Author Archive: NCN

Avoid These Budgeting Mistakes

My family and I have been living on a budget for nearly 10 years.  Over that time, we’ve made our share of mistakes – and we’ve adopted some valuable habits.  When making your budget, consider the following –

Do not wait until the last minute to make your budget.  Our budget begins on the first of each month, so we sit down and write ours out a week or more before then.  This gives us a chance to discuss the upcoming month – and it also gives us plenty of time to tweak the budget before the new month begins.

Do not use an unmanageable number of budget categories.  It’s easy to get too complex – or too basic – when creating a budget.  Use enough categories to “tell your money what to do”, but not so many that you are overwhelmed.

Do not use an unusable system.  If you have a spouse who is comfortable using budgeting software, rock on.  If not, stick with pen-and-paper.  Use a system that is accessible for all involved.  Which leads to the following –

Do not use a budgeting system that restricts total-family buy-in.  If the system doesn’t work for everyone, it doesn’t work for anyone.  When it comes to financial planning – I love to nerd-out.  My awesome wife? Not so much.  We want to work together to manage our finances, so our budgeting system has to be something that she will use and enjoy.

Do not forget annual expenses.  It’s easy, when making that first budget, to focus on next-month’s expenses.  Remember – there are taxes, fees, and insurance payments due on a non-monthly basis.  These must be factored in when creating a budget.  We use a savings account, make monthly “payments” into that savings account, and use those funds to pay for annual expenses.

Do not skip the emergency fund.  Budgets are awesome – but they are not perfect.  Unexpected expenses occur – which is why we focus on maintaining an emergency fund.

Do not keep your kids out of the loop.  We have three kids, ranging in ages from elementary school to high school.  We routinely include them (especially our older two) in discussions about money, financial planning, long term goals, and where we are headed as a family.  They like being included – and are developing skills which will be beneficial for them in their adult lives.

Do not overestimate the amount of sacrifices you are willing to make.  This is crucial.  Sure, we all like to think of ourselves as frugal, but creating a super-tight budget, based on unrealistic expectations, is a recipe for failure.  Obviously, we want to curb spending, but let us be true to ourselves.

Do not give up.  The reality is, there will be months when we simply do not stick to our planned budgets.  Life gets in the way, stuff happens, and it’s easy to feel discouraged.  Don’t!  Instead, regroup, focus, and move forward.  Take the lessons learned, and incorporate those into a new, improved budget!

Living on a budget has been a blessing for our family.  I hope that you have enjoyed this article.  If so, please use the social media buttons below to share it.  Thank you.  Blessings.

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How To Save Money On Repairs

Here are a few tips and tricks for saving money on repairs –

Keep track of your manuals.  I have a binder wherein I keep the manuals for all of the tools and appliances that we buy.  Quick tip – If you’ve lost your manual, check online.  Search by manufacturer and model number.

Check to see if the item is under warranty.  Remember those little warranty cards that come with the stuff you buy?  They’re important!  Keep up with them – and register stuff.  If something breaks, and it is still under warranty, you may have it repaired, or replaced, for free!

See if you paid for the item with a credit card.  I know, I know.  I’m no fan of credit cards, but, that doesn’t take away from the fact that several credit card companies offer extended warranties on items purchased with their cards.

Take a look on youtube.  If you have a bit of a “DIY” spirit – search for the repair that you need to make on youtube.  I’ve learned how to replace the drive belt on my dryer and to repair our garbage disposal, simply by watching videos on youtube.  What an awesome resource.

Talk to friends and neighbors.  I was talking to my neighbor the other day, telling him about building a small desk for my son.  A few days later, he stopped by – and asked if I could help him with a small project, repairing a broken board on his front porch.  He saved a few bucks – and I got to repair the board and look like a hero in front of my boy!

tool wall repairs

Visit your local library.  This is old school – but very, very practical.  I love old woodworking books, and our local library has several of them.  I’ve learned how to frame up a shop, install an electrical outlet, and lay shingles, all from books available at most libraries.

Check out the bulletin board at a home center, lumber yard, or feed store.  I live in a rural part of the state – and there are dozens of carpenters who tack their business cards to bulletin boards in local stores.  Grab a few of these and make a few calls.  You might be surprised by the reasonable rates some will offer – especially if the job you need doing is a one-person gig.

Discuss the cost for parts and supplies before hiring a contractor or carpenter.  Often, these folks will be able to buy parts and supplies (think lumber, paint), cheaper than you can.  However, in some cases, if you are willing to do a little legwork, you might find better deals.  Discuss this with your carpenter and figure out what works best for you.

