http://www.wikihow.com/Save-Money
The How to Save Money webpage does bring forth many good points. I'll review (add my opinion) here.
Setting goals: My personal goal (for starters) is to have 3 months of living expenses stashed aside (approx. $4500) and money for vacation (approx $1000). I have failed in coming up with a time frame because I'm not saving money all that fast - I'm just getting started and am like the tortoise, slow but steady. Right now I am having $20 taken out of my checking account 1 day after my paycheck is directly deposited. That's $10 a week or $40 a month. Yes, it's small but its a start and helping me develop a habit all the while teaching me not to see that money and get used to the fact that I don't need that money. I plan to increase that to $30 each paycheck next month and hold steady til I feel comfortable and raise it again.
Keeping a record: This is something I've always thought about doing but never did. I'm gonna attempt again. Starting next pay day I'm gonna attempt to keep track of everything I spend and save receipts. If I can't get a receipt I'm not gonna buy it *IE: No drinks from the soda machine* and I think that one little rule will help 2 ways: 1. saving; 2. tracking spending.
Trimming Expenses: The webpage lists these ideas for trimming: (My comments in green)
* Can you move to a less expensive apartment or house? Can you refinance your mortgage? Moving to a less expensive place to rent has expenses too - don't forget about that. Security deposits for place, electric, phone, cable, etc. Now, if you are moving locally instead of the utility security deposits again you may just get slapped with "transfer fees" instead. Moving truck? Bribing a friend? Gas for your own truck? Do I need to list more examples? Refinancing your home's mortgage has it's up's and down's and you'll need to talk to a financial adviser or ask your lender a bunch of questions, just one thought to remember: Interested added the the principle of the first loan has now become the principle of the second (refinanced) loan and theoretically you will be paying interest on the interest. Make sure you are getting a good deal and really will be saving money. This idea is good for trimming expenses, just do the math first.
* Can you consolidate your debts so that you're not paying as much interest? I did this by calling my credit card company - asking for a lower rate and asking about transferring balances and had gotten a new card with the same company for 0% apr for 1year and then transferred my higher balances to this new card. This only works if you have self control over credit cards.
* Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one? This is a great tip. Gather all your "trips to the store" in one time frame. Stop by on your way home as opposed to getting out and making a special trip. Is it possible to walk or ride a bike to work? Saving money and free exercise - can't beat that! I can't walk or ride to work because my job can require me to use my car in less than a moments notice, but if I could... I would.
* Can you get a better price on insurance? Call around and make sure you are getting the best price you can. Consider taking a higher deductible, too. I agree with the calling around thing but also look at your current insurance agent. If you've been there a while let them know that you short on cash and need the best discount they can give you. Especially for car insurance; anti theft, anti lock brakes, anticipated mileage, drivers, ages, defensive driving courses...etc etc.
* Can you drop a land line and only use your cell phone? Since I've lived on my own I have never had a landline - only a cell phone.
* Can you live without cable or satellite TV? I don't even own a TV. (not intentionally though) I do plan to buy a TV and a cheap cable or satellite package just so I can watch basic tv and channel surf some. Not home long enough to fully watch tv but for me it would be nice to have just a little of that and it would be bundled with my internet service so the bills would be mildily discounted due to the bundle.
* Can you cut down on your utility bills? This is hard! I'm spoiled with heat and air. I have brought my electric bill from nearly $200 to $100. Last month was $145 but we had a few days of extreme cold.
* Can you restrict eating out? Buy food in bulk? Cook more at home? You might be able to save a lot of money on food. That's hard! Working 10-15 hours days every day, 7 days a week, and maybe 2 days off a month. I don't wanna cook then!!! Working on it.
Thursday, January 22, 2009
Income Taxes!
After completing my tax returns, I've learned that I will be getting some back. BEFORE I get that money I want to decide what I am going to do with it. What are some options?
1. Invest in stock market/mutual fund
2. Put in savings account
3. Certificate of Deposit (CDs)
Right now, option 1 is out! I want to get some stocks and/or mutual funds but I have no money saved up. I have $25 dollars in the savings account so far but it will grow slowly and surely - even with just $20 a month going out of paycheck and whatever little extra I can toss in.
Putting in to a savings account would also be praying that I can control myself enough not to touch it!!! I'm trying to practice that idea by forgetting about the savings account and letting it come out of my checking account a day after payday.
CDs is what I'm leaning to. They have higher interest rates than regular savings accounts and I'd be coerced not to touch the money cause of the penalties that you have when you pull money out of a CD before maturity. Also that money isn't gonna be tied up so that if I do need it I wouldn't be able to access it. The penalty really isn't that major but I'll pretend it is so I don't touch it... and accept it for what it is if I have an emergency and need the money.
Option 3 it is for me and my tax refund!
Do you have any ideas? What will you be doing?
1. Invest in stock market/mutual fund
2. Put in savings account
3. Certificate of Deposit (CDs)
Right now, option 1 is out! I want to get some stocks and/or mutual funds but I have no money saved up. I have $25 dollars in the savings account so far but it will grow slowly and surely - even with just $20 a month going out of paycheck and whatever little extra I can toss in.
Putting in to a savings account would also be praying that I can control myself enough not to touch it!!! I'm trying to practice that idea by forgetting about the savings account and letting it come out of my checking account a day after payday.
