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Jeremy Schalf

Learning to Save Money

It is no wonder that American’s cannot save. There is nothing in our culture that promotes keeping your income. You need to keep up with the Jones’s. If you don’t have the bigger house or the new car, you’re not successful in life. We are taught from a young age that image is everything, so buy it.

While there is nothing wrong with having things, it is important to know how to save money to be able to get them. Saving and living within your means gives you the best chance of affording the things you want without overextending to get it. It is possible. You can start getting onto the road of saving.

First, you need to have a reason to save. Why do you need to keep your money? What are your goals? Having clearly defined goals will help establish a discipline to help meet that objective. Maybe the goal is to save for a car, a house, a trip, or retirement. Once you know where you want to go, then you can start the journey on how to get there.

Next, you need to find the money. The sage old advice says to save 10% of your income. Well, that is easier said than done. The point is that you need to start somewhere. Many financial institutions have financial calculators on their websites that can help calculate how much you need to save each month to get to a certain dollar amount in a certain number of years. This information is helpful because if you don’t know what the end number is then you won’t know how much to put away. For example, if you save $150 a month for 20 years with a 3% interest rate, you will have a bit under $50,000 at the end.

Now you ask, where can you find the money to put aside? This is where priorities come into play. This step might take some sacrifice. Unfortunately, not many people were taught delayed gratification growing up, but here is where it comes in handy. Sacrifice a little today for a better tomorrow. Is going out 4 or 5 times less a month worth $50,000 down the road?

This is where a budget can be a life saver. Again, many financial websites have templates that can be used to help figure out what your monthly expenses are compared to your income. This will be helpful in seeing areas that might be cut to help set aside some funds for the future. You must live within your means today so you can live your dreams tomorrow.

Last, is consistency. Don’t stop. Don’t give up. If you stop putting the funds aside, you are robbing from yourself. Yes, there are always reasons for wanting to spend the funds you earmarked for savings. There is always a gift to buy or a sale at the mall, but if you budget correctly, you should have money for these occasional wants and needs.

Prevent Elderly Financial Exploitation

Seniors make up for one third of the nation’s net worth, which makes them a considerably easy target for advisors looking to exploit them financially. Ninety percent of abuse comes from family members or trusted others like, financial advisors. According to a 2007 University of Miami study, since many elder suffer from cognitive impairment, investment skill deteriorates dramatically after the age of 70. Warning signs of elder financial exploitation often include sudden reluctance to discuss finances, unusual unexplained cash withdrawals and wire transfers.

Between 2008 and 2011, a Metlife Study of Elder Financial Abuse found a 12 percent increase in the dollar amount of which elders were being defrauded. One of the most common scams targeting seniors are “free lunches,” marketed as educational presentations. However, these meals often end up as sales pitches for investment products with misleading claims. The elderly are put in a situation where they are given a hard sell for unsuitable investments, and pressured to buy investment products after accepting a free meal.

Another instance in which elders fall victim to financial exploitation is via unsolicited phone, mail or e-mail pitch. In this case, they are tempted with financial products and services, like low-cost, high-yield investments. Another common tactic advisors use to exploit elders is to omit or misrepresent information about the costs and risks of a product. Equity indexed annuities and variable annuities are the most common products used because they promise a fixed income throughout retirement. Variable life insurance, mutual funds and universal or whole life insurance are other bad investment products advisors market to seniors.

These products are sold without any disclosure of risk, which most often includes extremely high commission rates and liquidation penalties. It is normal for seniors to end up in situations where they don’t have access to liquid assets in retirement.

Benefits of Independent Investment Advisors

Understand exactly what you are paying

Independent RIAs charge a fee based on a percentage of total assets managed. This fee structure has many advantages. It’s simple, transparent and easy to understand, helping to avoid surprises. It also gives your advisor an incentive to grow your assets-when you succeed, your advisor succeeds.

Advice for your complex needs

Independent RIAs provide services that address a variety of complex investment needs that often arise when you accumulate wealth, such as assisting you with the sale of a business, complicated tax situations, trusts and intergenerational issues. They can also help you prepare for future goals including college funding, debt management, and retirement planning. They should be your point of contact for every financial issue that may come up.

