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LIFE HACKS from Kennedy

It may come as a surprise to many of you that I do not come from a life filled with riches and privilege.  Growing up, we were very poor. My mom was a single mom at a time in American history when being a single mom was very scandalous. When she divorced her 2nd husband, we were thrown out of our rental house because the landlord was embarassed to have a single mother and her child living there. (True story)

 

My grandparents lived through the Great Depression and if you've studied American History at all, you know this was a very economically deprived time for everyone.

 

So growing up with parents who lived through the Great Depression, my mother was taught how to make a dollar stretch. And stretch, and stretch and stretch! When I was younger I was embarassed that we were so poor. I wondered what it was like to always have enough and never have to scrape by... So I learned a lot about how to save money from my mom and grand parents, much of which I still use and have added in my own money-saving ideas as well.

 

Please put this in your design notebook. And keep it. Or do your best to remember it. I hope none of you are ever in a situation where you NEED to watch every nickel and dime that you spend, but just in case you are...

 

1. Never Buy Garbage Bags. Never? Yeah, never. I have small trash cans, like what most people only have in their bathrooms, as my primary trash cans in my home. This allows me to use the plastic bags from the store that groceries, etc. come in as trashbags, thus eliminating that expense. It does something else as well. Instead of having a lot of smelly garbage in your house that can potentially attract bugs, you take out your garbage more frequently so you reduce the risk of bugs.

 

2. Cook at Home. Eating at restaurants and fast food places may be convenient, but it is costly. That $10 you spend on one meal could potentially feed you for a week if you needed for it to.

 

3. Use Coupons and Sales Circulars. Every week, usually on a Tuesday, the postal service delivers a bundle of grocery store sales circulars highlighting what various stores are running specials on. Shop the sales. This is a great way to save money, particularly on fresh produce and meat, if you eat that. If you are name-brand loyal, use coupons to reduce your overall expense of these pricey brands.

 

4. Buy Generic Whenever Possible. Honestly the main difference between the store brand and the name brand is usually the label. The ingredients are the same and in some cases, the generic or store brand is actually better tasting and uses fewer chemicals than the name brand.

 

5. Buy in Bulk. Costco and Sam's Club sell items to the public in bulk. The price for membership is usually around $35 for the year and it is more than worth it in the end. Buying food in bulk means fewer trips to the grocery store, saving you gasoline and smart shoppers know that buying dry goods in particular, they won't go bad before their expiration date. Consider things like pastas, rice, canned foods NOT in the gigantic cans, and frozen foods.

 

6. Be Aware of Expiration Dates. Your expiration dates can creep up on your and make your food budget go out the window if you're wasting food. On average, Americans throw out more food than we consume. That means that we are the most wasteful country in the world. Don't contribute to that. It will kill you financially.

 

7. Don't Pay for Cable TV.  I am NOT recommending you steal it either, but rather am telling you that you don't NEED it. Keep watching but use NetFlix or Hulu -- or both!  Cable TV is roughly $100/month vs. NetFlix which is $7.99 and Hulu which is also $7.99 -- saving you around $80+ monthly.

 

8. If You Drink Coffee/Lattes, Make Them at Home. What? Yes. You can get an inexpensive espresso maker for around $30 and your cappuccino coffee is not very expensive either. (Keep it in your freezer) Then you can make your coffee for a much lower monthly average than your Starbucks. (Your Starbucks is roughly $5 per trip. If you go 5 times weekly, that's $25 or $100/mo on coffees. You can save even in your first month with the purchase of the coffee and machine!)

 

9. Pay Your Bills on Time. Why? Because if you don't, you get late fees and those can pile up, fast! Example: Your rent is due on the 1st of each month and considered late if received after the 5th. There is a $30 per day late charge. You are paid on the 10th and 25th of the month only. So if you pay 5 days late, in addition to the rent you owe, you would now owe an additional $150 vs. if you would have just paid on time. That's $150 you could have spent on anything else. So you'd be smarter to pay from your check on the 25th and pay early. Landlords appreciate tenants who pay early and will generally leave you alone more if you are always paying early or on time.

