a minute and post some one or two of your most successful budgeting or spending plan ideas.

Thank you,
Greg and Jody Roche
Be Frugal Live Wealthy
http://www.befrugallivewealthy.blogspot.com/