Category Archives: Budgeting

Financing Tips for Home Maintenance Emergencies

Budgeting

This informative post was contributed to Leisure Freak by freelance writer Sierra Powell. 

Regular maintenance comes with a home. Owners spend 1% of their annual budget on repairs, which hurts if you don’t prepare for unforeseen circumstances. To help avoid this, here are some financial tips to prepare for home maintenance emergencies.

Financing Tips for Home Maintenance Emergencies

Photo from Pexels 

Perform a Home Repair Audit

A home repair audit isn’t much different from what a business does. It’s an examination of your property’s infrastructure. The results of the audit reveal your financial needs.

Focus your repair audit on frequently maintained items. These include the kitchen appliances, plumbing, roof, and HVAC (heat and air conditioner) system. Secondary items are electric wiring, doors, windows, and walls.

Examine these areas for noticeable issues. Consider asking professional agencies if you’re uncomfortable in certain areas. For instance, if you don’t want to go up to the roof, hire a contractor to check its quality.

Create an Emergency Fund

Vacations and spontaneous purchases are not the purposes of your emergency fund. Instead, the fund helps pay for unforeseen issues. Further, it also helps establish peace of mind around repair emergencies.

One thousand dollars is the average amount to have in your emergency fund. However, the value varies depending on your home’s size and the state of current repairs. Although it may not pay the total amount, the emergency fund should have enough money to make a sizable dent.

For instance, a severe storm could cause damage to your roof’s shingles. The emergency fund would help pay for a storm damage roofing company to come out and assess the problems. The emergency fund would probably take care of shingle replacement. In a worst-case scenario, it would take a chunk of the bill if the entire roof needed to be redone.

Create a To-Do List

The number of regular maintenance projects can overwhelm a homeowner. They may forget to do something over the years. As a result, an unexpected issue could appear that takes a chunk out of the emergency fund.

Minimize this risk with a maintenance to-do list. Enter items by their frequency. For example, replace the HVAC air filter every month, have the plumbing checked twice a year and examine the driveway for cracks two years after a resurfacing project. Put the information into an online document and set calendar reminders.

Handle DIY Repairs

You won’t need to hire a professional for every maintenance project. Take care of some of these issues through do-it-yourself (DIY) methods. Usually, they cost little to fix and take minutes to repair.

Air filter replacement is a case in point. These items cost a few dollars and take less than five minutes to swap in the HVAC unit. Regular repairs minimize the risk of frozen air conditioner components and other mechanical issues.

Take Care of Things Before They Get Worse

It’s never too early to address issues before they get worse. In the end, something that seems minor can become an emergency in a few hours or days. It could be severe enough to cause extensive damage.

Take care of things before they get worse. Don’t place a bucket under the sink to catch leaks from faucet pipes. Call a plumber to check the issue. The same goes for missing roof tiles, water stains on the walls and ceilings, or clogged gutters.

Hire Professionals for the Important Jobs

There’s a difference between fixing a leaky faucet and a pipe. The former is an easy repair if you follow the directions. Conversely, you cause damage if you don’t know how to fix a leaky pipe. It may result in necessary repairs to walls, ceilings, or the entire plumbing system.

In other words, hire professionals for home repairs that require more than an air filter or new washer. Hire subject matter experts to repair items related to electrical systems, plumbing, and your roof. Although they cost more, proper fixes are assured.

Purchase Maintenance Plans

Maintenance plans are one way to reduce the cost of emergency repairs. The return on investment translates to regular check-ups of your home’s mechanical and structural components. Additionally, maintenance agreements cover part costs. At most, you only pay for labor.

Plans and warranties are part of replacement packages for HVAC units and roofs. However, these may have a limited scope. Contact the vendor before warranties expire to learn how to extend coverage and reduce your monetary liability.

Overall, there’s a way to prepare for home maintenance emergencies. It could take some money away from funner activities. Nevertheless, the peace of mind received is worth the investment when you can’t make the repairs.

Thank you Sierra for contributing this article to Leisure Freak. Your tips to be prepared for the inevitable home maintenance emergencies is something all homeowners should consider. 
freelance writer Sierra PowellAuthor Bio:  

Sierra Powell graduated from the University of Oklahoma with a major in Mass Communications and a minor in Writing. When she’s not writing, she loves to cook, sew, and go hiking with her dogs.

 

8 Money-Saving Tips for Large Families

Budgeting, Frugal Living, Saving Money,

 

A woman and her five kids having fun on a light blue couch

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This post was contributed to Leisure Freak by freelance content writer Charlotte Wyatt.  

Having a large family means constantly working on your spending discipline and finding different ways to save more money. After all, there is no such thing as a never-ending supply of money, and taking care of a large family can get quite expensive. However, even with everything you have to handle financially, there are ways to save extra money. In this article, we’ll let you in on eight money-saving tips for large families that will make your everyday lives that much easier.

Surprisingly simple money-saving tips for large families 

Many people dream of having a large family, but most of them end up quitting this idea due to financial concerns. After all, it’s not a secret that taking care of a big family can be very expensive.

A large family walking across a bridge during a sunset
Even though taking care of a large family is expensive, there are plenty of ways to make it work without having to sacrifice a lot.

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But even with all of that in mind, we often see many large families making it work with smiles on their faces. So, we did our research and found money-saving tips that might make you decide not to give up on your dream of having a large family.

#1 Set a budget and stick to it

The bigger the family, the more important it is to focus on determining your budget. Make sure to write down what money is coming in as well as what money is going out. Even the smallest expense should be on your list as it will help you understand your spending habits. More importantly, it will help you see if there is any more room to save.

By creating a budget, you’ll be doing yourself, as well as your entire family, a huge favor. There’s no better way to save money than rationally and strategically deciding how to spend it.

#2 Live simply

Most people think that having more kids means needing extra space and more things. But many large families do quite the opposite – they downsize their belongings and live a simpler life. This helps them save money and still live comfortably.

Four siblings hugging in the middle of a field and looking at the sunset
Living a simpler life will help your kids learn and nurture strong core values and become good people.

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Thus, you don’t need to wait to downsize after retirement. Your kids can learn to share rooms, and even if you don’t have a backyard, we’re sure there’ll be great parks in the neighborhood. Your holidays will still be magical without spending too much on decor, and your kids will still feel happy and loved.

Living simpler will surely help you save money. But, more importantly, it will help you teach your children the value of togetherness over material things.

#3 Save while shopping

Shopping for a large family is very different from your regular weekly visit to the grocery store. In fact, it usually requires thorough planning and detailed considerations.

Here are just some of the ways large families save money while shopping:

  • Many large families buy in bulk. 
  • Shopping online allows you to stay organized and curb impulse buying.
  • Visiting thrift shops is a great way to find cheap treasures your entire family will love.
  • Research coupon and promotion websites and take advantage of good offers.

#4 Don’t run away from hand-me-downs

Hand-me-downs are not something that’s reserved only for large families. Even in families with two kids, hand-me-downs are entirely common. We completely understand if you want all of your kids to have their own things, but just remember how expensive kids’ clothes can be and how fast they outgrow them, and you’ll realize you can spend that money on something more valuable.

