Category Archives: Household Savings

Fund Times: How to save smart without waste

The two words most people fear in terms of money is “emergency fund,” perhaps even more so than “savings account,” since the former is more fearful given that not many have one.

An emergency fund is quite simply money set aside in the event something unexpected happens. Given that the average saving account for about half the population is around $1,000 or less, the idea of an emergency fund is quite laughable.

But why don’t we have money saved? Why is our emergency fund more prepared for a few months worth of grocery bills rather than a new roof, transmission for the car or braces for the kids?

The fact remains there are two main reasons we can’t save: we don’t spend correctly, and we live far beyond our means. In both instances, you need a budget, you have to track your spending, and by doing so you’ll flush out the bad spending and keep the good (i.e. necessities).

Living beyond your means is more about borrowing money and trying to have what you want or keeping up with certain trends even though your income won’t support it. Having a budget keeps you accountable, and if you’re overspending and you write it all out on a piece of paper and can actually see you’re in the negative that could sharply change your spending habits.

Spending correctly isn’t just about paying your bills and paying them on time, but also our innate ability as a society to waste money on anything from lottery tickets to cigarettes. While some might not consider those purchases a waste of money, consider what not buying those could mean in the long run. if you spend just $3 per day on the lottery over the course of 10 years, you’ll have spent $10,000 and have nothing to show for it. And if the average lottery player spends $5 per day, that number is going to be nearly double.

And wasting money isn’t just about lottery tickets or addictive habits, but also can be something as simple as take out food on a weekly basis consistently. If you spend $10 per day on lunch, and another $10 on coffee and drinks that are just part of your day to day routine, you’re spending about $7,000 per year on one meal and a quenching your thirst daily.

What about your need to refill more than just a cup at lunchtime?

Your focus should be on tracking spending, increasing income (if possible) and budgeting what you have not what you don’t. Being wasteful is just an added negative to this entire process, one that can easily be fixed but by your hand only.

Bumpy Rogue: How to get off the path of wasting money

No one is going to argue that saving money isn’t hard. But does it really have to be perceived as next to impossible?

The fact remains is that debt is a real issue, one that isn’t going away any time soon, and you can look at the cruel, crude numbers of the average amount of debt (unsecured) at around $25,000 and also pay close attention to the average amount of money a person keeps in their savings account, around a paltry $1,000.

That is a huge disconnect and distance between those two figures, and with that, you can see why people assume that saving money is a dream, and nothing more.

But the fact remains is that you can break away from that mentality if you avoid some simple ways that you’re wasting money. Even more, you might not even realize that you’re doing it.

The most obvious is two fold: you don’t have a budget and you’re living beyond your means. Those two go hand in hand with one another, good or bad. If you’re having trouble saving money, chances are both of these things are working against you. And, for example, if you have a budget and it’s iron clad (more on that in a minute), you still can overspend or live well beyond your means, which essentially renders your budget useless.

As for the budgeting process, you can’t just focus on the obvious. You have to take into consideration little elements of spending, such as a gym membership or a simple bottle of water every day for 365 days of the year. The small, so called inconsequential things add up quickly and can’t be overlooked.

Another huge missteps when it comes to why you can’t save money is a propensity to ignore your income and only add expenses as you go through life. Successful people who pay attention to money know that they’ll always continue to look for ways to earn more, even if you’re going to be a part time driver or work from home as a typist. They’ll always try to sell things they aren’t using or look for ways to save any way they can, whether that is their cable television bill or cell phone plan. Those individuals don’t add expenses; they find a way to minimize them and work that total number spent down.

Being successful at saving money does take work, but you can argue just how hard it is. The word “hard” should be replaced with attention to detail as the driving force behind financial prosperity.

Limited Engagement: How to save money on small budget

 What’s the first thing that comes to mind when mention “budgeting?”

For most, that word is negative. It reminds the masses that budgeting is directly related to not having what you want, scraping along to just “get by” because you’ve limited yourself to what you can spend, based on a variety of factors led by income and expenses.

The income factor is quite paramount, but what is someone supposed to do when they’re trying to save money when they don’t make a whole lot, and that aforementioned budget doesn’t stretch very far.

In that situation, budgeting does take on quite the negative connotation, but it doesn’t have to be that way. The first and most natural reaction is to cut spending and expenses, being that feeling of depriving yourself is going to stand out more so than anything else. Cutting expenses is the easiest path realistically but it comes at the expense of peace of mind, furthering the thought that you’re only working to pay bills, and you’ll never have the funds to actually have fun.

Granted, if saving money is a priority and you don’t have a huge income, having fun might need to go on the back burner, but there may be other ways save money first.

