Standard Deviation as a Measure of Risk

Standard Deviation as a Measure of Risk for Stocks Explained

One of the preferred ways in which buyers will decide the dangers related to a given funding is to review its normal deviation. While mildly difficult to reach at, the usual deviation supplies numerous useful details about a safety’s worth and, particularly, the way it will “sometimes” behave.  This is why know about the standard deviation as a measure of risk for stocks is important.

In its purest type, the usual deviation tells buyers how a lot they will anticipate a safety’s worth to fluctuate from its imply returns. That signifies that if a safety usually earns 10% per year, a excessive commonplace deviation will recommend that day-to-day fluctuations shall be excessive whereas a a low normal deviation will point out that fluctuations can be decrease. In different phrases, securities a with normal deviation can be thought-about extra risky than securities with a low determine);

The significance of understanding this numbers comes right down to portfolio development. Consider a extra-balanced investor who needs to take pleasure in regular progress, understands there may be worth fluctuations however actually doesn’t need to see giant swings in a portfolio’s worth. Putting collectively a household of securities may contain selecting some shares which have greater volatility and offsetting these shares with securities which have decrease volatility. Standard deviation helps with this course of.  Related article: How to Fight Inflation.

Why is it Important to Know the Standard Deviation as a Measure of Risk?

The good factor about understanding this statistical measure is that it’s particular to the safety. In different phrases, though a safety may be a part of an general index, some might and can behave indifferently to regardless of the broader market is doing. And that degree of volatility may be unbiased of the market’s volatility as properly. Standard deviation as a measure of risk tells us precisely what to anticipate from such securities, no matter what its relationship to the broader market could be.

The shortfall with this measure is that it’s based mostly on historic knowledge and might be pretty simply manipulated. Since it can measure returns over a interval days, weeks, months and typically years, the precise commonplace may be inaccurately masked behind longer-time period market circumstances (e.g. utilizing the final 10 years) or can present inaccurately excessive deviation (e.g. utilizing the final S months of risky interval);

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Therefore, warning must be exercised when counting on this measurement and relying on present market and financial circumstances, the investor or analyst should determine how “watered down” the measurement ought to be (e.g. during times of heightened volatility, it might make higher sense to undertake an extended-time period interval, corresponding to a year or a number of years). Regardless, buyers ought to be nicely conscious of the parameters that go into the usual deviation.


Safe Harbor 401k Plan

Safe Harbor 401k Plan

A safe harbor 401k plan is a unique type of retirement plan with two significant differences from a traditional 401k plan.  One, it requires mandatory employer contributions to employee accounts.  Second, it gives an employer an ability to offer a 401k plan to employees without any required discrimination testing.

The Safe Harbor 401k plan permits eligible employees to defer a portion of their salary to their own retirement plan account.  Employers then contribute to the participant’s account on behalf of eligible employees.  And, these employer contributions come in the form of either matching or non-elective amounts.

Safe Harbor 401k Plan Eligibility

Most any type of small business is eligible to establish and maintain a safe harbor 401k plan.  Sole proprietorships, LLC’s, partnerships, and corporations, including S corporations, are examples.

All eligible employees must be allowed to participate in the 401(k). An eligible employee is any one who:

  • is a minimum of 21 years old,
  • has performed one year of service and worked 1,000 hours in the year beginning with the date of hire.
  • Union employees and non-resident aliens without United States income may be excluded from participation in the plan.

One important thing to remember is that an employer may not establish more restrictive requirements than those listed above.  However, employers may set up less restrictive requirements for employee entrance into the safe harbor 401k plan.

Safe Harbor 401k Tax Benefits Tax Advantages

Employer contributions are tax deductible for the employer — up to 25% of compensation of all eligible participants.  Employee elective deferrals are excluded from the employee’s income for Federal Income Tax purposes.  Tax-deferred growth potential is possible — any investment earnings grow tax-deferred until withdrawn.


Vesting refers to the participant’s ownership rights in the value of his or her retirement account.  Often, a traditional 401k plan required participants to wait a certain number of years before they can access the employer matching contributions. 

However, a safe harbor 401k is unique in comparison to other types of 401k plans in that all employee and employer safe harbor contributions are fully vested immediately.  There is no waiting period for employees to access the matching contributions made by employers.

Plan Deadline

Generally, the deadline to establish a new plan is anytime between January 1 and October 1 of the applicable year.

