According to some research and reported in a new release at Brigham Young University, many of the bankruptcies that seems to be much more prevalent in certain states in the US are more due to local state policies, and not to weird community financial behavior/practices.

That’s good news – we don’t suffer from isolated pockets of financial idiocy. However, the fact remains that bankruptcies are much higher than normal due to the economy (and worsened by some local state policies). Its always the right time to revisit your budget and make sure you’re on track.

While there is no accurate answer, best guesses put about 10% of our behavior as innate while about 90% of our behavior is learned (in adults). This means that 90% of what we do is a direct result of either conscious thought processes or habit. I suggest that nearly 100% of our financial habits are learned behavior. Let me illustrate with an example. (This is a great story – worth taking the time to read it)

In a famous behavior experiment, 4 guinea pigs we put into a cage.
Each guinea pig had an electrode attached to them. There was a small circle on the floor at the center of the cage and when ever a guinea pig ran over the circle, the other 3 guinea pigs we given an electric shock. At the beginning when the guinea pigs were first put into the cage they sought a way out, and inadvertently scurried over the circle, causing the other 3 guinea pigs to receive an electric shock. It didn’t take long for the guinea pigs to learn the cause. After learning what happened, whenever a mouse would go near the circle, the other 3 guinea pigs would beat on the one.
After a while, one of the guinea pigs was removed and a new guinea pig was introduced into the same environment, but without an electrode attached to it. Of course, when first entering the cage, it scurried about seeking a way out and occasionally would run over the circle, causing the other 3 guinea pigs to receive a shock. The other 3 guinea pigs would then beat on the new guinea pig. After a while, the new guinea pig learn that whenever one of the other got near the circle, you beat on them. But that new guinea pig was not receiving any shock, it just learned from the others that that was how things worked.
After another short while a 2nd new guinea pig was introduced – same situation, no electrode. It too learned after a short while not to walk over the circle and to beat on any other who approached it.
In time, all of the original guinea pigs were replaced with new guinea pigs who did not have any electrodes. These guinea pigs had never received any kind of shock or other kind of punishment (other than from the other guinea pigs) for walking over the circle. But the learned behavior continued, and although none knew why, the circle was forbidden territory and you would get beaten up if you went near it. In actual fact, walking on the circle did nothing at this point, but the guinea pigs had learned to enforce this “rule of cage citizenship”.

We should ask ourselves – how similar are we to these guinea pigs? Do we repeat behavior simply because “thats the way its done”? Do any of the following wealth limiters apply to you?

• continue working in a job you hate because you have to pay your bills
• continue spending money they way you used to even though your income is not the same or inflation is growing
• continue living a wealthy lifestyle once you move out from your parents home, even though you can no longer directly benefit from their incomes
• go on expensive vacations even if you clearly can’t afford it
• eat out more often than your budget (and diet) should permit
• etc…

Don’t be a guinea pig. Wake up to the fact that you don’t need to blindly follow habits and patterns of behavior without good reason. More to the point, examine some of the bad financial behavior you do and determine why you do it. If you end up with “thats just the way its done”, seriously consider putting it on the chopping block or at least modify it to suit your actual needs.

There are 2 camps of personal finance products.

1. Those that connect directly to your online bank account and pull your financial information for you and attempt to automatically categorize your purchases.
2. Those that require manual input but are much more secure since they don’t touch your actual bank account.

CalendarBudget falls under camp #2. We feel that security these days is one of the most important aspects of online personal finance management. Since this model does not connect directly to your bank, there is some manual input required to get your data into CalendarBudget. Until now, that has meant checking what actually happened with your bank account and manually entering each transaction into CalendarBudget one at a time (reconciling). Admittedly, this was a tedious process. However, the act of seeing each transaction has a benefit – that is, you get to know your money habits much better than if everything is automated.

Recently, CalendarBudget introduced a Bank Reconciliation Assistant, which keeps this important benefit of understanding your spending habits while reducing the tediousness of reconciling between your online bank transaction history and CalendarBudget.

For ongoing reconciling, you can now export your account history to an OFX file (these are sometimes called MS Money or Quicken export files – depends on your bank/credit union) and then import this file into CalendarBudget. CalendarBudget then automatically picks out the transactions that are already in your budget and correct and marks the transactions that need to be added or merged, making the reconciling process MUCH easier and faster.

Here’s how it works.

1) Export your data to an OFX file. (This sample screenshot is taken from ScotiaBank’s online banking interface)
2) Login to CalendarBudget and select the Bank Import tab in the sidebar (its the new 3rd tab). Click the browser and select your OFX file from step 1. Then click the Load Transactions button.
3) You’ll now see the transactions that need to be added/merged in this list. If the date has a red X beside it, the balance for that day is not correct. This either means that the transactions below that are red need to be created or merged, or that there are entries in your budget plan on the calendar that did not actually happen on that day that should be deleted or moved into the future.
If the red transaction already exists in the calendar but just has the wrong amount, or is on the wrong date, simply drag this red transaction from the list onto the corresponding calendar entry. You’ll then be prompted to confirm the update of that calendar entry to move to the correct date and update the amount. The original transaction name and category will be preserved.
If the red transaction needs to be created (it doesn’t already exist in the calendar), simply drag it to any blank spot or day header on the calendar and you’ll be prompted to create that entry and optionally give it a more descriptive name and category.

After a few minutes of reconciling using this new Bank Reconciliation Assistant, even a budget that has been neglected for a few weeks is easily updated with no frustrating addition, subtraction and flipping between screens trying to compare balances on your budget and online banking transaction history.

This feature has been a long time coming for CalendarBudget. Already I’ve been using this and its a HUGE relief compared to the old way. I hope you find the same.

We are excited to announce that W.B. White Insurance and Financial has now made CalendarBudget available as its Money Manager tool of choice for their clients. CalendarBudget is available through the “Budget Manager” link on their toolbar just below their logo.

CalendarBudget provides the hands on tool to aid the clients of W.B.White in implementing the great money management ideas they are learning from W.B. White. CalendarBudget’s easy to use interface was created with simplicity in mind so people, like W.B. White clients, can maintain their budget in a few minutes a day and plan their future with the expected account balance shown next to the date for each day.

---

CalendarBudget is an online personal finance management tool that helps you organize your money and plan for your future.

W.B. White is an insurance brokerage firm serving the Durham Region in Ontario, Canada since 1929. They “are not tied to any one insurance company” and they “have access to an extensive range of policies offered by many of the major property and casualty insurance companies.”

Where do you see yourself financially in 2 years or 5 years? Create an account with CalendarBudget now and have a look at your financial future!

It is more challenging to track your spending when you make either most or all of your purchases on a credit card. I find my purchases don’t show up on my credit card statement until at least 3 days later. By then I’ve forgotten what the breakdown of my purchases are. I like to break my purchases down into different categories. For example, if I make a purchase at the superstore I may break it down into categories of food (for groceries), clothes (for my new shoes), house (for the new drapes), and entertainment or miscellaneous (for the DVD). I track these break downs before I forget so I can live within my budget and avoid overspending every month and creating a large debt on my credit card which has a high interest rate.

I use CalendarBudget to track my credit card spending. I usually put a purchase in CalendarBudget before I make it (planning for it) to know when I can pay for it before it collects interest or schedule the purchase for a later date when I can make the purchase without collecting interest. For those occasions when I can’t pay it all off and I do carry a balance over, I track the interest gained by making a seperate entry in my CalendarBudget Credit Card account (accounts are just another tab in CalendarBudget) for the amount of interest shown on my credit card bill. This way I can still see the trends of my spending and can also use a category for interest in my credit card account and track and see reports indicating how much I am paying on interst as time goes on. I’d rather keep the money in my pocket so it’s been in my favor to track my credit card spending and schedule it to be paid off before interest would start accumulating on my credit purchases. Also, CalendarBudget’s remind me feature sends me an email so I don’t forget to pay off the credit card before that nasty interest gets me.

What helps you to keep on top of your credit card payments and avoid interest?

There’s nothing like having a great Christmas full of happiness, family and giving and then having that fire dowsed like a sugar high crash by the realization that you have a big debt that’s been multiplied by Christmas gifts.

Often it won’t manifest itself until after New Years since we’re still in vacation/party mode. But don’t let a looming sense of debt ruin your vacation and dampen your spirits. The way to overcome that feeling is to put forth at least a minimal effort to understand where you stand financially, what your plans are for the immediate future and be on a plan to execute those plans.

This is where a budgeting system helps. It will ensure you know where your money is going and where you’ll be in the near future. Once you have that assurance, your mind will automatically stop worrying about it. And if you ARE in trouble, you can take action before you make things worse.

There are lots of budgeting systems out there from paper and pencil to fully automated systems. CalendarBudget has been designed to meet the needs of budgeters to alleviate that guilty feeling and help you get on your financial track.?? Try it today – its free while in beta period – and can get you on the right path.? If CalendarBudget is not for you, at least sit down and organize your finances so you have a plan.? It can take less than 2 hours to get a fairly accurate picture of your finances, and its time very well spent.

First of all – the rule of thumb is NEVER buy a new car unless you have money to burn. Vehicles devalue so quickly, the financing usually leaves you paying for something that is not even worth the remaining balance you owe. In fact, as soon as you drive the car off the dealers lot you can take a few $1000 off the price you just paid. 0% financing may make is look more tempting, but its still a bad deal.

Now, having said that, I just bought a new car But I did so with my eyes wide open. You may recall from a previous blog that my van died. We decided at the time to try living without owning a vehicle. We tried the experiment for 3 weeks. The money savings were great, but here’s what we found. We were spending up to 1 hour/day trying to arrange for borrowing a vehicle to get our family (7 of us) to the places we needed to be at. That time (and to a less degree, the stress of feeling like a burden to those we were constantly asking) was something we didn’t fully consider. The time I would have been working was spent thinking of who to ask, making calls, leaving messages, returning calls, worrying about not getting to meetings I had, etc…

So in the end we decided that although we could live without a vehicle, it was causing more pain (time loss, stress) that it was saving us (financially). In fact this was triggered by a friend who discovered my situation and suggest a vehicle and described some financing I hadn’t heard of before. It seems car companies are desperate to sell vehicles these days. So, in the end we bought a new car – a Kia Rondo 7-seater.

Here’s why I did it: More…

Here’s a portion of the email sent to existing users:

---

We at CalendarBudget love you and your feedback.

We are happy to announce that we have entered into a Beta period (for a few months) during which time access will be completely free.

We are making this move to introduce a number of new features such as auto-consolidation from bank transaction exports, tutorials and other great things that will make managing your finances even easier. The beta period will give us sufficient time to ensure that these important features are working properly and to incorporate your feedback before charging you for them.

We hope to get through this beta period soon (around February/March) and deliver these high quality features you’ve been asking for.

Feel free to contact me if you have any questions or suggestions for CalendarBudget.

---

Now’s your chance – sign up today and really give it a test drive for several months for free, and enjoy all the new features being constantly added.

I came across this diagram today, depicting the process of financial planning. Following these simple steps you can ensure that your current and future finances are and will be on a firm foundation.

Over the next 6 blog entries, I’ll go into detail for each point and discuss how we can plan for our future.

Feel free to add any insight you wish to the process.

Ladies and gentlemen… I give you my family, with a side-dish of cheese.