Posted on Fri, Jul 31, 2009
Award-winning author A Dawn is a City University of New York Economics graduate. The former Financial Advisor now works as a Data Integrity Analyst for a major Canadian wealth management corporation. He created Canada’s Personal Finance Website to make the world of personal finance easy and accessible for everyone. Invest Now is author’s first book. He makes his home in the world class city of Toronto.
There is no denying the fact that in times of economic hardship, people begin to look at their own situation and consider whether they can continue to live as they have been. Spending money is great fun when it is plentiful and you know there is more to come. But in times of recession, there is always a danger that the next company to announce major job cuts will be either yours, a family member’s, or one of your customers. It is then that you need to ask yourself if you should change the way you look at financial matters.
Keeping a positive attitude when it comes to spending money is important. It is not necessary or desirable to immediately put locks on your wallet and say “no” before kids, friends or anyone else suggests or asks something which may entail spending money. This will lead only to a situation where no fun is had, and before too long it becomes depressing and, often, unsustainable. This is no call to arms for big spenders – but a recognition that what is needed is not austerity, but responsibility.
To some people the two things may amount to the same. This is not really correct however, as it is possible to behave responsibly and still enjoy yourself whereas austerity strips away everything but the essentials. Making responsible choices need not mean making boring choices. Sure, you can still go out, but not every night to expensive places. You don’t need to give up a holiday, but maybe two weeks in Dubai would be excessive. Decisions like these are where people make the savings that can get them through tough times.
A lot of people will be shy of investing money that could be saved in a tricky financial climate, but again it is not a matter of locking down the cash you have in order to protect your position. Sitting down and working out a budget to which you can realistically stick, and assigning a portion of your monthly income for “fun” and another portion to save can make the recession a lot more manageable. For many people the worst aspect of the recession is not having to cut back on spending, but rather the uncertainty it brings.
If you are budgeting as a single person then you need only concern yourself with meeting essential payments and then spending responsibly enough to make it through the month with a minimum of fuss at the end. Budgeting as a family is different, and will sometimes mean difficult, controversial choices need to be made. Discuss these as a family and make sure that everyone understands how the decision has been arrived at and why it was necessary.
There is no doubt that a recession or even a short period of financial hardship is undesirable and can be frightening, but there are lessons to be learnt through dealing with it – lessons which can apply when the cash flow is back on track. Approach the situation with a level head and an honest attitude and you will see out any rough period.
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Posted on Thu, Jul 30, 2009
Andy Hough is the writer of Tight Fisted Miser. Tight Fisted Miser provides information on extreme frugality and personal financial advice for the modest earner.
‘”What is the best way to manage personal or family finances during difficult economic times by making smart financial choices?”
My advice on what you should do during difficult economic times is similar to my advice for any time. If you implement the following three tactics you will be prepared for financial difficulties.
1. Cut Your Spending – Most people waste a lot of money. If you are like most people then there you can probably cut your spending by a significant percentage without any hardship. Although I keep my monthly expenses low at about $1000 a month if I were experiencing or anticipating a financial problem I could lower this even further. The next tactic will give you some ideas on how you can cut your spending.
2. Track Your Expenses - If you keep track of all your expenses you will know where your money is going. After you have a two or three months of expense records review the data and identify areas where you are overspending. You will probably find a couple of expense categories where you are surprised at how much you are spending. Those categories are prime candidates for reducing your spending
I find that just tracking my expenses helps me keep them under control. If I spend too much on a category one month I will be more mindful of it the next month and my spending on that category will revert to normal. If this doesn’t work for you then you might need to make a budget.
3. Build/Maintain an Emergency Fund – This is probably the most helpful tool for dealing with financial difficulties. If you have an emergency fund then losing your job or your car breaking down is not nearly the crisis it could be if you didn’t have any savings. I have about two years of living expenses in savings. This brings me a lot of peace of mind. Two years of living expenses is probably excessive for most people but I would aim for a minimum of six months. Whether you want to build your emergency fund beyond that depends on your own preference.
These are basic tactics but they are very effective if fully implemented. It might be too late for these tactics to help you during a present financial difficulty but if you start now you will be prepared for difficulties in the future.
