Learning How to Budget and Spend Your Money

Spend Your Money

If you were raised, as I was, in a family that lived from payday to payday, you might not have the least idea of how to budget your finances. If you think a budget might be a good idea, you might begin by looking for information on how to make a budget. There are a lot of books, programs, classes and friends willing to take your time and money to tell you how they plan and follow a budget.

The big problem with other people’s budgets is that they suit them, not you. You need to plan a budget that works for you. In order to do so you must first know how you spend your money; which isn’t as simple as one might think. Do you keep track of every cent you spend whether cash, check, check card or credit card? I’ll let you in on a big secret here. Most of us do not keep that close track of our money. Yet, in order to develop a working budget for yourself, you need to do just this; at least for a little while. The while will depend on how much financial trouble you are in.

I’m assuming you are in some sort of financial discomfort if you are reading this article. It may be as mild as not having any money for the last few days before you get your next paycheck or as severe as bankruptcy court is imminent. If the latter is your problem the very best advice I can give you right now is consult a reputable attorney.

In this particular instance the American Bar Association will not be your best source of contact. You need an attorney that knows the local laws and to find her you need to consult the local Bar Associations. To find that reputable attorney call or email your local Bar Association. If you live in a large city there will be a City Bar Association. If you reside in a small town or the country then you need to contact your State Bar Association.

As for creditors; Call your creditors RIGHT NOW and talk to them about your problem. Do not let things go on so long collections agencies get involved. Evading your creditors will only make things worse. If you are all ready in the hands of collection agencies and can’t pay them you really do need to contact that lawyer.

I repeat, if you are in such dire financial straights you are facing foreclosure and/or bankruptcy, do not waste any more time reading this article. Go find an attorney. You also need to find a Credit Counselor as well. Come back here after you’ve put your affairs in the hands of the experts and begin teaching yourself how to stay out of such trouble in the future.

For the rest of you, as I said at the beginning of this article, the first thing you need to do is find out exactly were all your money is going. If you already have a PDA you have a good tool right there to use in keeping track of your spending. You probably have access to a nice spreadsheet that you can set up to enter your data into.

If you don’t have a PDA there is no need to rush right out and buy one, though eventually you may decide to do so. An old check register can serve the purpose at first or, if you no longer have one, you can buy a small notebook for about a dollar that will easily fit in your pocket or purse. I like the marble back ones because they are sturdier than the spiral ones. The reason you need one of these is to enter every cent you spend. And I do mean every cent. If you drop a penny or two in the dish at the local convenience store enter those pennies and where they went in your log.

The next thing you need to do is set up a pocket in your purse, briefcase, jacket or pants to put receipts in. Put EVERY receipt you get in that pocket. Then, daily if you are using a shirt or pant pocket, weekly if you are using a purse or briefcase, transfer them to a folder at home.

At this point you are not trying to control your spending or make a budget. Frankly, that would be self-defeating at this point. What you are doing is learning where your money really goes. If you don’t know this then you don’t know where your leaks are that can be plugged. You also may not realize what is of absolute importance to your sense of well-being. This is different for everyone. For you it may be that having a cup of coffee from Starbucks every morning is so vital that you’ll give up any number of other things to be able to buy your cup o’ java. For someone else it may be a candy bar or the daily newspaper. You need to find your absolute, can’t do without it, perk and budget for it.

Very simply, for the next four to six weeks, enter every penny you spend in your log and check those entries against the receipts you accumulate. And, please, don’t even consider blocking a line at the gas pumps or supermarket while you make your entry. Move out of the way, then stop and enter your information, but do so before you leave the store and completely forget about the thirty-nine cents you spent on a candy bar.

The first day check your entries and make sure you entered everything. If you are shocked by how much you spent-welcome to the club. I said you aren’t trying to control your spending, but I’ve found that with money or calories once you start keeping a log book you begin asking yourself “Do I really need this?” Putting our expenditures down in writing and looking at them has an effect in and of itself.

Sometimes the first day results of keeping a log book can be so shocking you don’t want to continue entering data. Take a deep breath and remind yourself you are doing this for a good cause. Then continue to maintain the log.

