Budgeting can be difficult at times. Some don’t see it that way. They just put out a budget every month that is exactly the same as any and every other month (what Dave Ramsey calls “the perfect month from heaven”). When we really stop and think, though, we all know that no two months are exactly alike.

What are Gotcha Expenses?

Budget for the Gotchas!

What, then, can you do to be ready for these budget “gotchas”? Here are 4 things to consider.

1. Save monthly for some.

The old-fashioned “Christmas accounts” at a local bank were there for a reason. There are some things that are quite easy to save for. My wife and I put money away each month for Christmas, for example. We do this for a few reasons. If nothing else, Christmas never moves on the calendar!

Also, though, by having that money at hand, we can jump on a good deal earlier in the year if we know what someone might want. We put the money away in cash in an envelope throughout the year. If you don’t trust yourself as much, open a special account, either online or at your local bank. Then, just have a small amount put in there each month. When December comes, you’ll be ready.

2. Use “extra” money.

Most of these “gotchas” are things that we know are coming, and a vast majority are items where we know the amount well in advance. Instead of just blowing a bonus check or some money given for a special service, use that money to help pay for one of these. That way, it barely touches your budget, if it affects it at all. As a preacher, I am asked at various times to come and preach for one night.

Often, the congregation is generous enough to pay a little money for these speaking times. My wife and I always try to do three things with this money. We give, we “pay ourselves back” for the expenses (gas, food, etc.) incurred, and then we plan to use the rest. Often, that leftover money goes to a “gotcha” item.

3. Set aside money for two (or more) months.

What I mean by this is to set aside half the amount the month before something is due, and then the other amount the month it is due. For example, if your HOA annual dues are $300, why not budget $150 for two months (or $100 for three months if money is tighter), instead of trying to find $300 in a single month. Get that money in cash, and put it in an envelope until the time comes to actually write the check or call in the payment. This spreads out the large expense without making one month really hard to manage your bill payments.

4. Don’t incur late fees and penalties.

Check and recheck the due dates on these categories. Often, late fees for dues and services are huge, and will make paying them even more of a burden. Some ofter a grace period, but only if you ask.

The real key to handling these situations is to plan ahead. It is amazing to me how some people claim a “gotcha” on something that happens quarterly, semi-annually, or even yearly. Taking a few moments to look down the line will help ease the pain of paying for those larger items that can often destroy a monthly budget.

How do you avoid or pay for “gotcha expenses?” Leave a comment below!

Stepping on a banana peel image from Shutterstock

Related Articles:

• 8 Ways We Dramatically Reduced Our Expenses This Month
• How Often Should You Review Your Household Budget Sheet?
• 15 Ways to Cut Your Expenses – GS2
• How to track daily expenses

Adam Faughn is a minister in Nashville, Tennessee. He is married to Leah and they have 2 children. You can check out his personal blog or follow him on Twitter.

Video Intro

What is the best way to start a budget?

The first thing that anyone who wants to make a budget must do is to compare their income versus their expenses. The good thing is that it is quite easy to do.

To get started you can download this free Excel budgeting spreadsheet (or you can look through 10 other budgeting spreadsheets) which will help you calculate how much you spend each month and compare it to your current income.

It’s too bad most of us never learned this in school and had to figure it out on our own – so here is the lesson that we should have learned in 5th grade:

Expenses  >  Income  =  Bad   &   Expenses  <  Income  =  Good

And honestly, as simple as it sounds, that is the key to wealth. Anyone, and I mean anyone, who IS wealthy (I emphasize IS because I am not talking about people who appear to be wealthy, but who are actually in debt up to their eyeballs) spends LESS money than they earn. AKA – their expenses are less than their income.

The great news about this is that anyone can do this – no matter what their income level. If you can do it on a small income, then you can do it on a large income. If you can’t do it on a small income, then you won’t be able to do it on a large one either. Trust me!

If you don’t believe me, just ask all of the lottery winners who went bankrupt within years of winning millions of dollars.

Back to making our budget…

Regardless of how your expenses and income compare right now – get excited, because you can easily change it!! If it is bad you can make it so much better!! If it is good, you can still make it even better!! I will show you how later, but for now…

Let’s make a budget!

Did you calculate what your monthly expenses and income were? Were your expenses less than your income? If so, you are a rare breed who is in great shape, so just sit tight for a minute.

For everyone else, whose expenses exceeded your income – you are not alone. You actually have a lot of company. The problem is that it isn’t good company! Most of our debt-ridden society is in the same boat, but you are one of the bold ones who is jumping out of the debt boat!!

So, if your income is $1000 and your expenses are $1200, that means you spend an extra $200 each month that YOU DON’T HAVE!! What your job is now is to find out what you can get rid of or quit buying each month to save that $200. If you have no idea where to start you can check out these money saving tips or browse other money saving ideas.

I know, I know – this is the part that hurts. Just like pruning a bush – cutting back hurts, but ultimately you are going to yield so MUCH more fruit because of it!!

The goal here is to get your expenses and income to AT LEAST be equal. Once that is accomplished we can work on eliminating wasteful spending or cut other costs to bring the expenses below the income.

Now that you have calculated what your monthly income and expenses are we can start designing our budget. We will first discuss the less effective, but easier method for budgeting…

The world’s easiest budget

There are 2 simple rules to do a simple budget:

1. You can’t spend more than you earn – carrying a balance on a credit card is not allowed.
2. Money must go to the budget categories as soon you get paid.

