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Saving Money

7 Ways to Become a Saver – Even if You’ve Never Been One Before

By //  by Kevin M

If you’ve never been much of a saver in your life, you’re probably finding that your biggest problem is just getting out of the starting gate. That’s likely the reason why the majority of Americans don’t save money.

You get into lifestyle patterns – and not such good ones – that don’t include saving. The only way to get out of that trap is create new patterns that include saving. Once you do, you may find the process is easier to maintain than it is to start.

[Join the 52-week savings challenge to jump-start your savings!]

Here are seven ways to become a saver, even if you never been one before.

7 Ways Become Saver

Learn To Live At Least A Little Below Your Means

Becoming a saver starts with the ability to live at least a little below your means. The basic idea is to earn say $1,000, live on $900, and have $100 available to put into the bank. Once you establish this pattern, saving becomes easy.

Getting to that point though, may not be so easy. You have to either increase your income (more on that later), lower your living expenses, or some combination of the two. It may be a struggle to get started, but it’s really the only way forward.

Ignore Your Credit Card Debt – For Now

Probably the second biggest reason people never become savers is because their financial attention is fixated on their credit card debt. They assume that there is no point in saving money as long as they have credit card bills. Though there’s some logic to this thinking, it’s hard for people to become savers when they’re focused on paying off credit card bills.

The key to the entire conundrum is the word “revolving” – which is the essence of what credit card debt is (the saying in the lending universe is once a visa, always  a visa). You borrow money, you pay it back in increments, but as you do you might continue to borrow. That’s the revolving loan Catch-22. While you are trying to pay off your credit cards, you continue to tap them for emergencies primarily because you have no savings to fall back on.

Though it can sound counter-intuitive, if you want to become a saver, forget about your credit card debt at least for a little while. Get some savings put away first, and then worry about paying off your credit cards.

Stop Using Fresh Credit

When I suggest ignoring your credit card debt, I mean ignoring it completely. That means avoiding using it to incur fresh debt. If you’re not going to concentrate on paying off your credit cards, you absolutely must stop using them completely.

Bonus: If you don’t use your credit cards, you will eventually pay them off simply by making the minimum monthly payment, or something just a little bit higher. This is another reason why it’s more important to establish savings before concentrating on paying off your credit cards. Your credit card balances will fall – simply from not using them – while your savings increase. That’s killing two birds with one stone.

[Here are 20 money saving tips for low income earners!]

Use Payroll Deductions

If it’s difficult for you to take money out of your budget and put into savings, you’ll need a strategy that takes you out of the process. By setting up payroll deductions, and directing the money into a savings account, you remove the decision-making process from the flow. The money automatically goes from your paycheck to your savings account, with no further action on your part.

There’s a saying, “out of sight, out of mind”, and that’s what you establish when you use payroll deductions to fund savings. The whole process takes place without your even being aware of it.

You can do this with a relatively small amount of money too. For example, if you get paid biweekly, and you direct $100 out of each paycheck, after one year you will have $2,600 saved – without your ever much knowing it happened.

A lot of non-savers accumulate a lot of money this way. In fact, it’s the standard way that retirement funding works.

Bank Cash Windfalls

Banking cash windfalls is a way to fast forward the savings process, especially when this is done in combination with payroll deductions. While payroll deductions are building up your savings slowly, adding periodic windfalls moves you ahead much faster.

Plan to bank your next income tax refund check, any bonus checks you receive, or any other windfalls that come your way. This will require a shift in thinking. Many people see windfalls as an opportunity to spend money on a needed or desired purchase. Change that thinking to wanting to see your bank account get bigger. And it will – fast.

Create Extra Income Sources And Bank The Cash

Another way to fast-forward your savings efforts is to create extra income sources specifically for the purpose of saving money. This can be a part-time job, a casual situation (like tutoring or helping a friend with computer problems), taking on overtime work, or even starting your own side business.

This can also be at least part of the solution to developing the all-important ability to live beneath your means. If you find it difficult to cover your living expenses, increasing your income can provide extra cash that you need to fill your savings account.

Make Saving A Lifestyle

Once you have adopted some or all of the steps above, it will be important that you begin to make saving a lifestyle. Everyone is subject to the occasional spending binge, but that’s should never be the normal course in your life. That means that you will have to make saving money your default behavior.

By doing that, you will stack the long-term in your favor. You will first accumulate enough money to cover immediate needs, then enough to begin paying off your debt, and finally plenty of extra for long-term investing.

That’s a blueprint for financial independence! Are you ready to make that a lifestyle?

Filed Under: Saving Money Tagged With: credit card debt, live below your means, make money, payroll deductions, Saving Money, Savings, Savings Account, savings challenge, side income, windfalls

20 Money Saving Tips for Low Income Earners

By //  by guest

[The following is a guest post giving 20 great money saving tips for low-income earners!]

Many people across the country are having a hard time making ends meet at the end of each month. With the price of many goods and services increasing at a faster rate than people’s pay checks, it is easy to see why this has become an overwhelming problem for so many families.

This can be especially true for low income earners, who are already feeling stretched to the limit and have very little resources left after paying just their basic bills.

20 Money Saving Tips for Low Income Earners

The good news is that there are some basic ways that everyone can save money on their day-to-day purchases. Below is a look at the top twenty money saving tips that are perfect for anyone, including low-income earners.

Money Saving Tips

  1. Change to a bank account that does not charge account-keeping fees or requires a minimum balance in their accounts. Some banks also refrain from charging low-income people additional fees like overdraft charges.
  2. Look for ways to save on transport expenses like walking instead of driving, when possible, or using public transportation instead of driving yourself.
  3. See if a couple of co-workers are willing to carpool, so everyone can save on transport costs.
  4. Eliminate your Pay TV services and use Free-to-Air TV instead.
  5. Instead of stopping at the coffee shop for coffee on your way to work, make your coffee at home and take it with you or wait until you get to work.
  6. Instead of heading out to the movie theater where tickets are fairly expenses rent a movie or watch a free movie at home.
  7. Never run the washing machine or dishwater unless you have a full load to help reduce your water bill.
  8. If you have a cell phone plan already, you may be able to eliminate your home phone, or consider running your phone through your internet service at a reduced rate.
  9. Shop for sales items at the grocery store and purchase items in bulk, to get the cheaper per unit price.
  10. Rent books and movies at your local library instead of purchasing them at the store. They usually have a wide selection to choose from.
  11. Limit the number of times you eat out each month and choose to eat at home instead. When you do eat out, be sure to ask for water instead of more expensive drinks, and skip dessert at the end of your meal.
  12. Consider making homemade gifts or offer to provide a service, such as dog walking, instead of going out and purchasing a gift.
  13. Lower your energy bills, by turning down your thermostat when you are not home, turning off your air conditioner when you go to work, turning off your lights and TV when you are not in the room, and unplugging your appliances at the outlet when not in use.
  14. See if you can group all of your insurances into one package to get a reduced rate on all of them.
  15. Sell and buy items at a local consignment shop or thrift store when buying clothes, household furnishings and miscellaneous goods.
  16. Contact your utility companies and ask about bill smoothing to keep your bills consistent and budget better.
  17. Check your bank statement each month and make sure that no additional charges are added on. If you do have additional charge find out why and if they can be eliminated.
  18. Instead of going to the gym, start a walking club with some of your friends, or purchase inexpensive fitness videos that you can do at home.
  19. Purchase generic-named medications, cleaners and groceries instead of the more expensive brand-named products.
  20. Trade services with someone else. For example, maybe you can babysit a friend’s children in exchange for a manicure or haircut.

Combined these twenty money savings tips can help you spend less on the everyday items you purchase, so you have more money available. While not all of the tips may be applicable to you, just doing five or ten of them on a regular basis can help you save a lot of money over the course of just a few weeks.  You should always be on the lookout for ways to save money, no matter how much you earn.

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Filed Under: Personal Finance, Saving Money Tagged With: bank accounts, Bartering, Cable, generic, Internet, Personal Finance, personal finances, Saving Money, shopping, spending, utilities

Our Best And Worst Purchase Of 2013

By //  by Khaleef Crumbley

Sherrian and I tried to be very careful with how we spent our money in 2013. We cut out anything we felt was unnecessary, and tried to evaluate every purchase based on our long-term goals. Although we were better than in years past, we weren’t close to perfect.

So we figured that a fun and useful exercise would be to look back over the year and talk about our best and worst purchase.

Our Best And Worst Purchase Of 2013

Waste Money

Timeshare Maintenance Fee

We talked for a while about whether we should count this as a 2013 purchase. We actually bought the timeshare back in 2006 during our honeymoon. However, in every odd numbered year until 2031 we will have to pay a maintenance fee. So even though we made the initial purchase 7 years ago, we have to pay for it every other year!

I have written in detail about our timeshare disaster in a guest post for Little House In The Valley, so you can read about our terrible decision and see exactly where we went wrong.

What I will say is that we did consider all of the future costs and we were still convinced that this was the right decision. If the timeshare only involved the original purchase price and the small exchange fee when we use it in a different city, then I would say that we got a great deal! However, since we have to pay this maintenance fee every 24 months, we hate that we ever got suckered into this deal!

Here is the full financial blow: the timeshare cost about $5,000, an amount which we had to finance and a very high interest rate. After making payments for less than a year we decided it will be better to use a zero percent offer from one of our credit cards to pay off the balance. On top of that, this year is the fourth year in which we had to pay a maintenance fee. In 2007 this fee was less than $500 and it has gone up each year to be about $750 this year!

So even though this was a 2006 purchase, the fact that we had to pay out $750 that we really didn’t have, made this our worst “purchase” of 2013!

Roku Box

Money Gift

I love this little box… sigh. As you probably know by now (since my husband is proud of the fact), we do not have cable television. We have used Netflix for the last few years, mainly watching it through our Nintendo Wii or our computers. We primarily watch TV in our bedroom, and so our Wii spent most of the time there, but we would transfer it to the living room to watch movies on Netflix or play games when guests came over.  One day, while glancing through Netflix-supported devices, I came across the Roku box.

From that moment, having to drag that EXTREMELY heavy Wii back and forth between the two rooms and connecting and disconnecting all those confusing wires became so laborious ( Oh come on! You’ve been there 😉 ). My really smart husband made me beg for over a year before giving in to this WANT (yes, I can admit it), but I am so glad he did. I researched it. I compared it to similar products like Apple TV and WD TV Live, but the Roku just came out on top.

The Roku not only supports Netflix, Pandora, Hulu and the like, but there are hundreds of channels available. There are tons of news channels, foreign programming, internet shows – you can never run out of entertainment. While many channels are by subscription, there are many which are free.  The cost of the Roku was way less than people spend for one month of cable.

For the cost, ease of use, and the overall enjoyment, this is definitely my favorite purchase for the year.

So there you have it. Our best and worst purchase of 2013!

photo credit: freedigitalphotos.net

What about you? What was your best purchase of the year, and which one do you wish you hadn’t made?

Filed Under: Personal Finance Tagged With: Best And Worst, best purchase, cable tv, Exchange Fee, fees, maintenance fee, Purchase Price, Purchasing, Roku, roku box, Saving Money, smart buy, timeshare, Timeshare Cost, waste money, Wii, worst purchase

Finding Deals To Ease The Pain Of Spending Money

By //  by guest

If you are looking for the best deals, take the middle man out of the equation. Sites like Expedia and Travelocity can include transactions fees (though some have been reducing them or even eliminating them). Take a look at the prices directly available at the websites of the airlines and hotels you are considering. You may find that it is cheaper.

Target

There are millions of deals out on the market; you just have to find them. Peruse the Internet and newspapers for deals that will save you money on all kinds of things that you need…and you’ll still have time to play a few games of Gala Bingo or candy crush. 😉

If you are thinking about opening an account at a bank, look for the locations that offer free checking accounts. These accounts are beneficial, and can provide you with an additional 50-75 dollars to start up with when you open the account. These deals can give you a kick start to maximizing the balance in your account.

Electronics are extremely expensive and can set you back a lot of money if you do not get a good deal. Try to do all of your electronics shopping online, as you will find great deals and auctions, which will allow you to choose the price that you want to pay.

There are many ways that you can find great deals on clothes, to put more money in your pocket and limit overspending. Avoid shopping at the upscale stores in the mall and shop at a clearance store, which carries the same brand named items, at much lower prices to fit your budget.

If one wants to make the most of their own personal finances they need to be thrifty with their money. By looking for the best deals, or a way for one to save or make money, a person can always be making the most of their finances. Being conscious of one’s spending will keep them in control of their finances.

You can often find great deals if you go shopping on the infamous Black Friday. If you are truly dedicated, you can wake up at the crack of dawn to get into stores as they open up and be the first person to get the best deals, which will greatly improve your personal finances.

As seen in this article, the tips associated in being able to handle your personal finances are both practical and logical. This task is far from being impossible and can be done with proper drive and discipline. If these tips are followed, you will surely see how easy balancing your finances can be, for people in most situations.

Filed Under: shopping Tagged With: Coupons, Deals, Personal Finance, Saving Money, shopping, spending

Steps To Build A Brighter Financial Future

By //  by guest

[The following post about the importance of saving for retirement today is brought to you by Genworth.]

Keeping your personal finances in order can be a difficult task. Do not feel like you need to give your hard earned money to any financial professional. This article offers simple solutions that will help you make sure your bank accounts and credit score stay in good financial standing.

To improve your personal finance habits, maintain a target amount that you put each week or month towards your goal. Be sure that your target amount is a quantity you can afford to save on a regular basis. Disciplined saving is what will allow you to save the money for your dream vacation or retirement.

If you have managed your finances well enough to own a home and have a retirement account, don’t jeopardize those by borrowing against them later. If you borrow against your home and can’t repay it, you could lose your home; the same is true for your retirement fund. Borrow against them only in dire situations.

It is never too late to start catching up on your savings and retirement. Everyone is always zoned in on spending everything they make if not more than they make. Get serious, get angry, get real! Start saving money and investing and planning today for what you want for tomorrow.

Fund your retirement account heavily. Make sure that you are at least put in as much as your company will match. More than that is even better. Planning for retirement now will keep you from worrying about it later. You will have a nice nest egg and be able to live comfortably when you reach retirement age.

An IRA is a great way to supplement your employment or other retirement plans. IRA’s are generally not as limited as far as types of investments as 401k plans are. If you have the money available, start an IRA as a supplemental vehicle for retirement on the side. It will greatly benefit your future.

Start saving for retirement. This can seem like a far way off, but every penny you put away for your retirement now is another penny you won’t have to earn when you’re older, less interested in working and less able to work. Start saving now so you can relax later.

Just because the economy is down, do not stop investing money in your 401(K) or other retirement accounts. While it may be a little tempting to stop investing at that time, you have to keep in mind that sometimes, more money is made at the bottom of the market than at the top.

No personal financial plan is complete without a long term goal for future financial security. Developing a program to contribute to a retirement savings plan will provide you with peace of mind and the confidence that you will be able to enjoy life after your retirement. Set a goal and stay with it.

There is no need to be worried about the state of your personal finances. This article offers many easy fixes for any of your money problems so you can take care of things without needing the help of a professional. Once you get your financial records on track, it will be effortless to keep up.

Filed Under: Retirement Tagged With: Personal Finance, personal finances, retirement, Saving Money

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