If you want to save even more, consider sharing with other families. This way, you’ll not only save your money, but you’ll also help another family save theirs, too.

#5 Dine-in and prepare meals

Taking a large family out to eat is not just an expensive experience, but it can also be quite stressful and frustrating, especially if younger kids are involved. And even if you choose more affordable restaurants, the bill quickly adds up.

Preparing meals together and eating at home is one of the money-saving tips for large families
Cooking family meals together is a great way to teach your kids responsibilities while strengthening your relationship at the same time.

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This doesn’t mean you can’t make your home dining experience fun and meaningful. For instance, you can have a “make your own pizza” night and watch a family movie together after. You’ll still have a great meal, but you’ll also spend quality time together, and your kids will learn new skills.

#6 Look for free activities

Every kid wants to participate in different activities, join classes, try sports, and similar. However, these things cost money, and these expenses are much bigger when a large family is in question.

Luckily, there are ways to save money by doing a little research. You may find that your town or city is hosting free events for kids, or perhaps the school district offers different classes at reduced rates. You can never know until you start digging and asking around.

#7 Teach your kids to place a higher value on experiences than on things

Take a moment and think about your childhood. We are almost sure that you most remember fun family trips, movie nights, and even family dinners that were enriched with some silly anecdote. We’re also sure that you probably don’t remember most toys you begged for and quickly lost interest in them.

Your kids will likely remember the same things. They’ll cherish precious family moments and always happily reminisce about the quality time you’ve spent together. Sure, there will always be a toy or a gift with a special meaning to them, but we guarantee that, for most people, experiences are much more memorable and meaningful than any material thing. The best part about them is that they’re mostly free!

#8 Remember – there’s always room to save more

Lastly, always keep in mind that no matter the situation, there are always ways to save more money. The trick is in thinking outside the box and looking for creative alternatives for otherwise expensive solutions. And trust us, if you put your mind to it, you’ll be able to get a lot of things done more or less free of charge. 

For instance, let’s say you and your family are moving. Sure there are costs that are unavoidable but saving money when moving is not impossible. A good way to cut costs during the process is by asking family and friends to help you instead of hiring movers or using things you already have at home, such as blankets as moving supplies.

Final thoughts

On top of everything we’ve listed, there are plenty more money-saving tips for large families you can test. Always have in mind that every family is unique and specific in its way. Therefore, it’s always good to think outside the box and come up with creative ways to boost your family’s budget. If you put enough effort, soon you might even be able to start thinking about ways to fund your early retirement.

Much thanks to Charlotte Wyatt for sharing these timely money savings tips when squeezing some discounts out of daily life has never been more needed.
8 Money-Saving Tips for Large FamiliesAuthor bio:

Charlotte Wyatt is a single mom living with her two kids in Washington D.C. She is working as a freelance content writer which gives her flexibility to spend a lot of quality time with her kids. Being that she’s supporting her family on her own, she learned many money-saving tips and she’s always happy to share them in her articles. 

8 Easy Tips for Saving Money for Travel

Budgeting, Vacationing in Retirement,

This  post was contributed to Leisure Freak by Aatish Khanna of Money Club. Bringing some timely tips for navigating these financially challenging times to those who dream of travel.

Travelling to beautiful European villages and the world’s most beautiful islands is a fantasy most people have but cannot afford. Money is not a limitless resource, and that’s a crushing reality. You may have every intention to travel to your bucket-list destination, but your slim savings doesn’t seem to support your intentions. However, with a little planning and a few lifestyle changes, you can easily save enough to book a fabulous holiday for yourself and your loved ones.

6 Easy Tips for Saving Money for TravelImage Source

Here are a few simple tips for saving money for travelling:

1- Start a dedicated travel fund

Most people use their emergency fund for travel. Your emergency fund is to be accessed only in case of an emergency; travel is a planned event and hence doesn’t qualify for an emergency. So, don’t confuse your emergency fund for the travel fund. Create a separate travel fund and feed it monthly, weekly, or daily.

2- Assess your financial situation

Figure out if your trip is feasible considering your current financial situation. While you’re researching, find out how much airfare, food, accommodations, and other activities will cost. Once you have an overall cost estimate, create a spreadsheet and list down your income vs your expenses to see whether the trip is doable or not.

3- Create a budget

Write down the total estimated cost on your calendar for your intended departure date. Count how many months/weeks you have until your departure. Divide the total cost by the time you have on hand to save. This will give you an estimate of how much you need to save each month/week in order to afford your trip. Once you get the ballpark figure, start saving.

Here are a few money-saving tips that ensure you stick to your budget and save enough to have a trip you have been dreaming of for so long.

4- Slowly eliminate your wants 

Your daily/monthly expense spreadsheet should have two columns: “Needs” and “Wants“. Start eliminating the wants slowly from the things you purchase regularly.

5- Eat out less often 

Trim your food costs by cutting down on the number of times you go out for food. Cook meals at home and stay in at night. Going to bars and clubs at night can easily shatter your travel goals. Instead, invite your friends over. 

6- Sell your unwanted belongings

Consider selling clothes, appliances or any physical possessions that you are not using anymore. Sell them online or trade them in for cash. Eliminating the clutter will provide you with the much-needed cash and also give you a vast amount of mental freedom.

7- Online side hustle 

Consider working part-time on freelancing projects and use your skills to save and earn money. Also, loads of apps allow you to earn money online by doing various easy tasks using your mobile phone. 

8- Buy in bulk

Buying in bulk doesn’t always make sense. But for things you regularly use in the house, buying in bulk is the best way to save money. Things you can buy in bulk include paper towels, butter, soap, laundry detergent, etc.

 

All the above money-saving tips are easy to follow. With determination and a sprinkle of optimism, you can easily save up for your dream trip.

Thank you Aatish Khanna for sharing these 8 easy tips for saving money for travel. 
Author Bio:

Aatish Khanna works with the Content Marketing team at Money ClubAatish Khanna works with the Content Marketing team at Money Club – a digital chit fund platform that makes saving, borrowing, and investing your money more efficient. He writes on topics to help his readers understand processes so they can make better financial decisions. He’s the go-to person that his family, friends, and colleagues turn to for all their money matters. He loves to play board games and aspires to one day build his one finance-related board game and app.

Early Retirement Using Matrimonial Bliss Split Budgeting

Budgeting, Retirement Plan, ,

I married my highschool sweetheart at the age of 18. That was a bit over 44 years ago. We quickly discovered that always being on the same financial page with someone else is tough to do. We both reached early retirement using what I call matrimonial bliss split budgeting. Our split budget didn’t start because of early retirement goals. We did it to keep the peace. But later it did provide the boost for us to reach financial independence together, but separately.

Early Retirement Using Matrimonial Bliss Split Budgeting

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Our Matrimonial Bliss Split Budgeting Ride

We didn’t come to matrimonial bliss split budgeting overnight. There were many years when our children were young where there was only a single income. Basically, one budget handled by two people in a partnership of aligned goals, but with different ways of thinking. Separate minds will have different mentalities on financial priority rating. I think that captures it. 

We had very tight income to outflow limitations and our shared checking account was the battlefield. There were many marital conflicts when money went to something required, like home utilities. When the other had planned on it going towards something else required, like grocery or children’s clothing. We also had to work on communication.

