We all fall for advertising, whether or not we would like to admit it. Of course, many of my friends and family scoff at print ads that make promises like “100 percent satisfaction guaranteed.” However, whenever we make daily purchases, we have a plurality of choice, and sometimes I wonder to what extent advertising pervades my decisions.
In terms of budgeting, I believe it’s very important to analyze how we go about making purchasing decisions when it comes to personal, pedestrian products that we buy at a grocery store or a convenient store. While we do tend to do much research when we are preparing ourselves to make large purchases–for example, a car or television–we may not even think twice about the products we buy monthly, even though when you really think about it, these smaller purchases often amount to a greater portion of our budget, when taken in aggregate, than do luxury, once-in-a-blue-moon items.
The thing about personal products at the grocery store is that while there are hundreds of different brands for essentially one item (think deodorant, toothpaste, cereal, etc.) they all essentially have the same functionality and effectiveness. As someone who is looking to spend and save wisely, the best way to go about picking products is to establish a criteria and stick to it. Here’s a suggested route:
1. What are my actual preferences (not preferences ads say that I must have)?
Everyone has preferences, and I think the best way to disentangle yourself from the pseudo-preferences that brands promote is to stop and think, what is it precisely about any product that I value? Preferences like specific flavors or scents are an example.
2. What is the cheapest product that adheres to my preferences?
This one is kind of tricky simply because sometimes the cheapest product is not necessarily the most cost-effective. What I do is start with the least expensive product that meets the above criteria, and then I determine if the next cheapest has anything of value to me specifically (better tasting or longer-lasting) that the cheapest one doesn’t.
3. What type of labeling draws my attention?
A recent study undertaken by Harvard School researchers found that many are drawn to advertising that perceives its products as the “underdog”. After reading the study, I found that I, too, fall for this sort of labeling. Always ask yourself about the product’s inherent value (which can be determined by trying out the product or reading reviews online) instead of its purported value.
These are just a few things to think about when it comes to advertising, but above all, whenever purchasing seemingly miniscule, everyday products, always be aware of what you are buying and why you are buying it at the moment of purchase. Ask yourself, do I really need this? Thinking deeply about purchases during routine shopping trips can, in the final analysis, help save more money than you would imagine.
About the Author:
This guest post is contributed by Lauren Bailey, who writes on the topics of online colleges. She welcomes your comments at her email Id: blauren99 @gmail.com.
Your summer vacation shouldn’t burn a hole to your wallet or drown you in debts – smart budgeting can help you get more for less. Here are some budgeting tips to help you budget for summer vacation:
1. Create a budget way ahead and start saving money
You can regularly save a certain amount of money from your income in preparation for summer vacation – this way you can manage to build up a lump sum of money for you to enjoy your summer – debt free. Remember, the more you save, the more you can spend it vacationing.
2. Find deals from the Internet
The Internet offers you a great opportunity to save lots of money for your vacation. Some offer special rates for booking over the web, while other offer discounts that only can be found online. Just google “vacation deals” or “travel deals” or “find hotel deals” and you’ll see plenty of options to choose.
3. Prepare meals yourself
Some accommodations allow you to opt out all-inclusive breakfasts and meals – use this opportunity to save big time. Some accommodations also allow you to cook your own meals – you should consider taking this route to keep your expense limited.
4. Book well in advance
Book your hotels, airline tickets, cars, etc. well in advance. They usually offer a much lower rate if you book well in advance.
5. Stay with friends or family
Instead of making hotel reservations, consider to stay with your friends or family residing on your summer vacation travel destination. Accommodations are one of the biggest chunk in your vacation budget’s expense column – eliminate most of them can free rooms for more fun.
6. Make use of freebies
Some hotels and bungalows offer free shuttle to main tourist attractions – use it as much as you can. Even if you don’t want to see the attractions, use the free shuttle to get you nearer to your destination. Also, some places of interests are simply open for public – for free – why don’t you consider visiting them?
I hope the tips can help making your summer vacation a more enjoyable experience – have fun!
A new baby will bring joy to your family, as well as headaches in your personal budgeting. Before your new family member arrives in the midst of your family, you need to start updating your family budgeting, especially in the expenses column.
Here are some tips to help you budget for the arrival:
1. Create a list
List the items you will need for your baby. Ask family members or friends who are new parents to help you make and refine your list.