 

10. Keep Close Watch on Your Bank Account. You want to avoid overdraft fees and any unnecessary bank fees for having your bank balance be below their minimum. Overdraft fees happen when you spend money you didn't actually have. Example: You had $73.28 left before you are paid again. You spend $75.26 at the grocery store.  You are overdrawn on your bank account by $1.98. You think "no big deal?" right? WRONG. You immediately get a $35.00 overdraft fee from your bank. The bank of the place you spent the money, let's say Von's, ALSO charges your bank and therefore YOU ANOTHER overdraft fee of $25. They attempt to process this charge twice. So you have (2) $35 charges and (2) $25 charges for a $1.98 overdraft so that less than $2 resulted in bank fees and charges of $120 additional - as you see, it really does add up quickly. (Yes, that IS a real scenario.)

 

11. Keep Up with Routine Maintenance on Your Vehicle. But that costs money! Yes it does but by keeping clean oil, a nice oil filter, a clean air filter, good spark plugs or fuel injectors in your vehicle, you can eliminate a lot of big expenses - or worse, needing a new vehicle - in the near future. Do the annual "wellness" checks for your vehicle and take it in for a full "check-up" every 3 months. By having the mechanic diagnose a problem as it starts, you can often keep expensive repairs from happening altogether.

 

12. Avoid the Vending Machines. Anything you might want from the vending machine is less expensive if you buy it in bulk. Buying from the vending machine is costly.  Figure if you bought 1 Snickers Bar each day for $1 x5 days weekly that you work, you would have spent $20 on Snickers Bars in a month. You could buy an entire case of Snickers Bars at Costco for $20 and you get 36 of them.

 

13. Make a Shopping List. It sounds easy but it is a great way to keep within a budget. Price check from home on any large items you may be purchasing to insure you're getting the best price, and make a list. Stick to the list. It will help you stay within your budget by planning your purchases in advance.

Budget 101

 

 

Monday, 27 April 2015

Learn Budgeting Basics

  • What is a budget

    • Simply put, a budget is an itemized summary of likely income and expenses for a given period.  It helps you determine whether you can grab that bite to eat or should head home for a bowl of soup.  It is typically created using a spreadsheet, and it provides a concrete, organized, and easily understood breakdown of how much money you have coming in and how much you are letting go.  It’s an invaluable tool to help you prioritize your spending and manage your money—no matter how much or how little you have. 

  • Why do we budget

    • Planning and monitoring your budget will help you identify wasteful expenditures, adapt quickly as your financial situation changes, and achieve your financial goals.  When you actually see the breakdown of your expenses, you may be surprised by what you find; this process is essential to fully grasping how things can add up.  Creating a budget will decrease your stress levels because, with a budget, there are no surprises.  Unexpected car problems or medical bills?  That dream vacation your best friends are planning?  With a budget, you don’t have to panic or wonder if you have the money—you already know.  This sense of financial clarity is important not only in high school or college, but throughout life.

  • How do we budget

    • Step 1 Identify your goals.

      What are your financial goals?  Do you have debts you need to pay off?  Do you want to minimize the debt you graduate with?  Are you trying to save for a car, a vacation, or your future?  Budgeting involves tough choices, but having a goal will make budgeting a little less painful.

    • Step 2 Unravel the mystery of where all your money goes.

      Do you check your bank account at the end of the month or semester and wonder where all the money went?  Before you can manage your money, you have to know how you’re spending it.  Use a spreadsheet to track and categorize your expenses for one month.   Get in the habit of recording your expenditures once a day. 