For the first week, at least, check your log book at the end of each day. Once the habit of putting all expenditures in it is set you can back off to checking your entries every few days. This is an important step because of the tendency to alter your spending habits because of having to enter them in the book. Once you are only checking every few days you will slip back into your old spending habits, which is what you want to do for awhile. It is critical to really know where your money is going all the time, not just when you are keeping a close eye on day-to-day expenses.

Once you do have your information about where your money is going you can determine what is important to you and what isn’t when it comes to spending money. A quick example here is; does your morning cup of coffee HAVE to come from Starbucks or would you be just as happy with a cup from home if you had a coffee pot set up to have the coffee ready just as you leave the house? Of course you might not want to buy the coffee pot and coffee, but how about getting your cup of caffeine at a convenience store? If you aren’t a coffee drinker this example may seem pointless, but there is something similar in your life for certain. You just don’t know what these little somethings’ are until you see them written out. If it is a soda then consider buying cartons of cola when it is on sale rather than a Big Gulp. The can may only cost twenty-five cents as opposed to whatever the sale of the day cost of your big drink is. The savings in calories can be pretty impressive as well.

There are a lot of things you can moderate, rather than give up entirely, and have a profound effect on your cash flow. Unfortunately, if you’ve really gotten yourself in a financial bind, you may discover you are going to have to give up some very significant spending for awhile. For some it may be buying shoes, for someone else it may be buying the latest game as soon as it comes out. Each person has different “needs” to consider which is why you need to learn just what yours are rather than try to use a one-size-fits-all budget.

One final example from my budget; two things that are critically important to me are books and occasionally eating out. I will give up a lot of things, but these two I have to figure out how to keep in my life. For you it may be movies or clothes or shoes or the opera, but there is bound to be something you need to keep in your life to make it a happy life. This business of learning where you spend your money will enable you to make decisions about which money leaks can be stopped entirely, which ones can be slowed, and which ones you can only give up if there is absolutely no other option.

I have put myself on a book diet for the nonce. I use the library a lot. Since I live in the country I have to pay for a card, but it only costs me the price of one hardback book and I have a year’s access to a lot of books. Since I actually like to cook, eating out can be managed by reducing the number of times per week I indulge and, occasionally, taking advantage of coupons or specials.

A leak I plugged entirely was giving up my gym membership. I didn’t go much anyway and making a date to walk with friends several times a week has proved to be more fun anyway, as well as harder to skip since they will call and ask where I am if I don’t show up. I also gave up my audio book rental membership. That hurt, but I still have access to some audio books from the library so it isn’t a cut to the bone hurt.

Remember, regardless of how appalling the initial results are, you have to have this information before you can even think about creating a budget for yourself. So, get your PDA, check register or notebook and start entering every penny spent right now.

My next article in this series will be about how to make the best use of this information.

Living with Bipolar Disorder: How to Keep Your Finances Under Control During a Manic Episode

Living with Bipolar Disorder

Millions of Americans are living with bipolar disorder, a mental illness characterized by extreme mood swings and sometimes erratic behavior. Medications are extremely effective in treating bipolar disorder, but no matter how good a particular medicine is, a person with bipolar disorder may still experience episodes of mania and depression at times. Manic episodes often start out with feelings of being happy and ultra-productive, however, it doesn’t take much time for more negative symptoms to appear, such as a compulsion to have sex or spend money. Indeed, many people with bipolar disorder have seen their financial lives ruined due to poor decisions made during manic episodes. Luckily, there are some steps you can take to help keep your finances from getting out of control during a bipolar episode of mania.

The first thing to realize is that your bipolar disorder is making you feel like you need to spend excessive amounts of money, so it may take some hard work and self-discipline to keep your wallet in check. As soon as you start to feel a manic episode coming on, you should be prepared to go into “damage control” mode. You’ll want to set a weekly spending limit for yourself–it should be enough money so you won’t feel deprived, but not so much that you can’t pay your bills. Once you’ve set an amount, go to the bank and withdrawal that amount of cash, then take your credit cards out of your wallet and leave them at home. By only spending cash, you’ll be able to keep tabs on your spending more easily, and you’ll make sure that you don’t make any extravagant “impulse purchases” that you really can’t afford.