2. Your baby’s first year
Consider your baby’s need for the first year – furniture (crib, changing table, etc.,) gear (car seat, stroller, baby chair, etc.,) bathroom accessories (diapers, wipes, towels, etc.,) feeding (bottles, pumps, etc.,) and other needs, including yours (diaper bag, etc.)
3. Other caring expenses
Also consider these to fit into your budget: child care, insurances, etc. including a decrease in income if a parent stays at home.
4. Compare prices
By now, you should have a good list of your baby’s need. Your next step would be compare prices. A hint: shop online for massive price cuts!
5. Calculate, review, prioritize and adjust
Add the costs to make a total. From this total, you need to review whether you want to spend the amount or not. Chances are, you will find that you need to take some, less important, items off from the list to cut your spending.
6. Stick to your budget and adjust it along the way
Your next step would be sticking to your budget. Record expenses as they occur and try to balance your budget (if you spend more, subtract the same amount from others in your list; if you spend less, consider it as a reserve for other needs.) You will also need to adjust your budget according to your circumstances.
7. Long term planning
From the first year and beyond, you need to consider other costs, as well, such as toys and educational expenses. Save and invest early – this is the best advice I can give as it has been proven time and time again that saving and investing early will make a huge difference later on.
Stop! No matter what, don’t join any debt settlement programs before your read this article!
If you are in debt problems and are looking for solutions, you might encounter ads and offers with something similar to this:
“We help you reduce you debt payments up to 70%”
Debt settlement agencies and sites are doing their best to persuade you and me into thinking that debt settlement is a better way to save your money on you debt payments and bills. Firstly, the 70% offers you see seem too good to be true: If those debt settlement companies can do just that, there will be a flock of people with debt problems line up for their service!
There are also agencies and sites claiming that they got your creditor calls covered and bring you peace of mind – all based on your ability to pay your debts. All sounds so easy and affordable – or are they?
One thing for sure, those agencies and sites that are using your desperation in settling your debt to scam you claim that they can see into the future and guarantee you results in 1 or 2 years. My take: bullsh*t. NO ONE can predict the future (I don’t know about gifted people who could see the future, but certainly not debt settlement agencies and sites!)
The thing is, how can they predict? Each time there are changes in the interest rates, in policies, or in a banking institutions merger, for instance, the result is obvious: There are also changes in settlement policies.
Debt settlement scammers are also offering these to clients:
If you are ever to join a debt settlement program, you must do your homework – investigate the companies offering you debt settlement solutions: check their background, Google them, test their free credit counseling service, etc.
Here is one of a select few coming out clean: CuraDebt – many satisfied clients, local legal representation, a clean BBB rating (from 2000) and a knowledgeable staff recommending various programs most suitable for your needs. Speak with a CuraDebt counselor to review details.
Image by Don Hankins.
Having a well-managed retirement plan is what each and every person should do. But then, how to save for your retirement when you are having enough trouble keeping up with your bills every month?
I believe this is the situation many, if not most, of us faces these days. With the uncertain economic outlook, retirement planning can be a little bit trivial. The question may of us ask to ourselves is: “How can I find enough money to safe for the future when today is already difficult enough?”
Take heed – here are a few suggestions you and I can benefit from to help our money-saving endeavors easier (although not that easy to achieve.)
First of all, to get things work out your way initially, you must have the willingness to make a few changes, especially in your mindset and financial policies. In fact, it all comes down to one, single big change you must make: making a commitment. Without a commitment – and the right financial planning to go along with such commitment – most likely nothing will never change, ever.
Here is what you should do. Make a commitment to yourself (or to your loved ones) that you shall do whatever it takes to change things for the better. Make a commitment that no matter what, you have to make your financial situation better.
For sure, the change wouldn’t happen overnight. So, give yourself a reasonable time frame through milestones and goals-setting to make it happen. Write down your commitment, and put it in your most-commonly visited place, e.g. your office desk, your bedroom, etc.
Next – get ready to make things happen! Here are some tips for saving money to get you started in your retirement planning; these tips will work wonders even when money is tight:
First, take some time to read your commitment each and every day. The more you believe in what you are committed to, the more you will be willing to take action and start seeing results.
Second, find and think of ways to make extra money. Here are some suggestions:
- start your own business
- sell stuffs around your house that you don’t need any more (tips: do a garage sale or sell them on eBay!)
