Category Archives: Savings

The Payday Savings Plan

Payday Savings Plan  | Money Savvy Living

 

It’s a simple concept: pay yourself when you get paid.

 

Instead of just budgeting to pay bills, make savings a part of your monthly budget. If savings aren’t a part of your monthly budget, then the chances of you actually setting money aside each month are greatly diminished.

 

Realistically, most of us spend based on what we see in our wallets or as our checking account balance. After all your bills are paid, if you have $500 left in your account, you probably feel that this entire amount is your disposable income. If, however, you have included savings into your budget—let’s say, $200—and prioritized it as you would any other expense, you would now only see $300 in your account as disposable income. This would force you to adjust your spending.

 

The payday savings plan enables consistent savings, sets aside money before it is spent on other disposable income items, and prioritizes savings as a part of your budget.

 

Pay Day Savings Plan | Money Savvy Living

 

You must plan to save money. Saving is not something that is going to happen on its own. It is a habit that you must purposefully implement into your budget.

 

Look at your entire budget.

Before you can decide how much to save, you must look at your income and expenses. After all of your bills are paid each month, the money that is leftover is your disposable income. So, for example, once you know that you will have approximately $500 a month left after all your bills are paid, you can then decide how much to set aside for savings.  Build savings in as a part of your budget.

 

Decide how much you can afford to save each month.

After you have taken a look at how much money is left over each month after all of your monthly obligations have been met is your disposable income. The disposable income is the money that you spend on the stuff you want—not the stuff you need. This is your fun money. Yes, it is fun to eat out or buy a new pair of shoes, or whatever your extra money each month goes to, but the short-term disappointment of sacrificing some of these wants will reap huge benefits for you in the long-term by saving and planning for retirement.

 

Commit to a fixed amount that you can put into savings each pay period.

It is easier to save each month when you are setting aside a set amount each time you get paid. Some savings plans tell you to start out saving $1 the first week and working your way up to saving $52 the last week of the year; this sounds good, but the reality of this means that the first month, you are saving $10, and the last month, you are saving over $200. That is a huge swing in your budget, one that can be hard to stick to, especially when unexpected expenses come up. Setting aside a specific amount allows you to budget more consistently.

 

Set up automatic funds transfer.

Whether your savings are through an employer-sponsored retirement plan or just depositing in a savings account each, set it up to go directly from your paycheck to that account. If the money is set aside before it even hits your bank account, it is not every likely to be spent. You know the old saying: out of sight, out of mind…

 

Don’t turn down “free” money.

If you have an employee sponsored retirement plan, such as a 401k, you are turning down free money if you aren’t participating in it. Many companies have some sort of matching component to their 401k plan. So if you contribute 2% of your paycheck, your employer will match that and also contribute 2%. If you aren’t contributing to a company sponsored plan, you are literally turning down free money.

Even if your employer doesn’t match or if you are self-employed and it is just you contributing to your account, you are still missing out on free money if you aren’t contributing each month. How is that possible? It has to do with the time value of money and the compounding effect that it has. Ok, this may sound a bit confusing, but simply stated, your savings account balance grows by compounding on the principle and interest each month. So the more you contribute, the more interest you will get on the larger balance each and every month. So the sooner you can start saving, the better.

Daily Habits that are Costing You Hundreds of Dollars

Daily Habits Costing You Hundreds | Money Savvy Living

When you are trying to save money, there are, typically, quite a few places that you can look. The obvious place to start is with monthly bills: evaluate your telephone package, cellular plan, satellite/cable options, and internet connection service. Many times, companies are able to give you special promotions that are currently going on or you can even down-grade your current options, based on what you actually need and use. Although, there are some ways to save that you may not have even considered. These money-usurping habits often slide under your monthly budget radar because they aren’t individual bills that come in the mail each month. You may pay cash or put them on a credit card used for other household items, so these expenses may go unnoticed, but could, literally, be costing you hundreds of dollars each year.

