Tag Archives: saving

Trouble with money?

Many of us at one point or another have been a bit tight with money. It’s common. Living expenses are high and depending on where we live, living expenses can range even higher. Take NYC for example, the “Capital of the World”. The cost of a meal at an inexpensive restaurant for one person averages $15. A three-course meal at a mid-range restaurant for two people averages $75. A regular cappuccino is $3.95. 1 pair of Levi’s 501 jeans averages $57. Renting a 1-bedroom apartment in the center of the city will cost you approximately $2,839.88 a month. Basic monthly utilities including electricity, heating water and garbage for a small apartment is $150.30 and Internet (6 Mbps, Unlimited Data, Cable/ADSL) is $49.18 .* Add to this the cost of childcare, transportation, preparing meals at home, entertainment, etc and it’s no wonder why we feel cash strapped.

What to do? The only thing we can do. Set up a budget to see where all our monthly expenses are going. On an excel spreadsheet, make a list of all the items you spend on monthly. For example, list your rental or mortgage costs, childcare costs such as babysitting and alimony, child support, clothes, movies, dining out, transportation, utilities, home costs such as curtains, bedspreads, furniture, TVs, kitchen gadgets, etc. Jot down everything you spend money on and by that I mean everything. Don’t leave anything out; otherwise you won’t see the complete picture. On the column next to this one write down your total income, subtract the expenses from your total income. What’s the difference? Do you have any money left or are you in a deficit? If you have some money left, great! Make sure some of this money is going towards saving for your emergency fund, retirement and college savings. If you are just scraping by, you need to whittle down your expenses. If you are spending more then you make, you have a lot more work to do.

That is the great thing about writing down everything you make and what you spend it on, you can see it. Seeing where your money actually goes every month makes you more receptive to your spending habits and much more aware of where your hard earned money is going.

Creating a budget sheet will help you cut down on unnecessary spending habits and help you save more. Of course, you can’t be a scrooge either. You can spend a little here and there on things that make you happy; this will promote your health and overall well-being but do it all moderately while also saving for a rainy day. Go ahead and try it.

*Cost of living expenses data obtained from www.numbeo.com

Tracking your funds!

You’ve probably read the wise old advice of “use cash instead of credit, you’ll be able to budget your money better!” While this in part is true because once you run out of cash, that’s it, you’ve reach the amount you have to spend, how do you keep track of where the money went?

One great way is to use your credit card. At the end of the month, you’ll have a detailed history of where you’re money went and how much you spent on each item. Even better is the fact that after a few months, you’ll be able to find a pattern in your spending by sitting down and analyzing your credit card statements from the previous few months.

Another bonus to using this method is that it will help boost up your credit history. However, make sure you pay your credit card bill each month in full to avoid those pesky interest charges. Make a point to spend up to a certain amount on your credit card each month. Give yourself a limit just as you would if you were carrying cash. Once you’ve reached that limit, stop spending. As months pass by, you’ll be tracking your spending habits on your monthly credit statement and can view exactly what goes where. Ultimately, the goal here is to pinpoint what expenses you can minimize and possibly eliminate thus modifying and creating a stronger budget.

Good Luck!

Steps to Financial Planning for the Holiday Season

Financial planning is not necessarily a topic we think about during the holiday season. We are all so busy going to Christmas parties and planning who to buy for and what to get. For this reason, I thought it would be a good idea to share with you the steps to take in order to plan our finances during the holiday season. After all, we all spend more during the holidays than any other time of year. So I asked Elaine King CFP®, CDFA™, President of Family and Money Matters Institute™ , author of Family and Money Matters & La Familia y el Dinero Hecho Facil, CFP Ambassador and Chairman of the Financial Planning Association of Miami Dade if she could write a piece about the key steps to take in order to plan our finances during the holidays. She kindly obliged.

Here is her contribution.

Did you know that you can save 30% on average if you plan ahead for this holiday season?  Now is the time to get started and dust off the plan you set up in January and make sure you are on target with your spending plan.

Financial planning is more than just keeping track of your money. Other areas of financial planning include education, retirement, taxes, investments, and estate planning among others.  But it all starts with a spending plan.  To get started on this first step, follow these 3 tips to stay on track for the holidays as well as for the rest of the year.

1. Create a realistic spending plan.  Before going out shopping, it is essential to have a fund designated for each activity in your spending plan.  A spending plan is a list of all of your expected outflows for the month, designated as either a variable or fixed expense. Fixed expenses are those that must be paid, holiday or no holiday,  and are the same amount each month, such as your rent or mortgage payment. A variable expense, on the other hand, is one that is not necessarily incurred each month and/or varies in amount.  Some of these variable expenses are necessary – such as utilities or transportation, while others are entirely subject to your discretion.  This last category includes your holiday spending.

The key to keeping holiday spending under control is to build these year-end expenses into your budget at the very beginning of the year, and actually fund them monthly.  The money can be moved from your checking account to a savings account or a money market, so you are not tempted to use it for other expenses during the year. A good practice to keep you motivated and on track to having the holiday money when you need it is to use online tools such as Mint, Doughhound or Yodlee.

2. Share your spending plan with the family. Most of the commercials, ads and marketing campaigns developed for the holiday season are targeted to children and families.  They are attractively designed, promoting “must have” products and experiences for the holidays.  It is imperative that you take the time to share with your children the value of money and giving, but also discuss what is appropriate and affordable for your family. Consider empowering your children by designating an amount in your spending plan that is for them to use (and keep within this plan!) as they do their own shopping.  Have them participate in financial decisions about entertaining.  For example, you could set aside $50 for a small gathering at your house, and have the children share in the task of buying food and supplies at the supermarket.  You might reward them if they find ways to spend less than the budgeted amount, such as putting the savings in their own accounts.  It’s so important to get children involved in financial management, and empowered to take control of finances.