Contribution Flexibility

Under a safe-harbor plan, an employer can match each eligible employee’s contribution, dollar for dollar, up to 3% of the employee’s compensation, and 50 cents on the dollar for the employee’s contribution that exceeds 3 percent, but not over 5%, of the employee’s compensation.

Alternatively, employers may make a non-elective contribution equal to 3 percent of compensation to each eligible employee’s account. Non-elective contributions essentially means that contributions are made by employers to employee accounts regardless of employee contributions. 

Plan Compliance Issues

Because of the vested matching contributions required of the employer, the safe harbor 401k does not call for broad discrimination testing.  The safe harbor employer contributions stand in the place of discrimination testing.

Employee Benefits

  • Attracting and retaining key employees is easier with a 401k plan.
  • A 401k plan can help in providing retirement income for eligible employees.
  • Elected Roth contributions are allowed in safe harbor 401k plans.

Early Withdrawal Penalty

A 10% penalty is typically applied to all early distributions on safe harbor 401k plans, as well as traditional 401k plans.  Early distributions are distributions that occur before the age of 59½.

HSA Rules

HSA Rules For Employer Contributions

Health Savings Account Issues for Employers and Employees

HSA Rules For Employer Contributions Must Be Fair for Employees! 

First, and perhaps most importantly, employer need to know that HSA rules require that contributions to employees must be “comparable” for all employees participating in the HSA.  If they are not comparable, or fair in terms of the IRS code, there will be an excise tax equal to 35% of the amount that the employer contributed to employees’ HSA’s.  Comparable contributions are contributions to all HSA’s of an employer, which are:

1.    The same amount, or
2.    Which are the same percentages of the annual deductible.

When it comes to testing for comparability, an employer may only count employees who are “eligible individuals” covered by the employer under the high-deductible health plan and who have the “same category of coverage” (i.e., self-only or family).  No other classifications of employees are currently permitted.

Part-time employees can, and should, be tested separately from full-time employees.  “Part-time” means customarily employed fewer than 30 hours per week.   

Employer matching contributions to the HSA through a cafeteria plan are not subject to the comparability HSA rules, but cafeteria plan non-discrimination rules apply. Non-discrimination rules typically look to make sure that contributions aren’t greater for higher paid employees than they are for lower paid employees.  (However, contributions that favor lower paid employees are generally considered allowable.)  

Employer contributions into employee’s HSA accounts are always excluded from employees’ income (pre-tax), and distributions are tax-free if taken for “qualified medical expenses”, which now includes over-the-counter drugs.

Timing Issues Regarding the Setup of HSA’s 

HSA rules for qualified medical expenses must be incurred on or after the account was established. If the high-deductible health plan coverage becomes effective on first day of the month, the HSA can be established as early as first day of same month.  Conversely, if the high-deductible health insurance coverage is effective any day other than first day of month, HSA cannot be established until first day of following month.  

Can Medically-Related HSA Distributions be Taken for Someone Other than the Owner? 

Tax-free distributions can be taken for qualified medical expenses of the:

  •  Person covered by the high deductible.
  • Spouse of the individual (even if not covered by the high-deductible health plan).
  • Any dependent of the individual (even if not covered by the high-deductible health plan).

How Much Tax Do I Pay if my Distribution is not Used for Qualified Medical Expenses? 

If an account distribution is not used for qualified medical expenses, the amount of the distribution is included in taxable income for 1040 Federal Tax purposes, and an additional 10% tax is applied except when taken after:

  • Individual dies or becomes disabled, or
  • Individual is age 65.

“Qualified medical expenses” do not include other health insurance (including premiums for dental or vision care).  The exception to these HSA rules include:

  • COBRA continuation coverage.
  • Any health plan coverage while receiving unemployment compensation.
  • For individuals enrolled in Medicare: Medicare premiums and out-of-pocket expenses (Part A, Part B, Medicare HMOs, and prescription drug coverage).
  • The employee’s share of premiums for employer-based coverage.
  • Cannot pay Medigap premiums.
  • Qualified long-term care insurance premiums.

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Should the HSA account holder keep receipts?

YES!  Here is why:

  • The account-owner may need to prove to IRS that distributions from an HSA were for medical expenses and not otherwise reimbursed, and
  • He or she may be required by an insurance company to prove that a high-deductible health plan deductible was met.

