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On Making a Budget… Don’t Panic

When it comes to creating your budget, it may be tempting to say, “let’s not and say we did.”  Nobody likes a liar.

Picture1 When you finally sit down and figure out you net worth, aka your place in the financial universe, the results may cause what is known in medical fields as a “freak out.”  The best way to deal with this condition is to avoid your finances at all costs; no, not really, but many people do react this way. 

I understand that feeling of panic that washes over you.  Where do I start?  Can I ever pay off all that debt?  How can I ever save enough money for the retirement I’ve always dreamed of?  Remember those days at school when you realized that big test would have been a lot easier had you just studied over the semester rather than just that last week?  This is kind of like that. 

So, let’s talk about financial goals; otherwise, why do you even care about your finances?  Here are a few of ours:

1.  Pay off unnecessary debt.

2.  Save sufficiently to have the option of an early retirement.

3.  Save enough for our future children’s college funds. 

4.  Buy a house.

5.  Buy an airplane (that’s Husband talking).

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Article publié pour la première fois le 17/06/2010

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Five Skills to Save You $$$: Financial Skills

The second skill in our series of skills to help you save money is perhaps the most obvious, but also the most important of the five skills: financial skills. While learning about finances may be boring to some people, it is time well spent. Here are the skills you need to acquire to save money and make yourself a financial genius.

Demystify finances/economics. Perhaps the greatest hurdle to being a financial ninja is fear. Let’s face it, for many people, finances are scary. They can be obscure, technical, and full of terminology which might as well be a foreign language. Most people bury their heads in the sand and ignore their finances because of this fear. One of the first things you can do to gain the financial skills necessary to save money is to get past this financial threshold. I have found that one of the best ways to stop this fear of all things money is to immerse yourself in the world of finance. Take a look at the Wall Street Journal. Read books on various financial topics. And there is always my favorite, financial podcasts. I listen to Planet Money, produced by NPR, at least once a week. They discuss deep economic and financial issues but they make it accessible to us lay people. By putting your toe into the world of finance, it becomes a lot less scary and lets you have the confidence to make better financial decisions.

Learn to budget. Perhaps the greatest financial skill you can acquire is to learn to budget. You not only need to learn to budget, but you need to learn to live by a budget. It can be too easy these days to simply spend away in blissful ignorance of where the money is going. By keeping track and watching how you spend money, you can put that money to better use. Nobody got rich living beyond his means. A budget will keep you on track to financial success. Learn how to track your finances and predict how much you’ll spend monthly. There are plenty of websites and software that make budgeting much easier. Use these to make the budget habit stick in your own life. By learning this skill, you will save money simply because you will be more aware of your finances.

Learn about credit. There are two sides to credit: one which will help you and one which will hurt you. If you learn what credit is, how it works, and how to properly use it, it can help you save money when buying a house, buying a car, or buying anything else on credit. Learn how the system works. Learn about the three credit reporting agencies. Learn what your credit score is and what it means. The more you can figure out the enigma that credit is, the sooner you can have it working for you rather than against you.

Figure out investing. Investing is what grownups do with their money. As you become more solidified financially, you will find that investing is how you will prepare for your financial future. Learn about the stock market and how it works. Learn about mutual funds, annuities, and other financial tools created to help your money grow. The more you can learn about how to make your money work for you, the faster it can grow.

Learn to plan for retirement. For many people, retirement seems a LONG way off. Unfortunately, it can sneak up on you before you know it. If you can gain the financial skills necessary to plan for retirement now, you can save money and secure your financial future. Much of this preparation will overlap with learning about investing (because like I said, investing is what grownups do with their money) and will serve your overall financial health. Planning for retirement now will give you financial freedom and peace of mind for the future.

Ok readers, what advice do you have for learning all things finance?

Article publié pour la première fois le 02/04/2013


Saving Money Myths

Cash savings are at an all-time low for most people and the rate of credit card debt is at an all-time high. Most individuals nowadays spend more money than they can afford because buying on credit has become so easy and convenient.

People are drowning in debt and the idea of opening a savings account is not something that people in debt consider as being viable. Those in debt are trying to make ends meet and pay off their bills and the idea of saving part of their money every month is not an appealing one.

There are all sorts of false beliefs and myths surrounding the idea of saving money, especially when a person is in debt. It is exactly at the time that they are in debt that people should consider putting money into a savings account and paying cash-only for their purchases.