 

The morning coffee addiction

If you are like most of us, you probably can’t really get going in the morning without a cup of coffee. However, it can make a huge difference in your budget where you are getting that coffee. If you are stopping by your favorite coffee shop and ordering a specialized coffee from a barista, you are probably spending around $4.00 each work day, or about $88 each month. While the gourmet latte each day is delicious, it is costing you over $1000 per year, if you buy a gourmet coffee each workday! Don’t lose heart, though, there is a much cheaper way that is still going to taste great. If you aren’t good at measuring out and making your own coffee, invest in a coffee maker that you can simply place a K-cup in and have a perfect-tasting cup of coffee every time. The least expensive way to enjoy a K-cup is buying at a wholesale store (I go to Sam’s Club). You can get a large box of 84 K-cups for just under $40. Buy some flavored creamer and you will get a great tasting cup of coffee for around $0.50 per cup! Making your own coffee at home costs about $11 per month and will save you $77 per month; that is a savings of over $900 for the year!

 

Eating out for lunch

Mornings can be hectic, especially if you are trying to get your children ready for school, help kids finish homework, make breakfast, and make sure everyone gets out the door on time. It can be really hard to add one more thing to the morning checklist. Honestly, we all know that it is just easier to buy lunch rather than take the time to pack one. Buying lunch at a restaurant each day can make quite a dent in your budget. Even if you are getting a value meal at a fast food restaurant, you are probably spending at least $5 per day, which would be about $1250 per year. This is an expense that can approximately be cut in half by packing a lunch each day.

 

Happy hour

It may not seem like a big deal to stop by your favorite sports pub after work and have some wings and a beer with a few co-workers to wind down after work, however, you may be spending more than you think. There are always “happy hour” specials so it seems relatively inexpensive. Of course, if you go every day, you are probably adding at least $5-10 to your daily expenses, and potentially, a whole lot more, depending on how long you stay.

 

The best way to limit the amount that you spend each month on these “daily habits” is to budget for them. You don’t have to give everything up altogether. Build a certain amount into your budget each month and then stick to it.

 

Money Advice: From a Kid’s Perspective

Money Advice: From a Kid's Perspective

Money Advice: from an 8-year-old

 

“Out of the mouths of babes oft times come gems.” I think the old saying is quite appropriate here. I asked my 8-year-old son what he thought was good advice regarding money. He immediately came up with “don’t spend it on junk.” He took a bit longer to come up with the other two: “store it in a bank” and “give some of it to someone else.” But he did think of these on his own, without any help. I would have to say that he nailed it! I am pleased to think that at 8 years of age, he has a better understanding of personal finances than many adults do.

 

Don’t Spend It On Junk
Seems obvious, right? I think he probably gets the term “junk” from the fact that whenever we are at a store, if he wants to get a cheap little toy, I tell him not to waste the money on it because it is made so inexpensively it will just break– probably about 5 minutes after he starts playing with it. Junk. For adults, it is a bit different though, maybe we aren’t spending a couple of dollars on something cheaply made and easily breakable, but maybe, just maybe, we are making unnecessary purchases. I mean, how many times have you bought something that you really didn’t need? Maybe it was on sale, maybe it was even a great deal as an end-of-season clearance item, but you really didn’t need it or hadn’t even thought about buying it… but it was on such a good sale, you just couldn’t pass it up? Sound familiar? I know I have done this before. And all those little purchases add up.

 

Store It In A Bank
While my 8-year-old has a money jar that he loves to store all his money in from birthdays and Christmas, his advice to store it in a bank is right on target. Every time you get paid, put some money aside in a savings account and 401k or IRA. A savings account will get you through the unexpected expense times, or allow funds for family vacations, or even just give you a safety net for the unforeseen life event, such as an unexpected layoff from your job. But a savings account isn’t enough, you also need to store money in a retirement account. Start saving for your future NOW. The earlier you start saving, the better. The compounding effects of interest over time will greatly increase your account value.