Not all medical expenses paid out of the HSA have to be charged against the deductible (e.g. dental care, vision care), and health savings account distributions can be used to reimburse prior years’ expenses as long as they were incurred on or after the date the HSA was established.  There is no time limit on when a distribution must occur, but the individual must keep sufficient records to prove that:

  • the expenses were incurred,
  • they were not paid for or reimbursed by another source, or
  • they were taken as an itemized deduction on a previous tax return.

Mistaken HSA distributions can be returned to the HSA. It should be noted that clear and convincing evidence must be shown that the distribution was a mistake of fact.

The original distribution must be repaid by April 15 of the year following the year in which the individual knew or should have known the distribution was a mistake.

What happens to an HSA when the HSA owner dies? 

If the spouse is the beneficiary of the health savings account, the spouse inheriting the HSA is treated as the owner.  To the extent the spouse is not the beneficiary, the account will no longer be treated as an HSA upon the death of the individual. 

The account will then become taxable to the decedent in the decedent’s final tax return if the estate is the beneficiary, otherwise, it will be taxable to the recipient.

The taxable amount will be reduced by any qualified medical expenses incurred by the deceased individual before his or her death and paid by the recipient of the account.  Also, the taxable amount will be reduced by the amount of estate tax paid due to inclusion of the HSA into the deceased individual’s estate.

HSA Rules: Who Owns the HSA?  The Employer?  The Individual? 

Accounts are owned by the individual (not an employer). The individual decides:

  • Whether he or she should contribute,
  • How much to use for medical expenses,
  • Which medical expenses to pay from the account,
  • Whether to pay for medical expenses from the account or save the account for future use,
  • Which company will hold the account,
  • What type of investments to grow account,

The employer cannot restrict:

The health savings account custodian or trustee can put reasonable limits on accessing the money in the account because of:

  • Frequency of distributions, or
  • The size of the distributions.

Who can be an HSA Trustee or Custodian?

  • Banks,
  • Credit unions,
  • Insurance companies,
  • Entities already approved by the IRS to be an IRA or Archer MSA trustee or custodian,
  • Other entities can apply to the IRS to be approved as a non-bank trustee or custodian.

Trustee, investment, or custodian fees can be paid from the assets in the HSA account without being subject to tax or penalty.

There are no “use-it-or-lose-it rules” like Flexible Spending Arrangements (FSAs).  All amounts in the HSA are fully vested.

Unspent balances in accounts remain in the account until spent.  In this, HSA’s encourages account holders to spend their funds more wisely on their medical care without the “use-it-or-lose-it” hurdles.  HSA’s also encourage account holders to shop around for the best value for their health care dollars.

  • Accounts can grow through investment earnings, just like an IRA. Same investment options and investment limitations as with IRAs.
  • Same restrictions on self-dealing as with IRAs.
Moving Out of Parents House

Moving Out of Parents House & Dealing With Money

Guide to Moving Out of Parents House & Dealing With Money

People do not stay at home in the entire life. The life must go on. And to build up the career and to make success in life you people need to focus on moving out of parents house.  For education, job or business, they must have to face the reality of life. But, most of the people often get stuck or fixed in the times of managing the money.

Staying at home, actually keeps people tension free from the tense of money management and dealings.  Especially, when people stay with parents they don’t have to care for anything. The problem arises when they leave home. Leaving home leads people in huge problem as they will have to manage each and every financial aspect in their own way. And often they fail to manage that.

So, what they need to do is to know and learn to manage the money so that they can get out of financial problems. Here you get to know the ideas about the ways to manage the money and budget so that life can run smoothly.

Planning a budget:

This is actually the most important part of money management. People need to make a budget about the expenses in every month. They must know how much they earn and how much they can expense. With this assessment, they need to set up a budget.

One thing must be performed and that is you should not spend more than you earn. You should spend less than your earnings. This habit can save you from all odds in the management of the life after leaving home. In fact, people must maintain this and exceed the budget.

It may happen for some month that you need to spend exceeding the budget. If you will have to do that, make sure you can recover that in the next month. If you can manage to make some savings in every month, you may not have to face problems even if you have to exceed the budget in a month. You can manage to make that possible with using the saving account.

Avoiding taking loans:

After leaving home, most of the people make this mistake. They depend on payday loan no credit check. This habit can lead them to huge problems. The problems are associated with the default as they can not manage to repay the debts. This can harm the future financing as well. So, people should avoid taking loans.

