New article posted at "Everything Finance"
Everything Finance
New article posted at "Everything Finance" |
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How to Reach Your Savings Goals Fast Posted: 10 Feb 2014 07:41 PM PST
Many people who have worked on Dave Ramsey’s snowball method have a hard time transitioning from paying off debt to saving. When people suddenly become debt free, they want to spend more than they’ve been used to. It feels like a huge weight off your shoulders to finally be debt free-why shouldn’t you be allowed to splurge? But the idea of living a financially sound life is that you should always be living within your means. Just because you’re debt free, doesn’t give you free reign to start spending like crazy. It’s important to keep your finances in check–and that often isn’t as fun as spending money. The good news is that the more responsible you are, the faster you can save and reach those savings goals, and spend your hard-earned money on things you were saving for! Does that make sense? Here are three key tips to help you reach your savings goals fast: Treat your savings like a bill. Perhaps you’ve heard this saying in many different ways–pay yourself first, direct deposit…any way you look at it, it’s called “force yourself to save.” By treating your savings like any other bill, you’re forced to contribute money into your savings account. Right now, my husband and I are working on saving $30,000 for a down payment. Instead of waiting til the end of the month to see how much money we have left, we automatically transfer a set amount of money into our savings every time we get paid. By doing it this way, we are forcing ourselves to live within a smaller budget to allow our savings to go into overdrive. It would be nice if we could spend that extra money instead, but then we would never reach our goal of saving for a house. Contribute all extra money into savings. A lot of people will come across random “extra” money and usually see it as bonus money that allows them to spend it any way they like. My husband and I are strict and treat bonus money as money that is earmarked directly for savings. That includes everything. Did you get a $30 rebate? Savings. Tax return? Savings. Did you earmark $200 for a plumber but it only cost $140? Transfer that $60 into your savings. I received a $50 gift card from work for a grocery store. I used the gift card and transferred that money from our grocery budget into our savings account. All these small “extra” money savings could transfer into big bucks throughout the year. Reward yourself. While my husband and I are both committed to saving, we also still want to be able to travel and live like DINKs. So for every $10,000 savings goal we reach, we have set rewards such as a new restaurant we want to try, and a spa day for the both of us. These small rewards are great motivating tools to keep us committed to reaching those audacious saving goals. RESOURCE CENTER
    
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How to Give to Charity When You’re Broke Posted: 13 Feb 2014 02:43 PM PST
Twenty-somethings often run into the problem where they’re so broke setting up their financial foundation that they don’t have any money left over to give to charity. It’s not that we’re a selfish generation as we’re often labeled to be in the media, but it’s that we have a long list of rites of passage that cost a lot of money to check off the list: paying off student loans, saving for a house, traveling with friends, possible starting a family, planning a wedding. These are all really expensive things that are hard to financially manage when most of us are still in the beginning of our careers and some of us are probably still making entry-level salaries. So what is a broke philanthropist-at-heart to do? Find other ways to give: Give your skills. Are you a web designer? Know how to manage wordpress? Have you ever put in a status update on Facebook or Twitter? Then you’re talents are probably needed by small older-leaning generations. Think of lending your computer savvy or other talent to a local organization that is in dire need of social media management or website development. Give your space. Are you an animal lover? A lot of animal organizations often seek foster homes for pets while they’re in transition for a permanent placement. This is a perfect organization to get involved in that doesn’t require a lot of financial commitment upfront. Give your stuff. Cleaning out your closets and getting rid of items you no longer need is a great way to give back without breaking the bank. There are lots of organizations seeking clothing, not just Goodwill. There are groups that seeks prom dresses for underpriviledged youth, groups that seek interview apparel for people getting back on their feet, and groups that seek clothing for scholarship recipients. Find a company you can support through sites like Volunteer Match. Give your time. Volunteering in person is a great way to give to charity in a non-monetary way. Organizations are always looking for volunteers. Whether it’s tutoring inner-city youth, or walking pets at your local animal shelter, you can give as much or as little time that fits your schedule best. Give in money. If none of these options are viable, and you’d still rather give financially, set a small amount that you can manage weekly or monthly, rather than doing a large lump sum payment. $260 may be too much to take out of one paycheck, but that’s only $5 a week or $22 a month. By making automatic nominal payments, you can contribute to the charity of your choice without going broke. |