If you find that you can’t stick to your weekly budget, it may be an appropriate time to hand some of the control of your finances to a family member or close friend, at least until your mania starts to subside. Pick someone that is familiar with bipolar disorder and your particular illness history, and explain to them that you need help to keep your finances in order until you are feeling more like yourself. This person can hold your credit cards and checkbook, and can help you evaluate any major purchasing decisions that involve spending large amounts of money. Make up your mind that you are doing this for your own future good, and try to trust your friend’s judgment when it comes to spending money during your manic episode.

Finally, try to avoid situations that encourage impulse spending. During a manic episode, you shouldn’t go to the mall “just for fun” or surf shopping websites “just to look around.” If you have something you need, go to the store with just enough money to buy it, and don’t spend time browsing or window shopping. If you’re still feeling compelled to spend lots of money after a week or two, you should ask your psychiatrist if it might be time to adjust your bipolar medication. The symptoms of mania, like the compulsion to shop, are one of the most difficult aspects of bipolar disorder to deal with. Luckily, by using a little commonsense and following this advice, you should be able to navigate the choppy waters of bipolar disorder without spending every last penny you have.

What is the Cody Principle? How Will the Cody Principle Benefit Me?

the Cody Principle

The Cody Principle of Frugality will provide you the reader with a common sense approach to guide you with in the outlines of the financial education, to get on the path of financial freedom.

One of the core principles of the Cody Principle of Frugality is to develop an understanding of the principles behind financial literacy. Once you understand those principles you can begin to implant and develop a plan to assist you in achieving your goal of being financially free. Your new financial IQ will provide you the confidence to take action and begin to implement your financial plans. You will begin to make wiser spending decisions, and you can control your budget.

With you financial IQ growing you will soon see the differences between bad debt and good debt. Bad debt can be defined as well keeping up with your family, friends and neighbors. You will end up purchasing products that can not help you, but only temporarily satisfied an emotional need. You financial IQ will guide you into making a better spending decision and help you live within the budget that you had set up.

Did you know that the average American family has about $8,000 in credit card debt. If you factor in other debt that is not a mortgage debt, then the average family is facing $18,654 in household debt.

One of the core principles that the Cody principle promotes is control spending. The other principles include that old saying pay yourself first. The average Americans median Net Worth is $120,000, that is according to the 2007 Federal Reserve board survey. So the question becomes How do you increase your Net Worth? How do you control your debt.

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Get the Top Individual Voluntary Agreement Provider

Individual Voluntary Agreement

Problems in finance management have shot up tremendously owing to the ongoing slump. A lot of people got home loans, auto loans, consumer loans, etc while the market was soaring and on its way to better heights but unfortunately, it all took a downward spiral in the end of 2007 and everyone began to suffer from finance problems that they were unaware of during the economy boom. Suddenly, they were not able to return the loans, and in some cases could not even return the interest due on such loans.

In case you are facing a similar problem and there are absolutely no choices left and it seems like bankruptcy is the only choice you can make, there is respite. Apart from filing for bankruptcy, a few choices are available to bail you out of this finance crunch. The Individual Voluntary Agreement is one of them and is a very good course of action as it is an agreement with the loan lender that saves you from filing for bankruptcy.

Individual voluntary agreement functions in a very straightforward way by extending the time period for repaying the loan and this is a crucial feature of the agreement. The details for paying back your loan lender can be hashed out and the individual voluntary agreement aids you to do away with a few loans, too. In addition, interest rates on the loan plus monthly installments are also negotiable and you can discuss it with the creditor. Your house, car, and electric appliances can be saved as well, whatever the conditions are.

A lot of companies facilitate the individual voluntary agreements between loan lenders and debtors. Usually, finance and debt management companies guarantee the facilitation of this arrangement. It works like this: the finance or debt management company purchases the loan or a part from the debtor. In some instances, it does not purchase it, although it consents to come forth in case the debtor cannot or will not honor the agreement.

A lot of companies claim to offer individual voluntary agreements, but it should be noted that not all of them are properly equipped to handle the complicated loans. You should hunt for a company that boasts of a solid standing in the market and changeable work practices and those that have handled individual voluntary agreements before. Huge businesses that are handling these finance dealings for a long time are most reliable and these are probably the top individual voluntary agreement providers.

A few businesses that have shot into fame of late are sure to provide you with the best possible finance deal. These are known to negotiate acceptable individual voluntary agreements with the loan lenders, surpassing the older companies because they have created the procedure.

