It’s a pretty sweet day when a nice tidy sum of cash falls into your wallet. Perhaps you’ve earned a bonus, received an inheritance, won the lottery, or found another source of financial fortune. Whee! Free money! Now what?

How ever you’ve landed your loot, it’s always a wise idea to have a plan in place before blowing through your new-found dough. There’s nothing worse then landing a windfall, spending it on crap, and waking up in the morning filled with regret and still in debt. And it’s not hard to do. The Consumerist reports that “1 in 3 lottery winners are in serious financial trouble or even bankrupt within 5 years” of turning in their winning ticket.

If lottery winners can blow though billions every year and have nothing to show for it, then even our humble bonuses and tax refund windfalls are at risk. Sorry, I don’t mean to give you a case of the sads since a financial windfall is supposed to be fun. I’m mean like that.

So, before flushing your hard-earned bonus down the la toilette (that’s French for crapper), how about getting smart about the elusive cash windfall by making a plan, man.

The Windfall Planner Worksheet

Not everyone wins the cash prize or earns a bonus every year. But depending on the luck of the draw, you may just find a use for this worksheet in your budget this year.

Download: Windfall Planner Worksheet

Here’s how to use it:

• Download the Windfall Planner Worksheet.
• Check if the promised windfall has been paid to you and is in your bank account before making any purchases or payments.
• Refer to your Net Worth Spreadsheet. How much to you own? How much do you owe? Where’s your debt?
• Review your money goals using the Financial Goals Worksheet.
• Double check your Needs and Wants List.
• Set aside a portion to pay your taxes. Yes, taxes.
• Now ask yourself: Can I afford to blow this dough?

5 Ways to Make the Most of a Windfall

Before looking at your windfall as free money and spending it, consider putting your extra cash to good use. Here are five ways to make the most of your windfall — big or small.

1. Pay off those credit cards: Even small amounts of windfall cash can add up to big savings when credit card interest is eating your wallet alive. If you’re carrying a balance, consider paying off your plastic to end the high interest misery. Try the Credit Card Calculator to see how many years it will take to pay off your plastic. Try these 5 Credit Card Tactics to help negotiate a better rate, among other helpful tips.
2. Make an extra mortgage payment: If your mortgage offers prepayment privileges, then add your windfall to the mountain of mortgage debt to live debt-free sooner. Mortgage prepayments are lump sum payments you make outside of your normal mortgage schedule, where 100% of the payment goes against the principal. Prepayment privileges are your best financial friend because they help you pay off your mortgage sooner and save significantly on interest.
3. Contribute to your retirement: If your employer matches your retirement plan contributions then you’re really winning the windfall game since your getting an instant return on your lucky dough. Jackpot! Those without generous employers should still consider an extra contribution since adding more money sooner gives your golden cash additional time to compound — and perhaps you’ll retire sooner! Americans can read up on their 401K Plans while Canadians enjoy the Benefits of RRSPs.
4. Save or invest the cash: Why not stash your windfall cash away for a rainy day and watch your savings grow? Conservative investors could consider CDs, GICs, or even high interest savings accounts to benefit from the magic of compound interest. Try the Millionaire Savings Calculator to see how little it takes to save a lot with compound interest doing the work for you. Those who don’t mind a little bit of stock market risk could invest in index funds or exchange traded funds and win from low investment fees and market growth.
5. Spend It! Oh what the heck. If you’ve used some of your windfall to pay down debt, contribute to your retirement, make a mortgage payment (or two), and saved a little — then why not go out and enjoy life. Kudos!

Squawkback: Ever win the lottery? How do you spend your money windfalls?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

Now that we’ve planned ahead for the holidays with the Gift Giving Worksheet, I want to look beyond presents by giving you a way to track all your holiday expenses in one place.

Sure, the Budget Spreadsheet has a space for the holidays, but I think a specific spreadsheet geared towards tracking holiday expenses can better help you deal with the varied costs of Christmas, Hanukkah, or your particular festival of fancy.

And yes, I am fully aware it is not yet July. But hey, go through some of your holiday gear this summer, unload your unused decorations at a summer garage sale, and make a list of the stuff you own. Knowing what you already have on hand can better help you plan your holiday budget since you won’t be spending good money buying duplicates of the forgotten stuff you have buried away in the basement. Yes, I’m talking to you. Smile.

In my own experience I’ve found that focusing on the varied spending activities during the holidays, rather than just gift giving, can show how the seemingly little costs add up. Smaller spends on things like wrapping paper, decorations, baking supplies, beverages, flowers, and even the ballet (The Nutcracker, anyone?) may seem insignificant on their own, but once added up can total hundreds or even thousands of dollars a year for one single holiday. Fa la la la la, la la la broke.

By tracking your costs during the holiday season, you’ll be able to get a grip on where your money is going since you’ll better know where you’ve spent the bucks, and when you’ve hit the end of your budget.

The Holiday Expense Tracking Spreadsheet

Like all the other worksheets and spreadsheets in this series, I think this one is pretty straight-forward to download and use. And yes, it’s free.