The way it works:

Rather than having 10-20 different categories of items to be budgeted for you only focus on the 1-3 most important ones and let the rest of the chips fall where they will.

So, to do this you take your paycheck of say $1000 and right off the top you put the money to your main priorities. For many people this is tithing to their church, retirement savings, college savings for children, etc…

A sample of this would be:

It is absolutely critical that the money gets taken out FIRST for these few budgeted items. If not, I can almost guarantee that the full amount will not make it as intended.

I highly recommend making this process automatic by using direct deposit or some other form of automatic withdrawal. There is just something about human nature that has a hard time staying consistent with things like this.

Why do you think the U.S. government takes our taxes directly out of our paycheck, rather than coming to collect the full sum at the end of the year? It is the same principle – use it to your advantage.

Easy budget, but not very efficient

I think this budget is perfect for people who don’t want to budget. It is simple, doesn’t take up much time, and will help you reach some savings goals. That said, it is still inefficient and leaves the door wide open for inefficient and foolish spending.

I think it should be considered the “lazy man’s budget” – and you are not LAZY and you are willing to work to get your finances in order!! I know this because you are still reading. So, since you are NOT lazy and are hungry for more of a challenge, let’s look at how the pros budget.

The money saving budgeting method

Yes, this method takes a little bit more time and energy, but it also will provide you will long-term financial benefits if followed.

To do this we are just going to expand on the lazy man’s budget mentioned above. Rather than having just 1-3 categories of items budgeted for, we are going to create as many as we need to put a limit on our spending in all areas.

You can use the budget spreadsheet (mentioned at the top of the article) as a guide for tracking your progress. Try to account for every possible expense that you could run into. You will never be able to budget for every possible scenario, but the goal is to minimize surprise expenses. Inevitably, there will still be surprises from time to time – so I suggest creating a category for these surprises (or you can just use your emergency fund).

How to stick with your budget

The almost sure-fire way to make a budget that fails is to NOT budget for any fun stuff. I wrote about how budgeting should be fun and it is a necessary ingredient for success. You need to budget for clothing, entertainment, going out to dinner, or whatever else it is you love to do! The key is to do it in moderation and to set limits and abide by them.

The amazing thing is that by budgeting for fun stuff, it actually liberates you to spend money on these items. When you have money budgeted each month to buy clothes, the money is now sitting there waiting to be used for that assigned purpose. Suddenly you can go clothes shopping without feeling guilty!!

This is how budgeting truly becomes fun. When you have money sitting in the bank waiting to be spent. Or, even better: if you start budgeting for vacation and after a little while you have hundreds of dollars begging to be spent on a vacation!! You go on your trip and come back home and don’t owe any money to a credit card company – now that is how a budget becomes fun and what helps you stick with it!!

I also suggest you check out the envelope budgeting method, or the method that I used to budget with ING.

Other budget options

There are many ways to make a budget work. The key is to finding a system that works for you and sticking with it. This article has gone over a basic method of budgeting, but if you need a little more hand-holding, and are willing to pay a little for it, I suggest YNAB budgeting software.

It is what I use and I would argue that it is the best budgeting software out there (although Mvelopes isn’t a bad budgeting tool) and makes the whole budgeting process as simple as it can be. But be warned, it isn’t a magic tool that is going to eliminate all the work – it will just make it easier to manage the budgeting process.

As far as paying for budget software I think it depends on the user. It is not a necessity by any means, but investing a few bucks could save you some time and make the process a little easier. It just depends on personal preference really.

Either way, I suggest making sure that you are committed to this whole budgeting thing before buying the software  - no one likes to waste their money!  But if you do decide to go with it, make sure you try it out first with their 34-day free trial.

Homework:

1. Create your budget!

I would love to hear what budgeting method has worked for you and what hasn’t. Let us know in the comments below…

Technorati Tags: how to make a budget, budgeting

Related Articles:

• Make Your Own Personal Budget: Articles, Tips, & Resources
• How to budget with ING direct
• 10 Free Household Budget Spreadsheets
• How to Budget: 5 Questions to Ask Yourself Before You Begin

Bob enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.

Originally this article started as 16 ways to save money by NOT being normal, but over the years we have written about so many great ways to save money, I thought I would expand on it a bit to create an even larger list of some of the best money saving tips.

Video Intro

1. Use Ebates when shopping online

Normal = Don’t get any cash back on purchases

If you are shopping online Ebates is a no-brainer! Basically it works like this…

You visit Ebates.com, then click a link to your favorite online store (they have over 1200 stores like Target, Kohls, Walmart, etc) and make your purchase like normal. Ebates will then will be paid a referral fee by that retailer and will share the earnings with you. They pay you a percentage (1%-25%) of the purchase price back. It is completely free to and they even give you a free $5 gift card for signing up. I have been with them since 2008 and have earned hundreds of dollars. For more info read my review (what is Ebates?).

2. Save money on Cell Phone Purchases

Normal = Just pay the regular price at the Verizon store

I had no idea that you can save $100 or more by NOT renewing & upgrading your cell phone service at the store. Instead you can buy cheap cell phones online from Amazon.com and do it all with them. I didn’t think much of it until I saw that some of the top phones are $100 or more cheaper from them than through your carrier. You can find out more about the program here.

