Before the days of Quicken and – when the envelope method reigned

Back in the day, when people actually “cashed’ their paychecks, and people paid for their life insurance by giving a weekly quarter to the agent, families budgeted by using the envelope method. They would place the cash available for each spending category in separate envelopes. As our culture became more comfortable with checking accounts, this strategy was mostly used to teach young people about budgeting. I imagine parent conversations went something like this: “Put 50% of your allowance into the envelope marked ‘treats,’ 25% into the envelope marked ‘savings,’ and the last 25% into the envelope marked ‘charity’.” READ MORE

Telephone service – too many charges, bills for too little convenience

I maintain two telephone lines because I don’t want to give up my business telephone number. I also had maintained two phone cards for long distance.  You know, just in case one is full.  And I was getting (4) ongoing bills for just telephone.  I was paying extra for a voice mail box, insurance, in case, the telephone wires in my 50 year old house failed and I did not have call forwarding. READ MORE

Keeping your financial act together in difficult times

I am all about helping my clients move forward financially.  It’s my way to touch people’s lives in a significant way.  I feel that I have found my work.  Unfortunately, individuals are often referred to me for work that I am not the best resource.

can help people in a number of ways:

  • Get control of their spending.
  • Create a map of how they are going to reach that next financial goal whether it’s funding retirement, college educations or getting out of debt.
  • Stop the nagging feeling that their assets are positioned wrong or that they are missing out on how to save on taxes.  READ MORE

What a difference a good p & c agent can make?

As a former licensed agent, in the distant past for a short while, and former lecturer on insurance planning you would have thought that my auto and homeowner’s policies were probably as good as value as you could get.  And still I felt like I was paying more than necessary.  So when an associate, Stafford Jacobs offered to review my coverage I took him up on his offer. READ MORE

Insuring your health – protecting your pocket book

While brainstorming/networking with a group of women business owners I found that what we all paid for health insurance was really across the board:  And I was pretty confident that this was a group of similar age and that we all enjoyed good health.  By across the board, I mean that some of us were paying around $200 per month and others were paying $800 per month.  And the later group could not exactly explain why they were paying so much more. READ MORE

Credit repair – the last debt frontier

Now that you’re back on track with your credit you might want to turn your attention to your credit score.

So why do you care about your credit score?

• Thinking about a mortgage or a loan? A good credit score could be the difference of getting financed or not.
• Many employers are including credit checks in their screening process.
• Buying a life insurance policy greater than $150,000? Your credit score will be considered. Your auto and homeowners’ policies premiums are also impacted by your credit score.  READ MORE

Welcome “Budgeting by Choice for More Savings Earned” Blog

I am a Certified Financial Planner(R) whose does cash flow based financial planning with a focus on budgeting.  While I got my CFP(R) in 1988 it wasn’t till 2007 that I made financial planning my focus.  I started by working for other financial planners in the background and grew until the role of principal adviser.  And the more financial planning I did, the more I realized that people really don’t know what they spend, and basing a plan on current spending is like building a house on a bad foundation.

As a result of having been married, I knew that those same questions were in the middle of a lot of marriages and relationships.  In my search for meaningful work, I realized that I had found “my work” in budgeting and financial planning.  I could make a difference in people’s lives.  Yes, I considered for a short time being a couples counselor.  And I realized that I empathize WAY too much and my clients would probably end up handing ME the Kleenex box.

So while I am here for you when it’s time for you to put together your budget or make a plan for your financial future, this blog is meant to give tips on how to save and, may be, include some techniques on how to work out the bumps in your cash flow.   The emphasis is on how to save money as, frankly, that’s just plain fun.  I will start with some of my own experiences and share those of my clients and others.  Thanks for checking in and if you have a question or an idea, let’s DISCUSS IT!

Dealing with debt – when to negotiate, consolidate or walk away?


