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Budgeting

What are you willing to give up?

October 22, 2013 By Liz Weston

HopeAs a reporter I learned a technique that saved my sanity. I asked my bosses to make choices.

In journalism, as in other fields, there’s far more good work to do than there is time to do it. Editors can and will keep piling on the assignments. So I learned, when my plate got too full, to ask my bosses to help me prioritize.

Here’s how I did it. I always said yes to the new assignment, then followed immediately with, “But I’m also supposed to do this and this and this. Which of these other projects should I drop?” Or “back burner” or “table” or whatever euphemism worked best with this particular editor.

Saying yes made it clear that I was a team player, that I valued my boss’ direction and that I wasn’t one of those pain-in-the-ass whiners who had to be wrestled into doing actual work. But quickly reviewing my current assignments reminded the editor of all the other work she’d tasked me with.

A more experienced journalist had explained that it was part of my boss’ job to help me prioritize. Managers are supposed to keep an eye on the company’s ultimate mission and encourage the actions that support that mission. Until he said that, I’d been saying yes to everything and driving myself nuts trying to fit it all in.

Fast forward a few years. I’m now my own boss, writing for different clients and once again faced with far more work than time to do it. Now I’m the one that has to make choices. I have to figure out what my ultimate mission was and what actions support it (and which don’t). I also now have a life—a husband and a baby girl I want to spend time with. Suddenly it became a lot easier to ditch the work that didn’t pay enough (or at all), and focus on the stuff that did.

There’s one other place it can be helpful to ask what you’re willing to give up, and that’s negotiating with family members about financial priorities.

First, you need to sit down together and set some priorities—what’s most important to accomplish, where you want to be in five years, 10 years, 30 years. You figure out what you need to do to get there, then wrestle your priorities into place. (Quick example: You want to take a vacation with your family next year, replace your car five years from now and retire before you’re 80. You figure how much you need to save for each goal and adjust until it’s doable. Maybe to save enough to retire by age 65 you’ll have to put the Disney cruise off a couple of years…that kind of thing.)

When new wants rear their heads—somebody’s agitating for a bathroom remodel, say—you return to those priorities and decide together what you’re willing to give up. Maybe the bathroom remodel is important enough to delay your retirement until 67 or to continue to drive your old car another five years. Maybe it’s not. But the exercise reminds you of what you really want, and helps you decide—together—when and how to adjust those priorities.

Filed Under: Liz's Blog Tagged With: Budgeting, financial priorities, goals

Monday’s need-to-know money news

October 21, 2013 By Liz Weston

Today’s top story: Could holding out until 70 make a significant difference in your retirement? Also in the news: Saving on holiday air travel, what to do when retirement boredom sets in, and what daily habits could be derailing your budget.

Does Layaway Affect Your Credit?
Could this convenient holiday shopping tool impact your credit score?

5 Things Retirees Miss About Work
What happens when retirement finally arrives?

How to save money on your holiday flights
The trip to Grandma’s doesn’t have to cost a fortune.

8 Things That Can Make or Break Your Budget
Those daily trips to Starbucks can add up.

Why Waiting Longer for Social Security Is Usually Smart
Could holding out until 70 make a significant difference in your retirement?

Filed Under: Liz's Blog Tagged With: Budgeting, holiday travel, Retirement

How to deal with your debt

July 31, 2013 By Liz Weston

Zemanta Related Posts ThumbnailDebt may be a four-letter word, but it’s not necessarily the enemy. Some debts are much, much worse than others, and knowing which to tackle first can leave you richer.

That’s the central idea of my book “Deal with Your Debt,” and I go into more detail in this interview with Experian’s Mike Delgado. (Also, you’ll get a great view of one of our bedrooms…I couldn’t get my laptop to cooperate with Google Hangout, so I had to resort to the desktop.)

We covered a bunch of topics, including:

  • What you need to know about getting, and paying off, student loans
  • Why retirement has to be your top financial goal (yes, even ahead of paying off debt)
  • What debts to tackle first and
  • When to consider filing for bankruptcy

…and much more.

Filed Under: Liz's Blog Tagged With: Bankruptcy, Budgeting, college costs, college students, Credit Cards, Credit Scores, debt, debt reduction, pay down debt, Retirement, retirement savings, Student Loans

Tuesday’s need-to-know money news

July 9, 2013 By Liz Weston

My first carHow to speed up your mortgage closing, saving more money with a maxed out 401(K), and preparing for your teenager’s time behind the wheel.

Four Steps to a Speedier Mortgage Closing
Speeding up the last, agonizing step before home ownership.
How Rising Interest Rates Affect Retirement
Rising interest rates could leave you altering your retirement plans.
Maxed Out on Your 401(K)? How to Save More
Maxing out your 401(K) doesn’t mean you should stop saving.
The Impact of Adding a Teenager to Your Auto Policy
Prepare to open your wallet when Junior’s ready to get behind the wheel.

How to Budget as a Live-In Couple
Creating a budget can make a stressful time much easier.

Filed Under: Liz's Blog Tagged With: auto insurance, Budgeting, couples and money, mortgages, Retirement

How much should you spend on rent?

July 9, 2013 By Liz Weston

Dear Liz: I am wondering about what percentage of your income should your rent be. Ours at the moment is 35% just for rent, not including utilities or anything else.

Answer: In high-cost areas, people regularly pay 40% or more of their income on housing. That doesn’t mean it’s a good idea.

When you spend a big chunk of your income on rent or mortgage payments, there’s often too little left over to save for the future, pay off the debt of your past and live for today.

There are no hard-and-fast rules for what’s affordable, but limiting your housing costs to about 25% of your gross pay or 30% of your after-tax pay will help ensure that you have money left over for other goals. “Housing costs” include rent, utilities and renter’s insurance if you don’t own, or mortgage, property taxes, property insurance and utilities if you do.

If you’re much over these limits, you should look into ways to reduce your costs, earn more income or both. Otherwise, you’re likely to continue to struggle with an unbalanced budget.

Filed Under: Budgeting, Q&A Tagged With: Budgeting, housing costs, renting

Friday’s need-to-know money news

July 5, 2013 By Liz Weston

House With Tree DamageHow to prepare for a disaster, avoid the financial pitfalls that come with a speeding ticket and how to get the latest iDevice without destroying your family budget.

How to Plan for Any Disaster
Preparing for the unexpected.

Do Employer Credit Checks Damage Credit Scores?
Understanding employer’s right to access your credit information.

5 Tickets That Will Ruin Your Insurance
Slow down to avoid paying extra.

5 Frugal Summer Activities to Beat the Heat

Staying cool doesn’t have to melt your wallet.

Don’t Let Gadgets Devour the Family Budget
Sometimes the latest isn’t the greatest.

Filed Under: Liz's Blog Tagged With: Budgeting, Credit Cards, Credit Reports, Credit Scores, disaster preparedness, disasters, FICO, FICO scores, Insurance

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