Download: Holiday Expense Tracking Spreadsheet

Use the Holiday Expense Tracking Spreadsheet to:

• Estimate all your holiday expenses.
• Enter actual costs and make notes on additional spends.
• Locate sources of available and budgeted money.
• Plan ahead for a shortfall and find ways to bridge the budget gap.
• Focus on all holiday spending categories so you don’t go into debt for the big event.

After putting together your plan for gifts using the Gift Giving Worksheet, enter that anticipated amount into the Holiday Expense Tracking Spreadsheet. When you’re done tallying your expenses after the holidays, be sure to add these costs to the big Budget Spreadsheet.

It may seem like a bit of work, but looking at the little holiday spends, tallying the total costs, and bringing that number into the bigger budget picture is a surefire way to keep costs down and spirits high throughout the year.

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

It’s June 21st and I already know what Carl is getting for Christmas. Actually, I know what I’ve budgeted for Carl’s Christmas gift in December, his birthday gift in March, a small Valentine’s gift in February, and a just because gifty for our anniversary in September. I also have a gift giving budget for my family and friends throughout the year.

Am I insane? OK, kinda. But I’ve found that a touch of insanity mixed with a dash of planning can help ward off expensive spends due to last minute gift giving-itis. Maybe you’ve been afflicted by this wallet-draining disease? It’s not particularly rare or unheard of. In fact, the biggest human outbreak tends to happen in late December, and smaller infections run rampant just before Mother’s Day, Valentine’s, and various other calendar days where birthdays tend to fall.

If you’ve been afflicted by last minute gift giving-itis — and most of us have — then you already know the sweat-inducing and heart-racing symptoms. Here’s a sample list just for giggles:

• Running crazily through the mall on the eve of December 24th willing to spend anything to find something for that someone on your gift giving list.
• Reaching for your maxed out credit card hoping that the gift purchase goes through.
• Freaking out ’cause you forgot to send flowers, buy dinner, or celebrate that special day.
• Dealing with a case of the financial sads January 1st because you have little idea how to cover the charges on your December credit card bill.
• Feeling financially strapped since birthdays, Mother’s Day, weddings, and anniversaries always happen when your wallet is empty.
• Stressing out around special occasions because you have no idea what gifts to buy.

Indeed, the symptoms of last minute gift giving-itis are dire to your dollars and deadly to a frugal lifestyle. But no worries, I have the cure.

The Gift Giving Worksheet

Using the Gift Giving Worksheet is simple. As you think of gift ideas, just add them to the list with your anticipated budget, and add the total to your Free Budget Spreadsheet.

Download: Gift Giving Worksheet

Planning ahead for birthdays and holidays also helps you find gifts during off-season sales, make homemade gifts to save money, and plan ahead for everyone on your list. By trying this simple worksheet, you may just find that budgeting today for tomorrow’s gifts not only saves you money, but also saves you a lot of time.

My timing for writing about Christmas in June is spot on. Trent over at The Simple Dollar just posted Five Big Ways You Need to Think About Christmas … Now! So if you think that planning for Christmas in June is batty, then jump on over to Trent’s post and learn how to Kill off unwanted gift exchanges and Get the important people on your radar sooner.

If you’re stuck for gift giving ideas, then try a few of these listed suggestions.

Gift giving ideas for your budget:

• Books about Money, Honey!
• 8 Homemade Gifts in a Jar
• 11 Ways to Wrap Gifts without Wrapping Paper
• 12 Smart Ways to Save Big on Christmas Shopping
• Frugal Last Minute Gift Ideas
• 6 Father’s Day Gift Ideas
• 6 Printable Holiday Gift Tags and Thank You Notes

Squawkback: Are you a holiday list maker? Do you buy gifts months in advance?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

“Were there any checks in the mail for me today, honey?” That’s the question I ask Carl every day when he gets home. Sure, I’d love to be the gal who gushes words of luuurve when her fine fellow returns from his steady-paying, regular check-depositing job. But I’m not. At that moment I’m far more interested in knowing if any of my invoiced customers have paid their bills. That’s the life of a variable income earner. Sorry honey.

If you run your own home business, live on sales commissions, do freelance work, are self-employment, or work a moonlighting side-gig to make ends meet, then you know how planning your finances can be a big challenge when your income is neither regular nor predictable. And it’s not difficult to get into a situation where you’re living on money you haven’t yet made. Yes, I’m squawking about those pesky plastic cards and credit card debt.

But you don’t need to carry a crystal ball to know how to cope until your next check arrives. All it takes is a bit of planning, a dash of discipline, and a handy tracking tool to make life run a little more smoothly. I’ve found that a simple tracking tool can help take the mystery out of client accounting schedules and can reveal a steady payment pattern.

