Tag Archives: debt

3 Tips to stay in the Money-Saving Mindset

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Everyone once in a while we need to know why we do what we do. This article is a short and sweet reminder help you stay focused on savings

3 Tips to stay in the Money-Saving Mindset

If saving money isn’t your strong suit, don’t worry. Changing your money habits will have its challenges, but with a little effort, you can stop making so many unnecessary purchases and start building a sizable savings. The first step is to think about your goals and priorities. Why do you want tosave money? You might be looking for the security of an emergency fund, hoping to spend less time working, or preparing to buy a new car. Recognizing what’s important to you will help you get to a place where saving money seems only natural.

1. Remember why saving is important to you

Here’s where your savings goals come in. Think about why you want to save money and take every opportunity to remind yourself. Talk about it out loud. Write it down. Even if your goal is as simple as saving for a single vacation, keep it in the back of your mind as you go shopping or seek out money-saving opportunities in your daily life. If your goal is to be a great saver in the long term, think about the financial freedom you will be gaining. It can be easy to concentrate on what you have to give up in order to save money, but if you shift your attitude to focus what you’ll get in return, it’s much easier to make the daily decisions needed to get there.

2. Hold yourself accountable

Budgets, spreadsheets, and shopping lists are enough to put the average consumer to sleep, but don’t be afraid to give this strategy a try. People who are already in the habit of jotting down notes or lists will likely be very successful making strict shopping lists and sticking to them. It doesn’t take much time, and it might save you the effort of trying to remember what you actually need when you get to a store. Once you make a reasonable budget for yourself, don’t stray from it.

3. When you get a raise, don’t increase your spending

It might seem natural to start spending a little more after a promotion. Maybe you start eyeing a larger apartment or some high-end gadgets. http://www.cheatsheet.com/money-career/3-tips-to-stay-in-the-money-saving-mindset.html/?a=viewall#ixzz3jEOhua00

Knowledge is Power by Ed Clark

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The KEY to making a change is knowledge and that knowledge doesn’t have to be complicated it just has to be executed. Take a look at these 4 simple principles and see where you can make a change.

4 Personal Finance Principles to Live by For a Richer Life

Taking control of your personal finances is key to living a more stress-free and stable life — a truly rich existence. All you need to do is take the first step: start becoming more aware of your bank account, and live by these very basic principals that just about sum up what personal finance is all about.

1. Pay yourself first

This is a common personal finance phrase that many people live by. But what does it really mean? No, paying yourself first isn’t buying anything you want and letting your bills collect dust. Basically, it means that before you spend your new paycheck on necessities or wants, you should squirrel away a portion of it to your savings. Getting into this habit is helpful because you’ll learn to prioritize saving, and the steady stream of monthly contributions is the best way to grow your emergency, savings, and retirement accounts. The best and easiest way to pay yourself first is to automate it so that the process is mindless.

2. Live within your means

Don’t spend more than you can afford to spend. Don’t take on loans or debt if you can’t afford it. This even means being cautious on what is generally considered “good” debt. Ever since the financial crisis, all of us had to reassess what we initially thought of as good debt, which includes mortgage, school, and car loans. Once people started getting laid off and defaulting on payments, the good debt very quickly becomes bad. That’s not to say that you shouldn’t go to the college of your dreams; but you should still weigh the costs while keeping in mind realistic expectations of job prospects postgraduation. And if it’s truly worth your investment, you should find ways to cut costs. Other than not taking on debt, conscious spending is also part of what it means to live within your means.

3. Prepare for the long term and the worst

Don’t spend your time living only in the here and now. Think ahead, and start preparing for your retirement and emergencies by starting an emergency fund and contributing to your retirement accounts.

4. Knowledge is king
Keep reading and keep learning about how to better your personal finances. This is just the start of your journey, and there is so much out there to learn

10 Ways That Too Many People Throw Money Away by Ed Clark

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Take a look at the list and see where you can FIND some money!!! I must admit that I am guilty of doing some of the things on the list.

There are all sorts of ways to cut spending and boost your savings, and there are just as many ways to sabotage your own finances. In addition to missing out on money-saving discounts, making unwise shopping decisions, and purchasing unnecessary items, you might also be throwing your money down the drain for no real reason at all. Often, all it takes is a little effort and organization to fix the problem. But first, you need to be aware of all the ways your money is being wasted. The list could go on and on, of course, but here are 10 ways consumers repeatedly throw their money away.