 

Give Some Of It To Someone Else
I love that my son has a giving heart. It isn’t too hard to look around to find a local church or other worthy charitable organization that could do a lot of good with a donation. Not only does someone in need benefit, but the giver gets to experience the joy of giving and making a difference. “Give, and it shall be given unto you…” Luke 6:38

 

*Article also published on my Examiner.com page.

Your budget tells you what you can’t afford, but doesn’t stop you from buying it

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Take control of your finances. It all starts with a budget: knowing how much your have coming in each month, and how much you are paying out. But just knowing your financial situation is not enough. You have to actually take steps to ensure that you are paying down the bills that you want to get rid of or not overspending and creating more bills.

Simple things to do to cut down on overspending:
So, instead of eating out for lunch everyday at work, you pack a lunch and take with you. Maybe that means not buying some new shoes that you really didn’t need anyways (even if they are on sale!). Perhaps that even means giving up your fitness club membership and working out at home. And this may sound obvious, but don’t go shopping with money that you don’t have; in other words, do go to the mall just because you are bored. Living within your means, sometimes means giving up the things you want, for the things that you need.

So how can you stick to a budget and not feel totally strapped? Make sure to budget in a little fun money each month. For example, if you budget in $100 of spending cash, then you are allowing yourself to spend money on something that is not in your budget without feeling guilty, and still work toward achieving your goals.

Discount Tickets to Monster Jam

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MJ2Quicken Loans Arena Feb. 14-16, 2014

Advance Auto Parts Monster Jam, starring the biggest performers on four wheels: Monster Jam monster trucks! The twelve-feet-tall, ten-thousand-pound machines will bring you to your feet, racing and ripping up a custom-designed track full of obstacles to soar over or smash through!  Monster Jam provides a massive night’s entertainment tailored perfectly for your family’s budget, and these colorful, larger-than-life beasts are sure to capture the hearts of both young and old.

Save 25% off of tickets using code: MOM25.

Click here to get your Tickets Today!

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**Not valid on Front Row or Gold Circle seats. Not valid on Friday night. No double discounts. Service charges, handling and facility fees may apply.

New Year savings: Online shopping codes

Take advantage of great online savings

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Banana Republic, code good Jan 9 – Jan 11, 2014

50% sale items for her, Promo code: BRSALE50

Free shipping on orders over $50

Disney On Ice coming to Cleveland – January 2014

Quicken Loans Arena, Jan. 10th – 20th It’s one colossal party on ice, with all your favorite Disney friends! Join Mickey Mouse and Minnie Mouse as they celebrate a Very Merry Unbirthday Party with Alice and the Mad Hatter; Mardi Gras with Princess Tiana and Prince Naveen; a Royal Valentine’s Day Ball with the Disney Princesses; a Hawaiian luau with Lilo & Stitch; a winter wonderland with Woody, Jessie and Buzz Lightyear; a Halloween haunt with the Disney Villains and more in a magical medley of holidays, celebrations and festivals from around the globe. Come join the party when this spectacular ice show visits your hometown! SAVE 25% off tickets using code: FAM25. http://www.theqarena.com/

Daily habits that could be costing you hundreds

coffee cup
When you are trying to save money, there are, typically, quite a few places that you can look. The obvious place to start is with monthly bills: evaluate your telephone package, cellular plan, satellite/cable options, and internet connection service. Many times, companies are able to give you special promotions that are currently going on or you can even down-grade your current options, based on what you actually need and use. Although, there are some ways to save that you may not have even considered. These money-usurping habits often slide under your monthly budget radar because they aren’t individual bills that come in the mail each month. You may pay cash or put them on a credit card used for other household items, so these expenses may go unnoticed, but could, literally, be costing you hundreds of dollars each year.

Click here to read the entire article.

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