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Posted on Wed, Jul 29, 2009
Ron writes for The Wisdom Journal, a blog about making wise choices, improving your finances, and living a better life. Ron is a husband of 19 years with three children. He has an MBA and is a partner in a 141 store chain with locations in 16 states. Having made many of the financial mistakes he writes about, he is now on better footing and is eager to share what’s he has learned along the way. Though many people learn faster on their own dime than on another’s, “experience is the best teacher,” he says, “especially if that experience comes from someone else!”
Have you noticed the bright pricing stickers being used on shelves today? The prices aren’t lower, they’re just more visible and eye-catching. Some brands will go out of their way to highlight their price even though it was cheaper all along. Try to scan the shelves and make sure that apparent markdown is real.
Today Only Deals
“Today Only” deals play on your emotions — fear, jealousy, greed. If a salesperson says a deal is ONLY good for today, I walk away unless I’m certain this is the EXACT product I need and the price is dead on.
Brand Claims
Here, gasoline companies are my favorite target. I’ll let you in on a little secret: all gasoline is the same when it arrives at the distribution facility. There, minute quantities of additives are poured into the ka-jillion gallon tanks and ABRACADABRA it becomes a “clean” fuel! Most name brand claims are just hype.
Buy Two For $5
Make sure the math makes sense. Does one item only cost $1.99? I’m constantly amazed at how grocery stores will trick customers with this strategy. If 2 for $5 really IS a good deal, do I actually need two? Will one of them go past its expiration before I use it? Will one ring up at $2.50?
12 Months Same As Cash
If I can’t afford that dining room suite or laptop today, there’s a good chance I won’t be able to afford it in 12 months. Usually, if a purchaser doesn’t pay in full before the 12 months are up, the credit issuer will back-date the interest. This can also have a detrimental effect on your credit score.
Extended Warranties
Extended warranties almost NEVER pay off. Either the product will last beyond the warranty period or getting it fixed will be less than the cost of the extended warranty. Do you think those warranty companies don’t make money?
Branded Credit Card Offers
Opening too many credit accounts WILL show up on a credit report and has the potential to have a negative effect on a credit score. When you have too many credit accounts, there’s a greater chance you’ll forget to pay one of them and then the hammer drops!
No one wants to overspend or feel exploited after making a purchase. In the current economic times, it becomes especially painful and even embarrassing. Learn to avoid these retailing come-ons and you’ll be better able to keep more cash in your pocket.
How do you deal with consumerist pressure? How closely do you look at the pricing details and what do you most often find? As always, your comments are appreciated!
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Buy Life Insurance Online visit
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Posted on Mon, Jul 27, 2009
By Sharon Harvey Rosenberg
Sharon Harvey Rosenberg is the author of the Frugal Duchess: How to Live Well and Save Money – a coming of age memoir about money — and a contributing writer in Wise Bread’s 10,0001 Ways to Live Large on a Small Budget. She is a freelance journalist and a blogger for Wisebread.com. The Frugal Duchess blog is located at www.sharonhr.blogspot.com.
Creativity, accountability and flexibility are key tools in my personal finance toolbox. With education and discipline, I use those tools to handle financial difficulties.
Here’s how my toolbox works:
1. Creativity: I try to find new uses for aging products, including my workplace skills. For cast-off household items, such as an old teapot, this process helps me to spend less money and save a small corner of the environment. Here are a few ideas for my teapot’s second life: plant potter, pen holder and a napkin centerpiece.
I’ve used the same process to earn more in an economic environment that has yielded massive layoffs and cutbacks for traditional journalists. I’ve repackaged, recycled and refurbished my writing, researching and reporting skills. This process has led to unexpected opportunities in the healthcare industry, blogging, public speaking and teaching. It’s a nonstop process of evaluation and can be applied to those in other industries.
2. Accountability: I know the bottom line, and it’s that space where my bottom hits the dining room chair. Quite simply, my dining room chair and table are great tools for managing the family budget. I use those tools best when I sit down and construct a realistic family budget that honestly reflects the income that comes into the house and the expenses that leave the house. This process demands full disclosure of nickel-and-dime expenses and the cost of big-ticket items. Periodically, the bottom line gets lost or mangled when I fail to either track expenses or dedicate adequate time to the budget process. Mindful planning, in contrast, keeps me honest about what’s really going on in my life. And there’s an eco-friendly perk to this process: When I live very frugally, I conserve energy, money and other resources.