1. Never redeeming gift cards

Even if you don’t want your gift card, at least give it to someone who will use it. American households also average $300 in unused gift cards, and nearly half of recipients do not use the full value of the card. Don’t be the person letting these dollars go down the drain.

2. Letting Groupons expire

According to Yipit, roughly 15% of Groupons go unredeemed by the time the expiration date rolls around. Make a note of your daily deal coupon’s expiration date to ensure this doesn’t happen to you. And if your Groupon does expire, you can still get some value from it. The digital coupon should retain its face value at the organization for at least five years.

3. Buying tickets and not showing up

4. Paying late fees

Even small late fees add up quickly. This can include everything from overdue library books to Redbox DVD rentals to late payments on utilities or credit cards. To avoid incurring late fees on your credit card,CreditCards.com suggests paying far ahead of your due date, changing your payment due date if possible to coincide with your payday schedule, scheduling automatic payment, or setting a reminder for yourself. If you are hit with a late fee after all, call customer service and ask to have the charge waived. On your first offense many companies are willing to let the late fee go.

5. Paying banking fees

It seems like every year banks come up with new ways to nickel and dime their members. Between minimum balances, fees for checking accounts, and ATM fees, these charges can add up. No one should have to pay for basic banking services. Many are having better luck avoiding these unnecessary fees after joining a local credit union. Credit unions typically offer free checking accounts and savings accounts with better interest rates. If you find yourself frequently out of cash and paying charge after charge from ATMs, instead get into the habit of getting cash back from debit purchases when you are out grocery shopping.

6. Not returning unwanted goods

It’s easy to let unwanted items or gifts just sit there in the closet, but with a little effort, you could be getting money back in your pocket. Even if you are past the return date, give it a try anyway. You may be able to at least get store credit. For online purchases, many retailers even cover the cost of shipping for returns. CBS News compiled a list of stores with generous return policies, such as Walmart, Target, Costco, and Kohl’s. Some retailers will even take returns without a receipt.

7. Failing to ask for a refund

Consumers who are dissatisfied with their service often don’t take the time to voice their concerns. Those people that do, however, could end up with a full refund or at least a discount. If you have a bad experience with a hotel, auto mechanic, cell phone carriers, or hairdresser, to name a few, don’t be shy about speaking up.

8. Never disputing mistakes on a bill

If you think your bill may be incorrect, it’s worth disputing the charges with the company. At most respectable businesses, the error will quickly be corrected.

9. Forgetting to follow up on a rebate

The sneaky thing about mail-in rebates is they are designed to be so complicated that consumers either forget to mail them in or do so incorrectly.

10. Not claiming money that’s yours

Every year, unclaimed money is reported by the government, and rightful owners are encouraged to step forward and claim their funds. Find more information about unclaimed money from the government atUSA.gov.

The best way to start saving

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People think that there is some magic bullet to start saving but I’m here to let you know that there is no magic bullet when it comes to saving.  Saving money is not easy, but it is essential to achieving financial well-being and securing your future. Honestly it’s about setting realistic goals, prioritizing how you’ll manage your money and sticking with it. Below are some ideas to get you started with saving without feeling pressured.  It’s important to understand the difference between Gross Income vs. Net Income, creating goals: short and long term goals, creating a simple budget, saving (ER fund, 401K, IRA, etc), paying off debt, and enjoying life.

 1. Gross Income vs. Net Income:  People really need to understand the difference between Gross Income vs. Net Income before   they start creating a budget, saving and paying off debt. Gross income is your salary, the total dollar amount your employer agrees to pay you over a given time period. Net income is what you take home: the amount you earn after your employer makes deductions for taxes, benefits, etc.  People make a huge mistake of budgeting from their gross income when they should be budgeting off of the net income.

2.  Create Saving Goals:This is important to understand why and what you are saving for and how much you will need to achieve your goals.  Creating short and long-term goals will get you pumped and motivated about saving.  Short-term goals (1-5 years) may be: family vacation, buying a new car, buying a video game system, paying off small debt amounts.  Long-term goals (5 years-longer) are saving for retirement, buying a house, having a baby, paying off large debt amounts, becoming financially independent.

Your circumstances do not matter. It is important to realize  your goals and start saving for those goals.  Once your goals are identified you can begin making your dreams a reality. When your goals are clearly defined on paper you are more likely to make those goals come true.  Remember to start small and build up from there.  With goals outlined and attainable it will make it easier than you thought to save and achieve those goals.

