Learn From Money Saving Experts

Managing money is a lifetime skill that is learned from someone, whether it is a family member or through reading and educating yourself about it. What is interesting is that your sense of self worth actually can empower you to be better at managing your money and saving money.

According to financial expert, Suze Orman, you alone are the power behind your money management skill. You make the choices to spend, save or borrow money. What is going on in your mind is what is controlling your financial security.

Sonja Lyubomirsky, Ph.D, wrote a book called The How of Happiness. She highlights five steps to happiness which can also apply to developing better money management skills.

Step  1 – Cultivate optimism – When you choose to believe in a future that is positive for yourself and your loved ones, you create pictures in your mind about how you want your life and your finances to be.  Optimism helps anyone get through the day. Suffering from negative thoughts is just that. You are suffering. Try everything you can think of to bring back optimism into your life.

Step 2 -  Invest In Social Connections – In your personal life, do something for someone else and continue doing random acts of kindness. In your financial life, when you make good connections with people by getting to know them and serving them, your sense of well being will improve and who knows, maybe you’ll get a referral to just the job you were dreaming about.

Step 3 – Let Go Of The Negative - If you are flooded with negative thoughts, write them down and develop some solutions to fix the problems. If you can’t stop thinking of them ask yourself, “What negative thought can I let go to make room for more happiness, more financial security, more abundance? Letting go or coming to peace with yourself that you have done everything you can to solve the problems, will bring relief and contentment. You may even come up with new ways to attack the problems you have.

Step 4 – Finding Meaning In Adversity - Everyone has gone through adversity in their lives whether it is in relationships or in their financial lives. What exactly have these experiences taught you? Have you learned from your failures? Gaining the strength to become debt free will teach you what you need to do to stay that way and give you a sense of control over your financial future.

Step 5 – Learning To Let Go – Past hurts, past mistakes, past failures are well, in the past. Over time you are better off letting go of these pains and forgiving yourself or others for their part in your personal or financial pain. Letting go of these means you have forgiven and when you forgive, your soul returns to the loving state it began with. Letting hatred and bitterness take over your life will not leave you room to grow and learn new things.

In conclusion, these five steps can help you achieve peace in your financial life and peace in your personal life. The power to control your future depends on your attitude and desire to reach your goals. As Suze Orman often says, “Self-Worth builds NET WORTH.”

Behavioral Finance Experts Share Tips

Are you one of the 50% of Americans that don’t expect your personal finances to improve in the next six months? According to a recent Harris Poll 30% of Americans feel that their finances will worsen. Fear of losing your job or losing money influences us tremendously.

Emotional Financial Decisions

There have been studies done by behavioral finance experts that say by nature we seem to look at our own situations as worse than they actually are. Is that true for you? One solution to this problem is to figure out how to conquer the emotions that stop you from making the best financial decisions you can.

Psychologists often use the phrase, “The emotional tail wags the rational dog.” The same is true for us in managing our personal finances. So what can you do to help yourself?

The first thing to do is to save money and save money early. A gentleman was discharged from the Army in 1958 with a check for $3,500. He got some advice from the head of research at Smith Barney about what to do with his money. He was advised to save it and invest it. He ended up investing the entire amount in IBM stock because he was familiar with the company. That stock is now worth over a quarter of a million dollars.

Why Is It Hard  To Save Money?

Richard Thaler, author of the bestselling book,”Nudge,” and professor at the University of Chicago, School of Business, says that the biggest problem Americans have is just not saving enough money. It is recommended that you save ten percent of your income, but many people fall far short of that. He says that people are not perfect. We all make mistakes. Figuring out how your emotions are getting in your way of saving will go a long ways in helping you get your finances back on track.

David Laibson, an economics professor at Harvard reports that the reason that people don’t save is primarily due to procrastination. They don’t want to fill out the paperwork that would make automatic payments into a savings plan. They decide that they’ll do it next week. It’s very similar to putting off a diet. It’s much easier to start on Monday. Do something about putting a savings plan in place. Use a strategy like saving ten percent of your income and put it on auto pilot.

Can you imagine how it would feel to have done this consistently throughout your life time? Warren Buffet, the third richest person in the world, worth $47 billion dollars, keeps $20 billion dollars in cash on hand. It helps him sleep at night.

Steps You Can Take Now

Your area of focus should be on building an emergency fund that will carry you through three to six months of unemployment. Try to eliminate big money expenses that may be unnecessary. Start networking with others before you lose your job. Find organizations to join where you can network at least once a week. Seventy-three percent of six-figure earners landed their current positions through personal contacts.

