As we approach the second quarter of the year, let’s try to shy away from the mistakes done and start a clean slate by focusing on what can be done now to improve the financial situation. For most us, a better quality of life translates to more money. Here are few tried and tested tips to share with you:
Create a Budget
Budget can become overwhelming, but if you make a monthly budget and stick to it, you can identify areas where you overspend and save big by controlling spending or simply by using money wisely. Write down monthly income (after taxes) and itemize monthly bills and other expenses. Don’t forget about the “little” things like daily coffee or fast food lunch – they add up.
“Spring Clean” Your Finances
You can dedicate an hour over the weekend to review all your current bills, or, you can thoroughly review bills as you receive them, keeping an eye out for hidden fees and services you don’t need or want. If you find questionable charges, investigate them.
Maximize the Value of Coupons
Learn about the potential savings associated with extreme couponing. Pick up a Sunday paper, browse through all the ads to find coupons on items you regularly buy. But don’t stop there. Keep an eye out for store sales on items you buy the most, and incorporate your coupons to increase the savings.
Reduce Entertainment Expenses
Entertainment is a necessary expense. However, it’s also necessary to avoid overspending in this area, especially because it’s easy to get carried away. Check one of the many daily deal websites and see if you can find discounts on places that you visit or would like to. You can often save 50 percent on dining and local activities simply by planning ahead and printing a voucher.
Commit to Fresh Foods
Buying processed foods is more convenient, but buying fresh will save you money and improve your health. You may need to spend more time in the kitchen, but if you make meals in bulk and freeze for later use, you can enjoy the health benefits and savings of eating fresh without “slaving over the stove” everyday. Visit your local farmers markets and make it a point to visit them weekly. You’ll find the highest quality of fruits and veggies at low prices.
Once you’ve identified and implemented ways to save daily, direct those savings towards paying off debt so you can reduce interest charges and improve your credit. And if you haven’t yet started saving for retirement, now is the time.
When it comes to your finances, a few dollars a day can make all the difference in reducing debt, saving for the future, and improving your overall quality of life. Everyone has the power to change, and saving 50 cents at the grocery store could be your first step to a life of financial freedom.
Budgeting is simply the act of working out how much money you’ve got coming in (EARNINGS) and then as accurately as possible figuring out how much you have to pay out (EXPENSES) on fixed costs such as rent, bills and so on to then come up with how much you’ve got left to spend on everything else (DISPOSABLE FUNDS/INCOME).
In simple math terms basic budgeting looks like this:
INCOME + FIXED COSTS = DISPOSABLE INCOME
Budgets can be calculated over a variety of time periods, such as a month, term or even a whole year. Most students have very fixed incomes made up from their Maintenance Loan or Grant, plus whatever they may get in the way of parental support or from a part-time job, so calculating income is usually pretty easy.
The trick comes when trying to figure out your expenses, breaking it down into the fixed costs that are known (for example rent is a ‘known fixed cost’), those fixed costs that are estimated (such as utility bills which can be guessed at based on how much was paid in the previous year) and then essential costs but based on educated guesswork. How much you are going to spend on food per month would be an example of an essential cost.
It’s also important to be strict with yourself about what are and what are not ‘essential’ costs. Whatever is left over after covering your essential costs what you are going to have left to pay for everything else.
Everyone is different, the important thing is to take full stock of your personal income and expenditure – being as honest as possible – and seeing if it leaves you with any money left over. If it does then it’s a case of making that remaining disposable income last (i.e. not overspending). However if after drawing up your budget you have more money going out than you have coming in then you only have two responsible alternatives: You can –
- Increase your income.
- Reduce your expenditure.
It can be difficult to track the small daily expenses (such as cups of coffee, sandwiches, car parking and so on) so here are a couple of tips to help.
1) Pay cash: Debit cards are very easy to use for even small purchases nowadays and you can spend money on them without ever really noticing the total impact on your bank balance. So take out a fixed lump sum of cash each week and commit to only using that cash for your ‘impulse’ spends on a day to day basis. You’ll realize how quickly you’re burning through your disposable income!
