Personal Finance Blog

Tips And Stories To Help You With Managing Money

The 31 Day Spending Diet

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Personal finance planning by eliminating excess spending.
Can you go on a 31 day money diet and cut out all spending on unnecessary goods?
Haven’t gotten serious yet about a resolution for the New Year? Here’s a thought: Instead of resolving to lose pounds, resolve to lose debt and live more frugally.

Eliza Cross, a blogger at Happy Simple Living can offer some advice. She has started each of the past six years on a fresh-start basis. To begin with, she spends no money beyond the necessary monthly bills, for 31 days. That means no restaurants, no movies, no fast-food purchases, no impulse items. Nada.

She gets excited when she realizes how much money she saves by bypassing everything except the bare essentials. The break from spending also inspires her to be ore cognizant of what she spends and what she spends it for. Then she maintains the attitude as the year moves along.

Her tips:

Look for free activities in your area. Local museums and art galleries often have special events. Libraries have moved way beyond books and now have DVDs and other media, all for free.

Plan some home cooking. You’ll find that in-season foods are cheaper. When you cook, make a double batch and freeze half. A slow cooker can tenderize a tougher, cheaper cut of meat if you let it simmer all day.

Treat yourself now and again. The tough part of any diet is that awful feeling that you’re starving. Don’t hoard the fancy lotions, soaps and scented candles that tend to multiply at Christmas. Wear your nicest nightie and whip up the baked goody mix that is languishing in your cupboard. Splurging in this way once in awhile can take the die out of diet. Just don’t overdo.

Make your friends part of the challenge. Tell them what you are doing and most likely they’ll go along cheerfully when you invite them over for potluck rather than heading to the expensive restaurant. Create some new traditions. If a friend has a birthday during your January spending fast, for instance, recycle a book you really enjoyed and create an opportunity to share your thoughts after she has read it. Make her lunch or share a trip to one of the free events you have identified.

There’s nothing that says January must be the month for your adventure in no-spending. It just happens to be traditionally the month for new resolutions. If another month works better, feel free to change your target period. The whole idea is simply to end mindless spending and be more wise about what you do with your money. Then you can start deciding how to make the money you saved work for you toward a more stable personal financial plan.

Gas Prices To Remain Low In 2015

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Major airline companies are saving billions of dollars in monthly fuel bills.
Major airline companies are saving billions of dollars in monthly fuel bills.
For the last three months in 2014, average gas prices dropped almost daily in the United States and the Energy Department predicts that American drivers will continue to see prices in the same range as the new year begins.

The department is forecasting a price of $2.60 per gallon. That would be 23 percent lower than the predicted average for 2014, the lowest since 2009. What that means to consumers is more money to spend for other things and a boost to the overall economy as the costs of transportation and shipping goods drop.

The average per-gallon cost of $2.66 registered in the last week of December is 61 cents less than a year ago, the agency reported.

At the root of the rapid decline is a drop in crude oil supplies worldwide. Global prices were down to $66 per barrel after hitting a high of $115 per barrel last June. Rising production in the U.S. contributed to high supplies around the globe. At the same time, slow economic growth in Europe and Asia has lessened demand.

Oil companies are trimming production plans for the coming year. U.S. crude oil production is expected to rise by 300,000 per day to a total of 9.3 million barrels. Before the precipitous drop in prices, the EIA had forecast a 400,000-barrel per day increase in production.

Home heating costs will fall this winter, according to the agency’s predictions. Weather forecasts do not predict a long period of low temperatures and prices for propane and heating oils are much lower.

The average savings to U.S. households for 2014 was $115. If prices stay low, as expected, the 2015 aggregate savings could be $75 billion. Gas prices are closely associated with consumer confidence, which is at its highest since the recession. The reduction in oil and gas prices contributed to better-than-expected holiday spending, according to Goldman Sachs.

South Carolina has had the cheapest gas for the past three years, at an average $3.10 per gallon. Missouri, Mississippi, Tennessee and Arkansas were next in line. Hawaii had the highest prices at $4.16 per gallon, followed by Alaska, California, Connecticut and New York.

The 2015 prices are expected to bottom out after the midpoint of the year and begin rising again.

Family Budgeting For The New Year

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Involve the whole family in planning your budget.
Involve the whole family in planning your budget.
Making resolutions as you head into a new year is simple. But a good hard look at the year disappearing over the horizon is just as important. If better financial management is your objective, it becomes the basis for what to do next.

In fact, your family may be well served to think beyond 2015 as you go through finances with a fine-toothed comb. Involve everyone in the group by making specific assignments. Tweak past plans to meet new realities related to aging children, changes in employment and all the other eventualities that go with real life.

Start with a review of assets and liabilities. Savings, investments and loan status all will have changed and need to be considered, as well as income. There must be room for possible challenges to your financial standing. If you find that debt leaves you with a negative net worth, make that the focus for the near future. Plan how you can attack debt through increased payments or finding more sources of income to beat it down. Don’t be one paycheck from poverty.

Involve all household members in finding way to economize, while focusing on the “musts” such as housing, food, transportation, health, utilities, tuition and clothing and prepare to resist temptation to stray off into unnecessary expenditures.

Don’t plan how you can pay tuition before the student is ready for classes. Prioritize spending to meet the costs that can’t be deferred. Keep everyone in the loop so they won’t be surprised when austerity comes to visit. Learning about trade-offs early is good training for life.

If you have problems sticking to a savings plan, make it automatic at the bank. If you don’t have the cash in hand, it is easier to part with. Make the importance of savings a household commitment.