Download: Extra Income Spreadsheet

How to use the Extra Income Spreadsheet

The Extra Income Spreadsheet isn’t just for those earning a variable income. If you earn a little extra cash through bonuses, royalties, investments (dividend stocks, compound interest), consulting/freelancing, tips/gratuities, or seasonal work then you can also use this tool to account for those irregular dollars along with a regular paycheck. Here’s the idea behind tracking your variable and extra income:

• Plan and budget for the best way to use the payout when the check arrives in the mail.
• Avoid treating irregular lump sums of cash as found money or as a windfall. Blowing those drips of dollars over time adds up to a big financial mistake.
• Find the payout patterns to your irregular income.
• Prepare yourself for lean times when there’s no income for months. It’s a bummer, I know.
• Plan and stay prepared for upcoming financial obligations by saving the right amount of money.
• Learn to set aside the right amount to pay income tax, and stop being surprised by taxes owed at the end of the year. It’s a bummer, I know.

Here’s how to do it:

Step 1: Download!

Click to download your copy of the Extra Income Spreadsheet. Yes, like all downloads on Squawkfox this one is free.

Step 2: Track your income!

Use this spreadsheet to track your variable income or extra income helps in two ways. First, it serves as a planning tool for projecting your monthly or yearly income as best as possible. Second, once the check arrives you can tally the income and record it for next year to better project next year’s total income. Here are some tips for getting the job done:

• Customize the spreadsheet rows if the categories don’t match your income type. Just don’t mix up the mathy math behind the columns and cells.
• Enter your income amount in the right category and under the correct month. Let the spreadsheet add your monthly and yearly income. Watch for patterns.
• Account for your taxes in advance. Using the totals from the spreadsheet, calculate how much you anticipate to pay in taxes for your country, state, or province. Set that money aside in a high interest savings account. No more taxing surprises.

Step 3: Get Budgeting!

Now that you have a handle on your income, it’s time to apply your moneyed knowledge to your budget. Grab a copy of the Free Budget Spreadsheet and make a plan to cover your fixed monthly expenses and get on track with those variable costs too. The Budget Spreadsheet can help you determine what irregular expenses exist and which regular ones must be paid pronto. If you haven’t completed this step yet, then go through this How to Make a Budget series and calculate your net worth, figure your financial goals, and make a needs and wants list. Once this is done, you’ve got budgetary lift-off!

If you have extra earned income this month then try these tips to get ahead in the budget game.

1. Pay off credit card debt: Oh that pesky plastic can really cost you. So let’s tackle it by biting into the principal and paying more than the minimum balance. Try the Credit Card Calculator to see how many hundreds, or thousands of dollars you’ll save by paying more than the bare minimum. This tool will also calculate the total interest paid and determine how many years it will take to pay off your balance based on your minimum monthly payment. The results are terribly shocking.
2. Add an extra mortgage payment: Want to be mortgage free sooner? Then take that extra income and make an additional mortgage payment. Try this Mortgage Calculator to see the big savings even a small additional payment can make. If you have a mortgage with good prepayment privileges — lump-sum payments you make outside of your normal mortgage payment schedule where 100% of the payment goes against the principal — then you will pay off your mortgage sooner and save significantly on interest. For example, on a $250,000 mortgage at 6% over 25 years, one prepayment of $1,000 each year can save you around $26,700 in interest and pay off your mortgage two and a half years sooner. Read
   6 Surefire Ways To Avoid a Mortgage Meltdown for more eye popping ideas.
3. Put the rest into savings: Topping up your savings account, adding to your emergency fund, and contributing to your retirement plan is how to make your variable income last and grow over the long term. Canadians should looking into topping of their RRSP and Tax-free Savings Account, while Americans should consider their Roth IRA. Compound interest is a powerful force, and over time that power could make you a millionaire. Check out the Millionaire Savings Calculator to get inspired about saving money.

Over time you may just find that the key to living well on a variable income is to spend sparingly in times of plenty and save as much as possible for future dry spells. There may be months when very little money comes in and you must live solely on savings. Although living this way can be unsettling, always remember to congratulate yourself for having the foresight and discipline to put sufficient funds aside.

Squawkback: Do you share my struggle with living on a variable income? How do you make it work?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

There are as many ways to make a budget as there are people. The budgeting basics are the same, but many of us like to manage our money with a known entity. Enter the big world of budgeting software.

The big player in the financial software space is Quicken or Quicken Canada, and to a lesser extent there is Moneydance (read my Moneydance Review here). While these packages offer possible solutions for those looking to count cash, many of the features offered — like synchronized investment data and portfolio analysis tools — can be overkill for the newbie budget builder. If you don’t need all that functionality, then why pay for it? Enter the world of free budget software tools.

Free budgeting tools can be a hit or miss adventure, depending on how you budget, your operating system (Mac OS, Windows, UNIX), and your currency. Many of the free budgeting options are specific to Americans, leaving the rest of the world wishing for a solution, eh! To help, I’ll round-up some of the best free budgeting tools with international support. The budgeting software listed here can be used by everyone. Group hug.

Wesabe

Wesabe is a free web-based tool that comes with a pleasant surprise — full support for all international currency formats and most international banks with deposit or credit accounts. I tested this feature by linking my chequing account in Wesabe and had no difficulty bringing in the data. The key is your financial institution must provide an export or download accounts option in OFX, QFX, QIF, or OFC format. Wesabe offers budgeters many robust tools for keeping on track. As a bonus, you get access to a huge community looking to master their money too. For Canadians and other international users, this is my top pick.

