Budgets

Trick Your Brain, Build Your Wealth

October 15, 2014 By Twila Van Leer

Make saving money automatic every month. The easier it is to save the better for you in the long run.

If we leave it to our brains, we don’t always end up financially well off. Evolution has created brains that look at the world in particular ways and predict certain behaviors that can be counterproductive. In short, humans tend to prefer short-term satisfaction over long-term gain.

So, time to change your mind. With effort, you can even use inherent thinking patterns to enhance your financial position. Here are some ideas:

Quit pitting saving against spending by making the savings automatic. Make a firm decision in favor of regular deposits into a savings account and then forget it.

Try to visualize what it is you want to achieve financially. A picture on the refrigerator of the object of long-term savings – a new home, maybe – is a constant visual reminder that you have to stick with the goal.

People tend to spend differently depending on their perception of where the money comes from. A credit card, for instance, may not offer as clear a notion as does cash, so it is easier to overspend with the card. Use cash when you can.

Use several savings accounts targeted to specific goals. That way, your brain is not tricked into thinking you are making more progress toward those goals than you really are. A generic savings account may be easier to dip into than one specifically labeled “Vacation in Paris.”

Save small bills. One-, five- or 10-dollar bills accumulate fast, although you may at first think it a strange way to save. It works because you are required to do mental accounting and there is an essence of “gambling” involved since you never know when the next bill will show up.

Use savings, except for retirement funds, to pay off credit card debt. At this point in time, savings earn little, and credit cards charge a lot. Make use of the difference. If you can pay down the credit card debt, you’ll have more to save. That requires a change in thinking and genuine action, but it’s worth it.

Ways of thinking about money, like everything else, can become habitual. The idea is to replace counterproductive thinking modes with those that will contribute to your financial well-being.

Three Tips For Protecting Your Finances

October 6, 2014 By Twila Van Leer

Monitor your statements for unauthorized charges.

There are a hundred ways to lose money out of your personal finance program, from having your credit cards compromised to making bad investments to purchasing counterfeit goods online. Be aware and be wary, the experts warn. Here are three specific steps to take to make your money more secure.

Protect Your Credit Cards: All of a sudden, only a few hours after you paid for your grocery store purchases with your credit card, someone in Anywhere, USA, is using it to make purchases of his/her own. It’s possible you lost control of the numbers at an ATM, but thieves have many ways to snag your data and misuse it. It’s far more likely you have been victimized by one of the massive data breaches that have made headlines in recent months. It probably isn’t possible to guard against any and all the potential methods the cons use to steal your information, but you can protect yourself by using only secure payment websites. Never store information in your Web browser. Check your account activity daily and act immediately if there are discrepancies.

Check Your Accounts: Investors, particularly those who are just learning the ropes, make mistakes. The first one is not taking an active interest in the market. “I have seen investors lose tens of thousands of dollars because they didn’t check on their accounts every few months,” said John Schmoll at Daily Finance. Set a schedule for periodic checkups with particular attention to fees, which can eat up earnings. Keep your portfolio balanced to minimize risks. At the same time, try to avoid concentrating your investments in the relatively small number of popular stocks that are the core of many mutual funds. Be careful and rational. Letting your emotions make decisions can be the beginning of big losses. Following the crowd isn’t always the best strategy when the crowd is reacting quickly to every uptick and downturn.

Buying Products: Some products lend themselves best to the counterfeit trade. In particular, in the United States, handbags, wallets, watches, jewelry, electronics parts and pharmaceuticals all are vulnerable to copy cat schemers. Look at the sellers before you fork over your cash. Particularly look for a physical mailing address and phone number. If there is no up-front return policy, beware. Check out the vender’s reviews before making a purchase. When ordering pharmaceuticals online, trace the seller’s affiliation with a legitimate manufacturer. If you can’t find such information, you may end up with fake products.

Tailgate To Double The Football Fun

September 28, 2014 By Twila Van Leer

Tailgating has become part of the traditional excitement during the annual football frenzy. And you can do it in style at a lower cost if you plan ahead and take advantage of shopping specials.

When budgeting for a tailgate affair, be sure you have food, gear, games, gas and parking all on the list. Then start looking for bargains.

Start ahead of time. As you find such items as brisket, ribs, chicken, hamburger or other family favorites on sale, buy and freeze them. The warehouse stores, such as Costco, Sam’s and others are generally stocked with beverages and the makings for every-day favorites such as hot dogs at reduced prices. Buy in bulk and divide up so you’ll have food on hand, game day or not. Then, when the food is taken care of, visit a local dollar store to stock up on paper goods and grilling equipment.

Save on ice by freezing water bottles and using them as ice packs while they last. Or think in larger terms. Large empty milk or beverage containers make good cooler coolers.

For many tailgaters, it’s a social occasion. Plan a menu in advance and divide up. The same goes for transportation to the game. Share rides and parking expenses if possible, with the promise that the hosting duties will be rotated among your group. Just be sure the vehicle you choose has a tailgate. Before you run out to buy fold-up chairs, tables or canopies, check with family and friends to see if you can borrow these items. Return them in good shape and maybe they’ll let you borrow again.

Do as much of the food preparation yourself as possible. No store-bought potato salad ever tasted as good as the one that comes from your kitchen. Ditto sandwiches, cookies, cakes and other tailgate goodies.