Plan meals in advance and shop in bulk where possible. Monitor waste in the kitchen. Make conservation of electricity, fuel and water regular habits by creating awareness among family members.

Investing has to be an action item. There is no other way to grow money. It takes study and time and resources. Make ongoing financial education part of the plan. Use your networks to learn more and identify mentors who can help you put your money to work. Get an “accountability” partner, a family member, if feasible, to encourage follow-ups and reviews of your action plan.

Make your resolutions based on practical experience and you’ll have more chance of actually keeping them.

Social Media May Affect Your Career

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Don't lose out on a job because of something you have said online.
Don’t lose out on a job because of something you have said online.
Everybody does it these days – uses social media in almost any setting. On the job, it can be very useful, but it also can be a huge stumbling block if what you share is detrimental. The impression you leave with a prospective employer, for instance, could be diametrically opposed to the one you intended. So use it, but use it wisely.

Reppler, a social media monitoring service, reports that 91 percent of employers use channels such as Facebook, Twitter and Linkedin to assess a prospective hire. Social medic profiles might give more information about a job-seeker’s personality and character than they imagine. Even passing remarks can be misinterpreted. You have the right to comment on controversial issues and to use profanity, but remember that the person who picks it up may object to such uses of the language.

If you want personal information kept private, don’t splash it on a post or tweet sites. If it’s something you probably wouldn’t tell anyone except a very good friend, you probably don’t want to share it with someone who is considering you for a job. And it may not even be you who makes the less-than-acceptable comment. What your friends have to say about you on social media could have an effect. Screen those you intend to interact with on social media and block those whose comments could hurt you if read by others.

Security features on social media applications change often. Stay current if you want to know how private your information is. Police your sites and lock down information as you feel it to be necessary.

If you comment negatively on your boss or the job, expect that it might become public. Even if the individual you have made the negative comments about is not on your list of friends, he or she may become aware through gossip. Maybe it can’t be easily traced back to you, but text is hard to discredit. Better be safe than sorry and unemployed.

On the positive side, social media can be very valuable in networking with others in your field. Share your ideas through industry-based groups and organizations. Logs and websites can help in the job hunt.

Social media obviously is not going away anytime soon, so expect that more aspects of your life, including your job, could become public. Just use caution to ensure that it doesn’t become a negative factor in that important phase of your life.

Top Ten Financial Resolutions For 2015

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The most popular financial resolution is to SAVE MONEY.
The most popular financial resolution is to SAVE MONEY.
Fewer than one in three Americans will resolve with the beginning of the New Year to get their personal finances under control. That’s too bad, because the experts tell us that making changes in money management is easier than losing weight or dropping a tobacco habit.

If you are among those who, according to the sixth annual Fidelity New Year study, are determined to take on more productive financial control, there are approaches that will increase your chances of success. (The Fidelity study showed that three in four who made the resolution in 2013 saw progress toward their goals. And about one in four achieved all the aspects they opted for.) Here is the advice from experts:

1. Save money. Before anything else, set up an emergency fund. Most financial planners advise that three to six months’ salary should be in reserve in case of unforeseen life events, such as a medical emergency or costly car repairs. Put the money into a reserve that isn’t easily dipped into, such as an online savings account. Then resist the temptation to use the reserve for discretionary purchases.

2. Pay down debt. Start with the highest-interest account and add a little extra to each payment. If you come by a lump sum, advise the lender that you want to apply it to the loan principal. That means interest savings.

3. Look for ways to supplement your income. Avoid the hype of multilevel marketers who want you on board. But if you have a skill, a hobby or specialized industry knowledge, try to find a market for it. Sell unnecessary possessions on eBay or put your artistic creations on the Etsy outlet.

4. A budget is crucial to your success. Review your checkbook for several months and see if you can pare. Order a free credit report from one of the three reporting agencies. They will provide one a year. Use the information to plan which accounts should be paid off first.

5. Every member of your household needs to understand the elements of your finances. According to the experts, this is an area that often is neglected. If you are planning to marry, make a thorough financial review part of the pre-planning. Plan together exactly how you will handle more than one income and try to develop a shared vision of how you will approach spending, debt and other issues.

6. If your employer has a program for matching savings, take advantage of it. See if your bank or credit union offers free or low-fee financial planning. Ask if there are ways you can get better earnings from your savings and investments. Opt for an automatic savings deduction from your paycheck to help you keep your resolution. Contribute the highest amount allowed, if possible, to retirement accounts or other plans designed to give you tax advantages.

7. Have your records in good order so you can file taxes early. Apps such as Mint can be useful in keeping your financial data organized and track things like daily spending.

8. If you resolve to spend less, that’s nice, but not easy to conform to. Better to give yourself an allowance and stick with it. Study your budget and all aspects of your finances regularly to see if you can spot places to cut. For instance, are you paying more for insurance than necessary? Get a professional audit to see. An energy audit may offer suggestions for cutting costs in that category. Websites such as our site can give you hints about day-to-day expenses.

9. If you have time and energy, use them to improve your earning power. Take classes, which may be tax deductible, or investigate the job market to see if you can ease up the ladder. Learn about investing money in stocks and bonds. Or invest in your own business if that is feasible.

10. Set up your computer for automatic bill paying and automatic withdrawals for savings and to meet other financial goals. A financial program such as Quicken can provide an ongoing updated picture of your finances.

With all this in mind, get ready, get set, resolve to make 2015 your best financial year yet.