UPDATE: As of July 31st, 2010 Wesabe has shut down, discontinuing their Accounts features and all of their related personal finance tools.

BudgetPulse

Budgetpulse is a another free web-based tool that aims to help you manage your budget. You can’t sync your bank accounts with this easy-to-use freebie, but it boasts international currency support, so a global audience can sign up and get tracking with basic budget functionality.

GnuCash

GnuCash has features that go beyond simple budgeting — it’s free accounting software for personal and small business use. Downloads are available for Windows, Mac OS, and Linux. GnuCash lets you track bank accounts, stocks, income, and expenses in a way similar to a classic checkbook register. There is multiple currency support and currency movements between accounts are fully balanced when double entry accounting is enabled.

PearBudget Spreadsheet

The PearBudget Spreadsheet is a free downloadable spreadsheet that’s loaded with budget friendly cells, tables, and features. It’s a lot more complex than my Free Budget Spreadsheet, which can be good thing if you’re more than a beginner budget maker. The PearBudget Spreadsheet has been downloaded over 100,000 times by people all over the world, so it’s got some serious followers. And you don’t need to worry about giving a third party your personal banking data since the spreadsheet is downloaded straight to your computer’s hard drive.

PearBudget

PearBudget is a web-based application for creating a household spending plan and record. After the success of the PearBudget Spreadsheet, husband and wife team Charlie and Sarah Park decided to “make a good thing better” by launching their budgeting tools online. PearBudget is not trying to be the next Quicken by offering lots of complex features. The goal of PearBudget is to give beginner budgeters a simple way to get started by “paring down” the complexities of other budgetary tools. If you’re looking for a way to integrate your online banking and budgeting with a single solution, PearBudget may not meet your needs since this online app does not link bank accounts. I wrote a PearBudget Review in 2008 and loved the application then. PearBudget is free to try for the first 30 days, and costs $3 per month afterwards.

Thrive

Thrive wants you to save and watch your money grow by offering free online budgeting tools to anyone in the world, including: budget features, bank account linking options, and bill payment reminders. There’s plenty of weasel words when it comes to who in the world can use the tool though.

The site says, “Thrive certainly works outside the US; in theory, it works from anywhere in the world. We can only support the banks that support us, however, so while you can still access Thrive from anywhere in the world, it may be that we don’t have the banks in your country in our system.” My take is if you don’t need to link your bank or credit accounts, then go ahead and try Thrive.

There are many other budgeting tool available across the interwebs — like Mint (the biggest of the bunch), Geezeo, MoneyStrands, and AceMoney — but none of these offer international currency support. The Mint forums are filled with Canadians begging Mint staff for Canuck buck support. Mint seems to be the one the world is waiting for.

Squawkback: I’d love to know from the readers which budget software or online budgeting tools work best for you. Which ones aren’t worth the time?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

Enter Saving Penny, a series of ten web video episodes featuring a young couple — Penny and Doug — who are finding their fiscal way in today’s financial world.

Penny is a shoe-loving fun-spirited girl who lives life to the max, and her credit card bills show it. Doug, on the other hand, has retirement savings, knows how to invest, and looks at the big picture before blowing his paycheck on fancy vacations and costly restaurants. Penny’s close friend Allison is also good with money, and shares her financial hits and misses with Penny throughout the series.

Explaining complex financial topics in a five minute video is no easy feat, so I can see why the series has been nominated for a Rockie at the 2010 Banff World Television Awards. And even though Saving Penny is produced by Sympatico as a Canadian feature on YourMoney.ca, I think many of the issues these video touch on can help a wider audience — Americans can learn lots too. After viewing the series, I’d like to share 5 Money Lessons Learned from Saving Penny, and encourage you to check it out!

Lesson 1: Discuss money with your “better half”

While many couples wait until after their weddings to discuss money matters, I waited until my second date before asking Carl about his views on finances. Sure, go ahead and laugh. But I seriously didn’t care about Carl’s favorite shirt color or food preferences. Nope. I cared more about our financial compatibility. I wanted a financial love match, not someone who could order the perfect burger.

Shacking up with that “special someone” is a big deal in my books, and I wasn’t about to waste my time dating a man who lived life as a splurging spender while I fought to be a frugal saver. The math just wouldn’t work.

Money is a hot-button topic when it comes to relationships, and there are endless books and studies detailing how couples can resolve financial spats. But why not deal with cash as a couple before walking down the aisle? This is exactly what Penny does in Saving Penny: Episode 9, where she figures out:

• How to deal with shared expenses
• If she should have a separate bank account
• How to fund a joint account
• How to deal with divorce and money
• How common-law relationships work

These are pretty heavy topics for a four minute video, and it’s easily my favorite of the series.

Lesson 2: Track your grocery spending, start a budget.

In Saving Penny: Episode 1 Penny gets on track with her grocery spending and learns to make a budget.

I’m a huge fan of the grocery list. Over the years I’ve found that making a grocery shopping list (and checking it twice) can save you lots of money (and time) when shopping for food. Give it a try by downloading this free Printable Grocery Shopping List.

