Beating Broke

Personal Finance from the Broke Perspective

Building a Budget From the Ground Up

By Leave a Comment

Creating a budget when you’ve never used one feels like a daunting task. If you’ve spend your life with money coming in and going out with no plan on what it’s paying for, now’s the time for a budget. Perhaps you’re swimming in debt and you can’t find a way out.

Building a budget is a lot like building a house. You need a strong foundation before you can do anything else. Ensuring that your needs are met each month is of utmost importance. Needs are the foundation of your budget. Don’t mistake bills for needs. Just because it’s a bill does not mean it’s a need. Your needs are housing, food, medicine, clothing, and transportation to get you to and from work. Credit card bills, Netflix, RV payments, and even an expensive cell phone in most cases are not needs. And in rare instances or unless you work from home, internet service is not a need either.

List Your Income

How much do you make or anticipate making each month? This includes all household income. For instance, if you have a roommate, how much do they pay for rent and utilities? If you’re married and you have a joint account, how much do they make each month? Your income is the starting point to seeing if you need to make adjustments to your lifestyle, find a way to make more money, sell off some assets, or downsize anything in your life.

List Your Needs

I said earlier that your needs are the foundation for your budget. Needs include housing expenses, food, clothing, vital medicine, and transportation. List these and subtract them from your monthly income. How much money is left? That’s how much you have to focus on paying down debt, and to go toward other financial goals and fun things. Your needs are not negotiable.

List Your Debts

This includes medical debt, car payments, credit cards, your credit builder card, and store credit. Anything you owe should be listed here. You want to write down the minimum monthly payment along with the total amount owed. Subtract these minimum payments from the amount that was leftover after your needs were accounted for. Is there anything left? Yes? Great!

Make Room To Save

Saving is vital especially if you want to stay out of debt. Emergency funds can help you take care of urgent situations without going into more debt. It’s important to start with a month’s worth of expenses, and then you can work on paying off debt while finding ways to boost your income through your daily job or a side gig that takes time and effort but has large potential paydays through sales or services in industries like events, real estate, or even transportation like Uber and Lyft.

List Your Wants

Here’s the place to budget for your fun stuff. Pick all the stuff you’d like to include in your budget. This can include things like saving for a vacation or for your internet and satellite service (see your rural internet options here), for example. If you’re drowning in debt, it’s still important to budget even a small amount of money each month to do something fun. Whether you splurge on a monthly Netflix subscription or a couple of latte’s from Starbucks, these wants can help you get over the challenge of getting rid of the debt.

How Much Is Left?

Got more left? There are so many ways to use this amount. You can use it to pay extra on debt, to build that emergency fund, or even to give to a cause you care about. If you’re stuck in the negative however after your needs, debts, and wants, it’s important to look for ways to either make more money or spend less. Getting out of debt is a great way to increase your disposable income each month. But when you make less than your bills it feels overwhelming to get out. Look for things to sell in your home and try and pay off some of the smallest debts first. This will help you feel accomplished and get you motivated to keep going.

A budget is a fluid thing. You start by building with your needs, but money should be coming in and going out. Planning ahead is what helps you stay on track to your financial goals and it ensures that your needs are always met first each month. Once you get used to budgeting each month, you’ll be able to get more complex by adding in investments and other more complex financial tools.

Car Buying Tips for New Parents

By Leave a Comment

Whether you’re expecting for the very first time or already have your newborn in your arms, moms and dads are super busy all of the time. From preparing the baby’s room to making sure you have enough diapers and getting into a routine as new parents to childproofing the house for the day your newborn becomes a toddler, a lot is going on.

Now you need to purchase a new car and want to make sure that it’s safe and secure for your bundle of joy. Now that you have your credit union car loan in your hand, it’s time to determine what the safest car out there is for your family.

Check Safety Ratings

As a parent, it’s your responsibility to keep your child safe, in and out of the car. Make sure that you check car safety ratings through NHTSA and IIHS before deciding which is the best family car for you. These sites can help you compile a list of the safest vehicles on the market today, and then you can narrow it down and choose from that list. It’s also essential to determine which safety features are the most important for you, such as Onstar. Check the safety ratings of cars just as you check reviews and the durability of the car seat you choose to transport your child in; both are important.

Choose the Right Interior Design

When selecting a new or used car to drive your baby around town in, interior design is extremely important. For example, when you have a newborn, you need enough clearance between the front and back seats to install the rear-facing car seat that is required by law. It’s also important for whoever is riding in the backseat with your child to have enough room to maneuver and still be able to properly fasten and wear their seatbelt. In other words, a sports car and a baby really don’t mix if you want room and safety.

Always Check for Trunk Space

When you have a newborn, you have a ton of stuff to take with you everywhere you go. Whether you’re traveling to your parent’s house in another town or just going to the grocery store, babies need lots of things. That’s why it’s vital for any car you choose to have plenty of cargo and trunk space.

The last thing you want is to head out on a six-hour ride with everything crammed into the backseat of the car and a cranky newborn in tow. A good rule of thumb to follow is if the stroller refuses to fit in the trunk, it’s not the right family car for you and your expanding family. You don’t want to stack things in the car because it makes it hard to see out of the back window, and if something falls, it could easily injure your baby or cause an accident.

Overall Value 

Of course, as a new parent, you have to purchase a car that fits into your budget. However, you don’t want to sacrifice safety for a lower price. Concentrate on safety first, then your budget afterward. Make sure to check the mileage on the car and determine if it’s good on gas or a gas hog to begin with, then go from there when making your final decision.

