Personal Finance Blog

Tips And Stories To Help You With Managing Money

10 Tips To Saving Money In 2014

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saving-plansThis is the time of year when many people make an effort to get a handle on their budget. People are turning their thoughts to self-improvement and personal finance is on their minds.

Generally speaking the ability to save money monthly depends on what you do everyday. Do you ask yourself each day if you are adding or subtracting to your net worth?

Companies like Wallet.ai  are developing algorithms that will help you answer these questions and send you a notification when you are getting off the savings path. They will analyze  your spending patterns and then send you text messages suggesting ways you can cut back. Someday we may be turning over our financial control to a robot.

Until that day comes, people still need to rely on good common sense while doing their financial planning. Below, you will find some helpful money saving tips to use in 2014.

1. Lower Media Consumption

Look into all the media that you are consuming on a daily basis. That means your cell phone, your home internet access, your cable television, your extra devices, like iPads or tablets and add them all up. The bill can easily add up to over $300 a month. Talk to your providers and see about how you can reduce this amount and still enjoy the media that is most important to you.

2. Spend Less On Dining Out

eating-out
Let’s face it, dining out is enjoyable and like it or not, you will make all kinds of exceptions in your head about why you need to eat out. To combat this, try hitting restaurants that have happy hours and dinner entrees at half price. Check the coupon sites for restaurant specials. Forgo the expensive dessert, fancy waters and cocktails. When reading your menu, don’t ignore prices just because there is no dollar sign in front of the numbers.

3. Spend Less On Movies

Going out to the movies will always be a powerful form of entertainment. Ticket prices have gone up in some theaters to $11.50 per person. Watch for special days that theaters reduce their prices and you can sometimes save up to 50% off. If you have Netflix at home, watching episodes of good television productions has become so popular that newscasters have coined a new phrase for 2013 – “Binge Watching.” You may get caught up in this activity for days at a time, but still you will be saving entertainment money by staying at home.

4. Enjoy Nature

The outdoors provides plenty of opportunities for enjoyment. Hiking local trails will keep you away from shopping centers and provide you with good exercise as well. If you are trapped inside because of bad weather, try your local indoor gyms.

5. YouTube Parties

Gather your friends together and have everybody contribute their favorite “funniest YouTube videos.” Television producers aren’t the only ones that can provide you entertainment.

6. Cut Back Cruising Expenses

Save money by bringing your own wine on board and by booking spa treatments ahead of time. Arrange to be a guest speaker on board the ship to lower costs. Book an inside room instead of a room with an ocean view. You’ll have plenty of time to have enjoy the ocean. Check for deals at VacationsToGo.com.

7. Read More

If you are looking for action and adventure, BuzzFeed published reviews of  16 books they judge as perfect movie scripts. Make your reading more enjoyable by using a Kindle PaperWhite which holds over 1,000 books and is small enough to easily carry around with you. With free 3g connections in over 100 countries, no contracts  and no monthly fees, reading has never been more convenient.

8. Save 10% or More Of Your Income

When people tell you to pay yourself first, they mean save part of  your income. Decide on a percentage to save each month and then set up an automatic transfer to your savings account so that it is done automatically. This system of automatic transfers makes savings much easier.

 9. Avoid Buying Just Because It’s ON SALE

Everyone uses different criteria for spending, but one common problem is that people see things on SALE and make purchases just because of the sale. There isn’t anything wrong with doing that if the purchase is within your budget.  The question that fails to get asked is “Do I Really Need This Item?”

10. Avoid Thinking “There is room on my credit card.”

Silly as this may sound, some people decide they can afford something if they have room on their credit card for it. Of all erroneous purchasing strategies, this is the worst one to make. You should be paying off your credit card expenses every month. You should also remember that there is a rule about the amount of credit that is extended to you. Credit scores are based on the percentage of debt extended to you and the balance you owe. Best advice is to keep this under a 50% ratio to maintain good credit scores.

We look forward to hearing what your best money saving strategies are in 2014. Please let us know by commenting below.

Why Saving Money Always Beats Investing Money

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Shop and earn money. Yes, even when you're buying socks."
Shop and earn money. Yes, even when you’re buying socks.

A “penny saved really is a penny earned”–unless you’re referring to a penny that’s sitting in a savings account or an investment certificate. With today’s pathetic interest rates paid on investments, there are far better ways to put your money to work for you. And one of them is by shopping wisely.

