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.

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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:

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.

Furniture:

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.

Jewelry:

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.

Textbooks:

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.

Tablets:

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.

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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 Bankrate.com. 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.

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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?

Have any comments on this topic?  Please leave us some below.

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Before You Budget

Budget, budget, budget. It’s the magic word these days. It seems everyone is making one, balancing one or blowing one. If you’re preparing to make your budget, you’re probably eager to get started, but don’t let your early motivation fade and leave the job half-done like an overly ambitious home improvement project. Be prepared for some legwork before you can crunch out a budget and don’t get discouraged; perseverance will pay off quickly and the benefits compound in the long run.

Making the Mindset

Chances are you’re not making a budget just for the fun of it. You have a reason to take a good look at your financial habits and start making adjustments. The backbone of a budget is financial goals. Perhaps you’re trying to pay off debt, save for retirement, send your kids to college or someday travel the world. Whatever you want to do, you need a plan to get there financially. To set goals that are realistic yet challenging, make them specific and WRITE THEM DOWN. Writing them down forces you to clarify and elaborate more than the vague ideas you can keep in your mind and creates a sense of commitment. Assign priorities and break each long-term goal into manageable short-term mini-goals. Setting such milestones helps you mark progress on your financial journey and stay motivated to stick with your plan.

Changing Habits

what to do before you start budgetingThe most difficult part of making a budget is looking your habits in the eye, sometimes habits to which you deliberately turned a blind eye. Those who begin budgeting for the first time are often surprised by at least one category of their spending, and you have to be willing to make changes. If you have a partner, you should both be prepared to talk frankly and openly about your individual spending. If one partner denies, blames or makes excuses, the team effort will fail.

Have Patience

Rome wasn’t built in a day, and neither was Warren Buffet’s fortune. Preparing a budget is work; saving receipts, compiling data and figuring out where all the cash went is no cakewalk. Be patient and persistent, and it’s better to let a few dollars slip by than to give up in frustration trying to track every penny.

Make a Plan

Budget methods are like shoes; the right fit is comfortable, practical and makes you confident, and it will take time to find that right fit. Most budgets are set up on a monthly schedule since many expenses occur monthly, but you may want to coordinate your budget with your pay schedule so you know where your money goes right away and prevent it from being frittered away unconsciously. Those who want to put strict reins on their spending might prefer Dave Ramsey’s envelope system.  Also, see our article about whether or not envelope budgeting works. Numerous types of budgeting software exists, free or requiring purchase. If you bank online you may be able to download statements to Excel or Quicken to make organizing simpler.

If you’re ready to get started, what are you waiting for? If not, what are you waiting for? Being prepared is a wonderful thing, but don’t get stuck in prep mode trying to perfect every detail before launch. Like riding a bike or running a marathon, the hardest step is getting started.

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Parties, home decorations and treats usually mean spending outside of your normal budget. Don’t be spooked by the spending or let money vampires drain your bank account dry; you can celebrate without breaking the bank, and that’s no ghost story.

Decorating

Instead of buying out the Halloween aisle at your local big box store, use your creativity instead of your credit card and make your own decorations. Buy old white sheets from garage sales or thrift stores and splatter with red food coloring. Layer a clean sheet or, better yet, a sheet of plastic underneath. The inner layer will keep your furniture clean and the upper layer looks festively creepy. For a darker effect, you can cut apart black trash bags, tape them together and finish with fake spider web. You can create shadows that make your guests do a double-take using just a flashlight and heavy construction paper or cardboard. Cut out simple shapes like bats or ghosts, tape them to the light and position the flashlight carefully to place the corresponding shadow. If you want a really over-the-top scary scene, try making your own shrunken heads!

Food and Beverage

The key to memorable party refreshments is not how much they cost but how much fun they are. That doesn’t mean you have to outdo Martha Steward preparing the treats; remember that she has a whole crew to help. A decorate-your-own cookie or cupcake station with plenty of options ensures that everyone can have his or her individualized treat. It satisfies the sweet tooth, while the act of preparation actually makes the eating more conscious and enjoyable.  For the adults, what could possibly be cooler than a pumpkin keg?

Activities

Fun and games that are available but generally unstructured make the best party fun. Children and the young at heart – on Halloween, who isn’t- will enjoy making trick or treat bags by decorating plain brown or white lunch bags with markers, stencils, stamps, glitter, sequins or any other odd craft supplies you might have available, the stranger the better. A feel-box can really set the Halloween mood; cut holes in boxes big enough for guests to put their hands in if they dare and guess what nasty object is inside. Try cold cooked spaghetti noodles for “worms,” peeled grapes for “eyeballs” and more ideas here.

Costumes

save on halloween stuffPlan ahead now for next year; costumes will be priced to sell after Halloween to make room for Christmas, so you’ll find savings to die for on classics like skeletons, zombies, vampires, etc. Also, many costumes can be made easily with a little time, creativity and a few resources. Any old clothes, ripped and covered in fake blood with some dramatic makeup to match can be a zombie costume. Popular variations include zombie clown, zombie bride and zombie prom. A cardboard box is the start of a Rubik’s Cube or jack-in-the-box.

This Halloween, you can celebrate in scary style while keeping the costs from creeping up on you. By using items you probably already have around the house, you save and have money left over to start building your zombie apocalypse survival kit.

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How To Save Money On Gift Buying

Americans spent $35.3 billion during the holiday season last year. Shopping for gifts may mean fighting the crowds at your local mall, surfing retailers’ websites endlessly or rushing through the store on Christmas Eve for the last gift on your list. For many, the holidays are a stressful time both personally and financially. Those who shop with a strategy, however, can save themselves the stress and spend less money on great gifts. By following a few simple tips, you’ll have happier holidays and avoid the fiscal hangover that often lasts well into the New Year.

Plan Ahead

Last minute gift shopping: heading to the store, hurrying through looking for potential gifts, worrying about finding the perfect gift, waiting in line and paying any price for it. Has this ever happened to you? Does this happen to you every year? It’s a strategy that’s stressful for you and your wallet.