You might want to take the time and start price matching or shopping around for better rates on anything from electricity to car insurance. That also includes online and print coupons, something maybe you didn’t take the time to do previously because you felt it wouldn’t make much difference. The fact remains is that price matching works, and coupons are all the rage if you actually sit down and dedicate yourself to getting the process down pat.

And if you’re not always trying to find a cheaper car insurance quote or a homeowners policy, then you’re accepting the potential that the status quo is quite expensive versus making the most of businesses that are fighting for yours.

If you’re someone who has a little bit of money saved, you might want to look at your credit and debt specifically. Sometimes if you pay off a credit card completely, you’ll save hundreds per year on interest and yet still have a little money left in your savings account. If you don’t have an emergency fund, that should take precedence over spending and your budgeting prowess should reflect that in terms of making sure you pay yourself, and then pay your bills. The paying yourself part is just another way to save money, but makes some feel as though they’re actually a priority in the process.

No matter how much you make, there’s always room to live within your means and save money, with the focus being on the former: spending what you have based on income, and nothing more.

Life Aligned: Budgeting starts with asking for help

Not too many people like to admit they’re wrong or don’t know what they’re doing, no matter what the project or endeavor is. Money certainly is no different.

The hardest part for most as far as saving money goes is the ability to budget, understand their credit and score, and to know what kind of debt they have and come up with a plan to get rid of it.

The fact remains is that the average individual has about $20,000 in credit card debt, another $50,000 in school loans, along with the average home purchase at around $170,000 and cars sitting at around $30,000.

If that sounds like a lot to manage, you’re right. The house and car aren’t as much of a concern since that is more about business as usual when it comes to debt, rather than having unsecured money that has nothing to show for it (credit cards).

The education number is high but also understood due to its nature and the fact that most student loans are protected by a very low interest rate.

The focus of this is more about asking for help when it comes to credit card debt and your credit score, specifically the amount of debt you’re carrying and your debt to income ratio. Realistically, the debt to income ratio should be about 60 to 40 in favor of the income, obviously. Some suggest a 70 to 30 split, which is wonderful but hard to achieve.

Asking for help doesn’t always have to a professional endeavor, either. You don’t necessarily have to seek out the help of a financial planner or credit advocate in the form of a lawyer or even a credit consolidation company.

Those avenues certainly are perfectly fine, but they might not be that necessary when it comes to your situation. If it is, so be it. Those individuals or agencies might be more helpful, but if you know what you should be doing and have a decent to above average salary, you might want to consider a spouse, sibling or parent to make you accountable for your plan and how you spend and budget.

Some have gone as far as saying that they give those individuals or ones of that nature money to save for them or ask them to keep an eye on them, for example, when they’re out to eat or shopping at the mall.

You shouldn’t feel defeated for asking for help but rather a sense of relief that you’re on the right path to crushing your debt, raising your credit score and finding that financial stability that has eluded you.

Cut-Backing: How to ensure yourself cutting expenses is best option

 

No one likes the idea of cutting expenses to try to save money.

That is, until they actually do it and realize two very important things: they enjoy the extra money saved, and the services and products they no longer buy aren’t very missed in the long run.

Expenses are part of the budgeting, spending and saving process but that doesn’t mean you can’t say no or so long to certain items even if they’ve been staples that you supposedly would label as necessities.

The true staples sound as those you’re channeling your inner cave man or woman, but they still ring true when you start with a foundation that is your budget. You need a house, a car, to pay your utilities (gas, electric for heat and power), food and nourishment. In today’s modern world, you have to go with insurance for that home and car, along with a few other things that come to mind, as most of us have some sort of credit card debt.

But what about those who end up spending money on things like cell phone plans, cable television, clothing (which is a necessity and belongs on that top list with some discretion).

For starters, the cable can go out the window, and that means all of it. You can stream your way to entertainment at a fraction of the price as the typical, traditional cable is something that is outdated at best. As for the cell phone, you’d be hard pressed for some to take on a lesser network then Verizon or AT&T but Sprint and T Mobile might be far behind the competition but they’re still viable, much less expensive options, not to mention other reputable companies like Cricket and Boost Mobile.

Clothing is something we absolutely need but at what price? A lot of what we buy can be purchased in the off season, when clothing is 50 to 70 percent cheaper, or you can forgo the department stores and instead buy used or at other retail spots that deal directly in not only used clothing but the kind that is imperfect (but only to the keen eye).

Food also should be specific to the grocery store kind, as limiting your eating out at restaurants for breakfast, lunch or dinner should be kept at a minimum. Dinner three times per week alone can cost you a few thousand dollars, money that could be doing much better in a savings account.

