Entries Tagged 'saving' ↓
December 2nd, 2008 — Budget, Goal, Personal Finance, frugal tips, saving
Retrain your Brain -
If you deprive yourself of the things that bring you pleasure, you are going to have trouble saving money. Retrain your brain by visualizing a future that is more fulfilling, like credit card bills that are smaller, and higher savings account balances to give yourself a sense of purpose with your saving.
Choose Your Extravagances -
Choose the extravagances that you can do without, and the ones that you can occasionally take advantage of. Eat out once every week, but give up extended cable television and TiVo. Enjoy high speed internet at home, but give up your habit of eating out, for example.
Made Trade Offs Whenever Possible -
Substitute small pleasures for those that cost more. Have a fun movie night with your friends rather than going out for high cost entertainment, and give all of your friends a night to enjoy cost cutting entertainment.
Set Goals -
Make weekly goals to sit down and discuss your family spending plan for the months ahead, or even the years ahead. You may have to give up luxuries like family vacations and expensive dinners out, but saving cash for a rainy day is often more important than planning that summer trip to Disney World.
Enlist Help from Other People -
Many people are reluctant to talk about their worries regarding money, but since nearly everyone has them, you should not be afraid to open up. Tap into your allies and feed off of each other’s motivation to save money and enlist other people to help you get the motivation you need to save.
Post it -
Use post it notes or other reminders and tuck them in your wallet, tape them to your bathroom mirror and attach them to your dashboard to remind you of why you are saving and what you hope to achieve. If you see reminders of your interest in paying off credit card debt or vacationing in Hawaii everywhere you go, it will keep your mind on the prize and fuel your motivation to save without really having to scrimp.
Make it Automated -
Use direct deposit or another automated system to divert money from your checking account into your savings account on a weekly, biweekly or monthly basis. This will force you to budget based on whatever is left in your checking account without taking that savings-designated money into account.
Rethink Your Rewards -
What are some of the happiest memories from your past? Those are the true rewards in your life. Next time you are about to purchase something frivolous simply because you feel like you deserve it, ask yourself if maybe there is something that you would enjoy more or that you deserve more, such as taking the time to craft a home cooked meal with your child, or taking a long evening walk with your best friend or your husband. These are the real rewards in your life, not material things.
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November 10th, 2008 — Debt, Goal, Money, Personal Finance, credit cards, saving
Over the past decade, an insane amount of debt has been wracked up. Household debt has significantly eaten up a slice of personal income since around the mid 90s. Here are four clues that you are carrying too much debt:
Clue 1 - Your debt to income ratio is too high. Your debt to income ratio is calculated by dividing your debt on a monthly basis by your monthly income. If your debt to income ratio is 15 percent, 20 percent or worse, you are definitely in trouble according to most credit counselors.
Clue 2 - You have no savings to speak of. If you have no savings to speak of, then your money is stretched too thin. You need a savings account and you need to start meeting your debt obligations and your savings obligations.
Clue 3 - You are over the limit on your credit cards. Straying over isn’t bad unless you’re not paying it off right away. If you are carrying a significant balance from month to month, you have a problem that needs to be stopped now.
Clue 4 - You find yourself worrying about your debt. If you are stressing about your bills or your debt, then it is clear that you have a problem, plain and simple.
Here are four tips that will help you get out from under your debt.
Tip 1 - Prioritize your Bills and your Debts. Write down how much you owe to each of your monthly bills and prioritize this list. Give priority to health, food and shelter, because these are the bills that need to be paid first and foremost.
Tip 2 - Stop using your credit cards and pay with cash instead. Cut them up, freeze them in ice or feed them right into a wood chipper. Stop relying on credit to solve your problems because it is not going to help you, but rather will only make things worse. Limit yourself to cash if you want to control your spending.
Tip 3 - Set up a plan that will allow you to pare down your debt. Call creditors to find out if you can get lower rates, or to have fees waived. Try to set up a better payment plan if you can. Most creditors are more than willing to work with you but you absolutely have to work the courage up to ask if you want to get results. When you pay down your credit card debt, target the highest interest rates first and then work to the next highest, and so on and so forth.
Tip 4 - Get help as soon as you know you need it. There are credit counseling services out there that can sit down with you and counsel you on your spending habits, helping you create a repayment plan for your debt that is affordable and workable. Choose a service that is free or inexpensive if you need help, and formulate a plan that will make paying your debts down easy and affordable without bogging you down with more bills or more debt.
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October 22nd, 2008 — Money, Personal Finance, saving
As the economy continues its upheaval, the word thrifty seems to be on many people’s minds. Is it absolutely necessary to be thrifty in times of economic uncertainty? There are many schools of thought on the subject, and while at first glance, it may seem like the only economical choice, there is another way to look at it. Speculation is an age old practice, and in times like these, those that are willing to take risks may end up either losing their shirts, or making out like bandits.
While it only makes sense to apply some measure of thriftiness to your everyday spending, now may be the perfect time to start thinking about investments. For example, with the housing market downturn, there are thousands of properties that are now in foreclosure, or that are running short sales. If the property is in reasonably good condition, you may be able to pick up one and flip it as soon as the market stabilizes. Or, you can pick it up as a rental property, since this market is currently booming.
Instead of immediately hunkering down during an economic crisis, it makes sense to start thinking about opportunities that you could be purchasing. Those that are into investing on a serious level know that when the markets get tough and the shakier investors bail that there is real money to be made if you can hold out and make smart decisions. The key is learning how to make those smart decisions and taking calculated risks that can pay off in the future.