To save time, stress and money, make a plan. Before major holidays, create a list of people for whom you plan to buy gifts and how much you can afford to spend on each. Spend a little time brainstorming potential gifts for each recipient. If you have a general idea, you can comparison shop, watch for sales and buy gifts for much less than retail price. It helps to make several shopping trips throughout the year instead of one major shopping spree. You will be able to keep perspective on how much you’re spending, avoid building up a large balance on your credit cards and feel less overwhelmed with the pressures of buying the right gift for the important people in your life.

how to save buying giftsFor those in your outer gift-buying circle –landlord/tenant, coworker, neighbor, etc. – stock up on basic gift items that you can buy in multiples or bulk at a lower cost. Lotions and soaps are appropriate gifts for almost anyone; candles, picture frames and photo albums are also good choices.

Flash-sale sites like Groupon, LivingSocial and RetailMeNot, to name a few, can be perfect for gift buying if you know what you are looking for. If you plan to buy a watch for your brother and jewelry for your mom, you can watch the sites throughout the year and buy when a discount on that item becomes available. It’s an advantage for you because they will only think you spent too much.

Presentation

When it comes to the presentation, you do not have to spend a fortune. Post-holiday sales are the best time to stock up on wrapping paper, gift bags, gift tags, bows, ribbons and holiday cards. You can add a creative touch without adding to the cost; wrap in brown paper and decorate any way you like with stencils, stamps or other art supplies. Go green and wrap in newspaper; give the comics a second life.

You can turn simple, inexpensive gifts into perfectly personalized, thoughtful ones. Consider a personalized basket of gifts with a common theme suited to the recipient. For those who appreciate a good wine, you could include a bottle of wine, two glasses, some gourmet crackers and maybe some chocolate. You can likely save by finding discounts on the individual items and create a gift that’s more than the sum of its parts.

Regifting

Yes, it sounds tacky, but it can benefit the giver and the recipient if done correctly. The rules for successful regifting: only give to someone who will truly appreciate the gift. If you can’t imagine buying it for someone else, don’t regift it to him or her. Only new, unused items are eligible. Tacky is anything used, obsolete, personalized, or accidentally regifted to the original giver. Don’t use the holidays as an excuse to give away the clutter in your closets. However, if you have a bookworm friend who would appreciate the novels you received but never had time to read, you already have the right gift for the intended recipient.

For the person who has everything, consider giving an experience instead of an item. Giving concert tickets, museum memberships, or spa gift certificate can bring memories to the recipient instead of adding clutter when you don’t really know what to buy. Here is an opportunity to be creative and personal with your gift by tailoring the gift toward the recipient’s interests and preferences. Brewery tours, craft shows, sporting events, anything; giving this kind of gift reminds a person to take time out of a busy schedule for what he or she enjoys.

Many savvy shoppers fall into the retail trap when buying gifts because they don’t apply their money-saving habits when purchasing gifts. Consumers often feel pressured to spend during the holiday season to find the perfect gift or to impress coworkers, neighbors, family and friends. Shopping last-minute causes many to spend more than intended, especially when the gift-shopping is combined with travel plans, party preparations and family affairs. Saving money on buying gifts isn’t being cheap; it’s being smart with your money. Planning ahead and thinking through each purchase means you will also give more thoughtful gifts that are well suited to the people who receive them.

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Saving Money During Your Baby’s First Two Years

Raising a child from birth to age 18 can cost anywhere from $200-250K. That’s the MSRP of an Audi R8 GT, which takes much less time commitment and maintenance cost. However, there is hope for new and expecting parents. Discount sites exist for every market niche, and items for infants and children are no exception. Check out BabySteals, Baby Half Off, Green Baby Bargains, BabyDirect and more. Instead of spending a fortune on your new arrival, following these tips can save you a bundle on your bundle of joy.

Diapers
The average infant uses about 6,000 diapers in the first two years. Parents have two main options for diapering: cloth or disposable. It’s a question not only of cost but also convenience, environmental concerns, and of course baby’s comfort. Fortunately, there are ways to save with both options. If you prefer disposable, you can save by buying in bulk. Diapers.com is a great place to comparison shop, buy in bulk and save. Amazon Warehouse Deals offers open-box and slightly damaged merchandise at a discount, so you will sometimes find quality diapers in damaged packaging, although the stock is not constant. Nearly all diaper manufacturers offer coupons on a regular basis, so keep an eye out for those as well. If you choose cloth diapering, prefolds are usually the most economical option. They will require a diaper cover or nylon pants and some type of fastener. DiaperJungle.com has a wide selection of cloth diapers, diaper accessories and bed & bath for baby well as resources for those new to cloth diapering. Those who choose cloth may want to use a diaper service to save time although it will cost a little more.

Clothing
save money on your babyWhen it comes to clothing, babies don’t demand designer duds or the latest fashions, and they don’t know or care if an older sibling or cousin wore it first. Good quality secondhand clothing or store brands make sense, since an infant grows out of clothing so quickly and won’t wear it long enough to be worth spending a lot. Rompers, sleepers, socks and a hat or two are the basics, plus cold weather gear if the climate demands it.

Food
Making your own baby food does save you money, but this savings is even overshadowed by its other benefits, particularly for parents who prefer “natural” choices for their baby. By making your own, you ensure that it is always fresh with no additives, and if your child has allergies it is easy to ensure food safety. With simple one-ingredient purees to more complex table food recipes, you can give your baby greater variety of tastes and textures, incorporating the same fruits and vegetables you already buy for yourself.

Healthcare
At each baby checkup, ask your doctor for free samples. Companies send masses of their product samples that the hospital or clinic is glad to distribute to parents.  Before scheduling an appointment concerning an illness, call your pediatrician. Experienced professionals can often diagnose common problems over the phone, saving you the time and hassle of an appointment as well as the co-pay.

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How to Make a Budget

Making a budget for your yourself or your household is more about the commitment to improving your finances than it is about actually sitting down and writing out your family budget.  In fact, it is more about having the will to save money, or should I say having the will power not to spend it.

With that said, budgeting is an important part of learning how to better manage your money.  If you’re serious about improving your finances, then here are some steps you can take to help you make a budget and improve your finances.