You won’t be sold a “Product”

An Independant RIA is not paid on commission. This means they will not push loaded mutual funds, non-public REITS, whole life, variable annuities, or other hard to understand products (which historically have high commission rates for the brokers who sell them). This means you are receiving objective advice with out any conflicts of interest.

Enjoy a different kind of relationship

The goal of an RIA is to help find solutions that are closely aligned with client needs and objectives, and many independent RIAs enjoy a deep, personal relationship with their clients through regular, ongoing interaction.

Saving Money at Work

  • CLOTHING . Whatever type of clothes you wear to work – casual, formal, or something in between, you can find them used in great condition for very little money at thrift stores. But one thrift store may not sell everything you need to wear. Also, not every thrift store will have your size. So, visit several of them to buy those clothes.
  • COFFEE, I don’t think any employee can go through the workday without drinking at least one cup of coffee. But, if you are a coffee connoisseur, you probably can’t resist buying your morning cup of Joe from Starbucks. Don’t go to Starbucks every day, or any other coffee shop that competes with Starbucks. The smallest cup of regular coffee there costs roughly $1.50. If your tastes lean towards gourmet you could spend up to $3 more per cup. You could spend between $7.50- $30.00 for one cup of coffee every day per week. That would increase your spending from $375 to $1,500 in one year. So, bring your own large jar or jug of coffee to work. A 48-ounce jug of Folger’s coffee grounds costs about $16.50 at Office Depot. This amounts to about $.03 per cup. Of course, if there is coffee at work, drink it since it’s free.
  • LUNCH
    Restaurant meals are expensive, with few exceptions. On average, restaurants cost $7.00 at the very least. According to the Aug. 29, 2012 issue of Time magazine, business columnist Dan Kadlec states a worker can save $2,500 per year by taking their lunch to work every day. So, bring your own lunch to work so you won’t spend so much money at a restaurant.
  • OFFICE SUPPLIES
    Buy most or all of your office needs at the beginning of the school year. I recommend “school supplies,” because many items used by kids in grade school, high school and college are the same ones you use at work. Paper, pencils, pens, notebooks, sticky notes, calculators and other supplies are drastically marked down for kids who go back to school in the Fall. Megastores like Kmart or Walmart sell plenty of school supplies at very cheap prices. You might also want to make a trip to your local Office Depot or Staples where you can find more office-specific supplies for minimal prices.

Financial Mistakes To Avoid This Holiday Season

Not having a financial plan

If you never utilized a financial plan for your own accounts, then risks are that you are going to fail miserably this season!

What amount would you say you are going to spend? What amount of cash would you say you are going to need? In particular, what are you going to afford? Shopping without a financial plan this Christmas is one of the top mistakes consumers do. Implementing a financial plan is the first thing everybody ought to do when planning on going to shop this Christmas season.

No budget Christmas by any means

If you do budget each month then you most likely are liable of this; not planning for Christmas. We are not perfect, and truly, this is a slip-up that many people do almost every year.

Do not plan for Christmas. Knowing the fact Christmas is coming. You will realize that it will drain you financially, still never do that. The reason behind this is because you will do the following things given below:

Not pay a bill or bills on December to buy Christmas presents.

Shop for Christmas and use a credit card.

It requires some time to understand that if you can budget Christmas in January, You will have the ability to stay away from these mix-ups and have an obligation and stress free Christmas.

Not having a plan

If you don’t take a seat and plan your holidays, you are going to overspend your hard earned cash. Planning your spending, your shopping, even your entire holiday if vital, will offer you some help with saving cash and keep yourself on track this Holiday season.

Do not have unreal expectations

Let’s face this, we do have unrealistic expectations of Christmas; and this transpires each Christmas season. We see the ads, we watch films, we see these expectations of what Christmas “ought to” be or feel like. This is the point at which you have to keep it genuine.

No, you are not going to get a brand new car with a red bow on the top. No, you are not getting a dream vacation package for Christmas. Be reasonable with presents and your expectations, Christmas is not just about presents.

