Personal Finance Blog

Tips And Stories To Help You With Managing Money

6 Tips For LIving On One Income

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Determine a good budget to use and make sure you stick to it.
Determine a good budget to use and make sure you stick to it.
One Income? Make It Enough

Two-income families have become almost the norm in the United States, but some families, for whatever reasons, can and do get by on the earnings of just one breadwinner.

It requires planning and commitment, but it is possible.

Analyze Your Budget

Start with an honest and thorough review of your current financial picture. How much do you spend? How much of the spending is for necessities and how much for luxuries you could do without? Think of ways you could cut back, such as eating more meals at home rather than out. Use the analysis to make a realistic new one-income budget.

Plan Your Spending

Get over some old habits, such as whipping out the credit card whenever you see something you might like to have, but don’t really need. Based on your new realities, give first priority to the expenses of running a household. Plan for some savings and then limit spending for other things to what is left.

Six Month Emergency Fund

Experts advise a six-month cushion in case of emergencies. That protects against financial disaster when the breadwinner is laid off, becomes ill or injured – any of the multiple disasters large or small that life sometimes dishes up.

Experiment Before Losing The Second Income

Try out a single-income existence before plunging headlong into it permanently. While you still have two incomes, put one into savings for several months or a year to test how it would work in reality. The cached money could become part of the cushion just mentioned.

Ask Tax Adviser For Advice

Talk to a tax professional who can tell you what moving to a single income might do to your tax liability. Moving into a lower tax bracket may offset some of the loss you experience from reducing your income. But have the facts in hand before you take the leap.

Cut Down Living Costs

Search for ways to reduce your costs. Many two-salary households may find they have accumulated a number of trivial items that could easily be sacrificed in the name of the new one-salary mode of living. Cut down the number of channels you carry on cable. Assess your insurance policies to see if they are more than adequate or if you can save by bundling. Each household budget is different, but engage everyone in your group in setting priorities and trimming excess. It will be worth some sacrifice if circumstances now call for a one-salary approach to living.

Wise Shopping During Christmas Time

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Get Ready! Get Set! Get Shopping!

Get Christmas shopping done ahead of time.
Get Christmas shopping done ahead of time.
Anyone who is paying attention knows that holiday shopping begins earlier every year and this year October had hardly dropped off the calendar before the Black Friday/Cyber Monday deals were being ballyhooed.

And you don’t have to wait for the turkey to become skin and bones to get in on the bargains, according to the shopping experts. But the wisest shoppers will go into the season with a strategy and a budget, those same experts say.

Here’s how:

Set A Goal

Be a “mission” shopper. Have the list before you shop and know how much you can afford to spend without fracturing your budget. If you wander around with no clue, looking for the perfect gift, you’re likely to fall victim to impulse buying. And once that starts, it’s hard to draw the line. To help stay on task, plan your holiday shopping as part of a list of things to be done – for instance, picking up the kids from school. That creates a deadline that won’t allow you too much time to be tempted. Or shop with someone whom you know to be impatient and who will hurry you through the process.

Price Match

Avoiding impulse buying can help with saving money.
Avoiding impulse buying can help with saving money.
Price match at the many stores that say they will meet their competitors’ prices. When stores began to lose customers to online shopping, they backed away from non-matching policies. Such tactics have become part of the Black Friday experience. If you find an item you want, use your smartphone to check the prices at other stores. If you can point out a lower price to a cashier or manager, most will meet the competition. It’s worth a try.

Email Newsletters

Keep a separate email address for store mailing lists, subscriptions to daily deal lists and related shopping aids. That helps prevent clogging of your main inbox and streamlines your online browsing for the best deals. Sign up for deal alerts on retailer websites so you can do your shopping at home before facing the crowded stores.

Free Shipping

Be aware of shipping policies before you make your online purchases. Delays with UPS and FedEx left a lot of people giftless on THE day last year. Read dealer shipping information thoroughly, especially if you’re crowding the deadline. If the fine print says the goods will be shipped in a certain number of business days, remember that Saturday and Sunday won’t count. Avoid paying extra bucks for overnight or one-day shipping by allowing plenty of time.

WeChat Saves You Money On Long Distance Charges

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WeChat is the fifth most-used smartphone app in the world.
WeChat is the fifth most-used smartphone app in the world.

Smart phone messaging applications have become essential to doing business, keeping in touch with friends, having fun on a vacation and saving money.

WeChat, an instant messaging system developed by the Chinese Internet company, Tencent has become an extremely popular messaging app. GlobalWebIndex lists WeChat as the fifth most-used smartphone app in the world. Forbes magazine says, “It is undoubtedly the most powerful mobile app in China today and is fast becoming one of the world’s most powerful too.”

Let’s review some of the features of the messaging app. It has the standard text messaging, photo messaging, video messaging features, social gaming, and it has talking functions. Talking functions are much like using a walkie talkie. Video calls makes the app even more valuable. Forming groups can be quite powerful as well. Up to 500 people can be in one group. While talking with groups, only one person can talk at once.

The number one reason people like this app is because it allows users to talk for free. That means if you have contacts around the world, you can talk for free.  Talking through the application has cut down the enormous costs of long distance charges.