Anyone who has tailgated more than once knows the routine. The early arrivals get the prime spots. That may mean several hours in the parking lot. Plan on taking a few favorite games or crafts to fill the time. Pinterest has ideas you can follow or adapt.

Many families can’t afford to attend every home game for their favorite team, but that doesn’t mean the tailgate party must go by the wayside. Nothing wrong with the back yard – or even the basement or family room if the weather is as football-ish as it sometimes gets around the country. The idea is the same, pre-game festivities and then the game itself. Improvise.

Save For Self-Fulfillment

September 24, 2014 By Twila Van Leer

There are people, believe it or not, who save with enjoyment in mind, rather than serious objectives such as major purchases or retirement. They consider personal growth and fulfillment worthy objectives for their savings. Their goals could be as diverse as donating to a charity pursuing a hobby, traveling or doing things that make life more enjoyable.

Ohio State University did a study to see if there was a correlation between Maslow’s Hierarchy of Needs and people’s saving habits. Maslow’s Hierarchy of Needs? That’s an old established psychological tool that looks at human needs and ranks them from absolutely necessary (food and shelter) to more lofty objectives (fulfilling one’s potential, etc.) The vast majority of individuals have to cover the basics before moving on to more abstract requirements for a happy life. Most savings objectives follow that same pattern. Retirement, security, emergencies/safety and family needs are what inspire most people to save. Only a few reach that state of perceived well being that they will devote savings to those “lofty” goals. But, the researchers found, there is a higher likelihood that they will actually do the saving.

In fact, the researchers learned, the self-fulfillment goals may be more important to this particular segment of the population than the “necessity-based” objectives are to their compatriots. Desires for self-fulfillment are “incredibly powerful motivators for actual savings behavior,” they concluded.

By extrapolation, they suggest that thinking about one’s self-growth might be impetus for more effective savings. They say that those motivations can be built into an individual’s approach to saving for the future.

While the practical needs of a family are likely to take precedence in making decisions about savings, not all human needs are covered by that kind of thinking. There should be room in the analysis for such things as dreams of becoming an entrepreneur, taking classes in a favorite subject, traveling, donating to charities that are near and dear to one or any other objective that doesn’t fall into the “necessary” category.

Based on their analysis, the researchers suggested that someone with a desire to set aside money for self-fulfillment should start with an analysis of what they really want to save for. Then begin by putting spare change, if that’s the most you have available, in a designated jar. Or open a separate auto-debit savings account for any amount of money that is reasonable for your own budget. The amount is not as important as the commitment. Then avoid the temptation to dip into this special savings account. You’ll be joining an elite group that sees the fulfillment of life’s “wants” as being as important as providing for the “must-haves.”

Flying High – With The Best Air Fares

September 16, 2014 By Twila Van Leer

The cost of air travel continues to go up, but with a little bit of Internet time, you can find the best possible fares.

Start with a search of discount travel sites, and don’t stop with just one. Compare. Popular sites include Expedia, Travelocity, Kayak, Google Flight Search and Hotwire. When you have made your comparison and think you have the best price you can find, act. Prices can change within minutes.

Skyscanner.com is a search engine that tracks prices for particular routes for a certain period of time – a month or a year. It’s easy to spot the best prices and the optimum times to fly as well as finding information on hotels and car rentals. You can receive email notices when the data changes.

Booking your flight online is cheaper than using the airline’s phone service, which adds a fee. Travel agencies also have started adding booking fees to replace revenue they used to get from the carriers.

Inform yourself as to the best times to fly. Be flexible if you are able. Tuesday, Wednesday and Thursday are the best days for private travel. Sunday is the most expensive. If you’re willing to make a brief stopover en route, it is less expensive than a direct flight. Early morning flights also are less costly.

As you would guess, holidays are not times to expect great travel deals. Christmas, Thanksgiving, Presidents’ Day, spring break and other high-travel times are when to avoid air travel if you can.

Booking ahead – six weeks, if possible, when the airlines are still hoping to fill up their flights, is usually the best time to get a deal. If you wait until a week or two prior to the date you want to fly, the airlines are clear on whether their flights are going to be full and they’re less anxious to offer deals. There are, however, last-minute deals to be had if you can be flexible.

Use your credit card to pay to take advantage of air mile offers. In addition, keep track of accumulated air miles through the airlines, particularly if you fly frequently.

The great majority of airports have shuttles or public ground transportation to get you to a post-flight destination. It’s less expensive than a cab. If possible, walk. If you rent a car, opt for the green alternative, a small, fuel-efficient car. Return the vehicle to the rental business fully gassed. They charge a premium to do that for you. And if you are really thinking ahead, consider driving to your destination instead of flying, then you’ll avoid a car rental.

Consider hotel alternatives such as condo or house rentals. Most units can be rented nightly or by the week. VRBO.com offers photos, details and prices and doesn’t charges a fee for the service. Make travel an occasion to visit family or friends, if possible. In exchange for their hospitality, help with groceries or take the hosts to dinner or some activity. And when it’s their time to travel, reciprocate.

Home exchanges can be arranged through homeExchange.com, SeniorsHome Exchange.com or Craigslist. That way, your home is not empty while you are away and you have housing at your travel destination. A win-win situation for both parties.