Libby Morsheimer, Author at Parachute

Don’t Get Left in the Cold: A Guide to Fall and Winter Budgeting

Don’t Get Left in the Cold: A Guide to Fall and Winter Budgeting

As the leaves change and temperatures drop, so do our spending habits. The fall and winter seasons, with their holidays, colder weather, and seasonal activities, can put a significant strain on our budgets. Without a plan, you might find yourself with a trickier situation in the new year. By preparing for these predictable expenses, you can enjoy the season without the stress.

Here’s how to create a fall and winter budget that works for you.

Step 1: Identify Seasonal Expenses

The first step is to recognize the unique costs that come with these seasons. Common fall and winter expenses include:

Holiday Shopping: Gifts, decorations, wrapping paper, and holiday cards.
Travel: Flights, gas, and accommodations for visiting family or going on vacation.
Utilities: Heating bills often skyrocket as you try to keep your home warm.
Seasonal Activities: Costs for pumpkin patches, apple picking, football games, and winter sports.
Wardrobe: You may need to budget for new coats, boots, sweaters, or other cold-weather gear.
Home Maintenance: Costs for winterizing your home, such as sealing drafts, cleaning gutters, or servicing your furnace.

Step 2: Review and Adjust Your Budget

Take a look at your regular monthly budget from the rest of the year. Your fixed expenses (like rent or mortgage) will likely remain the same, but your variable expenses will need to be adjusted.

Track Your Past Spending: Review bank statements or credit card bills from the previous fall and winter. This will give you a realistic idea of how much you’ve spent on seasonal items in the past.
Create a Holiday Sinking Fund: If you haven’t already, set up a separate savings account specifically for holiday expenses. By putting a small amount of money into this fund each month, you can pay for gifts and travel without relying on credit cards.
Set Spending Limits: For each of your fall and winter expense categories, assign a realistic spending limit. For example, create a gift list with a budget for each person, or set a total amount you’re willing to spend on travel

Step 3: Implement Money-Saving Strategies

Once you have your budget in place, it’s time to find ways to make your money go further.

Reduce Your Energy Bill: Winter heating costs can be a budget-buster. Take these steps to save:
- Seal Drafts: Use weatherstripping or caulk to seal gaps around windows and doors.
- Adjust Your Thermostat: Set your thermostat to a lower temperature when you’re not home or are asleep. A programmable or smart thermostat can do this for you automatically.
- Reverse Your Ceiling Fans: This pushes warm air, which rises, back down into the room.
- Open Curtains: Use sunlight to your advantage by opening curtains on sunny days to let in natural heat.
Shop Smart for the Holidays:
- Start Early: Begin your holiday shopping in the early fall to take advantage of sales and avoid last-minute rush shipping fees.
- Use a List: Stick to your gift list and assigned spending limits to avoid impulse purchases. Remember your financial goals to curb temptation.
- Consider DIY or Experiences: Instead of buying expensive gifts, consider making homemade presents or giving the gift of an experience, like tickets to a concert or a cooking class.
Find Free or Low-Cost Activities: The seasons offer plenty of opportunities for fun that won’t break the bank. Go on a hike to see the fall foliage, visit a free holiday light display, or host a potluck dinner with friends instead of going out.

By being proactive and mindful with your spending, you can navigate the fall and winter seasons with a sense of control and peace of mind especially for the New Year!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching or call 716-712-2060.

Budget, Credit, Debt, Parachute Services

The 5-Step Formula to Financial Freedom

The 5-Step Formula to Financial Freedom

Feeling overwhelmed by debt? Struggling to save money? Many people find themselves trapped in a cycle of financial stress. With the right approach, you can take control of your finances and build a brighter future. This blog post will guide you through five essential steps to help you overcome financial challenges and help you achieve your goals. Here are some effective strategies to help you accomplish them!

Budgeting and Saving

Create a Realistic Budget: Track your income and expenses to identify areas where you can cut back.
Emergency Fund: Aim to save 3-6 months’ worth of living expenses to cover unexpected costs.
Automate Savings: Set up automatic transfers from your checking to savings account.
High-Yield Savings Account: Maximize your savings with a high-interest rate. Research daily rates at https://www.bankrate.com/.

Spend Mindfully

Track Your Spending: Monitor your expenses to identify areas of overspending.
Cut Unnecessary Expenses: Reduce costs on subscriptions, dining out, and entertainment. Most people gain the most traction by watching what they spend on food, groceries and drinking/dining out.
Shop Smart: Use coupons, compare prices, buy generic brands, shop discount grocery stores and dollar stores.
Cook at Home: Prepare meals at home frequently to save money on dining out.
Explore Money Mindfulness: https://www.forbes.com/sites/financialfinesse/2024/05/07/financial-mindfulness-the-key-to-enhancing-your-financial-life/.