Shopping out of guilt will destroy your finances

Feeling guilty because you couldn’t afford to buy everything your family needed may prompt overspending. Try not to promise your children or family what you can’t afford. You don’t need to buy for somebody because they gave you a gift. If they get mad because you didn’t give back a gift, possibly you have to question your relationship.

Once more, you don’t need to buy presents for everybody if you can’t manage the cost of it. You shouldn’t be made to feel guilty that you didn’t give somebody a gift back because they gave you a gift. If you are willing to shop, then the best way is to rest over it. YES, go to bed.

Financial Advisor Can Help You Stay on Track

  1. Measuring where you are now

You know the expression “you can’t know where you are going, if you don’t know where you have been.” Nothing could hold more truth, in relation to your personal finances.

If you don’t know your key money numbers (your net worth, monthly cash flows and several others), learning how you need to proceed forward in a helpful way is made more difficult.

If these calculations are properly determined they will tell you: what you have now (assets), what you owe now (liabilities) and what you have retained (equity). Further, the money that you earn and spend will be uncovered in detail, which will give you the extended information of what you can save, debt you can either pay-off or your capacity for new debt and serve to indicate if you have the funds to give money away and/or invest.

These questions are not easily answered without a proper look into your personal financial information and then suitable conclusions and decisions made from them.

  1. Establishing your priorities

Prioritizing what you need and want from your money is not always easy.

There needs to be not only the “hard numbers” of your personal money situation but also some thought about your feelings towards money and how you think about it. For example, some of the questions that your advisor should include deal with:

  • What are the most important things in your life?
  • What do you want and expect for yourself and your money?
  • What do certain purchases bring to your life and are they worth it?
  • How best should you manage your time to get the most from it?
  • What money habits do you have that are not good for you?
  • Do you really understand the inner workings of money and how it affects you?
  1. Making suggestions to reach your money goals

Although this could include a variety of methods, it should be one that is:

  • Realistic for your current situation
  • One that honours your future desires and goals
  • Doesn’t impose on who you are and what you are about
  • Doesn’t make demands but rather, works with you to move you forward and build momentum
  • Not a “cookie cutter” approach to your personal finances, that so many advisors promote

Debt Helpline

Now, you do not halt at acknowledging that you have got financial debt problem. One reason why maybe you have debt concern is that you have modest resources to cover what you awe or perhaps a serious event persuaded you to definitely borrow money. As a result, the next step you need to do would be to concentrate on your financial allowance. This may give you extra cash to repay what you awe. The primary theory of budgeting is living within your means. Don’t spend much more than what you earn.

The following course of action will be to discuss with your lenders. It’s best encouraged to communicate with them to start with prior to getting the aid of a third party. Trying to begin the settlement is a satisfaction to your creditors simply because this would certainly express your eagerness to pay them. Deal wherever possible. Loan companies will certainly bargain things so they can get the return of their expenditure. Even so, don’t expect to see great results in the beginning. Bear in mind you are bargaining. So don’t dash into things. Even though you’re on the negotiation process, don’t neglect to pay back your responsibilities.

When things fail on your end when you have made an effort to bargain, consult with debt helplines. They exist certainly to help people who have debt difficulties. You may well be deliberating on conversing with a stranger on sensitive matters regarding debts. You need not worry considering they are professionals who handle matters relating to debts. Nonetheless, do your assignment by researching to get the best just before contacting any of them. Stay away from deceitful ones. Don’t easily be swayed by ornate words and pledges without your checking out the dependability of the third party debt helpline.

Once you have selected a third party to manage your obligations, the debt helpline will analyse your debt circumstances and analyze what debt resolution meets your dilemma. Depending on which one satisfies your condition along with your finances, you may have IVA, debt plan, debt relief order or what have you. There are many hundreds of debt helplines on the web whose debt advice services are free of charge. Benefit from it to get the best offer to aid you.