Penny also finds that building a balanced budget is a vital step for tracking her financial health. If you don’t know where your cash is going, then it’s impossible to meet your financial goals. My series on How to make a budget the unboring way offers several free budget worksheets and budget spreadsheets to help you along the way.

Lesson 3: Get real about credit card debt.

Have you ever had your credit card rejected? Penny does in Episode 2. Her choice in purple stilettos isn’t exactly my idea of stepping out in style, but getting real about her maxed out credit cards is definitely a step in the right direction.

I’ve always been a fan of screwing your credit card company (the legal way) by paying more than the minimum balance and learning the trickster ways those plastic people use to get you to spend.

Want to see how much paying the minimum balance is really costing you? Check out the Credit Card Calculator for the scary numbers. You’ll be shocked. Penny sure was.

Lesson 4: Invest in a diversified portfolio.

In Episode 6 Penny and her boyfriend Doug discuss investing basics. Penny learns about stocks, bonds, and how to build a diversified portfolio.

Long time readers know I invest in a diversified portfolio of index funds and exchange traded funds (ETFs). Americans can find ETF portfolio building advice at Bogleheads. Canadians can learn to build a balanced portfolio using index funds and ETFs at these popular blogs:

• Canadian Couch Potato
• Canadian Capitalist
• Where Does All My Money Go?

All of these sites — both American and Canadian — encourage investors to take note of investment fees such as management expense ratios (MERs) and loads. If you currently invest in mutual funds, be sure to calculate how much you’re paying in fees with the Portfolio MER Calculator. You might not like the results. Sorry.

Lesson 5: Save for your first home.

In Saving Penny: Episode 9 Penny and Doug discuss buying their first home. Penny spies a “cute yellow house” for sale just down the street. But after careful consideration, they decide the mortgage might be too much to carry.

This video reminds me waaaaay back when Carl and I first looked into buying a condo in Vancouver B.C. — a pretty pricey city. Sure, we wanted a place, but after adding up our household net worth, running the numbers using this Mortgage Calculator, and meeting with a mortgage broker, we decided to keep saving for a down payment. Dealing with a mortgage meltdown wasn’t going to be in our financial future. Penny and Doug would agree.

Squawkback: What was your biggest financial lesson? Ever make a big money mistake?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

I’ve been thinking a lot about budget spreadsheets. I don’t stay awake at night dreaming of Excel cells and mathematical equations — because that’s weird — but back in my days of student debt I did lose sleep over accounting for my missing money. What a nightmare!

I turned things around when I started a simple budget to track my spending, income, and expenses. Knowing how much I earned and spent on a monthly and yearly basis helped me catch those needed Zzzzs and find my financial way. If you’re losing sleep over missing moolah or can’t account for your expenses, then getting on track with a budget may be the secret to a six-figure slumber. Ka-ching!

What is a budget? A budget is a financial plan for tracking the flow of money into and out of your life. A simple budget can expose where you’re leaking money (the outflows), plug those drips, and find ways to save more of the inflowing cash for the stuff that matters. A budget can also highlight the spending habits you’re not aware of and help you better plan for future spending. The hard part is getting started. After a bit of practice though budgeting becomes easy.

How to use the Budget Spreadsheet

The Budget Spreadsheet is pretty darn easy to use. I’ve kept things super simple by listing the biggest budgeting categories and showing you how it all adds up. Here’s what you can do:

• Budget by month: List your monthly expenses, track your income, tally your monthly averages, and see how it all adds up. Helpful for those with variable incomes too.
• Yearly budgeting: Get an annual snapshot of your success by entering all the monthly budget details. Yearly totals are listed below.
• Make a personal budget: Single and loving it? No worries. This budget spreadsheet works for individuals too.
• Household budget: Families can budget too. Just tally your spousal income and set your total household budget.
• Budget worksheet: If you’re not fond of spreadsheets, then go ahead and print it out as a monthly budget worksheet. Stick in a binder and keep track of your moolah by writing it all down.
• Budget calculator: Adding everything up can be a pain in the purse. Use the budget spreadsheet as a calculator to show you when you’re in the red. Just scroll to the bottom and see if your Total Difference is positive (black) or negative (red).
• Customize like crazy: Go ahead and customize this Excel budget spreadsheet by adding your own categories.

Download: Free Budget Spreadsheet

Step 1: Download!

Click to download your copy of the Budget Spreadsheet.

Step 2: Track your spending

Tracking every cent you earn and spend sounds like work, but it’s easy to do if you carry a notebook with you or save all your receipts. The idea is to track your cash, credit card, and debit card purchases to identify the costly culprits.

• Get a notebook. Place a small notebook and pen in your purse. OR carry an iPhone, iPad, or iWhatever with you.
• Write it down: Every time you spend money — write it down. Make a note of each and every purchase (grocery, coffee, shoes) and add the date. Ask for a receipt.
• Add it up: Tally your expenses during the month and add them to the Budget Spreadsheet under the right category. See where your money is really going. Results may shock you.

Step 3: Get budgeting!

