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Author: Danielle YB Vason
She Makes Cents (SMC) delivers personal finance to empower a community of goal-setting women to use their "cents" to invest in their money and lifestyle goals.
From money diaries and personal stories by Atlanta-based personal finance blogger, Danielle YB Vason, to money weekly check-ins from members of the SMC Money Tribe, the SMC community aims to remove the taboo surrounding money conversations- one money convo at a time.
Budgeting 102- Spending Diet
I saw the movie Eat Pray Love not too long ago. In it, is a reference to an old Catholic joke that I have become very fond of. In a voice-over, Liz, played by Julia Roberts, recalls the following:
I remember an Old Catholic joke about a man who spent his whole life going to a church every day and prayed to the statue of a great saint begging, “please, please, please, let me win the lottery.” Finally the exasperated statue comes to life and looks down at the begging man and says “my son, please, please, please, buy a ticket”.
Sometimes I find myself in situations where I am the one begging and sometimes I am the statue. Today, I come to you as the statue. I once heard it said that we buy what we want and beg for what we need. Is this you? Have you put you financial security at risk with things you wanted and now you are begging for a financial miracle? Be a part of your own miracle…buy a ticket. I am taking the points mentioned in Budgeting 101 step by step. Like dieting and working out, budgeting takes time, restraint, and accountability. I invite you to join me on my Spending Diet.
Write Down Everything You Spend Your Money On. Since April 1, 2011, I have been writing down EVERYTHING I have spent money on. I included this advice in Budgeting 101 with the suggestion to do this for two weeks. I would now like to retract that advice and tell you to extend it for an entire month. Every financial and money management writer will tell you to do this. Honestly, it wasn’t until the beginning of April that I actually did this myself. I thought between my memory and online banking statements, that I had an accurate grasp on how, when, where, and with whom I spent my money. SMC readers, I couldn’t have been more wrong. My spending chart has revealed that I am an emotional spender who blows a great deal of my food budget on eating out with my sister because I believe we don’t see, talk, or interact as frequently as we once did. My spending chart personified aspects by my sometimes-narcissistic personality. I made a donation to my alma mater that I really couldn’t afford, because I didn’t want to be the 5,999 person who comes shy of the 6,000 donor goal for the Founder’s Day scholarship fundraiser. I also learned that while there are aspects of my personality where I am admittedly spoiled, I also spend and give the a great deal of my money to others to make them happy. Hi, my name is Danielle and I am an emotional spender. Buy the ticket. I am putting myself in financial rehab to get back on track like my Rah Tiffany did years ago. I have locked my credit card away and most importantly, I am learning to say no to others. Catey Hill, the author of Shoo Jimmy Choo created a Day to Day Spending Chart that I particularly like. I used Hill’s chart as an example and made one that fits my own financial goals and spending style. Buy what you need and you will not have anything left to beg for. Buy a ticket and let’s start our financial journey together.
If you are interested in my own Spending Chart, please email me at shemakescent@gmail.com
subject: Spending Chart
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A Government Shutdown Could Mean No Tax Refund for You
Within a matter of days, we will know the fate of the looming government shutdown. At this point, it is not an issue of black or white, Democrat or Republican, cow or pig (Grey’s Anatomy reference); it simply comes down to money and everyone will be affected in some way. If an agreement is not reached by Friday at midnight, the government will halt all “non essential” services which could last a few hours or weeks. People will be laid off. Medical clinical trials will not admit new patients. Federal home loan guarantees will be withheld. The Cherry Blossom Festival will be cancelled. Passport applications will go unprocessed. If that isn’t enough, federal refund and tax returns by paper filers will not be processed. If you haven’t eFiled before, this is the year to do it! And guess what, your returns are still due by April 18, 2011 (April 15th is a holiday). Remember, nothing is definite, but I believe it is always better to be over prepared than under prepared.
Some Services That Will Continue
- Postal Services
- Police
- Fire Fighters
- Armed Forces
- Utilities
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The Benefits of Teaching Children About Money
“I now realize that the greatest power in the world is the power of knowledge” (insert lol here if you already know where I’m going with this). The quote, was something that every student from my elementary school and I had to say at the start of every day. Nevertheless, the quote holds true– there is much power in knowledge and the sooner one understands a concept the better. Yesterday, in The First Piggy Bank, I posed the question: how do you introduce the concept of saving to children? To take that question a step further, when is the best time to introduce the concept of saving to children? The earlier the better. The benefits of teaching your children about money early on are both immediate and long-term. It helps in the development of smart saving habits earlier in life and also teaches discipline and self control. Understanding that just because you want something right now doesn’t mean that you can afford it, will save children and parents in the end. I’m glad I shared the tidbit of my first one hundred pennies because it allowed me to dig deeper into my memory bank of children and saving money. One memory definitely comes to mind. I was in high school and my best friend at the time had a little sister in elementary school. Instead of spending her money on snacks and little kid things, she decided one day that she was going to save her money for a limo. I thought it was extremely funny at the time, but admittedly, I didn’t realize how financially mature she was. The little sister, maybe around 5 years old at the time, decided on a goal and chose to cut her spending to save so she could one day afford her dream car, even if it was a limo. Some adults still haven’t mastered this concept in their endeavor to keep up with the Joneses, but that’s for another post.