Yes, you can save when you’re spending. If you’re scratching your head with your eyebrows furrowed up in puzzlement, and your finger hovering over the “back” arrow, wait just one second. It really does make sense.

Think of it this way. A person would be extremely hard pressed to find an investment that paid them an interest rate of 25%–and anything that could potentially offer such a high rate of return would involve an enormous amount of risk. But, what if you could save 25% off the purchase price of grocery items that you usually buy? By shopping wisely you would be, in effect, earning 25% on the money you invest in your groceries. You didn’t have to risk losing a single penny of your hard-earned dough. And, unlike the interest earned on investments, you don’t have to pay taxes on the money you saved at the supermarket.

Now that your eyebrows have returned to normal, here are a few ways that you can put your money to work for you in your everyday life.

Become a coupon clipper

If you made fun of your mother for clipping coupons, you may want to smack yourself up the side of the head. Your mother was, in fact, a wise women who knew how to save herself some coin. Why not use a coupon to save 75 cents on your next loaf of bread? There is no shame in being frugal. If you’re so anxious to waste 75 cents, I’m sure there are charities more deserving than your local grocer.

Compare prices

A loaf of Wonder Bread tastes the same no matter where you buy it, so why not get the best price? No one is suggesting that you burn expensive petrol running around from one store to the next. That would be pointless. But you can check out the sales flyers for bargains and plan your shopping trips accordingly.

Buy in bulk

If you see a great deal on toilet paper, stock up. Why buy just enough for the next couple of weeks, when you’ll only have to run out for more–and pay regular price? Huge savings on non-perishable items present you with an opportunity to save a fortune and really get your money working for you.

Curb unnecessary spending

Think of the money you would save if you learned to say “no” to the desire to buy for buying’s sake. Instead of wasting money on items you don’t really need, try a few techniques to avoid emotional spending. Don’t go to places that are filled with temptation. Don’t carry credit or debit cards. Don’t withdraw excess cash from your bank account. Brownbag your lunches and fore-go the expensive coffees and lattes from your favorite cafe.

Don’t get hung up on brand names

In many cases, the only difference between a brand name and its generic counterpart is the price. Admittedly, no one is telling you that you have to abandon your favorite brand of ketchup or laundry soap, but do try giving generic items a chance. Seriously, no one can tell the difference between one manufacturer’s dry pasta from another. And switching equates to savings.

If you train yourself to be a frugal consumer, you will soon find that “a fortune saved is a fortune earned.” So stop fretting over the puny amount of interest that your bank account earns. You’ve got a wallet full of coupons, an arm full of flyers, and a travel mug filled with coffee from home. Go out and get richer.

How do you spend to save?

Kimberley Laws is a freelance writer, avid blogger, and coupon clipping queen. She has written on a vast array topics including career choices for WAHMs, financial software, social media marketing and online reputation management. You can follow her at The Embiggens Project.

Photo courtesy of photos.com.

Start A New Thanksgiving Tradition

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thanksgivingTraditions have to start somewhere. Besides gobbling up the turkey and trimmings, which is at the heart of the annual feast, you might consider something new this year to help cement family bonds and give deeper meaning to the holiday.

Suggestions from moneycrashers.com include the following:

Put technology aside for the day. Outlaw all the gadgets at least for the duration of the dinner and for a period of uninterrupted and uninterrupted visiting. Collect the cell phones in a basket as family and guests arrive. And let host and hostess lead the way by keeping conversation flowing and providing opportunities for children’s entertainment (Nope. No TV) to bridge the “tech fast.”

Choose a charity project and use the usual pre- and post-dinner periods to fulfill it. If it’s feasible, volunteer as a group at a local soup kitchen or other organization that provides for the needy. Organize a neighborhood food drive to be completed after Thanksgiving. Or actually go out to collect items. Plan ahead to donate to annual Christmas toy drives by asking each child in your group to find ten expendable toys. Visit an assisted living or long-term nursing facility. Contact the facility ahead of time to learn what particular needs are. Reading, telling stories or providing music are simple gifts that have great meaning to patients. Take dinner to someone you know might not have ready access to family during the holiday. You’ll return to your own table uplifted and more grateful for what you have.

Make a jar for “thankful” comments. Put it in a prominent place and provide sticky notes or notepaper for family members. Encourage them to think about daily blessings and the extraordinary graces that come from time to time. Pass the jar and have each person read a note during your meal.