Grab your receipts, sort your bills, and check your bank accounts. It’s time to fill in the blanks and account for your cash in the budget worksheet. Here are the columns to consider:

• Income: Enter your monthly salary, all bonuses, and investments to get a grip on your total income. Did you make enough? Do you need to earn more? Be sure to include your spouse’s income too.
• Home Expenses: Doesn’t matter if you rent or own. Enter your housing costs, insurance, maintenance, and property taxes.
• Transportation: Enter all your automobile costs, transit passes, fuel, and maintenance. If you’ve got a bike that needs a spare tire, enter it under Other.
• Utilities: There is no mystery in this category. Go through your bills and find the REAL costs to surfing the internet, watching TV, and chatting on the phone. Enter your electricity and water bills too!
• Medical: Not my favorite category, but we’ve all got something medical, right? Add up your prescriptions, dental bills, and health insurance.
• Financial: Tally all your financial bits and pieces, including: bank fees, interest payments, debt repayment, and various savings accounts.
• Enjoyment: Yay! Time for fun stuff! Keep track of all gifts, holiday expenses, pet costs, entertainment (don’t forget your liquor), restaurants, and hobbies.
• Routine Expenses: Groceries, clothing, and all anti-wrinkle creams need to be listed here. Yeah, wrinkles happen. Grumble.
• Family: Get the kids involved by showing them how the money is spent. List childcare expenses, allowances, activities, sports, books, toys, tuition, school supplies, and field trip costs. A financially savvy kid is likely to grow into a financially wise adult.

Phew! It seems like a lot, I know. But budgeting gets easier as time goes by. So get downloading, tracking, and take the time to see where your money goes each month. You may just find some lost loot.

Squawkback: Does minding a budget help you manage your money?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

What we want does not necessarily correlate to what we need. Sure, you may want that double crust pizza with extra cheese and double pepperoni, but what your body really needs for healthy sustenance are wholesome calories from fruits and veggies. It’s a bummer, I know.

Just like keeping a food diary or tracking your exercise with a workout log to get physically fit, writing down your needs and wants on a list can help keep you on the right fiscal track.

I’m including these Needs and Wants List Worksheets in this series to give you pause for thought when you’ve got some extra cash and need a reason to spend it on the important things in life. And no, those sexy three-inch Jimmy Choo stilettos advertised in Vogue don’t count. Sorry. But yeah, I liked them too.

Needs, Wants, and Goals Oh My!

So how are needs, wants, and goals different? Good question.

Goals: The Three Goal Setting Worksheets from earlier in the series are intended for your biggest plans, such as paying down debt or saving for a big purchase. Your goals probably take time to accomplish and may require lots of saved cash.

Needs: Your needs are pretty basic in life. Food, shelter, and simple clothing are all things you need. Designer jeans and a penthouse view may fall within the clothing and shelter category, but you aren’t going to freeze your arse off if your denim is not branded Calvin Klein. And not being able to see Russia from your window won’t kill you either. Living in a street-level apartment costs less and keeps you out of the cold.

Wants: Your wants are the fun things in life. These are the things you spend your discretionary cash on after paying the bills, dealing with debt, and feeding your family. I may be a fanatical frugalist, but I have wants too. My wants are those wish list items I dream about. A new iPod, a faster computer, and a trip to Europe are all things I’ve listed on my wishful want list.

Budgeting with Your Needs and Wants List

The main reason for keeping a Needs and Wants List is to prioritize purchases and prevent impulse spending. If you stumble upon a sale while breezing through the mall, it’s easier to consult your list and make a buying decision based on documented needs versus wants. Let the list decide, and keep your emotions out of it.

Download: Your Needs and Wants List

Here’s how to use it:

• Make a list of items for purchase.
• Date each item.
• Determine if the item is a need or a want.
• Suggest a store for purchasing the item.
• Estimate or track the cost.

I asked the Squawkfox fans on Facebook if they kept a needs and wants list, and many do. I think Laura says it best:

I think that the key part about a list is using it as a thought-deposit-slot. If I am inspired to buy something and write it on the list, I can stop actively trying to remember to buy it — and thus put it out of my mind. If I forget about it entirely until I see it on the list several days or weeks later, then I know I can just cross it off as unnecessary.

I’d estimate that I cross off and don’t purchase about 75-90% of the things I put on that list, then am usually very happy with the few items I do buy. It also pulls double duty as a comparison shopping tool — as I narrow my wants/needs down to the few really important items, I am also comparing prices in stores, and can refer back to those quick price notes when checking online if it’s a more expensive item.

Check out Squawkfox on Facebook for more real budgeting ideas.

Get Your Kids Budgeting Too!

If you’ve got kids, now is a good time to get them on board with your new family budget. Kids want and need stuff too, so it pays to get the kidlets thinking about what they really need compared to wistful wants.

The forces of TV advertising, blinking internet sites, and other school-aged kids that seem to have everything can be strong pulls on your purse strings. So having a tool to help curb your child’s impulse wants early in life can give you some financial relief while teaching an important lesson — money doesn’t grow on trees and you can’t always get what you want today. Sad, I know. Boo hoo.

