When it comes to the holidays, so many people start getting out their credit cards. After all, it is just once a year, for the ones you love and you'll pay it back in a couple of months. So we are generous.
Without realizing that we will pay on those gifts for the next year or more. They will cost up to 20% more than what we purchased them for, due to interest.
Most people do this every year. It has become a holiday tradition for many consumers. However, buying holiday gifts, dinners and travel isn't a good use of your credit. You are increasing your debt and reducing your monthly budget. While it may seem great right now, later it will start to pile up on you.
Most financial advisors will recommend that you save small amounts of money throughout the year in a special holiday savings account. All you have to do is know how much you plan to spend and then divide it by 12. Deposit the resulting amount in the account each month. That is your holiday spending.
Or if you find it difficult to put this money into savings, have it put there for you by your bank. Many banks and credit unions have Christmas clubs that allow you to put so much a month into a savings account. They will often automatically deduct it for you.
I recommend a unique approach to many people. Have a year-long shopping session. Yes, you will still need to save for your food and travel, but the gifts will be taken care of. Simply dedicate each month to finding certain people's gifts. For example, in January, I purchase my mother's gift. In February, I look for my sister's gift. This allows me to take advantages of sales and other bargains. If something is on sale that fits my sister better than my mom, I might swap their months. The idea is that I spread my shopping out over 12 months. I love to shop and am not great at saving, so this works perfectly.
The holidays are truly a season of giving. But don't give away your future. By charging up your credit cards, you are spending next year's savings. Your budget will be stretched even more. Look to the consequences instead of just the benefits of spending a lot of money on your holidays. Be creative and give from the heart instead.
There are many frugal holiday gift ideas out there. You can make things for those you love. Many families draw names, limiting the amount they have to spend. Others don't allow themselves to give gifts that they have purchased. They have to pass on or make something. These are nice traditions. They take the focus off of the shopping and put it back on the thought that goes into the present.
Avoiding Gift Card Scams
Gift cards are a popular holiday gift, but be careful. Gift card scams are the new fad out there in the world of financial frauds.
The National Retail Federation says that gift card sales increase in the billions each year. Most people spend $30 or more on gift cards that they give as holiday presents. Many people don't realize that the gift they are giving might be part of a scam.
One very popular scam involves people copying the gift card numbers that are hanging on the store racks. They then call the retailer's 800 number to check on the balances for the card numbers they have copied. When the cards are purchased and activated, the thief uses the card number to buy items online.
There are also many fake gift cards floating around out there. These have been stolen. You buy them online and give them as a gift only to find that they had never been activated.
The National Retail Federation says that gift card sales increase in the billions each year. Most people spend $30 or more on gift cards that they give as holiday presents. Many people don't realize that the gift they are giving might be part of a scam.
One very popular scam involves people copying the gift card numbers that are hanging on the store racks. They then call the retailer's 800 number to check on the balances for the card numbers they have copied. When the cards are purchased and activated, the thief uses the card number to buy items online.
There are also many fake gift cards floating around out there. These have been stolen. You buy them online and give them as a gift only to find that they had never been activated.
Budgeting for Your Future
Your budget will guide you through the financial processes that build financial freedom and personal wealth. This guide will help you build security and independence. Without it, you are wandering aimlessly in the dark.
The budget is the main requirement for financial planning. Without it, you can dream all you want, but you will not know how to make dreams into reality. Budgeting helps you organize both your current financial information and your long-term financial picture.
It is vital that you plan for a secure financial future. By setting goals and knowing what you are working towards, budgeting becomes a great tool.
Any good budget will address your entire financial picture, not just your day to day spending. It should manage what you make and what you spend. It should track your spending, showing you were you can cut back. It will help you prepare for emergencies. And most importantly, it can help you fulfill your savings and investment goals. It will not only make today financially peaceful, but will secure your independent life in the future.