CDs is what I'm leaning to. They have higher interest rates than regular savings accounts and I'd be coerced not to touch the money cause of the penalties that you have when you pull money out of a CD before maturity. Also that money isn't gonna be tied up so that if I do need it I wouldn't be able to access it. The penalty really isn't that major but I'll pretend it is so I don't touch it... and accept it for what it is if I have an emergency and need the money.
Option 3 it is for me and my tax refund!
Do you have any ideas? What will you be doing?
Sunday, January 11, 2009
Paying off Credit Card Debt
Today I figured up the DLOP (Dead On Last Payment) method for my credit cards and medical bills.
There are many methods that you can use to choose which order to pay off debts but in short what you do is you list all of your accounts and their balances. For the DLOP method you take the outstanding balance and divide that by the minimum payment due each month and then you will come up with a number - the DLOP number, if you will. Then you would rank each account lowest to highest DLOP number. The account with the lowest DLOP you would pay off first and then the second lowest DLOP number is paid next.
Other similar methods of paying off debt are sometimes referred to as the snowball method and are a little less mentally complicated. Here you would just list all of your accounts and then either choose:
highest interest
highest balance
lowest interest
lowest balance
And rank your accounts accordingly in order to pay them off.
Ok, so - we have come up with our ranking: now what?
Each debt you continue to pay the minimum balance due with the exception of one. The one that you picked (ranked 1) you will send in the minimum balance due plus any extra that you can send. For myself, the priority account gets NO LESS than minimum due + 20.00. (Keep in mind I am a single 24 yr old female living on her own with no financial support but my own wages.) If I happened to have a good paycheck then of course I would send in more, as much as I could. The purpose of me saying the Minimum+20 is because I know that push come to shove I can find $20 extra somewhere but I couldn't exactly always find $100 extra.
http://www.oprah.com/article/money/debtdiet_steps_03/1
Oprah is awesome - no matter what your opinion about her is. Here is a four page explanation of credit cards. There is even a script for you to help negotiate with the credit card company for a lower interest rate (which I'll prob talk about in a later post) and at the end of it is a DLOP worksheet helping to further show what I have explained above about DLOP
There are many methods that you can use to choose which order to pay off debts but in short what you do is you list all of your accounts and their balances. For the DLOP method you take the outstanding balance and divide that by the minimum payment due each month and then you will come up with a number - the DLOP number, if you will. Then you would rank each account lowest to highest DLOP number. The account with the lowest DLOP you would pay off first and then the second lowest DLOP number is paid next.
Other similar methods of paying off debt are sometimes referred to as the snowball method and are a little less mentally complicated. Here you would just list all of your accounts and then either choose:
highest interest
highest balance
lowest interest
lowest balance
And rank your accounts accordingly in order to pay them off.
Ok, so - we have come up with our ranking: now what?
Each debt you continue to pay the minimum balance due with the exception of one. The one that you picked (ranked 1) you will send in the minimum balance due plus any extra that you can send. For myself, the priority account gets NO LESS than minimum due + 20.00. (Keep in mind I am a single 24 yr old female living on her own with no financial support but my own wages.) If I happened to have a good paycheck then of course I would send in more, as much as I could. The purpose of me saying the Minimum+20 is because I know that push come to shove I can find $20 extra somewhere but I couldn't exactly always find $100 extra.
http://www.oprah.com/article/money/debtdiet_steps_03/1
Oprah is awesome - no matter what your opinion about her is. Here is a four page explanation of credit cards. There is even a script for you to help negotiate with the credit card company for a lower interest rate (which I'll prob talk about in a later post) and at the end of it is a DLOP worksheet helping to further show what I have explained above about DLOP
Welcome All
Welcome all to read this. I am putting myself on track to go down the road of Financial Freedom.
There are many many many and even many more books, seminars, training, etc on this very topic but in most cases... if you are already struggling with money then how can you afford to pay more on money? Now, don't take me wrong, some people are in need of financial planners and such so - if you are one of those... then get the help you need. What I'm talking about: Spending $50 on a book that tells you how to save money by putting it into a savings account doesn't make much sense. Just put the $50 in the account :D (Go to the library, as long as you return it on time..there shouldn't be a fee!)
The reason above is why I'm putting my financial path online in a public setting. As I discover things - I want you too!
Legal Stuff: I'm not a financial advisor nor am I qualified to be anything near the sort. I am just an average person putting together and to use some tips/tricks that I may have found somewhere else (internet/tv/news/other media) or that I may have thought about and gone: damn, why didn't I think of that before!
As always, your comments will be forever appreciated. Again, welcome to my journal to financial freedom.
There are many many many and even many more books, seminars, training, etc on this very topic but in most cases... if you are already struggling with money then how can you afford to pay more on money? Now, don't take me wrong, some people are in need of financial planners and such so - if you are one of those... then get the help you need. What I'm talking about: Spending $50 on a book that tells you how to save money by putting it into a savings account doesn't make much sense. Just put the $50 in the account :D (Go to the library, as long as you return it on time..there shouldn't be a fee!)
The reason above is why I'm putting my financial path online in a public setting. As I discover things - I want you too!
Legal Stuff: I'm not a financial advisor nor am I qualified to be anything near the sort. I am just an average person putting together and to use some tips/tricks that I may have found somewhere else (internet/tv/news/other media) or that I may have thought about and gone: damn, why didn't I think of that before!
As always, your comments will be forever appreciated. Again, welcome to my journal to financial freedom.
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