Why am I starting off the year talking about debt? My hope is that if you do have debt I can help you start the year with a New Year’s resolution to face and to deal with your debt issues. To get a better fix on the issues and options that are plaguing so many people these days, I turned to JEENA CHO (, a well-respected San Francisco bankruptcy attorney, for her take on some of the more common strategies that have arisen as result of today’s difficult economy.• Debt Negotiation – It is possible to negotiate a settlement on your debts. For example, consider the case of a husband who did not pay the debt he had been assigned in a divorce. He declared bankruptcy making the wife liable for the joint debt. She was able to negotiate an $8,000 liability down to $1,000. A more typical reduction in today’s environment would be 50%.

According to Jeena, the best candidates for debt negotiation are those individuals with few creditors and the cash available to make a lump sum settlement. But consider — debt that is forgiven may be considered taxable income. Consider also that if you hire an attorney to negotiate at an hourly rate, there is no guarantee that they will be successful. It’s a little like gambling. You need to know how long to keep paying attorney fees in the hope of reducing your debt. You may also turn to a debt consolidation company. I’m sure you’ve heard their advertisements. If the company is not paid by an hourly rate, its fee is based on a percentage of debt reduced. You should avoid any company that requires an upfront fee which is typical of the prevailing scams.

One issue that comes up in negotiating debt is the effect it will have on your credit rating. To answer this question, I spoke to a number of mortgage brokers. I was discouraged as not only did several not answer the question, but more than one mortgage broker suggested that you refinance and roll up credit card debt as part of a new mortgage(s). IF YOU GET NOTHING ELSE FROM THIS EZINE, PLEASE DO NOT CONVERT UNSECURED CREDIT CARD DEBT TO DEBT SECURED BY YOUR HOME. The mortgage broker who did answer my question explained that the credit score was determined by multiple factors and that it wasn’t really possible to predict the long-term effect without a lot more information.

• Debt Consolidation/Debt Management Plans –  If you have too much debt, or you are unable to make a lump sum repayment, you can have a credit counseling agency enroll you in a debt management plan. Depending upon the creditor, interest rates may be lowered, and fees may be waived. Here’s how it works: the credit counseling agency receives payment from you and makes payments to the creditor based upon the payment plans they have negotiated with your creditors. Again, be careful which agency you choose. Look for certified counselors, with government agency endorsements from the Department of Housing and Urban Development (HUD) or the California Department of Consumer Affairs, as well as membership in national credit counseling associations. You should pay no more than $35 – $100 per month for this service, depending upon the number of creditors.

And what about your credit rating when you choose debt management? Once again, there are no definite answers. It depends upon how the creditors note the reduced payment. Some creditors will note the consolidated payment as “late” or “payments administered by a credit counseling agency,” which will negatively impact your credit report, or as “current” because they re-aged your account which will impact your report positively. If you’ve missed payments in the past or have been late in making payments, the overall impact on your report might be positive.

• Debt Elimination – One increasingly popular way to handle debt is to declare bankruptcy. It’s a complex issue and will be discussed in the next ezine(s) along with credit repair.

As a final note, I can report that many of my recent clients have had the resources or potential income to establish a successful debt reduction plan or consolidation. Even if you are in this enviable position, I would be concerned if in your eagerness to rid yourself of debt, you don’t leave yourself with an adequate emergency fund or enough cash on hand, or that you rob your retirement funds. Bottom line — even if you do have a debt reduction plan, it should be viewed in relation to your total financial plan, which is why you should include a financial planner in your debt management team.

Both Jeena Cho and I are available for complimentary consultations to determine if we can be of assistance. One fact concerning this difficult issue is that the sooner you act the better, so do get in touch as soon as possible.

Tax Preparation – Are you an individual or small business owner who typically does their taxes and would prefer not? Are you concerned about the thoroughness of the preparation and the attention to detail? If so, let Celeste, along with a local CPA who will review the returns, prepare your tax return this year.