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Money Management

Five Money Saving Tips for the 21st Century

We’ve all heard how important it is to build up personal savings, but so few people actually have any type of substantial savings.  If saving money is as easy as most financial experts purport it be, why aren’t more people successful at doing so?  Quite simply, it’s because saving money requires personal discipline.  Practicing personal discipline in the 21st century is incredibly difficult due to our commercialized culture.

Everywhere you look there is an invitation to spend money.  Turn on the television and what do you see?  Commercials galore.  Go to a movie and before the previews start there are commercials.  Some restaurants have even started selling advertising space in their menus.  Our current multimedia and digital age gives the average advertiser far more exposure to the consumer than in decades past.  As consumers we are flooded with marketing, selling us the idea that we need extra things to make us happy – even if we cannot truly afford such things.

The following are five tips that can help anyone break the cycle of spending and begin the habit of saving.

1. Pay yourself first

If you’ve heard this tip before but ignored it, it’s time to start paying attention.  We’ve all seen what happens on payday.  When payday rolls around the first thing most people do is immediately spend.

Bills need to be paid, grocery shopping needs to be done, and recreation needs to be had.  When the paycheck is almost all used up, whatever pathetic amount is left over is sometimes allocated towards savings but there are no guarantees.  More often than not some other unforeseen expense creeps up and drains the leftovers.

It’s time to face an important reality: If you don’t pay yourself first, chances are you won’t do it later.

 

It’s recommended that you put away ten percent of every paycheck.  That might sound like a lot at first but the sooner you start doing it the less impact your budget will feel.  Look for places in your monthly budget/expenses where you can trim some fat to make up the difference of what you’ll lose by allocating ten percent to savings.

If ten percent sounds like a wildly unreasonable amount, start with five percent and work your way up to ten.  If you want to walk on the wild side, try 15 or 20 percent!

2. Put your savings out of sight

Ever heard the saying “Out of sight, out of mind?”  Well that rings especially true with money.  A $20 bill sitting on the kitchen table isn’t going to last very long in any house.  Twenty dollars sitting in an interest bearing savings account could likely survive a whole year if you forgot about it.

One of the tricks to saving money is to stash your savings in a place that makes it difficult to make a withdrawal.  Here are a few ideas for making your savings more elusive:

  • Don’t use your regular bank for a savings account.  If at all possible, use another bank – one out of the way, or even out of state.
  • Set up reoccurring automatic withdrawals from your regular checking account into your savings account.  For example, ask your bank to withdrawal $25 every Friday and deposit it into your savings account.
  • Check with your employer to see if they will allow you to split your direct deposit.  Many employers can take a percentage of your paycheck and deposit it into a different account than your normal checking account.
  • Don’t use a checking account.  You want to make it difficult for yourself to make withdrawals from your savings so it’s important not to have a debit card or paper checks connected to the account.

3. Use less plastic and more paper

Debit and credit cards are ultra convenient.  They make transactions so much easier.  However, sometimes they can cause us to lose track of how much we’ve been spending.  In this era it’s pretty difficult to not use any type of debit or credit card, but there are some expenses where it’s not necessary.

As an experiment, try putting yourself on a cash budget for certain line items in your budget where you’d like to cut back.  One example is food.  It’s very easy to spend a lot of money eating out or grocery shopping.  Set your monthly food budget and at the beginning of the month withdrawal the full amount in cash.

Put the cash in an envelope and put it in a safe place in your house.  For the entire month, only use money from the envelope for food-related purchases.  When the money runs out, that’s it.  No pulling money from elsewhere.  You’ll be amazed at how clever you can be when you absolutely must stick to a budget.

4. Keep the change

Have you ever gone on a change hunt in your home?  Change is lurking in all sorts of interesting places.  That change may seem insignificant, but it quickly adds up.  Make it a practice to regularly spend an hour or so gathering the spare change around the house.  Check under sofa cushions, in the laundry room, in pants pockets and all around.

There are many services that will cash in your change for dollar bills.  Coinstar.com is one of them.  Coinstar has kiosks in many grocery stores where you can simply dump all your change while the machine counts it and spits out a receipt you then redeem at the checkout stand for cash.  Doesn’t get much easier than that.  Take that cash and immediately deposit it into your savings account!

Another tip for saving change is to establish a change/money jar somewhere in your home.  Every time you find spare change or dollar bills, drop them in the jar.  Empty your pockets at the end of every day.  Whatever you do, don’t take money out of the jar and spend it!

5. Ignore unexpected income

We’ve all been blessed with some unexpected income.  It might be some birthday money.  It might be a bonus from work.  It might be a lonely $100 bill you found on your morning jog.  The reality is our first inclination when we come across extra money is to spend it.

Start a new habit and put any new and unexpected income directly into savings.  If you really think about it, it’s money you didn’t expect in the first place so you’ll never miss it when it’s gone!

These are just a few easy (and not so easy) tips to get you started down the path of true financial freedom.  Stop living paycheck to paycheck and embrace the lifestyle of saving.  The peace of mind you get by stacking up savings is worth the temporary sacrifice.