3
. Flexibility: A package of Oreo cookies once sweetened a difficult lesson about personal finance. Driven by a strict diet, I had banished sweets from my life. The severe diet was short-lived because the sugar purge led to a huge binge in which I ate an entire package of cookies. When I brushed away the remaining crumbs of pride, I realized a personal truth about personal finance. Discipline and flexibility are equally important. It’s crucial to create and adhere to a plan, but budgets and menus have to deliver small perks and well-placed desserts. My best budgets have room for occasional small treats. That process rewards good behavior and avoids rebellious spending or eating binges.To get a
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Posted on Fri, Jul 24, 2009
By Max Messner
MaximizingMoney.com offers cash bonus opportunities, money-making tips, and financial articles to help you save more money and earn extra cash with banking bonuses, credit card offers, travel discounts, investment opportunities, and more ways to make more money.
What is the best way to manage personal or family finances during difficult economic times by making smart financial choices?”
As far as I can tell, the best way to manage your finances during difficult economic times is to make smart financial choices during good economic times.
Of course, it’s too late for that if you’re in financial trouble now, but consider this your second chance to prepare for the future.
If you own a Mercedes, live in a 5-bedroom home, and work at Shenanigans, then you’re living beyond your means.
Start saving your money, pay off your credit cards, and sell your car so that you can start taking the bus.
If you’re living within your means now, and you’re still having trouble making the bills, then it’s time to really cut down to the basics.
Cut the cable, disconnect your cell phone, and cut back on chips, soda, and other unnecessary food expenses. It’s amazing how cheap your groceries are when you shop around the outside of the store.
You might have to get a second job if possible. Hopefully you have one already, and if you do, keep looking for a job that pays more. It’s always good to have options.
I mean, let’s admit it. Our financial troubles are really our own fault. America always wants more, and we’ll find ways to get it, even if it’s something we can’t afford.
It’s not necessarily a bad thing, because we’re resourceful and creative at finding the means to our ways, but we’re also inconsistent with where we spend our wealth, and our greed doesn’t always equal good.
We burn more oil, we borrow more money, and we pollute more air. We just do it bigger, better, and badder than anywhere else is the world, for better or worse.
And every once in a while, when you’re living on the edge of the bubble, you’re bound to burst, crash, and burn, so you just have to learn how to live with it.
So buckle down, save more than you spend, and forget about what you don’t have, as you may have to start selling some of the things you do.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
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Posted on Wed, Jul 22, 2009
by LAL
I’m LAL (livingalmostlarge), from LivingAlmostLarge and LAL Musings. I recently turned 30, and am married with a dual income and no kids. I write about personal finance from the perspective of someone searching for financial freedom. I one day want to live large. To me that means not worrying about paying my bills or losing my job. So join my on my journey and see what pitfalls and successes I have.
What is the best way to manage personal or family finances during difficult economic times by making smart financial choices?
Honestly, making smart financial choices starts before difficult economic times. I am not a fan of the “latte” factor. You know, the term coined by David Bach talking about people who spend $3/day on a latte. That works out to $1000/year on coffee at Starbucks. Well why not?
Well here’s the deal, if $1000 breaks your budget, then you are on way to tight a budget to begin with. I’m a firm believer that if you keep the biggest line items in line with your budget, everything else will fall in line.
If you overspend on a house, car, student loans, etc then there is no way to manage a budget. How can you live if a house takes up 50% of your income? Not possible. Or if you pay 25% of your income towards a car payment?
Truth is that $3/day isn’t going to allow you to keep a home or car that is unaffordable. Nor is going out to eat for $5/day going to make keeping that luxury car possible. The reality is if you make $50k/year why are you buying a car that is $30k? Or if you make $50k/year, why are you buying a home for $300k?
People only look at whether they can “afford” the monthly payment. Then when repairs or problems occur they can’t afford it. Or if they lose their job for a few months or take a paycut what was once affordable, isn’t anymore.
Smart financial choices start when you make your big purchases. Staying within the general guidelines can help. For example 15% to retirement, 28-33% for a home, 5-10% for a car, and 5-10% student loans as rules of thumb.
Realize that if you have a lot of student loans, it may mean not buying a new car with financing or purchasing a home at 28% of your income. Instead you might have to drive an older car and buy a home at 20% of your income to make ends meet.
Smart financial decisions begin with the biggest line items in your budget. Once you have those in line, then the rest will fall into place.
How much do you spend on your major purchases? What prevents you from overbuying, or what causes you to purchase what you probably can’t afford? As always, your comments are appreciated!