Buy new?  This can be a tough one – but there are times when purchasing a new item is actually cheaper than fixing an old one.  So, do a bit of research and make sure that a repair is worth the money.  Blessings.

Find out if the item has been recalled.  I almost forgot this one.  It’s a good idea, any time you have a product that isn’t performing like you think it should be, to check for a recall.  A simple internet search will reveal several sites where you can find recall information.

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How We Are Paying Off Our Mortgage

We have a 15-year fixed-rate home mortgage – and we are working hard to pay it off in less than 10 years.

We purchased our home in February of 2010.  The original mortgage term of our our loan was 180 months, with the loan due to be paid off in March of 2025.  So far, we have whittled away 7 months from that date.

Here’s what we do –

Each month we make our monthly mortgage payment.  We do so via an auto-draft from our online banking account.

Then, we make an extra, principal-only payment.  We write (type) the words “apply to principal” in the memo section of the check.  Our mortgage company knows to apply this payment towards our principal – and to not treat it as a prepayment for the next month.

(Once in a while, we will combine these payments into a single check – or withdrawal from online banking – but I prefer 2 separate transactions, so that I can more easily keep track of our extra payments.)

Throughout the month, should we make any extra money – or find that we do not spend any budgeted funds – we’ll take that money an send it to our mortgage company, as an additional principal-only payment.  Often, we’ll have months where we send 2 or even 3 principal-only payments.

ncnblog mortgage

I have seen all kinds of formulas for reducing a mortgage, including bi-monthly payments, or adding an extra payment at the end of the year.  These definitely work – but for us – our simple system works.  We make our payment – then we make a principal-only payment (usually just a few dollars) – then we work hard to make (or save) extra throughout the month – and we send that.

Our approach is hands-on and keeps us focused on this long-term goal.  (We are paying off our mortgage in addition to saving for retirement and kids’ college.)  Blessings.

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Getting Our House Ready For Fall

A quick Google check confirms it:  The first day of fall is September 22.

I had to look that up just to be sure, because the high today was 91 degrees, which is decidedly un-fall-ish.

In just a few weeks (hopefully!) the weather will turn and fall will be here.  In preparation, I’ve been working hard to get our house ready for fall – and the winter to follow.

Outside

Rain Gutters – At the end of summer and winter, I clean out our rain gutters.  With several large oak trees in our yard, it’s important to routinely remove fallen leaves from our rain gutters.

Vinyl Siding – Our house has vinyl siding and I pressure wash the siding (at least) twice a year.  I’ll do so this week, washing off the dust of from summer mowing, so that house will look nice for fall.

Tool Shed – The summer is a busy time in the yard – and that means that tools get used – and often misplaced.  I like to take the time, while the weather is still nice, to organize my tools.

Lawn Mower – I use my lawn mower year round – to mow the grass in spring and summer – and to mulch leaves in fall and winter.  So, at the end of each summer, I sharpen (or replace) the blades, change the spark plug, drain and refill the oil, and replace the air filter.  I’ll repeat this at winter’s end.

Pipes and Spigots – We rarely have to worry about long periods with freezing temperatures, but I’m still mindful of the need to insulate exposed pipes and outdoor water spigots.

Shrubbery – We have a few shrubs which require annual pruning, which I’ll take care of, as soon as temperature drop.

Inside -

HVAC – We have electric heating and air.  I recently replaced all HVAC filters throughout our house.  This is important, because a clogged filter reduces efficiency, which increases electricity costs.

Refrigerator Filter – Our refrigerator has a water filter which needs replacing every 6 months.  I replace at the end of each summer and winter.  These things can be quite expensive – so I buy the 2-pack and save a few dollars.

Carpets – We have a mixture of carpet and hardwood in our house.  At the end of each summer, I’ll clean the carpet in our den.  I’ll also spot-clean throughout the year.  We don’t have pets, so we’re dealing mainly with foot-traffic.

Detectors – There are several smoke and carbon monoxide detectors in our house – and I change their batteries each year, on the first day of school.  It’s an odd habit, but it’s my way of always remembering!

Laundry Room – I visually inspect the hoses that connect our washing machine to the water supply.  I also clean out the dryer vent and dryer vent hose.

Clothing – Our kids just keep on growing, which means they have clothing that no longer fits.  Now is a great time to sort through their closets and get rid of, via charitable donation or yard sale, clothes they do not need.

I love the fall, with milder temperatures and lots of football.  It feels good to get the above mentioned tasks taken care of – so that we can better enjoy the season to come.  Blessings.

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