Category: Finances

9 Helpful Tips To Fix an Overdraft Problem in Your Checking Account

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Let’s admit it. We all have, at some point, looked at our bank account or updated our check register and realized we are in the red. If you have never had this happen, congratulations and move on with your amazing life. As for the rest of us, this is a scary situation to be in and I must confess, I have been there more than once.

Luckily, I have matured a little through the years and although money is still tight in my family, we are getting better at staying out of the red altogether. Here are a couple of tips to both avoid getting in the red and how to get out quick if you happen to find yourself there.

How to Avoid Dropping “Into the Red” in your Checking Account

1. Keep a detailed list of deposits and transactions

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Enter YNAB. I have written an entire post about why I love YNAB, which is a budgeting software. One of the great features is the ability to track all of your spending. Remember those old school check registers that we used to use to keep on top of how much was in our checking account? YNAB allows you to do essentially the same thing via your computer or smartphone. This has been a lifesaver for me and I have faithfully recorded every transaction since the beginning of last year.

Some people fall into the trap of only using online banking to check their account balance and fail to record their spending. I would bet I’m not the only one who, while adopting that philosophy, spent money when my online banking said I had it in my account, only to overdraft later because something hadn’t gone through yet. DON’T TRUST YOUR ACCOUNT BALANCE FROM ONLINE BANKING!

Most of us have automatic payments set up for most of our bills, some of us still use checks on occasion, and some pending transactions don’t show the true amount for a couple of days. All of these things make it difficult to budget your spending based on what your online banking shows. The best way to get around this is to keep your own records. It really isn’t as difficult as you may think. If you don’t want to use a budgeting software there are many free check register apps that are helpful too.

Of course best practices would include to record transactions on the spot, which is why a mobile app is helpful. However, life is busy and there are days when I don’t record anything. This is when I first wrack my brain to remember what I paid for and then use my online banking to double check. If I get gas and it shows as a pending transaction on my online banking, I can usually remember about how much it was. I will record that number and flag it so I can remember to check back later, when the transaction is cleared in my account, I adjust the amount as needed. This helps me stay on top of my spending and always know how much is ACTUALLY in my account and not just what the bank SAYS is in my account right now. I always look at my numbers when deciding how much money I have left, not my online account balance. This helps to keep us out of the red.

2. Round your transactions

When recording your transactions, round the amount up to the nearest dollar. When recording your deposits, round down to the nearest dollar. This is helpful in two ways. 1) You are always dealing with even dollar amounts and 2) You create a small cushion of savings. When recording your transaction for your trip to Walmart where you spent $100.57, record it as $101. When entering your paycheck for $829.78, record it as $829. This makes recording and calculating much easier, as you don’t have to deal with change. Think of it as a change collector.

We have a mason jar where we keep most of our extra change and I sometimes dig through it when I go to the car wash or something. This is essentially the same thing. Instead of accounting for every penny, forget you even have it and round your transactions. Throw the change in an invisible mason jar and feel good about the fact you are building a small cushion in your checking account to avoid overdrafts. This is another reason to record your transactions because your bank account will always say you have more than your records say you do. Trust your records and you’ll be fine.

3. Build an emergency fund

Emergency Fund2

This is a no-brainer but apart from your invisible mason jar, you want to set aside money in some kind of easy-access emergency fund. This helps to avoid going over your budget when you blow out a tire on your car one day or forget you have your amazon prime yearly subscription due this month and you don’t have that money budgeted. You can build it little by little. Making this step automatic is even better. If your job allows for direct deposit to more than one account, take advantage of that and set it up for a certain percentage to go into a savings account to build up that emergency fund. In just two years, you can save $1,000 with only $42 a month going into that account. If you get paid biweekly, that’s only $21 a paycheck!

4. Set up overdraft protection

This is the last option because I’ve come to find out that this doesn’t necessarily avoid paying fees. Most banks now charge a fee if they have to transfer money from your savings account or transfer transactions from your checking account to a credit card in cases of overdraft. It’s good to have this set up as a precaution but remember to include the other steps above in order to avoid problems in the first place. If you completely fail to check your account balance one day or by the time you check it the banks are closed, this would be a great protection. The fees associated are most likely much less than the alternative of insufficient funds fees.