2) Cut back: Why pay for coffee when you’ve got a thermos flask or for sandwiches from a shop when you can take in a packed lunch? The simplest way to manage impulse spending is to stop it altogether or reduce it to an absolute minimum. Changing habits can be challenging but the savings can be rewarding.
I was thinking it would be a great time to take a look at comparing the amount you owe as well as how to create a healthy debt repayment arrangement. Obviously, this only works if you commit to spending less than what you earn. If you’re spending more than what you earn, this will cause pile up of debt – which eventually lead to a more serious financial problem.
To get you started, you need to write few items. Doing some tasks by hand adds personal touch and commitment and importance in what you want to do. You will also need to have all the latest statements of what you owe, from bills, credit card, and consumer loans. Analyze the interest rate on each.
You must make a chart with four columns consisting of each debt, amount you still owe, monthly payment, and the current interest rate on each debt. Make sure to get all the information from all the statements. The goal here is to have all your info in one spreadsheet.
Once you have the list and check which of the debts to be prioritized. Go through that list and number the debts based on their interest rate. Give the highest interest a big number 1 off to the left, the next highest a big 2, and so on. Don’t worry about which debt has the biggest balance – that doesn’t actually matter when figuring out which debt is the most important one to pay off.
Once you’re done with the order of debts in place, go to the debt marked with numbers. If it’s a credit card debt, call the credit card company and ask for a rate reduction, or transfer the balance to another card for a lower rate. You can also pay it off with a home equity line of credit or with a personal loan from your credit union. Consolidate your loans at a very low rate. The key is to lower that interest rate. Go through every one of your debts from highest to lowest interest rate and do your best to get each rate nice and low. Obviously, there are some rates you’re likely to be unable to easily change, like your mortgage rate, but see what you can do about most of the rest of them.
Over time, you should be eating away quickly at that top debt, and you’ll be able to eliminate it. Cross it off the list, then start hammering away at the new top dog on your list.
Whenever a debt adjusts in interest rate, cross it off the list, then add it back in just like a new debt where it belongs based on the new interest rate.
After you do this a few times, it’s useful to rewrite the list so that everything remains clear on it, but it’s fun to hold onto the old one (with some crossed-out debts) to remember where you came from.
If you are tired of lengthy family budgeting and want a quick fix in saving some funds, start on your basic needs – grocery. Your food budget is probably the highest budget-eater. On average, consumers spend more than 13 percent of their income on food. Fortunately, food bill is one of the most easily manipulated, and saving money is virtually effortless.
First, everyone’s heard that you should not shop when you’re hungry is a good idea. And you know the reason too well, right?
Here are some practical shopping ideas to keep in mind:
> Always shop with a list. On average, impulse buying accounts for 20 to 50 percent of a total grocery bill. Instead of wandering aimlessly through the aisles, bring a shopping list and a pen with you.
> Grocery stores are for groceries. Books, batteries, light bulbs and pet supplies can all be found at the grocery store. Before you purchase everything you need from one store, make sure you aren’t paying too much.
> Shop alone. Marketers spend a lot of money convincing kids to buy their cereal for a reason. By reducing your distractions, you can make thoughtful purchase decisions.
> Carefully consider the cost of convenience. As a general rule, the more convenient the item, the more it will cost. Ask yourself if it is really worth paying more for shredded cheese when shredding it yourself would take mere minutes and save you some cash.
> Shop only once per week. Try to adjust your schedule and your purchases so that you are going to the grocery store once a week. This will help reduce impulse shopping and should be a big cost saver. If you must go more than once per week, stick to your list.
> Plan your route. To find the most natural and least expensive ingredients, such as dairy, bread, vegetables, and fruit, try skipping the center of the store and make a loop of the outermost aisles.
> Consider generics. Look for generic brands of items where it really doesn’t make a difference. For example, most dry goods have the same ingredients, regardless of the brand. The difference in price, however, can be as much as a 50 percent discount.
> Use coupons wisely. Only use coupons for items you are planning to buy anyway. Also, make sure you compare the price of a product with the discount on the coupon to the regular price of the brand you normally buy.
Finally, don’t assume that all supermarkets have the same prices. Make a list of the ten or so products you buy the most and do some comparison shopping. Often you will find a huge difference between chains, and if you can save just 5 percent it will add up to hundreds of dollars in the long run.
If you are neck-deep buried by debt, one of the best things to do is organize your finances first; to determine exactly how much you owe and to whom. You can do the conventional way or you can download Apps to organize your finances.
The simplest and slowest way is to take each individual bills and find the balance due as well as the lender’s name. You should keep track of this information going forward, using a spreadsheet, an online service, or a personal finance computer program. While some programs can pull balance information directly from your lenders, if you are using a spreadsheet or notebook, you’ll need to do it manually. Consider signing up for online access for each of your lenders so that you can check your balance and payment information easily and frequently.
If you aren’t entirely sure that you are receiving all of your bills (especially if you’ve moved around quite a bit or have recently divorced), then it’s a good idea to pull free annual copies of each of your credit reports to find out what your lenders are reporting to each of the credit agencies. To get a full picture of how much debt you owe, you really should get reports from each of the three major credit reporting agencies, Equifax, TransUnion, and Experian, because different information may be contained on each of the reports.
Keep in mind that the information contained in the credit reports may not be the absolute latest, due to the lag in reporting. Therefore, once you obtain the credit reports, you should also contact each lender to find out what the current amount owed is. Then, sign up for online access to each of these accounts to accurately track payment amounts and balances.
The organization is essential to keeping your financial obligations up to date, so taking some time up front to set up access and find out balance and payment amounts will definitely save you some time later, and help prevent late fees.
Becoming a couple changes your financial situation. Whether you are in a serious relationship, newlyweds, or tied the knot years ago, there is an undeniable stress that comes from mixing love and personal finance.
If you are getting married, you and your future spouse are ready to embrace all of each other’s outstanding qualities and unconditionally accept any less-than-ideal traits. However, before you walk down the aisle and commit to spending the rest of your lives together, you need to discuss how you will be spending your money as husband and wife.
Avoid financial problems and start making plans for your future together. Find the resources you need to stay committed to successful financial planning together. Money does matter when it comes to having a happy, healthy relationship so couples should try to devote time to improving their financial standing. A little honest communication could keep your relationship from becoming a statistic.
When you and your partner are busy balancing everything in your lives, sometimes financial planning can fall to the wayside. Following are 10 quick tips about financial planning together for when life gets hectic.
1. Set priorities and specific goals. Don’t assume you both have the same goals without discussing them.
2. Discuss values. Sometimes differing values make agreement on goals difficult. When one person wants to spend now and one wants to save for later, it can be a source of friction. The same is true when one spouse tends to be less risk oriented than the other about investments.
3. Plan in five year units. When planning for five year blocks, you can set both intermediate and long-range goals without feeling you’re being deprived forever.
4. Budget together. Set up a manageable system for your cash flow together.
5. Know where your money is going. Keep records of your spending.
6. Don’t assume that because you’re both working that you have a lot more to spend.
7. Save regularly so you aren’t locked into that second income.
8. Who handles the actual paperwork can be a matter of personal preference, although both of you should practice at it.
9. Don’t confuse the task of doing paperwork with the act of financial decision making.
10. Sit down together and discuss finances at least once a month. We all know that communication is crucial in developing a healthy financial relationship, yet it’s sometimes hard to know where to start. Since taking the time to talk is a great.
Finally, the most important money move you might make for your relationship is to embrace your differences. Understand that you cannot change feelings created by a lifetime of experience; instead, try to cultivate the positive aspects of each of your styles. There is no one “right” way to handle your finances and a marriage of your money styles may be the perfect solution.