Balancing the daily costs of living and raising a family, let alone saving for the future, can be a marriage challenging experience. 

Once our kids started school we entered back into the dual income realm of making ends meet.

My bride was able to work part-time and bring in much needed income. We were still on a single budget, but now with a little more income to work with. That didn’t end the financial stresses of two people trying to find a middle ground on financial priorities. 

Don’t get me wrong, her Yin was needed to balance my Yang. It’s hard to relax or have fun until all work is done and bills are covered. Even when there’s likely time later to meet those needs. She on the other hand can let go knowing there’s realistic time to enjoy things and take a break from the pressure of pending needs. 

Realizing our differing mental dynamics is how our split budget was created. 

We both needed to support our overall financial goals. Like providing for our family, keeping a roof over our head, and having a meal on the table. But we also needed to have some control over our spending without infringing on each other’s different mental processes when determining financial priorities or happiness. 

In a nutshell, aside from the benefits of having a covered budget, there are things that are needed to be happy. What makes a person happy is a unique human experience. It isn’t always shared, or equally felt and enjoyed in the same way between different people when shared. If only one person of a couple is happy about things most of the time, the chances of staying a couple gets murky. Blown finances regardless of reason just adds stress to anyone’s happiness.

Matrimonial Bliss Split Budgeting to retire earlyImage Source

We Split Our Budget Based On Two Factors, Earnings And Preferences

Percentage of income budget separation-

I earned a higher income than my bride’s part-time and later full-time earnings. With that in mind I took on the bulk of the budget. Initially we both had tight budget demands that left just enough to fund our own 401Ks and little left for discretionary spending. As incomes increased over the years there was more wiggle room but our budget allotments were only slightly altered. 

Preferred happiness and strength based budget separation-

It isn’t like I love paying utilities, insurance, mortgage, auto and home maintenance, vacation, debt, etc. But I sure didn’t enjoy or care more about grocery or clothes shopping than my wife did.

Our split budget settled on my portion including all living expenses other than grocery, toiletries, household cleaners, her clothing, her auto gasoline, and her 401K. This way we could budget for our share. It ended the chance for surprise hits to the account balance from the other. When we could afford it, we would treat each other and the family out to dinner, movie, or other impromptu fun.

What This Did For Our Marital Financial Peace

Having the separation provided with matrimonial bliss split budgeting allowed us to have control over our earnings and spending without infringing on each other. While still working towards our common and separate goals. Whenever a spending emergency occurred beyond one’s capability to handle, we would both chip in to make it work. 

Establishing Separate Finances To Accommodate Our Separate Budgets

Bank Accounts

We had started our marriage having a single joint Checking, Savings, and Credit Card account. We kept that for my wife to use, then opened another joint account at a Credit Union which I utilized. Having the 2 joint accounts allows us to separately track and balance our budgets. While also allowing us access to either account in the event of an emergency situation. 

Credit Cards

Initially we each used separate Visa cards to track and pay for. As time went we settled on a single Rewards Visa to use for any of our spending. We still pay our respective budgetary expenses in full monthly, but we separately track our Visa use and split it out on the monthly Visa statement. The shared rewards card distributes cash every Holiday season. We use it to cover our shared Christmas holiday and gift budget. 

Retirement Savings 

Our retirement savings evolved from just the normal separate 401K withholding from our respective paychecks to my also funding both mine and my wife’s yearly Roth IRA savings. 

Early Retirement Goals And Split Budget Impact

I had a far more aggressive attitude toward early retirement than my bride did. 

She actually loved her job when I explored the possibilities of retiring young. We both took part in the initial financial planner meetings when my 10 year early retirement plan took form. Our own retirement goals were based on our unique budget and income. When I retired early at age 51, she wasn’t onboard then with her also retiring. She wasn’t menatlly or financially ready to go and had some other milestones she wanted to continue working towards. 

After I retired early we maintained the same split budget even though the earnings dynamics were now reversed. 

My monthly IRA funded retirement income was far less than her full-time salary. But I had just enough coming in to make it work. The thought was for my wife to continue a higher retirement savings rate while still trying to hit her milestones. The split budget arrangement living off of a now more limited retirement income was tight but workable. We enjoy frugal living and I was still able to cover everything. 

Having my budgetary needs being met allowed me to stretch myself to pursue opportunities of interest and passion. I see retirement as the absence of needing to work, not the absence of working. I had always planned on doing my “retire early and often” thing whenever the perfect opportunity presented itself. I’ve had some exciting and rewarding adventures with retirement gigs that checked off a lot of my “would like to learn and do” bucket list. As I was funding my retirement from my IRA, any income I earned was added back into the portfolio and even pay off our modest mortgage. That certainly relaxed my part of the split budget expenses. 

A year into my early retirement my wife saw the early retirement light.

Seeing how I was free from obligatory toil and making it all work without having to work, my wife decided it was time for her to get more serious and join me. We tweaked her savings plan and set a retirement funding strategy to cover her budget to also retire early. A couple of years later she ditched the rat race. We both have the retirement income to cover our split budgets. 

There are lots of ways to do this to keep the marital peace and financially benefit

We certainly had some marriage challenges over the decades. There were a lot of changes in us over the years from when we married at such a young age. 

There are many many things that can challenge a marriage. Finances is one of the big ones that can creep in and ruin everything. I think the most important financial success part of this matrimonial bliss split budget story is that we stayed together, sticking it out through all of what life threw at us. Struggles of all kinds, growing up together and ultimately becoming different people, and raising kids while balancing life and careers can be a relationship meat grinder over time. 

Our having love and a commitment to each other and family; having aligned lifestyle and financial goals; and managing financial stress with our budgeting decisions, played a big role in our marriage longevity and ultimately our financial independence, separately but together.

Budgeting Before You Retire and Planning for the Future

Budgeting, Retirement Plan

This post was contributed to Leisure Freak by fellow financial freedom content writer Karan Mahindru.

Trying to estimate what your expenses will be during retirement can be challenging. It’s difficult to plan for inflation and to predict the costs of essential expenses in the next 10, 15, 20 years, or more. However, trying to come up with a spending plan for your retirement is crucial, as the earlier you start saving for your future, the better off you’ll be.

Budgeting for retirement now, while you are still working and earning a regular income, is the right thing to do if you don’t want to run out of money during retirement. It gives you more time to plan for the future and more peace of mind.
Budgeting Before You Retire and Planning for the FutureImage Source

To help you tackle this task, here are six tips you can follow.

1. Budget for your big three expenses: housing, transportation, healthcare

Now and during retirement, your big three budget items will be housing, transportation and healthcare.