What To Do Immediately If You “Drop Into the Red”

1. Start a spending freeze

Spending Freeze2

If you’re in the red, please do not continue to spend money. Insufficient funds fees are usually based on the number of transactions overdrawn. The minute you find out you’re in the red, freeze all spending in your family. That means letting your spouse know it’s NOT ok to buy a coke on their way home from work and you will have to cancel your hair appointment that day.

,Challenge yourself to only cook what you already have in the house for dinner this week, until your next paycheck. You may need to contact your utility company, cell phone provider, or any other bills that are scheduled to come out of that checking account between now and your next paycheck. Many companies will work with you if you let them know you’ve run into a small financial crisis and many times they will allow you to pay your bill a little late with little to no penalty.

2. Deposit cash or directly transfer from savings

If you check your account daily, which you should, you will see those red numbers and should act immediately. If you’re quick and you check it in the morning, you can deposit cash or directly transfer from your savings account within the same bank to cover the deficit in your account. Most banks, I believe, will waive the fees associated with overdrafting from your checking account if the problem is taken care of immediately. Depositing a check will not take care of that immediately. It must be cash or direct transfer within the same bank.

3. Raid your house for things to sell

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If you don’t have the cash…or savings…or mason jar of change…raid your house for things to sell quickly. Do you have something you meant to return to the store but haven’t yet? Get your butt to the store, with the receipt hopefully, for a cash refund. What can you part with at home that you could sell quickly? There are usually many facebook groups where you can sell things locally and if you do it right, you could sell it the same day and deposit that money right away. In Utah we also have KSL classified ads where you can sell things online, or there’s always craigslist. Get real about things you don’t necessarily need and let somebody else benefit from them while saving your financial butt.

4. Do a service for quick compensation

A while back while chatting with my sister about having to replace the transmission in our truck and wondering how that was going to be possible with our budget at the time, she quickly said, “Oh hey! I’ll pay you $100 to finish painting my furniture I started!” She gave me the money right then and it took me a few days to finish her furniture.

Maybe you don’t have a gracious sister like I do but I bet you have a neighbor who could use your help in clearing the leaves and debris from their yard. Or I once heard of a young man going door-to-door offering the disgusting service of washing out your city garbage bin for 20 bucks. The point is, people are willing to help you if you let them know you need it. I wouldn’t recommend borrowing money if at all possible. That can drive a rift between you and the ones you love. Instead, ask if there’s anything you can do to help them out and receive a little compensation in return.

5. Work on avoiding these situations in the future

There are small changes you can make to totally avoid ever going through this again in the future. I rarely overdraft in my account anymore but I do sometimes “overdraft” according to my own records. This is when my online banking shows I have $500 but according to my records, I’m negative $78. It’s sometimes easy to let that slide because I know I have an invisible cushion from rounding my transactions and it’s unlikely I will really overdraft in my checking account. However, I try to treat these “overdrafts” just as I would a real one with insufficient funds fees from the bank.

Let’s quickly recap: First and foremost, avoid these problems by keeping meticulous records (and by meticulous I mean rounding your transactions ) saving money, and setting up overdraft protection as a last resort. If you end up in this situation of “being in the red” start a spending freeze and deposit cash or directly transfer from savings immediately to cover the deficit. If you don’t have anything to deposit, get some cash by selling stuff or working for it. It’s that simple folks.

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So…what are you going to do differently to avoid these situations? Or if you find yourself there now, what are you going to do to get out of it?

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10 Minute Homemade Laundry Soap

Laundry Square

If I told you that you could wash all your laundry in a month for only a quarter and about 10 minutes of your time, would it be worth it to you? A batch of this stuff takes roughly 10 minutes to make and will last anywhere from 3-8 months depending on how much you use per load and how many loads you do. An entire batch (448 oz.) costs about $1.83. I assure you, it is worth your time.