- get a part-time job
- make money online (hot!)
Third, take out your checkbook and start writing down a list of your expenses for the last three months (or at least for the last month.) You have to write everything, as hidden things are often pile up quite a lot. Next, you must decide which expenses you can eliminate (I’ve warned you before – this won’t be easy!) You must also decide which ones of your expenses that can be reduced:
- cable TV
- cell phone
- internet service
- newspapers
- magazines
- entertainment
- eating out
- luxuries
- anything else you can live without
Be creative. Be honest. And be committed!
Last step – secure your excess cash in a place (e.g. bank account) that you know you would ‘kill’ yourself if you lay your hands on it.
To sum it all up – For your retirement planning, you need to be committed, follow the right money-saving strategy, and secure your excess money in an ‘untouched’ account. Repeat and rinse. You will soon see you are becoming a master of personal finance and will most likely build up a retirement fund in an amount that you are actually surprising yourself for being able to commit!
To note, your retirement account is not your investment account. Unlike what many think, your 401K plan and similar retirement plan is nothing more than an investment account (which means they follow how the money market moves.) Again, consider separating your retirement account with your ‘retirement’ account.
Whenever you wish to fulfill your dream of having your own house, you ask yourself “how much can I borrow for a mortgage“. Whether or not you would qualify for a loan, depends on your gross monthly income, interest rate, debt payments and other monthly liabilities.
Calculate how much u can borrow
You can use a “how much can I borrow for a mortgage” calculator to find out how much loan you can borrow. The calculator requires the following inputs:
• Your total monthly income before tax deduction
• Monthly payment towards your existing debts
• Your monthly credit card payments
• Child support and monthly alimony
• Your desirable rate of interest ,time period of the loan (years) and down payment
• Yearly property taxes and insurances you expect
Factors determining the amount you can borrow
When you apply for a home loan, you often think about “how much can I borrow for a mortgage”. The maximum loan you can get is the amount your lenders think you can manage. The maximum loan amount that you can be offered depends on:
• Your gross monthly income: Your income is used to determine how much monthly payment you can afford.
• Your outstanding debts: Lenders consider your existing debts and how much monthly payment you make towards them.
• Debt to income ratio: The debt to income ratio can be a front-end ratio or a back-end ratio. Your gross monthly income divided by your new home loan payment (including the principal, rate of interest, property insurance and taxes) gives the front-end ratio.
Back-end ratio is your gross monthly income divided by the portion of income that goes towards paying your monthly liabilities (including the new mortgage payment, existing loan payments and credit card payments). “How much can I borrow for a mortgage” largely depends on these two ratios.
• Loan to value ratio: Loan to value ratio is the loan amount (the purchase price of the property minus the down payment) divided by the purchase price. Lenders evaluate this ratio to determine the loan they can offer you.
If you are concerned with “how much can I borrow for a mortgage”, you must work on improving your credit score by eliminating negative listings on your credit report. This is because lenders consider the score to approve you for a mortgage.
Image by lilinhah.
Do you print a lot? I do. I print my own business cards, greeting cards, calendars, to-do lists, organizers, and many more. Do-it-yourself (DIY) does save a lot. Or does it?
I just realized a while ago that one of the biggest misconceptions in your personal finance’s cost-cutting endeavors is DIY. DIY is thought to be less-expensive than buying printed products in stores or buying/hiring someone to print for you. In fact, in some cases, DIY is a bad practice in budgeting for your personal finance.
In printing, you might get things at lower cost by doing DIY, but quite often you forget to consider your time, energy, electricity and other materials for the DIY purposes. Quite often, discount printing service such as PsPrint can offer you a better overall resource-saving that is budget-friendly.
Printing stickers for your kids’ school project doesn’t always come cheaper by DIY. Instead, ‘outsource’ your sticker printing to printing services can save a lot of time, even money, on your side. More examples: If you are going to send greeting cards to your friends and family with your pictures in them, it is probably better for you to get your printing job done with the help of discount printing service provider that can offer you low-quantity printing solutions. For your business needs, you can also ‘outsource’ your Business checks printing with the help of a discount printing service.
Let us consider Pareto’s 80-20 law – DIY can cost you 80% of your time for only 20% result, whereas getting the job done by a discount printing service can get you 80% job done using only 20% of your time – Just think about this and you’ll realize how much time we waste in order to minimize our spending.