Manage Your Bills.  One of the most important parts of managing your money is to manage your bills.  Make sure that you have a good grasp of when your bills come in and don’t just pay them without first making sure they are accurate and that you have done your best to reduce each bill.  Sometimes picking up the phone and asking for a better rate can reduce your bills, especially for services like television, phone or internet bills.  For me, I created a checking spreadsheet that I have used for years to manage my monthly bills and to keep my finances organized and up to date.

Find Ways to Save Money.  Once you’ve got your bills under control its time to find some creative ways to save some money.  Literally, there is no end to how much money you can save over the long run if you keep finding new and creative ways to save.  If you’re willing to make lifestyle changes to save money, there are even more options to save.  Note that many methods take months to start saving you money, so get started today.

help making a budgetUse a Budget Worksheet.  Once you’ve made some decisions about how to spend your money more wisely, it’s time to find some budgeting tools to help you record and track your monthly budget.  Of course, we offer a free budget worksheet that you can use, but we also list several other top household budget worksheets that may work just as well for you.  Download whichever copy you like the most and start using it.  Remember that with a little spreadsheet skill, you can really turn any spreadsheet into your own personalized budget.

If you don’t like using spreadsheets, don’t worry, there are lots of budget tools and free budgeting software that you can also try.  Although software is less flexible, a lot of it is automated and if used properly can save you some time gathering your budget information each month.

Keep At It.  Just like any excercise or diet program, you have to stick to your budget program.  Use your spreadsheet or software to help you track your spending and to look for new opportunities to save money.  Over the months, you’ll find that your finances will continue to improve.  It’s important that you don’t give up, especially if you have a bad money month or two.  Keep the faith and you can stay motivated to improve your finances!

Do you have any advice to add?  If so leave us a comment.

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8 Ways to Save When Starting College

Save by Maximizing Aid Eligibility.

Financial aid awards can make a difference of thousands of dollars. Grants and scholarships don’t leave the student with a heavy burden after graduation. Knowing how financial need is calculated in the Free Application for Federal Student Aid (FAFSA), you can take steps to prepare and maximize your eligibility for financial help. In short, anything you can do to reduce liquid assets before filing the FAFSA without losing value benefits both parent and student. Some tips:

Save money in a parent’s name, not the child’s: A college’s formula for calculating financial need considers about five percent of parental assets and twenty percent of the child’s assets. The lower tax bracket is incentive to save in the child’s name early in life, but once the child nears college age those funds work against them in terms of financial aid. Now is also the time to pay necessary expenses for the future: you’ll probably spend on a laptop for college, car repairs and dorm furniture anyway, so paying for it now reduces the student’s available resources from the financial aid viewpoint.

Maximize retirement fund contributions: Retirement funds are excluded from parental asset calculation, so saving for your future helps your student save for theirs. Many parents think that paying for their child’s education is their responsibility. However, students get financial aid to pay for college, and they have a career ahead of them to pay off debts. Parents don’t get help paying for their retirement, and they don’t have years ahead of them to rebuild savings once they’ve drained their accounts into tuition payments. Borrowing from a 401(k) is one of the worst mistakes parents can make because it incurs early withdrawal penalties and erases years of savings.

8 ways to save on collegePay off consumer debt: The FAFSA does not consider parental consumer debt in the need-based financial aid calculations. For example, the child of a parent with a high income and credit card debt will receive less aid than the child of a parent with a lower income and no debt. Paying off debt reduces the assets measured by the FAFSA, and repaying the debt sooner benefits you by saving money in interest. You have to repay the debt at some point, and before filing the FAFSA is the time to do it.

Save by Taking a (Tax) Break.

The federal tax code encourages college attendance by giving tax credits for tuition costs. If your adjusted gross income is less than $80,000 if you are single or less than $160,000 filing jointly with your spouse, you qualify for two important federal tax credits, according to a free tax calculator. The American Opportunity Tax Credit lets you claim all of the first $2,000 plus one-fourth of the next $2,000 in tuition and required fees for enrollment. You can claim it during the first four years of an eligible degree-granting program. The Lifetime Learning Credit can be worth up to $2,000 per year, but there is no limit on the number of years it can be claimed. It also includes courses that are not part of a degree program, so workers who take occasional courses to improve job skills are also eligible. You may only claim one of the credits for one child in a given year. Find more information on IRS.gov, which publishes FAQs on a range of tax topics in language anyone can understand.

Know why you’re going to college.

This could be the most important step in saving money when starting college. If you know why you are at your chosen college in your chosen field, you are less likely to change majors or transfer, which can lengthen your time in college if credits don’t count for your new major or don’t transfer to your new school.

Choose your studies carefully. Career tests, personality assessments, job shadowing and volunteer work can help you learn your strengths, weaknesses and preference. If you research careers and know your personality and preference, you will likely pick a path that suits you and leads you to a rewarding future in the workplace.

Choose your school wisely. Research your top choices. Don’t just take the tour, participate in it. Talk to your tour guide to get behind the script and ask as many questions as you need. Talking with students or taking time to just explore the area can give you a feel for the campus and decide if it fits you.

Start somewhere else. If your dream school is so expensive you can only dream of affording it, consider taking prerequisites at a more affordable school. First, become familiar with school policies on transfer credits. You may be able to take college-level courses during your senior year of high school. Scoring well on Advanced Placement (AP) tests or the College Level Examination Program (CLEP) can count for college credit and allow students to skip introductory level courses in their first year of college. Most curriculums have a core of basic requirements that are similar across colleges. You could take the same courses at a local community college for much less money, perhaps even living at home and commuting for additional savings. Consider also location, since in-state tuition is usually half or less of out-of-state tuition. If you want to go out-of-state, move to that state and work for the minimum number of months required to be a legal resident before enrolling.

Know your learning style. Knowing how you learn before you get to college will help you make the most of your class’s right from the start. If you learn by doing, sign up for a learning lab or form a study group with friends. If you need time alone to absorb information, find a quiet, comfortable study spot where you can do just that. Your grades will be better, making you eligible for more scholarships in the future and helping you retain what you learn, which is really why you’re there in the first place.