When the cost of living rises and the economy weakens, we find ourselves hard-pressed to make ends meet each month.
Some worse cases, financially burdened as are, depend on credit cards to buy all necessities, shooting up card balances and adding the issue of higher food and energy prices – all with interest.
While you’re using credit to splurge, or for necessities, it is an expensive habit. Ponder on the following tips to help you shy away from dependence on credit cards:
> Put away your credit cards. Consider carrying cash or your debit card for daily use. Leave credit cards at home and only carry one when you plan to use it for a larger purchase or something that you have already reserved for your credit card.
> Closely watch on your budget. Create a real budget and include even the smallest expenses. As soon as you start spending your own money, it’s time to start tracking your spending so that you can create and follow a personal budget. Keeping track of expenses, while sometimes tedious, is the best way to find out exactly where your money is going. Maybe filling up at the station or picking up a few things at the grocery store were once expenses that would previously go unnoticed in your checkbook. However, with much higher prices in gas and food today, even smaller ticket items add up.
> Ignore on non-essentials. The easiest way to free up extra cash is to know the difference between needs and wants, and make a conscious effort to do without those things that you don’t need such as eating out, vacationing, and shopping for discretionary items such as furniture and electronics.
> Work on a plan to pay down debt. Sometimes it’s easier to break a habit when you have a goal you are trying to accomplish. Make a commitment to pay down a portion of your debt within a certain timeframe, and get your family involved in working towards a shared goal. A Debt Management Plan is recommended for those individuals who need more than advice and could benefit from a structured repayment plan. Through a Debt Management Plan, you are able to make one convenient monthly deposit to MMI which is then disbursed to each of your creditors.
A Debt Management Plan may help:
– Reduce interest rates
– Waive late fees
– Lower monthly payments
– Eliminate collection calls
Finally, if your financial obligations become overwhelming and you find yourself losing control, seek help. Your human resource or employee services department may have options available. Community service and counseling agencies are also available and can offer a number of services to assist you with gaining control over your finances.
When faced with financial struggles or difficulties, we need to pause and take time out to reflect on what could’ve happened. We may need to re-think and evaluate our financial concerns. Here are few things that we may need to ask ourselves and it might help us resolve and get over such financial difficulties.
Have we determine our financial priorities?
When we are recovering from a personal setback, establishing financial priorities will help us focus our effort and resources. Not all of your household debts will equally impact our families. Our first payment priorities should be bills associated with our essential needs, including utilities, food, mortgage or rent, and insurance. While we may be able to find ways to save on all of these bills by cutting back and negotiating lower rates, paying them is extremely important.
Can creditor hardship programs help us with our credit card debt?
If our debt is all over and can no longer make a better option to pay, we can get professional help by asking the lender for a payment arrangement. Some lenders offer programs to help in re-structuring the debt and payment.
Victim of Identity Theft, made you in the “red” zone?
If there is a suspected fraud activities on your account, do not hesitate to call your bank to investigate. It may take some time for the results, but it will be worth the long process, financially. You can also ask for a fraud alert.
How to keep insurance coverage if become unemployed?
Things that we cannot control happens – in such cases, we need to be prepared. We can check with the insurance provider if we have the right to extend your medical coverage, usually there is. Under these rights, insurance payments will likely be significantly higher than they were when still employed, but they will be lower than similar coverage obtained on our own. Having appropriate health insurance coverage is essential because without coverage, a medical emergency could devastate our finances.
“What is voluntary and involuntary repossession, and how does it affect our personal credit?”
Some loans are secured with collateral, such as a vehicle. If the terms of a secured loan are not met, the financial institution may take back/repossess, the collateral. When the consumer takes the initiative to return the object—before the financial institution takes it—it is called “voluntary repossession.” Both types of repossession, voluntary and involuntary, affect our personal credit in the same way. The only difference is that if we voluntarily return the collateral, we could save on some fees associated with its collection. Either way, the derogatory notation will remain on our credit bureau file for certain years.