3. Stay away from credit card debt.  Equally important is to avoid using your credit card to buy more than you can currently afford.  You should also limit the number of credit cards that you hold. Consider that a debt of $1,000 at a 19% APR where you only pay the monthly minimum will take 20 years to pay off the balance.   Debt is not always bad, however.  Debt that is used to finance items that appreciate over time such as a college education, or a business start-up, are effective uses of leverage.  On the other hand, using debt to purchase something that depreciates in value or has only short-term benefits, such as clothing or entertainment, is bad debt.   During the holiday season, our generosity and holiday spirit can sometimes lead us into bad debt that lingers long after the festivities have ended.

In the past few years, the year-end has brought feelings of anxiety and loss due to economic, political, and social turmoil.  However, we all want to close the year on a positive note, creating a culture of responsible finance despite the affairs of the nation.  Consider giving donations in the name of a family member or friend rather than buying the person a store gift. Consider hosting events and asking your guests to bring a toy for a shelter, or contributing to someone’s education fund.  A Certified Financial Planner professional can help you with your seasonal planning and budgeting and give you more control of your finances which will allow you to enjoy the season and relax.

Ways to Control Your Holiday Spending

Overspending and the holidays seem to go hand in hand, but it doesn’t and shouldn’t have to be that way. I know, I know, we want to show the people we love that we care by giving them thoughtful and sometimes expensive gifts. However, we have to remember that once the holidays are over, we are the ones stuck with a credit card bill we can barely pay off. Some of us will even dig into our emergency savings in order to *gasp* pay that holiday debt. Let’s not get crazy here folks, avoid hitting the panic button by holiday shopping the right way.

In order to shed some light on how we should shop sensibly this holiday season, I interviewed Don Batsford, retail expert and co-founder of ShopGala, an online store coupon codes and promotional codes provider for online retailers.

What is the best and smart way to plan financially for the holidays?

Don: Stay focused. People tend to overextend themselves when they don’t stay on target. Concentrate ahead of time on building a list of people you want to buy gifts for. Then you can create a budget of how much you want to spend for each person. Think of thoughtful gifts you want to buy each person within that budget. Ideally, you will write down ideas throughout the year and then refer to those ideas during the holiday season. If you stick to shopping for only what you need to buy and staying within your budget you will save money.

What are some of the biggest mistakes people do during the holidays that gets them into trouble?

Don: People get into trouble when they are supposed to be buying gifts for friends and/or family and they end up buying things for themselves. It’s very easy to fall in love with shopping during the holiday season and ending up buying a ton of stuff for yourself that you don’t really need. Instead, take note of the things you like by adding them to a wish list and let people know about your list when they ask you what you want for the holidays.

Can you save yourself if you are already getting into trouble or is it too late?

Don: Return extra items now. Even if it’s a great deal, return it if you don’t really need it. You can always buy it again later if you find you can’t live without it.

Where can consumers find the best savings?

Don: There are terrific savings all the time. You just need to know when you see a good price or discount code. Also, don’t be afraid to use eBay or CraigsList to buy things. Very often you will find huge savings on items that are still brand new.

Coupon codes are a great way to find discounts for many of the most well know sites on the internet. Coupon websites like Retailmenot.com and Shopgala.com consolidate these deals together and allow shoppers to see who is running an aggressive deal at any given time. If you are looking for a particular item, comparison shop. Find out who sells the item the cheapest and include shipping, taxes and any promotions when checking prices.

What are some strategies a last minute shopper can use to shop efficiently for friends and family? Online? Any special techniques they could use?

Don: To find the perfect, gift look for hints in their social media profiles. For example, pins on Pinterest may suggest clothing interests, likes on Facebook can help with favorite authors and check-ins on Foursquare can tell you what restaurant they would love a meal from.

Organization can be key during the holidays. If you are comfortable with Excel, create a simple spreadsheet with names and gifts. This way you can keep track of all the items you need to buy and for whom. You will see in front of you what you have purchased and what you still need to get.

Are there any online sites they can help organize gift lists?

Don: Sites like MyRegistry.com allow users to combine existing wish lists or add products from disparate sites. There are also some great apps for your phone and/or tablet including mGifts or GiftShopper.

Teaching Your Kids About Money

photo: d i a n a*

(This story was originally published by Mint.com on Wed, May 19, 2010.)

By Ana Gonzalez Ribeiro

Up until a couple of years ago, being financially literate was a skill needed for “later in life.” Nowadays, things have drastically changed. The number of financial literacy classes is multiplying and money management classes are taught to students as early as grammar school.

“It’s never too early to learn about money” seems to be the consensus. An early start to understanding how to manage your assets means an early start towards a financially successful life.

Mint recently conducted an online survey aimed at better understanding what users’ approach was to money as kids and how they are teaching their own children. Nearly half of the survey respondents stated that they earned money before or in elementary school. Mowing lawns and babysitting were the most frequently held jobs and almost nine in 10 respondents had paying jobs in high school. High school jobs were mainly in retail stores, baby-sitting, restaurants and, again, mowing lawns. The survey indicated that earnings in high school were mostly used for entertainment, eating out or car related expenses.

Most importantly, however, the majority of survey respondents said they were not very prepared to manage money after high school.

To read the rest of this article please click here:

http://www.mint.com/blog/how-to/teaching-your-kids-about-money-05192010/