A thorough investigation for a better individual voluntary agreement provider is the finest method of getting one. You may seek advice from family, friends or colleagues to relate their experience in such finance matters. Also, go online and visit websites about debt finance that display customer feedbacks on individual voluntary agreement providers. It will give you a wide range of views and mostly unbiased.

Another option, though least recommended is that you go about it in a practical way. Subscribe to the company that supplies individual voluntary agreements and learn more about its functioning and standing. Like earlier warned however, it is not recommended because one may land in hot water and not get any relief from financial troubles.

Budgeting Money: Simple Ways to Ensure You Don’t Spend More Than You Earn

Budgeting Money

Start putting money back into your pocket by learning how budgeting money can help you take control of your finances.

You first need to understand the basics of income and expenses. If you can learn to control these two aspects of your finances, you are on the road to financial freedom. Being in debt is tough. If you are like many Americans today, it may seem that there is no way out. Budgeting money will help you start to reduce your debt.

Make sure that your budget plan is simple and structured. What is a budget exactly? Simply put, it’s your income minus your expenses. Starting a personal budget is one of the best ways to visualize where your money is going each month.

Start first with your monthly income. Always use your net pay, not your gross.

If you have multiple forms of income, you need to make note of these. Once you have all forms of income notated, add them up. Make sure to write down your total.

Now you will want to list your expenses. It might be best to divide them into groups. Try these groups: Direct Withdrawals, Necessary Spending, and Leftover Income.

Direct withdrawals are those expenses that are automatically withdrawn from your bank account or credit card each month. This will include house payments, school loan payments, car payments, insurance premiums, utility bills, and doctor/dentist expenses. If you have an electronic withdrawal set up from your checking or savings account each month, make sure it is in this group. Add up all expenses in this group and write them down.

Necessary spending consists of credit card payments, grocery bills, cell phone bills, dry cleaning, and any other expenses. This could include eating out on Friday nights or renting a movie on Saturday night. Make sure to list all of these and write them down. You will want to add up all of these as well and write them down.

Leftover income is now what you have remaining after you have paid all other bills. You can use leftover income for vacation trips, birthday presents, and large purchases like home electronics or furniture. I would also recommend budgeting money to set aside for your savings account. It is always good to have something set aside in case of an emergency.

Following these steps will help you start the path to financial freedom. There is light at the end of the tunnel!

Can I Refinance My Car with Bad Credit?

Refinance My Car with Bad Credit

With the crumbling economy showing no signs of recovery, many debtors are unable to keep pace with their finances. Most banks are shying away from lending money. They would prefer lending money to those with good credit record, rather than lending them to those with bothersome credit report.

Most reputed national lenders would want to stay afloat by lending to good borrowers. However, there still is a huge market for debtors with bad credit because they form a substantial segment of those looking for new loans. Admits the recession, not many people would want to borrow to buy homes or cars. This is why bad debtors are such attractive bait for lenders already engaged in a fierce competition with each other. A bad creditor is a definite risk, but lenders know that they can repossess the car if the debtor defaults again.

Capital-One, Wells Fargo, Citifinancial Auto Finance and Pentagon Federal Credit Union, still manage to keep faith in defaulters and refinance their loans.

Those with bad credit can ask the new lender to simply pay off the balance to the old lender and negotiate refinancing options. Lenders who are hesitant may demand the presence of a co-signor with a good credit standing. This human element of collateral actually does wonders to renew faith.

Buyers these days may not consider refinancing a car as it is a short term loan as compared to a home loan, however with the recent upheaval in the economy, interest rates can fluctuate wildly. It’s not just the borrowers who have to watch out; lenders have a lot to lose too. In such times, it actually may reverse the situation by making the lenders scout around, to bail out buyers with a bad credit.

With much of the paperwork already eliminated with the online loan application procedure, this has not only simplified and streamlined the refinancing process, but also helped cut costs for most lenders out there in the market.

Refinancing an auto loan is a good thing because of reduced interest rates and extended loan term which allows monthly expenditure to be allotted to other needs. Moreover, the positive impact it makes on the credit standing is undeniable.

Having said that, it is important to say that buyers may be better off, just trying to pay the principal amount completely to the old lender, if they can arrange for money from their family members or some other reliable source. This is because a vehicle is a depreciating asset unlike a house. No point paying $25,000 for a car whose value will be at $10,000 after the loan is paid off.