All in all, following some common sense can avoid you from unnecessary uses of your limited resources.
To make your budget more effective and work efficient, you must know about the budgeting tools. You can maximize your savings and earnings with the effective means of budgeting tools. Here is how to seek for the right budgeting tools and software for you.
If you are preparing your personal budget, you require a budget tool that would help you to figure out what are your expenses on monthly basis. For example payment of rent, electricity, water, internet, phone bill, groceries, shopping for clothes, fuel for your car, movies and DVDs.
On the other side, the budgeting tool will also give you an account of your earnings in the form of salary, property income, investor income or any other income. So, this tool will help you in making an assessment of your earnings on one side and expenses on the other side. This is a personal budgeting tool.
Another budgeting tool which will help you to manage your finances and this tool would detail your expenses, savings, credit card bills and a complete list and pattern of your spending. With the help of this tool, you can assess where you are spending more and can make suitable changes in that area. Controlling your expenses is also a budgeting tool that that helps you to make an assessment about monthly expenses.
There are plenty of web sites on Internet which will guide you to download budgeting software programs. Once you install the budgeting tool software in your computer, you can work on it by entering your income, expenses and savings. This work sheet will help you to identify where exactly you are spending more money and how you can lower your expenses and stay within your budget limit. One personal budgeting software Money Estate recommends is Money Tree.
Another type of budgeting tool is online budgeting tool. Some of the best budgeting tools available online is free to use. Money Estate’s choice for this online budgeting tool is Mint.com. Mint.com downloads and categorizes your balances and transactions on daily basis – automatic – and present them in graphs and stats for getting a better view on your personal finance.
It will also help you to cut your costs and would give a clear picture of your personal finances. So next time when you are working on budgeting tool search for software that suits your needs and that helps you to maintain your budget.
None of us would like to stay in debt. Because when debts mount, our good hours of sleep are disturbed and we are of the opinion that we must work some how to get rid of debt. So we would like to work on ways and means to plan and find good ideas to get rid of debt.
There are plenty of reliable and good sources available to help you to get rid of debt. Whatever may be the reason of debt, if you have your lost job because of job layoff or any other unforeseen factor, you can easily come out of the problem.
Here are some practical tips that can save you from the threat of personal bankruptcy:
Firstly, you should find out the sources of companies, agencies who give you proper guidance and support for you.
Secondly, approach them with honest presentation and with a sincere request to help you to get out of debt. Discuss and put forth all the necessary information that they require but ensure that you are with good and friendly people who would be willing to help you with the best remedy.
The remedy they provide should be useful to you and must not create any further debt problem to you. Therefore, you must make a good selection of debt relief company for the present and for your future financial plans.
Financial planning is a very crucial subject for every individual, company and industry. This is to ensure that our funds are managed well and we maintain our income, earnings and profits.
Financial planning is essential, even crucial. Therefore, if you are unsure about what you are doing in financial planning, you might need help from a financial planner instead of doing it yourself.
Financial planning has to be learned from fundamentals. If you are planning to buy a home in a span of five years from now, you need to have your financial planning so that you can have savings in your bank account to help you to buy your own home. In order to make more savings, you need to cut your expenses wherever possible.
Financial planning for your taxes, retirement and business are special and unique in its importance and each category of financial planning requires a specific planning. Some of the needs (often disguise as ‘investment’) can be postponed and those that can purchased now which are required for the present needs, can be purchased. All of those need proper handling, and doing it wrong today can lead you to opportunity losses in the future.
Therefore, again, if you do not have much knowledge about financial planning, you should consult a financial planner who would be able to give you proper advice and suitable guidance on your financial planning.
The job of a financial planner is to give you the best guidance and support to help in your wedding, buying you a perfect home, see that you have sufficient money in your savings account when you retire from your employment. If you are in business, financial planner would help you with various models of financial planning.
Therefore, always hire an efficient financial planner who can give you an excellent financial planning schedule which helps you to increase your finances and also keeps you safe from financial situations. While discussing with your financial planner about your financial planning, be honest and sincere in your presentation and that will help your financial planner to guide you properly with a professional advice and suggestion.
You also need to go by the advice of the financial planner for financial planning, and you can deviate from the plan as it will increase your expenses and may not help you further. Therefore you must know that the financial planning is an effective tool that will help you to stand ahead of your situations.
Image by koyochi.
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