Before I start in on this amazing stuff (of which you will find I am SUPER passionate about) let me address the upfront concerns that I, and probably you, have had about laundry soap you make yourself.

1. Do your clothes smell good?

I have a slight obsession with pleasant smells. I always want my house, my linens, and my clothes to smell good and I have gone to great lengths to accomplish this. For my laundry, I used to spend inordinate amounts of money on not only detergent but add on top of that every single product on the shelves to make my clothes smell like my Nammie’s (grandma’s) used to. It was totally possible for me to spend over $50 a month on laundry products. Yikes! To answer this question, my clothes smell no different to me. My husband trains horses so you can only imagine how not-pleasant-smelling his work clothes are. However, even when I wash them with my own laundry soap, they don’t smell any worse or any better to me than with Tide or Gain or any other brand name laundry soap. Now, I do use fabric softener (although vinegar works just fine too) and I sometimes use the Downy Beads to give it a boost but I would have done that with regular laundry soap anyway. The difference now is that I can buy those kinds of products with zero guilt since I’m saving a truckload on the soap itself. As far as my Nammie’s laundry smell? Hanging my clothes outside has proven to be the answer. Totally free, totally easy, and smells glorious in my book!

2. Do your clothes get clean?

I have a somewhat messy 4-year-old and a ridiculously messy 2-year-old and I can tell you that stains are completely commonplace at our house. I use a regular stain remover like Spray and Wash or sometimes Clorox 2 but as far as the laundry soap goes, not any different than any other I have tried. Our clothes are clean but stains are still the bain of my existence. I have found that getting stains out has more to do with how soon you wash the clothes than what kinds of products you use.

3. Is it safe on HE machines?

I have an HE machine and so does my mother who also uses this recipe. We have been making our own laundry soap for at least 3 years and have had no problems to date. If you google “homemade laundry soap he machine” you will find mostly positive comments and just about every homemade laundry soap I have seen uses almost the exact same ingredients with very similar measurements. The HE machines can’t handle a lot of suds but this is supposed to be a low-suds detergent. I have also heard that liquid laundry soap is almost always better than powdered forms on HE machines. If you’re really concerned check your owners manual or call the manufacturer.

4. Are the ingredients safe?

If you were to research the ingredients in homemade laundry soap as opposed to store-bought laundry soap, you would probably find that homemade is almost always safer than store-bought. Not that I would drink this stuff, but I feel totally comfortable with the mostly natural ingredients. I have very sensitive skin and I haven’t seen any problems in that regard with this laundry detergent. But as always, do your own research if you’re still concerned.

5. How long does it take to make?

Ok are you ready to have your mind blown? This was another big hangup of mine and why it took me so long to catch onto the DIY laundry soap train. I watched my sister make laundry soap one time, grating the soap by hand and trying to pour this globby mess out of a bottle into her machine. I have experimented a little with this recipe and have found some serious shortcuts and tricks to make this as painless as possible. Most days that I make this (which I only make it about once every few months) it takes me all of 10 active minutes, if that. It takes a while to let it cool but since that doesn’t require my attention, I don’t count it. You may need once a year an extra 15 minutes or so to grate the soap and measure it out into baggies, which is what I do, but it saves you loads of time down the road. Also, a food processor and immersion blender make this job super easy and incredibly quick. You can make it without these but in my book, it wouldn’t be worth the time investment. I bought both my food processor and immersion blender at different yard sales for about the price of a month of store-bought detergent.

Let’s Get Started

Are you ready to get started?! You will need the following ingredients:
Ingredients2

  1. Fels Naptha Soap Bar
  2. Borax
  3. Super Washing Soda

All of which can be found in the laundry aisle of your grocery store, probably on the bottom shelf. I have included links to both Amazon and Walmart (I used the link where I found it the cheapest) but quite frankly, I was amazed at how expensive these are online. I can buy each ingredient for under $5 (and the fels naptha for less than $2) at my local grocery store.