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Jul 20, 2009
by Cheryl Smith
Cheryl Smith is a columnist and blogger for The Examiner, covering her local area of Ft. Lauderdale. She writes helpful first-person observations and advice concerning financial matters among other topics. For more articles by Cheryl, visit her personal website on The Examiner.
As the recession drags on and unemployment continues to skyrocket above 10%, we must look for ways to stretch our budgets. The Sun Sentinel/CNN.com ran a series of Tips of the Day ideas which listed twenty ways to fix “leaks in our household budgets” by changing the way we spend money for of variety of services. I have picked out a few of them for you to try. I’ve noted where we’ve tried these suggestions and how it worked out for us.
1. Cable, Phone and Internet: Subscribing for cable TV, Internet access, and phone service from three different providers can end up costing you money. Consider a package deal from your local cable or phone company. You can get digital phone service, which is provided by a broadband Internet connection, high-speed Internet, and digital channels for much less than you’d pay separately. Some may want to consider eliminating their land line all together or cutting back to basic service without all the bells and whistles.
By cutting back to basic land line service we saved $20 a month on our phone bill
2. Paying Bills by Snail Mail- It costs 44 cents to mail a letter the old fashioned way. You can save time and money by signing up for on line bill pay with your banks. This is typically a free service and allows you to schedule payments in advance. You can also use the individual merchant websites to pay your bills. Many credit payment the same day they are made. You must be sure to check the terms of each account as some may take a day or two to be credited and you do not want to incur late payment penalties.
We pay all our bills on line. This is a quick and efficient way to do business. We have a record of payments and don’t have to be bothered with writing checks. While it may not seem like a huge cost saving, when you consider how many bills you send out, it adds up.
3. Eating out on Vacation- Consider getting a room with a kitchen or kitchenette. Even if you have to pay a bit more for the accommodations, you’ll easily save money by not taking your family out for breakfast, lunch, and dinner.
On a family trip to Disney World, we had a suite with a kitchen. When traveling with children, eating out can be costly. This allowed us to have breakfast and dinner in the room as well as bring snacks and drinks for the day. Aside from saving money, it makes it easier to provide healthier meals. Plus you don’t have to deal with crowded restaurants. I highly recommend it.
4. Flexible Spending Accounts- Many employers offer spending accounts that let you sock away up to $5,000 per household tax-free for medical expenses, which you can use for health-insurance co payments, prescription drugs, eyeglasses, contact lenses, and even nonprescription drugs, such as aspirin. Estimate your needs carefully when open enrollment comes along. The IRS now offers a grace period of an extra 2 1/2 months to spend the money, so you don’t have to rush to spend it all by the end of the calendar year.
We’ve been doing this for years and it wonderful. Besides saving you money on taxes, you have a record of all your medical expenses. The money is taken out of each paycheck throughout the year so large medical expenses do not have to be paid for in a lump sum. It is a shame that more people don’t take advantage of this program.
5. Water Usage- There are many ways to cut back on water usage. Turn off the tap while you’re brushing your teeth or shaving — every minute the water flows wastes up to 2 1/2 gallons, according to the Environmental Protection Agency. Run full loads in washing machines and dishwashers. Water plants in the early morning to ensure that the water goes into the ground instead of evaporating. And use a bucket to wash the car, hosing it off for a quick rinse, to save 90 gallons of water per wash.
Just thinking about saving water will cause you to make subtle changes such as turning off the sink instead of letting it run.We’ve set the timer on the sprinkler system to come on at 5: AM, and do laundry once a week to insure full loads.
6. Online Shipping Fees – The convenience of ordering on line is nice but we are sometimes put off by the shipping charges. There are several things you can try. Pool purchases with friends to qualify for free or flat-rate shipping offers. For example, several sites, such as Amazon, Barnes and Noble, and Tower, offer free standard shipping on most orders of $25. Use a shopping search engine, like shopzilla.com or shop.com. Enter your ZIP code and compare retailers’ prices, including shipping and handling. You can even specify “Free Shipping” as an option in your search (on Shopzilla, search for “Special Offers” and then “Free Shipping Offers”).
7. ATM Fees- On average, consumers withdraw $60 from an ATM four times per month, estimates David Gosnell, an editor at ATM & Debit News. That’s about $240 a month in unaccountable spending. Try withdrawing the exact amount of cash you’ll need each week from your bank to avoid other institutions’ ATM transaction fees.