Getting out of debt is easier than most people think if they are willing to be disciplined about their spending and cutting unnecessary items out of the monthly budget.

The top common saving myths

1.Many people feel that because they are in debt, they cannot afford to put money aside every month. This is simply not true. Even if it is only a few dollars a month that are saved, they soon add up. There are often unhealthy spending habits at the bottom of most debt situations.

Many people feel it necessary to eat out several times a week or to buy coffee at upscale coffee shops every day. The money saved by eating at home and making your own coffee can be quite substantial when the monthly total is added up. It is not that people cannot save money; it is more likely that the habit of going out to eat has become so prevalent that it does not even register how much money is wasted indulging in this several times a week.

2. Owning assets is considered the same as having cash by many and therefore it is not considered necessary to put money into a savings account. This is far from the truth. Owning a million dollar property cannot be considered the same as having $1 million in a bank account.

Owning cars and furniture is not the same thing as having cash on hand either. This is especially true if the home and the car are not completely paid for. Property can get damaged and the real estate market can fall, making the assets less valuable than they used to be.

Having cash safely in a savings or other account is the best way to be prepared for all emergencies. An account with a high interest rate can also provide a liveable monthly income for people so that they no longer have to work.

3. Saving money is thought to hamper lifestyle and make people sacrifice the things they would like to do or have. The opposite is true. Buying things on credit means that there are usually high interest charges attached to the purchase. This can really add up, especially if the debt is high.

This means that over several years it is easy to spend thousands of dollars to pay off interest charges on credit card debt or car loans. When unnecessary items are cut out of the budget and purchases are made in cash, the money spent to pay off interest can be put into a savings account instead. It is all a matter of prioritizing and being disciplined. Saving money can be a lot easier than most people think.

Article publié pour la première fois le 13/04/2012


Hang Up the Telephone Bill

In scouring over my monthly bills, trying to figure out ways to save money on them, one bill seems to stick out month after month like a sore thumb. My telephone bill. Ever since I got married, my husband and I have ditched the landline and survived with only cell phones. It didn’t seem to make much sense to have yet another phone number to remember for a telephone line that would only be frequented with telemarketers and political surveys. Also, we figured that ditching the landline was a great way to save money. Now, as month after month of a $120 cell bill comes and goes, I decided that looking for ways to save money on the telephone bill was worth researching out.

The first thing to remember when looking for ways to tweak your telephone setup is that no one plan will fit for everyone. We are all different people with different schedules, routines, and needs. Personally, I don’t use my cell phone a lot. My husband, on the other hand, has had his surgically attached to his head. While it might make a lot of sense for me to find a cheaper cell plan that may offer fewer features, that isn’t going to fly for a power user like my husband.

With that in mind, here are some of my tips for saving on your monthly telephone bill:

Bundle your services. Some people need a landline. Maybe they have a security system or a satellite system that requires it. Some people like to have one for their children to share. If you have cable service and internet service from the same provider, chances are that the provider also has a telephone service to sell you. Luckily, when you take advantage of all of their services together, you can get a bundled rate. Many times this will mean that in the end, you are paying as low as $10 per month for a landline. Not a bad deal.

Consider using magicJack. MagicJack is a little box that plugs into your computer or directly into your router. That box also plugs into your basic old, every telephone. You can also get a new phone number with magicJack or transfer an already-existing home number. The service also allows for free international calls. They claim that you can save up to $1,000 per year using their service, but your mileage may vary. If you need a simple telephone service, this might be the way to go.

Try Ooma Telo. Ooma Telo is another box that plugs into your router and uses an internet connection to make phone calls. The box costs about $175, but then monthly, you only pay applicable taxes. The service includes a ton of features you are used to getting with a typlical cell plan. There is also a premier service you can buy that adds even more features, for a nice little monthly fee. Again, like magicJack, Ooma Telo lets you add a home line without forking out for typical home service rates.

Try a pre-paid cell phone. One of the major problems with cell plans is that your monthly bill can be quite unpredictable. You may go over on your minutes or send just a few too many text messages. It can be quite the surprise every month when your open that bill. A pre-paid cell plan gets rid of all of that uncertainty. By pre-paying, you guaranty what your montly bill will be and you are prevented from going past that alotment of minutes or texts. If you don’t use a cell phone much, this provides a nice cheap way of getting what you pay for rather than a blanket monthly plan that provides, and charges, for more minutes, text, and data than you use.

