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Money Management

Are You Eating Away At Your Budget?

Managing a budget can be difficult.  Little expenses can quickly get in the way of meeting your financial goals.  One of the biggest and easiest ways to eat away at your budget is by eating out.  It can be difficult to find motivation to cook dinner after a long day at work, but if you really want financial freedom, reduce your spending on this expensive non essential.

Let’s See How it Adds Up

A thousand dollars is simply one hundred $10 purchases.  That sounds like a lot.  However, if you eat out three meals a day at $10 each, you will have spent almost a thousand dollars in just one month.  If you eat at more expensive restaurants or are trying to feed a family, this expensive habit can add up even more quickly.

It’s surprising to see just how quickly it all adds up.  By eating out, you could easily destroy your savings goals and your financial security in just a matter of months.  On the other hand, if you change your eating out habits and start spending less, you could end up with a substantial amount of extra money each month.

Look At Other Options

Everyone needs to eat.  This doesn’t mean that you should stop spending money on food or never enjoy your favorite restaurant.  There are other solutions.  Look at your budget at determine how much you are willing to spend eating out each month.  Set a goal and then stick to it.  This can mean that you will need to make other plans for your meals.

If you know that you will be tried after a long day at work, plan ahead.  This will help you to avoid impulsive trips to the local fast food joint.  Prepare easy to reheat meals on the weekend so that you won’t need to spend hours cooking after work.  Pack your lunch several days a week.  It can work well to get it ready the night before just in case you are running late in the morning.  Stock your cupboards with easy meal options so that you can always find a snack in a hurry.  If you need to go out, find some inexpensive choices at your favorite restaurant.

While there are many ways to find extra money and save, eating at home more often is one of the easiest.  With a few simple changes, you can have several hundred dollars extra each month to devote to your financial goals.

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

Get back on your feet quickly after a financial setback

Most people experience a financial emergency at least once in their lifetime. Some people have them more frequently than their bank accounts can handle. These emergencies can include unexpected car repairs, a traffic ticket, an illness that prevents you from going to work or an unusually hot or cold month that wreaks havoc on your energy bill. The situation is always worse when you don’t have enough money in the bank to take care of the problem. An overdrawn checking account can lead to spiraling costs that are difficult to reign in. 

One of the best ways to minimize the impact of a financial setback is to get a payday loan. Short term payday loans are a great option if you don’t have access to other funds, such as a saving account or help from family or friends. As long as you meet the minimum requirements, you may be able to get a loan for several hundred dollars to take care of your immediate crisis. This kind of loan can give you the breathing room you need assess your financial situation and get back on your feet.

By utilizing a payday loan, you may be able to seamlessly handle your financial obligations. Because payday loans often only require minimal documentation, loans are typically available quickly. Minimum requirements are sometimes as simple as having a bank account, valid identification, a way for the lender to contact you and a source of income to pay back the loan. If you get the loan in time, you can pay your bills without incurring late fees or overdraft charges.

It is important to understand the costs of short term payday loans versus bank fees and late payment penalties. Many banks charge more than $30 for each overdrawn check on an account. Those fees can quickly add up, especially in a financial crisis. Credit card and utility companies charge late fees if their bills are not paid on time. Energy, phone and water companies may also charge a reconnection fee if your services are disconnected due to nonpayment. If you are in danger of being charged any of these fees, you are likely to save money and gain peace of mind by getting a short term payday loan.

After you secure the payday loan and pay your bills, it is important to assess your overall financial situation. It may be helpful to set up a budget, reduce your expenses or change one or more expensive habits so you aren’t likely to have the same problems again. A financial setback is not the end of the world and it doesn’t have to take a long time to recover. With a short term payday loan, you can take care of your urgent needs and get back on your feet quickly.