You can also get cash back at many grocery and drug store chains for no charge. This is our usual way of getting cash without incurring fees.
8. Too much insurance- Does your home owner’s insurance include the value of the land? The land isn’t going anywhere so you don’t need to insure it — just the structure and your belongings. If you have an older car, the annual premiums and deductible might make collision and comprehensive insurance cost more than the car is worth. On any insurance policy, auto or home, think about a higher deductible. Because filing numerous small claims can raise your insurance rates, you may be better off covering minor losses yourself and getting a lower rate with a high-deductible policy. You may also have unneeded special riders on high-value items you no longer own. If you think you might be over insured and want an opinion from someone besides your agent, go to the Insurance Information Institute site, at iii.org.
As circumstances in your life change, you need to make sure your insurance coverage changes when necessary. We canceled the collision on an older vehicle, increased deductibles on all policies and were able to save hundreds of dollars on premiums.
9. Home Renovations to improve value of home- Renovating your kitchen at a national average cost of about $43,860 doesn’t always mean you’ll make it back when you sell your house. On average, you’ll recover 85 percent of the cost of a new roof 90 percent of the cost of new windows ($8,680 of $9,680). A bathroom renovation is the project least likely to lose money (a return of $10,730 on the average cost of $10,500, or 102 percent). A wiser option is hiring a professional who can give your home an inexpensive makeover. “A home stager adds furnishings, decorative touches, and details,” explains Alan Montgomery, a real estate agent in Seattle, “down to setting your dining-room table.”
Montgomery had a client whose home sat on the market for six months at an asking price of $334,000. After spending $5,000 on staging, the owner sold the place in three months for $379,000. Ask your real estate agent or broker if she knows anyone in the home-staging business, or go to interiorredesigndirectory.com, a directory for interior decorators, many of whom also stage homes.
10. Using SunPass-Sign up for the SunPass (or your local equivalent such as EZ-Pass) which is now good on a number of toll roads. You’ll save time and fuel by not idling in toll lanes, and some toll roads offer regular commuters discounts of as much as 50 percent. The International Bridge, Tunnel, and Turnpike Association lists websites for local toll authorities and their discount details.
We always looking for ways to save money. If you come across something that works for you, please share it with us.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Jul 15, 2009
by GingerLatte
Ginger is the writer of Girls Just Wanna Have Funds. Girls Just Wanna Have Funds is dedicated to the woman that wants to take charge of her personal finances. We value budgeting, investing, frugality and remain mindful of our spending habits. Move over and make way for women who are in control of their financial destinies and not afraid to say it. We’re armed with a positive net worth and not afraid to flaunt it while breaking financial ceilings one stiletto at a time!
People all over are scrambling to make ends meet in one way or another across income brackets. Virtually everyone is feeling the pinch of the recession and they are surely thinking about next steps. There are no more HELOCs or credit cards to fill the gaps as banks are cutting limits like a lumber jack wading through the forest. Jobs are also scant as businesses are cutting back in critical areas to stay afloat.
So what’s a well intentioned person to do?
Check out the following tips to learn how to make smart financial choices amidst a deepening recession. You’ve probably heard of these before, but now more than ever is the time to apply them to your lives.
Track Spending, Eliminate Bad Habits And Determine Priorities
What are your current goals? How are your financial actions and choices aligned with said goals? Are you saving towards an 8 month emergency fund but splurging on weekend shopping sprees and coming home with nothing to show for it? How about that $500/month car payment? Is it all really necessary? Can you trade it in or sell it in order to lower the monthly payment? If you’re living on the edge or are close to it then look at your spending and determine based on your goals and priorities if your spending habits are aligned. If not, you have a problem and the two need to be in harmony, fast.
- Action: There are many online services that you can use to track your spending for 30-60 days. Review all transactions for the first 30 days then use the second thirty days to make adjustments. Open an account for savings not easily accessed and use a debit card or separate bank card to keep “play money” separate from bills.
Also review each of your monthly bills and determine where you can cut back. This includes:
- Electricity: Lights off if no one is in a room. Plug out appliances overnight and during the day when you aren’t home. Check windows for energy efficiency.
- Gas: Cook weekly meals on Sunday to avoid more usage in the week. Also, plan errands instead of making multiple trips during the week.