For tools you will need:

  1. Large pot
  2. 4 or 5 gallon bucket
  3. Food processor or hand grater
  4. Immersion blender or large whisk
  5. 4 one gallon containers (I use old laundry soap containers)
  6. Kitchen scale (optional)
  7. Small plastic baggies

Step One:

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I do this step once every year or two usually. I buy 4 bars of fels naptha soap and grate them all in a food processor. Use the finest grate you have and if there are any large chunks, mince them up with a knife. The chunks will not dissolve unless they are finely grated or minced. Then I use a kitchen scale to measure out 2/3 of a bar. I have already done the math for you so don’t let it be more complicated than it is. One fels naptha bar weighs about 5.7 oz. so 2/3 of that is about 3.8 oz. I separate each batch of grated fels naptha bar by weighing out 3.8 oz and putting it in a small baggie. Four bars will yield 6 batches, which is enough for at least a year or more. Doing this ahead of time will save you the largest chunk of work and time.

Step Two:

When you’re ready to make your laundry soap, heat up 8 cups of water (not to boiling but obviously hot) and pour in one bag (2/3 of a bar) of grated fels naptha soap. Stir or mix with an immersion blender until dissolved.

Step Three:

Pour in 1 cup of borax and 1 cup of super washing soda. Stir or mix with an immersion blender until dissolved.

*Note: Try not to allow your water to boil or it will start to suds up with the soap in it. It just needs to be hot enough to allow the mixture to dissolve.

Step Four:

Fill your 5 gallon bucket with 3 gallons (48 cups) of hot water from the tap. I actually drew a line with a permanent marker on my bucket so I wouldn’t have to measure 3 gallons every time. Empty the contents of your pot into the bucket. Mix with an immersion blender or large whisk until mixture seems properly diluted in the water. Let sit until mixture comes to room temperature, preferably overnight.

Step Five:

This is what the soap will look like after cooling to room temperature. There are several inches of congealed soap sitting on top. You can use your hands to break it up or just start mixing again with the immersion blender.
CongealedThis is what it looks like after a couple minutes of mixing.
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Mix, mix, mix! The more often you mix the detergent while in the 5 gallon bucket, the less you’ll need to shake it in the container to keep it from congealing. I usually mix it with the immersion blender once after adding the mixture to the bucket, again after it starts congealing and before I go to bed, and once in the morning before I start to empty the mixture into my detergent containers. That seems to be the trick and I rarely need to shake my container afterwards.

Step Six:

Fill your laundry detergent containers with the soap. I use old Gain containers and fill them with a ladle and a funnel. Each container should only be about 3/4 full. This allows for room in the container should you need to shake the detergent a little in case it congeals.

I made you a little label that you can print out on waterproof sticker paper and stick on your containers. These labels look like they would work but I actually ordered and used these ones. It helps to have the recipe on the back so you don’t have to look it up every time you go to make it. 

Download (PDF, 847KB)

And there you have it…the easiest laundry soap and $30 of savings per month. That’s almost $400 a year! What could you do with that extra money? I hope you do something fun with it…tell your husband that you worked hard to make it and so that’s your extra money

 

10 Minute Homemade Laundry Detergent
Super easy and quick DIY laundry detergent to help you save loads of money.
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Ingredients
  1. Water
  2. 2/3 Fels Naptha Bar (3.8 oz) grated
  3. 1 cup Borax
  4. 1 cup Super Washing Soda
Instructions
  1. Heat (just under boiling) 8 cups water in stockpot and add grated fels naptha bar. Stir until soap dissolves.
  2. Remove from heat and add borax and super washing soda. Stir until dissolved.
  3. Fill 5 gallon bucket with 3 gallons of hot water. Add soap mixture and blend with immersion blender until completely dissolved (about 2 minutes).
  4. Allow detergent to cool to room temperature or overnight. Blend with immersion blender two more times, allowing to sit for several hours in between to avoid congealing.
  5. Empty detergent into containers.
  6. Use 1/4-1/2 cup per load of laundry.
Adapted from Life at Cobble Hill Farm Blog
Count the Happies http://countthehappies.com/

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Let me know if you try this and any questions or concerns you have. I’ll do my best to answer them! Happy Laundry Day 🙂

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Get a Budget Finally… 5 Reasons I’m in love with YNAB!