These are just a few tips to help you find the right vehicle for your family when you have a newborn or a baby on the way. Safety is a top priority, and then you can start looking for something you can drive for years to come.

Car reviews would be a big help in choosing the best car for you and for your family. Check this out to find more information on different variants of vehicles.

How to Find Affordable Tires, Batteries, and Insurance

By Leave a Comment

A car is a major investment, not just in the money you pay upfront, but also in the money it takes to maintain it. Tire quality, battery longevity, and insurance coverage can all take a major bite out of your budget. Fortunately, there are ways to lower these costs without sacrificing quality.

From discounts on tire maintenance to the ins and outs of insurance rates, here are some of the ways to get the least expensive offerings for your automotive needs.

The Potential Savings of Auto Insurance

There are many ways for consumers to lower their auto insurance bills, and one of the most obvious ways involves adjusting the policy to have only the offerings most necessary for a specific situation.

There are two main auto insurance types that protect your vehicle in the event of an accident: collision and comprehensive. Collision covers you in the event of an accident involving your car and another vehicle or object, while comprehensive covers non-collision damages. But what is the cost difference between collision and comprehensive auto insurance?

If you have both collision and comprehensive auto insurance, then you have full coverage. As a general rule, if you don’t fully own your car, you will be required to get collision or comprehensive car insurance.

Collision insurance handles damages from hitting a parking post, bench, tree, curb, or vehicle, regardless of who is at fault. It is often cheaper than other options, but once your car’s value surpasses what the insurance will pay out in the event of an accident, you should probably drop it.

Comprehensive auto insurance covers any damage to the vehicle that isn’t caused by a collision, such as accidents involving animals running into the road, property damages, falling trees, floods, fires, and projectiles. It often covers theft and vandalism as well.

However, comprehensive insurance doesn’t cover regular wear and tear or the value of the car’s contents. In most cases, collision and comprehensive car insurance are bundled into one offering by an insurance company, but often you can choose to purchase only one or the other to save on money.

Opting for comprehensive coverage alone is, on average, under $200 a year, whereas choosing collision alone bumps average rates up to around $360.

Liability insurance, which is for covering the other driver in an accident you cause but not yourself, often is more expensive than both of the former together. Full coverage, including liability, often costs over $1,000 per year. To see exact numbers for your situation, you should request a variety of quotes from different insurers.

The auto laws in your state may also dictate which insurance you are required to have, and often liability is required. Understanding what different types of coverage mean will allow you to choose the best option for you.

Many choose to keep the necessary liability coverage and then have to decide between comprehensive, collision, or neither.

However, if your car is of a high enough value, it may be more cost effective to opt for full coverage so you don’t have to recoup the loss of the whole car in the event of an accident.

The Cost of Tires

Tires can be an expensive investment, ranging from $50 for cheaply made ones to $1,000 for specialty premium ones. Most people will buy tires in the $100–$500 range in addition to the mounting and balancing costs. Most auto shops will charge a standard fee for installing tires that ranges from $15 to $45.

Fortunately, you can save a bundle on the cost of tires by shopping in April or October, which are the two months when tires are most likely to go on sale (in preparation for winter roads and summer trips). Shopping online or at warehouse stores can also give you access to much more affordable tires.

In addition, many tire manufacturers offer rebates throughout the year, so look into what your tire manufacturer may be offering. Having an older car may impact the cost of your tires, too.

Depending on the quality of your tires, you should inspect them after five or six years and absolutely replace them after 10. The amount you drive and the quality of the tires will affect how long they last, however, so be sure to get them checked regularly.

Another thing that affects the cost of tires is air pressure. Properly inflated tires save up to 11 cents on the gallon, and improperly inflated tires will not only impact your mileage but also weaken your tires. This will force drivers of low-pressure tires to need to replace them earlier.

There are plenty of ways to save on air refills, however.  In 2013, Nissan implemented a new feature on the 2013 Nissan Altima called the Easy-Fill Tire Alert. This feature warns drivers when their tires need to be refilled. Technological advancements like this can help the savvy consumer save more over the years.

The Expense of Car Batteries

All car batteries have a limited lifespan and will eventually lose their charge. Although it takes only a tiny amount of gas usage to charge the battery, maintaining it properly can take a lot of horsepower. This, combined with the fact that gas prices have risen astronomically since 1979, means that it’s important for car owners to improve battery life.

Often, you can get cheap batteries at local stores like Walmart and Costco, but it can also be dangerous to opt for the cheapest option, as they can often corrode or wear out more quickly. The easiest way to have a cheap battery is to maintain and care for your current one so it costs less to replace.

Turn off your lights when the engine is off, and make sure that nothing drawing on the electrical power is running when you exit your car.

You should also try to keep your battery fairly cool. While cold weather makes it harder to start your engine, the real reason why batteries struggle is due to the wear and tear of heat. Heat increases water evaporation, sapping the battery cells. This then results in the car struggling to start once cold weather arrives.

To combat this, park your car in the shade or in a garage whenever possible and try to keep your engine from overheating. Taking care of your car battery can help you both save money and help the environment.

These are just a few of the ways to lower the cost of auto insurance, tires, and batteries. Consider your vehicle’s needs and compare offerings to get the best possible deals.

 

 

About The Author: Deborah Goldberg is an insurance expert who writes and researches for the auto insurance comparison site, AutoInsurance.org.