Instead of taking bad credit loan, they can do an added job. Utilizing the vacation or weekends can make you generate some money so that you do not need to go for a loan. Whatever you do, you should not go for applying for a loan.

Avoiding using credit cards a lot:

If you have the habit to purchase everything with credit card, avoid that if you have left home for making career. This habit can lead you face credit card debts which can harm you a lot. So, use the credit card as less as you can. It would save you from many dangers.  Now you’re ready to start the process of moving out of parents house.

Fidelity Credit Card Review

The fidelity credit card has a lot of great perks.  This includes a number of things from 401k improvements to the fidelity rewards card.

Using 401k For Down Payment On House

Using 401k For Down Payment – Is It Right For You?

After adding money to your 401k plan over several years, you may have built up a lot of money inside your 401k accounts. These accounts could be a desirable supply of funds for investing in a home. Nevertheless, there tend to be rules as well as restrictions upon withdrawals from the 401k accounts. Fortunately, there may be a way for you to make use of the money within your 401k plan. One great way is using 401k for down payment.

Some 401k programs allow participants to consider a loan from the funds inside the 401k. Usually, the 401k plan will limit the quantity of the loan to some certain percentage from the total balance. This implies that you cannot borrow all the money inside your plan, are just some of it. Nevertheless, this quantity may be significant enough to become useful for the long-term objectives.

Borrowing From 401k Plan

Using 401k For Down Payment Fidelity

Here’s a screenshot showing what loans you have available through your 401k plan if you’re using Fidelity.

When a person borrow money from the 401k plan, you borrow the cash from yourself. In additional words, the money is withdrawn out of your account as well as distributed for you.  That means there isn’t a credit check as well as your credit score doesn’t impact in your loan rate of interest.  This is because, there isn’t any risk in order to any lender.  You are repaying yourself. Actually, the curiosity you pay about the loan goes straight into your personal 401k accounts.  It does not go into any financial institution or loan provider.

Be Aware Of The Rules When Using 401k For Down Payment

However, it doesn’t mean you are able to control how so when you pay back the mortgage. The INTERNAL REVENUE SERVICE has requirements that must definitely be met concerning 401k financial loans. As this kind of, the plan may have a set rate of interest that you need to pay whenever you repay the actual loan. Additionally, you should make well-timed, regular obligations, just like every other loan. Usually, most 401k programs require that you simply make regular monthly obligations to be able to fulfill this particular requirement. Check out our 401k calculator to see the impact loans can have on future earnings.

When using 401k for down payment you need to be aware of possible negative situations that may arise.  It is necessary that a person make your own 401k program loan obligations. While you will find no lenders involved, and therefore there isn’t any damage for your credit score or credit history, there could be substantial taxes repercussions with regard to failing to settle the mortgage as decided. Any mortgage principal that isn’t repaid is recognized as a distribution through the IRS. Which means that the entire amount associated with any delinquent loan stability is taxable because ordinary earnings. Even worse, if you’re under grow older 59 1/2, then your distribution is going to be considered an earlier distribution and could be susceptible to a 10 % tax fee.

“Using 401k For Down Payment Does Have Its Advantages!”

I would advice against using 401k for down payment, if you already have the cash sitting around.  Otherwise, the advantages of using 401k for down payment to purchase a house are extremely advantageous to many people. Nevertheless, it is essential to realize that though it is financing to yourself, it continues to be an actual loan, also it must end up being repaid. If you’re able to do do that, then borrowing using 401k for down payment can be a smart method to finance your house purchase.



How to Fight Inflation

How To Combat Inflation? – 5 Strategies To Fight Inflation

Inflation – Rising Prices – Can Make It Difficult To Get Ahead

Inflation occurs when prices are steadily and noticeably on the rise.  Out of control inflation can wreak havoc on an economy, and for individuals even moderate inflation can make it challenging to get ahead.  The purpose of this article is to provide some concrete, practical strategies regular people can use to combat the effects of inflation.

How Inflation Affects Regular People

One of the positives of inflation is that wages generally rise.  Isn’t that great!  If only the story stopped there it would be.  The problem is that inflation causes costs rise as well.  For example, if you rent then each time your lease is up then your rent will noticeably increase, thus eroding the effects of your higher wages.  It’s not just rent.  Inflation causes the price for gas, groceries, electricity, mobile phone usage, movie tickets, clothing, and all kinds of things regular people need and want to rise as well, making it a struggle for regular people to keep their heads above water.