Besides, getting your kids to decide what is needed and what is wanted early in life can pay dividends when they’re adults. The sooner financial lessons are started, the more savvy your kids will grow up to be when it comes to using credit cards, spending, and saving.

Kids also want to be included in “big people” matters. So if you’ve got one or more kids, give them each a list and let them decide what goes on it. If you’re not shy about your own Needs and Wants List, then show it to them! Make budgeting a family affair and lead by example.

Download: Needs and Wants List for Kids

Here’s how to get your kids involved:

• Sit down with your kids and explain the differences between needs and wants.
• Make it fun by using crayons, paint, whatever.
• Get your child to make their list.
• Help them determine if the item is a need or a want.
• Let your child suggest a store for purchasing the item.
• See if they can estimate the cost for each item.
• If your child is old enough for an allowance, show them how long it will take to earn enough allowance to pay for each item.

When money is available — either from allowances or birthday money — let your kid decide what to buy based on their list. Have them review their priorities and decide based on cost and reason, rather than impulse spending. You may just find that having a “wish list” keeps the whole family’s spending in check.

Your Two Cents: Do you keep a needs or wants list? Do you teach your kids about money?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

Do you have a financial goal? Yeah, I’m sure we’ve all dreamed of making a million, but have you ever figured out what it takes to get there?

Setting financial goals throughout your lifetime is an important part to building a budget, so don’t go rolling your eyeballs in my direction. Goal setting works, and I’ve lived to tell the tale. When I paid off a $17,000 student loan in six months it wasn’t because of luck or good genes — it was because I had a plan, man. Sure, I worked hard at cutting costs too, but paying down my student debt had everything to do with setting a goal and finding the motivation to follow a plan.

Financial goals can address your immediate needs, your long term dreams, and everything in between. Perhaps you’re saving for school, looking for a starter home, wanting to end your mortgage sooner, fancying a vacation, or just looking to fund your retirement. Everything is possible when you identify your personal financial goals and develop a plan for reaching them.

To show you this isn’t just a magic trick, I’ve put together 3 Financial Goals Worksheets to help you identify your short term financial goals, set your long term goals, and achieve results through planning and goal tracking.

I previously squawked about goal setting in the Job Hunting Series installment Stop Setting Goals! Start Gathering Goals! — so go take a peek if you’re looking to revamp both your financial and career goals.

Here is the mostly painless three-step process to setting financial goals.

Step 1: Set your short term financial goals

Short term financial goals can fund immediate needs for today, increase cash reserves for next month, or start needed savings for a year from now. A few example short term financial goals can include: buying a car, saving for a digital camera, taking a vacation, or funding the all important emergency fund.

You have an emergency fund, right? If not, take a peek at my scary MRI in Reasons to Build and Love an Emergency Fund — you won’t need to watch hospital dramas on television after seeing that mess!

Anyscaryscars, it doesn’t take much for a seemingly healthy person to be blindsided by a sudden illness or life emergency. It happened to me, it could happen to you. So let’s skip being a downer by making an emergency fund one of your first short term financial goals.

If you have emergencies covered, then feel free to save away for that thing you can’t live without.

Download: Short Term Financial Goals Worksheet

Here’s how to do it:

• List your short term financial goals.
• Prioritize each financial goal.
• Determine your target date to reach each goal.
• Give each goal an estimated cost.
• Account for money already saved for each goal.
• Plan how to achieve your goals.

This isn’t a difficult task, it just takes some honest thinking to make each goal attainable and reachable. Maybe you need to cut back on eating out or find a second job to fully fund your financial goals. Sometimes the truth hurts and forces one to sacrifice, perhaps just a little. But reaching short term goals is easy if you put your mind to it.

Once you’ve reached your short term financial goals you’ll have more confidence and motivation to achieve your bigger, longer term goals.

Step 2: Set your long term financial goals

Got a money goal you’d like to reach in two to five (or more) years? This is a good time frame for setting middle to longer range financial goals. Perhaps you want to save for college and avoid student debt, or you’d like to switch jobs or choose a new career path, or you’d like to save for a home and avoid a mortgage meltdown — ok, no one wants a meltdown.

With specific longer term goals in mind you’re more likely to watch your cash in the shorter term and make better money decisions. If you’re feeling like a super saver, then go ahead and list an early retirement as your ultimate financial goal.

Download: Long Term Financial Goals Worksheet

Here’s how to do it:

• List your middle and longer term financial goals.
• Prioritize each financial goal.
• Determine your target date to reach each goal.
• Give each goal an estimated cost.
• Account for money already saved for each goal.
• Plan how to achieve your goals.

Now don’t get befuddled with all these financial goals. If you have lots of short term goals and even more long term goals, make sure neither sets of goals are at odds. The money has to add up, and hopefully you can save a little for your short term and longer term goals at the same time.

Step 3: Achieve your goals!

Now that you’ve decided your short term and long term financial goals, it’s time to move towards achieving your goals. For this you’ll need to download the Achieving Goals Worksheet and mark off each milestone as you reach it!

