Balanced Living

January 2006

New Year, New Budget

The end of holiday spending means a new year of saving

Many of us fail to see the relationship between budgeting and saving. Budgeting is a process that starts by setting spending targets that help you to stay within your means of paying for the bills. A personal budget is useful in controlling personal expenses.

Reasons for having a personal budget usually change over time. In our 20s, we focus on repaying debts or saving for a down payment on a home. We may want to budget in order to set aside several thousand dollars for a trip around the world. In our 30s and 40s, budgeting is important to help pay for our children’s living and college expenses. By the time we enter our 50s, saving for retirement becomes a major financial goal.

Budgeting is the cornerstone of saving. No personal budget often means an inability or unwillingness to identify a potential source of regular savings. A personal budget imposes some discipline on adhering to a savings plan.
Some important steps in setting up a personal budget include:

• Select a period to measure. A monthly budget often works best. Most of us pay our rent, mortgage, and utility bills monthly. It is also the period over which many of us get paid. If you are paid every two weeks, you can add the amounts to determine a monthly figure.
• Calculate net cash flow for the period. Your personal net cash flow subtracts your cash expenses (cash out-flows) from you cash income (cash inflows). If you charge with your credit card, add those charges to your cash expenses. Using your credit card is only a means of postponing cash outflows. While you’re at it, be sure to add the little items, like those $4 lattes and video store trips. These items easily add up to $100 or more in a month.
• Keep records. Accurate records will help you to keep a history of several budgeting periods. You can string together 12 months of budgets to create an annual budget. You can use your budget records to compare actual and budgeted spending. The differences in actual and budgeted spending are called variances. Be as precise in your record keeping as you can afford to be.
• Monitor and review. Your records help you to compare how well you budget. The key is to identify positive budget variances where your actual cash outflows are less than your budgeted cash outflows. These variances are a source of funds to save and invest. For example, if you budget $1,500 in monthly cash out-flows but routinely only have cash outflows of $1,400, you have identified a source of savings worth $100 a month.
• Save for an emergency fund. As you gradually find you can save each month, you may want to first set aside enough for an emergency fund. An emergency fund consists of three to six months of savings. An emergency fund is also called a rainy-day fund and should be used only to pay for unanticipated financial setbacks. These setbacks may include losing a job, becoming ill, or suffering the death of a family member.
• Invest regularly. A personal budget may have led you to identify a way to save $100 a month. Investing this extra $100 every month lets you take advantage of dollar-cost averaging. Dollar-cost averaging is a basic principle of investing. Studies consistently show that, over time, dollar-cost averaging buys shares at a cheaper price than if you attempt to time your purchases. In addition, your regular contributions fuel the compounded growth of your investments.

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Make a Healthy Resolution

20 Easy Ways to Improve Your Diet

Eating healthy can reduce your risk of illness and lengthen your life. Eating a balanced, low-fat, low-cholesterol diet reduces your risk of heart disease, certain cancers, diabetes, stroke and other diseases. Follow these tips to help improve your diet.

• Have seconds on vegetables. Doing so will help ensure you consume the recommended three- to five-serving daily minimum. Reminder: A typical vegetable serving size is 1/2 cup.
• Eat a whole-grain cereal for breakfast.
• Top your cereal with fresh fruit. You’ll add fiber and, depending on the fruit, a healthful dose of vitamins A, B and C.
• Order healthy choices when you eat out. Request that foods such as fish and chicken be baked instead of fried.
• Keep salads healthy by going easy on regular dressing or using low-fat or nonfat dressing. Four tablespoons of regular dressing can contain 60 grams of fat, which is as much as most adults should consume in a day.
• Eat fish for dinner at least once a week. The omega-3 fatty acids in fish can reduce your risk of heart attack.
• Choose whole fruit over fruit juice. You’ll consume less sugar and more fiber.
• Add onions to pizza, sandwiches, hamburgers, salads, and chili. They’re good for your blood and your heart.
• Educate yourself about nutrition. Your new knowledge will make it easier to eat a well-balanced diet.
• Drink a full glass of water before a meal and another one with it. You’ll stay hydrated and be less likely to overeat.
• Add lentils, beans, kasha, brown rice and peas to your diet for an added fiber boost.
• Buy low-fat or fat-free bologna, ham and other cold cuts.
• Choose low-fat alternatives when a food craving hits. Go for a low-fat candy bar instead of a regular one, or baked chips instead of regular ones.
• Don’t peel apples, pears, peaches and potatoes.Many of their nutrients and a lot of their fiber is contained in, or just under, their skins.
• Buy “healthy,” low-salt versions of soups, pasta sauces and luncheon meats if you’re watching your sodium intake.
• Drink iced tea instead of soda. Tea contains antioxidants and can help protect against heart disease and cancer. A 12-ounce can of regular soda contains 10 teaspoons of sugar; diet sodas are sugar-free but contain no nutrients and lots of chemicals.
• Read food labels of comparable brands of salad dressings, convenience foods, frozen foods, packaged dinners, cookies, and crackers. Choose those with the least fat, cholesterol and sodium.
• Switch from whole milk to 1 percent or skim milk.
• Take fresh or dried fruit to work for a midmorning or midafternoon snack.
• Eat reasonable portions of food. Even healthy foods can cause weight gain if you eat too much of them.