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The Truth About Budgeting

know the truth about budgetingThe truth about budgeting is that it’s hard work. You think: “Why can’t I just have everything I want all the time?” Maybe you don’t even want luxury items or super expensive clothes and stuff like that, you simply want to go out to eat a bit more often and get a great Starbucks coffee every other day. The answer is simple: You can’t have everything you want when you want it because you need to pay off your student loans and maybe retire before you’re eighty. Budgeting means giving up things that you like in the present so that you can have what you want in the future. Whatever your reason for budgeting and saving your money, it is going to make the present a little less enjoyable for you, but your future will be much more exciting.

Another truth about budgeting is that it doesn’t work unless you make it work, which means if you don’t personalize your budget and have a plan you will not be a very successful budgeter – you can’t just print off a budget plan from the internet, you have to use the internet as a resource to create your own. To be a successful budgeter, you have to really know yourself or give yourself a trial period to see what works for you. The best place to begin is to record your spending for a period of time. You should probably start with at least a week and continue meticulously recording your spending for up to a month (any longer and you will just get bored). When your recording period is over, sit down with your notes and add up where your money is going. Look at what categories take up the most of your money; do you throw it away at Starbucks? Do you grocery shop too often? Do you make too many Target trips in a week? Find out where your money is actually going.

Once you know where your money actually goes every month or week or other period of time, you can effectively start limiting your spending in certain areas to free up money for saving or spending in another area. Looking at your spending data you will probably realize that you are overspending on something that you hadn’t really thought of. For example, you might see that you are spending upwards of one hundred dollars a month on your special eat-out Fridays. That is a perfect place to save money, because although you might think that you need to go out to eat at least once a week, there is a guaranteed chance that you will be just fine if you limit your consumption from once a week to once a month.

Overall, a budget is a commitment. Like anything you commit to, it has to fit your lifestyle and your needs. Once you have a dynamic budget that works for you, you start to worry less and enjoy life more – in the long run too, which is the important part of creating a budget.

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I was reading an article about how people save for retirement, and it struck a few chords with me.  The first thing it said is that most people struggle most of their lifes trying to save money for retirement.

I’d have to agree with this.  After all, you can’t save money while you’re still in school.  And schooling takes up nearly 20-25% of most people’s lives.  After that, if you went to college then you probably have years of student loans to pay off.  If you didn’t go to college, chances are the job you find isn’t going to make you wealthy right away either.  What I’m really trying to say here is that you don’t even get a chance to start saving until you are in your mid twenties.  Then, there’s the buying a house, having kids, and saving for your kids future.  Not to mention that the cost of raising a kid is now approaching several hundred thousand dollars over their lifespan.  And then, just when you start to get ahead, there will always be something to set you back.  Perhaps it’s a bad economy, a job loss, your children’s tuition, a large medical bill.  Whatever the case, saving money for retirement is difficult.

how to burst saveEnter the concept of burst saving.  Burst saving is really a concept of how to save money quickly when you can.  Most people that use burst saving are only able to do it for a short period of time.  That is why it’s called ‘burst’.  For example, if there is a time when both you and your spouse are working and you have held your costs down, it is possible that you can save a lot of money each month.  Or maybe, you start getting bonuses at work or some larger raises, but don’t raise your spending.  You can start to save a lot more money.  Burst saving doesn’t last forever, but by really taking advantage of the times that you can save money without raising your expenses, you can really juice up your retirement savings.

For most people, burst savings comes later in life.  After their kids are done with college, their house is paid off, their expenses are low, and their income is at its peak.  However, with some proper planning, you can get your burst in early.  For example, when I graduated from college, I started making pretty good money after about four years.  The first thing I did in the first two years was to buy a car and pay for the entire car and all of my student loans within two years.  That meant I had the next eight years before I had kids to burst save.  I put all of my bonuses and a lot of my paychecks into savings and invested them all.  It worked great for me, and if I hadn’t made some poor investments and gotten wiped out by the dotcom bubble, I would be set today.  Unfortunately, I’m not in the position to boost my savings while being a blog writer.  Google’s immense de-emphasis of my several blogs has seen to that.  However, I am on the lookout for a real job that I can use to pay the bills.  Then, my blogging business can be my ‘burst’.

So what do you think?  Have you been able to burst save?  Please share your thoughts?

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How To Find The Best Budgeting Tool For You

There are lots of great budget tools out there.  Some are free budget tools and are available as online tools.  Some will cost you a monthly or one-time fee and are downloadable. Here is some advice on how to find the right one for you.

Finding the Best Budgeting Tool

Search the Internet, a lot

There are millions of different budgeting tools out there. There are so many that do different things, in fact, that it can be difficult to determine which is the best and will work the most effectively for you and your budget. In finding which tool works best for you, decide what you hope to gain from a budgeting tool. Start by reading online reviews of different budgeting tools. A simple Google search will yield millions of results that can help you make an informed decision.

Read Reviews, and often

In your search for the best tool, read customer reviews as much as you read the product descriptions. It is very common that a product will seem great until you read that everyone who has bought it says that it doesn’t do what it claims to. Customer reviews may also lead you to realize what you actually want in a budgeting tool; from reading other’s complaints or praises of products, you may realize that a certain feature is necessary for you. This will only streamline your search. Also, be mindful of what ratings customer’s have given different products. For example, if a product doesn’t have a lot of reviews but has an overall high rating (say, 4.5 out of 5 starts) it is probably still a pretty safe investment. If a product doesn’t have a very good rating, but it has some good individual reviews, you are still better off avoiding it.

Remember that you get what you pay for

how to find a good budget toolDecide how much money you are willing to spend on a budgeting tool right away, and stick to your limit. There are a lot of different options out there that range from free Internet downloads to more costly software to hiring a legitimate financial advisor. Determine what you are willing to spend, if anything before beginning to search and remember that you will most likely get what you pay for. If you decide to use a free online application, it may not work so well or it will solely depend on the amount of effort you put in.

Use what you pay for!

In selecting a budgeting tool, what it comes down to is this; how much will you actually use the tool? If you find a product that you think is really cool and could potentially help you a lot, but it seems confusing and complicated, don’t get it. It makes absolutely no sense to put the effort and money into purchasing and setting up a product if you aren’t going to use it. In products that are overcomplicated, this happens often; people put out the money for all of the bells and whistles but then don’t use them. It would be much smarter to use a simpler, cheaper product that makes sense to you than one that does a million things that you don’t understand.