Download: Achieving Goals Worksheet

Here’s how to do it:

• Transfer each goal to this worksheet.
• Under Total Cost, enter your estimated costs for each goal.
• Divide your total cost for each goal by 12. This is the amount of money you need to save each month.
• Save away!
• At the end of each month, tally up and track your progress.

This goals worksheet is a great place to keep track of your progress over time. You may just feel inspired by how fast these little drips of money can add up to help you reach your financial goals sooner! Now go stick these worksheets in a three-ring binder.

Your Two Cents: Do you set financial goals? Ever reach one?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor

Leeds, the New York Times Best Selling author of One Year to an Organized Life (also available in Canada), knows a thing or two about organizing a successful life and career — and too many cups of coffee don’t cut it.

In chapter one of One Year To An Organized Financial Life, Leeds advises us to cut back on soda and coffee and replace these beverages with calorie and caffeine-free water. Sounds good to me. After all, too much of the sugary stuff can ramp up a financially disorganized person, leaving them in a fit of chaotic paperwork everywhere. I’m all for financial calm.

In my personal bid for less chaos and more financial organization, I grabbed my copy of the book and amassed 10 three-ring binders, a label maker, some folders, a hole punch, a stapler, a paper shredder, a Sharpie, a weary husband, and my dog.

Truth be told, I’ve always been an organized gal. But no one is perfect, and given the opportunity to read this step-by-step guide I thought even this financially-savvy clutter-busting gal could learn a trick or two. Boy did I ever!

Leeds neatly lays out One Year To An Organized Financial Life by month, with each month containing four weeks of financial activities, lessons, and stellar money tips. Throughout the book Leeds shares personal stories of her own money battles and gives the reader insight into how her clients have dealt with their own financial chaos. With help from her co-author, NAPFA certified financial advisor Russell Wild, Leeds sorts through financial jargon in a readable and easy to understand way.

Leeds’s writing style is warm and approachable. I was surprised reading about her battle with cancer and how she dealt with the costs of a serious illness. If you ever deal with medical costs in the United States, Leeds’s advice could help you manage the bills.

Leeds also writes candidly about the lack of financial education in her upbringing. Her parents generously provided for everything, leaving her with little understanding of how money works. In a phone interview, Leeds said:

Money was something that magically appeared. People would just pat me on the head and say don’t worry about it Regina.

For this reason, Leeds dedicates a full month (September) to teaching children about the value of money. In her book, she writes that as parents you should “be conscious of the fiscal example you set for your children.” This chapter details how to involve kids with cash in a responsible and fun way.

Here is a brief overview of the 12 monthly chapters in the book:

• January: Take Control Uncover your relationship with money, clean out your purse or wallet, and streamline your office space.
• February: Assess Your Finances Get a system for paying bills on time, tally your income, and learn about your fixed and variable expenses.
• March: Get Ready for Taxes Save the right documents, topple your stacks of paper, and prepare your tax return.
• April: Spend Less, Save More A fun chapter explaining how to reduce your spending, master your budget, and banking — you may just fire your bank after reading this chapter.
• May: Borrow Smart Get a grip on credit card spending, lower your credit costs, and protect yourself from identity theft.
• June: Build a Nest Egg Review or start your retirement plan, calculate how much you really need, and find the type of investments that work best for you.
• July: Make Long-Range Financial Plans Learn how to hire a financial advisor, build a balanced portfolio, and write or update your will.
• August: Refinance or Downsize Options Determine if a smaller home makes financial sense, rethink your transportation costs, find your hidden cash by selling clutter, how to hold a yard sale, and learn about refinancing options.
• September: Children and Money Learn how to teach your kids about money in a fun and frugal way and discover some tips for your child’s education.
• October: Protect Your Assets Get yourself covered with the right medical insurance, insure your belongings with renter’s or homeowners policies, and build a home inventory (free download).
• November: Season for Sane Spending Plan your holiday budget, gift-giving ideas, and holiday packing and travel.
• December: Year-End Money Moves Tax strategies, charitable giving, and fine tune your financial files.

Final Thoughts

Overall I learned a lot from One Year To An Organized Financial Life, especially in the sections on wills and beneficiaries. I’m working on updating my will, and I’ve recently changed the beneficiary on my various investments and retirement accounts. It’s easy to lose track of beneficiary details if you’ve recently married or contributed to a multitude of retirement accounts over the years.

Americans can benefit the most from the financially-focused chapters in this book since Leeds and Wild discuss IRAs, 401(k)s, college savings plans, Uncle Sam and taxes, US banking and credit.

Even if you’re Canadian (like me), then you can still become financially organized using the guide, but you won’t learn the nitty gritty details on Canuck Bucks, including: RRSPs, RESPs, CDIC, or CRA tax rules.

Oh, and about that cup of coffee! After speaking with Regina Leeds on the phone I learned that she drinks two cups a day. So raise a mug (or two) of your favorite brew while filing away your money mess. The job of becoming financially organized just got easier. Thanks Regina!

Your Two Cents: Are your finances organized? Do you have a helpful system you’d like to share?

	397 Ways to Save Money Spend Smarter & Live Well on Less By Kerry K. Taylor