- Insurance: Do you really drive that much in a recession? Live near public transportation? Use it and tell the insurance to reduce your mileage for the year which in turn reduces your monthly premium. You save on gas and insurance
- Credit Cards: Call your bank or credit union and try to secure a personal loan to consolidate your debts if the personal loan rate is lower than your current credit card interest rates. Once secured, pay off the debts, and you now have one lower monthly payment.
Understand Your Weak Points
What’s the saying? Squeaky wheel gets the most grease? Well, the same thing applies here. My weaknesses are beauty products gadgets. Right now I am eyeing a very expensive WIFI Sony Cybershot camera but know that I don’t absolutely need it right now, but photography is a hobby of mine. Still, it can wait till Christmas or until Ive made all of my financial goals for the year.
- Action: Look over your 30-60 day transaction charts. Where are you the weakest? Lunch? Dining out too much? Too many trips to the grocery store or the mall? Where are you weakest in your finances? Address those immediately and watch how much you can save which pushes you even farther towards your goals.
Protect Yourself: Set up Life Insurance and Stack 8 Months In An Emergency Fund
What happens to your loved ones if you’re no longer here? If you lose your job tomorrow are you prepared to support yourself until your next job? Suze Orman recommends stacking an 8 month emergency fund before paying down debt.
In the event of the unthinkable, are you prepared? I know that we can’t prepare for everything that may come our way but we can do the best we can with what we have. An insurance policy protects you and your children in the event of your passing.
- Action: Please consider at the very least looking into and sitting down with a life insurance agent to discuss your options. Term life policies cost less and provides coverage for the essentials upon your passing.
Pay Down Old Debt/Refuse New Debt
Need I say more? Make a plan to pay down old debts and refuse to take on new ones. If you can’t pay for it in cash then you cannot afford it.
- Action: Check out the Snowball Method of paying down debt and see how it can work for you.
Consider Multiple Income Streams
I hate to beat the horse to death but if you lose your job, how would you make ends meet? Do you have a side hustle or business? Work on making yourself immune to the recession by having a back up second source of income. If you do-bravo! If not, consider making a hobby profitable by turning it into a business. The ladies of the Girls Just Wanna Have Funds Meetup.com group in DC are getting together to showcase their side hustles to inspire and motivate each other to create second streams of incomes. In some cases, these businesses have been lucrative enough so that if laid off they did not have to seek employment.
- Action: Consider making a hobby profitable by turning it into a business
Tips:
- Be realistic about your goals: If you’re down to one income, pay the essentials and work out the rest with your debtors or let it work itself out. Your survival is paramount
- Couples: Discuss Goals, adjust your spending accordingly. Discuss new spending limits if needed due to layoff or job loss. Be honest with each other about your financial limits and honor them.
- Families: Discuss new financial changes with your children and help them to understand that due to current economical conditions, you may need to start tightening belts. However, instead of taking certain luxuries away, replace them with cheap/free options as you have the discussion with your children. This helps them understand that while they may not be able to go away on an expensive family vacation this year, a closer to home staycation may be in order.
The recession may be here, but you don’t have to participate in it if you’re adequately prepared. Think about the worse that could happen and prepare yourself. In the mean time, live your life while making smart adjustments to your finances.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Jul 13, 2009
By Christina Brown
Christina Brown writes for Northern Cheapskate, a blog dedicated to helping others live a frugal lifestyle through coupons, freebies, and money-saving ideas. Learn how she saves money as a stay-at-home mom living in the rural northwoods of Minnesota at www.northerncheapskate.com.
Many of us have lived well for a long time. We dressed nicely, we ate out at restaurants and took exotic vacations. But now layoffs arrive with little notice, and families are struggling to make ends meet. The days of spending without thinking have disappeared. For many of us, it is a cold, hard reality we’re not prepared to deal with.
Here are five ways to take control of your personal finances during these tough economic times.
1) Learn to Budget. In order to manage your personal finances properly, you need to know where every penny you make is going. Keep track of all your income and expenditures for at least a month, if not longer. You’ll get a better sense of what your problem spending areas are, and what bills you may be able to reduce (such as your grocery or cell phone bills). Check online for free budgeting resources or visit your local library for more ideas on how to get started.
