Personal Finance Blog

Tips And Stories To Help You With Managing Money

Funding Your Spending Goals

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Most everyone has in their budget some special projects, purchases or plans that require advance savings to accomplish. If you have created such a wish list, it’s time to seriously begin the planning part.

Set Written Goals For Your Desired Purchases
Set Written Goals For Your Desired Purchases

Start by identifying as accurately as possible what this “dream” item is going to cost. When the figure is set, break the total into as many “payments” as necessary to reach that goal. That’s how much you need to set aside each pay period to fund this goal. Take the “wish list” into consideration if you should happen into any windfalls, bonuses, raises, inheritances or other augmentation of your income. The sooner you achieve one goal, the sooner you can start on another.

Make your goals concrete by putting them down in writing. Purchase or create a chart that lets you see at a glance where you stand vis-à-vis the goal.

It’s likely you will have several savings goals concurrently: a dream vacation, saving for a down payment on a house, building a retirement fund, etc. If you find you are pinching to fund all of them, you have some options: Reduce the list or scale back on some of the goals (a shorter vacation, perhaps?) You can extend the time for some of the larger goals, reducing the periodic savings payment. Or you can reassess your overall budget and see if there is some category that can be reasonably reduced and the money shifted to the savings category. For instance, you may be willing to sacrifice some of your regularly budget entertainment or transportation funds to speed up the long-term goals.

Other tips that will support those goals include setting up automatic deductions when possible, for instance for your 401k, a savings bond program, a brokerage account, etc. Track expenses monthly. If there is a category in which you are overspending, apply self-discipline. Streamlining could save you something to put toward your wish list. When you go out, leave your credit cards and checkbook home. Use cash. Having to hand over something concrete may inspire you to be a bit more stingy when you are out and about.

Above all, keep your attention focused on what it is you want in the future and don’t let the wants of the present rob you of those satisfying financial objectives.

Cut Your Expenses And Increase Your Income

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Savings Can Grow When You Decrease Expenses and Increase Your Income
Savings Can Grow When You Decrease Expenses and Increase Your Income
The annual AARP list of 99 ways to save money is out and it offers these nine suggestions to reduce your expenditures on financial matters:

Auto Insurance

Shop around for auto insurance. Insurers use a tactic called “price optimization.” That means they raise premiums based not on risk factors, but on how much of an increase they think you will accept. When it comes time to renew your insurance, bargain with your insurer for a better rate.

Pay Raises

Before you are called into human resources to discuss your next raise, ask for a salary range that informs you of the low-to-high range the company pays for a particular job. Knowing where you are in the range can become the basis for negotiation. Perhaps understanding the range will be impetus for more training so you can move up.

Free Credit Reports

Don’t pay for a credit score. It can be obtained free from Creditkarma.com or Credit.com or from Sharpen Your Financial Focus through its website, Sharpen Today.org.

Social Security

Plan ahead on your Social Security. If you have reason to think you will live beyond age 80, wait until you are 70 to begin collecting so you will get the maximum benefit. If you are a couple and feel it likely you will live past 80, let the partner who had greatest earnings delay collection.

Home Improvement

If you are considering house renovations, these changes are considered the most likely to enhance the value of your property: Replace the front or garage door, add a deck, turn an attic space into a bed/bath or update the kitchen. That‘s from Remodeling Magazine’s 2014 cost/value report.

Credit Card Payments

When you have heavy credit card expenditures, consider paying the bill in two increments instead of one monthly payment. Paying on time is the most important factor in calculating your credit score. Next is the percentage of credit you have available. People with the highest scores keep utilization under 10 percent. Paying your bill in two payments in a month keeps a lid on this number.

401Ks

Consider tax diversification in your 401k. Like Roth IRAs, many Roth 401k’s allow you to put in money on which you already have paid tax. Then you may withdraw it at retirement tax-free. If there is a possibility your tax bracket will go up in the future, these tax-free dollars stashed in a 401k now be even more valuable.

Interest Rates On Bank Accounts

Look at your banking institution. Some smaller banks and credit unions offer more than the going interest rate (about 2 percent) on checking accounts, even with balances of $10,000 or more. You’ll have to make direct deposits, in all likelihood to reap this benefit.

Pet Prescriptions

Talk to the vet who cares for your pets and see if he offers drug discounts or will provide samples of medications free. Ask if you can fill the vet’s prescriptions at a pharmacy for humans. Walmart and some other pharmacy outlets provide a $4 prescription price for many medications, which could save you money.

Hints For Saving Tech Dollars

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Saving MoneyYou can pocket some cash when adding to your technology “stuff” by following these suggestions that were included in the AARP’s annual list of 99 ways to save money:

Research new gadgets and find when they will be on the market. That way you won’t purchase an item soon to be obsolete. In general, a new iPhone hits the market every September, followed by an updated iPad in November. New camera models hit the markets in February and October. And there’s always a pile of electronics items that make their appearance for the holidays.

Consider a prepaid cellphone. That way, you pay for the calls before, not after, you’ve made them and that can save you considerable cash. All the big cellphone producers offer prepaid versions, but they don’t tend to advertise them. Make the request.

Keep in touch with family via Skype or similar app. They are available for smartphones, tablets and computers. Face Time is the version for Apple phones, tablets and computers. This free phone chatting over the Internet adds the bonus of video. Both parties, obviously, must have the app, but most families are now prepared to commune by computer.