      It's useful to separate your expenses into three categories:

    • Fixed Needs – Necessary expenses that stay the same from month to month, e.g., rent, phone bill

    • Variable Needs – Necessary expenses that may vary from month to month, e.g., gas, food

    • Wants – Nonessential expenses, e.g., lattes, movies, eating out, electronics

    • Is this just another rote exercise in organization and formatting?  No!  As you will see in Step 5, categorizing your expenses will help you balance your budget by identifying which expenditures should be cut back on first. 
       

      If you have a monthly savings goal (and you should!), include it as an expense.  It is much easier to save money if you've planned for it in your budget.  And it's important, too: if you run into unforeseen expenses, you'll want to be able to pay them without going into debt.  And even if nothing goes wrong, having some savings will help you follow your dreams in the future. 

    • Step 3  Identify your sources of income.

      Where does your money come from?  List the sources of your income (e.g., work, student loans, parents) and the amount that comes in from each source each month.  If you get one disbursement per semester (e.g., student loans and scholarships), determine the monthly allowance by taking the amount that's left after paying nonrecurring costs (e.g., tuition, books, dorm room) and dividing it by the 5 months in a semester.

      Example: If you earn $400/month at work and you have $1000 left over from student loans after paying your once-per-semester costs, then your total monthly income is $600.

    • Step 4  Add it all up.
      When you compare your income and expenses, do you have a monthly surplus, or will you be needing another job and begging your parents for help by the end of the semester?
      If you already have a surplus in your budget, congratulations!  You can invest in your future.

    • On the other hand, if your expenses exceed your income, Step 5 will help you make some adjustments.

    • Step 5  Make adjustments if needed.

      If you're over budget, you need a strategy for controlling costs. Balance your budget, starting with the “wants” identified in Step 2.

      When you added up your monthly expenses, did you notice any surprisingly large numbers?  Did you spend $100 at restaurants or on yet another new outfit?  Did you spend more on electronics than food?

      Begin with such "wants" that you may be overindulging in.  For each type of "want," decide on a reasonable monthly limit that will help you balance your budget.  Would it help you reach your goals if you limited yourself to spending $40 a month at restaurants and did more shopping at the grocery store?  Can you get by without a monthly clothing or electronics expenditure, making such purchases only after you reach savings goals?  Set a cap on your "want" expenses and see if you've balanced your budget.

      If you can't trim enough from your "wants" in order to balance your budget, you will need to reduce your variable needs expenditures in the short term and perhaps your fixed needs expenditures in the long term.  This may mean taking the bus instead of driving and finding less expensive housing next year.

 

BUDGETING WORKSHEET: Handed out in class, to be worked on Monday & Wednesday, turned in COMPLETED on Wednesday by the end of class.
It looks like this (click here)...

 

 

Wednesday, April 29, 2015

We will continue working with our budget worksheets we received on Monday. I will show you how to place your numbers in the matrix provided to see where spending is happening. You will likely need to be present to understand, particularly if math is not your strong suit.

 

FOR OUR NEXT ACTIVITY, you will need your packet from the shelf.

  • If you do not have a job regardless of circumstance, you will need to come and draw one out of the bag without exception.

  • If you had a pay decrease, you have to decide if you're going to gamble and get a new job that might pay less than your present job, or keep your present job.

  • If you got a pay raise, congratulations!

 

You will need to figure out how much money you're going to make monthly for our next activity. USE YOUR DESIGN NOTEBOOK to figure out the math.

For this worksheet you will receive, you need to figure out the following:

  1. You work on average, 30 hours weekly at the rate of pay (plus tips where applicable)  so how much is your MONTHLY NET INCOME? (remember, Net means after taxes)

  2. Your rent will cost you 30% of your net income

  3. Your car payment will cost you 12% of your net income

  4. Your car insurance will cost you $132/mo for gentlemen and $107/mo for ladies

  5. Your cell phone bill will cost you $40/mo

  6. You should budget 10% of your income for entertainment

  7. Plan on saving 15-17% of your income* (IF you are able)

  8. Gasoline will cost you roughly $150/mo for a small car that gets good mileage at the current price of gasoline per gallon (subject to change without notice)

  9. You gotta eat. Gentlemen, budget $70/week and Ladies budget $60/week for food.

  10. How much do you have left?

  11. Do you need to make any adjustments? If so what, how? (write it down)

  12. Flip worksheet over to back and write 3-4 sentences about your job, about your living situation in this scenario and what, if anything, you COULD do to improve it.

