Personal Finance Blog

Tips And Stories To Help You With Managing Money

You are here: Home / Archives for Budgets

Budgets

5 Reasons Why We Fail To Save Money

By

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.

Frugal Tips For Saving Money

By

Saving money isn’t that hard when you take a frugal approach to it. I know that the words “saving” and “frugal” don’t bring the happiest thoughts to your mind. And that is the number one reason you aren’t able to save any money. You have the wrong attitude. It is surprising how easy it is to change your attitude. When you succeed at saving money, you are helping yourself. Keep you goals at the top of your priorities. When you have a budget and live frugally, you don’t have less, you have more. It is all about having more money. Not less.

I know that personally, my biggest challenge is wanting more. It is something that is hard to fight. We are saturated by advertising. We see new and more expensive things all around us. Many of us struggle with issues surrounding shopping and acquiring. I have the fear of being without something I need, so I buy everything I might use someday. I have to constantly remind myself that if I don’t buy it now, I will have the money to buy it later. It is in the attitude. You can change it.

One of the easiest ways to start saving is to cut down how much you have to buy. You can stretch things out a bit. Use less cleaning supplies and soaps by diluting them with water. Save scraps and reuse old clothing as rags. Look at the uses of things that might be considered trash. If you can avoid a shopping trip by reusing something once, you are saving.

I have found that being frugal has a great side effect. You can lose weight. Start by only drinking water and milk. Cut out the sodas. Save juice for breakfast. Don’t make the sugary drinks. None of it is good for you anyway. Drink water. Cut the calories and feel healthier.

You can also cut out a lot of money, and calories, by only buying healthy foods. These are often cheaper than the prepackaged convenience foods. Instead of frozen pizza treats, have a salad or turkey sandwich. Eat fresh veggies and fruits instead of chips. Shop on sale. Don’t eat as much each meal so that it goes further for your family.

If you have the money to stockpile on sales items that you will use, then by all means, shop up. Buy enough to last you until the next sale. But don’t get carried away. Only buy items that you will absolutely use. Canned and frozen veggies, flour, sugar, tomato sauce — look for the items that are staples of your diet. In fact, if you can only buy sale items when you shop, you’ll be doing pretty good.

When you stock up your pantry and have plenty to eat, it is easy to focus on other matters. You don’t have to worry about finding the money for food. The food is already there. When you can make something yourself, make it. You can often save money by simply putting a little time into it. And it is often quite satisfying.

And my number one way to save money — pay off those debts. Take every penny you are saving and put it towards getting rid of that debt and building an emergency fund. Don’t buy things you can’t afford and don’t need. Ask yourself what is more important to you — having some item or living a stress-free financial life? Having the money you need when you need it is more important than having some gadget sitting around collecting dust.

Article Source: by Martin Lukack

The Success Of The Kids’ Fun Fund

By

Our family recently returned from a week of vacation, and I’m proud to report that the Kids’ Fun Fund that I mentioned a few months ago worked just as I had hoped. Throughout 2009, my kids have been doing little chores around the house, chores for which they can earn a little money. A portion of this money gets deposited into the Kids’ Fun Fund – just a plastic square container decorated with their names and labeled Kids’ Fun Fund.

The purpose for our Kids’ Fun Fund was pretty specific. Our kids love to go to an arcade – a very specific arcade – located about fifteen minutes from where we go on vacation. This arcade is really more than just an arcade, it’s more like a small-scale amusement park, complete with miniature golf course and go-carts. My kids, for some reason, just really like to this particular arcade.

Last January, when we started to plan for our vacation, I asked my kids what they thought about creating a Fun Fund, so that they could save up a big pile of coins to use at the arcade. They really took to the idea an the Kids’ Fun Fund was born. You can click this link to read more details about the Kids’ Fun Fund.

The Kids’ Fun Fund really worked. Our kids worked hard – and worked hard together – to earn money for the Fun Fund. They were both so proud, when we were preparing for vacation, to pack their big jar of coins. When we arrived at the arcade, we all stuffed our pockets with quarters, and headed inside. The kids had a blast and it was great to see them enjoy the reward for their labors.

It’s cool to note that the kids could have spent every penny in their Fun Fund, but they chose not to do so. In fact, they used just a small portion of the money that they had saved. Now, they are in the process of deciding exactly what to do with the rest of the Fun Fund. I’ll guide them as they make the decision, but I’ll leave the final choice up to them. Whatever they do, I’m super-proud of my kids. They set a goal, worked hard to achieve it, and then had a blast at the arcade. Success!

Follow me via Twitter

Article by:
No Credit Needed: The Success Of The Kids’ Fun Fund

Living and Saving in the Moment

By

My three year old son loves to go to the grocery store with Mom and Dad. He wanders around with us, listening to our discussions about which products to buy, and quite often expresses his own opinions. He’ll remind us that he loves V8 Fusion (our preferred fruit juice, since it’s 100% and also is half vegetable juice) and often dallies for a long time near the Pepperidge Farm goldfish crackers, as I noted two years ago (and depicted as well):

Joe wants goldfish

As we shop, we make tons and tons of little decisions along the way. Those decisions, on their own, seem inconsequential.

Should we buy the bulk can of diced tomatoes or the smaller can?

These tortillas feel softer, but they’re way more expensive – is it worth it?

The free range whole chickens are on sale! Should we stock up?

A choice one way or another here might save us a dollar or cause us to spend a dollar more. In the eyes of many people, it’s an inconsequential decision – just make it and keep going. One dollar doesn’t make a huge difference, right?

The problem is that each little buying decision you make is deeply tied to other buying decisions, whether consciously or not.

How so, you might ask?

All of our buying decisions are based on a set of principles in our head, ones that are often so well-grounded that they don’t even pop up in conscious thought.

Here’s a thought experiment to help you see what I mean. Imagine a product you would never buy in a grocery store – pork rinds, maybe, or perhaps insanely potent hot sauce. Now, what about that product would cause you to not buy it? You’re likely to pop up an immediate simple answer – I don’t like the taste or it’s unhealthy – but on other purchases, you’re quite willing to overlook that principle for other reasons.

In truth, when we make a decision to buy in the grocery store, we’re trying to reduce a big set of principles and inputs down to one split-second decision. And often we feel we’re completely justified in that decision – and we move on with life.

It is very easy to tease apart each little buying decision, tell yourself that it doesn’t really matter that much and that it’s okay to splurge, and then essentially ignore your final tally when you get to the checkout because each decision was justified in your mind. Doing that, though, is a game that will, time and time again, put your wallet in the hurt locker.

So, what can you do to overcome this problem?

The easy methods are the shopping list and the meal plan. Making a shopping list in advance of your visit to the grocery store simply serves to reduce the number of decisions you have to make. This, of course, leads you to making fewer bad decisions.

But that’s just the start. Once you’re in the store with your shopping list in hand, commit to three more things.

First, simply do not put anything in your cart that’s not on your list. Your list, if it’s thought out at all, should have everything you need for your meals for the next week. If you see something you feel like you need or deserve, jot it on the back of the list for next time.

Second, mark any items that you’re not simply searching for the cheapest version of. On our list, I like to put a little X by any item that I don’t intend to just buy the cheapest version of. For example, with diced tomatoes, the various brands and cans are identical in terms of ingredients, so we usually just get the cheapest version. This, again, reduces the number of opportunities for poor impulse decisions in the store.

Third, if you have specific brands in mind (because of coupons or because of previous buying experiences), put those on your list, too, along with the size. For example, we usually have a big stack of coupons for V8 Fusion (100% juice, half fruit and half vegetable). So, instead of just writing “fruit juice x 3,” I’ll write “46 oz. V8 Fusion x 3? on the list. In other words, if you make the list more specific, you further reduce the number of potential impulse decisions in the store.

Using all of these techniques, you’ll end up making just a handful of in-the-moment choices in the grocery store – and with fewer potential decisions, you have fewer chances to make poor ones. The end result? A cart full of items that you actually want and a much smaller grocery bill.

By The Simple Dollar

What helps you eliminate bad spending habits?

By

How many times have you made financial mistakes because of bad spending habits ?  Too many to count? Already reached perfection?

Life gives people daily opportunities to use good money management strategies or to ignore them. The good news is that if you have failed, there is always another day to try again at your goals.

Money management strategies can be as challenging for some people as going on a diet. For other people, keeping a budget and sticking to your goals is no problem at all.

Here are a few causes of people who have gotten themselves into bad situations.

  1. Poor communication with your significant other about money.
  2. Lack of setting realistic goals so spending is much easier.
  3. Little or no record keeping so you are unaware of how much you are spending.
  4. Allowing yourself to purchase things because you think you deserve them.
  5. Lack of career preparation so income levels aren’t what they should be.
  6. Taking care of everyone else before you take care of yourself.
  7. Failing to look at the consequences of barely meeting your bills from month to month.
  8. Little or no savings to rely on in case of emergencies.
  9. Being a recreational shopper.
  10. Not being able to distinguish between needs or wants.

Here are a few tips to help you break your bad spending habits

  1. Leave your credit cards at home. It’s much easier to spend if you take them wih you, so just leave them at home.
  2. Limit yourself to 1 or 2 credit card accounts. It’s easier to pay them down if you don’t have so many credit cards.
  3. Shop with a list and plan what you are going to buy.
  4. Recognize when you are impulse shopping.
  5. Go shopping with a friend that knows your goals.
  6. Use what you already have in your home.
  7. If you need therapy, get it. Don’t using shopping as therapy.
  8. Be resourceful and try to do without what you think you want.
  9. Remember: No-one ever became rich by spending all of their money.
  10. Ask yourself: “Do I really need this?”, “Will I end up wasting this?”, “Is this an extravagance I can easily live without?”

So find out what the real culprit is behind your urge to splurge and recognize it. Read about how to fix your bad spending habits.

Remind yourself daily that money or a lack of it doesn’t determine who you are. Your worth as a person has nothing to do with how much money you have. Once you truly believe this, and money is no longer connected to your sense of self-worth, you open up the psychological barriers that were keeping you from wisely handling the money you do have and limiting your ability to make more. 

Build a library of the best personal finance books out there. Find a great list of books at the Get Rich Slowly blog.

What helps you eliminate bad spending habits?