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Are you SAD?

Understanding Seasonal Affective Disorder

Seasonal affective disorder (SAD) is a depression that occurs during a particular season of the year. Most people with SAD are depressed during the fall and winter, when the days are shortest. Their depression disappears in the spring and summer. A less common type begins in late spring or early summer. Changes in the amount of daylight may be the cause of SAD.

Although many people say they get the “blues” in the winter, a person with SAD has much more difficulty coping during this season. Like other forms of depression, SAD interferes with daily life. Overcast days can make a person with SAD feel worse. People with SAD have mild to moderate depression.

SAD can affect anyone, but women and adolescents seem to be more susceptible; older adults are less likely to develop it. It is more common in northern latitudes. SAD sufferers also tend to have a family member with mental illness, such as depression or alcohol abuse.

Varying levels of the neurotransmitter serotonin are believed to play a role in SAD. The sleep hormone melatonin, which has been linked to depression, also may play a role. The body makes more melatonin in the dark. So, the shorter, grayer days of winter boost levels of melatonin.

The symptoms of SAD can be confused with symptoms of other illnesses, including hypothyroidism and viral infections such as mononucleosis.

Someone with a mild case of SAD can ease symptoms by adding more daylight to daily activities. Spending time outdoors each day and getting regular outdoor exercise are two effective methods to combat SAD. For more severe cases, doctors may prescribe light therapy and possibly antidepressants. Light therapy involves using a full-spectrum fluorescent light for a certain amount of time each morning.

Signs/Symptoms:

Winter SAD:

• Symptoms of depression or feeling “blue” only during fall and winter
• Craving for sugary or starchy foods
• Oversleeping
• Weight gain

Spring/Summer SAD:

• Decreased need for sleep
• Weight loss
• Poor appetite

Consult Your Doctor If:

You have signs or symptoms above significant enough to interfere with daily life. Your doctor can refer you to a mental health professional trained to treat patients with SAD.

Home Care Ideas:

• During the fall and winter, try to spend time outside each day.
• Get regular exercise—outdoors, if possible.
• Rearrange your furniture at home and your workspace to take advantage of as much sunlight in fall and winter as possible.

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Understanding Consumer Law

What you need to know about your rights

With more and more consumers purchasing online (especially around the holidays), you might have some questions about your rights.

I’ve ordered items they haven’t arrived, and it’s been two months. Can I walk away from the order now?

When you order something by mail, phone, fax or computer, the Federal Trade Commission Mail or Telephone Order Merchandise Trade Regulation Rule requires the company to:

• Ship the merchandise within the time promised or, if no specific delivery time was stated, within 30 days of receiving your order
• Notify you if the shipment can’t be made on time and give you the choice of waiting longer or getting a refund; and
• Cancel your order and return your payment (or credit your account if you charged the purchase) if the new shipping date can’t be met, unless you agree to another delay

If you applied for a charge account with the merchant at the same time you placed your order, the company has an extra (additional) 20 days (for a total of 50 days) to ship the merchandise to allow time for processing your application.

The rule only applies to the first shipment of magazine subscriptions and other merchandise that comes repeatedly. And it doesn’t cover:

• Orders for services (for example, photo finishing)
• Sales of seeds and growing plants
• Collect-on-delivery (C.O.D.) orders
• Transactions that are covered by the FTC Negative Option Rule, such as book and music clubs

Do online merchants have to provide the warranty so I can review it before I buy?

You have the right to review a warranty before you purchase a product. For warranty information online, look for hyperlinks leading to the full warranty, or an address where you can obtain a free copy. Reading the warranty before you buy can help you understand exactly what protection you’ll get should something go wrong later. If a copy of the warranty is available online, print it out when you make your purchase and keep it with your records.

Is it safe to provide my credit card over the Internet for a purchase?

The chances that your credit card will be misused are very remote, particularly if you give your number to the merchant in a secure manner. Most merchants use secure web sites, where your personal information is encrypted or scrambled, so that it can’t be easily intercepted. Do not send your credit card number by email as opposed to a secure order form. Emails are not secure.

How do I know an Internet site is secure for purchases?

Look for any of the following items which note a secure site:

• A notice pops up on the screen alerting you to that fact
• You see a closed lock or unbroken key in the bottom corner of your screen
• The first letters of the Internet address of the page you are viewing change to “https”.