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Step one: locate your spouse. Methods include yelling their name, calling their cell phone, ringing the cattle bell for dinner (be ready for their disappointment when there is no food), or gently tugging on their shirt to get their full attention.

Step two: locate two chairs, or other sitting devices that comply with two people, such as a couch or bench. These can be found grouped around tables, in living rooms, or outside with canvas backs and cup holders. Where you find a sitting device and what it is doesn’t really matter, just make sure it’s one that you can stay in for a while but isn’t so comfortable that you will fall asleep.

Step three: Lower your rear and bend your knees over the sitting device until it is holding you up. Your legs will be baring no weight and your knees will be at a roughly ninety-degree angle. Instruct your spouse to do the same, either next to you, in front of you or on another sitting device close by.

Step four: Now that you are sitting, BEAT OUT THAT BUDGET. This calls for an entirely new list of steps that are much more complicated and less fun. Be calm and do not fight if you can help it. No good ever came out of two people arguing about money while sitting simultaneously in chairs facing each other. Fighting usually leads to standing which usually leads to walking which is the opposite of writing a budget.

The unfortunate truth about writing budgets is that it is an activity that is interesting and/ or fun to very few people, but it is also an activity that has to be done to be fiscally responsible. When you and your partner decide that you have- or want- to sit down and write a budget for yourself, you must come to terms with the fact that it’s not going to be all that fun (although you can make it fun if you try) and that you will most likely start to pull your hair out.

budgeting with your spouseWhat you also have to come to terms with, however, is that it has to be done and the quicker you get it done correctly, the sooner you can do something else that doesn’t make you want to cringe.

Before you even begin to think about money or numbers, allot a manageable amount of time to household budgeting, and stick to your schedule. If you want to get everything done at once, set an amount of time that you can work hard for and when that’s done, take a break and do something you like for at least fifteen minutes before going back. So, budget like it’s your job (because it really kind of is) for forty-five minutes, then take a fifteen-minute break. If you have more time, budget for thirty minutes every night for a week or so. Whatever your schedule is, make sure you work hard for the entire time you’ve allotted yourself. Be extremely productive when you’re working and do something you really enjoy doing when you’re not. Things get done surprisingly well when balance is used.  If you are new to budgeting, check out our advice on how to budget for beginners.

When you have your schedule planned out and you are ready to begin with the actual budget writing, look carefully at your income versus outcome for every month you have records or for which you can obtain records. Are you in debt? Are you making money to save? Maybe you are just breaking even. Whatever the case may be, you must know the actual factual numbers of what you make and what you spend each month before you can effectively budget.

Next, determine your priorities. What do you absolutely need to spend money on every month? Bills will (probably, hopefully) be the first thing on your list followed by groceries and other necessary living expenses (shampoo? Toilet paper? Don’t forget about the little things.) Keep track of receipts or look at your bank account if you use a debit/credit card and get spending statements and calculate how much these things cost. Then, make sure that at least that much money (and probably a little extra for cushioning just in case) goes into your checking account each month.

A side note; once you know your spending and have determined your priorities, you will most likely be able to find ways to save on everyday items. Maybe you find that you can buy generic brands, or that you end up throwing away a lot of food because it goes bad before you have time to eat it. Who knows what you may find; there is probably some way to cut down on your monthly spending, which is why making a budget isn’t just a one-time deal. It’s a constant, usually monthly, task to review and plan for the next month.

After the necessities are accounted for, if you have extra income, make some financial goals. Maybe you would like to pay off your house or car in five years, or you want to take a vacation at the end of the year. Even if you just want to get out of debt and start saving for a ‘rainy day,’ you must discuss these goals and write them into your budget. Having them be even as tangible as written down makes them a lot easier to stick to long term.

Next, go to the bank, or call the bank, or find your bank on the Internet. Use all the cool bank things that your bank does to your advantage. Separate your checking and savings account so your savings account is high interest. Get a debit/atm card and get rid of your credit cards. Open a ‘rainy day’ account if you want. Have your paychecks directly deposited to your bank and in your accounts in the correct amounts. Once you have all of this set up, the rest of your budget is a breeze given the fact most banks have budgetary systems in place specifically for you!

The final step is to launch your budget. Once you have figured out where all your money is going, stick to your spending plan. If you don’t over spend, you will start to see your goals take shape as you save money.

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Party Favors On a Budget

Want to throw a party to impress your friends without denting your savings? Try making your own party favors for guests. Many homemade favors are simple, inexpensive and unique. You’ll leave your friends guessing how you learned to be so crafty!

Using recycled materials means you don’t have to make a special trip to the store to buy supplies, in addition to keeping the cost low. If you have an infant, you probably have recycled many small glass jars. These are a great basic supply with many uses. They can be easily decorated with paper, ribbons, sequins and other art supplies to match any occasion and filled with candy or nuts. You can wrap them in fabric remnants or glue colored tissue paper to the outside to create tea light candle holders. When decorated with a winter theme, they also work well for individual servings of hot chocolate or instant coffee. The options are endless if you get creative, use a variety of materials and match the decoration to the occasion. You may even want to personalize favors with each guest’s name using letters cut out from magazines.

how to make party favors on a budgetIn most American households, waste paper abounds. The Japanese art of paper folding, origami, gives thousands of ways to use paper to make almost any shape imaginable, even fold into tiny gift boxes. Newspaper is easy to fold and makes an elegant black-and-white palette, while magazine pages make each piece colorful and unique.

For a truly eco-friendly party, give the gift of plant life. Giving seeds is an inexpensive and practical party favor that will grow and remind guests of the good time long after the party is over. You’ll need about a teaspoon of seeds if packaged in a small paper envelope, or more if wrapping seeds in fabric and tying with ribbon. Consider the climate of your area and the time of year, and be sure to include identification and instructions for the best way to grow the plant. Wildflowers like daisies, poppies and baby’s breath grow well in most climates. If you have a green thumb yourself, you can plant seeds in small glass jars in advance and have starter plants to use as party favors and give away after the party.