3.  Simple Budget: It is crucial to create a simple budget to track your income and expenses.  My budget consist of no more than two columns in an excel spreadsheet:

                                            a)      Income

                                            b)      Expenses

Your budget may change throughout the year due to circumstances outside of your control.. I really enjoyed the following website about simple budgets:http://frugalandthriving.com.au/2009/creating_a_simple_budget/.

4.  Make saving automatic and effortless:  You should start out by saving a minimum of 5% of your income and make it automatic; the more you can save the better.  My savings are automatically taken from my paycheck so I don’t have to think about it.  Paying myself before I pay anyone else is an important concept to understand. The benefit of making your savings automatic is that you don’t see it; therefore you don’t miss it.  I have been using IngDirect to do this since 2002. Remember it’s not how much you save. It can be $5, $10 or $15 every time you get paid. It’s about making it automatic and effortless so it becomes a habit.

  1. Emergency fund: This is where you should first start. I recommend saving enough money to cover your basic living expenses for three to six months. The money in your emergency fund should be kept in an easily accessible savings or money market account so it is easily accessible if an emergency was to occur.  It is important to only use the money set aside in your emergency fund in the event of an emergency, such as your car breaking down, receiving unexpected medical bills, losing your job etc.
  2. 40lK or 403b Plan: If your employer offers a retirement savings plan, such as a 401(k) or 403b plan, sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate. Find out about your plan. For example, how much would you need to contribute to get the full employer contribution and how long would you need to stay in the plan to get that money.
  3. Roth/Traditional IRA: You can put up to $5,000 a year into an Individual Retirement Account (IRA) and you are allowed to contribute more if you are 50 or older. IRAs provide tax advantages. When you open an IRA there are two options:  a traditional IRA or a Roth IRA (you should talk to your financial advisor or research which  one is best for you based on your income). The tax treatment of your contributions and withdrawals will depend on the IRA you select. IRAs can provide an easy way to save, you can set it up so that it can be  automatically deducted from your checking/savings account and deposited into your IRA.
  4. Investing: If you are thinking about investing I believe you need to think about  how to buy rather than what to buy. You should understand that investing is risky and you can’t eliminate that risk but you can become an educated investor who makes informed decisions. Being educated about the market allows you a margin of safety and a cushion in case events go against you. Once you start thinking about investing in stocks, bond mutual funds, your first steps should be to talk to a financial advisor. You need to understand what type of investor you are and what risk you are willing to take.

5.  Paying off Debt:  Paying off debt is definitely going to mean making sacrifices and going without sometimes. It’s the sacrifice you make to live debt free. As a debt-free individual I can’t tell you how much pleasure I get from having no consumer credit card debt or student loan debt. It creates so much happiness and freedoms that you don’t get to experience with having credit card debt.  It is important to pay more than the minimum payment each month. Paying the minimum of the outstanding balance only prolongs the torture of paying the debt off.  The longer you keep your credit card debt the more you become best friends with the banks that you owe and of course the more you will owe them. The system that I used to eliminate my debt was simple I used the snowball elimination:

  1.   I listed my debts from lowest balance to highest balance and I created a timeline of when I wanted to have the debt paid off;
  2. I called my credit card companies on a monthly basis to have them lower my interest rate (most of my cards had an interest rate of 6.99% or lower);
  3.  I designate a certain amount of money to pay toward debts each month;
  4.  I paid the minimum payment on all debts except for the one with the lowest balance;
  5.  I threw every other penny I possibly could at the debt with the lowest balance;
  6. When I eliminated that debt, I did not alter the monthly amount used to pay debts, but what I did was threw all I could at the debt with the next-lowest balance;
  7. This method allowed me to become DEBT-FREE.

*While trying to become debt-free remember to try and live as frugal as possible AND to increase your income (yard sales, selling items on craigslist, get a weekend or second job, babysit, etc), if possible.  The combination of living frugal and increasing your income will make it easier to pay off your debt quicker. Also do not use your credit cards while paying them off (don’t close your accounts just don’t use them).

6.  Living Life: It is important to remember to live your life while putting all of these steps into place.  It is a lot to think about, but you have to make sacrifices in order to become independent and wealthy. You also do not need to sacrifice so much that you are taking the happiness out of your life.  The point of all this to make your life easier now and in the future– so just remember to make sure to enjoy putting these steps into place so you can enjoy life in the future.