If refinancing does not work out with those unfortunate enough to have a bad credit, they can simply ask the old lender to lower the interest rates or extend the loan term while maintaining the same interest rate. Although this slows down payments, they may agree just to avoid the hassles of repossession.


Does the Role of the World Bank Need to Change?

World Bank

A press release announced on Thursday that Professor Adam Lerrick of Carnegie Mellon University’s Tepper School of Business, a leading authority on international banking and finance, has appeared before a subcommittee of the U.S. Senate to argue that the World Bank is becoming an ineffective institution. Lerrick argued that the United States should demand greater accountability and transparency from the World Bank.

Lerrick stated, “After 60 years and $600 billion, there is little to show for bank efforts. n the last 20 years, the world has changed dramatically, but the World Bank has refused to change with it.” Lerrick went on to describe his belief that the advantage the World Bank once had is gone as private capital now channels over 300 times the amount of funds to emerging countries than the World Bank. Lerrick continued, “The private sector dwarfs official funding and emerging nation leaders are just as smart, just as skilled and know their countries infinitely better than anyone at the bank.”

Indeed, the founding purpose of the World Bank was to provide knowledge and finance developments in emerging countries. Some, like Lerrick, believe that emerging countries no longer need money or advice from the World Bank. Lerrick went on to testify that the World Bank isn’t really lending to those types of countries much anymore anyway, “More than half of bank loans since 2000 have flowed to six upper- middle-income nations where only 10 percent of the developing world lives.”

The next portion of U.S. funding for the World Bank is expected to be somewhere between $4 and $5 billion dollars. Lerrick argues that the United States must demand more information from the World Bank, as they historically don’t release information detailing the approximately 280 projects they fund each year.

General information describing projects the World Bank is funding can be found on their website, but Lerrick believes that U.S. officials should have access to more detailed data. Projects recently approved by the World Bank range from an HIV/AIDS prevention project in Afghanistan, an irrigation development project in Armenia, a higher education project in Mozambique, and an agriculture and infrastructure development project in Liberia.

Projects like unto these would suggest that the World Bank is fulfilling their initial purpose. However, if Lerrick gets his way, the U.S. will analyze in detail their relationship with the World Bank and consider whether the role of the World Bank in the global scene should change.

Managing Your Finances Before Military Deployment

Military Deployment

When Army Major Mark Stone (not his real name) deployed to Iraq last year, he found himself more scared about what was happening at home than in the Mideast.

Shortly after arriving at his duty station, he suffered an eviction scare. The rent on his two-bedroom apartment was paid a week late. He quickly switched to online bill payment and got the help of a trustworthy stateside friend to take care of most financial issues. He also convinced his apartment manager to waive any late fees.

Whether the deployment is planned or somewhat of a surprise, members of the United States armed forces and their families are seldom covered as far as financial planning for the service member’s absence. One Army wife complained that when her husband first deployed to Iraq, he forgot to pay a credit card bill. When she tried to call the credit card company to find out the actual balance, the customer service representative refused to give her any information since it wasn’t a joint account. Her husband’s credit rating suffered as a result.

A number of Internet sites offer help for the deploying service member and his or her family. Meredith Leyva, of Pensacola, Florida, is the wife of a Navy officer. She founded the site CinCHouse.com to provide ideas for managing finances during deployment and general assistance for military families.

Another helpful site is Operation Home Front, at http://www.operationhomefront.org. Many service members and their families also find excellent advice at the site of the United Services Automobile Association (USAA). This organization was founded in 1922 by a group of Army officers seeking to self-insure each other for automobile insurance. It’s located at http://www.usaa.com.

There are some logical steps all military families can take to make their financial lives easier, according to USAA. The first is to build an emergency savings fund of three to six months of living expenses. Families facing a deployment should put aside a minimum of $2,000 more to cover unexpected expenses such as car repairs, plumbing problems, or other unanticipated bills.

Leyva says before a service member deploys, the family should set aside additional funds to cover routine responsibilities the member routinely performs, such as maintaining the lawn or cleaning the house. In the chaos of a deployment, it might prove necessary to hire someone else to take care of these services.