How To Combat Inflation? – Lock In Your Costs!

What if your income is $100 and your expenses are also $100.  Now, if your wages increase to $110 due to inflation but your expenses also go up to $110 then you would just be treading water financially.  However, if your wages went up to $110 but your expenses stayed at $100 THEN you would be getting somewhere.  One of the keys on how to fight inflation is to lock in your expenses.  But how can regular people do that?  Here are some strategies on how to combat inflation.

How To Combat Inflation Fixed RateStrategy #1 – Buy A Home With A Fixed Rate Mortgage

Housing is most people’s most significant monthly expense, so it follows that if you can lock in your housing costs then you really put a stake in the ground when we answer the question of how to combat inflation.  How does a regular person do that?  By buying a home with a fixed-rate mortgage.  Doing so locks in your housing costs, and as inflation increases then your purchasing power can actually increase as well (because your wages should continue to rise, yet your housing costs should remain the same).

Strategy #2 – Refinance Your Variable-rate Mortgage To A Fixed-rate Mortgage

As I stated above, on how to combat inflation, it’s not enough to just to own a home, you need to either own it outright (congratulations if you do!) or you need to refinance to a fixed-rate mortgage.  Why?  Because interest rates tend to rise with inflation, and if every time you get a raise your mortgage resets to a higher amount due to an increase in interest rates then you’ll always struggle to get ahead of the inflation curve.

Strategy #3 – Buy Your Cars Rather Than Lease

Cars are often regular people’s second most expensive monthly cost.  So if inflation strikes then you may have a decent lease today, but when it comes time to renew then the cost to do so will be significantly higher.  On the other hand, if you buy your car then you lock in the cost, and the more years you drive it the more effectively you’ll battle inflation.

Strategy #4 – Have Some Of Your Financial Reserves In A Money Market Account

The stock market struggles to do well during periods of inflation because borrowing costs are high for businesses (due to high interest rates).  Bonds do even worse because as interest rates  increase they take a hit in value.  So what can you use for a financial reserve?  A money market account is a good option because the interest it earns will rise with inflation, and money market accounts also have the advantages of being liquid and relatively safe.  If you want even more safety (at the cost of a lower interest rate) then put your money in an FDIC-backed savings account instead.  Check out our Stock Profit Calculator!

Strategy #5 – Avoid Variable-rate (Or Floating) Consumer Debt To The Extent Possible

Again, when inflation rises it takes interest rates along with it.  So if you have a substantial amount of consumer debt then it increases your exposure to the negative effects of inflation.  Credit card debt is one obvious example.  However, a less obvious example is a home equity line of credit with a variable interest rate.  If you’re caught with a high balance (through financing major home improvements or college tuition, for example) then try and lock in your rate if at all possible (check out borrowing against your 401k plan as an alternative).

An Inflationary Economy Unmasks Poor Financial Choices

The strategies above generally work well during most economic cycles, so what’s the big deal?  It’s important to keep in mind that a good (or even a stable) economy can mask less than ideal choices.  For example, if you got a variable-rate mortgage while interest rates are flat or declining you would notice little or no difference between your situation and someone who had a fixed rate.  On the other hand if inflation took off then it would take your monthly mortgage payment with it, and that could cause you to feel a strain on your finances in a very real way.

In summary, inflation has serious and far-ranging effects on both individuals and the broader economy.  While the strategies above may at first blush seem general and applicable to most any economy, they are particular well suited to deal with an inflationary environment.  Thus by taking steps on how to fight inflation you can not only weather it well, but you make it work for you.

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Debit Card Budgeting Methods

Budgeting Methods Using Debit Cards

Introduction Of Budgeting Methods Using Debit Cards

Check and debit card budgeting methods are refinements of the Budgeting Cash Envelope System.  When I say “refinements” in this case, I don’t mean that a cash based budgeting system cannot work or be an effective budgeting method for some people, because it absolutely can.  However, cash based budgeting systems do have some notable shortcomings which I discuss in more detail below, and the use of checks and/or a debit card is intended to shore up those weaknesses while still maintaining the integrity of the budget process.  As a means to illustrate how checking and debit card budgeting methods work, assume that your financial situation for the month is as follows.