While “cutting” sounds bad, it actually can be the most beneficial part of being able to save money.

Small Wonderful: Why you can live big on small budget

Without getting too cliche, you can live life as you see fit on a budget that works for you, even if you’re not a millionaire or have the kind of lavish spending that others you know do.

Being able to get by on a small budget, meaning that you spend and save like everyone else, but don’t do the former quite the same because your income dictates otherwise.

In most instances, living small doesn’t mean you have to stop spending or all of a sudden implement a spending style that goes against what you truly want.

Shopping and eating out at restaurants is a perfect example of this point. Those who live “small” still spend money on clothes and go out to eat at restaurants, but they do so with extreme patience, virtue and a flair for the finer things.

Now, that might sound as though it makes little sense since the “finer things” and a small budget don’t go hand in hand.

But consider it from a different perspective: if you buy clothes every day or every weekend or with some regularity, then you’re going to not only spend more but you won’t get what you want, instead feeling as though you have to buy cheap and more frequent. Rather than buy a bunch of $5 shirts, why not shop once every six months and buy yourself something a little nicer since you’ve been saving on a whole lot of $50 or $100 trips every weekend.

You can look at food in the same breath.

Spending $10 for lunch and another $20 for dinner three days a week adds up quickly (more than $1800 in six months of food shopping). Imagine if you packed a lunch, cooked dinner at home and went out to a fancy dinner with your significant other once per month for $100 a pop. That’s $600 spent versus $1800 for what only could be described as a lunch time sandwich or salad or a dinner meal at a chain restaurant.
And as long as you’re being smart with food, think about eating out for lunch and skip dinner. Lunch could be a $10 meal and if that same person mentioned earlier cuts out a $20 three days per week, that $1200 in their pocket or more in six months and more than $2,000 saved each year.

Living small doesn’t mean you’re never going to be able to enjoy the good life. That life just gets better when you can splurge and still save at the same time.

 

How you’re losing money every month

Sometimes a budget is only as good as the person who created it or just how diligently it is followed.

Simply put, the budget, specifically having one, isn’t a full proof method to be able to save money if a few things aren’t lining up properly.

Does the budget make sense? Does it account for everything? More importantly, are you accounting for everything?
The problem centers on you having a budget that on paper looks pristine but the execution of it leaves you in the red every month. So, how do you have a budget and yet you can’t manage to save any money as one month rolls into the next?

Chances are, you’re losing money in places that you might overlook or are a given and, secondly, you aren’t treating your budget like a business, one that you can always adjust to save money and eliminate expenses for a better bottom line.

For starters, do you track how much you spend on eating out at restaurants or grabbing a quick lunch on the road? Those dollar figures aren’t just incidental in the way of expenses that you can forget about, but rather need to be accounted for each time you spend. The average lunch bill, eating out three times per week for an entire year, can cost you nearly $2,000 per year. While that number doesn’t sound like much when you’re only dropping 8 to 10 dollars on every meal, it certainly adds up quickly. The same could be said for not paying attention to bottled water, coffee, cigarettes or even the consumer who buys themselves a $50 shirt every time they get paid. If you don’t believe those purchases aren’t important, then you’re not accurately falling under the “budgeting” umbrella.

As far as expenses and treating your budget like a business, you should constantly be combing over your numbers to see where you can save money. Maybe ditching $200 per month on cable versus a $12 streaming subscription is a means to save extra cash. Perhaps it’s been a while since you shopped for insurance rates for your vehicle, and since you’re such a wonderful driver, you’re actually overpaying at the moment. Maybe a home refinance would be in order to get a better interest rate and a lower payment. That cell phone plan, too, might be creeping a little too high for you, and your office just gave you a company phone you can use as your own. The smart money is cutting your ties with your personal line.

Those little tweaks can take what is an average, run of the mill budget that is underachieving and underperforming and turn it into a money-making powerhouse.

Budget Breakdown: Why your budget is only as good as how it adapts

Having a budget isn’t a full proof way of assuring you’ll be able to save money, pay bills on time or have a general, strong understanding of your finances.

The misconception is that just because you put pen to paper and thus have accounted for your car payment, house or apartment or your utilities that you’re on the right track to becoming more successful when it comes to money.

Truthfully, that’s just a small part of the budgeting process as other elements play into all of things you want to do with your money beyond just knowing that it exists and where you hope it is being allotted.

Experts argue and with good reason that your budget has to be adaptable; it has to be able to change with how your lifestyle, job or other elements can shift in one direction or another.

Would you believe that someone can get take a pay cut at work and leave their budget absolutely untouched? You’d think that those with any sort of financial acumen would be trying to look for easy places to start cutting expenses as well, such as cable television, cell phone perks or spending money on clothing less frequently then previously.