While tweeting, I came across a link that directed me back to a site that is becoming a quick favorite of mine and a financial must: www.mint.com. Mint and the Scholastic have teamed up to teach kids the basics of money management. Mint education has figured out a way to make learning about personal finance fun with how to articles to interactive games that guides kids to adults through the ends and outs of money management. Personally, I can’t wait to read More Education, More Problems? The Myth of Grad School.. Teaching kids about saving early will help them to respect your hard-earned money earlier in life. Just remember, adults, it is never too late to learn about personal finance and money management. See The 5 Golden Rings to Your Child’s Financial Success to start the conversation with your child/teen or a child/teen that you care for.
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The 5 Golden Rules to Your Child’s Financial Success
- Children learn what they see. How can you teach children about the horrors of impulse spending when you are guilty of it yourself? Clean up your act, first. In school, kids are taught the basics: reading, writing, mathematics, and science, rarely are they taught money management. Therefore, as an influential presence in a child’s life, you have the opportunity to shape their thoughts and views regarding personal finance.
- Make it fun! If it starts to feel like a school lesson, then you will start to sound like the teacher from Charlie Brown. Several online resources available can make learning more enjoyable. For example, the FREE online video game I played yesterday on Mint’s Education page is both fun and illustrates how smart money decisions equals #winning
- Break it down so it is understandable. When I was younger, I couldn’t understand why my mom told me we couldn’t afford a monkey (a pet I was totally obsessed with having), when I saw her simply put her ATM card in the machine and magically receive money back for the things she wanted. Explaining where money comes from is a good place to start in the conversation about money.
- Stop reinforcing bad behaviors. Merchants put all the goodies closest to the register for a reason. Not only are all of the goodies close to checkout, they are often strategically placed at a child’s eye level. This sets up the stage for several scenarios that counter-act the concept of smart money management. I worked in retail while in college and I saw kids and parents alike get suckered into buying items they had no intention of buying. I also witnessed, more often than not, the adults who bribed children into good behavior with the promise of a purchase. One way to stop reinforcing bad behavior is to explain that we are going into this store for “xyz” and if a tantrum for an impulse buy comes up, explain that if you want the item, you must save “blank” amount of money…also known as establishing financial goals #5.
- Make Financial Goals Together. Want a new bike? Video game? Nail Polish Set? Bracelet? Start saving. Adults if you want a new TV, that cute handbag from the other day, or that iPad 2….start saving. If you save and enjoy it, then they will too. In addition, there is much gratification to be found in accomplishing a goal.
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The First Piggy Bank
Last summer will forever be burned into my memory as the summer of 27 Dresses….well maybe more like 6, but that is still doing the most. That’s right, I was in SIX weddings last summer and TWO the summer before that. And guess what? They are now all having babies and their due dates are within weeks of each other. Saturday, I attended the first of four baby shower’s for the spring/summer season for a princess that is scheduled to arrive in June. Shopping for the princess to be, I knew I wanted to get her something special because of the relationship I have with the mom. I also wanted to get the little princess something that she can use when she gets older and remember as something that her Auntie Danielle (yep, I assigned myself as an aunt) gave her before she was a born. So I got her this and I put her name on it:
A piggy bank from Auntie “She Makes Cents” seems like a perfect fit. Unfortunately, it broke before the mom and dad opened the gift (that kind of hurt my heart). The gift also got me to thinking about when one should start saving. When I was little, I used to pick up pennies from the ground and put them in a red rider wagon. I would be so excited to find pennies and I thought I was rich when I got my first hundred. I poured them on the floor of my room and counted them proudly. That is my first memory of me saving all by myself.
When did you start saving for yourself? How do you introduce saving to children?
Let me know your saving stories.