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5 Things you didn’t know Could Affect your Credit Rating Posted: 29 Jan 2014 04:57 PM PST
Your bank, credit union or finance providers like Dreamloans will check your credit rating before they approve your loan, so it’s a good idea to find out about your credit rating and how it can be damaged. Most people understand that they can harm their credit rating by failing to make loan repayments, but there are other more subtle things that can negatively affect your credit score. Applying for Lots of CreditIf you apply for too many credit cards too quickly you will send a negative message to credit providers. Every single time you apply for a credit card the lender will carry out an enquiry on your credit file. Every enquiry is noted on your credit score. This information is retained so that credit providers can be alerted if someone is trying to open lots of credit accounts. A person who is seen to be doing this is considered more of a credit risk. The fewer enquiries made for credit the higher your credit score will be. So, before you apply for a new store card (yes, a credit enquiry will be made for a store car) consider how long it has been since you last applied for credit. Remember every enquiry will impact your credit rating. The same applies if you are applying for a mobile phone plan, so be aware. Cancelling CardsCancelling credit cards can lower your credit score. What happens when you cancel a card is that the account is removed and with it your payment history. When you have a credit card and make regular repayments, even if they are only the minimum payment, your credit rating will reflect the fact that you are reliable. When you cancel a card this history of reliability is gone. It is better to keep your credit card going and use it occasionally to make a small purchase and repay it on time. This will build your credit rating. The other aspect to closing your accounts is your utilisation score. The higher the amount of available credit you have the better you look. For instance, say you have two credit cards: one has a credit limit of $10,000 and it has a balance of $4,000; the second card has a limit of $10,000 and also a balance of $10,000. The bank sees that you have utilised $6,000 out of a total of $20,000, which means you have utilised only 30% of your available credit. If you were to close the second card, you would then be utilising 60% of your available credit, so your credit position would not appear as strong. |
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5 Ways to Make Your Tax Refund Grow Posted: 17 Feb 2014 08:02 PM PST
Not really, of course. Your tax refund is just the government giving back money that was already yours to begin with. The government is giving back money that you loaned to them. Because so many Americans see a tax refund as free money, they’re not careful with the refund. “When people view their tax refund as a gift or some kind of reward or bonus, they spend it differently. They’re more likely to splurge, and it’s easier to rationalize purchases” (TIME). Admit it, if you’ve gotten a refund in recent years, haven’t you said to yourself that it’s okay to blow some of it (or all of it)? After all, you work hard all year long. Well, precisely because you work hard all year long, this year I want to encourage you to do something different with your money. This year multiply your refund by using it to make more money or save you money. Here are some ideas: 1. Take a college class or two.Often, you can earn more at your job if you pursue additional education. Why not use your refund to pay for a college class or two so you can make more money at your job? If you already have a B.A., consider using it for a Master’s. 2. Invest in your house.No, not with a remodel, but with ways to help you save money all year long. If your house has old, drafty windows, why not use the tax money to upgrade to new, energy-efficient windows? What about getting more insulation? Or buying a programmable thermostat so you can keep the house cool in the winter when you’re gone all day at work? Invest money in your house in this manner will save you on utility bills all year long, for years to come. 3. Invest in your retirement or a college fund for your children.Consider your own retirement first. Use the money to contribute to your Roth IRA or 401(k). If you’re already making contributions to your retirement, use the money to establish or add to a college fund for your children. 4. Add to your emergency fund.Most financial experts recommend a 6 to 12 month emergency fund. If you don’t have that much yet, add your refund to your retirement fund. A nice size refund could easily add two to eight weeks to your emergency fund, depending on your living expenses. 5. Buy something that will help you save money.If you grow a garden in the summer or like to stock up on produce when it’s in season, consider buying a deep freezer. Doing so can help you buy food during the summer when it’s at rock bottom prices so you can save money during the winter when produce is more expensive. Consider what other items like this you could buy that would help you save money over the long term. What do you typically do with your tax refund if you get one? |
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Posted: 19 Feb 2014 01:46 PM PST