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***This is not a sponsored post, I don’t work for YNAB nor are they compensating me at all for writing this. I wouldn’t even bring it up, let alone write this entire post about it, if I didn’t absolutely LOVE it!

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I am a sucker for apps. My iPhone and computer are full of them. I have one for just about everything you can think of. However, when it came to finance and budget apps I was sorely disappointed.

After trying to keep up with our finances and budget for years, using every program that looked worth trying, and then trying to create my own system, I was at a loss. So I did some serious research for some kind of software/app that would help me stay on top of this mess, because seriously, that’s what it felt like. One. Big. Mess.

I had heard of YNAB (You Need a Budget) a while back and the philosophy of living on last month’s income. It was appealing so I looked it up. Lucky for me they had a free month trial so I downloaded it.

This is no joke folks. This software has changed my life! Actually, it’s not merely just a software. It’s a whole new philosophy and approach to budgeting for me.

Here are 5 reasons why I can’t stop talking about it:

Categories1. Easy to Use Categories

I once got it in my head, after reading about it on a finance blog, that I needed to have 7 different bank accounts. Maybe you are familiar with this concept. Let me tell you, it didn’t take long to realize that was way too much for me to handle. I’m a simple girl and want a simple plan and although it didn’t sound too bad when I read about it, implementing it was entirely different. YNAB makes it easy to categorize your expenses but keep all the money in one account. You can easily set up additional accounts and additional budgets but for most families, one main account and budget is sufficient. You don’t have to take out cash and divide it up between categories represented by envelopes (which was also WAY too much work for me…how do you get the right amount in each category unless you’re using multiples of 20?) All the money that you budget, stays in your account but on your YNAB screen you can see exactly where every dollar belongs. However, don’t think you’re cemented into your plan once it’s made, you can easily borrow and transfer money between categories.

The relief of knowing where every single dollar goes and of course, still having the flexibility to change it up, is so nice. I don’t care how much money is in my account anymore (although it also makes that easy to follow with a sort of built in check register), I care about how much money I have budgeted in each particular category.

Real Money2. Budgeting with Real Money

Instead of setting up a budget for the entire month with anticipated income, as I have miserably failed at for my entire adult life, YNAB encourages you to only budget when you get money. Since I have always lived paycheck to paycheck anyway, this really works for me.
Obviously, the goal is to get away from paycheck to paycheck kind of living and eventually be able to create a budget for next month, with income that is already in your bank account from last month. I can’t tell you how badly I want to be able to do that.

For now, I only have to follow my budget paycheck to paycheck. For us, that’s every week. It takes me about 5 minutes to go in and budget out every dollar we received today by way of a paycheck. Then, I just use the app on my phone to make sure I stay within that limit, just for the week. If I don’t use that money I budgeted towards clothes, it still stays in that category and I can keep adding to it to use later (hello guiltless impulse shopping!), or I can move it to another category that takes priority right now.

Peace of Mind3. Provides Peace of Mind

You know when you map out a great budget and think, “YES! I’m really going to do it this time. This is my budget for the month and I’m sticking to it.” Then halfway through the month you remember you have to register your car this month, or your son ruins his only pair of church pants so you need to buy another pair, or maybe that STUPID Disney Movie Club sent you another featured title because you forgot to decline it in time and they took $40 out of your account automatically. This kind of stuff happens to the best of us but that may be $150 you didn’t budget for this month! YNAB helps you to plan for these things and helps you get a jumpstart on quarterly or annual expenses that we inevitably forget about. After budgeting all the expenses I have to pay for this week with our weekly check, I use whatever is left over and divide it among upcoming rainy day funds (such as car registration, putting our garden in, Christmas, etc.) Of course, there’s also the Buffer savings category to help us work toward the goal of saving until we can live on last month’s income. I can’t wait for the day when I can budget once a month, with money I already have, and not worry about it the rest of the month. Talk about peace of mind!!!