Learn to outsmart scammers. If you receive an email purportedly from your bank or a big store, don’t click the link and log in. The email is fake and takes you to a fake website. As you are logging in, you give the bad guys access to your password.

When traveling outside the United States, put your phone on airplane mode. If you don’t, the phone will keep checking the Internet and emails on the cellular network in the country you are visiting. You’ll have a big bill when you return home. If you have to check email, turn on Wi-Fi and find a Wi-Fi hot spot.

Look at refurbished computers, rather than investing in a “new” one. Many of those listed as refurbished are, in fact, new ones that were bought and then returned for some reason. There are inspected more thoroughly than new machines, but the dealer can’t sell them as new. They cost less and have the same warranty.

Stick to basic cable, then sign up for Netflix streaming, which usually costs about $8 per month. You then have unlimited movies and entire seasons of some T shows. Your local library most likely has a good collection of DVDs.

Before you buy anything online, check for discounts and deals. You may find a better deal.

Higher Education Is A Step Up Financially

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Education Still Pays
Education Still Pays – Source: TheAtlantic.com
It just makes sense. The more education you have, the more you are likely to earn over your lifetime. Even in a tough job market and burdened with student loans, the college graduate will have the advantage over those who don’t advance beyond high school.

$1.2 Million More

The Federal Bank of New York recently released a report confirming the value of higher education. Those who earn a bachelor’s degree can expect to earn about $1.2 million more during the usual work years — ages 22 to 64 — than their peers who stop short of that educational milestone.

Even those with an associate’s degree are expected to outstrip their non-degreed friends by some $325,000 over their work lives, reported the study, which was based on U.S. Census Bureau and Bureau of Labor data.

The college-educated have lower unemployment rates and are less likely to live in poverty, the statistics showed.

Between 1970 and 2013, those with a bachelor’s degree earned on average about $64,500 per year; those with an associate’s degree about $50,000; and those with a high school diploma about $41,000 per year.

The higher earnings tend to more than offset the costs of higher education, the report indicated. A bachelor’s degree, after subtracting tax benefits and financial aid awards, cost an average $122,000 in 2013. The cost for an associate’s degree in the same year was $43,700. Most college students also lose the income they could have earned while they are studying.

More Earning Power

Even so, college graduates have more earning power than their less-educated peers, according to data gathered by the Bureau of Labor Statistics and the College Board. Most employers, even if they provide only basic employment, will pay more for workers with any level of post-high school education.

In an Associated Press report on the New York study, the example of recent college graduate Katie-Beth Vornberger, age 24, was cited. She graduated in May from George Mason University, taking away with her some $20,000 in debt. She had worked part-time to help cover her tuition. She was immediately employed by a consulting firm that manages social media accounts at a salary $4 per hour more than she was earning while in school. She hopes for a full-time job with the firm and has expectations that her higher education will soon begin paying off.

Though it has always been clear that there are avenues besides college that lead to valuable job preparation, the statistics continue to affirm that some formal training, including trade schools and on-the-job experience, will lead to more earnings over a lifetime.

Women Starting Businesses At Unmatched Growth Rate

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Women Starting Businesses
Women Starting Businesses
From 1997 to 2014, the number of American businesses owned by women rose an amazing 68 percent, twice the rate of increase shown by their male counterparts, according to a study based on U. S. Census Bureau figures.

Every day, about 1,288 women-owned businesses pop up on the horizon. That’s up from 602 in 2011-12, the study showed. The results were prepared by American Express using the federal data.

Women See Opportunities

Susan Duffy, executive director of the Center for Women’s Entrepreneurial Leadership at Babson College, believes the phenomenon is related to a growing awareness among women that there are business options available to them. Differences in the job market since the most recent recession also favor the types of businesses in which women excel.

A general renewal of the entrepreneurial spirit in this country is another factor that favors women. A body of role models has grown up, offering patterns and incentives that younger women are applying to their own endeavors. Among those role models, according to an Associated Press article on the new statistics, are such notables as Oprah Winfrey, designers Tory Burch and Diane Von Furstenberg and technology gurus such as Weili Dai, co-founder of Marvell Technology. Even the current head of the Small Business Administration is a woman, Maria Contreras-Sweet. She succeeded to the position that was held by Karen Mills. Both have been business owners in their own right.

Summer Scarbrough had a built-in role model, her mother, Elizabeth, who is a former executive with a medical devices company. Together, mother and daughter now own VinniBag, travel containers for wines and other bottled products. The company, located in Ventura, Calif., is five years old.

Resources For Women

The number of resources devoted to aiding women in their entrepreneurship also is growing. The Women’s Business Centers, an arm of the SBA, is one that is encouraging women in their business start-ups, and there are a number of other organizations with the same purpose in mind.

Optimistic Views

Women tend to be more optimistic about their efforts than men, a survey conducted by Bank of America showed. Seventy percent of those surveyed expect to see rising revenues over the coming year, compared with 66 percent of men. Fifty-six percent of women said they expect to make new hires in the year, compared with 50 percent of their male counterparts. An optimistic 68 percent of the female entrepreneurs say they will expand their companies, again somewhat ahead of the 63 percent of males contacted in the survey.

If the trend continues, many more Americans can soon expect to be working for a “boss lady” than in the past.