Money doesn’t always flow in and out of our budgets in predictable amounts. And even though we all try to create a savings account, the reality is that at some point in time we are going to need to spend more money than we make. Hopefully, if you are living within your means, this will be a short term phenomenon that you can recover from. This post addresses a few ways to use short term loans to your advantage.

Step 1. Develop a Plan

If you are running out of money you need to realize that getting a short term loan can easily turn into a chronic long term problem. The real solution is to find a way to start getting ahead of your spending. Getting a short term loan will get you money in the near term but will make your life more difficult when it comes time to repay the loan. Review your income and expenses and do what it takes to raise one and/or lower the other.

Step 2. Find Your Loan

Shop around for a loan that will work for you. Analyze your credit and your loan options. If you have good credit, income and assets it should be easy to get any sort of traditional loan. Pay close attention to interest rates and compare your options. If you have income but bad credit you might be able to get a loan against your income. If you have a car that is paid for, you could even consider getting a short term title loan. You can see an example of that at title loans Orlando. If none of these options work you can always hit up your friends or family for help. And in the worst case, you can stop paying the bills that aren’t secured. This would destroy your credit so you should see a credit counselor before being this drastic.

Step 3. Prevention

If you’ve taken the steps above then you’ve surely realized that the most important thing you can do now is to prevent this from happening again. It’s time to create a long term financial plan that will balance your income and spending, and that will allow you to build some savings as well as start to prepare for the long term.


How to Quickly Finance a Foreclosure

It’s never a good thing when there are lots of foreclosures hitting the market. It means people are losing their homes and that the economy is likely in the dumps. However, where there’s misfortune sometimes a fortune can be made. I’ve had several friends invest in foreclosures and discovered that there are more ways than you’d think to quickly finance a foreclosure.

Traditional Mortgage. Of course, if you have the time (not at an auction) and the house is in good enough shape to meet the traditional mortgage guidelines, you can get a traditional mortgage. The good news is that this is usually the lowest interest rate you can find. The bad news is that this type of loan takes the longest to secure.

Home Equity Loan. This type of loan is only available to those that have a lot of equity built up in another real estate investment, but it does have its advantages. Home equity loans are fast and somewhat easy to obtain, and they offer rates close to those of traditional mortgages.

Bridge Loans. A bridge loan is another alternative. Its possible to get a fast bridging loan approved and funded within a few days. The disadvantage is that you’ll have to pay a higher interest rate than for a traditional loan.

Hard Money Loans. A hard money loan is similar to a bridge loan, but instead of financing it through a traditional lender the money comes from a hard money lender. Hard money lenders require a lower loan to value and usually charge a higher interest rate than other loans.

Credit Cards. If the foreclosed property is cheap enough, you can use cash advances from your credit cards to pay for the property. While this isn’t typically recommended, it actually makes sense in some scenarios.


Six Common Budget Mistakes

American culture is inextricably tied with capitalism, materialism and debt. It seems that no matter how hard individuals and households try to save money and manage their finances well, financial security is elusive to most. Seventy-seven percent of American adults surveyed said that they are “always trying to save money,” yet out of the 47% of US households who have credit card debt, the average amount owed is $14,517. So why does such a discrepancy exist? Maybe their methods of financial management need reexamination. Here are six of the most common budgeting mistakes that Americans make every day.

1. Not living within your means. If you spend more than you make, you will eventually have nothing, and then you will have less than nothing. When you have less than nothing, everything is more expensive because you borrow to buy it. A budget is crucial; it doesn’t have to be precise to the penny and it doesn’t have to be complicated, but you need to know how much you make, how much you spend and how you spend it. When you start to have money left at the end of the month, save it!

2. Not saving for emergencies. If you live paycheck to paycheck, you are unprepared to handle non-routine expenses which are, statistically speaking, guaranteed to happen eventually. Something as simple as an unexpected week off work to care for a sick family member, a little fender-bender or an appliance that suddenly bites the dust becomes a catastrophe if you don’t have some savings to cover the immediate costs. Without savings, people use cash-advance services or credit cards, which will both cost far more in the long run with interest and other fees. Such situations often lead to a slippery slope of debt. One of the easiest ways to save is to have money taken directly from your paycheck to a savings account so that your savings can grow consistently.

3. Buying more car and house than you need. A car is a depreciating asset; the longer you own it, the less value it has. If you borrow money to pay for it, as most buyers do, you’re paying interest on a depreciated asset. If you need personal transportation to and from work, an SUV or large truck is much more car than you need, and it will be more expensive to buy, fuel and maintain. Unless you need it for towing or hauling power, you don’t need it. The same mentality applies to housing. A bigger house is not always better. While you need sufficient space for living, the rest is just extra. A bigger house means a higher mortgage payment each month, while if you bought a house just big enough for your needs, you could pay it off sooner and save money in interest as well. Factor in higher property taxes, maintenance and the time it takes to keep all that space clean and organized, and that McMansion suddenly looks a lot less appealing.

4. Paying again and again. Maintaining subscriptions, services and membership fees is like giving a retail store money when you walk in the door regardless of whether you actually buy anything. If you don’t watch most of the channels in your cable package, visit the gym just once a month or barely skim the magazines that arrive in the mailbox, why pay for them? Rethink whether you are still interested in the service; if so, consider other less expensive ways to achieve the same end. If not, just cancel it already!

5. Treating investing as a game. Fact: you can’t maximize returns on stocks simply by “timing the market” or suddenly “getting lucky” and having one of your obscure stocks become the next big thing. The stock market is not a slot machine or a lottery. Trying to make a quick buck in the short term by constantly buying and selling will earn you a headache and stress but probably not profits. Be rational in your investing; a solid portfolio will have both high-risk and low-risk assets working over time to build wealth.

6. Not checking your credit score. Your credit score is a number that will determine interest rates on car loans, home mortgages and insurance. The quality of your score could cost or save you thousands in the long run, so why wouldn’t you want to know it and maximize it? The three credit rating agencies –Equifax, Experian and Transunion- are each required to provide you with a free report once per year. Check the report carefully for clerical mistakes that could harm your credit score. The report is also a straightforward way to detect and stop fraud before it causes irreparable damage. This simple check performed just a few times each year can save you money and hassle in the long term.

Since the recession began, Americans have been learning – almost always the hard way –the value of thrift, the problem with keeping up with the Joneses, and the necessity of saving for emergencies. Saving money doesn’t have to be a full-time job itself, but it does take discipline and conscientiousness. This list is not a complete how-to for saving, but it provides key points to begin tackling your individual financial problems. After all, the first step of any process is the hardest.


Help For Shopaholics

Do you suffer from oniomania? The term comes from the Greek words onios and mania, meaning “for sale” and “insanity” respectively. The condition is better known as compulsive buying or being a “shopaholic.” Almost everyone overspends occasionally or buys on impulse, but for many the spending is truly out of control, ruining their financial health and steadily building debt. Those who spend to alleviate negative emotions like anger, sadness or disappointment, those who get an adrenaline rush from spending money, and those who consistently buy more than they intended may be compulsive shoppers. Social and cultural conditions reinforce such behaviors. Magazines, TV, movies and other media glorify “retail therapy” and blur the distinction between needs and wants. Credit cards give consumers easy access to money they don’t have. Advertisements are everywhere we turn, and shopping isn’t limited to a physical store location; you can buy from your computer, TV or Smartphone. You can even shop during a flight! Conditions may encourage you to shop ‘til you drop but offer no help or dealing with the debt that follows. Break the destructive spending habits and splurge no more with these easy, creative tricks.

Avoiding Temptation
No one has superhuman willpower. The best way to avoid giving in to temptation is to avoid encountering it. Switch the channel away from home shopping networks and stop browsing store websites or one-stop online shopping like Amazon or eBay. Don’t window shop, or if you are going to do it, do it after hours. Recycle catalogs that come in the mail or, better yet, call customer service and unsubscribe. Discount and dollar stores can also present pitfalls; it’s not a good deal if you don’t need it. Since credit card usage often facilitates excessive spending, put your plastic somewhere else. Keep it in a file with your statements so you can’t use it without seeing the balance. Give it to your spouse or partner so that you must justify each purchase to someone else. Having a support system in place will also help you stick to your goals. As a last resort, consider freezing your cards in a block of ice. Waiting for it to melt gives you time to rethink your purchase.