Globally, WeChat has around 397 million users. The app is most popular in China, where it was built and launched in 2011.  There are around 300 million Chinese users. While China actively blocks some popular social websites they have not blocked this app.

So how can WeChat be both good and bad? The app also has a GPS system that allows other people to see where you are. In fact, there is a feature that let’s you shake your phone and find other members close to you that you can add as contacts.

This tracking ability has caused some problems. Chinese authorities have linked the systems use to a large number of crimes. Recently Tencent identified and shut down over 20 million accounts that they had successfully linked to prostitution rings.

There was a tragic incident where a Chinese woman met a man through WeChat and arranged to meet with him. Little did she know that he had just spent 13 years in prison and was currently being investigated for rape. The meeting proved fatal for the young woman. She was robbed and murdered.

There are also people who are concerned about threats to national security as well as personal privacy issues. The gps functions in the app reveals your geographic location. Security officials could monitor users’ movements in real time, critics say, and give non-users access to text messages and contact books. Countries such as the United States, Taiwan and India, as well as the home nation of China have all wondered about the threats to national security.

The benefits of the app will have to be weighed carefully for each individual.   It is quite touching to see how one teenager, nervous to perform in a violin concert was reassured by doing a video call with her instructor.

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Letting The Present Rob The Future

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Proper planning for retirement really helps alleviate stress.
Proper planning for retirement really helps alleviate stress.
The comparative wealth of Americans born into the post-World War II economy is taking a toll on retirement expectations. With the greatest economy known to history, Americans have tended to become a “gimme more” population, a condition that is reflected in soaring national debt and near-depletion of some natural resources.

The national stress is often mirrored in personal finances. Too many Americans are approaching retirement only to find they don’t have the resources to match their expectations for the “golden years.” Now it’s too late to cut expenditures and put more into savings. The alternative is to lower expectations and live more frugally than they had planned.

For those who still can affect the future, there are some common-sense steps that will ease the challenge when retirement arrives:

Savings: Put a percentage of your income into savings and investments to build a cache for the future. The more generous you are to yourself, the greater the expectation you can have of being able to control your life as you age. Recognize the difference between needs and wants and act accordingly.

Housing: In that spirit, consider housing. You may want a mansion, but you need secure shelter for your family. Opting for a smaller home that does not consume a large percentage of your resources will give you more leeway in the future. Consider all the factors, including down payment, interest, mortgage payments and upkeep over the time you expect to live in the home, then decide if luxury now will offset a skimpy retirement fund.

Possessions: Consider the mental costs of owning many “things.” The care and keeping of many possessions can cause considerable stress, which can in turn manifest itself in physical ailments, psychiatrists say. Count the cost of the time you may spend looking after, protecting and replacing excess possessions. An “attitude of gratitude” rather than obsessive collecting will help you toward a balanced life.

Health: Look after your physical health as a foundation for your retirement. Living long but not well is not a good option. Two in three Americans are overweight or even obese. This contributes to increases in such complaints as diabetes, heart disease and some cancers. Surgical remedies for obesity have surged from 13,386 operations in 1998 to 220,000 in 2009.

Overeating is the simple underlying factor in overweight, compounded by lack of exercise. A huge increase in the number of high-calorie foods and drinks consumed by Americans is part of the problem, abetted by too-large servings, according to health experts. They advise eating about half what a restaurant serves. Reduced trips to eateries and an increase in home-cooked meals will be easier both on the budget and on the calorie intake.

In summary, living lean involves having money in reserve, providing for a reasonable retirement and putting needs before wants. It’s an approach to living that can result in a less stressful, more satisfying present and the prospects of a better future.

Start Early To Teach Kids Finances

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Saving money is a good habit to get into.
Teaching kids to save money can help them in all aspects of life.
Like everything else, children have to learn the basics about personal finances in ways that make sense to them. Unfortunately, money matters often are overlooked when it comes to what’s important for them to know.

Starting early and being consistent are the keys to helping your children avoid the big bump that comes with hitting the financial world uninformed.

Start with regular savings. If the child has an allowance, convince him or her that putting a portion of that money into savings is a good idea. Don’t just assume they will go along with that approach. If they can be taught to save toward a particular goal, such as a new toy or a special outing, it will be more meaningful. But if they only save money to spend it immediately, they may miss the message. Only a portion of their savings should be in this category.

Many parents (nine out of 10, according to some sources) expect children to work for their allowance, another little dose of the real world that may come in handy as they embark into their own financial independence.

Sharing your family financial basics with children as they are able to understand is good backup for savings accounts. If your own finances are in disarray, they will have a hard time coming to healthy conclusions. Remember that the amount of the child’s allowance or savings is not as important as the consistency.

Starting early and regularly to absorb the basics of money management is the key to responsibility later on. When faced with their first forays into auto ownership, college and other adult expenses, they won’t be overwhelmed with it all. The loan officers with whom they deal will be more impressed if they have the vocabulary and the familiarity with financial terms and concepts.

Sound, lifelong money management skills may be the best gift you can offer to your children.