What ways do you use to save money?

photo credit: paul (dex)

 

Money Management

How to Stick with Your Financial Goals While Travelling

As you progress toward financial security, you will often find that you quickly fall into a routine.  You will learn to be great at managing your money, sticking to your budget and saving.  While it is easy to fall into a routine with your finances, you will find that it can be difficult to keep on top of financial goals when you aren’t in your usual situation.  Going on vacation is an excellent example of a time when your personal finance routine may become a bit disrupted.  Luckily, with a few easy tips, you can learn to master your finances whether at home or touring the country. I’m going on a vacation soon so I’ll be testing out these tips.

Look at Your Budget

Vacations are important.  More important however is staying on top of your financial goals.  Before planning a trip, first look at your budget.  How much can you afford to spend?  It is better to set the budget first and the destination second.  This will ensure that you can afford the trip you are planning to take.  It is better to know where you stand first, so you don’t get your heart set on something you can’t afford.

Plan, Plan, Plan

A great way to save money on a trip is to really take your time during the planning stages.  Make sure you calculate all of your expected expenses, set aside money for unplanned expenses and consider food, gas and other necessities.  You will also want to be really careful with your packing.  It is easy to spend hundreds of dollars more on a vacation just because you forget important items at home. Make a check list for yourself, download one from landofthetraveler.com or another travel website, you really don’t need 5 travel adapters in your junk drawer at home. Having a plan will help you stick to your financial goals while travelling.

Carry Cash

Most people lack self control.  Don’t get carried away on your vacation.  Carry cash and use it to pay all trip related expenses.  This means gas, food and other expenses.  Carrying credit cards while traveling makes it so much easier to splurge on a souvenir you can’t afford or to let loose and spend more than you were planning.  Carrying cash also helps you to avoid expensive withdrawal fees if you can’t find an ATM from your bank nearby.

As you learn to manage your money, you will need to learn how to handle every situation.  Don’t make the mistake of thinking that vacations are a time to forget about personal financial goals.  A week of fun can ruin your financial progress if you don’t plan carefully and remember your budget.

What tips do you have to not go bankrupt on vacation?

Money Management

Saving For An Emergency Fund Isn’t Just About Security

Security

I’m still currently saving up for my emergency fund. I’m not even half way there, but it’s getting there.

Along this journey I’ve realized that saving for an emergency fund is a lot like delayed gratification. Once I save up for the EF I’ll finally have the end result, which is security. But along the way I’m learning about delayed gratification. It teaches you that it doesn’t kill you to wait until you save up to have enough money. With an EF you can’t cheat your way with a credit card, so it is forced delayed gratification.

But as you go through this financial journey you can actually think about how you feel about waiting, and can cope with those feelings. You’ll realize that if you take your focus off of that object (EF, TV, Car, Whatever you want to buy without saving) you don’t miss it. That’s why waiting a couple of days before you make a big purchase ($50 for me) helps make you think about if you really need it or not.

I’m also learning that it’s hard to get what you want and there are bumps along the way. Things keep popping up (Fixing my truck) that prevent me from contributing to it, but I know in the end it’s well worth the wait. And there are always payday loans online.

I know that once my EF is full I’ll be excited and know that I earned that security and my money isn’t being wasted on it.

Have you learned any lessons from your emergency fund?

Money Management

Saving Money for a Deposit

For many, owning their own home is the ultimate financial goal. Unfortunately, many are giving up on this goal due to the rising house prices and indeed the rising cost of living.  

The problem is, the rise in house prices has had a knock on effect on the size of the deposit required. For example a 15% deposit on a £238,000 (The average UK house price) house is £35,000, however with many experts predicting dramatic rises in house prices, this deposit is set to rise to over £40,000 over the next 5 years.

Naturally, the idea of saving nearly £40,000 seems pretty unrealistic especially in these tough economic times. Despite this, financial goals should never be given up on, regardless of how far away they may seem. We’ve come up with some top tips that should help you when saving for a deposit:

Identify areas where you can cutback

If, over the past few years you’ve had very little reason to save money, then the chances are you’ll have simply let your finances drift along and won’t have worried too much about your spending. Now that you have got an incentive to save, you’re going to have to assess your finances and look for areas to save money each month.

The best way of doing this is to create a budget. Nowadays, you can either choose to create it manually or use an online software service such as the budget planner on the Money Advice Service website.

Initially, it is likely that one or two areas will immediately stand out, however if they don’t you’re going to have to scratch beneath the surface. While you’ll be unable to do anything about your rental costs or your utilities, it is your variable outgoings such as your weekly shop, transport costs and entertainment costs that are likely to be costing more than they could be.

Make money outside of work

With many people working long hours already, taking on a second job or asking for overtime is out of the question. Fortunately, there are now things you can do that take very little time out of your busy daily schedule and could prove to be a nice little earner.