3. Get Rid of Your LandLine

Normal = Spending $25/m for a phone you never use

Many people can save money by only using their cell phones and just doing away with a landline. If you are like me and prefer to use a landline rather than a cell-phone, you can still save money by getting free long distance calls using a device called Magicjack. I have been using it for years, when I purchased mine it cost me $20 for the device and it costs $20 per YEAR to use – which equates to about $1.66/month. Admittedly it is a little quirky, so read my Magicjack review to be sure you know what you are getting into.

4. Save money with the library

Normal = Pay for things that the library offers for free

If you can get past the frequently outdated décor, public libraries are home to a wealth of resources. Of course you can borrow books instead of buying them, but they also often have subscriptions to high cost services or publications like Hoovers or Valueline. Our local library has grown a huge collection of popular CDs and DVDs over the last few years. So, it can be a cheap (free) ways to catch a few good movies. If you must be “Normal” and buy, at least use these 5 ways to save money on books.

5. Buying used stuff always saves money

Normal = Buy new

This is one of my favorite creative ways to save money. I first learned the power of this back in college, when I discovered that I could get my textbooks for free, by buying and selling them at Amazon. I was paying a few bucks (at most) for my textbooks that many of my classmates were paying over $100 for.

Leo from Zenhabits suggests to, “Send out an email to family or friends, or just ask around. You might be surprised. I was about to buy a printer, and then found out my mom just bought a laser printer and didn’t need her old inkjet.” Freecycle.org and craigslist.org are also good places to look. And of course, you can always check out garage sales and thrift shops.

6. Simplify your wardrobe

Normal = Buying clothes that you like without looking at the wardrobe as a whole

Don’t buy clothes that will only work as one outfit. Look for clothes that you will be able to wear with many other things, creating multiple outfits. Instead of buying that green and purple striped coat that will only go with one or two outfits, you could get a solid color gray that will work most of what you wear. Spend less money on the trendy items that won’t be in style long, and spend more on quality items. You really can do this and still be stylish at the same time. Simplifying your wardrobe is just one way you can save money on clothes.

7. Make money with your clutter

Normal = Garage sale or throw away clutter

It is easier than you may think. eBay and Amazon.com make the process a breeze. Sign up for an account, take a few digital pictures, post it, and watch the buyers come to you. HINT: The biggest key I have noticed is selling brand name items and taking a few seconds to think, “If I wanted to buy this item, how would I search for it?” If you do this, you will be much more successful.

Below are a few more ways to make money selling your clutter…

• How to sell books on Amazon.com
• How to sell your stuff on eBay
• How to sell old electronics
• Selling Your Gold? Be Careful!
• What to do with old cell phones

Of course, some of your junk won’t be worth the effort of selling it online. For that stuff – maybe garage sale, maybe just save yourself the hassle and give it to the thrift store.

8. Maintain stuff

Normal = Buy new, don’t maintain, it breaks, then buy new as cycle repeats again and again.

Even if you buy the best stuff, if you don’t maintain it you will not save you as much money as it could. You’ll then spend less on buying new stuff. When you buy something worth maintaining, take a few minutes to read the maintenance manual, and create a maintenance checklist that you can attach to the item. For important things like your car’s oil changes or tune-ups, put them in your calendar. To make it even easier schedule most of your maintenance all on one day with a Car Day.

9. Saving energy = Saving money

Normal = wasting energy

Even though, “Being green is so IN right now,” the “normal” thing to do is waste energy. So not only will everyone think you are cool, but you can save money as well. Check out these10 Energy saving tips.

Also, I am not sure how much money this will save you, but check out Blackle.com – birthed out of a question, “How much energy would be saved if Google had a black screen instead of a white one?” Supposedly, the search results are the same as the regular Google results.

10. Save money on exercise

Normal = Sign up for an expensive gym membership and never use it

Why not be extremely abnormal? You can get much cheaper access to a gym AND use it too!! Sign up for a class at a local community college (as little as $35 a semester). Then, use your ID to work out at the community college gym. That is a lot better than the $30-$40 a month most gyms charge.

11. Regularly Shop Insurance Rates

Normal = Buy insurance and keep renewing without checking rates

Regardless of who you buy from, you can be abnormal and save money by shopping around every year or so for insurance. I have saved over $530/year for the same coverage by getting car insurance quotes on a regular basis. Now there is something to be said for finding a top-rated insurance company – it may not be worth saving $50/year to switch to a terrible company, so use your own judgement.

Term life insurance is recommended for most people and you can read my Zander term life insurance review if you are interested. To get other types of insurance quotes you can just click the links below…

• Get a Health Insurance Quote
• Get a Life Insurance Quote
• Get an Auto Insurance Quote
• Get a Home Insurance Quote

12. Use PerkStreet Financial‘s Cash-Back Debit Card

Normal = Don’t get any cash back on purchases

My PerkStreet 2% cash-back debit card is my new favorite financial product. A lot of people like to use rewards credit cards so they can get cash back from their purchases, but just one late payment can completely negate any rewards earned that month. But when you find a debit card that pays rewards just as good (if not better) as most credit card rewards programs it seems like a pretty simple decision to me. I have been banking with PerkStreet the last two months and have earned $147 in rewards over that 2 month period – not too bad!