Managing Debt During The Holidays

Giving On A Budget

First, write out a list of people who you are buying gifts for. You may find that your list is a little unreasonable or could be trimmed down. Arrange a gift exchange for your family or coworkers so that everyone is only responsible for one person. Draw names and give a more expensive gift to that one person. Get creative and try to find other, inexpensive gifts for additional people on your list or find a few people who might appreciate homemade gifts, like baked goods or craft items. You would be surprised how many neat ideas there are for gifts that can be made from a few, affordable items from the local craft store or farmers market.

Also, consider the fact that you still have two months to stock up cash for your gifts. Eliminate one of your luxury purchases and save that money to go towards your gift fund. Rather than splurging on Starbucks from now until Christmas, make coffee at home and keep that money in your bank account. Look online and in newspapers for coupons or discount days. Many stores are already running specials and holding sales, and shopping early can save you both money and time before the holiday rush. If you are considering an expensive purchase, ask the store about layaway. Why put that large purchase on your credit card when you can pay for in slowly in cash? It makes more financial sense to pay in cash, especially for expensive items, as putting them on your credit card is only going to cost you more in interest fees. Another place to shop is at resale or donation stores. Many gently used items can be found at Goodwill and second-hand stores; these are especially good for baby items, who will only outgrow a piece of clothing or toy in a matter of weeks.

Cautious Credit

If you truly cannot avoid using credit for purchases during the holiday season, don’t give up on these charges after the holidays. Make a plan to repay these debts as soon as possible. Continue to give up your luxury purchases for a few months into the New Year as you work towards reducing your credit card balances. A little bit of sacrifice will go a long way in keeping your debt accounts at a healthy level and prevent you from ending up in financial hardship.

About Systematic Debt Management

Follow Your Budget

You have to strictly follow what is on your budget. Always observe what you have written down. You will know that something is wrong, when your bills keep mounting up and you have need for finding a way out of all your obligations. Make every effort to get back on track. It may take a while but it is possible.

If you are unable to adhere to your budget, what you really need is a program to assist you in achieving better result. Don’t worry because there are several programs that will support you and your financial obligations. These programs provide you with sound counsel on how you can focus on the things that you really need to do. Your plan should be practical and doable. Don’t set your goals too high; otherwise, you will not accomplish anything. Normally a debt management system runs for four to six years.

Negotiate And Bargain

You can also enlist the help of professional credit counselors who will teach you the value of managing your finance. They will assist you in restructuring your debt payments by combining all your monthly payments as one. They in turn will take care of distributing your payments to your creditors at the same time reducing your interest rates and no late fees.

Debt negotiation companies will discuss on your behalf with your creditors. Debt negotiators will bargain with your creditors in lowering the amount that you owe but not the interest rates that go along with your financial obligations. This is rather drastic but also the fastest way of eliminating your debts. On the average it will take three years to completely pay off your liabilities.

Ways to Eliminate Debt Faster

Refinance your debt

If you’re struggling with a large debt such as a mortgage or a student loan, it may be possible to refinance to take advantage of low interest rates. When your debt has a lower interest rate, you end up paying less in interest over time. Depending on the term you refinance over, your monthly required payment may even go down and give you some extra breathing room every month.

However, refinancing often comes with fees and closing costs, so it’s important to make sure that the money you save in interest is worth the cost of the process.

Take advantage of balance transfer cards

Credit card companies often attempt to lure in new customers by offering 0% financing for transfers from other cards. The promotional periods are generally short, but during that time, you pay no interest on your balance. That means that any money you pay towards your debt will go directly towards your principal. By using this hack, you can quickly knock down your debt while saving a lot of money each month in interest costs.

Using a balance transfer card can be dangerous. If you are not disciplined and you take on more debt, you will be in an even worse position than when you started.

Generate extra income

If you don’t want to muck around with refinancing and moving debt around, the best way to put yourself in a better position to pay off debt quickly is to simply make more money. How you go about making more money really depends on your specific set of skills and interests.

Seasonal jobs are a great way to make some extra money temporarily. For example, most retail stores hire extra staff during the busy seasons. If that is too much commitment for you, perhaps gigs like mystery shopping, freelance writing or odd labor jobs would be a better fit. The key though, is to throw any extra money towards your debt. All these extra payments go directly towards your principal, bringing you that much closer to debt freedom.