Reduce Debt

Prioritize High-Interest Debt: Focus on paying off credit cards and other high-interest loans first.
Debt Avalanche Method: Pay off the debt with the highest interest rate first.
Debt Snowball Method: Pay off the smallest debt first to gain momentum.
Consolidate Debt: Combine multiple debts into a single loan with a lower interest rate.
Look into the various debt repayment options: Consult not-for-profit credit counseling agencies like Parachute to explore the best option for you! https://parachutecreditcounseling.org/services/debt-management/

Increase Income

Side Hustle: Explore opportunities like freelancing, tutoring, or driving. Turn a hobby into an opportunity!
Upskill or Reskill: Invest in your education to increase your earning potential.
Negotiate a Raise: Advocate for a higher salary or better benefits.
Passive Income: Generate income through rental properties (e.g., apartment building, a spare room, storage space), dividends, royalties, etc.

Invest

Start Early: The earlier you start, the more time your investments have to grow.
Diversify Your Portfolio: Spread your investments across various asset classes to reduce risk.
Dollar-Cost Averaging: Invest a fixed amount regularly, regardless of market conditions.
Consider a Financial Advisor: Seek professional advice to tailor your investment strategy. Because there is a risk of losing money, you should thoroughly educate yourself or seek expert advice.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Budget, Parachute Services

Money-Saving Hacks for Every Day Life

Money-Saving Hacks for Every Day Life

Here are some money-saving hacks you can incorporate into your daily routine. Remember, small amounts saved regularly add up to BIG amounts, especially over time.

At Home:

Energy Efficiency: Switch to LED light bulbs, unplug electronics not in use, and adjust your thermostat for seasonal comfort.
DIY Maintenance: Learn basic repairs for leaky faucets, clogged drains, or ripped clothes. YouTube tutorials are a great resource!
Embrace Free Entertainment: Explore free library resources like e-books, audiobooks, movies, and events. Take advantage of free outdoor activities like parks, hiking trails, or community events.
Cook More at Home: Eating out adds up really quickly! Plan meals, utilize leftovers, and explore budget-friendly recipes.
Embrace Reusable Items: Invest in reusable water bottles, coffee mugs, shopping bags, and food containers to reduce waste and save money on disposables.
Shorten Shower Time: Every minute counts! Take shorter (not colder) showers to conserve water and energy costs.
Adjust Your Water Heater Temperature: Lowering the temperature slightly can save on your energy bill.

On the Go:

Pack Your Lunch: Bringing lunch from home is significantly cheaper than eating out daily. Most people see a big impact by eating more meals or prepping them at home.
Utilize Public Transportation: Consider public transportation, biking, walking, or carpooling to save on gas and parking costs.
Plan Errands Efficiently: Combine errands into one trip to reduce gas mileage.
Embrace Free Fitness: Utilize free workout options like bodyweight exercises, running/walking outdoors, or free online fitness classes.
BYOB (Bring Your Own Beverage): Skip expensive coffee shop drinks and bring a reusable water bottle or coffee mug filled from home.
Seek Out Free Events: Many cities offer free museum days, concerts, or festivals.
Search for Free Entertainment Apps: There are many free apps for music, audiobooks, podcasts, and even mobile games.

Tech and Subscriptions:

Audit Your Subscriptions: Review your monthly subscriptions for services you rarely use and cancel those you can live without.
Negotiate Bills: Don’t be afraid to call providers and negotiate lower rates for internet, cable, or phone plans.
Utilize Free Trials: Take advantage of free trials for streaming services or apps, but remember to cancel before you get charged.
Borrow E-books and Audiobooks: Libraries offer a vast selection of e-books and audiobooks you can borrow for free.
Compare Streaming Services: Research different streaming service options and choose the one that best fits your needs and budget.
Embrace Free Open Source Software: There is free, open-source software available for many tasks, potentially replacing paid programs.

General Money-Saving Habits:

Embrace Cash: Using cash can help you stay mindful of your spending compared to swiping a card.
Set Savings Goals: Having a specific goal can motivate you to save.
Challenge Yourself: Try a “no-spend” challenge for a certain period to curb unnecessary purchases. Some people try 3 months and then 6 months, etc., without buying clothes or shoes or accessories.
Sell Unused Items: Declutter your belongings and sell them online or at consignment shops.
Embrace DIY Projects: Consider DIY alternatives for minor repairs, cleaning solutions, or even gifts.
Learn to Cook Simple Meals: Mastering a few budget-friendly meals can save you money on takeout.
Repair Clothes: Learn basic sewing skills to mend clothes instead of replacing them immediately.