I know that it is easy to forget about the long-run, so we don't budget at all. Even I have a lapse in financial judgement every now and then. But budgeting will take you farther and benefit you throughout your life. A budget will keep you moving towards were you need to be going. You are reviewing your goals on a regular basis, which keeps them on the top of your priority list. Budgeting will allow you to live today and save for the future at the same time.
When you are budgeting, it is easy to identify the areas in your life where you are overspending. You are able to spot financial problems before they attack you. With a budget, you find the ways to eliminate your debt and start saving for your goals. Debt is often the result of overspending and poor money management. If you have a budget, you are taking control of your finances -- which is beneficial in halting the debt accumulation. Personal finance plans can effectively allow you to manage your credit in a responsible manner.
By reviewing your budget on a regular basis, you are able to see your progress towards achieving your goals. Without a budget to review, you are simply flying blindly. Many Americans are unable to tell you how much money they have in their checking, investments and debts. If you don't know what your financial situation is at any given moment, how can you make any financial decisions during the day.
A budget simply assists you in getting your mind prepared to make financial decisions. You are able to properly assess the situation and make an informed decision in regards to where you money goes and who it is going to.
With a budget, you can build wealth, attain personal goals and prepare for your future. Manage your money right now, don't let it manage you.
The budget is the main requirement for financial planning. Without it, you can dream all you want, but you will not know how to make dreams into reality. Budgeting helps you organize both your current financial information and your long-term financial picture.
It is vital that you plan for a secure financial future. By setting goals and knowing what you are working towards, budgeting becomes a great tool.
Any good budget will address your entire financial picture, not just your day to day spending. It should manage what you make and what you spend. It should track your spending, showing you were you can cut back. It will help you prepare for emergencies. And most importantly, it can help you fulfill your savings and investment goals. It will not only make today financially peaceful, but will secure your independent life in the future.
I know that it is easy to forget about the long-run, so we don't budget at all. Even I have a lapse in financial judgement every now and then. But budgeting will take you farther and benefit you throughout your life. A budget will keep you moving towards were you need to be going. You are reviewing your goals on a regular basis, which keeps them on the top of your priority list. Budgeting will allow you to live today and save for the future at the same time.
When you are budgeting, it is easy to identify the areas in your life where you are overspending. You are able to spot financial problems before they attack you. With a budget, you find the ways to eliminate your debt and start saving for your goals. Debt is often the result of overspending and poor money management. If you have a budget, you are taking control of your finances -- which is beneficial in halting the debt accumulation. Personal finance plans can effectively allow you to manage your credit in a responsible manner.
By reviewing your budget on a regular basis, you are able to see your progress towards achieving your goals. Without a budget to review, you are simply flying blindly. Many Americans are unable to tell you how much money they have in their checking, investments and debts. If you don't know what your financial situation is at any given moment, how can you make any financial decisions during the day.
A budget simply assists you in getting your mind prepared to make financial decisions. You are able to properly assess the situation and make an informed decision in regards to where you money goes and who it is going to.
With a budget, you can build wealth, attain personal goals and prepare for your future. Manage your money right now, don't let it manage you.
Mortgage Life Insurance: Tips To Help You Get The Cover You Need
Having enough life insurance to not only cover the loss of income, but also your family's other debts (such as house, car, credit cards, etc.) is a wise move. Even though it may feel like a struggle at the time if you have to scrape the funds together to cover the premium.
In the event the unthinkable happen, the house (and perhaps other debts) would be paid for and your family would have one less burden to worry about. Or, if you have mortgage insurance that is triggered by your disability or being unable to work (or disability insurance), then your family is covered if something should happen.
When you take out the loan on your house, the company financing your home will often insist that you include mortgage insurance as part of the arrangement. While this may seem like an unnecessary addition to your already full expenditure list, it does make financial sense for the mortgage company but also for you. However, just because you are buying mortgage insurance from one company doesn't mean that you need use that same company for your other insurance needs.