  • Housing: Do you own a home and see yourself living in it until retirement? Or will you be downsizing or renting instead? If you are a homeowner, consider the upkeep based on the size of your property. You also need to allocate the costs of making your home elderly-friendly in case you plan to age in place when the time comes. If you will be renting or living in a retirement home, you should adjust your budget accordingly.
  • Transportation: Will you be driving your own vehicle or taking public transport? Your transportation expenses depend upon where you plan to live come retirement. If you plan to travel once or twice a year, you should also factor that into your calculations.
  • Healthcare: Medical costs tend to eat up a huge chunk of a person’s retirement budget, especially if they lead a generally unhealthy life. While living well by exercising, getting enough sleep, sticking to a balanced diet and avoiding alcohol and tobacco won’t give you 100% assurance that you’ll be healthy all your life, doing so can keep lifestyle-related diseases at bay. These include obesity, hypertension, heart disease, type II diabetes and lung cancer. Therefore, aside from saving for retirement, strive to lead a healthy lifestyle today. And, to help manage your medical expenses in the future, invest in good health insurance as well.

2. Consider budgeting in yearly or five-year increments

If you’re in your early 40s right now, it could be really difficult to visualize how much you’ll be spending every month two decades from today. Therefore, in figuring out your monthly retirement budget, consider first how much you’ll be spending during your first year (or first three or five years) of retirement.

Once you determine your first retirement year expenses, it’ll get a bit easier to calculate for the succeeding years. Again, retirement financial planning is not an exact science, but you need to start somewhere reasonable.

3. Consider the phases of your retirement

Since your needs at every stage of retirement may change, consider these phases while budgeting for the future.

  • Stage 1 (Transition): The stage where you transition from working to retirement is not full-fledged retirement itself. The transition phase could see you working part of the time or providing consulting services. During this time, your expenses are likely to stay the same and you’ll still have an income stream, albeit at a reduced level.
  • Stage 2 (Early Retirement Proper): When you get to the second stage, this is the time when you’ll be focused mainly on leisure, relaxation or having fun. If you stop working altogether, you will find yourself having a lot of free time and more opportunities to spend money than you normally would. You may be indulging in hobbies, so you’ll need to budget for hobby-related expenses. You could start travelling more, too, so that could be a significant expense.
  • Stage 3 (Later Retirement): As you continue to age, your health could also deteriorate or you may find yourself slowing down. Instead of travelling, you might find yourself feeling content puttering around the kitchen or tending to your garden and pets. If you have health conditions, you need to allocate money for medical exams and prescription medicine.
  • Stage 4: This phase usually involves the last two years of life – which can get quite expensive if you become seriously ill. It’s not a pleasant stage to think about, but you need to take a pragmatic view and consider all the expenses that come with hospitalization and dying.

4. Prepare for one-time major retirement expenses

Just like your spending today, once you set your retirement budget, most of your monthly expenses would fall into the same categories, although there may be some fluctuations over the years.

The rest of your retirement spending, however, may involve major one-time costs such as:

  • Helping with your child or grandchild’s college expenses
  • Yearly or biannual travel overseas
  • Purchasing a second property
  • Funding or contributing to the expenses of elderly parents or a child’s wedding

5. Clear your debts

Remember that you can’t really focus on saving for retirement if you have a lot of outgoings and outstanding loans or debt. This includes your mortgage, personal loans and credit cards.

Therefore, by prioritising debt right now and paying it off, you can start saving for retirement earlier. Of course, the opposite is also true; the longer you put off paying your debts, the longer you will also be delaying your preparation for retirement.

6. Budget for emergencies or unexpected expenses

Just as people are advised to keep an emergency fund pre-retirement, the same advice holds true for retirement financial planning. So, aside from calculating your future monthly expenses, it’s wise to keep an emergency buffer for unexpected costs.

Sudden hospitalization or healthcare-related costs tend to be substantial, whatever stage of life you may be in. Therefore, if you can afford it, factor that in. For whatever emergency expenses may arise when you retire, try to set aside an amount equivalent to three to six months’ worth of living expenses.

Start early and plan today

As they say, no one knows what the future holds.

But you can make your retirement comfortable by planning for it as early as possible. 

So, start saving for the future now. Today.

This informative budgeting before you retire article was contributed to Leisure Freak by Karan Mahindru

  Author Bio: Karan is a keen content writer and traveller. He’s passionate about developing financial freedom, travelling the world and spreading his knowledge and expertise around accumulating wealth. Currently living in the beautiful Manly beach of Sydney, Australia. Karan loves anything and everything outdoors – going for swims, surfing, staying active and healthy and prioritising his physical and mental health and wellbeing. Overall, Karan is driven and passionate about building a better and more fulfilling life.

FIRE Transition Alert: Good Savers Are Lousy Retirement Spenders

Budgeting, Early Retirement Lifestyle,

One of the hardest retirement transitions that I encountered wasn’t a loss of work identity or social isolation. Yes, I did work through some of that but those were rather quick and manageable. Here’s the thing that threw me harder- good savers are lousy retirement spenders. It has been the bigger and longer lasting FIRE transition. I still occasionally struggle with it, even after 11 years into my early retirement.

FIRE Transition Alert: Good Savers Are Lousy Retirement Spenders

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Good Savers To Lousy Retirement Spenders

Having been a successful saver and now lousy retirement spenders is certainly a fortunate problem to overcome. Especially when a Fidelity Retirement Savings Assessment found 46% of American households are at risk of not being able to cover essential expenses in retirement. The whole reason we saved as well as we did was for a better future. Sure, when it comes to spending there are all the numbers that must be respected. But then there’s the nagging mental side of things when making this retirement spending transition regardless of how good the numbers look. 

Frugal Living Got Us Here 

There’s nothing extreme about our early retirement story. Everyone has to define their own livable frugality to meet their financial goals. For our family’s frugality, we never feel like we live a deprived life. But we also don’t enjoy spending money thoughtlessly. There will always be needs, wants, and nice to haves in life. 

During the FIRE journey we were really good at sticking to what we defined as our frugal budget. It focused on our needs and only what brought true happiness to our family. A game that was hard won in the face of all the consumerist temptations and social pressures to fit in. 

As hard as it was to create what became good frugal living habits, once the game is won and numbers look great it’s just as hard to draw against savings and decide to spend a little more. Maybe enjoy some wants and “nice to have or do” things that were long set aside. We found early in our retirement tendencies to even scale down spending on things long considered part of our budget. 

The Balance Between The Retirement Budget and Covering For Longevity

A new mental spending boogaloo started to rise up several years into our early retirement. Aging adds new dimensions that I really didn’t fully appreciate in my youthful retirement planning and early retirement living. The realized reality is that our retirement portfolio and spending is a lifelong dance with changing music and tempos. I’ve already found that out as I get older. Life’s tempo does start to slow down. Aging adds new dimensions long before what we consider old age. 

Like most people, my retirement planning was more focused on the portfolio financial swings that came with market volatility, future projections, and possible inflation.

There was motivation to get out of the rat race early but I should’ve also had a higher focus on the diminishing years to play on the planet. There’s a high value associated with youth and health that is often missed in our calculations. I was doing everything right to stay fit and healthy. That might have influenced my thinking. I didn’t fully allow myself to focus on the likely future negative age related health issues that could surprisingly appear and disrupt my perfect retirement plan. 

Good retirement calculator scores help settle a retiree’s spending-troubled mind. But we just don’t really know how long we’ll be on this world and under what health conditions. I think that’s the monkey wrench in the mental works for triggering most of the lousy retirement spenders syndrome. Even without fully thinking about it, it’s always there: The fear of outliving our money, which of course is a worthy concern. It just has to be reasonable and balanced with living a purposeful retirement life, not a financially fearful one. 