For a memorable birthday party for kids, there are favors they can make with an adult’s help. Too-small crayon stubs can be melted down and mixed to create multicolored, swirled crayons in fun shapes. Simply place crayon stubs in a cookie cutter on wax paper, heat until wax melts and use toothpicks to swirl colors. Candy or soap molds can also be used. Another easy favor begins with cardboard tubes from toilet paper or paper towels. Fill with candy, cover in wrapping paper extending a few inches beyond the ends, twist ends and tie with ribbons. Simple, festive and filled with candy: what’s not to love?

When it comes to saving on party favors, the more creative you are, the more you save.

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5 Ways To Trick Yourself To Save Money

Breaking news: frugality doesn’t mean austerity and saving doesn’t have to mean sacrificing. If saving is a dreaded chore like going to the gym, eating more vegetables or visiting the in-laws, you can still save without needing superhuman willpower. Here are five ways to trick yourself into saving more money.  You can also check out our list of favorite ways to save money.

1. Make it automatic
Have money taken out of each paycheck and put into your 401k automatically. Automatic means you don’t have to think about it to do it; effort and decision making is minimal. The same strategy can build a savings account with automatic transfer from each paycheck. Now your default setting for your finances is saving, not spending. Another habit to save: once you finally pay off your credit card debt or finish making car payments, make payments of the same amount to your savings account instead.

2. Save your windfalls
Did you come across some extra money this month, like an unexpectedly large tax refund, a bonus at work or twenty in your winter jacket pocket? Save it. It might seem small or you might reason that you can use it to indulge because it’s not coming out of your regular budget, but the money will do much more for you if you save it. If you really can’t resist a treat, save half and spend half, but once you see the power of interest growing your savings over time, the pull of the fancy restaurant, the movie theater or the new shoes won’t stand up to the long-term reward.

learn to trick yourself into saving money3. Play mind games
When it comes to saving, psychology is working against you. Your brain chemistry encourages instant gratification over long-term gains. Fortunately, there are ways to fight back. If you buy on impulse, set a rule of separation; wait a day or two after seeing an item you want before buying. Chances are you will decide that you really don’t need it or even forget about it completely. Another way to bolster your defenses against overspending is to make a custom sleeve for your cash and credit cards that will remind you why you’re saving. A quote that motivates you, a picture of your dream home, the slogan of the home business you’ve been wanting to start or any other reminder of your big goals will make the abstract more tangible and help you think twice about your spending.

4. Have consequences for failure
Fear of failure can be a powerful motivation. Here’s where you can enlist the help of friends, family or coworkers to hold you accountable. Set a reasonable goal for saving and a consequence if you don’t meet that goal. Tell your significant other that failure means you will watch a movie of his or her choice without complaint. Love to talk politics? Say that losing means you have to donate a specified amount of money to a party whose views you oppose. Anything that makes failure hurt will help you succeed.

5. Reward yourself by saving
Positive reinforcement helps you stick to a goal, so recognize when you are spending less and save it consciously. When you brown-bag your lunch, put the cash you would have spent going out into a savings jar. Same for home brew coffee vs coffee house spending and a movie at home instead of the theater.

Saving doesn’t have to be a raincloud over your head or a constant worry. Keep it simple and you’ll be saving with ease.

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The skyrocketing cost of tuition and fees get all the attention, but they are not the only cost associated with higher education. Scholarships, grants and other financial aid can greatly reduce the amount a student actually pays, but what about the cost of housing? Housing is a generally a student’s biggest expense outside of tuition. While many college students drastically reduce discretionary spending, a place to live is a requirement. Here’s how really smart college students (and sometimes their parents) pay for housing.

If parents will pitch in, or if you have friends or siblings attending the same school, buying a house near the campus can be a great investment. You live there for free and rent out extra rooms to cover the mortgage payment. You also get hands-on experience in home ownership, maintenance and repair. After graduation you can sell the house or keep it up as a rental property for other students wishing to live on campus while attending college.

how to save money on housing for college studentsConsider living with relatives or friends in the area, if possible. You’ll have the comforts of home, familiar faces every day and a quieter place to study than the average dorm or apartment. This works best if the house is near campus or if you have your own transportation available on a daily basis.

Even renting an apartment can be much more affordable than you might think. It will be a constant expense for four years, so it pays off to shop around. Doing your research online can help you narrow the search to a few options with the best value, so you don’t waste your time scheduling a walkthrough of every apartment in the area. Subletting an apartment can be a great deal as well. A person who signed a contract to pay rent and then needs to move will often cover part of the rent rather than let their room sit empty and pay the entire rent alone.

Several sites help you search apartments by location, size and price, such as Sublet.com and Apartments.com. Sometimes more personable methods of communication will help you find a place. Try checking bulletin boards around campus, craigslist or social media sites to rent, sublet or find a roommate. A roommate arrangement reduces cost for all parties by splitting rent and sharing the cost of utilities.

If you would rather live in university housing, consider becoming a Residential Advisor (RA). As an RA you are responsible for enforcing dormitory rules, coordinating activities, mediating conflicts and acting as a liaison between students and housing staff. Compensation varies by school, most commonly free or reduced price housing, free or reduced price meals, monthly stipends, tuition remission or some combination of these benefits. The position requires communication skills and a lot of responsibility, but the monetary and intangible benefits really pay off.

Your dorm room or apartment will be your other home for your college years. If you scout out the best prices or consider options outside of the usual, you can be home sweet home at the right price.

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How To Save On Your Mortgage

Car loans: up to 5 years repayment
Student loans: 10 years standard repayment
Home Mortgage: 15 to 30 years repayment

This debt will be with you for a long time. According to the US census, about seventy percent of US homes have a mortgage. Record rates of foreclosure after the burst of the housing bubble give the mortgage a bad name, but at its core it is a beneficial tool to help homeowners. The long repayment period means that small actions can add up to big savings in the long term.

Simply paying a little extra toward your mortgage each month can help pay off the balance sooner and reduce the amount of interest you will accumulate. Make additional payments by sending a check separate from your regular payments and specify that you want to apply it to the loan principle; otherwise your lender may apply the money to the next payment owed and still charge interest. Make sure your mortgage does not include a prepayment penalty or “service charges” for extra payments.