What this illustration shows is that after you pay all of your bills, you have $1,000 left to cover your day-to-day living expenses for the month.  It’s important to clarify before going any further that there are distinct advantages and disadvantages of making payments with checks, debit cards, and cash, and to learn about that in more detail you can see the article, “Comparing Paying with Cash, Checks and Debit Cards.”  However, for purposes of this budget-related article, I am going to treat the use of checks and debit cards as essentially the same, because both payment methods draw funds directly from your checking account each time you make a purchase.

The Advantages Of A Debit Card Vs. Cash Based Budgeting Methods

Budgeting Methods Card SecurityThere are distinct advantages to managing your budget with checks and/or a debit card as opposed to cash.

  1. Convenience and flexibility – If all you have is cash and you’re out and about then you’re your spending is limited to the money you have in your purse or wallet.  However, if you’ve got a debit card or a checkbook then you have immediate access to all of the money in your budget (which is $1,000 in our example).
  2. Security – If your checkbook or debit card is lost or stolen there are steps you can take to limit your risk of loss, but if cash is lost or stolen then it’s likely gone forever.
  3. Better record keeping – When you make purchases with cash you only have your receipt from the transaction, and in some cases you may have no receipt at all (paying a babysitter, for example).  On the other hand, when you pay with a check or debit card you not only have the receipt from the transaction, but you have other records as well (entries on your bank statement or, in the case of checks, check carbons).

The Disadvantages Of A Debit Card Vs. Cash Based Budgeting Methods

While there are certainly advantages to managing your budget with checks and/or a debit card, there are drawbacks as well.

1. Discipline – While I don’t pretend to know all of the psychological reasons why, people tend to take spending cash more seriously than writing checks or handing over a debit card.  SomehowBudgeting Methods Debit Card Vs Cash spending cash “hurts” more, or makes the cost of a transaction more “real.”  As a result, some people have an easier time respecting and staying within their budget using a cash based budgeting method as opposed to a check/debit card based budgeting methods.

2. Math Errors – If you make a math error in tracking your budget while using a checking or debit card money budgeting method there is a real possibility you could overspend, thinking you have more money in your account than you actually do.  With a cash based system it’s unlikely you’ll go long thinking you have more money than you do.  For example, you might think you have $100 of cash left, but if you open your purse or wallet and you only have $60 then that’s it – you’ve only got $60.  Granted you may not be able to remember where the missing $40 went (which can be frustrating), but after counting the money in your hands there will be no doubt how much you have to work (which can provide a sense of certainty).

“Remember Time Is Money.  Simplifying Your Budget Will Give You A Better Chance Of Sticking With It!”

Debit Card Budgeting Methods Receipts3. Losing Receipts – When using debit cards in particular, it’s not difficult at all to lose track of a receipt, and thus forget to account for it in your budget.  For example, if you get gas with a debit card and fail to take the receipt then it’s very likely you’ll forget to deduct the purchase from your budget.  As with math errors, if you miss recording a transaction such as this then you’ll think you have more money to spend than you actually do, which will put you in danger of blowing your budget.

4. More Complex Record-Keeping – While it’s true that using checks and debit cards technically provides you with better record-keeping, it also makes your record-keeping more complex.  Think about it, if you convert the remaining $1,000 in your account for day-to-day living expenses into cash then you will have very few transactions to account for on your bank statement when you balance your checkbook.  On the other hand, each check and debit card transaction will hit your bank statement, and all of those transactions can be difficult to reconcile unless you’re diligent and organized.

Combining The Debit Card and Cash Based Budgeting Methods

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It’s important to note that the check/debit card method of budgeting and the use of cash basis budgeting are not mutually exclusive.  In fact, you can combine the two methods in a myriad of ways, and doing so can provide you with a lot of flexibility and can be tremendously effective.  To illustrate, in our example you have $1,000 to manage your day-to-day expenses for the month.  That being the case, you might elect to take $100 in cash to spend on miscellaneous things over the course of the month, leaving $900 in your account to cover checking and debit card transactions.  Thus, as you go through the month, you have the flexibility to pay for things with a check, debit card, or cash as you see fit.  Again, that’s just an example.

There are almost limitless ways you can combine checking and debit card based budgeting with cash based budgeting to manage your finances.  The important thing is to develop a system that meets your needs, that you’re comfortable with, and that best enables you to live within your means.

Related article “Cash Budgeting Method Explained