We also decided that we’re done stressing about Christmas money in December. It’s going to have to come from money we’ve saved throughout the year. It’s so easy to set that money aside in a category in YNAB and just add a few extra dollars when I have some left over. I don’t have to deal with a million separate accounts or take out cash or use envelopes. I just depend on my budget set up in YNAB to know where all the money in my account actually belongs. It creates this buffer where you never have to worry about your checking account going in the red as long as you are always reconciling those red numbers in your budget, borrowing and transferring between categories. The math is all done for you so there’s really little room for error.

I hate dealing with money. I like to spend it on fun stuff, but the whole financial world is mostly a mystery to me. I hate having to constantly keep track of where everything goes and pay for things like insurance and rent. However, I realize that it’s a part of life that will never go away. So anything that makes it easier and is moving me toward less stress in the future, I’m on it.

Prioritize4. Helps Me Prioritize

I’m writing this post because I know how bad it sucks to have to think about your finances and try to tame the beast. It’s even harder when you’re married and the two of you are trying to work it out together. There’s always differences of opinion or one of you (or in my case, maybe both of you) who consistently fail at following the budget. That’s why I love this program so much.  If I go a little over, I borrow from another category. This helps keep me accountable because I’m using only the real money that is currently in my account and I know I can’t overspend and hope to make it up later. If I overspend, I know I have to take the money from somewhere so it helps me prioritize. Again, it’s like a game, transferring money between categories until all the red numbers are gone.

For example, I REALLY want a water softener for our house. I had a guy from Culligan come down and give us our options. We decided that in our situation, renting for a year and possibly buying it out at the end was our best bet. It’s only $130 to install it and for two months now I keep thinking I should be able to come up with it. The old Lacie would have just scheduled to have it done and worried about how to make up that $130 later. The new Lacie with the YNAB software has looked, with every paycheck, and realized we’re still catching up from Christmas. Hopefully, we’ll be able to get on top of this soon (and it’s looking that way) so that I can finally get my water softener.

Efficient5. Super Efficient

I used the program and its accompanying app for a month and bought the software. It’s not complicated like other software that I’ve tried to use in the past. It’s meant for people like me who hate to budget and need to get on top of it. I watched the hour long getting started tutorial and I’m so glad I did. It lays it all out and it’s actually super easy and intuitive but watching the video helped. I love that I can make a budget and use my main checking account for our family’s finances and just as easily make a separate one for business. The app makes it easy to stay on top of each category and real time syncing means my husband can use it on his phone too so we’re always on the same page. No more text messages “I need gas, how much is left in our budget?” Now he can check the app and see if I got gas that day too and how much is left over.

I used to think the best way to handle finances in a marriage was to split it up. However, I much prefer working together on it and since we both have savings goals we really want to meet, uh hum…buy a house, we are more willing to work with each other and agree how much money is going where.

It’s easy to set up your categories and automate payments and things as recurring transactions. The more you use it, the easier it is to use. Not only that but the website has amazing tutorials on all kinds of things like how to categorize cash, how to handle credit card debt with the software, and how to use all the great features the program has to offer. Even if you never watched any of those videos, the program is totally functional.

The icing on the cake is…the price. One time, I spent an entire week working on an excel spreadsheet that I called “Our Family Budget.” I don’t know how many hours I spent on it, but I would venture as to say some 12 hours or so. It was several workbooks in one excel document including one for income, one for expenses, a calendar, a list of debts, etc. So let’s say I was paid $10 an hour (which is pretty reasonable for that kind of work I think). That means I spent $120 of my life working on that budget. I bought YNAB for half that, $60 after a free month.

If your budget needs a facelift, or you need to start one from scratch, try the free trial. There’s no credit card required to try it, you only put in your payment information when you’re ready to buy it. When you are ready, you can save $6 by using this link: http://ynab.refr.cc/KDPC652. So you’re only paying $54 after a month of using it and it’s yours for life, including the app.

I can’t praise it enough and although everybody is different when it comes to dealing with money, I feel like this program is the simplest and most flexible for most people.

How do you tame the budget beast?

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