My wife and I have already experienced a couple of unexpected health scares, which adds to this reluctant retiree spender mix.

These came before we reached the traditional early retirement age of 62. There’s the highly probable cost of covering future unknown but inevitable medical issues. I will admit, it took our medical scares to wake us up. All of a sudden our focus was forced to change. Now we truly realize there needs to be a balance between having enough to pay for what comes but also put a value on how we really want to spend the healthy time we do have left. 

How We Overcome Lousy Retirement Spending Syndrome

Old spending habits die hard. 

It takes time to transition from saver to spender. For us it had been a far more gradual transition over time. Regardless of how good calculated financial results looked, we knew there was little headroom with our less than million dollar portfolio and we needed to slowly and cautiously test them first. It took us seeing reality based results bounce against the simulations. Now eleven years into early retirement it appears any past financial anorexia on our part was for not. The numbers held up better than expected, even with surprises like rising healthcare costs.

My takeaway: Give yourself the time to make the retirement spender transition.

Track and test as necessary. But there’s wasted time in worrying or cutting back beyond the budget that got you to retirement or cutting the retirement budget numbers used in your retirement financial calculations. Trust in your ability to recognize any problems. Be flexible enough to counter them.

Updated our spending quotient.

To get to early retirement our spending was always done with purpose. We spent on needs and only what added real happiness to our family’s life without fluff and waste. Now we’ve also added to our spending quotient the permission to allow for spending to reduce stress or simplify life. 

Previously in my younger form if it was something I could do myself I wasn’t going to pay someone else to do it. I still struggle with this issue. But there are things I’ve always hated doing even though I’m fully capable of doing it. Life is much better letting go and paying for qualified professional tasks that need to be done. 

My takeaway: Doing full due diligence with cost comparisons and client reviews when applicable will satisfy frugal financial tendencies.

That’s what helps with mentally accepting this form of spending. 

Spending on unique experiences, each time might be the last time.

We have kids and grandkids. I remember my grandparents but it’s limited to visits with a lot of quiet chatter and sitting around waiting for mom and dad to say it’s time to go. That’s also the subject of every old photo I look through. There are no special experiences to remember them by. We’ve tried our best to be part of our adult kids and our grandkids lives. We’ve found that spending a little more on experiences with them is a whole new level of joy in our retirement.

Building memories of shared vacations and spending on experiences now with them instead of worrying about leaving more behind when we ditch this world makes for a more satisfying retirement. All of those opportunities evaporated during the pandemic and now with vaccinations and reopening of life, we look forward to returning to this big part of our retirement happiness.

My takeaway: We remember how hard it was for us when our kids were young and we didn’t have the resources or money to do a lot of things.

From vacations to simply babysitting. Doing things now that makes their lives easier while the grandkids are still kids makes for our happy retirement and will hopefully be remembered. Budgeting for and mentally opening up some of our spending so we can offer to do things with them that they might not normally be able to do spreads that joy across our family. 

YOLO with a twist.

Falling into the “You Only Live Once” thought process is usually a sign of overspending and poor financial decisions. Certainly a financial curse to many and something that must be tamed when tapped. But if there’s ever a time to recognize some of the wisdom within YOLO it’s when you have had a close call or are otherwise finally made fully aware that there’s an eventual end date.

As the years tick off, any unchecked bucket list items need to be seriously addressed or just scratched off. It’s not even about how long we will live. It’s about how long we will be fit and healthy enough to accomplish them. All of course with respect to budget and portfolio constraints. My misstep was allowing spending reluctance to overtake any other thoughts.

My takeaway: There are things I missed an opportunity to do because I didn’t get off my keister earlier to make them happen.

Missed opportunities that I either can’t do now or even really want to do now. But I still wonder if I have missed out by not doing them because of my lousy retirement spenders syndrome when my life’s time was right to do them. I will never know. But I’ve pledged that I owe it to myself to do a better job of it going forward. 

 

Once we retire after a successful run of years saving and investing to pull it off, changing from saver to spender will mess with our minds. For my wife and I, it has been a long gradual mental adjustment over many years that still challenges us. 

Being aware and having new reasons to combat mental tendencies to unnecessarily hold retirement spending back even when the numbers support relaxing spending reluctance is the first step. Then it’s giving ourselves the time it takes to work through this transition and the permission for the occasional purposeful splurge for a better retirement life. 

Can A Frugal Retirement Be Enjoyable? Mine is

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My choosing a frugal retirement is an enjoyable personal success. When you can’t ever see earning a 6 figure salary or having a million dollar portfolio you have to create a unique retirement solution. I chose to strategically make smart balanced adjustments and decrease our lifestyle cost which means less is needed in the bank to retire. Getting our lifestyle cost aligned with our portfolio amount where the retirement calculator said the numbers work became the goal. I’ve seen some frugal retirement naysayers, mostly from people who have never tried it. Now as I’ve already cleared a decade of early retirement I can say that my flavor of a frugal retirement lifestyle has exceeded expectations. 

Can A Frugal Retirement Be Enjoyable? Mine is

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Choosing A Frugal Retirement, What’s Not To Enjoy?

Why I looked for a workable employment liberation answer –

Retirement is constrained by how much money we have. All the talk about being able to replace 80% of our pre-retirement salary for a comfortable retirement is a tall task and I think I’ve proven that notion wrong. For many households including ours, it’s really tough to save a million dollars or more for retirement. With all I had experienced in my tech career that required a relocation, endless cycles of layoffs, reorganizations, etc., my having to survive working into my 60s or later was something I couldn’t stomach as acceptable or even viable. In 1998 at age 40 I decided that I wanted to explore early retirement options and began my 10 year early retirement plan. 

We didn’t let the million dollar portfolio barrier deter us from early retirement. That’s when frugality became the solution. But it had to be done right or not at all. If it was a joyless existence of austerity it wouldn’t be worth it. While some choose extreme frugal practices, ours was uniquely measured to fit us. 

The Fun Stuff – 

I want to clear the air up front and get past notions of a frugal retirement as sitting in a small apartment or RV with a TV as the only entertainment. While some may call that heaven, that isn’t at all close to our retirement lifestyle. We stayed in our 2 story home close to our daughter’s families and have what we call a frugal budget. It not only covers all of our living expenses, but includes our hobbies, entertainment, and much more.

Travel- 

We travel as much as we want to. Other than a Hawaiian vacation bought through Costco Travel a couple of years ago, we usually prefer budget friendly road trips. We have our go-to destinations of the Black Hills SD and southern California where we hunt for and lock-in great lodging deals ahead of time. We also travel yearly to places where we enjoy visiting and staying with extended family. All on a yearly travel budget of $3,500. If we over do something and go over one season we adjust down the next, make other budgeted adjustments, or accept any slight overrun for the year.  

Holidays-

We enjoy making the holidays merry just like anyone else. With grandkids there’s always something going on from Halloween to New Years. We have a $1,500 holiday budget that covers family outings, celebrations, and gifts. 