Register for a race. Many communities sponsor a “turkey trot” or 5K race of other outdoor events to mart the holiday. A list of such events is posted on the Running in the USA site. What a great way to work off the extra calories hidden in those yummy holiday specialties.

Write a letter to a hero. Maybe he or she didn’t make headlines, but we all have heroes. Encourage children to identify those they most admire and then write that person or persons a letter expressing thanks. If they need help recognizing their heroes, remind them of church leaders, teachers, doctors, special friends, family members, even favorite entertainers who contribute to the joys of his or her life. Then be sure to post those letters when the post office re-opens.

Theaters usually have special family movies lined up for the holiday period. Buying tickets ahead of time might save some frustration on site. Some theaters allow you to reserve seats. Just do it in plenty of time to avoid any last-minute hassle that would detract from the meal.

Instead of eating and then running for the football game, take time for some genuine family conversation. Give each member of your group time to talk about him or herself. Call for everyone to say something positive about little Suzy or Uncle Bill. Or ask each person to choose just one other member of the gathering, focusing on good qualities and explaining how valuable that individual is in the life of the speaker. Thanksgiving is the perfect time to celebrate those qualities that make us willing, wanting and waiting to sit down together for feasting and family nurturing.

Managing Credit Is Essential

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The successful financial management of a household in a day of easy credit depends to a large degree on controlling the credit load you acquire. The amount of money being paid on credit card debt compared with income is a critical figure that household managers often don’t know, or simply ignore and it can lead to financial disaster.

Figures compiled by government overseers show that in 2001, 11 percent of all American households had debt that was using up more than 40 percent of their income. The ratio is even greater in low-income families, which have a greater tendency to use credit when cash is short. The 2001 study was conducted by the Survey of Consumer Finances, an arm of the Federal Reserve. Results indicated that 7 percent of all the households contacted had a payment at least 60 days overdue. Only 45 percent of the credit card-holding households surveyed did not carry over a balance on their accounts.

Using some smarts at the beginning of the credit card pipeline pays. But even this common sense approach often is overlooked. Only a third of those who responded to the survey said they compared the many offers being made to potential credit card holders before acquiring a card.

The low figures may reflect how individuals view credit purchasing in the overall management of their resources. Those who simply use credit as a convenience in purchasing, with no intent ever to have a balance, may see no need to compare. Even so, it pays to look at the fees, terms and special features of the many credit offerings.

The level of financial knowledge in a household often mirrors how finances are managed. The survey found that lower levels of knowledge often correlated directly with less efficient handling of credit debt.

Debt management and savings also had direct correlations. Families that had control of debt payment also were more likely to make regular payments into a savings account. Four-fifths of all the families surveyed reported a savings account, but fewer than half of these made regular contributions to their savings out of each paycheck.

Maintaining an emergency fund to cushion against financial shocks also tied sound credit management to being prepared. Many studies, including those done by the Federal Reserve, consistently show that more than half of the country’s households are unprepared, even for a moderate period of unemployment. Again, general understanding of financial principles lagged in those families least prepared.

Planning ahead for such things as vacations, college expenses, medical needs, replacement of vehicles and other large-tag items also should be considered when credit use is a factor. One area that should call for some particularly thought is the prospect of retirement. A third of those surveyed did not know how much they needed for reasonable retirement and many who had looked ahead were far short of the amount financial experts suggest.

The survey emphasized the need for making credit buying a significant factor when analyzing family finances across the board. And it definitely made a strong connection between knowing about finances and managing them. That can be taken as a word to the wise.

The Cure for Common Household Debt

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At some point in our lives, many of us come to believe that accruing debt is part of life. After all, you can’t build credit without taking on debt, and credit scores are becoming increasingly more important when it comes to finding a place to live, purchasing a vehicle, and even getting a job. The problem is that many people wait too late to stomp their debt break. When you reach the point that your debt is eating up most of your income, you are headed for a financial car wreck.

Budgeting

budgeting

Many people just “wing it” with their finances and spend money as they feel the need/desire to. Financially speaking, that is the equivalent of trying to drive through the rain without windshield wipers. Without clear visibility, you can’t really see the road ahead. Start by making a list of your expenses, and it should include all your expenses, not just reoccurring monthly bills. Factor in costs like food, gas, parking, etc. While you can’t plan for every single expense, you can account for most of them. Set reasonable limits on personal expenses and stick to them. The first step in managing your debt is to know exactly where your money is going every month. [Read more…] about The Cure for Common Household Debt