13. Live in a smaller home

Normal = Buy the biggest house you can afford (or more than you can afford)

For some reasons, Americans just love to assume that bigger is better with just about everything. There is a plague of families constantly having to get a larger dwelling because their stockpile of junk gets too large for their current home. Often just by throwing junk away and spending time organizing storage areas and closets, you may realize that you DO have a big enough living space, it just needed a little organizational love. A lot of money can be saved by living in a smaller place. When you think about it that way, organizing really might pay very well.

14. Buy a used car

Normal = Buy a new car, pay it off (or maybe not) and buy a new one

You can save a lot of money on car depreciation by purchasing a car 2 years old or older. Some cars can lose as much as 35% in value during the first year. It’s best to drive a car as long as you can especially if you do purchase them new.

15. Shop after the season

Normal = buying Christmas décor during Christmas season

Shop for holiday cards, decorations, and gift wrap as the season ends, and keep them for next year. We do this and then we also enjoy the nice surprise after Thanksgiving of finding out what we bought the previous year that we forgot about.

16. Shop when no one else wants to

Normal = House shopping while the weather is nice

If you are considering a new home, remember the best time to buy is in the dead of winter, when other buyers huddle inside. You can save 5 percent off the peak-season price.

17. Save money on your home entertainment

You can now watch many TV programs and many free legal movies online if you hook your computer up to your TV. Or you could spend about $60 on a device that allows you to watch HDTV on your computer. Or if you rent a lot of  movies one of the best ways to save money is to use Netflix or Blockbuster’s streaming or online video rentals. For even more, you can check out these 5 movie renting alternatives.

18. Buy jewelry from a discounter

Normal = Buy jewelry from the mall jewelry store or another traditional store

If you haven’t purchased jewelry in a while, you may be interested to know that the jewelry industry is going through some major changes. Diamonds have always had ridiculous markups, but recently there are more options for relief. Many direct importers are selling rings themselves at much better prices than you could get from the traditional stores. It makes perfect sense – the traditional stores have to pay for a storefront, sales force, utilities, etc., therefore the importers can usually beat their prices hands down. I bought my wife’s engagement ring at Amazon and ended up having it appraised for thousands more than I paid. That may just be my best way to save money.

19. Save money at the hospital

Normal = Don’t know that it is possible to save money at the hospital

I didn’t realize that you had options and to be honest most times if the hospital is involved, I am “normal” and could care less about what it costs. But, if it isn’t an urgent matter there are ways to save money at the hospital that I had never thought of. Did you know that you can bring your own stuff (e.g. pillows, linens, nightgowns)? Evidently, hospitals charge quite a bit for these items. (I have no personal experience with this one – can anyone confirm or deny?)

20. Go out to dinner for half price

Normal = Go to the same few restaurants all the time and pay full price

I love to try new restaurants, but since it is quite an expensive hobby – it is nice when you can save a few bucks. Enter the Entertainment Book. This wonderful tool costs about $25, but will pay for itself quickly if you use it a couple of times. It is available for most large U.S. cities and has thousands of coupons to participating restaurants – most of which are buy-one-get-one-free. This is one of my favorites ways to find new places to eat and save money in the process. Also consider Groupon.com or Restaurant.com who sells $25 gift certificates (with restrictions) for $10 to thousands of restaurants across the country.

Feel free to share any creative and ways that you save money by NOT being “normal.”

Related Articles:

• 5 Simple Ways To Save Money Shopping
• A few great ways to save money
• How to Save Hundreds of Dollars By Taking a Day Off Work
• 15 Ways to Cut Your Expenses – GS2

Bob enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.

So, you spend more than you make – you are not alone

This is a tough one. Spending more money than you earn is common practice in the U.S., and increasingly in other countries around the world. Credit card companies have simplified the process so much that it requires quite a bit of discipline to live only on the money you make. This is a difficult task, but it is the first step (and most crucial) for most people to financial freedom.

Video Intro

Just like there are more than one way to “skin a cat” or to quit smoking, there are multiple ways to spend what (or less than) you earn. Listed below are the steps that I took to make it happen for me.

1. Believe that you can.

This is so important, because it is this belief that is going to carry you when you feel like quitting. Find people who have gone from overspending to living within their means and get encouraged by their stories. I am not sure what made me decide that I needed to change, but I had read enough stories of people changing their financial picture that I truly believed that I COULD DO IT.

If you do not yet believe that it is possible, keep reading and listening to success stories until you believe that you can do it. When you get discouraged and feel like quitting, go over the stories again and encourage yourself. The motivation gained from other people’s successes are going to be one of your main keys to succeeding, because if you do not BELIEVE that you can do it, you are NOT going to make it.

2. Eliminate the temptation to spend.

I don’t really have an opinion about cutting up credit cards, because to me it is kind of like throwing away a smoker’s pack of cigarettes. It is pretty easy to go buy another pack of cigarettes and it is almost just as easy to get another credit card. Obviously, the key here is to have a burning desire to want to curb your spending. It is not a bad idea at all to cut up the credit cards. I think I did cut up my credit card (luckily, I was too foolish to know that you could have more than one credit card at a time).

Romans 13:14 says to,”make no provision for the flesh in regard to its lusts.”

I did this by not going to the mall and not going out to eat. These were my two big areas where I spent/wasted the most money. Especially with the case of the mall, I could eliminate most of my temptation just by not being there.