  13. TURN IN WORKSHEET WHEN YOU ARE FINISHED.

 

 

Thursday, April 30, 2015

Did you finish worksheet #2 yesterday?

 

NO: Finish it quickly and get it turned in ASAP, you are behind.

 

YES: YAY! Thank you for being on task and on target! Your assignment for today is as follows:

  1. Get your packet from the shelf. Reminder: YOU are responsible for your packet. Not me. You are over the age of 13 and are in high school. The packet was to not leave this room. At this point, if you do not have your packet, you will likely not be able to pass 4th quarter, so find it. Look everywhere on the shelves. In all class periods, in all baskets, shelves and in the plastic drawers. It is your job to keep track of your supplies, not mine.

  2. You made an ATM purchase today at Albertson's for food in the amount of $86.24.

  3. You made an ATM purchase today at Wal-Mart for supplies in the amount of $94.33.

  4. You went to the movies with your friend today. You used your ATM card to pay for your movie ticket, some popcorn, a bag of Snickers Bites, and a large soda. You spent, with tax, a total of $27.93 at Brendan Theaters South Point.

 

MAKE SURE you keep a running total in your check register of your available funds.

 

 

PERIOD 7 ONLY: Instead of ATM purchases, you need to WRITE CHECKS to those places for those amounts using your LITTLE check book from the bank.

I STILL HAVE MONEY LEFT

Congratulations! You don't need to do anything else if you have recorded all these transactions. If you have not, take this time to do so.

OMG I AM OUT OF MONEY!!!

That's too bad. For EVERY transaction that made you go over, even if by ONE PENNY, you need to DEDUCT another $35 PER TRANSACTION and label it "Over-Draft Bank Fees." 
Yes. I realize this makes you more broke than before. Lucky for you, tomorrow is pay day.

Friday, May 1, 2015

 

THANK GOODNESS ITS FRIDAY!

Here is what to do today:

  • Get your packet from the shelf.

  • You are going to write a check - please write the next one you have in sequence, don't skip checks for your payroll check.

  • IF YOU HAVE YOUR ORIGINAL JOB, these were your hours this week:

    • Sunday: 4:00am until 3:00pm with (1) 30 minute break

    • Monday: 4:00pm until 3:00am with (2) 30 minute breaks

    • Tuesday: 3:00pm until 9:00pm

    • Wednesday: 2:30pm until 10:00pm with (1) 30 minute break

    • Thursday: 7:30pm until 4:00am with (1) 30 minute break

    • Friday: 3:30pm until 9:00pm

  • IF YOU HAVE A NEW JOB, these were your hours this week:

    • Saturday: 10:00am until 9:00pm with (2) 30 minute break

    • Sunday: 5:00am until 2:00pm with (1) 30 minute break

    • Monday: 3:00pm until 9:00pm

    • Tuesday: 5:00pm until 9:00pm

    • Wednesday: 3:00pm until 11:00pm with (1) 30 minute break

    • Thursday: 4:00pm until 12:00am with (1) 30 minute break

    • Friday: 5:00pm until 2:00am with (1) 30 minute break

  • REMEMBER: You do NOT get paid for your 30 minute breaks. Do NOT add that time.

  • IF you are working and getting TIPS, your TIPS are CASH. Don't write a check that includes the TIPS but DO write in the amount of your tips on your DEPOSIT SLIP in the "cash" area.

  • Make your bank deposit and be sure to update your check book registers.

 

ALSO DUE TODAY:

  • Notebook checks

  • Worksheet with budget scenarios

  • Worksheet using our jobs with scenarios ala Kennedy

 

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