Better Budgeting in 3 Steps
Whichever method or tools you use, the three steps to develop a monthly budget are always the same.
Step 1 - Determine Monthly Income. Your first budgeting step is to determine your monthly income. When they think about income, most people think of what they earn from their job. However, it is important to include all sources of income. For example, if you earn regular money babysitting for a relative or receive child support, it should all be included in your budget. Use net income, which is the amount of money you receive after taxes and other deductions (health and life insurance, 401k contributions, etc.) After you become comfortable managing your money on a monthly basis, you may want to consider a six-month plan and, eventually, work up to a yearly budget.
Step 2 - Identify High-Priority Bills. Your next budgeting step is to determine your high-priority bills. Examples include a mortgage or rent payment, basic utilities, auto payment, and insurance premiums. These payments are generally fixed, and you are expected to pay them every month. Some bills, such as insurance, are paid periodically. For this type of bill, budget by dividing the amount of the expense over the appropriate number of months (i.e. a quarterly payment would be divided over 3 months).
Step 3 - Estimate Other Expenses. After subtracting the priority bills from your net income, you will ideally still have money left for other important items, such as groceries, gasoline, and credit cards. The first time you set up a budget, it may be hard to determine how much you will spend on groceries or gas. So the next step is to try your best to estimate these amounts, and track your expenditures to monitor the accuracy of your estimates. Comparing your estimiates to how much you actually spend will help you adjust your budgeting amounts for the next month.
A word of warning: Most people are surprised at the amount of money they spend on trivial or unnecessary items. It’s important to set aside funds to cover the high priority bills first. Try to allocate a reasonable amount of money for miscellaneous expenditures, such as dining out and entertainment. For example, if you’ve been spending $100 per month on dining out, consider allowing only $50 in your budget. Then, after spending your allocated amount, don’t spend any more in that expense category. It takes discipline, but is well worth it. The money you save can go toward building up your emergency savings account, paying down your debts, saving for retirement, or maybe even paying for a vacation.
It may be difficult at first, but most changes are not easy. You’re changing your mindset and attitude toward money, and that takes time. But the longer you do it, the easier it becomes. It won’t be too long before your budget becomes a habit.
Spring Cleaning Your Finances
Springtime means opening the windows, sweeping out the
dust from over the winter and starting anew. It is also the
opportune time to clean out your wallet or purse, that junk
drawer full of receipts and those overflowing file cabinets.
But where to begin?
Go through your wallet and purse and fish out any receipts
you may have accumulated. Review which ones you need to
keep and why you kept them. Do you have receipts related
to rebates? If so, sit down today, fill out the form, and either
load on-line or put in the mail. Do you have credit card offers
lying around that need to be dealt with? Or, how about
passwords scribbled on post-it notes? Do you have other
receipts tacked on a bulletin board or shoved in a kitchen
junk drawer? How about all the paperwork from filing your
taxes? Rake them all together!
Once you’ve raked together all your sensitive papers, it’s
time to decide what to do with them. For tax documents,
in most cases, you should plan on keeping tax returns
and any supporting documents (e.g., W-2s, mileage logs
if you itemize, etc.) for at least three years after the date
you filed or the due date of your tax return, whichever is
later. Always consult your tax preparer, if you have questions.
Receipts not related to refunds or extended warranties can
be set aside for shredding. Do you have a pile of credit card
offers taking up space in a drawer? Get them ready for
So, once you decide what you need to shred, how do you
handle it all? Tearing the documents in half and throwing
them out is not the way to go! A home shredder is a good
idea. It is recommended that you buy a shredder that
crosscuts. In other words, you want all that paper ending up
looking like confetti, and not in strips. Home machines are
not typically heavy-duty, so be careful as to how much you
shred at a time. If your shredder is not equipped to take on
staples or other metal, be careful to remove them from the
paper to avoid damaging the blades. If you have a lot of
sensitive documents, many communities now offer Shred
events. They enable you to drop off your documents for
shredding for free, or for a small fee, and even watch it
being shredded while you wait.
Highly sensitive documents (social security cards, passports,
birth certificates, wills) should be locked up in a fireproof file
cabinet or lockbox. Gather all other pertinent papers, like
insurance forms, tax documents, mortgages, and put them in
a secure location. Inform trusted family members where the
documents are located and/or location of a key for the secure
file cabinet or lockbox.
A little planning this spring, alongside your traditional
cleaning, can set you up for a great financial year!
8 Steps for First Line of Defense against Credit Card Fraud
With all the news about breaches in security from popular places such as Target and Michaels, you may be wondering, how on earth did that happen and what can I do to protect my accounts?
Cardholder diligence and account monitoring is becoming more important as the first line of defense in fraud mitigation. Manatee Community Federal Credit Union wants you to be aware of steps you can take to decrease the chances of this from happening to you:
8 Steps for first line of Defense against Credit Card Fraud
- Monitor activity on your accounts regularly. Fraudsters are becoming savvier at avoiding detection of fraud monitoring programs by following transaction spending patterns that are similar to cardholders as well as by using less popular merchants that may not be monitored as heavily.
- Ensure your financial institution including Manatee Community Federal Credit Union has current contact information to reach you in case of suspect activity on your account. Manatee Community members: To report your MasterCard lost or stolen, please call 1-800-338-0566 immediately. To report your VISA® Debit card lost or stolen, please call 1-800-757-9848 immediately.
- When shopping online, do not store your login credentials or your debit/credit card information on websites.
- Ensure your login credentials (user IDs and specifically passwords) for your computer, online banking, smart phones, web sites or any system where you log in has secure, complex passwords that are difficult to guess (ex: minimum of 9 characters long using a combination of upper & lower case letters, number and characters).
- Update passwords for web sites regularly to ensure continued protection. We recommend doing this monthly.
- Be cautious of accessing personal information and of purchasing online if on an unsecured or public WiFi network.
- Ensure that personal computer and smart phone protections are kept current (ex: firewalls, anti-virus software, etc.)
- Be aware of current fraud trends related to social engineering (ex: phishing) and social networking sites (ex: Facebook).
Although nothing is guaranteed to completely safeguard you against breaches, these due diligent steps will make it more difficult for the culprits. If you need assistance or have any questions feel free to contact Manatee Community Federal Credit Union at 941-748-7704.