2) Learn the difference between needs vs. wants. If you’re serious about taking control of your money, then you need to get serious about what you truly need. You don’t need a giant house, but you do need shelter. Downsizing your living space may help you free up extra cash in your budget. Think hard about what you could give up if you needed to. You may discover that you don’t need cable television after all.
3) Recognize that the little things count. While it is important to consider making changes to those bigger ticket items in your budget (such as vehicles, living arrangements, and insurance deductibles), realize that the little amounts you can save do add up. Clip those coupons, find those freebies, and conserve that energy. Every dollar adds up.
4) Use the internet. The internet is the best tool you can use to manage your life. You can find tools for budgeting, scour the internet for coupons, freebies, and deals, and use it to job search. You can watch television on the internet, find free things to do with your kids, and talk with friends and family online. Cut your cell phone, cut out cable television, sell your car, but try to keep your internet. It’s a great tool that can help you on the road to personal financial freedom.
5) Accentuate the positive. Yes, these are tough economic times, but this is also the best time to grow as a person. Learn new skills (such as cooking or sewing). Enjoy more time with your family. Cultivate a simpler lifestyle and you won’t regret it.
What are your tips for saving money? How do you get by during financial difficulties? As always, your comments are appreciated.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Thu, Jul 09, 2009
We often speak of the importance of paying off debt as a means to financial freedom, but what is equally, if not more important, is a discussion of ways to pay off that debt. We’ve compiled some helpful hints on how to pay off your personal debt (whether it be credit card, student or other types of debt). With a little smart shopping, saving sense, and the willingness to seek help, anyone can get themselves out of debt without having to go the dreaded bankruptcy route.
Talk to your credit lender. They may be willing to cut you some slack if you explain to them that you plan on paying off all the debt. Ask for a reduced payment schedule. The key is to ensure them (in not so many words) not to give the debt over to a collection agency. If you can talk to them and ensure them that the debt will be paid off, then you may convince them that getting the full amount of money you owe is preferably to hiking up your interest rate and never getting most of it.
Make sure you pay off high interest rate debt first. This always has to be your first priority. Even if there is more money in that debt, or less, or whatever reason you may not prioritize it, ignore that reason. That money is more likely to increase substantially and further hamper your ability to get out of debt.
Cut expenses! Cut expenses! Cut expenses! Every dollar you waste on an unnecessary purchase is potentially several dollars that you owe in debt. Make sure you prioritize getting out of debt first, then spending latter. Those expenses will even feel better once you know you can make them without worrying about your debt. There are plenty of ways to do this too. You can cut more coupons, buy generics instead of brand name products, you can watch less tv, make your own lunch and brew your own coffee. Each of these will cut expenses easily.
Refinance your debt. All the time people are told to refinance their mortgage as a means of lowering debt. Why not do it for other forms of debt as well. If you can get your hands on a lower interest credit card, switch your debt from one source to a cheaper one. Don’t make a habit of paying off credit cards with other credit cards, but finding lower interest solutions to your credit and debt problems is a good solution.
Make larger payments towards paying off debt. This is sort of the culmination of the rest of the tips, but it is important to say. Paying the minimum is often only a single digit percentage of what you owe. Your interest on your original debt could easily get higher than the original debt if you keep this up. Along with this, you may want to consider withdrawing some of your money that is invested or in savings. Think about your returns on a savings account: 4%? 5%. What is your interest rate on a credit card? Most likely much much much higher than that. Don’t get rid of an emergency fund, but consider taking money that is earning very little compared to what you are losing in interest.
Think of all these measures to get rid of debt as a way of making 15-20% more income each year, without it being taxed. That’s a hard prospect to scoff at isn’t it? Keep that goal in mind, and you will be able to do what is necessary to get rid of your debt
How do you save money? What have you done to reduce debt? As always, your comments are welcome
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
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Posted on Mon, Jul 06, 2009
By J. Money
J. Money writes for Budgets are Sexy – A laid back finance blog of a guy just trying to spice things up a bit. He also finds budgets….well…sexy! If you like what you see, pop on over and say hello.
Rockin’ out your finances is smart anytime, but with the economy these days a little extra attention can go a long way. Luckily, smart doesn’t mean complicated! Many of us try to make things a lot harder and convoluted than we have to, but it’s the simplest moves that will keep our nest eggs happy (and ourselves sane).
I present to you three of my all-time favorite strategies. The more you can check off, the better your financial life will be. And you’ll see they’re pretty plain words of advice as well – just don’t mistake boring for not worth while! They may not look all that sexy, but they’ll sure keep you out of trouble.