One Way to Rid Yourself of a Car Note
A year after I graduated from college, my dad presented me with an Emerald green BMW that I named EMMY (yes, I named my car and it’s a girl). She was cute, small, and just what I needed to get me around town. She was also purchased off Craigslist from a guy who wanted to punish his son for slacking off in school. My father, who had been diligently checking the internet for BMWs, came across the ad for the sale of the car. Instead of jumping on the deal immediately, my father decided to wait it out and do as much research on the car, the person selling it, and vehicle purchases from Craigslist before he would make a financial transaction with a complete stranger. We met the man at a Walmart and my dad talked to the seller as I drove around in my version of a test drive. By the time I returned, I was in love with a girl named Emmy.
How I Bought A Car From Craigslist
While I was test driving, my dad and the seller talked and the seller dropped the price of the car an additional $200. Apparently, while I was driving around my dad and the seller talked about something they had in common—their kids. My dad told the seller of how I had graduated not too long ago and how he wanted to buy me a car. The seller confessed to my dad, a perfect stranger, of how he was disappointed in his son’s attitude towards academics and he was selling his car to teach him a lesson. While I felt bad for the son, I happily took the keys and drove off in my BMW. I mean, seriously, that dad was going to sell the car anyway so as much as I felt bad for the son who would come home to find his car and a cd that he left in the cd player gone, I wasn’t going to miss out on my opportunity. I loved that car, may she rest in peace.
R.I.P Emmy
Purchased off Craigslist for $3300
After I loss Emmy to a sudden battle with the concrete barrier on the highway, I had a window of about two weeks to find a car. You see, to get the best deal on insurance rates I have bundled multiple accounts that require you to maintain all accounts with the company. I certainly was not going to pay for car insurance when there was no longer a car to be insured, but I also did not want my home insurance, for example, to increase because of this. So back to Craigslist we went. My dad was looking for another BMW, which I wouldn’t have minded, but I felt like he kept showing me pictures of cars that looked exactly like Emmy. Then I found it, my new ride. I found a car, similar to this for less than $5000. Yep, I’m driving a Mercedes with no car note for less than $5000. Now let me show you how you can do the same SAFELY, with my 12 Commandments to Buying a Car on Craigslist.
Purchased off Craigslist for under $5000
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My 12 Commandments for Purchasing Cars from Craigslist
- Do your research. There are only two ways in which you can purchase a car from Craigslist– dealer or owner. Anything else is a scam!
- If a deal seems too good to be true, it probably is.
- Know the fair market value of the item you are trying to purchase. Just because it’s on Craigslist doesn’t mean that you won’t find anything comparable for less somewhere else.
- Stay away from money wires, transfers, or shipping of vehicles. Scam! Scam! Scam!
- Once you decide to meet, meet in a public place. I viewed both of my cars from Craigslist at a Walmart and/or Target.
- No title no deal. If someone cannot provide a clean title, you have no way of knowing if this person is the legal owner of the car.
- Do not bring money with you when meeting a seller. In my opinion, this is like inviting someone to rob you. Hello, my name is (insert your name here) and I have thousands of dollars in my pocket. Do you want to rob me? Creepy, huh?
- Trust your gut. Not everyone out there is trying to scam, con, or rob you. I facilitated this last sell on my own and despite advice from my dad to walk away, I pursued my car and trusted the seller based off of a gut feeling. She turned out to be an honest and nice person but she broke a few of my Craigslist shopping rules. She mentioned a transfer in an email correspondence and the title was not readily available in the negotiation phases. In this instance, I acted based off feeling not good sense and it worked out.
- Talk to people who own the same make, model, and year as the vehicle you are trying to purchase. While I love my car for aesthetic reasons, this particular make, model, and year is known to have issues with battery drainage, which has been an ongoing issue with this car. It’s not the fault of the seller or me for buying it. It is what it is.
- Owners over Dealers. If you are searching Craigslist to find a deal, remember that dealers often don’t include taxes and dealer fees when advertising cars. The price on the sticker is not the actual price of the car and depending on the price and your budget you could end up with a car note. Owners, in my experience, have been known to budge on their price and you drive away without the financial worry of a new car note and hidden dealer fees.
- Take a mechanic or someone who knows cars with you/Don’t go alone. Look at everything and take pictures of the car just in case something happens between the time you test drive it and the time you actual purchase it, you can have proof of the condition of the car. Check the condition of the tires, look under the hood of the car. Turn the car on and off. Accelerate and hit the brakes. Turn the radio on and off. Open the sunroof. Make sure the power seats, power mirrors, and power windows work. Ask for ALL service records and actually review them. Order a Carfax to find out detailed vehicle history. Walk around the car to inspect the exterior. Check for chipped paint and potential rust damage. Turn on all lights. Check seat belts. Everything.
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Deal Locally With Folks You Can Meet In Person. follow this one rule and avoid 99% of scam attempts on Craigslist.