Dining Out-

We dine out on occasion but we aren’t hooked on going out to eat a lot. In fact, by the time we return from a vacation we get pretty tired of restaurant dining. We do dine out for special occasions and typically try to use a promotional discount or coupon of some kind. I happily admit to useing our advancing age to our advantage and get senior discounts when available. Dining out comes out of my misc budget which also covers other random household, automotive, unplanned but expected non-fixed monthly spending. 

Activities-

When you look you find all kinds of free activities and events. The only cost is getting there and what you spend once you are there. Food trucks and beer vendors are always around. We go with a $40 cash budget in mind for events and it comes out of my misc budget. It’s always easy to stick to. We typically go to events to enjoy the venue, not load up on expensive food or drink. We have a habit of going with a beverage in hand to start things off and have already eaten a meal. I do love a good draft beer and that is always a budget challenger while attending events. 

Coffee Shop-

Every frugal person goes on about ditching the lattes. I do enjoy a good cup of drip coffee or an Americano and frequent an independent coffee shop in my town. It also serves as my daily social outlet. I have gotten to know many people in my town there and have been able to greatly expand my social circle beyond what had only included work peers before retirement. I have a $40 a week petty cash, aka pocket money allowance in the budget that covers this and everything else that’s a small random purchase during the week. 

Movies and TV Entertainment-

We cut the cord years ago and not sending that bill in every month still puts a grin on my face. I installed an attic type antena and used the existing coax cables running through the house to hook up our TVs on every floor that had cable before. Between over the air and online streaming with a Roku or Chromecast dongle we get all the programming we want. For movies we checkout free DVDs from our local library or use a standard $13 a month Netflix.  

Hobbies-

We do have hobbies in retirement. My biggest is an automotive hobby. Although that can be expensive if buying cars, my oldie has been with me since 1993. The hobby cost comes from the events I attend. Like other events, I set a cash budget. Any out of town events are aligned with planned vacations. Car maintenance comes out of my monthly misc budget. I did have a 21 year old Corvette that I gave up this year for a fun but rationally more practical all-season any weather or road condition convertible Wrangler. The difference between the two in the purchase amount was outside our 2020 budget and will be listed as a one time charge off. I had just survived a serious health scare and was ready for a change. It was also about a 45 year bucket list item I wanted to scratch off and it only happened because we had the extra funds to do it. Our frugal retirement allows for the occasional splurge.

Cell Service-

I see people spending way too much for their cell plans. I still use an old $100 a year pay as you go flip phone plan that I never use up all my prepaid account balance. One that brings a laugh from people around me every time I take a call. My wife uses an iPhone on a $10 low cost cell and data plan. We can live frugally and still stay connected to the world as much as we want to. 

Day to Day Lifestyle Cost and Spending-

What we did was push against our frugality threshold. When we went too far we backed off. The idea was to cut costs that didn’t have real happiness values and do so without feeling deprived. As opportunities to improve our frugality came we took them. There are many frugal living decisions we can make. There are just as many frugal living tips to put into practice. We embrace purposeful spending. Seldom is anything bought on whim without thinking first about whether we really need it, getting it will add something positive to our lifestyle, or if we decide to get it, getting it for a better price. We also won’t just settle for cheap. A needed quality product that may cost a little more but will last and do what it is supposed to do is what we target. 

Our 2020 Retirement Budget Numbers

We do not live in a low cost area of the US and live in the house we raised our 3 kids in. The last report I found of the median household income where I live is $121,000 and it’s most likely higher than that today. As almost everywhere else, based on the cars I see in the driveways and the cost of some of the housing around here, most people are living paycheck to paycheck. Here’s a peek at our retirement lifestyle budget figures for 2020. It’s based on the previous year and adjusted when necessary like once we see actual property tax assessments, insurance increases, etc. This should give an idea of what our definition of a frugal retirement that’s sustainable, enjoyable, and that works for us: 

  • Utilities: Water/Sewer/Power/Natural Gas/DSL/Cell/Netflix – $3,500
  • Insurance: HomeOwners/Umbrella/Autos – $4,400
  • Home Property Tax – $2,800
  • Healthcare Insurance: Medical/Dental –  $15,990
  • Out of Pocket Healthcare/Predeductible) – $4,000 max
  • Petty/Pocket Cash – $1,960
  • Misc: Repairs/Maintenance/Dining/Purchases/Gas/etc. – $9,000
  • Grocery/Toiletries/Cleaning Supplies/etc.- $10,400
  • Travel – $3,500
  • Holidays/Christmas – $1,500
  • Federal/State Income Taxes – $3,500

Total yearly budget $60,550

Will we be on budget for 2020? 

We will come in under budget this year. We are not traveling during the pandemic nor having family celebrations as normal. Events have all been a no go. Some things at the grocery store cost more but other expenses have all but disappeared. Just because we have a budget doesn’t mean we have to push against it. Hoping 2021 is a little closer to normal.

Are you thinking that our retirement budget isn’t very frugal?

There are plenty of frugal living stories of those living an enjoyable life spending less than we do. I love reading about what other people do and get great ideas but I don’t compete in frugality games. Here’s why I feel confident about considering our retirement lifestyle as frugal.

  • Our retirement lifestyle budget is just under 50% of our town’s median household income. We get to live here and enjoy all that it offers at a discounted price.
  • That 2020 budget figure comes in at 42% of our actual, not inflation adjusted 2009 household joint tax return AGI. That AGI was eleven years ago when I retired. Sure beats that 80% pre-retirement salary recommendation some experts throw around. 
  • Our yearly budget is the equivalent of us both earning $15 an hour at a full time job. An amount recommended as a dignified minimum wage.
  • When looking at the budget breakdown, our living expenses are fairly low at nearly $40K if it weren’t for ridiculously high healthcare costs. Health insurance and its associated out of pocket represents a full third of the total budget. In 3 years we will see a big part of that cost decrease when we are Medicare eligible. That along with my eventual Social Security that will also reduce our IRA withdrawals, lowering our taxable income for less income taxes.

Frugality Is Personal, Make Sure You Can Enjoy Yourself

We have been more frugal in the past when we needed to be and we still make adjustments to stay in our frugal living sweet spot. Our frugality isn’t defined by anyone else’s definition of frugal living. It’s based on what makes sense to us while still meeting our financial sustainability goals. All of this became the model for our frugal retirement lifestyle. What’s not to enjoy about that? 

I won’t nor can tell anyone what they should cut to live a sustainable and enjoyable frugal lifestyle. That has to be figured out by each individual and their unique circumstances. Everyone’s frugality threshold is different. Living a life feeling deprived is not an enjoyable way to live if you can do something about it. 

I want to give a shout out and a thanks to Feedspot’s top 10 frugal retirement sites that rated Leisure Freak at number five for 2020. Check out their list if you want to find sites that can provide ideas for successfully living your own frugal retirement lifestyle. 

Three Retirement Expenses to Avoid at all Costs

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If you are reading this blog you are already considering retiring, and you have put into place or are putting into place your plan for being able to do so. This post will set forth three expenses that you should avoid in retirement if you are to be as comfortable and secure as you wish.

This might be considered advice along the lines of “tough love,” but if you are not going to hear it here, who else will tell you? Know that as you approach retirement you are going to be perceived as financially-secure, and you might be approached for financial help by family members. Of course, de minimis gifting is always appropriate – it is the large financial commitments we want to avoid.

Three Retirement Expenses to Avoid at all Costs

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Do Not Cosign Student Loans

If you have children or grandchildren hoping to attend college and needing to take out student loans, do not offer or agree to cosign those loans. Why? Because student loan debt is the only debt you can not get rid of, through bankruptcy or any other means, and if your child or grandchild later defaults on the loan, that debt will haunt you for the rest of your life.

Of course, the student has the best intentions when taking out loans to attend college, but the economy and job market are in flux right now and there is no guarantee that he or she will be employed and able to make student loan payments when they fall due. Your loved one may fail to make student loan payments as agreed through no fault of their own.

If this happens, and unfortunately it often does, the lender will surely pursue you as well as the student for payment. Penalties will accrue if payments are made late, and if you refuse to pay, the lender can garnish wages and social security payments and can levy on your bank accounts. The lender can even place a lien on the home you are working so hard to pay off!

Nothing can derail your plan for a financially-secure retirement more than a student loan in default. You must think of yourself first and if you don’t take care of yourself, who is going to? It  is difficult to say no to a loved one, but you must explain that you don’t have the resources to back up a promise to pay if the student fails to pay. Again, tough love. 

Affordable Ways to Help a Loved One with College Expenses

We are not saying you can’t help a child or grandchild attend school, just that you shouldn’t put your financial well-being at risk by co-signing student loans. There are alternative ways to help your loved ones attend college or post-secondary training if you wish, that involve less risk to you. 

What you might offer instead of co-signing for loans, if you can afford it, is some financial contribution to education expenses in an amount that matches the student’s earnings over the summer. Or, you might offer cash incentives for achieving a certain GPA. 

If you are planning to contribute to a child’s college expenses and you have some time to save, explore the possibility of opening a 529 college savings plan. A 529 plan is a state-sponsored tax-deferred account that allows you to save money for college, for yourself or someone else. The money may later be used to pay any and all qualified higher-education expenses, including room and board.

While a 529 plan does not offer any tax break for you, as contributions are made with post-tax funds and are not tax-deductible, it grows tax-free and will not be taxed to the student when withdrawn. If you start saving while a child or grandchild is very young, even small contributions will grow over time and provide a tidy sum when the child is ready to attend college.

Of course, you can and should help loved ones attend college if you can afford it, but you should help in a way that is prudent, responsible, and in keeping with your retirement plan.

Do Not Support Other Family Members Financially

Again, this is tough, especially as the pandemic has the economy in a downward spin and so many are out of work.

In emergent times, such as sudden illness or unexpected job loss, it is natural for parents and grandparents to want to help their loved ones. We are not suggesting that you withhold all help, rather, that you carefully consider how much assistance you can afford, and that you avoid providing so much assistance that you are actually supporting that person or family unit.

Providing financial support is a slippery slope. Unfortunately, family members come to rely on and expect that support if it is given regularly and in a significant amount. And needs seem to always increase, not decrease.

Tips for Helping Loved Ones in Times of Financial Crisis While Avoiding Risk to Your Financial Security

Of course, you can and should assist your loved ones when they fall on hard times, if you are able. Here are some tips to help you give only what you can reasonably afford, and to manage your loved ones’ expectations:

  • Do not allow family members to move in with you. It is very difficult to get them to move out if you do. Offer instead to help with the rent or mortgage if you can afford to.
  • If you fail to take this advice, a resident loved one should contribute to household expenses from whatever income or benefits they have, and should do chores around the house and perform errands for you. Be clear that this is a temporary visit, that way all parties involved will be able to enjoy it rather than resent it.
  • Be sure to tell loved ones that whatever you give them is all you can afford, on your fixed income. Be firm and consistent about this.
  • Rather than giving cash, buy them groceries, or pay their electric bill, or put gas in their car. This ensures whatever assistance you can afford to give is spent on necessities.

Avoid Taking Out Life Insurance You Don’t Need 

If you are nearing or have reached an age where you can retire comfortably, you may also be thinking about what legacy you can and will leave for your loved ones. That is admirable, but you must be careful not to fund your legacy goals to the detriment of your current and future financial security.

You probably had term life insurance when you were a young family, to provide income-replacement for your spouse and children should something happen to you. This was relatively inexpensive at the time, but as you got older, premiums necessarily increased because the insurer’s risk of loss increased. 

Having a life insurance policy when your children are grown and independent and you have enough saved for retirement is only necessary if your spouse requires income-replacement. Otherwise, a small inexpensive policy providing for funeral expenses is all you need. 

Your legacy will be whatever is left of your estate and retirement funds when you pass, and even more valuable, the lifetime of prudent financial modeling you provided to your family. 

This informative and well timed post for today’s environment was contributed to Leisure Freak by Veronica Baxter

V Baxter Leisure Freak Contributed Post About the Author

Veronica Baxter is a writer at assignyourwriter, blogger, and legal assistant living and working in the great city of Philadelphia. She frequently works with and writes for Boonswang Law, national life insurance beneficiary attorneys based in Philadelphia.

 

Budget-Friendly Resolutions To Better Yourself

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It seems that New Year’s resolutions tend to be centered around ways to make yourself healthier, a better person, or how to save yourself money in the upcoming year. The truth is: this isn’t something that just feels common; the most popular resolutions actually center around one of these themes of health, self-care, or budgeting.  

The best news is that you don’t have to overwhelm yourself with new tasks to complete all year round to try to make a better life for yourself. There are ways you can be healthy, practice self-care, and be eco-friendly all while saving yourself money. 

Budget-Friendly Resolutions To Better Yourself

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Making eco-friendly changes

This year, strive to make changes that will help you and the environment. Being retired, you have more time to focus on things that really matter, like making the planet a better place so it makes sense for your resolutions to not just be focused on yourself. I am sharing some eco-friendly changes to make to your lifestyle that can actually save you money too! 

Reusable water bottles – If you are still using single-use plastic water bottles, 2020 is your time to make a change. Reusable bottles are a great investment. They may be a pricier one-time payment, but they can prevent you from spending money on water bottles and wasting plastic every week for years to come. 

Contact lenses – You may think that something as small as your contact lenses wouldn’t matter. However, just like water bottles, you have to think about how the small amount of plastic you use daily can add up quickly. Switch your contact lenses to a brand that uses less plastic and is affordable! You can’t go wrong.

Clothing – There are even ways to be conscious of the environment with your clothing. Shop from sustainable brands that source their materials naturally and ethically, as well as brands that are mindful of their carbon footprint and employee treatment. To save yourself even more money, you can shop second-hand. Thrift stores are a good way to save money on clothes while giving a second life to clothing that others no longer wanted.

Budget-friendly health changes

Being retired means there is more time to do things you enjoy – and it’s a plus if any of those things include exercising and being active. Oftentimes, people waste money on gym memberships they don’t use or seek out classes and don’t end up enjoying them. Fortunately, there are alternatives to these typical go-tos! Make better use of your funds and keep yourself motivated by doing things you actually have fun doing. If you like tennis or golf, then you should do those things to get your daily exercise in if that’s your plan for the new year. 