Remember, consistency is key! By incorporating these hacks into your daily routine, you can make a significant impact on your savings over time.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Budget, Parachute Services, Uncategorized

Raising Financially Savvy Kids: A Guide for Parents

Raising Financially Savvy Kids: A Guide for Parents

In today’s complicated economic landscape, equipping your children with strong financial knowledge and skills is more crucial than ever. It’s not just about saving for college; it’s about building a foundation for financial well-being into the future. Here’s a practical guide for parents on how to raise financially responsible kids:

Start Early, Keep it Simple:

Toddlers (2-5 years): Introduce basic concepts like “money buys things” and differentiate between coins and bills. Use real money during playtime to familiarize them with it.
Early Elementary (6-10 years): Explain the concept of earning money through an allowance or doing small chores. Introduce the idea of saving for a desired toy or treat.
Preteens (11-13 years): Discuss budgeting, comparing prices, and the importance of delayed gratification. Open a savings account together and explain how interest works. Emphasize how SMALL savings can turn into BIG savings over time.
Teenagers (14-18 years): Introduce more complex topics like credit cards, loans, and investing. Encourage them to get a part-time job and manage their own spending.

Model Responsible Behavior:

Children learn by observing. Be mindful of your own spending habits.
Involve them in family budgeting discussions, explaining how you prioritize expenses.
Demonstrate responsible credit card usage and discuss the dangers of debt.
Show them the value of comparison shopping and seeking out deals.

The Power of an Allowance:

An allowance can be a powerful tool for teaching money management.
Consider tying it to chores to reinforce the connection between work and earning.
Encourage them to divide their allowance into spending, saving, and giving categories.
Avoid bailing them out when they overspend; let them learn from their mistakes.

Saving and Spending Smart:

Emphasize the importance of saving for future goals, whether it’s a new bike or college.
Teach them to distinguish between “wants” and “needs.”
Encourage them to research purchases and compare prices before buying.
Explain the concept of compound interest and how it can help their savings grow.

Open and Honest Conversations:

Create a safe space for your children to ask questions about money.
Talk about your own financial experiences, both successes and failures.
It is okay to say you don’t know an answer, and then research the answer together.
Tailor your discussions to their age and understanding.
Discuss the importance of charitable giving and helping others.

Practical Tools and Resources:

Find age-appropriate books and online resources to supplement your teachings.
Consider opening a joint savings or checking account with your teenager.
Explore budgeting apps and tools that can help them track their spending.
Many banks and credit unions offer educational programs for children and teens.

Values and Money:

Money is a tool, and it is important to discuss how that tool can be used.
Discuss how your family values align with how you spend and save your money.
Discuss how to avoid materialistic values.
Talk about not comparing to others materially especially in the neighborhood and through social media.
Discuss the importance of giving back to the community.

By consistently reinforcing these principles, you can help your children develop the financial skills and habits they need to achieve a secure and prosperous future.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Credit, Debt, Parachute Services

Building Credit for a Brighter Financial Future

Building Credit for a Brighter Financial Future

Building good credit is a process that takes time as well as consistent and responsible financial habits. Here are some key strategies to help you establish a strong credit history:

1. Get a Credit Card:

Secured Credit Card: This is a great option for those with no or a limited credit history. You’ll need to deposit a security amount, which acts as your credit limit. Responsible use can help you build credit over time. You can consult https://www.nerdwallet.com/best/credit-cards/secured?msockid=27ec8dd2cb9164941d859e36ca39659e for options.
Unsecured Credit Card: Once you’ve established a good credit history, you may qualify for an unsecured credit card, which doesn’t require a security deposit.

2. Make Timely Payments:

Payment History Matters: Paying your bills on time is the most crucial factor in building credit as it accounts for 35% of your credit score. Late payments can significantly damage your credit score, so be sure to be on time!
Set Reminders: Use digital tools or calendar reminders to stay on top of due dates.

3. Keep a Low Credit Utilization Ratio:

Credit Utilization: This is the amount of credit you use compared to your total available credit limit.
Aim for 30% or Less: Ideally, you should keep your credit utilization below 30%. This means if your credit limit is $1,000, you should aim to use only $300 or less at any given time.

4. Limit New Credit Applications:

Hard Inquiries: Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your score.
Apply Strategically: Only apply for credit when you truly need it. Try not to have more than 2-3 hard inquiries per year, if that.