Budgeting 101- How to Make a Budget
Today I will be visiting my alma mater, Spelman College, to sit in on a class taught by the smartest woman I have ever met, Dr. Michelle S. Hite (seriously, she is probably one of the top ten people who have significantly impacted my life). Just thinking about Spelman puts me back in an academic frame of mind, so for today class, I will be teaching Budgeting 101. In my opinion, budgeting is like using common sense, everyone should do it but not everyone does. The importance of making and sticking to a budget is the freedom of knowing exactly how you spend, what money can be spent elsewhere, and where you overspend. So grab a pen and paper and let’s get started:
- LIST YOUR SOURCES OF INCOME
- CREATE A LIST OF YOUR MONTHLY EXPENSES
- Fixed (Mortgage/Rent, Car Payments, Insurance, Emergency Fund)
- Variable (Utilities, Groceries, Gas, Food, Entertainment)
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REARRANGE YOUR LIST IN ORDER OF PRIORITIES
This is the time for you to really think about what’s important. Shelter, Food, Utilities, and Gas are at the top of my list. Although I hate to do it, I can live without costly entertainment.
- ASSIGN A BUDGET TO EACH EXPENSE
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WRITE DOWN EVERYTHING YOU SPEND YOUR MONEY ON (for 2 weeks)
Do not leave anything out in this step. If you spend $1.00 at the vending machine, $3.00 for Girl Scout cookies, and $7.00 for parking downtown when meeting friends for drinks, you already splurged $11.00 on random spending that you probably don’t even consider when mentally reviewing your spending for the day. Writing EVERYTHING out will help you see exactly what, where, and how you spend your dineros.
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CUT OUT IMPULSE SPENDING
My friend and Rah Tiffany (hey girl) put herself in a mental shopping rehab back when we were in college. At first, my friends and I thought she was crazy, but in fact she was making the best financial decision as a then single black female addicted to retail (thanks Kanye). She went almost 40 days without random impulse shopping. Following suit, I did the same. I reviewed my spending habits from the previous step that revealed my mindless exhaustion of funds at the mall. I would get up, go to the mall, see something I thought I couldn’t live without, buy it, then after working so hard at shopping I would go for lunch, go back to shopping and finally come home. Now looking back, I have to ask myself, did I really need those shoes, that purse, that book, that phone case, or that expensive lunch….NOPE, I did not. Then I thought to myself, wow, I could have taken that money and put it in my bucket list fund. Trust…skydiving will be more memorable than that cute shirt I purchased sometime last season.
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PAY FOR EVERYTHING IN CASH
This tip makes its way into almost every post I write. This is a must for financial empowerment!!!
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REVIEW YOUR BUDGET MONTHLY
Things change. Financial situations change. Keeping your list up to date is the only way to ensure that your budget is working for you.
Good Luck and Enjoy!
CLICK HERE FOR YOUR BUDGET WORKSHEET
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How to Spend Less on Gas
Gasoline and oil prices are at their highest levels in the past two years; which is causing people to freak out and/or speculate just how bad this situation is about to get. $4.00 per gallon for regular unleaded is what we should expect as the norm in the coming days. I’ve even heard that we will see $5.00 per gallon in 2011. I don’t know about you all but these gas prices are killing me, especially since my car requires premium fuel. So what can we do? For one, I’m seriously considering riding my bike from the 5th grade with streamers, glitter, and basket- it’s economical and will definitely help me in my endeavor to achieve my awesome bikini body. But before I get to that point, I will remind you of some basic tips & tricks that you may have forgotten:
1. Speeding and braking wastes gas, so slow down. According to Fuel Economy, aggressive driving can “lower gas mileage by 33 percent at highway speeds and by 5 percent around town”. Driving sensibly can save you between $.17-$1.12 per gallon.
2. Clean out your car. Simply said, excess weight = wasted gas. For every 100 pounds you remove from your car, you get 2% more gas mileage.
4. Car Pool/ Telecommute (if you have that option)
5. Keep Tires Inflated Properly
6. Use Cruise Control on the Highway
7. Use A/C on the Highway (rolling your windows down causes air drag which forces the car to work a little harder and decreased fuel economy)
8. Use your GPS!! It helps you not waste gas from getting lost and often has a “shortest route” option in your device settings.
To FIND THE CHEAPEST GAS NEAR YOU
Gas Buddy • Gas Price Watch • Fuel Economy
TO FIND THE CHEAPEST GAS IN A RAH CITY
Atlanta • Miami • Chicago • DC • Nashville
OTHER HELPFUL LINKS
City and State Averages• Prices by Counties
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