Firstly, you could sell some old stuff. There are a number of routes you could go down here; eBay can prove successful, however beware of the seller fess involved which are often quite high. Another option is Gumtree; this is a free online ad trader and while the prices your goods fetch may not be as high as those you’d get through eBay, there will be no listing or seller fees involved. Alternatively, you could take your old goods to an old fashioned car boot sale; however these are decreasing in popularity due to the presence of sites like eBay and Gumtree.

Another way to boost your income is to compare costs of current credit commitments in a hope to find a cheaper deal. For example you could save in excess of £200 just by switching energy providers; you may also be able to save £20 here and there on broadband, mobile phone and TV subscriptions.

Ensure you’re getting the most out of your savings

Having worked so hard to get the most out of your wages and cut back on outgoings, the last thing you want to do is put your hard earned savings into an account that is going to offer very little in terms of interest. While savings rates are very low currently, it doesn’t mean you have to settle for second best. Look out for Cash ISAs, Fixed Rate Bonds and Easy Access Savings; these are likely to offer the best rates for your money.

When looking to save for a deposit, the trick is to act quickly. As we outlined above, house prices are expected to rise over the coming year, so the quicker you can save, the lower the amount you’ll require. Consequently the longer you leave it, the more you’re going to need to save.

This article has been written by Jason Scott on behalf of UK Credit Guarantor Loans. For more top money saving tips visit https://www.guarantorloansonline.co.uk/Blog.  

Money Management

Eight Reasons People Choose To Get Personal Loans

personal loans

Image Source

When you are struggling with your finances, taking out, a loan might be the last thing on your mind. You should know, though, that getting a loan could be a massive help to your financially. If you are hoping to improve your finances, you will have to work hard to do so. That means that you need to scrimp and save all the time. Sometimes, though, there will be a reason for you to consider taking out a loan.

If you are responsible when you choose your lender, you can get an excellent deal. Before you do anything, you need to make sure that you assess your finances. When you know how much you can afford to borrow, you will find that everything is easy to deal with and that you can cope. If you decide on a payment scheme ahead of time, you should have no trouble when it comes to repaying your sum of money. If you are thinking about getting a loan, you should consider these eight reasons other people get loans.

  1. So that they can pay off outstanding debts

One of the main reasons that people get loans is so that they can afford to deal with their debts. If you have a load of different debts to your name, you will find yourself worrying about how you can manage to pay. Many people believe that consolidating all their debts into one monthly payment will work for them. That means that you can stop paying loads of different lenders, and just pay one sum of money each month. If you get a simple loan, you will find it simple to pay off your debt over time.

  1. To bridge the gap between paydays 

Sometimes, you will have a super expensive month. You might find yourself worrying about how you are going to make it until your next payday. If you need to get one, an online short term loan could help you bridge the gap until your boss pays you again. That means that you don’t have to worry about money this month at all. When you get your paycheck, you can pay back the loan straight away. If you pay the loan off in one go, you won’t have to pay monthly charges. Many people use this method when they have a lot of things to pay for in a short space of time.

  1. So that they can build a credit score

If you have a poor credit score, you need to think about the ways in which you can improve it. One thing that you can do right away is take out a loan and repay it within the expected time limit. Doing so will mean that you improve your credit history. People give you a rating based on how trustworthy you are when it comes to money. If you show people that you can pay back any money you borrow, you will build a high score for yourself.

  1. To reinvest in a business or enterprise

If you are trying to start a business, you might find that you need a little extra cash to invest in it. If you are passionate about your business, you should consider getting a personal loan to help you out. If you have faith that your enterprise will be a success, you have every right to reinvest money in it. Make sure that you have a payment plan in place so that you can start to repay the money once your company is off the ground.

  1. So that they can further their careers

If you feel as though your career has come to a stand still, it might be time to give it a little push. Sometimes, when people are striving to get their dream job, they have to work for nothing. If you need to take an unpaid internship, for example, you might find that a loan is a massive help to you. There are particular loans that are suitable for career development. These schemes allow you to borrow money for a specified amount of time so that you can pursue your passion. After that, you will need to start repaying your loan in manageable monthly installments.

  1. To cover unexpected expenses or bills 

When you get an unexpected bill, it can be a nightmare. If you don’t have any spare cash to cover the bill, you might find that the company charges you late fees and various other fines. The last thing you need is to have to find some extra cash to cover these costs, as well as the bill itself. When you have to face extra expenses, you should consider taking out a loan to cover them. As soon as you can, you should pay off the loan.

  1. So that they can improve their home 

If you want to improve your home, you could get a loan to help you with that. Home improvement projects can be costly, but they often add value to your house. If you add a load of value to your home, you might find that the loan pays for itself. You could make money by working on your house so that you can sell it for a massive profit on the property market. In a way, the loan you take out is an investment. You know that you can pay it back soon, and so you have no reason to stress yourself out.

  1. To help cover medical expenses

We all know how expensive it can be to have any modern medical treatments. If your insurance does not cover all the costs of a particular treatment, you might need to look at other options. A short-term loan could be ideal for you. Make sure that you talk to a financial adviser about your various lending options. You need to know what you can do and how much you can afford to borrow. Once you have a figure that you can get, you should have no problems when it comes to applying for a loan.