Granted, if you are not in a position to start making investments now, you may want to hold off. However, it is important to change up your mindset a bit and start looking at times of economic crisis in a different way. These are the times when fortunes can be made by the intrepid, and with care, it is possible to do quite well. Speculating is obviously not for everyone, but for those that are willing to take that risk, it can pay off handsomely.
So, how can you apply this to your everyday life? Instead of immediately clipping coupons and stopping all spending, think about funneling some of your unnecessary spending into other avenues. Take a look at the big picture financially and see where you could be making money instead of hanging on to it or throwing it out the window. With the help of a financial advisor, you could use this time as your own special turning point towards financial stability.
Being thrifty has a time and a place, but it doesn’t need to apply to your finances across the board. Take some time to consider what you could be doing with your money and take the necessary steps if you feel that you can bear the risk to perhaps get into investing or at least developing some secondary income streams that could provide you with more security in the future, as well as right now.
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October 15th, 2008 — Budget, Money, Personal Finance, checking, children, education, saving
As parents, most people focus on the basic lessons of life, and may not be covering important financial lessons that could last a lifetime. Successful adults are usually those that were trained early on in proper management of their money, and developed an early respect for a dollar. If you have not yet implemented a plan to start teaching your child about money, now is a great time to start. Here are some tips to help you along the road.
Children Aged 3 to 5 –
This is a great time to start working with kids and teaching them about earning money. While they can’t exactly go get a paper route, that doesn’t mean that they can’t take on tiny tasks and get rewarded. For example, you can have boys (or girls) find certain types of bugs in the yard. For each bug they correctly identify and capture, you can give them a quarter. As a bonus, this is also a great lesson in entomology. If bugs aren’t your child’s thing, you can easily adapt this into another form. The key is teaching them that hard work and persistence does pay off.
Children Aged 5 to 9 –
This is the time when kids are more able to start handling basic chores around the house. You may also be able to start working on goal setting, especially as they get closer to nine. Try taking them to a store and ask them what they would like to get. Then, you can use this as a lesson by teaching them how much work they will need to put in, in order to get that item. For example, if they want a toy that costs $10, and they get a weekly allowance of $2, you can teach them that they will have to work five weeks, and save that money in order to get what they want. This has the added benefit of teaching them about saving, and learning more about hard work.
Children Aged 9 to 13 –
These are very important years and you can start to expand on the lessons you’ve already taught them. If they are mature, they may be ready for their first child checking account. This is also the time when they will be able to do bigger jobs around the house, or even get a paper route. Use each opportunity that comes up to reinforce the lessons that they have already learned.
Children Aged 13 to 18 –
By now they should have a firm foundation in how money works, how to get what they want, and the importance of respecting how far a dollar can stretch. Once they reach 16 they’ll be able to get their first job, and all the lessons you’ve taught them will carry over.
It’s never too late to start teaching your children about money, saving and earning. In fact, as you teach them, you may even learn a few things on your own and come to a better appreciation of your finances.
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October 6th, 2008 — Budget, Personal Finance, bad debt, credit cards, saving
Whether economics is your idea of a great way to fight insomnia, or you just didn’t get the benefit of learning about money management early on, it is never to late to learn the basic skills of proper money management. We highly recommend taking a brief course on finance if possible, but there are other ways that you can develop a strong financial foundation that will get through your life and help you retire with less worries.
Basic money management can be broken down into three main principles – Spending Less, Avoiding Bad Debt and Saving More. Let’s take a look at each one and determine how you can start including these principles into your own life.
Spending Less –
This is a vital lesson that everyone must learn, and unfortunately, it is a hard one. While most of us get the point that you have to spend less than you earn if you want to stay in the black, that concept tends to fly right out the window when faced with every day life. The prevalence of credit cards, easy payment plans and a lack of knowledge about bad debt has led many into spending much more than they make.
One of the best ways to start spending less is simply to monitor exactly what you spend, keep a log and determine where you can cut expenses. A budget is a vital tool that will help you learn more about the money that goes out the door each month and how much comes in. By working with a budget, you can start to tip the scales in favor of how much is coming in.
Avoiding Bad Debt –
This is a major problem for millions of Americans and it is only getting worse. It is vital to recognize that there are two main forms of debt – good and bad. If you have gotten into a bad debt trap, getting out is extremely difficult. Remember, bad debt is something that drains your finances, good debt is something that adds to it. Reduce your amount of bad debt, increase your amount of good debt and watch your finances turn around.
Saving More –
No matter how much money you make, saving part of it is very important. Whether it is a simple emergency fund that can help you get through bad times, or a fund for retirement, saving is essential. If you find it difficult to have any extra money each month for savings, it is time to investigate how you can change that.
Whether you need to find a better job that pays more, manage your finances better, or find ways to create more than one stream of income, there are many ways that you can start saving more money.
These three principles will help you learn more about how your own personal finances work and how to start managing your money more effectively. Everyone makes mistakes, but the difference is whether or not you rise about them, recognize the problem and implement the solution.
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September 21st, 2008 — Investing, Leverage, Money, Personal Finance, Stocks, loans, roundup, saving
Welcome to this week’s edition of the SMR. Browse by category for your weekend reading material. What other categories would you like to see here? Let me know - leave a comment!
College | Home:
Investing | Stocks:
Debt | Debt Leveraging:
Save Money | Frugal Tips:
Thanks to the carnivals that hosted us!
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