3. Learn to say “NO” to yourself.

Learning to say NO to ourselves is one of the most beneficial habits we can develop. I call it a habit because it is truly is. People who never tell themselves NO have a difficult time doing it. On the other hand, people who regularly tell themselves NO find that although it may not be easy, it becomes less difficult the more you do it.

Your success is based on your ability to say NO

It is difficult to find a person who has had success in any area of their lives who didn’t become good at saying NO…

• If you want to lose weight, you have to say NO to your body when it tells you that it is going to die if it doesn’t get a Krispy Kreme doughnut.
• If you want your marriage to last you have to tell yourself NO when you really, really want to say something that you probably shouldn’t.
• If you want to succeed in your career you have to say NO to your body’s desire to be lazy and work hard and smart (even when no one is looking).
• If you want to get out of debt, you have to say NO to fun indulgences even when everyone else around you has them.

The list goes on and on, but the point remains the same: Get good at saying NO.

“Do something you hate every day, just for the practice.” –John Maxwell

The point John was making in this quote was that in order to succeed you have to do things you do not want to do. People who achieve their dreams have to pass up a whole lot to reach their destination.

As I think about areas of my life where I have been able to implement this in small steps, the corresponding rewards have been great. My walk with God, my finances, and my relationships have all seen great progress as a result of saying NO in seemingly insignificant moments.

By following these simple, yet difficult steps I went from spending about 125% of what I made to 85%. If you are over 100%, make that your first goal: not getting into anymore debt, then your next goal should be to snowball your debt and move to well below 100%.

Related Articles:

• Quit spending (Part 4)
• Encouraging story of getting out of debt: Patrick Gesselman
• How to negotiate with credit card companies – GS5
• Is It Possible to Manage Credit Cards Well?

Bob enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.

I heard about the PerkStreet Financial Cash-Back debit card about a year and a half ago and it seemed like a pretty good deal when they were offering 1% cash back on all purchases. But when I found out that they were offering 2% cash back for new customers for the first 3 months, I decided to give it a shot.

Video: How our bank has paid us over $1000

Now that I have been banking with them for 1.5 years I figured I would let you know how it has worked out for me.

Since opening my account in May of 2010 I have earned $1169 cash back.

This breaks down to an average of $58/month for doing nothing different than I was doing before I switched from my old bank. They have all the same protection and features of my old bank, the only difference is I get a ton of money back just for using them.

Everyone’s situation is different, so I know not everyone will be able use a bank like Perkstreet, but I would recommend looking at your current banking situation and budget and considering if opening an account would be worth it for you.

Below is the original article I wrote in June of 2010:

The PerkStreet Deal

Basically this is a rewards debit-card (note: debit card, not credit card) that really does have some great perks. You are lucky to find a credit card that gives you 2% cash back on your purchases, much less a debit card.

In order to get the 2% beyond the 3 month introductory period, you just need to maintain an account balance of $5000. We did this by moving our Emergency fund over to the account. But even if you have a $10 balance in your account you will still earn 1% on all purchases. So if you use the card as your primary debit card, you can imagine how the rewards could add up.

Once you are ready to cash out your rewards, you just go to the PerkStreet site and press a button and viola, your $50 or $100 Visa Gift Card will be on the way.

Here are a few of the answers to the questions I had…

• They do not have physical branches
• Similar to ING Direct, to make a deposit you have to transfer the $ from another account or set up direct deposit.
• They do offer checkbooks (and the first one is free)
• They have live phone service 24/7
• Free online banking and bill pay
• According to their website they have the “Nation’s largest surcharge-free ATM network”
• No minimum balance requirement
• FDIC insured up to $250,000

What’s the catch?

I am naturally skeptical when it comes to good deals, I am always looking for the catch in the fine print – and here it is… There is a monthly inactivity fee of $4.50 if you don’t use your debit card or write a check that month.

While I wish they didn’t have the inactivity fee, I still opened an account because I am going to make it my primary debit card. I use my debit card almost daily, so as long as I am using this account – I won’t ever being charged a fee.

How do they offer 2% cash back rewards?

According to their website, “U.S. banks spend over $80 billion a year to build and keep their branches open. Our customers prefer to bank online, so we invest our money in what really matters.” This makes sense to me. ING functions using a similar business model – they save millions by doing away with branches and pass some of the savings on to the customers.

Deciding if it is worth it

Before signing up Linda and I had a quick discussion about whether or not it would be worth it for us to sign up. I am not a guy who drives 10 miles out of my way to save 3 cents on gas, and so I didn’t want to waste my time creating this account if it really weren’t going to be worth our time.

Looking at our budget I calculated that during the first 3 months we would likely earn $55-$60 each month if we kept a $5000 buffer in our account.

After thinking about it I realized that while it would take a little time setting up the account, once it was set up, running our personal budget and money management would be no different – except that the debit card would have a different logo. So after chatting about it for a few minutes we realized that for us it would definitely be worth trying it out.

We would likely earn $500-$600 this year in cash back rewards and really don’t have to do anything different.

If things end up being different than I am expecting I will be sure to update this article.

Setting up the account

As it says on the website, it only takes about 5 minutes to open the account. I filled in all the info and then they said they would get back to me within 2 business days and the debit cards and checks would be in the mail.