Keep an open mind. It is easy to get set in our ways. Sometimes you have to keep an open mind when trying to figure out new ways to do things to save money. Think about what things you absolutely need and what features are unnecesary. You may be surprised what you can lose and never miss.

So friends, any other ideas for saving money on your telephone bill? Any other services out there people should know about? Sound off in the comments.

Article publié pour la première fois le 01/10/2012


The Gift Card of the Magi

Since Christmas is now an entire month behind us I have decided to finally clean up and put my Christmas gifts away.  I replaced old favorite sweaters with new favorite sweaters on my closet shelf.  I crammed a few more games and puzzles in the family room closet and gathered up the bountiful array of gift cards.  Now, I have been guilty of letting cards like these go completely to waste in years past, losing them, not knowing what to get thus ignoring them.  We all have done it. In fact $2 billion per year of gift card dollars go wasted.  But, I am determined for this year to be different.  I am a new home owner– I can’t afford to let good plastic money go to waste!  So, I though I would share some strategies for using these tiny shopping spree rectangles to the fullest.

If you have a card that you are really just NOT going to use (S & M Emporium?) try an online gift card swap such as Plasticjungle.com

In my humble opinion, there is nothing wrong with regifting a gift card– you got $20 to Meat Town from your grandma who refuses to accept your vegetarianism?  Make a beef eaters day!

Don’t let a card waste away because you are “sure” the store does not offer anything you are interested in.  Maybe Tire World isn’t your thing but they carry tons of cute air fresheners and keychains!

If you have a whole deck of gift cards, set up your date night schedule around them.  Make your plans to fit the cards instead of making plans randomly and then wondering afterward “Didn’t I have a gift card for that somewhere?”

This may be a little too unconventional for some but consider paying for certain services with gift cards.  I am sure my babysitter would find more age appropriate clothes at DEB than I would anyway. Or maybe the kid down the street who feeds and walks your dog when you are out of town would love those free movie passes.  Just remember to ask about it first.  Even kids often prefer cold hard cash.

Not into that day spa gift card you got from your mother-in-law?  Especially when the card is for just $10 to a spa where that wouldn’t even buy a five minute massage.  You can’t even get out of your clothes that fast!  Don’t fret, spas and salons often sell luxurious prepackaged products right out front, so if you don’t want to chip in 90 additional dollars to your spa day just pick up a nice leave-in-conditioner or foot soak and relax at home.  And bonus, you can ask about what products to try and get their expert advise for free!

Remember, they spend like cash so treat them like cash– put them in your wallet for safe keeping and easy access as in…

Cashier:  “Do you have any coupons or gift cards?”

You:  “Wait let we check my wallet.  Yep!  Here you go.”

Gift cards don’t do you any good at home under a pile of old mail or under your bed.

Beware the vampire Time!  For he slowly sucketh the life blood from your gift cards.  I hate this, but some gift cards lose value over time when they are not used.

Remember to use them up, even if it seems silly.  My husband and I received a gift card for $100 to a very expensive steak house.  We ended up using about $85 on a luxurious dinner leaving just $15, which would not go far at this place on a return visit.  So?  We returned another day and ordered one dessert to share and guess what?  They didn’t throw us out and we didn’t shock all of humanity.

If you are planning on giving a gift card check out the nifty new prepaid credit cards.  I call them the “anything gift cards.” Use like a credit card anywhere you would use a credit card. Available through Visa, Mastercard, and American Express.

So, there you have it friends.  I hope my tips have been helpful and happy spending!

All right gift card maximizers, what are your tips for getting the most while spending the least?  Leave a comment…

Article publié pour la première fois le 29/01/2013


In the Credit Card Details

Our credit card will do more for us than we thought.  I wonder if it can do backrubs.

During my Untitled-1credit-card-research-bonanza last week I did the impossible:  I actually read the fine print!  Well, not really the fine print, the almost invisible print, actually.  Sure, Husband and I know our rates (not that they matter, because we pay off our complete bill every month) and our limits, but we didn’t realize just what our card could do for us.  I found a document for our World MasterCard titled, “Guide to Benefits.”  Initially I thought this to be one of those ironic pamphlets where ‘benefits’ really just means ‘ownership’ and the whole 17 pages were just legal butt-coverage for MasterCard.  In this case, I was luckily wrong. 

Turns out, that aside from whatever rewards program that your credit card offers, they may also offer you some free and clear (crazy, I know) benefits.  Here are the unexpected highlights of ours:

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Article publié pour la première fois le 01/07/2010