Money Management

Excellent Ways to Save Money

We all keep hearing about how the financial climate is stabilising, and we are now bouncing back from the recession. This may be the case, but for the less well off, the crunch of financial affairs is still a very real one. The onslaught of high energy prices now means even more pressure is on people with a tight budget. The poor are still poor, and as we head into winter, it’s time to start thinking about cutting costs.

Cut Your Energy Bills

The first thing you need to do before the change is made is to assess previous bills. There is no point trying to get a new deal without knowing the old figures. Comparison sites are great at helping people find the best deals, and some companies will be open to negotiating as well. Average gas and electricity bills are currently £1,500 a year. But that doesn’t mean you should lose out. If you’ve never deserted your original supplier, you can still save £300 a year. The best option to take is to try a get a dual fuel deal. This way you can have gas and electricity with the same company, from which you can gain benefits from discounts.

Cancel Your Gym Membership

It is very easy to waste endless amount of money on the gym. We are all self-conscious people to an extent. So when we see adverts that tell us to better ourselves, we can be drawn in. So many people get persuaded to join the gym on moments of inspiration, with promise of a better life hitting home. However, having a gym membership does not make you lose weight or get fitter. It is the actual exercise that makes that happen. There are plenty of stories of people who pay huge amounts on membership, but very rarely go to the gym. If you don’t go to the gym on a regular basis, i.e. twice or more a week, then you should consider cancelling your membership.

Reduce Your TV Subscription

Another great way to waste money is by over paying for TV. Humans are creatures of habit and these days, television companies are extremely skilled in making you feel like you’re missing out. This is particularly effective when it comes to sport on TV. Big companies do make you feel like the only way to watch sport is to have their channel. But this is simply not the case. As way of saving money, a suggestion may be that for big games you go to your local pub. This would save you money in the long run (though you might spend some of your savings on beer!).

Remortgage Your Home

One of the best ways to reduce your outgoings is to remortgage your house. Financially, your current mortgage may be dragging you under into financial oblivion. To avoid getting into debt, this option may be the best one. Lengthening the time on your mortgage is certainly a big decision, so be sure to take time. Contacting a company like Capital Fortune is a good plan. This way you can get expert advice, so you know all of your options. 

Money Management

Try This If You Suck At Budgeting

I came to the conclusion that budgets don’t work for everybody because it doesn’t really work for me. Especially since I have a significant other and we don’t always see eye to eye. Yea a budget helps me to see if I’m spending more money than I’m taking in but I’ve learned to use Outright.com to keep track of that. Yea it’s for small business but it does the job of keeping track of my total income and expenses without having to worry about setting up categories.

My “You Know” theory

My theory is that we all know what we’re doing when it comes to spending. We know if we’re spending too much but we just don’t want to face up to it. Well you won’t be helped by this. In fact, you really can’t be helped by any plan until you change your attitude. Go get help.

Cut down on the extras

For everyone else that actually wants to change their situation try this idea. Just cut out half of what you do. No I’m not talking about fixed expenses like rent or mortgage. I’m talking about things you can actually control. If you eat out for lunch 5 days a week, try to make your own lunch 2 days or even 3 if you’re feeling spunky. If you don’t want to cut out  buying lunch then cut out something else more than half. Instead of shopping every weekend so shopping just once a month. Sign up for Outright.com so you can see how you’re making progress.

No this isn’t going to work for everyone but if you’re having a problem sticking to a budget or you don’t know how to start, try this.

This is going to teach you to sacrifice. Yea it’s a tough word but it’s just that, a word. It’s not going to kill you to sacrifice, but it will make you stronger financially. I tried looking up another word for sacrifice that was nicer sounding but there isn’t one. But here’s a word that is good, Freedom. Freedom to live without the stress of debt and without knowing how you’re going to pay to fix your car because it just broke down.

Start now

Don’t wait to have to sacrifice when you’re in a crunch and have to stop everything you’re doing. Sacrifice a little now so you’ll get financial freedom. So don’t start a budget, start sacrificing.

What do you think about this?