Take, for example, the case of Jane Dodd. Jane and her husband Eric worked hard to raise a down payment to buy a home. The Dodd family had three children, and they both decided that Jane should stay home with the kids. Eric had a good job and a solid paycheck so it wasn't a strain. But when Eric was tragically killed in car crash, Jane was left to support her family without an income.
In the event the unthinkable happen, the house (and perhaps other debts) would be paid for and your family would have one less burden to worry about. Or, if you have mortgage insurance that is triggered by your disability or being unable to work (or disability insurance), then your family is covered if something should happen.
When you take out the loan on your house, the company financing your home will often insist that you include mortgage insurance as part of the arrangement. While this may seem like an unnecessary addition to your already full expenditure list, it does make financial sense for the mortgage company but also for you. However, just because you are buying mortgage insurance from one company doesn't mean that you need use that same company for your other insurance needs.
Take, for example, the case of Jane Dodd. Jane and her husband Eric worked hard to raise a down payment to buy a home. The Dodd family had three children, and they both decided that Jane should stay home with the kids. Eric had a good job and a solid paycheck so it wasn't a strain. But when Eric was tragically killed in car crash, Jane was left to support her family without an income.
Diversify Your Retirement Income
Diversification, it's not just for income any more. Let's talk about the importance of not putting all of your retirement funds into one solution. Maybe you work for a company that offers a defined benefit pension plan. Defined benefit plans are really on the way out. Companies such as Boeing, GM, and Ford have such huge pension plan obligations that they can no longer continue to fund them.
United Airlines declared bankruptcy and got out from under their huge pension plan obligations. As a result, retired employees saw their monthly benefit drop by about 50%.
I would expect that GM and Ford would be following in United's footsteps in the very near future.
For those of us who are expecting Social Security to provide us with a comfortable retirement, think again. In the next 10 years, the bulk of the baby boomers will be receiving social security and for the first time in the history of the plan, Social Security will be paying out more than they take in. The government will have to make up the difference.
This is why it is vital that you do not rely on only one source of retirement income in your plans.
United Airlines declared bankruptcy and got out from under their huge pension plan obligations. As a result, retired employees saw their monthly benefit drop by about 50%.
I would expect that GM and Ford would be following in United's footsteps in the very near future.
For those of us who are expecting Social Security to provide us with a comfortable retirement, think again. In the next 10 years, the bulk of the baby boomers will be receiving social security and for the first time in the history of the plan, Social Security will be paying out more than they take in. The government will have to make up the difference.
This is why it is vital that you do not rely on only one source of retirement income in your plans.
10 Reasons to Choose Direct Deposit over Paper Checks - ANYDAY!
More than half of employees (Over 70%) have converted to Direct Deposit as their preferred method of payment. As more people come to the realization that Direct Deposit is simply safer and more convenient, these numbers continue to rise - rapidly. Let's review ten reasons why Direct Deposit is rapidly ripping paper checks to shreds:
1. Direct Deposit Saves You Time
* Funds are conveniently deposited in your account electronically - saving you trips to the bank and helping you avoid long lines at tellers or ATMs.
* No more waiting for checks to clear... Funds clear instantly!
2. Your Money is Safer and More Secure
* You'll never have to worry about lost or stolen checks and can avoid the risk of carrying cash.
* Direct Deposit is more confidential. Since deposits are transferred electronically it passes through fewer hands than a paper check. This helps protect you from becoming a victim of identity theft.
3. It's Wiser
* You can access your money earlier - No more waiting for checks to clear. (Usually at the strike of 12:01a.m. on payday funds are available for use).
* Puts you in complete control of your money... You can automatically divide your funds amongst different accounts with ease.
* You're always a step ahead! - Employers will issue you a paper stub, in advance, so that you'll already know the amount of your direct deposit before it hits (including taxes, insurance, and any other deductions).
* Financial planners recommend Direct Deposit as a proactive step toward gaining control of your finances.
4. It's Simpler
* Once you sign-up for Direct Deposit you don't have to worry about it anymore. Your money is deposited on time, every time... regardless of where you are. Try that with paper checks.
5. Saves You Money
* Avoid check cashing fees
* Save gas money from traveling back and forth to the bank or check-cashing store.
* Avoid bounced check fees because you can always rely on your funds being cleared and in your account in a timely manner.
* Helps you to better manage and budget your money to avoid OVERspending.
1. Direct Deposit Saves You Time
* Funds are conveniently deposited in your account electronically - saving you trips to the bank and helping you avoid long lines at tellers or ATMs.
* No more waiting for checks to clear... Funds clear instantly!
2. Your Money is Safer and More Secure
* You'll never have to worry about lost or stolen checks and can avoid the risk of carrying cash.
* Direct Deposit is more confidential. Since deposits are transferred electronically it passes through fewer hands than a paper check. This helps protect you from becoming a victim of identity theft.
3. It's Wiser
* You can access your money earlier - No more waiting for checks to clear. (Usually at the strike of 12:01a.m. on payday funds are available for use).
* Puts you in complete control of your money... You can automatically divide your funds amongst different accounts with ease.
* You're always a step ahead! - Employers will issue you a paper stub, in advance, so that you'll already know the amount of your direct deposit before it hits (including taxes, insurance, and any other deductions).
* Financial planners recommend Direct Deposit as a proactive step toward gaining control of your finances.
4. It's Simpler
* Once you sign-up for Direct Deposit you don't have to worry about it anymore. Your money is deposited on time, every time... regardless of where you are. Try that with paper checks.
5. Saves You Money
* Avoid check cashing fees
* Save gas money from traveling back and forth to the bank or check-cashing store.
* Avoid bounced check fees because you can always rely on your funds being cleared and in your account in a timely manner.
* Helps you to better manage and budget your money to avoid OVERspending.
Credit Cards and Your Personal Budget
Many people will tell you that credit cards are evil, that you shouldn't use them, that you should destroy them all or lock them in a drawer. In some cases, this might be true.
If you don't have a budget that you use regularly, credit cards might be a big risk for you. If you can't keep yourself from spending money you don't have, credit cards might be a big risk for you. If you carry a balance and don't pay it in full each month, credit cards might be a big risk for you.
But if you are the type of person that has the discipline to use credit cards without getting yourself in debt, you may still have some issues getting your card to work with your budget. Credit cards can provide a lot of utility to your life, like easy spending records, fraud protection, and kickbacks like frequent flier miles or cash back.
The key to successfully using your credit card in conjunction with your budget is exactly the opposite of how you handle savings: you consider your credit card to be a part of your account. What does this mean? It means that when you charge something on your credit card, you immediately count that money as "spent" in your budget. So if you've charged $500 on your credit card by the end of the month, you should have a corresponding $500 counted against your budget categories.
In this way, you're never spending more than you should be. You're keeping to your budget. Then at the end of the month (it's best to try to align your credit card's payment date with your budgeting cycle if possible), when you make the payment to your credit card, the payment itself doesn't show up in your budget at all. As far as your budget is concerned, your credit card is just a part of your regular account.
If you don't have a budget that you use regularly, credit cards might be a big risk for you. If you can't keep yourself from spending money you don't have, credit cards might be a big risk for you. If you carry a balance and don't pay it in full each month, credit cards might be a big risk for you.
But if you are the type of person that has the discipline to use credit cards without getting yourself in debt, you may still have some issues getting your card to work with your budget. Credit cards can provide a lot of utility to your life, like easy spending records, fraud protection, and kickbacks like frequent flier miles or cash back.
The key to successfully using your credit card in conjunction with your budget is exactly the opposite of how you handle savings: you consider your credit card to be a part of your account. What does this mean? It means that when you charge something on your credit card, you immediately count that money as "spent" in your budget. So if you've charged $500 on your credit card by the end of the month, you should have a corresponding $500 counted against your budget categories.