1. Track your spending for 3 months
This is the one thing you can do to learn EXACTLY where your hard-earned money goes to. Think of it as an E-True Hollywood Story based on Your Financial Life – you think you know, but you have no idea! Haha…okay, well maybe it’s not that drastic, but you’d be amazed at the things you’d find if you actually sat down and sorted through it all. Even if you do it just one time, and one time only, it’ll give you a better over all picture of your finances.
Once you know exactly how much you spend, you can then figure out how to move forward – whether it’s to remain on the same route you’re currently taking, or move to a newer one. I had guestimated a budget of $500 for my credit card each month (I put most of my expenses on it for better budgeting & cash back rewards), but in reality i was spending between $800-$1200! Whoops. I then created a more realistic budget.
2. Create an Emergency Fund
The emergency fund is important, if only for great peace of mind. There’s something to be said in having a pile of cash in your account for whatever it is you’ll need it for. I really don’t know what constitutes an emergency, exactly, but for me it’s more of a stash to keep myself out of trouble 
As for how much to put in there, I personally shoot for 3 months, but it really depends on what you’re comfortable with. It can be 2, 3, even 6 months, whatever you feel would make you sleep better at night. Once you reach that point, you’re all set! You can then go about using your money as you wish, knowing you have that safety net.
3. Pay off all Bad Debt
Get rid of it! Whether it’s credit cards, outstanding loans to friends or family, or whatever – it’s not great to have. This is much easier said than done, of course, but my goodness if it’s not true. It effects everything from credit scores, mortgage rates, car loans, and even worst – your overall happiness 
What would you do if you had $0.00 in debt?! How insanely awesome would you feel! It’s not gonna happen overnight, and it certainly won’t be easy, but it needs to happen. Whatever you need to get rid of it, do it.
Again, these aren’t the hottest or newest ideas around town, but they work. And they work WELL. It’s all about getting your mind right and staying focused. If you can do that, you’ll be a lot better off once this crap storm comes to an end. Shoot, you do just ONE of the three items and you’ll be much happier! All you have to do is start.a
What are your tips for financial growth? What are your strategies for saving and planning? As always, your comments are appreciated!
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Jul 01, 2009
By Chad Brand
Chad Brand is the founder and President of Peridot Capital Management LLC , a registered investment advisory firm specializing in personal finance and investment portfolio management services for individuals. Chad’s blog, The Peridot Capitalist has been recognized by major media outlets such as Forbes as one of the top investment blogs in the United States since it launched in late 2004.
There is a television commercial airing right now from Charles Schwab that I think sends a very poor message to those of you who are wondering how you should change the way you manage your finances and investments during the current economic downturn. The lady in the commercial points out that she used to take a hands off approach to her investments, but now that the economy is in decline and the stock market has fallen dramatically, that strategy seems crazy.
I was surprised by this commercial, especially coming from a reputable company like Schwab, because I think it sends the completely wrong message to those who are trying to navigate difficult economic times by making smart financial decisions. The woman in this commercial implies that since times are tough she believes that is reason to dramatically alter the way she manages her finances and investments. Is dramatic change and action really the best strategy?
As a professional investment manager, I don’t think so, in most cases. Too many people I have seen and worked with have made the mistake of making sudden and dramatic changes based solely on their emotions, not sound financial advice. I have had clients who, during the stock market’s worst days, called or emailed me in a state of panic and wanted to know if they should sell off all of their investments. People who sold based on emotions, simply because things were tough, made a huge mistake. The stock market has rallied more than 40 percent from its March 2009 low and those people missed out on it.
Changing your strategy simply because times have changed is not necessarily a good idea. Going back to the woman in the Schwab commercial, don’t you think the question she should have asked herself was “How strong is my current investment plan and strategy?” After all, if her current plan was being implemented well, it might not be so “crazy” to just let it continue unchanged.
Now, if she had no plan or was neglecting her original plan, then we could surely make the argument that it was “crazy” to continue on that path. However, whether the economy or the stock market are doing well should not have any influence over these decisions. Implementing a sound financial plan will work wonders for you regardless of economic climate, which in turn prevents you from needing to worry about things when times get tough, as they are today for many people.
What are your investment strategies for tough times? Can you alter your investment strategy without a dramatic overhaul?
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com