Taking Control
Good news: you don’t have to quit cold turkey. Set aside a specific amount each month for shopping. You won’t feel deprived, and you will actually appreciate your purchases more when they are fewer and more thoughtful. If you’re shopping for little extras, donate one item to charity for every item that you buy. This trick helps you consider what you already have that is similar or maybe better than what you are buying. If you overspend on little items a few dollars at a time, make a list before shopping and stick to it.

Press Pause
Controlling an impulse of any kind requires creating space between the trigger and your response. Like hitting the pause button, you need to be able to stop and consider your reaction. Try the two-day rule: if you must have it, wait two days. If it’s really great you can go back and get it, but chances are you will forget about it as soon as you leave the store. A personalized credit card sleeve with an inspirational quote or picture to remind you why you’re saving also helps you stop and think before you buy. If you’re home and the urge to go shopping hits, sit down and make two lists: ten things you would like to do but never have the time and ten things you would like to do but you never have the money. Consider all these ways you would rather spend your time and money. Make a plan to do one of the things on your list, and you’ll find much more fulfillment that you would by shopping.

Satisfy the Craving (Safely)
You really can keep the fun in shopping while keeping more money in your wallet. Your friends and family can be a great help in this area. Shop with a friend who is also trying to save money and both can act as a reality check for each other.

Instead of buying new, check out local thrift stores and garage sales. The variety and uniqueness of what you’ll find is a shopper’s dream, and the prices are a fraction of the retail price for the same items. Most items are like new or gently used; some items still have store tags (maybe from another shopaholic who couldn’t resist something he or she didn’t need). Many thrift stores also support philanthropy or local charities: Goodwill, one of the most widely known, supports employment and job training programs. The Society of St Vincent de Paul also uses proceeds for works of charity.

Act as a personal shopper for someone who recently changed jobs and needs a new wardrobe or moved and wants to redecorate the new place. You can help them browse, compare, choose and buy without spending a dime, and they will appreciate the shopping help and the second opinion on their purchases.

If you shop with friends for the social experience or if your friends are shopaholics too, host a clothing swap. Everyone brings clothing or other items they no longer use or want and set them on “display.” Guests barter and make trades until all are satisfied with their “purchases.” Everyone gets to clear out the closets and goes home with “new” items. Donate leftover items to charity.

If There Is A Will, There Is A Way
By incorporating these strategies; avoiding any instances that you would be tempted, taking control of your money and money spending habits, pausing before you purchase and making any purchase you do make safe, you will indefinitely lose the title of shopaholic. Not to mention, thousands of other people who are suffering from being shopaholics will have one more person to look up to.


Common Trust Deed Questions

One of my friends was telling me about a unique debt solution that is used to help debt burdened citizens in Scotland.  I started doing some research to help answer some of my Scottish trust deed questions.  Here are some of the answers I came up with.  If I’m wrong or have missed something, feel free to add your feedback in the comment section.

What does a trust deed do?

A trust deed is set up by a third party based on your specific circumstances.  The trust deed reduces the amount of debt you owe and creates a contract between you and your creditors for you to pay back your debts over a 3-4 year period.

Who is eligible for a trust deed?

To be eligible, you have to be a Scottish citizen and demonstrate that you have more debts than you can afford.

What is the disadvantage of using a trust deed to get rid of your debt?

As far as I can tell, the main disadvantage is that your credit will be ruined for at least several years.  Other potential disadvantages would be that you could lose some of your real assets like your car or house in some situations.

Which debts does it cover?

A trust deed is a contract that only covers your unsecured debts.  If you have debts that are based on real assets – like your home or car, a trust deed will not resolve those debts.

Who enforces the contract?

A trustee is appointed to you and it is that person’s duty to make sure that you pay your contributions and that the creditors get the money that was agreed upon when the contract was entered.

Does the service cost money?  If so, how do I pay for the trust deed service?

Like any service, it costs money to enter into this contract.  Hopefully the money you save will more than offset the costs of the service.  Fortunately, the costs are part of the contract and the service fees come out of the contributions you make to the trust.

Can I get out of a trust deed contract?

Probably not.  You are obligated to pay the agreed upon contract payments. If you stop payment or go into default the trustee has the right to freeze your bank accounts and perhaps sequester you to the courts for resolution.

How is the trust deed payment calculated?

The amount of money that you can afford to pay is calculated by looking at your income and then subtracting the payments from all of the secured debts that you owe.  The amount that is left over is used to compute how much you can afford to pay each month.

Any other questions or answers you’d like to know?


Why Government Budgeting is a Joke

Government budgeting is a joke!  Now that the latest government shutdown is taking place and everyone is up in arms, it seems like an appropriate time to share a few thoughts about how ridiculous government budgeting has become.

For starters, no matter which side of the political divide you’re on, you probably agree that Washington has gotten out of control ridiculous.  If not, then you probably haven’t been paying attention.  Without trying to take sides, I’m going to point out a few comparisons between a business budget, a household budget and the government budget.  When I’m done, please feel free to agree or disagree.  You can always make an argument for or against these points, but I hope you find them interesting and thought provoking.

There are No Rules in the Government Budget

The first thing about the government’s budgeting that is ridiculous is that there are no rules.  What I mean is that, normally, if you own or work for a business your budget is tied to your income and to your bottom line.  The goal of a budget is to make sure you are profitable at the end of the day.  The rule is that over the long term, you will eventually get out of debt and run your company in the black.  The same can be said for a household budget.  While you may get behind some times, the general rule is that you spend less than you earn, or at least close.  For the government, they don’t see things like that at all!

First of all, the government spends somewhere in the range of two dollars for every dollar it earns.  No budget can ever work under these circumstances.  Just imagine if you did that at home, or your business took that approach.  In the past, the government was run with much smaller deficits, but the short term outlook by members over the past several decades have completely disregarded any of the historical rules that drive traditional budgeting.

No one addresses the solution!

It’s clear that government spending is out of control.  If my household spending was out of control, I’d find out how I could reduce it and take any necessary steps to improve it.  The government, on the other hand, when they have a chance to pass a budget that can reduce their expenses and deficit, completely ignores the situation and instead passes a law that allows the government to take on more debt.  Think about how ridiculous this methodology is!  If I continually spent double my income every year and took the government approach, I would end up getting a new loan each year to cover my overspending.  Instead of addressing the problem (low income, high expenses) they instead raise the amount of money they can borrow.  Can you say “house of cards”!

Entitlement Syndrome is Now Widespread

Even if the government could get their act together, I’m not sure it would matter.  That’s because the average voter, or the average American, has gotten so used to fat government that they now feel entitled.  That’s right, I said it.  But think about it, every time you look out your window and see a road in disrepair, a streetlight that doesn’t work, or a park that is in dissarray, what is your first thought?  That someone should fix it.  That someone is big government.  Also, think about what goes through most voters minds when they are voting.  If they are given the option of the government paying for more of their needs or less, where will they vote?  And of course there are also the big abusers of the government programs.  The people using welfare to buy drugs.  Many of the nearly 20% of Americans claiming disability (compared to less than 4% 4 years ago).  Or those unwilling to look for a job because they can get what they need for free.  While some of these are a bit on the extreme side, I hope that most would agree that entitlements are a big part of the problem with government budgeting.

That’s all I have for now.  I apologize this wasn’t written with a great outline and with better organization, but I’ve been falling behind in posting on this budgeting blog and wanted to put something out there that may generate some thought.

Leave us your comments – good or bad – about what you think about government budgeting.


Methods Of Saving For College Early On

If you’re already worried about paying for college while you’re still buying diapers, there’s help for that. You can start saving now, and you can do more than putting your change in a jar with clip art of a mortarboard taped to it. Here are a few ways to get started now.

Use a 529 Plan to Save for College Early

The 529 college savings plan, named for the section of tax code that outlines the plan, is a way to put money aside for your child’s college education and take advantage of a few tax benefits to do so. Most 529 plans are sponsored by a state, but in general you can enroll in any 529 regardless of what state you or the beneficiary lives in. There are “direct-sold” plans available for anyone or “advisor-sold” plans provided through financial advisors.

A 529 plan is a tax-deferred savings account, giving it an edge over putting the money in an ordinary savings account and earmarking it for college expenses. Withdrawals are also tax-free as long as they are used for qualified educational expenses. Many states offer additional incentives with a 529 plan, most commonly a deduction on your state income taxes so you may want to find a tax calculator to determine that. In addition, individuals can contribute up to $13,000 per year without incurring a gift tax, and those married, filing jointly can give $26,000 per year with no gift tax. There are no income restrictions and you can open a 529 plan with as little as $25, so it is accessible and affordable to anyone.

Coverdell Education Savings Account

A Coverdell ESA is a savings account designated for the beneficiary’s educational expenses, similar to a 529. One important difference is that the per year contribution limits are much lower – up to $2,000 per year- and the allowable amount depends on the individual’s modified adjusted gross income (MAGI). Multiple Coverdell ESA accounts may be established for one beneficiary, but the total amount contributed each year cannot exceed $2,000 or the amount allowed based on MAGI. In both Coverdell ESA and 529 accounts, the money does not belong to the beneficiary but rather to the account holder, an important distinction to increase financial aid eligibility, since parents are generally expected to contribute 6% of their assets versus the 35% of the child’s assets. In addition, the account owner can change the beneficiary of the account without penalty if the new beneficiary is an eligible family member of the original beneficiary.

Qualified education expenses for a Coverdell ESA are not limited to postsecondary education but also include any K-12 educational expenses, making it ideal for those hoping to send children to a particular school that might otherwise be financially out of reach. The Coverdell ESA also has an age limit, while most 529 plans do not; the balance of the Coverdell ESA must be disbursed on qualified expenses before the beneficiary reaches age 30. If not, the remainder is subject to additional taxes and penalties.

Save for College Early With Upromise

Socking away cash for college far in the future can be especially difficult for those struggling to make ends meet now. Instead, you can save for college by earning rewards on regular everyday purchases. Upromise is an account you can set up to earn cash back when you shop at partner stores, including many grocery stores, drugstores, clothing retailers and hundreds of online retailers. Sign up with a credit or debit card, use that card to pay for eligible purchases and automatically earn 2-10%, small amounts that add up to something big. In addition, you can invite family and friends to link to your account and contribute cash back on their purchases.
The money from your Upromise account can be disbursed into a 529 or high-yield savings account. When the time comes, you can use the account to pay tuition or request a check to use for living expenses.

Save for College With a 401K

Perhaps the wisest choice for parents hoping to provide an education for their children is to invest in their retirement. Many adults are just beginning to really think about the financial reality of retirement when their children are preparing to leave the nest. Colleges do not count retirement savings when evaluating a family’s ability to pay for a college education, and a parent who hasn’t started saving for retirement early will have to play catch-up in later years, making it more difficult to support a college student’s tuition and living expenses. Most companies offer some level of matching funds to employees who direct-deposit a portion of each paycheck into their 401(k). If you’re not saving the maximum amount that the company will match, you’re giving up free money. Regular savings into your own retirement account will help ensure your own financial stability and put you in a better position to assist your child in covering the costs of higher education.

Paying for college is a constant worry for many students and their families. Ever-increasing tuition feeds fears of being “priced out” of an education and the chance for a personally fulfilling and financially substantial career. Advanced planning is key; financial stability has to precede college savings, but the two are not mutually exclusive. There are options for those in all income brackets to help students prepare for college, financially at least. The rest is up them.


5 Reasons to Start a Budget

The term budget can send a chill down the spine of the average consumer. We like to think that our paychecks will accommodate our basic needs as well as our hobbies and personal interests. This belief runs hard against the realities of a slow economy where people have to work multiple jobs just to stay afloat. Creating a personal or household budget might seem like a big deal but the process is simplified when thinking about legitimate reasons to manage earnings.

A great reason to start a budget is to keep more of your weekly pay. Imagine how much money the average person spends on snacks, coffee, and other frivolous items. Each purchase might be a dollar or two but these dollars add up when purchases are made each day. These purchases along with poor decisions on major purchases like health insurance and transportation can eat into take-home pay. You can hold onto more of your money by creating a reasonable budget for your monthly income.

Your weekly, monthly or annual budget can anticipate unforeseen problems that we all experience. We don’t often think that our cars will break down until a tire goes flat or engine gives out. An unexpected medical or legal expense can be devastating for anyone who doesn’t have an emergency fund. A lost job without savings means a cycle of loans and credit card usage that leads to heavy debt down the road. An effective budget sets aside money each paycheck to anticipate these problems.

Individuals and couples looking to move up from their current economic status find budgeting very beneficial. You can use a household budget to set money aside for renovations or repairs to an older home. A budget is useful for anyone who has a steady job and is looking to purchase a condo or home instead of renting an apartment. Your budget might be used to balance monthly expenses with tuition bills for a first college degree or graduate school. Budgeting your paychecks can also make room for a down payment or monthly payments on a new vehicle.

Another good reason to start a budget is to anticipate the high costs of raising kids. New parents might be aware generally of expenses created when raising kids but they don’t realize these expenses until they have children. The combined costs of healthcare, clothing, food, education, and entertainment can dig deep into parents’ pockets. A smart move for aspiring parents is to spend some time before having children sticking to a reasonable budget that accounts for the aforementioned costs. This budgeting warm-up allows parents to get comfortable with expenses and set money aside early in the process.

The ability to retire after decades in the workplace also depends on budgeting. Potential issues with Social Security payments as well as dwindling pension opportunities offered by employers means that workers have to take retirement planning into their own hands. An effective method for budgeting for retirement is to assume that 401(k) and Social Security payouts won’t be around. This approach means that a retiree will have a safety net in this doomsday scenario but should have a sizable nest egg in more realistic scenarios.


How I Budget at My Business

For those of you that don’t know me, I have been working as a financial analyst for the past year.  I am working at a $250 million fitness equipment manufacturer, and as part of my job I am responsible for creating a massive budget that is used to hold all departments accountable for their spending and revenue goals.  While I won’t go into all the details, there are steps that we take to get the end result – a completed business budget.

The business budgeting process begins several months before the budget needs to be finalized.  That’s because it takes a lot of time to get each manager to give their feedback on the budget.  After all, their top goals aren’t budgeting and they often see it as more of a nuisance.  Also, there is a lot of time spent doing multiple reiterations of the budget that are also very time consuming.  In the end, you need to get both top management and every last employee to buy into the numbers if you want it to work.

We start the budgeting process by getting the sales and expense forecasts from each department manager.  This takes a couple of weeks.  The best way to get managers to comply is to give them an easy to understand template that you can easily incorporate into your final budget template.  Of course you should offer to sit down with anyone that wants your help or requires any explanations of how to forecast or budget.  Also, you should give guidelines for them to follow.  In my case, I give them last year’s numbers and some guidance as to how they should approach this year.  For example, you may be experiencing a slowdown in sales and you need managers to reduce costs year over year.  Or maybe, you have lots of growth in the forecast so you want to stress the items needed to reach that growth.  Whatever the end goal of your budget, you should give as much guidance to the managers as you can.

Of course there are two sides to a budget.  The business budget that management wants, which always includes higher sales and higher profitability.  And then there’s the budget the sales department wants, which has sales that they can exceed (higher commissions) and much higher spending than the year before.  That brings us to the next part of the budget process.  Gathering the information and finding middle ground.  As a budget analyst, you need to try to bridge the gap between all involved parties.  That means finding out the final requirements of executive management and using negotiation and a higher starting point to get both sides to agree.

After you’ve gotten all the information you need its time to build the budget model to include everything and summarize the overall budget.  Many companies do this in Excel.  Our company uses a hosted software solution known as Adaptive Planning.  In the Adaptive Planning Budget Software, each revenue and expense line item is entered once.  It is entered directly into the cost center or profit center that it occurs.  Profit and cost centers are typically the same as departments.  For example, there is a profit center for sales (they have profit) and there is a cost center for Finance and HR (they have only costs).  Profit centers also have cost centers assigned to them, but for the most part I hope you can get the idea.

In our budgeting program, we can save multiple versions of the budget and it will automatically summarize and report the data as it is changed real time.  In Excel, you would have to just save different versions and create the summary pages that you desire.

The next step is to have the executive management team review the budget.  They will provide feedback as to where you need to increase, decrease, align, improve or reduce something, and you can then circle back to the manager of that area and further negotiate the required changes.

When this process is done, the business budget you’ve just completed can be finalized and then used to track all of your business metrics such as revenue goals, expenses, shipping rates, etc. – that is until the next budget is due.  Hopefully you only have to do your business’s budget once a year.


How to Budget for the Holidays

Many people struggle with how much money to spend during the holidays.  Making a holiday or Christmas budget is a great way to help you control costs during these times.  What people don’t understand is that a holiday budget includes much more than just presents.  Let’s take a closer look at the things you should look at when making a budget for the holidays.

Quantify Your Holiday Budget.  This is something most people already do.  For example, our family sets a dollar amount per person for buying gifts.  Some families set an overall dollar amount to make their holiday budget.  This is the part that most people do, but this is also the place where most people go wrong. Budgets get out of control mostly because people spend more on gifts, buy gifts for more people, or don’t take into account the other ways that they spend money for the holidays.  Here are some of the other spending that you should include in your budget.

Presents and Gifts.  Gifts are one of the larger expenses for many families.  Most people start with a ballpark budget for gifts and then, as the holiday gets closer, they get excited and outspend their gift allotment.  In my case, when I struggle finding a gift for someone, my tendency is to increase the price range.  Also, I’ve gotten into trouble some years when I started buying gifts for people like teachers, mailmen or friends.  Keep your gift giving simple and set hard and fast budgets and you can help reduce overspending.

budgeting for the holidaysFood.  Food is sometimes the biggest expense for some families and is often overlooked when creating a holiday budget.  Not only do people splurge on buying treats and exotic foods, but people tend to go out to eat more often during the holiday season.  Also, when it comes to Christmas parties and other events, it’s easy to drop a few hundred dollars on food for a party that you don’t even consider a holiday expense.

Decorations.  Don’t forget to include decorations, lights, flowers, Christmas trees and ornaments as part of your holiday budget.  These costs can add up quite a bit if you don’t budget for them properly.

Christmas Cards.  Sending out holiday cards can be very costly.  Especially if you make custom cards and have a big list.  The stamp price alone is nearly $50 for every hundred you send.

Things You Buy Because You’re In a Good Mood.  I find that when I am out holiday shopping and enjoying all of the decorative shopping malls and store displays, that I am more likely to spend money.  I feel like the holiday itself is a way to justify spending more money.  Try not to let this happen and you can help save your budget.

Going Overboard.  As the holiday gets closer and you see your kids excitement levels rising, don’t go overboard.  Don’t try to outdo the gifts you gave your girlfriend or spouse last year.  Going overboard can end up costing you more money every year, because expectations get set and you can’t afford to disappoint.

Do you have some tricks that help you stay on budget during the holidays?  Please share them if you do.


25 Ways to Save Money

In difficult economic times, we all spend considerable time figuring out how to make our paychecks last longer without giving up essentials. Earning additional money can be difficult when part-time jobs are unavailable and temporary positions are too fleeting for reliable earnings. Your family can develop a checklist of 25 methods of saving money that can turn pennies into dollars over time. An important step toward saving money is to think about every purchase made on a daily basis and determine whether that purchase is important.

An easy way to save money is to cut down on expensive food purchases. You can pack lunches each day with affordable fruits, vegetables and small snacks that are more affordable per item than fast food. On occasions where dining out is required, choosing lunch rather than dinner portions equals a few dollars saved per meal. Another cost-saving tip is to create burritos, soups, and other items that can be frozen and enjoyed later when you don’t feel like making dinner. The best bet when saving money on food is to always make food rather than paying for the convenience of fast-food or casual dining restaurants.

Apparel, shoes, and fashion accessories can be costly for tight budgets. The latest fashions might seem out of reach but a few shrewd moves can yield an affordable wardrobe. A trip through the local secondhand store might highlight dress shirts, pants, and accessories donated by people moving out of the area. You can shop at your favorite retailer but simply wait after new releases to find shoes, underwear, and other apparel on clearance. As one season moves into the next, you can often find past releases as clearance items discounted 25% to 75% off initial prices. Families can keep kids clothes if they anticipate new members of the family or to swap with neighbors. You can also arrange a clothing swap with your friends and family to share fashions without spending a dime.

A few sensible changes to your household routine can also contribute to greater savings. Your heating and air conditioning system can rack up high costs during temperature extremes. You should lower your heating and air conditioning when out of the house while keeping use moderate when at home. The electric bill can be reduced by planning your laundry and dishwashing routine. A fully loaded dishwasher or washing machine is more cost-efficient than a hastily filled machine. Families with ample backyard space can grow their own fruits, vegetables and spice to avoid costly trips to the grocery store. This abundance can be shared regularly during potlucks with friends and neighbors that cut food costs for everyone. It is also possible to reuse plastic bags, bottles, and jars in the future, which cuts down on waste as well as the costs of storage products.

Commuting to work is not only wasteful in terms of time but gas money and tolls where applicable. These costs are felt not only by employees but employers that send out couriers, sales people, and other staff. You should consider public transportation options in your area to save fuel and avoid wear and tear on your vehicle. This review might yield ride-share schemes, commuter buses, and other services that are more affordable than commuting costs. Another approach is to ask your employer if your work could be done through telecommuting rather than driving to the office. Major corporations have been allowing IT professionals to telecommute for years and many tasks can be completed from home computers.

The workplace can produce major expenses for the average employee who feels a need to develop camaraderie with colleagues. You should consult with co-workers to reduce costs from birthday parties, group lunches, and other events. For example, a birthday lunch with gifts at a local restaurant could be an office potluck with a modest limit on gifts. You can also adopt cost-saving methods from the workplace in your personal life. These practices range from reducing printing costs by using electronic documents to shutting off lights when you walk out of a room.

You need not eliminate fun from your life when trying to save money. Most communities offer free concerts, festivals, and public events designed to attract broad audiences. These programs might be hosted at local colleges or high schools, providing educational elements to your entertainment. Your local library not only offers the latest books but magazines, CDs, and DVDs at no charge. The added benefit of using the library is that greater use will lead to higher funding for new acquisitions that keep users happy. You can also trade books, movies, and music with friends and co-workers to stay entertained on a budget.

A major cost for many families is the monthly expenses for cable television. Quickly glancing at your monthly cable bill might show unnecessary expense based on your programming tier. You should consider reducing your cable package at least one tier if possible to save a few dollars each month. You might be able to negotiate free premium channels or reduced rates on higher tiers when speaking with your customer service representative. Movie fans likewise might not like missing their favorite films as they reach theaters but second-run theaters offer affordable tickets for recently released movies. These theaters often sell tickets at least 50% cheaper than first-run theaters.

These cost-cutting tips should equal money saved even after a few weeks. You should focus on how to put aside this money to highlight the value of saving. A change jar where coins and bills can be placed each day will fill up quickly to reward thrifty behavior. The 52 Week Challenge requires participants to save $1 in the first week and add a dollar to each week’s savings for an entire year. This popular savings method equals a total haul of $1,400 for the faithful participant. You can also focus on more conventional savings methods like a basic savings account that will accrue relatively low interest over time. As you use these various cost-cutting methods, the amount you deposit in this account should rise each month.


Get That Discount: How To Negotiate A Sale

If you get sticker shock from something you want but can’t afford, think again. Many prices are negotiable given the right setting, and you may be able to get what you want for less.

  1. Just Ask

Many people feel uncomfortable or embarrassed about it, but negotiating a price really benefits both parties. A salesperson would rather make a sale at a lower price than none at all, and you get what you want for less. Practice your skills often to increase your comfort level. Garage sales and flea markets are a great place to start. Once you feel confident, go for a better deal on your next big-ticket item such as an appliance, electronic equipment, furniture, hotel stay or car rental. The simplest path to a discount begins by asking “Can you do any better on the price?”  You can also ask if any markdowns or promotions will begin soon, and you may be able to buy at that price if the seller fears you won’t make a second trip back later.

  1. Be Casual

If you really want a particular item, don’t let the seller know. Your willingness to decline an item if the price is too high gives you negotiating power. If the seller thinks you will pay a high price, he or she will insist on a high price. Give the impression that you are just browsing and picked up something that caught your eye.  Say “It’s nice, but I can take it or leave it.” Show hesitation about the purchase; a long pause as though you’re having difficulty deciding will usually push the seller to offer a better price or add something extra to the deal. If the seller doesn’t budge, do walk away. There’s a chance they’ll chase you to offer a better price.

  1. Knowledge is Power

Research the typical price for the item you want. Knowing the going rate enables you to spot the markup that less informed customers would pay without question.  You can also use a competitor’s price to negotiate. Retailers hate to see a sale walk out and take their business elsewhere, so knowing that a customer is already looking elsewhere gives them incentive to make the sale at a better price.

  1. Pay Cash

For an independently owned business, paying with cash instead of plastic could net a discount. Processing a credit card costs the business, and checks take time to clear along with the risk of a bad check. Cash is better than inventory, so the upfront payment also gives you negotiating power, especially if you have cash but are just a few dollars short of having the sticker price.

  1. Be Patient

Salespeople are trained to control a sale. Be friendly but firm and stay focused on the price. Negotiation takes patience, and the side with more of it will get the better end of the deal. If a salesperson says he or she doesn’t have the authority, ask for a manager.

Remember that grocery stores, discount stores and large chains may not be willing to negotiate price, so don’t waste your time and theirs. Be friendly and stay confident and you will be able to negotiate like a seasoned shopper in no time.


Save Money By Doing It Your Self

To Do It Yourself Or Not To Do It Yourself?

Are you a do-it-yourself type? Do you aspire to be? With the increased specialization of labor in today’s workforce, the character of the jack-of-all-trades handyman is disappearing. You may want to save money on a job by doing it yourself, but is it always cheaper? Even if it costs less, will the savings be worth the time you spent on it? Several factors can help determine whether you should tackle the challenge or stick to what you know and leave the rest to the pros.

Do you have the skills?

Do you know what the project requires, or could you learn by doing a little research? Are you prepared for unexpected complications with the project? There are plenty of resources out there for those who are willing to learn, but some skills require experience, practice and finesse that you won’t learn in a week. Also consider if you would be proud of the job you did yourself, or if you would rather trust

Do you have the tools?

Once you have the skills, you need the equipment for the job. If you have the equipment or can borrow it from a friend or neighbor, then you can go ahead with confidence. However, if you have to buy all new power tools for the job and you only use them once, the project will probably cost you a lot more overall than if you had hired a professional.

Do you have the time?

Will you be able to complete the project just working nights and weekends or taking a few vacation days off work to finish it? If you have great enthusiasm starting a project and your motivation wanes as time goes on, a do-it-yourself job may turn into a half-finished nuisance you’d rather be rid of. Before starting, estimate a best case, worst case and most likely case for how long the project will take. If it seems likely to take more time than you can reasonably commit, outsourcing is best.

Is there danger involved?

There are some situations in which the potential danger far outweighs the potential benefits of doing the job yourself. Some work that you should never do yourself unless you are a professional in the field: electrical repairs, plumbing, asbestos removal, gas appliance repair and roofing. Safety always comes first, and an expert will do the job correctly without risking injury or damage to your home.

Is it worth the time?

How do you value your time? Is the task something you would enjoy doing yourself, or are there other ways you would rather spend your time and resources? Consider the time you would spend as hiring yourself. Put a monetary value on your time, a cost per hour for your time. Compare the cost estimate from a professional to the hours required for you to do it yourself. Considering the numbers along with less tangible factors will help you feel confident in your decision.


Eight Everyday Items Worth The Extra Dollar

The classic conundrum: when shopping, do you seek to spend or search for savings? Is it always true that “you get what you pay for”? While you can sometimes find a great product for a lower price, often a lower price means less durability, reliability and value. There are three basic rules of thumb for products worth spending the extra dollar. If it is used daily, you will almost definitely notice a difference in quality and wear over time. If it is a big-ticket item, something you buy only once every few years and costs a lot of money, you might lose money buying two or three cheaper products over the lifetime of one higher quality option. Lastly, if a breakdown or malfunction would be inconvenient, choosing the cheapest option incurs risk that you don’t need. Think of the dishwasher that breaks and floods the kitchen or the car that breaks down in the middle of the family road trip. Here are 8 everyday items worth the extra dollar.


If you enjoy cooking at home, you need good quality pots, pans, kitchen knives and other utensils. If you don’t cook often, quality cookware will make cooking simpler and the results better tasting. Pots and pans with a copper bottom heat more evenly than cheaper counterparts so that food cooks more evenly and burns less easily. A good block set of knives will include every type of knife you will need in the kitchen, last longer than cheap cutlery and require less maintenance.

Weather appropriate clothing

If you live in a climate where temperatures are below freezing from November to March, a quality winter jacket is worth the investment. In order to really stay warm, a down jacket, wool coat or waterproof shell with fleece lining is a must. Retail for such a coat ranges from one hundred to several hundred dollars. Same goes for warmer climates; you’ll be glad you splurged on lightweight, breathable clothing for the added comfort. Clothing designed to keep you cool with synthetic fibers will be much more comfortable than a standard cotton t-shirt.

Living Room Furniture

Furniture is a big-ticket item that you will probably own for 5-10 years. Since it will probably be used often, it makes sense to pay more for comfortable furniture that will last. You will feel the difference, and so will your family and friends. You only want the best for them too, right?

Bed and Bedding

Your daily health and energy level largely depends on the quality of your sleep. A more expensive mattress is often the better value simply because it will outlive a cheaper mattress and last about ten years, not to mention the better sleep quality. Can you put a price on a good night’s sleep?


Do you carry stuff every day? Is the way you carry it comfortable? If not, you could be causing yourself unnecessary muscle aches and back pain. Students with backpacks often carry heavy loads and depend on one backpack for several years. Since backpacks are often tossed, dropped, overloaded, and carried everywhere, backpacks made of cheap materials won’t do the job. Comfort is also key, so durable materials and thick, well-padded straps are requirements. Consider also the inconvenience if your bag rips on the way to class. You have to find a new way to carry books, supplies and possibly a laptop for the day, then shop for a new backpack as soon as possible. For those in the white-collar world, a leather briefcase or attaché case is more reliable, durable and professional than a cheaply made cloth bag.

Your Car

An unreliable car is both costly and inconvenient. If you have a long daily commute, both comfort and reliability become especially important. The right vehicle depends on each individual’s needs and wants, so a more expensive car may or may not be “better” for everyone. Bottom line: don’t choose a car based on its prices. There is an extraordinary variety and potential for customization in automobiles, so know your own wants and needs, find a car that suits you and forget the rest.

Home Appliances

The idea is simple; a more efficient washer will save money in energy and water usage over time. But how long will it take to recoup the higher cost? An Energy-Star certified washer uses 14 gallons of water per load versus the 27 gallons that a traditional model uses. At calculators for appliances, lighting and electronics can give you a detailed overview of savings from increased efficiency. Since washers, dryers, dishwashers, refrigerators and the like are large, costly and (hopefully) durable goods, high quality pays for itself in savings and convenience of not having to replace it frequently.


If your TV is a silent fixture of your living room and speaks only in the voices of news anchors and weather forecasters, the most basic of television sets will work for you just fine. However, if you avidly follow sports televised sports, love movie nights or host parties to watch a popular TV series, you’ll enjoy the bigger, better electronics every time you turn on the tube. Same goes for the home stereo system; for those who really enjoy quality sound, the difference between the high end and the bargain is the difference between the New York Philharmonic and your preteen’s school band concert.

Toss-up: A Cell Phone

This comes with a disclaimer. A broken cell phone is a hassle; personal and professional contacts wonder why you suddenly stopped responding while you do your best to find other means of communication. A durable phone means you may not have to rush to replace a broken one but instead upgrade when you choose. It is important to have a cell phone that really suits your needs, so if your phone is your right-hand man – figuratively as well as literally – the phone that works may be worth the extra cost. However, if you prefer to carry the newest model at all times, it doesn’t make sense to splurge on a phone that you won’t be using in a year.


How To Save Money With Cheap Car Insurance

While state minimum car insurance may not be enough for every driver, auto insurance companies can provide cheap car insurance for drivers on tight budgets looking for affordable premiums. All 50 states have financial responsibility laws that require every driver to have a minimum amount of car insurance and provide proof of insurance as well. Although this is intended to protect the public from negligent drivers who cause injury and damages to others, most states have low liability limits that may not provide enough coverage, making it important for drivers to find cheap coverage so they can purchase enough protection from their carrier and shield themselves against out-of-pocket expenses for repairs and potential litigation.

Bodily Injury

Mandatory state requirements are usually $25,000 per person and $50,000 per accident. Medical bills and payments for an injury to one person in an auto accident can easily exceed the $25,000 limit. If more than one person is injured in an accident, the cost of the injuries could reach more than $50,000 per accident coverage. If an insured driver has any financial assets, a court can force the sale of the assets to satisfy judgments for injury claims that exceed the policy limits. For this reason, buying low cost car insurance online does not necessarily mean purchasing coverage at the state minimum, but finding quotes from a reputable, top ranked insurance company so family’s can buy enough to adequately cover themselves.

Property Damage

Although the limits vary between states, most states have a minimum property damage limit of $10,000. While this may seem like a lot, the average new car in the U.S. costs nearly $25,000. In a serious accident, the cost of car repairs or replacement could be more than $10,000 and the driver at fault for the accident would have to pay the difference out of pocket. Carrying state minimum limits coverage does not absolve the driver from responsibility for damages that exceed policy limits.

Uninsured Motorist

Uninsured motorist coverage is similar to bodily injury and property damage liability insurance, but UIM covers the insured driver for injuries and damages caused by a driver who is uninsured or has insufficient insurance to pay out the no-fault driver’s claims. Not all states require that drivers carry uninsured motorist coverage, but in some states that don’t require underinsured insurance, drivers have to sign a waiver of coverage. Uninsured motorist protection can be very cheap, giving drivers the opportunity to protect themselves with extra coverage just in case an opposing individual was not responsible in purchasing coverage or making on-time payments. Drivers comparing car insurance quotes can easily add UIM coverage onto their policy just to see the rates car insurance companies charge.

No Fault

Only 10 states have no fault car insurance laws, and not all ten require that drivers carry personal injury protection (PIP car insurance) coverage. PIP insurance or medical payments coverage pay medical bills for the driver and passengers in the insured car if they are injured in an auto accident, regardless of who is at fault for the accident. Some states, like New Jersey, offer optional protection for lost wages, lost services and a death benefit at an additional cost.


Insurance companies, agents, and brokers know how to cut corners on coverage just to make your premiums look low, so drivers seeking a policy should ask questions first. Don’t ever just ask for the cheapest rates they can get you. This will likely result in absolutely bare minimum liability limits, and what could have cost you an additional $100 per year could end up costing you thousands in out-of-pocket repair costs, medical bills, and attorney bills.

Multiple Policies. In some cases, it pays to have more vehicles insured due to the savings discounts for “multiple car coverage”. A family of three may pay more for insuring two vehicles than they will for adding a third, even if it is not being driven. Additionally, if one car is newer and more valuable than another, don’t buy the same coverage for all the cars in the policy. Buy full coverage for one and liability-only protection for the other if you can afford to replace it in-case of a major accident. Usually, the threshold is, if a car is worth less than $5,000, it is probably better to have liability coverage only and forego more protection.

Furthermore, insuring a vehicle with the same company that carries your life insurance or other type of insurance is another way to save. Companies usually offer up to 15% off each policy you buy with them.

Low Mileage. Another way to save is to decrease the usage of each vehicle by asking for a “Low Mileage Discount”, while choosing higher deductibles. Not that you needed statistics to prove it, but for obvious reasons, the less you drive, the less chance you have of getting into a car accident and submitting a claim to your carrier.

Customer Loyalty. According to my friend in the insurance industry, this is the most publicized discount, but not 100% of consumers who qualify have it applied to their discount. Every car insurance policy-owner should call their carrier and ask for it to see if they can up the percentage discount or if they qualify, no matter how long they’ve been a customer (assuming it’s been at least one year, though).

Defensive Driving Classes. Some states require insurers to offer a 10% discount for up to 3 years to drivers who have completed a defensive driving class. The classes are inexpensive, about $30 and take about 8 hours. Even in states which do not mandate the discount, many insurance companies offer the discount voluntarily. Some classes are offered online, but drivers seeking cheap car insurance should make certain that the school offering the classes is approved either by the state or by the insurance carrier.

Final Word

Most drivers get online quotes to find affordable rates, whether they need state minimum auto insurance coverage or a policy with more protection. Drivers can also easily compare different types of car insurance, including collision coverage, liability insurance, or comprehensive car insurance. Instead of dealing with a sale rep, agent or broker, just add and subtract these coverage options from your policy and you can see how much each one adds to your monthly or annual premiums. Like anything else, the more information you have at hand, the better decisions you are able to make.

To learn more about saving money, investing, credit and debt, real estate and career advice, check out Gajizmo was designed to educate and help consumers make better financial decisions in their lives.

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7 Things You’re Paying Too Much For

If you’re tired of your monthly bank account balance vanishing into oblivion faster than you can say “Pay Day,” take a look at these common expenses many Americans are paying way too much for. You might be able to cut your spending by taking a few simple actions.


If you just can’t start the day without your standard quadruple-shot Venti Americano coffee, consider the hefty chunk of change this habit is likely taking out of your pocket. Starbucks and many other coffeehouse franchises are notorious for marking their products up by as much as 300%. Someone who spends $3 or more every day on fancy lattes is way overspending on coffee – you could make your own at home for less than a coffee is something you pay too much money forquarter a day.


Take a look at your monthly expenses to make sure you know exactly where your money is going. You may be surprised to find that you’re paying for things you don’t use anymore, such as a magazine subscription or a gym membership. You may also be able to cancel other subscriptions in favor of cheaper alternatives. For example, many customers have opted to cancel their expensive cable subscriptions since the rise of online video streaming companies such as Netflix and Hulu.


A recent study by Credit Sesame reported that a third of Americans are overpaying on loans by as much as $541 a month. That’s more than $30,000 in less than 5 years. If you’ve improved your credit since you first took out a loan for a car, for your home or any other reason, you may be able to refinance and get a much better rate. As a matter of fact, improving your credit score also could help lower your payments on other expenses, such as utilities, rent and insurance.


If you’ve become complacent with your insurance company and the rates you’ve been paying for years, you’re probably paying too much. It’s important to shop around every year or so using websites to compare rates and offers from a variety of providers to find the best value available for you. You may also be able to adjust your policy if you’ve had the same coverage limits for several years in addition to finding other smart opportunities to save, such as good-driver and bundle discounts.


How often do you dine in at restaurants or order take-out instead of cooking or packing a meal from home? If the answer is more often than not, you’re spending way too much on food. The $7 you spent on a hamburger meal from a fast food joint could be used instead to buy an entire chicken from a grocery store and create multiple meals for yourself or your family. Even if you only buy food from dollar menus, purchasing staples from a grocery store that can be combined to form a variety of meals is much better for your body and for your wallet than eating out.


According to the Bureau of Labor Statistics, the average American family spends almost $3,000 a year on gasoline alone. If you’re shelling out hundreds of dollars on gasoline every month, you might consider cutting back on road trips and finding alternative modes of transportation such as carpools, public transportation or bicycling. It’s also important to monitor gas prices and fill up when you’re sure you’re getting the best value. Don’t just choose the first station you see when your car is on empty – plan ahead to get the biggest bang for your buck.


It’s easy to quickly burn a hole in your pocket when you go out for a night on the town or even just take the family out to a movie. It’s best to take advantage of cheap or even free entertainment options such as a trip to the park or other community activities, but if you (understandably) need to enjoy an occasional fun night out, just make sure to a plan. Take a limited amount of cash with you to the bars, and eat a big meal before going to the movies so you won’t be tempted to blow $10 or more on an overpriced bucket of popcorn and a small soda at concessions.

The bottom line is that you can improve your bottom line by taking more control over your spending. Choose where you can cut back, and enjoy the extra cash you’ll have in your pockets.


When families try to save money, they usually turn to cutting discretionary spending first. No more dinners out, nights at the movie theater or shopping sprees at the mall. However, most overlook a potential source of significant savings: the grocery bill. Slashing the food budget sounds like a painful task for those in the most extreme poverty, but there are many ways to cut costs and still eat well.

  1. Know if it’s really a deal. Don’t be fooled by big, bright sales flags and pictures in ads. Being “on sale” doesn’t mean it’s the best price you can find for the item. Stores can mark an item down less than a dime from its original price and call it a sale. The smart shopper’s solution is to keep a price book. Record the usual and the best prices you paid for items you buy often and compare each so-called sale to those numbers. Also pay attention to how often stores offer these best prices. You want to buy enough to last until the next sale but not so much that you store it forever.
  2. Buy in bulk ONLY what you can use. Buying in bulk isn’t such a deal if you wasted half of the jumbo size container you buy, so buying everything in bulk doesn’t always lead to savings. The best items to buy in bulk are canned foods and dry goods like flour, sugar and rice, for example. Bulk ketchup, not so much.
  3. how you can cut grocery bills and eat wellAsk your local grocer how the store deals with items nearing their expiration dates. You may be able to buy many products at a discount because these dates reflect a very conservative estimate of the shelf life of the product. Many bakeries will sell day-old bread and other goods as well, and you can freeze any extra above what your family will eat fresh.
  4. Coupons. You don’t have to take this step to the extreme to save money. Savings can be as simple as going online to a few great sites like RedPlum, SmartSource and Become familiar with the coupon policy at the stores where you shop. Some stores offer double coupon specials on certain days. If the store allows, you can get great deals by combining manufacturers’ coupons with store specials. However, some may not accept internet coupons or have other specific limiting policies, so to keep it simple, know the policy before you shop.
  5. Store brands can offer great savings on basic items because you don’t pay for a name, but if you are brand loyal, you have options for saving as well. Most brands have Facebook pages, Twitter accounts and email lists to share news, promotions, special offers and coupons with loyal fans.
  6. A few quick hints: More expensive items are usually placed on shelves at eye level while the lower-priced counterparts occupy the highest and lowest shelves. Beware the items conveniently displayed near the checkout; travel sized items and candy at inflated prices are there to tempt you.
  7. Lastly, be alert at checkout. Cashiers have a monotonous job and even the best make mistakes. If something doesn’t add up right, speak up.

You can save money on groceries without resorting to ramen. With these secrets to savings, you can keep your fridge, your stomach and your wallet full.


5 Ways to Immediately Lower Your Energy Costs

Of all the things you pay for each month, it’s a good bet your energy bills take up the lion’s share after your rent or mortgage. Whenever you’re tightening your budgetary belt, thinking about ways to decrease your energy use is a particularly useful and painless tactic for limiting your expenses.

The first thing to do is take a look at your existing energy bill. If you’re spending a lot of money each month, find out whether you’re in a deregulated market or not. If you are, you might be able to save just by choosing a new energy plan. For instance, people that compare electricity rates can usually save a lot of money just by switching providers.

If you don’t live in a deregulated market, there are still plenty of ways to save money on your energy costs. Try out some of these easy tips, and you could be surprised by just how much you can save!

1. Replace your light bulbs

immediately lower your energy costsIf you still have incandescent light bulbs in your home you’re still using technology developed over 100 years ago! Times have changed and there are several new types of light bulbs that offer increased efficiency and thereby lower running costs. Replace your old light bulbs with either CFLs or LEDs, and you’ll quickly start saving money on energy.

2. Use power strips

Many electronic gadgets use power even when they’re turned off. How do you keep that from happening? Use a power strip! By plugging all your electronics into a power strip and flipping the switch when you’re not using them you’ll prevent any unnecessary power usage.

3. Adjust your thermostat

Whether it’s freezing or sweltering outside, you can make an adjustment to your thermostat that can save tons of energy. Just raising or lowering your indoor temperature by two degrees will make a marked difference in your energy costs. You can make up for those degrees by wearing thicker layers or running fans – both of which use little to no energy and can keep you just as comfortable.

4. Always cover foods when refrigerating them

Taking the extra step to cover your food and drink with foil or plastic before putting them in the fridge is a simple action that can prevent your refrigerator from working harder than it has to. This is particularly true for hot foods because the heat they put off raises the temperature in the appliance, making the condenser work harder to return the temperature to its coldness setting.

5. Don’t use warm water for cooking, washing dishes or laundry

Whenever possible, try not to use hot water. Your hot water heater uses a lot of energy, and in most cases you don’t really need warm water. If you’re running the washing machine, use cold water to save energy and keep colors from fading. When you’re cooking, there’s no need to put hot water in a pot that you’re about to boil anyway. For dishes, cold water is just as effective as long as you don’t let the dishes pile up for a few days before tending to them.

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Gel pens?  A secret code?  Paper cut-out letters?  These are some unique ways in which you can write a budget.   Actually creating a budget, however, is a whole different ballgame.  There are a lot of different factors involved, perhaps the most important being that you want to write a budget you can actually stick to for a long period of time. The most important thing to understand before starting a budget is that you absolutely have to have one to make the best decisions with your money and ultimately reach your financial goals. Since it has to be done, find a way that makes it do-able for you and your family.

Try making budgeting a game.  This can be either personal or with your family members.  If budgeting somehow has an element of fun, it will be much easier to stick to in the long run.  While making it fun, you can also find ways to make it a bit competitive; this can also push your family and yourself to make better choices with money all around. Here are a couple different things you can try right away to get your budgeting game started.

how to start and stick to your budgetSee who can be the most creative with not throwing things away.  Ultimately, reusing things you would usually get rid of will save you money because you will (hopefully) cut down on buying new things.  They key is to repurpose items; give them a new job to do.  For example, old glass jars can be repurposed as cups and containers.  Old clothes and t-shirts can be used for new blankets, to cover pillows, and as washcloths and dishrags.  While this does create some extra work for you and your family, it could be really worth it if you save money for something fun in the long run, like a family vacation or something new for your home.  Aside from saving you money, repurposing keeps everyone thinking creatively, which is always good for adults and children alike.  It is also great for the environment because you are cutting down the amount of waste your household produces in a year.  Basically, everyone wins.

Cut coupons competitively!  Couponing can get out of hand, but, at the same time, it does save you a lot of money (if you have the will power to sit through hours of clipping and searching for the things you need.) Before big family shopping trips, (or personal shopping trips) have everyone make a list of what they want or need and then sit down with the coupon section of the newspaper.  Have everyone cut out coupons for the things that are on their lists, and when you get to the store, see who has saved the most.  They should probably get a prize of some sort (perhaps the opportunity to buy one item that is not attached to a coupon? Just an idea.)  Overall, having some fun family rivalry just might take enough of the drudgery out of couponing and budgeting in general to make it worthwhile.


Top Items To Buy Used

Many stores claim to “eliminate the middleman” implying that one less retail markup means big savings for you, the customer. However, you can eliminate the retail markup and then some by buying used. You can feel good about saving the environment too by keeping still-useful items out of landfills and buying fewer new products. Here are the top ten items to buy used and save money.


Cars depreciate in value significantly over time (except collector cars), with the greatest value loss in its first years. The moment you drive a new car off the dealership lot, it drops in value from the price you paid to the wholesale price, losing about 11% of its value on average, and after five years is worth about a third of its original value.


top value used itemsMost people remodel, change residences or update their home, but most furniture is made to last for twenty years or more given that furniture is made to withstand years of daily use and show little visible wear. Secondhand is often equaled to new but at half or less of the cost. Upholstered furniture like couches, recliners and loveseats wear out soonest due to flattening of the cushion and fabric wear, but hardwood pieces like dining tables and chairs, end tables and dressers can last for decades.

Kids’ Clothes and Toys:

Kids outgrow clothes and grow tired of toys quickly, so it doesn’t make sense to splurge on new clothes for a short period of ownership. At thrift stores and garage sales you can buy kids’ clothing for just a few dollars, and for most children it is the novelty of the toy, not its price, that counts. Bicycles, particularly, are expensive if bought new and are quickly outgrown or crashed. Bike helmets, however, should be bought new, as well as car seats or booster seats.

Musical instruments:

For a child’s first introduction to playing and performing music, a used instrument will suit their needs on a budget most parents can afford. Used is also best if your budding Beethoven turns out to be a Brahms instead and loses interest in the instrument in just weeks. A new, top-of-the-line piece is excessive unless you plan to perform professionally. Whatever you choose, buy from a reputable dealer who can sell you or help you find additional supplies, accessories and repair services.

Entertainment Media:

Just-released CDs and DVDs can set you back a Jackson each. Pre-owned CDs and DVDs are often available at thrift and consignment stores, pawn shops and video rental stores for less than a Lincoln apiece. Used books are another great way to save. Why pay full price for an item you’ll only use once or twice? Unless the book you want is a popular new release or a recent bestseller, you can find it at a used bookstore like Half Price books, which also sells CDs, records, textbooks and more. You can shop online too; on eBay and Amazon’s third-party seller network you can easily search and compare prices from different sellers around the country.

Exercise and Sports Equipment:

Thirty-eight percent of Americans who make New Year’s Resolutions want to lose weight, according to a survey by GNC. In a well-intended burst of enthusiasm, many rush out to buy exercise equipment for the home only to find that it gathers dust in the back room months later. The secondary market is full of barely-used pre-owned equipment at affordable prices. Durable sporting equipment like baseball bats, nets, tennis rackets and hockey sticks are also best to buy used, since adults and children alike can go through phases of fascination and apathy with a sport or activity.

Power Tools:

Another common New Year’s resolution is do-it-yourself home improvement. Even when the job is finished, power tools purchased for the project might never leave the garage again, even though they could withstand many hours of use with proper care and storage. Local classified ads, pawn shops and online seller postings are great places to find the right tools for the job. Reconditioned tools are another option if you want to know exactly what you’re getting. They are repaired and tested by the factory, and most come with a one-year limited warranty.