Spending less is usually the easy part, but it’s the earning more that often has people in a quandary. Of course we want to earn more money, who doesn’t? When paying off debt, many people look toward getting a second job or freelancing on the side in order to earn more money. But what about looking at your current day job for help in making you earn more money too? Oftentimes, people will overlook asking for a raise because they’re scared of getting told “no.” But fear should hardly ever be a reason for stopping you from asking in the first place. After all, the worst they can say is “no.” And wouldn’t it be awesome if they actually said “yes”? Here are some tips on how to negotiate a raise. Start with How You’re Valuable The very first step in negotiating a raise successfully is by scheduling a meeting with your boss. Start this meeting off by telling your boss how valuable you are to the company and how you have helped increase the company’s value in general. List your most recent and valuable accomplishments and tie numerical values to them if possible—a lot of bosses like numbers. For example, did you help land a large client that has increased the company’s output by 5%? Did you plan a large event and stay below budget? Have you reduced company expenses by 10% since your employment? Have you streamlined processes? These numbers and values are important to get your boss intrigued and sense your value to the company. List Your Responsibilities Focus on the number of responsibilities and how you’ve gone above those responsibilities to truly be an asset to the company. Just doing your job is not going to guarantee you a raise, but showing how you have gone above and beyond your job duties is definitely an asset. Do Your Research Make sure you have a set number you’re asking for. By checking how your salary compares with the industry, you’ll have a better chance of getting compensated properly if you can prove you’re being underpaid. Perhaps you may even have more luck by stating a range that you’re thinking of. Go with what you think would work best with your direct supervisor. Have a back-up plan If you’re turned down initially and given no future incentive, ie. Re-visit a raise in six months or so, then have a back-up plan. Perhaps you can ask for some additional vacation time in the meantime, or a more flexible working schedule. Some companies are more willing to part with non-monetary bonuses that won’t affect the bottom line. If you are told that they will re-visit the raise at a later time, put the date on your schedule now so you remember to schedule a follow-up meeting. Too often, supervisors will put it off and forget about it rather than make it a priority. |
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How Should You Spend Your Tax Refund? Posted: 19 Feb 2014 01:42 PM PST
It’s Not Free MoneyBefore we start on your tax refund game plan, let’s talk about what you should not do with your refund first. The most important thing to remember is that tax refunds are not just free money. You have to remember that you worked hard for that refund and that it should be considered part of your income, even though the IRS says that it is not taxed like income. You should also not just leave the refund in your checking account, leaving it to chance. There may be a few people out there with the discipline not to spend it, but let’s be honest. If we put a few thousand dollars in our main checking account, a few months later we will be scratching our heads wondering where it went. Keeping excess money in your main checking account can lull you into a false security. There is a short distance from, “Hey, I have a little extra money, why not go out to eat tonight,” to “Where did all that refund go?”. So What Should You Do With Your Refund?The short answer is to delegate every single dollar of it. Give each cent a job. Now for the longer answer… In my personal opinion, there is no right number of what percentage of your tax refund should go to savings, debt repayment, and fun spending. The right number depends on the person. However, I am a firm believer that your tax refund should line up perfectly with your yearly goals/resolutions. Hold Up, I Don’t Have Any Goals or Resolutions!I know many people boycott making New Year’s resolutions because they are tired of never changing. However, not setting financial and personal goals for yourself will lead you nowhere. If you set the target for nothing, you will hit it every time! Starting today, write down ten concrete goals that you will accomplish by the end of the year. Here are a few of mine just to give you an idea:
Of course, your goals are going to look different. I really want to be debt-free, lose 40 lbs, and have a published book. Therefore, I set the goals I knew would help accomplish those things. Knowing your concrete financial goals makes it simple to delegate where each dollar of your tax refund goes. Now That You Have Goals, Let’s Move OnLike I said before, the best way to spend your tax refund should be in direct relation to your goals, financial goals or not. This means that I am going to use my tax refund to pay a good chunk of my debt off, put some in my savings, and use a small amount of money to buy books on writing and writing book proposals. Spending my whole refund on a luxurious vacation and massage is quite tempting, but a week in paradise will not get me closer to all of my yearly goals. Furthermore, treating myself to a shopping spree or a nice dinner will also not get me closer to my goals. So what should you spend your refund on? The answer depends on your goals. Once you have clarified your goals, then you can delegate a certain percentage of your refund to each goal. Yes, treating yourself would be more pleasurable in the moment, but accomplishing goals you set for yourself is far more rewarding. So how will you use your tax refund to help reach your financial and personal goals this year? |