Also consider a mortgage with biweekly rather than monthly payments; synchronized paychecks and mortgage payments may help simplify your budgeting and make paying down the mortgage a financial priority. Take, for example, a thirty-year mortgage for $100,000 at 3.6% interest. With a standard plan, you would pay $63,000 in interest over the life of the loan. Now suppose that after a year in the house you feel more financially stable and begin making an extra payment of $50 each month. The extra payments shorten the loan by almost five years and save you over $10,000 in interest! The mortgage prepayment calculator from DecisonAide.com can crunch the numbers and show how much your extra payments will save.

how to save money on your mortgageA mortgage from your lender is not the only option for financing your home purchase. You may be able to assume the mortgage on the house you are buying and take advantage of the existing interest rate if it is lower than the current market interest rate. In addition, you will avoid settlement costs on a new mortgage. Note that assuming a previous mortgage is not the best option in all cases. Make sure you understand the terms of the mortgage you assume, as you would with any new loan.

A seller may offer financing directly; you make payments to the seller over time instead of taking a loan to pay the seller and making regular payments to a lender. You can negotiate your interest rate and avoid fees from a lender. Most sellers expect a short-term mortgage, no more than five years, at which time the buyer will likely take out a traditional mortgage. An attorney or real estate agent can help with the legal documents and paperwork to smooth out the process.

A long-term debt like a mortgage need not be a long-term worry. Making extra payments or taking a new approach to borrowing can reduce your interest payments and shorten your loan term with ease and simplicity.

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I’ve already written a few posts about saving money on gas and how to save money buying your car, but today I ran across some stats on how much fuel you burn by exhibiting specific types of driving.  While I don’t believe these statistics are scientifically proven, I do believe that they are in the ballpark of reality, which means they should be a way to give you and I a better idea of exactly how to save gas.

For starters, it’s safe to mention that everyone gets different mileage based on their driving style.  For example, my Dad can drive a car that is supposed to average 25 mpg and get well over 30.  I, on the other hand, can drive a car that is supposed to get 30 mpg and barely break over 20.  The truth is, the way you drive your car makes all the difference.

The first stat I read was that “jerky” driving can eat up 33% more gas on the highway, and 5% in city driving.  Thirty three percent seems a little high, but if true, that means you’d really be wasting gas and money.  For example, if gas were $3.50 per gallon, you’d be wasting as much as $1.15 of it by your driving.  That could really add up over the years.

saving gas and moneyAnother gas usage statistic I ran across was air conditioning can reduce efficiency by between 5 and 25%.  If this is true, it could be costing a lot of money to leave your car’s “auto” air control on.  That’s because it automatically uses the air conditioning.  If the weather is nice, try controlling the climate in your car manually.

And the final stat I saw was about driving above 60 miles per hour.  According to the article I read, it says that each five miles above 60 that you drive is the equivalent of about 31 cents in gas costs.  In other words, if you are paying $3.50 for gas and drive 65, you would effectively be paying $3.81 for the same amount of miles you could have driven at 60 mph.  Of course, this figure varies based on the price of gas and the speed you drive, but I would translate this to mean that every five miles over sixty that you drive is between 5 and 10% less efficient.  Obviously, you can save gas and money if you drive sixty and don’t accelerate quickly.

These stats are interesting, but will they really make you drive any differently.  Most of us hit the gas to pass or to merge onto the freeway without even thinking about it.  Perhaps reading stuff like this can help us change those habits and save a little money.

Do you have a way to save on gas that you care to share?  Leave us a comment.

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Favorite iPhone Apps to Save Money

When it comes to saving money, knowing how to take advantage of your smartphone or iPhone is a key advantage.  Perhaps you have a favorite app to share?  My favorite iPhone apps that I use to save money are the following.

GasBuddy

GasBuddy is an app that helps you find the lowest price gasoline.  My family used it when we were driving to Florida last winter, and even in somewhat remote locations the information is usually up to date.  It works because a lot of people use it, and the more people that use it, the better it works.  It is basically an app that tells you, on a map from your current location, what the gas prices are at nearby locations.  I was in Georgia at what must have been a popular stop (next to a Chik Fil A) and I ended up filling up at a station that was literally 25 cents higher than the gas stations a mile down the road.  That was when I downloaded the app and I haven’t gotten screwed by a gas station since.

TripAdvisor

my favorite money saving iphone appsTripAdvisor is another iPhone app that can save money.  Personally, I have mostly used it to find hotels, but you can also find restaurants, flights and things to do.  While this app does help save money by comparing prices, it also saves money by saving you time and hassle.  If you’re like me, when you’re on the road looking for a hotel you don’t want to drive around looking for a decent hotel.  With TripAdvisor, you can easily locate nearby hotels, but more importantly, you can read dozens of reviews.  Because TripAdvisor is used by a lot of people, it has some of the most reviews out there.  Also, you can use the information from the app to help negotiate lower prices.  For example, we typically like to stay at Holiday Inn Expresses but they are not always the least expensive.  By using TripAdvisor to find a lower priced hotel across the street from the hotel you want, you can call the hotel you want (by clicking a button on the app) and ask them to match their competitor.  In almost all cases they are willing to lower the standard price (at least in my experience).

Hotel Tonight

Hotel Tonight is an iPhone app (also available on Android and iPad) that helps you locate steep discounts on last minute hotel reservations.  As you can probably tell, I don’t typically book my hotels in advance when I’m on the go, so apps like these are very useful ways to save money on hotels.  Whether this app is useful to you depends on if you happen to be in the 35+ cities that it operates in.  If you are, you can often find savings up to 70% off the standard hotel room rates.  If you’re not, you can still use another app such as Priceline’s Negotiator App.

In summary, those are the basic iPhone apps I use to save money.  Let us know what your favorite money saving apps by leaving us a comment.