5. Monitor Your Credit Report:

Free Reports: You can get a free credit report from https://www.annualcreditreport.com/index.action representing each of the three major credit bureaus (Experian, Equifax, and TransUnion) weekly for free.
Check for Errors: Review your report for any inaccuracies and dispute them if necessary.

Additional Tips:

Pay More Than the Minimum: Paying more than the minimum payment can help reduce your balance faster and save on interest charges.
Consider a Credit Builder Loan: These loans can help you build credit by reporting your on-time payments to credit bureaus. Consult banks and credit unions to see if they offer this.
Be Patient: Building good credit takes time. Don’t get discouraged if you don’t see results immediately. It can take several months to see the impact.

By following these tips and practicing responsible financial habits, you can establish a strong credit history that will benefit you for years to come.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Budget, Credit, Debt, Parachute Services

Living a Financially Peaceful Life

Creating and living a financially peaceful life is a journey, not a destination, and it’s very personal. It’s about aligning your financial habits and mindset with your values and goals so that money supports your well-being rather than causing stress. Here are steps to find this peace:

Deepen Your Understanding and Acceptance:

Revisit Your Money Story: Take some time to reflect on how your upbringing and past experiences have shaped your current beliefs and behaviors around money. Understanding the roots of your financial habits can help you approach them with more compassion and less judgment.
Practice Self-Compassion: Be kind to yourself regarding past financial mistakes. Everyone makes them. Focus on learning and moving forward rather than dwelling on regret.
Define “Enough”: In our consumer-driven society, it’s easy to fall into the trap of always wanting more. Take time to define what “enough” means for you. What level of financial security and lifestyle allows you to feel content, fulfilled and help you sleep at night?

Solidify Your Financial Foundation:

Craft a Conscious Spending Plan (Budget): Move beyond simply tracking expenses to creating a plan that reflects your priorities. Allocate your money intentionally towards your values and goals. Consider using different budgeting methods (e.g., 50/30/20 rule, zero-based budgeting) to find what makes sense to you.
Build a Robust Emergency Fund: Aim for 3-6 months’ worth of essential living expenses in an easily accessible, liquid account. Knowing you have this safety net can significantly reduce financial anxiety.
Prioritize Debt Reduction: Develop a clear strategy to tackle any outstanding debt. Whether it’s the snowball (start with small debts) or avalanche (highest interest rates) method, consistency is key. Celebrate milestones along the way to stay motivated.
Automate Savings and Investments: Set up automatic transfers to your savings and investment accounts on payday. This “pay yourself first” approach ensures consistent progress towards your future goals without requiring constant conscious effort.
Protect Your Assets: Ensure you have adequate insurance coverage (health, home/renters, auto, life if applicable) to safeguard yourself and your assets from unexpected events that could derail your financial peace.

Cultivate a Peaceful Financial Mindset:

Practice Gratitude for What You Have: Regularly acknowledge and appreciate the financial resources you currently possess. We can always be grateful for something.
Embrace Mindful Consumption: Before making a purchase, pause and ask yourself: “Do I truly need this? Will it genuinely add value to my life? Am I buying this for emotional reasons?”
Detach Your Emotions from Market Fluctuations: If you’re investing, understand that market ups and downs are normal. Avoid making impulsive decisions based on short-term market noise. Focus on your long-term investment strategy especially if years away from retirement.
Limit Exposure to Financial “Noise”: Be mindful of how much financial news and social media you consume. Constant exposure to others’ seemingly “perfect” financial lives or fear-mongering headlines can increase anxiety.
Focus on Progress, Not Perfection: There will be months where you overspend or face unexpected expenses. Don’t let these setbacks derail your overall progress. Learn from them and adjust your plan as needed.
Practice Generosity: Giving to others can foster a sense of connection and purpose, which can contribute to overall well-being and a more peaceful relationship with money.

Nurture Your Financial Well-being:

Regularly Review and Adjust Your Plan: Your financial goals and circumstances will likely change over time. Schedule regular check-ins (e.g., monthly, quarterly, annually) to review your progress and make necessary adjustments to your spending plan and goals.
Seek Knowledge and Education: Continuously learn about personal finance. The more you understand, the more confident and in control you’ll feel. There are ample free resources.
Communicate Openly About Money: If you share finances with a partner or family, have open and honest conversations about your goals, values, and concerns. This fosters trust and collaboration.
Know When to Seek Professional Help: Don’t hesitate to consult a fee-only financial advisor, therapist or counselor (e.g., Parachute) if you’re struggling with financial stress, anxiety, or making sound financial decisions.

Creating a financially peaceful life is a process that involves practical steps and a shift in mindset. By focusing on clarity, control, and aligning your finances with your values, you can move towards a future where money supports your overall well-being.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE