Effective Budgeting: Step 5 (or in reality 1) in Securing Financial Freedom

Welcome back to Money Matters! While starting with budgeting might seem logical, understanding the foundational aspects of a financial plan is crucial to understanding the reason for effective budget management. Let’s explore various methods that cater to individual needs and preferences:

1. Zero-Based Budgeting: This method involves assigning every dollar a purpose, ensuring that income minus expenses equals zero. It requires meticulous expense tracking and categorization, including savings and investments.
2. The 50/30/20 Rule: Divide income into needs (50%), wants (30%), and savings and debt repayment (20%).
3. Envelope System: Allocate cash into categorized envelopes representing different expenses. Once the cash in an envelope is depleted, spending in that category stops for the month.
4. Automated Budgeting: Utilize apps or bank tools for automatic transfers, expense tracking, and alerts for overspending.
5. Pay Yourself First: Prioritize savings by setting aside a portion of income before other expenses.
6. Track and Adjust: Continuously monitor expenses and income to adapt the budget to changing financial goals.

In my role at Choreo, the integration of technology into financial management takes center stage. You might think my solution to budgeting would be a technological one, akin to method 4 above, and you’d be partly right. I started early in my career and marriage by using Mint.com as my budget tool. I linked my bank accounts, investment accounts, debt accounts, etc., and set up categories that made sense for our lives. But despite having all that data at my fingertips, there was a major problem – having information about where our money was going didn’t necessarily translate into the discipline needed to change our spending behaviors. It resulted in acquiring knowledge without actual behavioral change.

My wife and I experimented with various methods over the years, but one stood out as the most effective. Surprisingly, it wasn’t a high-tech solution but rather the envelope method. Instead of relying on high-tech software, we withdrew our budgeted cash each pay period and divided it into separate envelopes, each representing a spending category. This hands-on approach forced us to manage our spending more consciously.

Regardless of the method chosen, where should one begin? Here’s a suggested approach:

1. Download and Categorize Transactions: Start by gathering transaction data from all your accounts over the past year. This comprehensive data will provide insights into your spending patterns throughout different seasons and events.
2. Simplify Categories: When categorizing expenses, simplicity is key.
   1. Essentials: This category covers unavoidable expenses crucial for daily living, such as rent/mortgage, utilities (electricity, water, gas), groceries, transportation (fuel, public transit costs), and essential subscriptions (like health or necessary digital services).
   2. Credit Card and Loan Payments: Focus on tracking and allocating funds for paying off credit card balances, personal loans, or any other debts. Differentiate between the actual expenses incurred using credit cards and the payments made to settle these expenses.
   3. Health and Fitness: Include expenses related to healthcare, including insurance premiums, medical expenses, gym memberships, or wellness programs.
   4. Home: This category involves maintenance costs, repairs, home improvement projects, or any expenses related to your residence that aren’t covered under utilities or mortgage/rent.
   5. Insurance: Cover all forms of insurance payments, including home insurance, life insurance, car insurance, and any other relevant insurance policies.
   6. Emergency Fund: Allocate a specific amount towards building and maintaining an emergency fund. This fund acts as a safety net for unexpected expenses or financial hardships.
   7. Extra Savings and Cash: This category serves as a catch-all for additional savings beyond emergency funds. It could include funds for specific goals, such as a vacation fund, future investments, or any discretionary spending.
   8. Discretionary Cash: Reserve this category specifically for managing cash transactions, handling various day-to-day expenses that might not be explicitly covered by other categories. It could encompass spending on miscellaneous items like entertainment, dining out, shopping, or other discretionary spending.

By simplifying and clearly defining these categories, you gain a clearer view of your spending habits. This approach enables better monitoring, easier adjustments, and a more effective allocation of funds towards your financial goals. Tailoring categories to suit your lifestyle and financial priorities is crucial for the success of your budgeting endeavor.

1. Calculate Household Net Take-Home Income: This step involves determining the net income received after tax deductions, health insurance, retirement savings, and other employer-based expenses. This net income forms the basis for budgeting.
2. Determine the Bottom Line: Subtract total budgeted expenses from the total household net take-home income. This calculation reveals your financial standing, potentially highlighting a deficit or surplus.
3. Negotiate Expenses or Seek Additional Income: Once you have your bottom line, it’s time to negotiate expenses. This could involve assessing what expenses can be reduced or eliminated. It’s a challenging and emotional task that may involve discussions with your partner or family. If reaching a balanced budget seems impossible with current expenses, exploring ways to increase income might become necessary. This could involve seeking additional sources of revenue or taking on extra work.
4. Committing to the Budget: The final and most crucial step is to commit to the budget. Staying dedicated to the outlined plan requires discipline and conscious effort. Regularly track expenses and income to ensure you’re adhering to the set budget. Adjustments might be necessary over time due to changes in circumstances or financial goals.

Each step in this approach is vital for successful budgeting. It’s not merely about creating a plan but also about actively implementing and adapting it to your evolving financial landscape. Remember, these steps serve as a roadmap toward financial stability and the achievement of your desired goals.

Our next discussion will delve into goals-based planning. By allocating a portion of our budget to savings, we pave the way for life goals. This is where dreams meet planning—a favorite phase indeed.

Join us next time as we embark on the enriching journey of goals-based planning and explore common aspirations.

Matt Bankston, CFP®, Co-Publisher of the Shreveport Bossier Journal, also serves as a Managing Director at Choreo Advisors, an independent firm focused on redefining the RIA’s role in the wealth advisory industry. Choreo, LLC is registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training of the adviser or its representatives.

This story was originally published on December 7, 2023.

By TONY TAGLAVORE, Journal Services

This story was originally published on December 15, 2023.

As we gear up for this year’s festivities, we’re thrilled to bring you a comprehensive guide to the exhilarating events and cherished traditions that make our Mardi Gras celebration so exceptional.

Save the Dates: Our Mardi Gras calendar is brimming with exciting happenings:

• Twelfth Night – January 5, 2024
• Krewe of Sobek Parade – Saturday, January 13, 2024
• Krewe of Harambee MLK Day Parade – Monday, January 15, 2024
• African American History Parade – Saturday, February 3, 2024
• Krewe of Centaur Parade – Saturday, February 3, 2024
• Krewe of Barkus and Meoux Parade – February 2024
• Krewe of Gemini Parade – Saturday, February 10, 2024
• Krewe of Highland Parade – Sunday, February 11, 2024
• Mardi Gras – Fat Tuesday – Tuesday, February 13, 2024

Our local Shreveport-Bossier Convention and Tourist Bureau presents the 18th Annual Red River Mardi Gras Bash. This unique experience is perfect for groups of 10 or more, offering exclusive access to the Krewe of Centaur and Krewe of Gemini parades on February 3 and February 10, 2024. Contact Matthew Hammock at 318-429-0649 or mhammock@visitshreveportbossier.org for more details.

For those seeking an immersive experience, delve into behind-the-scenes tours at Lilah’s King Cakes to witness the artistry behind crafting their beloved king cakes. And don’t miss Tubbs Hardware and Cajun Gifts, your go-to spot for Mardi Gras souvenirs and essentials.

Mardi Gras in Shreveport-Bossier isn’t merely a celebration; it’s a tapestry of our culture, community, and heritage woven together in a vibrant display of joy and camaraderie.

Stay tuned as we cover each event, capturing the essence of our local celebrations and bringing you the pulse of Mardi Gras as it unfolds on our streets. Join us as we journey through this exciting time, embracing the spirit of Mardi Gras that defines our beloved Shreveport-Bossier!

The Health Center at Live Oak, part of The Oaks of Louisiana senior living community, earned a spot on Newsweek magazine’s prestigious list of America’s Best Nursing Homes 2024. This recognition, in collaboration with Statista Inc., celebrates excellence in long-term residential care and short-term rehabilitation.

Jaf Fielder, President and CEO of Willis-Knighton Health System, the operating body behind The Oaks of Louisiana, expressed pride in this achievement: “Being recognized by Newsweek is a significant honor. The exceptional efforts of Live Oak’s staff ensure the safety, happiness, and well-being of our residents.”

Randall Myers, Health Center Administrator, attributed this recognition to the dedication of the entire team: “This acknowledgment highlights our commitment to delivering top-notch healthcare services. Our personalized care, comprehensive services, and unwavering dedication set Health Center at Live Oak apart.”

The evaluation for America’s Best in State Nursing Homes 2024 was thorough, considering factors such as CMS performance data, peer recommendations, COVID-19 management, accreditations, and resident satisfaction. Health Center at Live Oak stands as the sole nursing home in North Louisiana with over 150 beds to make this esteemed list.

For more insights into Newsweek’s America’s Best-in-State Hospitals 2024 and the comprehensive list of recognized nursing homes, visit Newsweek’s page on America’s Best Nursing Homes 2024 150+ Beds.

SporTran, in response to insightful feedback from the Fall 2023 Community Feedback surveys, is set to usher in significant changes in the upcoming year. Taking into account the valuable input received, the transportation authority is gearing up to roll out a series of enhancements that aim to elevate commuting experiences across Shreveport.

Among the key modifications on the horizon are adjustments to several fixed-bus routes, tailored to optimize connectivity and streamline travel for residents. Moreover, the extension of the Zero Fare program signifies a commitment to fostering accessibility and inclusivity within the community, ensuring transportation remains a non-barrier for all.

Marking a milestone, SporTran is set to broaden the Shreveport Saturday service, catering to the weekend travel needs of the city’s inhabitants. Additionally, the expansion of services into previously unserviced areas within Shreveport reflects a dedication to reaching every corner, ensuring equitable access to public transportation for all starting January 2, 2024.

Why did the smartphone go to the New Year’s Eve party?

[showhide type=”post” more_text=”Show Answer” less_text=”Hide Answer”]It wanted to ring in the new year![/showhide]

What did the champagne bottle say to the wine glass at the New Year’s Eve party?

[showhide type=”post1” more_text=”Show Answer” less_text=”Hide Answer”]Pour me another one, let’s start this year off with a pop![/showhide]

The below information is shared as a courtesy from the Shreveport Water Department.

As winter approaches and temperatures drop, the department emphasizes proactive measures to protect pipes, secure the water supply, and manage utility expenses. Cold weather significantly threatens plumbing systems, but preventive actions can avert the costly consequences of burst pipes and potential flooding. To aid residents in safeguarding their plumbing, Shreveport’s Department of Water and Sewerage offers these essential tips:

• Locate and Label Your Water Main Shut-Off Valve: Identify this valve and ensure all household members know its location. A swift response to shut off water can minimize damage in case of a frozen or burst pipe.

• Insulate Pipes and Outside Faucets: Wrap pipes in unheated areas, like garages or crawl spaces, with insulation to prevent freezing. This simple step can substantially protect your plumbing.

• Disconnect, Drain, and Store Garden Hoses: Remove garden hoses, drain them, and store them before freezing temperatures arrive. This prevents increased pressure in the plumbing system and potential damage to spigots or connecting pipes.

• During Freezing Temperatures:

• Open kitchen and bathroom cabinet doors to allow warmer air to circulate plumbing, especially on exterior walls.
• Let cold water drip from the farthest faucet from the main valve to keep water moving and prevent freezing.

• In Case of a Burst Pipe: Immediately shut off the main water valve and contact a licensed and registered plumber for prompt assistance.

• Help Us Help You: If you notice the ground buckling with water coming up from the street or sidewalk, it might indicate a main break. Report it to our 24-hour EMERGENCY LINE at 318-673-7600. For billing-related issues, call our customer service line at 318-673-5510.