In this way, you're never spending more than you should be. You're keeping to your budget. Then at the end of the month (it's best to try to align your credit card's payment date with your budgeting cycle if possible), when you make the payment to your credit card, the payment itself doesn't show up in your budget at all. As far as your budget is concerned, your credit card is just a part of your regular account.
Learn Money, Take Control, and Become Wealthy
Personally, I believe the ONLY long term debt help solution is to increase your financial education. When it comes to getting yourself debt help, your greatest asset is time. The greatest investment you can make is to invest your time into increasing your financial education.
When it comes to money, wherever you stop learning, you stop earning. See, it does not take money to make money...it takes knowledge and experience to make money. The more knowledge and experience you have, the less money and risk are involved.
Most people are discouraged from taking control of their financial situation because they believe it is too complicated for them to handle. Nothing could be further from the truth! This is a perception encouraged within society to help keep you in your place. The first step is to believe you can do it.
The next big spot where many people fail...they do not find the right information soon enough. This becomes another group of people who end up discouraged. In our schools today, you will learn reading, writing, math, and science, but you will never be given a financial education. You might get a lesson on how to balance a checkbook, or how supply and demand work, but you will never be given the right information...the simple lessons that could change your financial position for the rest of your life.
When it comes to money, wherever you stop learning, you stop earning. See, it does not take money to make money...it takes knowledge and experience to make money. The more knowledge and experience you have, the less money and risk are involved.
Most people are discouraged from taking control of their financial situation because they believe it is too complicated for them to handle. Nothing could be further from the truth! This is a perception encouraged within society to help keep you in your place. The first step is to believe you can do it.
The next big spot where many people fail...they do not find the right information soon enough. This becomes another group of people who end up discouraged. In our schools today, you will learn reading, writing, math, and science, but you will never be given a financial education. You might get a lesson on how to balance a checkbook, or how supply and demand work, but you will never be given the right information...the simple lessons that could change your financial position for the rest of your life.
Simple Steps to Living Frugally
Living frugally isn't difficult, you simply have to take a few steps. They aren't large steps, in fact, they are baby steps. The difficult part is staying on the path.
Step One: Know your destination.
You can't stay on the path towards your goals if you don't even know what your goals are. Have you ever gone into a grocery store without a list? You wander up and down the aisles, not really knowing if you are getting what you need. This is a lot like your frugal living. You have to know where you are going and what you need in order to follow the correct path.
Step Two: Don't take every path.
You will quickly find that if you follow every single frugal path that you encounter, you will go crazy! It just isn't possible. Not everything works for every person. For example, the busy mom with five small children is not going to have time to make homemade bread and everyone's clothes. She might simply focus on shopping wisely and reducing the utility bills. The retired homemaker may have time in which to make her own laudnry soap and plant a garden. It simply depends on where you are at in your life -- and how much you want to take on. There are some things that are just worth it.
Step Three: Keep searching for new paths.
You know your destination, but you don't always know how to get there. Frugal living is an ongoing challenge. There is no end to it. You keep learning and you keep pushing yourself to save a little bit more.
Step Four: Budgeting is your gasoline.
You have to know where you are spending your money in order to spend less. It often helps to track every penny that you spend. Right down to the penny. Don't cheat. Those small expenditures can really add up.
Your budget will keep you working towards your goal and spending less each month. This is where you can really sit down and see what is necessary and what isn't. When everything is on paper, it is easy to see the changes that could be made.
Step One: Know your destination.
You can't stay on the path towards your goals if you don't even know what your goals are. Have you ever gone into a grocery store without a list? You wander up and down the aisles, not really knowing if you are getting what you need. This is a lot like your frugal living. You have to know where you are going and what you need in order to follow the correct path.
Step Two: Don't take every path.