Get your finances back on track by saving on a regular basis, making good financial decisions without undue emotional factors and do yourself a favor by networking with others like-minded business people on a regular basis.

5 Ways to Easily Save Money

Why is saving money now more important than ever?

Take a look around you folks.  It’s no secret that the US economy as well as other global economies have been a state of unpredictability for a year or more.  The 4^th quarter stock market crash of 2008 is more than evidence of that.  Not to mention the fact that the auto and finance industries have been in trouble as well as the real estate markets and various retailers.  As a result, more and more people are focusing on creating and developing their personal budgets, and trying to save money so known and unknown expenses are covered.

It doesn’t take a rocket scientist to figure out the importance of creating and maintaining a personal or family budget since this is such an invaluable financial tool.  Not creating a personal budget is like that old adage about “failing to plan means that you are planning to fail.”  And that is basically what you are doing.  You have no control over your money, your finances will most likely end up in disarray, and you will never be able to get ahead financially.  The bottom line is that you should not be spending more money than what you actually have.

Five Ways to Easily Save Money

There are many ways that you can effectively budget just as there are a number of ways that you can save money for future purchases or unknown expenses.  Additionally, this will relieve the stress that occurs when you are struggling to make ends meet and pay your bills.  Here are 5 tips you should consider for saving money:

Tip #1:  Create and develop a personal budget

This is pretty much a no-brainer, but you would be amazed if you knew that people were surviving by the skin of their teeth without employing this invaluable financial tool. If you haven’t created a budget in the past, be sure to start one now. When you budget, make allowances for a saving category and save that much money each and every month.

Tip #2:  Get better at recycling, repairing, and re-using household items

This is part of the “Going Green” mentality, but it still makes a lot of sense.  In addition to this, you should consider using alternative energy sources and purchasing only those consumer goods that are manufactured from either recycled goods or sustainable resources.

Tip #3:  Cutting food waste will cut spending

What is the point in purchasing more meats or fresh vegetables than you can possibly consume at one sitting? More importantly, how much sense does it make to let leftovers go to waste and then get thrown in the garbage?

Tip #4:  You can still maintain a normal lifestyle inside or outside of the home by shopping sensibly

You don’t need to spend a fortune to dress and look good, nor do you need to spend a lot of money on food if you just pay attention to discounts and sales as well as not being a name brand junkie.

Tip #5:  Automated Payroll Deductions

Some companies will allow you to send part of your paycheck to a savings account. You just tell them how much you want to send from each paycheck and they will transfer it. This automated process makes saving money much easier.

5 Reasons Why We Fail To Save Money

Money makes the world go round. That is something we all have to admit. We often try to save money but once spring sales or holiday sales kick in, we blow all our savings by breaking the bank.

It sure is hard to save money especially if you see something on sale and sometimes when we window shop. We also have a tendency to buy  things. Most of the things that we buy are not necessarily what we need but we buy them because they’re just too pretty to be sitting there at the shop.

Apart from binge spending what else stops us from saving money? Here are a few things why we fail to save enough money:

1. Just Not Having Enough

This is the most common reason for many people but not having enough money to save is not the real issue. We usually do not have enough because we spend too much money. Growing savings in the bank requires us not to spend and that on its own is a rather difficult task. One thing all of us should remember though is –it is doable.

2. Not Starting Early

Saving money should be part of a person’s values even at an early age because the earlier we all start saving, the more money is saved in our bank accounts. Children should learn how to save money at an early age so they can be educated about finances. Financial literacy is sadly not taught in schools even if it is vital for day to day activities. If you have children teach them how to save so they won’t have to go through what most people are going through –not having enough most of the time.

3. Not Prioritizing

After getting our paychecks, we usually spend on a few things that we don’t actually need. Prioritizing what needs to be paid first would definitely stop us from spending on unnecessary things. Prioritizing would also keep the bills from piling up. This is something that most of us want to escape from –paying three or even five months worth of telephone bills or cable bills. Something that should have been affordable in the first place turn into big amounts just because we do not know how to prioritize.

4. Not Budgeting

Not doing our monthly budget is one culprit of overspending which leads us to not saving a dime. Budgeting will lay down all the things that are needed to be paid and what are needed to be purchased. By budgeting you sometimes come to the realization that there were quite a few things bought last month or last payday that aren’t actually needed.

5. Not Paying Up

A person who has a lot of debt and is not keeping current with their payments gets more interest fees and owes more than they did. Having to pay on credit cards for a very long time makes saving money barely possible. Put an end to this vicious cycle by making payment arrangements with creditors.