Another option is to invest in items for a home gym so you don’t have to leave your home to get a good exercise into your day. Simply dumbbells, yoga mats, and resistance bands can offer a great workout. However, you can take your dedication to fitness a step further this year and invest in a product like a stationary bike. There’s the top of the line exercise option the Peloton bike which can give the feel of a workout class in your home. But there are also lower cost options like the Schwinn IC3 Indoor Cycling Bike and  L Now Indoor Cycling Bike that can be purchased at a reasonable price! Both have a media shelf and if you crave that interactive workout class feel and motivation then you can still get Peloton’s classes via their app.

Make sure you’re investing your money and your time in something you enjoy doing for any health changes you consider in 2020. There is no point in spending money on a gym membership, classes, or workout equipment if you aren’t having fun while doing it! 

Self-care practices for the new year

Self-care is another practice that is important to better ourselves and is often a focus of New Year’s resolutions. The eco-friendly and health resolution ideas we’ve discussed are actually both forms of self-care in themselves – it’s important to feel good about yourself and the life choices you are making.

Budgeting – Yes, budgeting in itself is a form of self-care. Being smart with your finances can give you peace of mind, help you spend your money more wisely, and encourage you to save money for things that are important. It’s especially wise to budget around the holidays, when we tend to spend a lot of money at once. 

Be outdoors – Something as simple as being outside for 30 minutes every day has a lot of positive benefits. Whether you choose to work out, go for a walk, or just bask in the sun, be sure to get outdoors every day for a free way to boost your health and mood! 

Journaling – Writing in a journal is something that can help your mental health by expressing gratitude and working through any feelings of stress, anxiety, or depression. It can also help increase memory capacity and comprehension. Writing is a simple, free practice that many people aren’t doing on a regular basis after retiring. 

 

Health, self-care, and living a green life luckily all go hand-in-hand. If you’re looking to make a New Year’s resolution for 2020, consider some of the budget-friendly options on this list to better yourself, the planet, and the people around you too! 

Keeping the Holidays Happy: Making and Sticking to a Money Plan this Christmas

Budgeting,

The holidays are supposed to be a time to relax and celebrate with family and friends. Images of decorating a tree, enjoying hot chocolate by the fireplace, and gathering around the table for turkey come to mind. 

Unfortunately, this time of year can be anything but relaxing for many people. In fact, it can be pretty stressful. Finding time to shop, navigating crowds, and dealing with the financial pressure of buying gifts for your nearest and dearest can put a drain on the holiday magic — not to mention your bank account. 

The truth is, even the most money-savvy folks need a financial plan for dealing with the season. Here are some ideas to help keep spending in check so things stay merry and bright. 

 

Keeping the Holidays Happy: Making and Sticking to a Money Plan this Christmas

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Build Christmas Into Your Monthly Budget

You know those people who earn modest incomes but always seem to have their finances in order? If you ask them their secret, I bet their reply will involve the word budget. 

Having and sticking to a plan for your money is the best way to ensure you address all your financial priorities. And these days, there is no shortage of budget templates available to help you tackle the task. It doesn’t matter if you use a pen and paper, learn how to make a budget in Excel, or opt for a budgeting app, as long as you make a plan for your money and track your spending relative to that plan. 

So what goes into a budget? It isn’t enough to include just your regular bills like mortgage or rent, utilities, and groceries. It isn’t even enough to add in your savings goals (although that’s a great start). To really master budgeting, you need to think ahead to the expenses you expect to incur and plan for them.

You can see where I’m going with this. If you know you typically spend $600 on Christmas gifts, you can start budgeting for it in January. I know that sounds like overkill, but think about it: $600 over 12 months is only $50 per month. What’s easier: putting aside $50 every month or coming up with $600 in December? 

Set a Gift-Giving Budget

If you’re building Christmas into your budget, that means you have a plan for how much you’ll spend. Sticking to that plan when the season rolls around can be a different matter. 

It’s important to set a realistic gift-giving budget and then stick to it. If you decide you can afford to spend $600 on Christmas, then that $600 has to cover all your gifts, no exceptions. That might mean opting for less expensive presents or paring down your list. Enter that amount into your budget template and hold firm.

Need ideas that don’t cost much? Homemade baked goods! You can whip up a few dozen cookies for about $10 and gift them to people. Homemade gifts are personal and usually inexpensive to make.

Put a Cap on Per-Person Spending

A good way to reinforce your gift budget is to set a maximum amount you’re comfortable spending on any one person. This can be in general or specific to your relationships. 

For example, you might say that $50 is your max for anyone. Or you might decide that you’re comfortable spending $50 on your immediate family, but prefer to keep gifts for extended family and friends at $25 or less. 

Try Secret Santa

A great idea that I see is secret Santa. You each draw a name and buy a gift for only that person. Then you plan a night when you all get together to exchange gifts and try to guess the identity of your secret Santa. 

It adds a fun, mysterious element to the gift exchange and saves you a ton of money because you buy only one gift. I’ve seen professional teams and even large extended families do this, too. It can really work in any group!

Pay Your Credit Cards in Full or Don’t Use Them at All

Credit cards are a great way to earn rewards on your regular purchases, but they can be dangerous for some. There are basically three rules to follow when using credit cards:

  • Only buy what you know you can afford
  • Always pay your bill in full by the statement due date to avoid interest charges
  • Ensure you use the card enough to justify the annual fee, if applicable

Credit card issuers love the holiday season because it’s when cardholders are most likely to violate the first two rules. If you don’t budget for Christmas, you’re likely to overspend, which is much easier to do with a credit card than with cash. And if you overspend, you may not be able to pay your bill in full by the due date, meaning you’ll incur interest charges. Credit card interest rates are notoriously high and can be difficult to recover from.

Even if you haven’t overspent and can pay your bill, you’re more likely to forget to make a payment during the busy holiday season. So if you’re using plastic to pay for Christmas gifts, make extra sure to pay your bill in full and on time. Set a calendar reminder so you don’t forget. Or better yet, automate the payment. And if you tend to overspend when using credit cards, it’s best to forego them altogether. 

Capitalize on Discount Codes, Cash Back, and Other Deals

Sales abound during the holidays, and whether you’re shopping online or in-store, there are deals to be had. 

Some people are avid couponers and save an incredible amount of money that way. I tip my hat to them, but I don’t feel like that’s something I have time to get into. However, when shopping online, I always check for cash back offers and discount codes before heading to the checkout. Browser extensions like Rakuten and Honey take the work out of doing this and help ensure you never miss a deal. 

A real life example? This week I got a check for $25 from Rakuten for cash back I earned from shopping through its online portal this quarter. That’ll cover a Christmas gift! 

Final Thoughts

The holidays are an expensive time of year, and it’s easy to let things get out of control if you’re not careful. It’s important to set limits for your spending so that a joyful occasion doesn’t become a stressful one. I hope these tips help you keep things in check. Happy Holidays!

This timely and informative article was contributed to Leisure Freak by Sandra Parsons

Sandra Parsons is a freelance writer for Club Thrifty, a website dedicated to helping people dream big, spend less, and travel more.