(A few days later…) I logged into my new PerkStreet Account today and my deposit had been made. I haven’t received my debit card or other paperwork in the mail yet, but it looks like everything is good to go. The website is pretty simple, but seems like it will do everything that I will need it for – transferring money and bill pay.

(A couple days later…) I just received my debit cards and activated them. Now we are good to go!

If you are interested and want to find out more, you can watch the video below or visit their website here.

Have you tried out the PerkStreet CashBack debit card or are you planning on it in the future?

Related Articles:

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Bob enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.

Every time I have been late paying a bill, it wasn’t because I didn’t have the money, but because I forgot about it! My hunch is that most late-fees occur for that same reason. Back in those days when I lived in financial chaos, I didn’t have a system in place to help me remember to pay my bills.

For me this was just like playing roulette with my bills – I remembered to pay them sometimes and sometimes I would forget. It goes without saying that paying bills late (especially for credit cards) is terribly expensive. Most credit card companies charge something like $40 each time it is late as well as jacking up your interest rate to 25%.

Batching the Process

Anyone who has ever forgotten to get something from the grocery store realizes that it requires a lot less time to buy everything one day than having to go get something as you need it. It requires a grocery list and a bit of foresight, but it saves you hours throughout the week by NOT having to go back to pick up missed items. Why not implement the same type of planning to the paying of your bills?

Rather than sporadically paying them as they come in, or checking a pile on your desk every few days, you should be able to designate 2 days a month to pay your bills. And of course, if you want to save even more time use your bank’s online bill pay.

4 Steps to Manage your Bills

1. Make a list of all of your bills. Next to each one right the day that it is due. If there is not a due date just leave it blank.
2. Decide on 2 days per month that you will pay your bills. I recommend the 2 days you when you get paid (if you receive a regular bi-monthly check).
3. Organize them by due dates. Assuming the days you get paid are the 1st and 15th – you would then take all of your bills due the 22nd through the 6th and pay these on the 15th. And on the 1st of the month you would pay the bills due from the 7th -21st. This will give each bill at least a week to get to through the mail.
4. Figure out what your monthly dollar amount needed for bills is and divide it by 2. If you get paid $1000 two times each month, then you will want to pay as close to $1000 worth of bills on the 15th and $1000 worth on the 1st. Use the bills that don’t have a due date (i.e. savings accounts) to balance this out as best as possible.

Download a bill pay template

To see an example, download my bill payment schedule Excel spreadsheet. I also suggest having a designated checking account specifically to pay bills from. That way you can know exactly how much comes out (the monthly total of your bills), therefore you can know exactly how much to deposit.

Of course if your bill paying days don’t balance out perfectly (paying $1000 both days) don’t spend the money! If you paid $700 this time, you know you will have to pay $1300 next time. If you don’t touch it, you know it will be there waiting.

Related Articles:

• Money Mistake #4 – Not having a schedule for bills
• How to Pay Monthly Bills on Time
• 15 Ways to Cut Your Expenses – GS2
• Practical Budgeting Tips to Manage Your Money Better

Bob enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.

For the past two years, I’ve been running a sole proprietorship business online. I’ve had to learn a thing or two about how much money to have in my business reserves fund in order to save for domain renewals, hosting renewals, and rewards for my website contributors. How much should you have in your business reserves fund?

Perhaps you’re like me, a fellow blogger that’s looking for just the right mix of saving and spending. Or maybe you’ve had a business for over a decade and are tired of playing games with the bank to finance your operation. This one’s for both of you.

Why You Should Pay Cash for Your Business Operations

Some of you might ask why you should pay cash for your business operations as opposed to using a business loan. I believe there are four major benefits:

1. You lower your risk of defaulting on your loan. Defaulting on your business loan can add unnecessary stress to your life. You never know how your business is going to preform in the future, so don’t borrow against the future!
2. You are given more flexibility with your money. There’s just something about having cash in the bank that allows you to make better decisions and open more doors. If some unexpected expense pops up, you’ll be able to use your business reserves fund to pay for it. Credit has its limits, and you might not be able to afford an emergency if you took out a loan.
3. You pay less. No interest is a good thing, a really good thing! When you pay cash for your expenses, you can’t go into debt. Using a business loan or credit card raises your chances significantly of paying more than you should.
4. You’ll tend to build your business more slowly, not getting ahead of yourself. While credit can help you construct a business faster, it entails more risk if it falls apart. When you use your own money to build your business, you’ll go slower and will be less likely of building a business you can’t handle.

How Much Should You Have in Your Business Reserves?

I’m not going to give you a percentage. Your business is unique, and determining the percentage of your profits you should put into a business reserves fund is shouldn’t be a process that is put through a cookie cutter.

But there are a few underlying principles that should be followed. Here are they are in no particular order:

Have at least enough to fund your business through the next pay cycle or project.

For those of you who are paid monthly, you’ll want to have enough operating funds to last you through the month. If you are paid when you complete a project – let’s say every three months – you’ll want to fund your business reserves enough to last you three months. You get the idea.

Consider adding money to your business reserves account to take advantage of new business opportunities.

Sometimes it’s not enough to have enough money saved up for operating expenses – you should probably have some extra money in there to allow you to expand your business! Add some extra money for opportunities that fit your budget!

Have enough money in your business reserves fund to spend on emergencies.