William Daniel, Director of Water and Sewerage, stressed, “During winter, it’s crucial for residents to take proactive steps to protect their pipes and prevent potential damage. Simple actions, like locating your water main shut-off valve and insulating pipes, can prevent costly repairs. By following these guidelines, we ensure the reliability of our water supply during winter.”

Remember, the City of Shreveport Department of Water and Sewerage is responsible for water mains and connections to the water meter, while property owners are responsible for pipes on their property.

I’m Listening

I was checking out at the grocery store one night this week.  It was my third trip to a grocery store for the week. There was no one in the check-out line and for some reason that small moment made me smile.  The two young men checking me out politely said hello.  Then one said, “How are you?”  Those were three brave words that he uttered.  So, I decided to take him up on his offer and I answered his question.  “If you really want to know, I am exhausted. I have had a busy week and I am just tired.”  He looked at me with surprised eyes in response to my honest answer and then he said two magic words.  “I’m listening.”

Don’t worry, I did not burden him with any details.  I still had self-control.  I could tell that someone in his life taught him to say those words.  Someone in church.  Someone at home.  Someone who loves him said, “I’m listening” to him before in a way that they meant it.  He actually meant it as well.  

When he said, “I’m listening.”  I heard the voice of God.  I found comfort and peace in those words.  I relaxed at the sound of those words.  I even smiled when I heard those words because they resonated with my soul. God is always listening.

How has the week been for your family or your life? If you were to fill a grocery bag with all of your frustrations, joys, prayers, hopes, successes, barriers or challenges, what would you see in that bag from the week? As you think about it, add two words to the end of the experiences.

You: “I am truly at peace and thankful.” God: “I’m listening.”

You:  “I made a good grade on my test.”  God:  “I’m listening.”

You:  “I don’t know how I’m going to get through this day.”  God:  “I’m listening.”

You:  “I can’t be perfect anymore.”  God:  “I’m listening.”

You:  “I don’t understand.”  God: “I’m listening.”

Be still before the Lord
    and wait patiently for him;
do not fret when people succeed in their ways,
    when they carry out their wicked schemes. Psalm 37:7

Join us every Thursday as we explore practices that connect us with our Creator God. God’s greatest desire is to BE with us. Spiritual practices keep us in the flow of the Holy Spirit and God’s presence. We are thrilled you are here and @Practice with us. This simple moment can be a retreat from daily life and a space for you to BE with God in your every day activities.

Meredith and Steven Bell share many things in common and share many differences. They met 24 years ago in Dallas, Texas while studying theology. With each having a science degree already, they both decided a theology degree was the next right step. For the past 24 years, they have served communities in ministry together in a number of different ways. The relationships they have built along the way with friends, colleagues and churches is a blessing to their lives. The biggest blessing is being parents to two amazing young women. From diapers to driver’s licenses, they have parented, laughed, sacrificed, loved, prayed, cried, and grown together. Their differences simply make life interesting. Growing up in different states, listening to different music, enjoying different hobbies and just seeing the world around them differently keeps conversations lively! You can find Steven at First Methodist Church of Shreveport most days unless he is looking for waterfowl with his dog, Sam. You can find Meredith writing grants for non-profits and coaching people in ministry. More than anything, you can find the Bells living grateful lives. We are grateful to live in Shreveport and even more grateful to join with others to spread hope, love, and faith in the community!

The latest Caddo Parish School Board meeting highlighted remarkable accomplishments within the district. Notable honors included Louisiana’s Elementary Counselor of the Year, Students of the Year, Support Employees of the Year, and a Shreveport Chamber of Commerce 40 Under Forty awardee. Additionally, Southern Hills Elementary secured top honors in the Greening of the Louisiana State Exhibit Museum, while Caddo Middle Magnet and Huntington High clinched first place in the Christmas in Roseland Christmas Cards to the Community program.