Gemstone jewelry sells with a huge retail markup. Consider instead estate sales and auctions or a reputable pawn shop. If buying from an independent seller you may want to have the item appraised before buying. Some jewelry stores also sell pre-owned pieces so you can compare side-by-side. Vintage jewelry has a certain mystique and appeal. Fashions change in jewelry and you may find a style from the past that perfectly fits you or a loved one.


For college students who have to buy their own, textbooks can cost $300 to $800 per semester. Why buy new for an item you will use for a semester and never again (or maybe not use at all)? There’s also the risk that a professor will change textbooks or a new edition will be published and you won’t be able to recoup any loss through resale. Instead of funding the overpriced bookstore at your university or ordering online and paying for shipping, look for other students who buy and sell books. Facebook and Craigslist have connected buyers and sellers in a city like never before, so you can save by buying used at the right price, and you support a classmate who also needs to save money for groceries, so you both win. If only Economics 101 was really that easy…

Designer Clothes and Accessories:

With designer clothing, the cost comes from the label, not the item. Those who buy designer duds update their wardrobe often and sell clothes to consignment stores or thrift stores, where you can get them for the same price you would pay for new jeans of average quality from another brand.


That’s right, you can get an iPad for less. Refurbished electronics are factory-tested and good as new. The only aspect diminished is the price. Look for a warranty just as you would if you bought new; one year is ideal.

When buying used, it’s not about getting what you pay for, it’s about getting the quality that someone else paid for by purchasing after the early depreciation in value while the item is still prime for use.


First Three Bills You Should Cut

The basis of a budget is elementary: spend less than you earn. Spending can be divided into two types. Fixed costs are those that must be paid every month, the same amount or approximately the same. Variable costs are just that, unpredictable and varying from month to month. However, some of your bills might not be as fixed as you might think. If you’ve trimmed the fat from your budget and overlooked monthly bills, writing them off as “fixed,” you’re missing out on an opportunity for savings. Here are the first three bills you should cut to balance your budget.

1. Cell Phone

While you probably won’t rack up a $201,000 cell phone bill, you’re likely still paying too much. Data, apps, and overage charges on top of your regular bill aren’t so smart for your budget. For starters, consider the accessories and peripherals for your phone; cases, covers and chargers add significantly to the overall cost. Buying them where you buy the phone is convenient, but the same items likely cost less online or from a third-party outlet.

If you’re new to smartphones, monitor your data usage and find the plan that fits your habits. A service like BillShrink can help you navigate the maze of plans, terms, conditions and fees. If you use only a small amount of data, you could save money by switching to a less expensive plan, but once you’re over your data, the charges can pile up like unread emails in your inbox that you can’t access without incurring more charges. To reduce your usage without sacrificing productivity- or Angry Birds- be sure to take advantage of free wi-fi hotspots. It seems obvious, but according to a Nielsen survey, only half of smartphone users access free wireless internet connections in a given month. Some apps eat up data even when you’re not actively using them, so you may need to proactively turn off GPS or other background apps and disable automatic updates. Ironically, there’s an app to help you locate and turn off vampire apps: Advanced Task Killer.

save money by cutting these bills firstPaying for cell phone insurance? Don’t. Insurance is meant to guard against catastrophic loss and protect what you can’t afford to replace, like your home. If you can’t afford to replace your phone, you overspent on it. Consumer Reports recommends keeping your old phone and reactivating if your new phone suffers an untimely death; use it until you qualify for another free or reduced-priced phone.

If you travel overseas, plan to change to an international plan or turn off your phone completely. You could be charged international roaming fees just for having your phone on, in addition to fees for incoming calls and texts. Most carriers allow you to change to an international plan on a month-to-month basis, so there’s no reason to rack up a huge bill in roaming charges.

2. Heating and Cooling

Depending on your choice of location, heating or cooling bills (or both) can burn a hole in your wallet. Regulate your temperature and your monthly bill by preparing your home and getting smart about utilities. To keep out winter’s chill, make sure your home has adequate insulation, an investment that pays for itself many times over. Cover old windows that leak heat with plastic kits available at home improvement stores. Even a fix as simple as a rolled-up towel on the sill or at the base of a door can make a surprising difference in the average temperature.

Find your lowest comfortable temperature and set your thermostat. There’s no reason to shiver to save money, but you may not even notice one or two degrees of difference, and one degree means two percent savings on the heating bill for the average house. Nighttime is perfect for lowering the temperature further because body temperature actually drops to prepare for sleep.

For those in warm climates who would like to chill out, there are options besides running the air conditioner like a marathoner’s daily workout. Dehumidifiers and ceiling fans will make your home environment feel more comfortable; just be sure to turn off fans when you leave the room, since they’re only moving air across your skin, not actually lowering the temperature. Don’t overlook the amount of heat generated in the house either. The oven, dishwasher, dryer and electronics all produce heat, so turn off electronics not in use, use the air dry setting on the dishwasher and consider hanging clothes out to dry. Closing curtains and planting shade trees on the south and west sides of the house can reduce the solar heat entering your home.

Whether heating or cooling, don’t pay for rooms you don’t use. Close vents and doors for spare bedrooms or rooms used primarily for storage. Well-maintained systems run more efficiently. Clean filters regularly and consider an annual inspection for your furnace.

3. Home Mortgage

This week’s market rate for home mortgages is 3.62 percent according to If your mortgage interest rate is a point or more higher, you would likely benefit from refinancing. A lower interest rate is a no-brainer for savings, and if you can afford a higher monthly payment, you could even shorten the term of your loan from thirty years to twenty or fifteen. The savings from refinancing can make the higher payment affordable, and repaying the loan sooner means huge savings in the long term. However, if you don’t feel confident in your job security or if your income is variable, taking on a shorter-term loan is risky. You can always make extra payments on a long-term loan, but you don’t want to fall behind once you’ve committed to the more aggressive repayment option.

Now you’ve begun to master cutting expenses that you thought were fixed and saved money without major sacrifice. All it took was a few changes of habit and a little legwork. It’s a valuable skill that will serve you well financially. Keep honing your skills and maybe you could take them to Congress and teach a lesson there.


Practice Mind Over Money

If you are surprised by the numbers when your credit card bill arrives or can never figure out why you can’t keep cash in your wallet, you probably spend without really thinking about it. Maybe you’re often rushed, distracted or forgetful when you spend money. Such a habit takes time to break, but you can succeed with patience and conscientious effort. Here are a few tricks to jog your memory and help the habits stick.

  • MAKE A BUDGET. If there is one single method that will help you reach your financial goals, it is making a budget. Seeing the number s in black and white brings consciousness to spending that never existed in the finances of many households. It forces a person to really think about available income, examine all expenses and prioritize spending. The importance of these three tasks cannot be overstated. When you examine your income, you may see ways that you could earn more. When you consider your expenses, you may see ways to reduce expenses without really losing anything. When you prioritize your spending, you can stop spending on what isn’t benefitting you and save more money for what counts.
  • practice mind over moneyWhen you shop, compare a purchase to something more concrete and meaningful than just dollars and sense. It’s the “broke college kid” mentality: if you really only have X dollars and overspending is not an option, you have to compare and choose to spend wisely. For example, if Amy goes out for dinner and drinks with friends and spends $50, that’s equal to two weeks of groceries for her. Even that $30 pair of jeans means nearly four hours of work at her $8/per hour campus job; four hours she would like to spend studying for her final exams. A simple, concrete comparison clarifies your priorities and helps you easily make good spending decisions. To get into the habit, keep a pay stub with your cash and make a personalized credit card holder with a picture or a phrase to trigger this examination of a potential purchase.
  • Establish a waiting period before spending discretionary income. Consider three different things you could do with the money if you didn’t buy the extra stuff. This will help you to practice the last and most important habit…
  • Spend Consciously. When you need to save, save, but if you stick to your budget, pay your debts and maximize your investment opportunities, you should feel free to spend what is truly extra money on anything you really enjoy, even if others believe it is frivolous and unnecessary. The problem with American attitudes toward money is that too many people fall into two extremes. One group spends on impulse, barely thinks about their purchases and realizes only later what they bought and how much they spent. The opposite view will go to extremes to save money, deprive themselves, and feel guilty for spending money for anything, even if the purchase is well within their budget. Bottom line: don’t spend without thinking, but if you can afford it and you have truly thought about the purchase, you shouldn’t feel guilty about spending on something you would really enjoy. After all, if your spending habits are responsible and you are financially secure, why shouldn’t you enjoy the result of your hard work and dedication?

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