You can determine approximately how much money you need in your business reserves fund for emergencies by looking at all your liabilities and assets. Ask yourself the likelihood of you needing a certain amount of money for a certain type of emergency. Then, fund your account accordingly.

When You Have to Buy Larger Purchases

As I said before, I have an online business. My operating expenses are extraordinarily low and so I’ve set my business reserves fund at $1,000. Month after month, I keep my business reserves fund at $1,000. If I spend $200, I replace that $200 with another $200 by the end of the month or as soon as possible.

This amount allows me to pay for the larger purchases such as buying hosting (I use Bluehost because they are fairly inexpensive and reliable).

I hope this helps many of you out there in determining how much money you should have in your business reserves fund! With a little research of your spending needs, you’ll quickly discover how much you should have saved up.

If you have a specific scenario you’d like to run past the ChristianPF community, leave a note in the comments below. We’ll be listening and responding!

Image by lenetstan/Shutterstock

Related Articles:

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• How Large Should Your Emergency Fund Really Be?
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John Frainee is a personal finance writer at TheChristianDollar.com. His goal is to provide biblical financial principles that encourage people to live healthier lives. Beyond personal finance, John enjoys spending time with his wife and two crazy cats, playing a competitive game of Monopoly, and reading just about anything he can get his hands on. You can also find him on Twitter and Facebook.

If you’re like me – a penny pincher – you need to know it’s okay to have a little fun every once in a while. But how much should you spend on entertainment and fun? The answer is different for everyone, but here are a a few ideas that can help you figure that out.

How Most People Spend Money

The very first step to saving money is determining that you have a problem with spending. If you do have a problem shopping and spend way more than you every should, you’re not alone.

Many people budget based on how much they have in their checking account. They figure if there’s money in there, and they can still afford their mortgage, they might as well spend their money without thinking about other expenses or the long term effects of their spending.

It is better practice to spend money in the context of a comprehensive budget. After budgeting for necessary and responsible expenses, you can choose to spend some discretionary money. How much is that? Here are some ways to determine that for you.

How Much Discretionary Money You Should Spend

Here’s the short version: enough to keep you sane, but not everything you can.

You’re going to want to save some of your discretionary money for long term financial goals. For example, you can put some extra money toward:

• Your mortgage.
• Miscellaneous debts.
• Investing.
• College education.

The more you want to get out of debt or save for retirement, the less money you’ll want to spend on discretionary fun. For our family right now, we’re spending what we consider to be a reasonable amount of fun money every month: $60.00 per person in our household (just my wife and I).

Trust me, that number used to be lower. Before we completed Dave Ramsey’s 3rd Baby Step, we only spent $20.00 per person.

The gradual increase in spending came as we started to experience success with our financial plan. We didn’t increase our spending to hundreds of dollars – just enough to keep us sane.

I recommend you try the same.

If you’re in debt and need to pay off your credit cards, keep your fun money spending low. Get intense about spending less money and paying off your debt!

If you don’t have an emergency fund and any hiccup in your financial life would cause a nuclear explosion, you might want to hold off spending too much money. Wait until you have a fully funded emergency fund, and then increase your spending.

The last thing you want to do is get ahead of your current financial situation when it comes to allocating fun money. Spend responsibly, think frugally, and be smart.

Define What Expenses Fit Your Fun Money Category

One of the best things you can do for your budget is define what expenses fit your fun money category.

Here is our definition of fun money:

Any expense that is not required for survival or for maintenance of our home should be considered a fun money expense.

This definition worked out pretty well for us, as it prevents us on cheating with the larger purchases.

Let me give you an example. I’ve wanted an iPad ever since Steve Jobs took the stage and introduced the device that would take a necessary place between the iPhone and the Macbook. But was it really necessary?

Nope. Because iPads are not “required for survival or for maintenance of our home.”

Sometimes the larger and more infrequent purchases might be justified if we didn’t clearly define what “fun money” expenses really look like.

I trust that you can figure out how much you should spend on entertainment. Follow these guidelines and you’ll be well on your way to figuring out the best amount for you.

How much do you currently spend on entertainment and discretionary items? How much will you spend now? Meet us in the comments and let us know!

Image by olly/Shutterstock

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John Frainee is a personal finance writer at TheChristianDollar.com. His goal is to provide biblical financial principles that encourage people to live healthier lives. Beyond personal finance, John enjoys spending time with his wife and two crazy cats, playing a competitive game of Monopoly, and reading just about anything he can get his hands on. You can also find him on Twitter and Facebook.

Money flows in and out of your life even if you are not really paying attention to it. You might as well be in the know and tell your money where it should go. Money does not sit idle. Our world is moving too fast. Too many people want to learn how to create a budget before they ever answer some important questions.

Your budget has to make sense to you or you are never going to use it. Just because you found some cool spreadsheet online does not mean that you are now good to go. If you do not make it your own, it won’t go anywhere. Here are 5 questions that you need to ask before you ever establish a budget.

1. How can I keep my budgeting process simple?

I have seen so many people fail with budgeting because they went from doing nothing to trying to do it all. They wanted to use expensive software and complicated spreadsheets. Even worse, they delayed using any kind of budgeting tool for months because it didn’t have “everything” they wanted to track.

Don’t get me wrong. I’m all about using tools to help you with the budgeting process, but sometimes it is the simple things that work best. When we try to overdo it when end up burned out because we can’t keep up with the job we just created for ourselves.