If the deployment results in an unused vehicle, families in the U.S. should check out potential savings on insurance. And for single service members or those with minimal possessions, it might be possible to avoiding paying any rent or utilities by placing items in storage.

All service members should realize that the Servicemembers Civil Relief Act of 2004 might qualify them to get a lower interest rate on mortgages and credit card debts well as protection from eviction after any late rent payments. In some cases, they are eligible to delay civil legal actions, including divorce, foreclosure, and bankruptcy.

Sometimes deployment to Iraq has led to an improved overall financial situation for a family. Those at home are forced to take action to pay bills, understand what’s required to keep the family afloat, and become very adept at handling financial issues.

USAA offers a handy pre-deployment financial checklist:

1 – Choose someone at home to handle bill payment and other issues. Depending upon your state of residence, you might need to execute a power of attorney to do this.

2 – Set up a record of all your personal or family accounts and take a copy with you once you deploy. Singles should provide this data to a responsible individual in the States, preferably the one with the power of attorney. For married service members, all accounts should be in both spouses’ names.

3 – Arrange for automatic payroll deposit, investments, and bill payments whenever possible. You might need to find a bill payment service that permits you to pay obligations online from any place in the world with access to the Internet.

4 – If possible, set up any loans your family might need while you’re away. You might be able to secure lower interest rates based on your military service.

5 – Create a special folder in which to store receipts and financial and legal documents during your deployment.

6 – Take the time to update life insurance policies, beneficiary forms, and wills. Also check out insurance savings if one or more vehicles won’t be driven while you’re overseas.

7 – Notify any creditors and other financial institutions that you’re deploying. Be sure to furnish them, as well as the representative you designate to handle emergencies, with a way to contact you if problems arise.

8 – Consider the benefits available through Servicemembers’ Group Life Insurance. It presently includes traumatic injury protection, which could keep your family afloat if you suffer certain types of injuries.

Once you’re completed the checklist, you can deploy knowing you did everything possible to protect your family and your credit rating while you’re gone.

Taking Control of Your Finances After Graduation

Finances After Graduation

If you have recently graduated from college, now is the time to take control of your financial situation. Many college graduates have little or no idea of how best to keep track of their money, especially if the temptation to blow a paycheck proves too strong. Fortunately, you do not have to be a financial expert to have a good understanding of how to keep control of your finances.

Set up a savings account

While it is likely that most of your income will be spent on rent and bills, you should aim to pay as much of the surplus into a savings account. Ideally, this should be a savings account that gives you easy access to your money in case you need to use it at a later date. If you are confident that you will not need to touch the money for a set period (for example, six months or one year), you can “lock away” your money, which often offers a more attractive interest rate than instant access savings accounts. Sometimes, these accounts may specify that you cannot make a withdrawal during the set period, or that you will lose interest for the month in which you make a withdrawal.

Look for a savings account that offers a good rate of interest, as this will obviously mean that you will see maximum reward for your savings. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate. In either situation, make sure that there are no hidden conditions attached to the savings account or interest rate. For example, some savings accounts offer a very attractive interest rate to new customers for the first year only. After this, you are demoted to an interest rate that is average, at best. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate.

Tax-free savings accounts are the best option, as nothing is deducted from your interest. Unfortunately you cannot put an unlimited amount of money into a tax-free savings account. They are capped, meaning that you can pay in a certain amount of money per tax year. While the government is keen to encourage as many people as possible to have savings, they do not want to be waiving tax too much as they gain nothing from it.


Drawing up a budget is a handy way to see whether your outgoings are in line with your income. This might seem obvious, but many people are shocked to find that outgoings such as rent, bills, food and socialising far exceed their monthly income. Listing all of your outgoings is also a good way to pinpoint exactly where your money is going each month. It is often the little things that add up the most. Buying a coffee on the way to work can soon cost you several hundred dollars over the course of a year.

Once you have worked out where your money is going, look at any areas where you can cut down on frivolous or unnecessary spending. Most people will find at least one area in which they can cut down on their expenditure. It is vital that you stick to this plan if you want to see an improvement in your finances.

Many college graduates are afraid to sit down and work out how best to take control of their finances, but it is something that should be done to avoid sliding into debt. With a little bit of research or help from a financial advisor, you can seek out the best ways to make your money work for you.