You will quickly find that if you follow every single frugal path that you encounter, you will go crazy! It just isn't possible. Not everything works for every person. For example, the busy mom with five small children is not going to have time to make homemade bread and everyone's clothes. She might simply focus on shopping wisely and reducing the utility bills. The retired homemaker may have time in which to make her own laudnry soap and plant a garden. It simply depends on where you are at in your life -- and how much you want to take on. There are some things that are just worth it.
Step Three: Keep searching for new paths.
You know your destination, but you don't always know how to get there. Frugal living is an ongoing challenge. There is no end to it. You keep learning and you keep pushing yourself to save a little bit more.
Step Four: Budgeting is your gasoline.
You have to know where you are spending your money in order to spend less. It often helps to track every penny that you spend. Right down to the penny. Don't cheat. Those small expenditures can really add up.
Your budget will keep you working towards your goal and spending less each month. This is where you can really sit down and see what is necessary and what isn't. When everything is on paper, it is easy to see the changes that could be made.
Preparing for Retirement
When it comes to retirement, there is more to consider than your retirement account. Preparing for retirement requires more than simply putting money away. While it is essential that you start as young as possible when working towards your retirement savings, you should work on other areas as well.
When we are young, we often think that we have plenty of time. So many people start their retirement investments late in life. This means that they will retire later with less money in their retirement funds. It also means that they will have to invest a larger portion of their monthly income in order to meet their retirement goals.
One of the most important things you should do to protect you into retirement is to remain healthy. Medical concerns are a top problem facing the elderly and their income situations. Getting older happens, but you can work at remaining healthy.
Start with taking care of your health by exercising, eating right and getting enough sleep. Learn to handle stress appropriately and handle health concerns immediately.
No matter how healthy you are, you will find that your medical expenses and insurance premiums will increase as you age. It can often be very difficult to purchase reasonable insurance when you are older. If you purchase your insurance now, in most cases you will be able to keep it so that it will be there when you are older.
You can't simply fall back on Medicare, which requires you be 65 years of age (except in special cases). If you have a major health problem at 63 without insurance, you will find that your entire retirement fund could be depleted rather quickly. Even if you qualify for Medicare, it doesn't cover everything. In most cases supplemental insurance is great for taking up the slack.
Don't think of Social Security as a retirement fund. This may have been true at one time for some people, but things have changed. In most cases, Social Security simply covers the basics, but not an excellent lifestyle. You should have retirement savings to fall back on, whether they be an IRA, 401(k) or other form of investment. In addition, if you are young there may be no Social Security when it comes time for you to retire.
When we are young, we often think that we have plenty of time. So many people start their retirement investments late in life. This means that they will retire later with less money in their retirement funds. It also means that they will have to invest a larger portion of their monthly income in order to meet their retirement goals.
One of the most important things you should do to protect you into retirement is to remain healthy. Medical concerns are a top problem facing the elderly and their income situations. Getting older happens, but you can work at remaining healthy.
Start with taking care of your health by exercising, eating right and getting enough sleep. Learn to handle stress appropriately and handle health concerns immediately.
No matter how healthy you are, you will find that your medical expenses and insurance premiums will increase as you age. It can often be very difficult to purchase reasonable insurance when you are older. If you purchase your insurance now, in most cases you will be able to keep it so that it will be there when you are older.
You can't simply fall back on Medicare, which requires you be 65 years of age (except in special cases). If you have a major health problem at 63 without insurance, you will find that your entire retirement fund could be depleted rather quickly. Even if you qualify for Medicare, it doesn't cover everything. In most cases supplemental insurance is great for taking up the slack.
Don't think of Social Security as a retirement fund. This may have been true at one time for some people, but things have changed. In most cases, Social Security simply covers the basics, but not an excellent lifestyle. You should have retirement savings to fall back on, whether they be an IRA, 401(k) or other form of investment. In addition, if you are young there may be no Social Security when it comes time for you to retire.
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