2. How far into the future should I look?

Another great question to settle on your budgeting journey is how far out to anticipate expenses. I have seen some people get too worried about this. They worry because things do not look good 6 months from now. While I commend you for taking a lead on your personal finances, the glass is not always half empty. Budgeting should help you to see reality but never to increase your worry. Too many good things can happen in the next 6 months. A bigger tax return than you were expecting, a surprise check in the mail from your mortgage escrow, and so on. Just decide on a reasonable time frame to look forward, all the while, keeping your hand to the plow and earning income for your family.

3. How large of an emergency buffer do I need?

One of the best tips I can give for getting your finances in order is to start an emergency buffer. This will help you to stop using your credit card for emergencies and have some peace of mind that you are in fact ready for a rainy day. Decide on an amount and do what ever you can to reach that amount. Put it into an accessible savings account and resist touching it except for emergencies.

4. What budget categories are essential for me to track?

Most of us find a budgeting spreadsheet online and then we try to use all of the categories listed. If you are just getting started, this is a plan for failure. Think about it in light of exercising. If you have not been exercising and you decide to now track on a detailed spreadsheet your performance on 30 different exercises, how long will you keep that up? My guess is not very long. Simple steps work best. Just sit down and figure out what the big budgeting categories are for you and start there. You can always get more detailed later.

5. How often will I review my budget?

This is a very important question to ask in my opinion. Creating a budget is not a one time exercise. Budgeting is not something you can just check off your list. It is a living, breathing document. It is dynamic and not static. You have to constantly review it, customize it, and use it if it is going to work for you. I sit down every Sunday evening to pay my bills, fill in my budget, and make any important money decisions. Before you ever start a budget you need to establish how often you will review your budget. Also, my wife and I have a monthly budget meeting at the beginning of every month. She is much better at the details than I am so I use this to my advantage. She lets me now about all of the miscellaneous expenses that are coming up that month so we can plan for it.

Have you answered these important questions? If you do not have clear answers to these questions there is a good chance that your budgeting strategy will fail you at some point.

What questions do you have about budgeting? What led you to failure in the past? Meet us in the comments!

Image by Karlowac/Shutterstock

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Jonathan has been blogging online since 2009 and is still in awe that the Creator of the Universe desires to have a relationship with him. He recently launched a new blog with Bob called Blogging Your Passion. It is dedicated to help bloggers find what it is they are passionate about and turn it into an income-generating blog.

Our groceries budget has fluctuated over the past couple of years. It started high, then went down pretty low, and now it is up again. I want to ask you, the readers, how much you spend on groceries so that we can all learn some valuable tips!

Our Grocery Budget Story

When my wife and I got married, we knew we had to start a budget. To be on the same page in our finances, a budget was something we could both look to for guidance when we were out and about shopping. It was an exciting time figuring out our income and expenses (although both looked pretty grim).

Looking at my pre-marriage expenses, I found that I spent just a tad too much at Burger King and KFC (understatement). And Starbucks was on my wife’s list of regular stops throughout the month. So, we realized that we were spending way too much on food – especially eating out.

I estimate I alone was spending about $400 to $500 on eating out. Yikes! Something had to change.

So we set up our “fun money” envelopes to be designated for anything including eating out. We also grabbed an envelope for groceries to keep those expenses in line.

If I remember correctly, we started out around $600 which was designated for groceries and worked our way down to bare bones over the next couple of months. Our grocery budget went down to about $300.

But then I read a book by Jack LaLanne on nutrition and fitness. Uh oh, now I had to spend more on whole foods. I realized that saving money wasn’t really worth losing my health to diabetes.

So our grocery budget went back up. Right now, we budget $460 for groceries for the two of us. That’s $230 per person per month. This seems like a good amount that can stay the same over the next few months if food prices don’t adjust too much.

Keep in mind that all our grocery money goes toward food – not any other items you’d find at the grocery store. We have separate categories for household items like toilet paper and toothpaste.

How Much Should You Spend on Groceries?

It depends. What are your goals? Are you looking to just scrape by so that you can follow a plan to get out of debt? Or are you looking to improve your health and spend a little more on your grocery budget?

Another thing that affects how much you spend on groceries is how you pay for groceries. We pay cash because it’s a great way to see quickly how much money we have left for the month.

Others spend using a debit card. If you’re going to take this route, you can save some money by getting a cash back debit card!

Where you live also has an affect on how much money you should spend on groceries.

As you already know, there are so many variables that go into determining how much you should spend on groceries. I think the answer is going to be different for everyone, so that’s why I’d like to ask for your input in the comments.

Share Your Grocery Budget Below!

Okay, here’s the deal. We can all benefit from learning about each other’s grocery budget, so leave a comment below with the following information:

1. How much you spend on groceries per person per month in your household.
2. Share how you typically pay for your groceries: the envelope system, a card, or another means?
3. If you’re in the United States, share what state you reside in.

Image by Elena Efimova/Shutterstock

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John Frainee is a personal finance writer at TheChristianDollar.com. His goal is to provide biblical financial principles that encourage people to live healthier lives. Beyond personal finance, John enjoys spending time with his wife and two crazy cats, playing a competitive game of Monopoly, and reading just about anything he can get his hands on. You can also find him on Twitter and Facebook.