The status quo when it comes to your budget, simply doesn’t work.

In addition to any pay changes, you also have to consider your retirement as it pertains to your income and how you save money.

If you’re thinking about retirement or have decided to invest a portion for the first time, you have to consider that as you get yearly raises, bonuses or cost of living expense increases, you might want to alter your contribution to your retirement account and increase it with each year, so you can build your wealth or take into consideration how the market might fluctuate. If your company has a match program, you’ll want to take that into your thought as well.

No one is going to argue that a budget is the way to start saving and to beat debt into the ground, while keeping track of everything and anything that is money related. But budgeting isn’t a one and done proposal. It’s about a constant changing effort to manage your money, with a key on the word “manage.”

If you are a manager at work, manage a team or are in charge in some form or fashion in any realm of your life, why shouldn’t money be the same? You don’t all of a sudden start managing and then stop looking to get better, and money should carry with it that same mentality.

Money Mattering: Why common budget mistakes can be avoided

Do you often update your budget?

Do you even have a budget?

Perhaps when it comes to spending, you don’t have a plan and you simply “wing it” and assume that you’re making more than you spend, whether that comes in the form of simply paying bills or buying what you want rather than need.

Let’s start with that over or under estimating your spending. If you aren’t sure what you’re spending on or, even worse, how much you’re spending, then you need to adjust that immediately and that starts with a budget.

That budget also should consist of a plan to save money for the future or for expenses that might be the unexpected, such as taxes that need paid, home repairs or something else of that ilk.

The real issue that most face and one of the more common mistakes is not really looking at money in the purest sense or buying as though you have all the money in the world. Think about the car you own; did you buy it based on the money you have or the car you want? If it’s the latter, you’ve likely overspent on a car that is much loved, but the monthly payment hardly is the same.

Overspending isn’t just about not budgeting but also not looking in more unique places to get what you want, more specifically buying used when that is perfectly acceptable and must less expensive.

The first thought in that school of thought is car, but what about your home?

Far too many who struggle with money buy too much home, and that isn’t to suggest they don’t need the three bedrooms or extra living space in the basement, but more about the monthly mortgage payment and the overall cost of the house.

The common phrase “house poor” is all too familiar in that your mortgage takes up more than half of your monthly income, a sure fire no-no in the world of budgeting and saving money.

Finally, money isn’t just the root of all evil but it also is something you like to pretend you have even if you don’t. Not having money just means your budget looks different than that of your friends, so trying to buy the same wardrobe, the same car or the same vacation plans is only going to put you further behind in your plans for financial success and freedom.

Making mistakes with your budget is nothing new. The trick is figuring out what you’re doing wrong and adjusting it before mistakes start to feel like commonplace.

Personal Problem: Is a personal loan the answer to paying off debt?

Credit card debt is a topic that is tough for most people to indulge in discussing, mostly because everyone has debt and paying it off can be difficult if not feeling nearly impossible.

So when it comes to tackling debt in the form of credit cards, you might be willing to entertain just about any option that you can think of, even if it means adding to the pile.

Consolidation is paramount for some, simply for convenience purposes of making one payment and calling it a day. The consolidation road can center on two avenues: debt consolidation companies that overtake your debt and help you manage it or quite simply a personal loan that can use its Superman like qualities and knock out your debt in a single swipe.

The debt consolidation plan through a company works, but that renders your credit cards cancelled and obsolete and will ding your credit score as a result. It doesn’t mean you’ll not be able to have credit or get more important loans, but that is a deterrent for the masses.

A personal loan allows you to have a fixed interest rate (which is a breath of fresh air versus doing balance transfers on credit cards that change drastically once the promotional rate that is introduced goes away after 12 or 18 months).

Before going into a personal loan, you have to make sure you’re able to carry something like that, first by checking your credit score but also making sure you’re not going to get saddled with a high interest rate based on your debt to income ratio or income in general.

If you don’t have the income to carry personal loan, what ends up happening is you borrow less than you need to consolidate and still have a stray card or two to pay on in addition to paying back that personal loan.

The real selling point of the personal loan is that one stop shopping (or paying back) mentality. The personal loan can take multiple lines of credit and allow them to be paid off and that one lump sum monthly is important for the purposes of convenience. That is hard to understate for the people who have a lot of debt and a lot of cards they’re trying to manage.

Having credit card debt is troubling and disheartening but it doesn’t have to be a mountain that you can’t climb. Taking a personal loan should mean that, credit wise, you can carry it with an interest rate that only alleviates the problem, not adding to it.