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Few people enjoy going back to work after a vacation, and the return to normalcy can be even more difficult after a major life event, like having a baby. If you will be paying for childcare when you return to work, the costs can be staggering depending on where you live. For infant and toddler care, the US average cost for one child at a day care center is $972 per month. In cities like Boston and San Francisco, new parents may pay up to $2,000 per month. Costs decrease as children grow older and become more independent but still can be overwhelming. For new parents adjusting to a change in lifestyle or families adding another child, here are ways to have peace of mind about your childcare and your bank account.

If you or your spouse has a flexible job schedule, you may be able to have one parent home at most times, which can eliminate or greatly decrease costs. Telecommuting or changing work hours allows you to spend more time with your children, which also eases the guilt that many working parents feel when leaving their children with someone else. This means less time together for the parents each day, so be sure to schedule some alone time at least once a week to keep the relationship strong.

save money on childcareIf you are staying home to take care of children but can’t seem to get housework done, consider hiring preteens as mother’s helpers. They can provide the basic care and supervision while you get work done, but if there is an emergency you are still readily available. They charge less per hour than an older sitter or a daycare center and generally have enough energy to actively play with the children for several hours. In a few years you will have a reliable babysitter who knows the children well and has already proven to be dependable.

If rearranging your work schedule is not an option, you still have resources. Friends, coworkers and neighbors who also have children may be struggling with childcare costs as well, and you can all benefit from a babysitting co-op. Parents in the co-op take turns babysitting, so all members know that their children are in good hands and in a safe environment. Many children appreciate having playmates, and all parents in the co-op save money. If your co-op is small, for example less than five children, you can hire one babysitter and pay him or her extra rather than hiring several babysitters separately.

If you have trouble paying cash for a babysitter, consider a barter system. Maybe you play an instrument, have a green thumb, enjoy cooking gourmet foods or make your own jewelry. You may be able to trade your services to benefit both parties. If you prefer traditional payment structures, there are resources to help you find the lowest price for childcare in your area. Your local Child Care Resource and Referral agency or the Child Care Aware website provides resources to find daycare centers, contact home daycare providers and compare costs in your area. Your child or children are precious to you, and leaving them in good hands shouldn’t cost you a fortune.

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It doesn’t take a degree in mathematics, statistics or finance to crunch the numbers on the current cost of higher education. Student loan interest rates will double on July 1st if Congress can’t reach a bipartisan agreement. Tuition and fees at public universities have risen 130% over the last 20 years; meanwhile, incomes keep falling behind. Today’s high school graduates need solutions to ensure a successful, productive future. There is no panacea for the complex issues plaguing higher education in the US, but students can achieve their career ambitions without paying an arm and a leg for the education to get there.

First and foremost, the college search begins with knowing yourself, your goals, strengths and weaknesses. Understanding your own preferences and lifestyle can help you choose both the right college and the right course of study. Going to college should be treated like any other major life decision; you need to understand why you want to do it, how you will adjust to the change, and how college will help you achieve your career goals. Even if you don’t know exactly what your major will be, if you understand your unique characteristics, you will make the right decisions for yourself. Understanding yourself will help you choose a college and avoid having to transfer. Knowing a general direction of study will help you focus your study right away in your freshman year instead of wandering academically and financially. US News published a remarkably thorough College Personality quiz covering ten factors in choosing a college, a great place to start for the overwhelmed high school student thinking about higher education.

cutting college expensesCollege could be much more affordable if a future college student could take college course equivalents in high school or show the college what he or she already knows and skip ahead. Fortunately, there are options for students that provide exactly that opportunity. For a student who took advanced courses in high school or for homeschooled students, the College-Level Examination Program (CLEP) measures a student’s knowledge of material covered in introductory level college courses. Thirty-three different tests are offered in topics such as American Government, Business Law, Chemistry, Calculus and level 1 and 2 French, German and Spanish. Each test lasts 90 minutes, about half the length of the ACT. Each one costs $77 and can earn up to 12 credits, depending on your score and each college’s requirements. Most schools publish the required scores for earning credit on their website, or you can contact the school to find out the minimum score for each test you plan to take.

Nearly 3,000 colleges and universities grant credit for CLEP, but the details of the credit earned may vary. They may apply toward general requirements, cover electives, or translate to specific courses. For some institutions you may be exempted from a course but not receive credit, or you may be required to complete an advanced course in the subject area before you receive credit for the introductory level. Before registering for the exam, know whether your top choice schools will require the optional free-response portion and what you may need to do after the exam to receive credit.

A similar option for students is Advanced Placement (AP) Program. Many schools offer courses during the academic year to prepare for an AP exam, but the class is not required to take the test. Most four-year colleges grant credit and/or allow placement into a more advanced course in the subject area. The College Board offers AP exams for 34 subjects. Each exam has a fee of $87 with fee reductions available for those with financial need. There is no limit on the number of exams you may take during your high school years. Credit and class placement depends on each college’s policy.

If your hometown has a college nearby, joint enrollment in high school and college offers expanded opportunities for advanced studies. You can become familiar with the workload of a college course and get a head start on earning your degree.

If you have no idea (or a thousand ideas) of what you want to study, taking a year off might be beneficial to you. A gap gives you more time to think about what you really want to do instead of paying for general courses until you decide on a major. You may be able to get a job in a field you are considering in order to get experience in the workplace and decide if it is right for you. Even if your job is just for the paycheck and not for the experience, living at home can enable you to save more of that paycheck and have more of the most-desired commodity in college: money in the bank.

For many students, half of the challenge of going to college is learning to live independently, just taking care of details like housekeeping, laundry, grocery shopping, cooking, paying bills, and many other tasks. They may seem small individually, but for many students they seem overwhelming when they combine with academic worries, adjusting to a new city, meeting new people and possibly homesickness as well. Now is an ideal time to take on more responsibility in your household to help you prepare for dorm or apartment living. If you’ve never done your own laundry, paid a bill or shopped for groceries, now is the perfect time to start. Your parents are still available to help, but more likely you will find that you really can handle most of the changes that would come with living alone or with roommates your own age.

The financial state of the average student is failing. Two-thirds of students graduating from four-year universities have debt averaging over $23,000. The total US student debt exceeds credit card debt. As a general rule, students who take on more debt than their first year’s salary are most likely to have difficulty paying it back. Don’t be average. Take steps to secure your educational and financial future and rise to the top of the class.

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