"Poverty is the common face of all scholars." - Chinese Proverb

SavingAdvice.com Blog

Bridging the gap between saving money and investing


Join Now or Login

money management

Fall Organization: Is Being Disorganized Keeping You Broke?

By Leave a Comment

fall organization tips
In general, life is more expensive when you are disorganized. You wind up spending money on things you wouldn’t normally, blowing your budget, and going into debt. Here are a few fall organization tips to help you get your finances on track.

How Disorganization Can Impact Your Finances

Being disorganized can impact your finances significantly. First, disorganization can lead to serious financial problems is not being able to stay on top of your bills. For instance, you get nailed a late charge for your electric bill but you are sure you’d paid it. However, because you have no organization system for your finances, you missed making the payment. You simply don’t know when your money is coming or going.

This type of disorganization can also lead you to make impulse buys. Consider this: you have had your eye on a new couch. Because your finances aren’t organized, you don’t save the money for the couch. One weekend, there is a great sale and, instead of getting your budget organized and saving up, you purchase the couch on credit (that you don’t really have). Now each month, for the next 24 months you have a payment due, that was unplanned.

Also, having disorganized finances generally means you won’t have a plan to pay that debt off and no effective way of doing so. Eventually, you’ll find yourself drowning.

Lastly, consider the feelings about money. Did you grow up having very little money in the family? Did you get the hand me downs of your older siblings? These feelings may cause a lack of respect for money. You may feel money is owed to you and spend with reckless abandon. Thus, financial disorganization becomes a way of life

 

Fall Organization Tips for Managing Your Money-Part 1

So, how do you keep your finances organized and become more likely to reach your financial goals? Here are a few tips and habits to adopt this fall to better organize your finances.

  1. Get rid of stockpiled financial documents. Having clutter can make it hard to get organized but the IRS makes people a bit nervous to throw away financial documents. You can safely shred and throw away any credit card statements that don’t include deductible purchases and are more than a month old. You can also trash utility bills, phones bills, receipts, deposit slips, and bank statements more than a month old (as long as you aren’t deducting anything).
  2. Make a digital copy. Once you’ve filtered through your documents, make digital copies of the ones you need and back them up.
  3. Keep your bills in one place. If you still get physical copies of bills, keep them all in the same place and create a way to track whether or not they’ve been paid. Check out this bill organizer.
  4. Develop a routine. Review your budget once a month and have a set day you review and pay bills each week. Having a set date and time will help you remain in control. It will also make sure everything is paid on time and you’re investing your money in the right places.

Fall Organization Tips for Managing Your Money -Part 2

  1. Create a good environment for organizing your finances. When you handle your finances, create a desirable environment. Play some music or light a pumpkin scented candle (or the candle of your choice). Making your finances enjoyable will help you want to better manage your money.
  2. Use tools that are more aesthetically pleasing. If you are using a physical calendar or physical sorting of any sort, make sure it looks nice. This will also make you less reluctant to handle your finances. For instance, this planner has coloring pages. It would make it fun to review your budget each month.
  3. Create firm boundaries and set dates for reaching your goals. Don’t allow yourself a whole lot of wiggle room when it comes to your budget and setting goals. The more room you give yourself, the less likely you’ll be to stick to your budget.

These are just a few organization tips to adopt this fall to better manage your finances. Do you have a tip you’d add to the list? Let us know in the comments!

Read More

9 Habits of Wealthy People That You Should Follow

By Leave a Comment

Habits of Wealthy People

Wealthy people are not better or necessarily even smarter than those with less money. Rather, it is commonly their daily habits and mindset that enhance their finances and separate them from the rest.

While other factors may come into play when determining wealth, you can emulate these nine habits of the rich to grow your own wealth:

Set goals

When you set goals for yourself, you increase your motivation and determination to accomplish tasks. You do need to still have a strategy when creating goals though. Make them genuine and meaningful. Most importantly, they should be S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, Timely) Why is this important? Individuals who write down their goals are much more likely to achieve them. Having a vision keeps you focused, which is why wealthy people are constantly creating goals for themselves. Wishful thinking won’t get you far; goal setting with follow-through, however, will. For more tips on goal setting, check out this article by Certified Executive Coach, Norma Reid.

Live within your means

Wealthy people are great at managing their money, which is why they are in a positive place financially, to begin with. On the other hand, it does go a bit beyond basic money management. Budgeting and tracking expenses along with having a spending plan is the best way to ensure you are living within your means. Wealthy people know they need to pay themselves first; they save the recommended 20 percent of their income.

Some ways you can be more sensible with your money include but are not limited to: driving a humble vehicle and avoid spending more than 5% on auto loans; investing in a retirement fund; prevent credit card debt by paying your balance in full each month; and creating an emergency fund made up of at least six months of living costs.

Read instead of watching TV

Successful people use their free time for productivity and personal development instead of in front of mindless television shows. Consider picking up a book and teach yourself a new skill, particularly one that will help you earn more money. Have a long commute? Download an audible version so that you can keep learning even while on the road.

Surround yourself with the right people

Negativity can really bring you down, and the same can be said for those who are not forward-thinkers. The rich tend to hang out with individuals who are hard working, self-sufficient, and persistent because they are like-minded. Hang out with the people who will influence and create a positive impact on you.

Wake up early

Waking up early creates more opportunities for you. By waking up early, you are not only able to accomplish more, but you also establish some personal time, which is important for maintaining productivity.

Network and look for opportunities

Wealthy people don’t wait for opportunities to come to them; they create them for themselves. Through networking, you produce valuable relationships and favorable circumstances for your career. Putting yourself forward and meeting new people also helps to keep you motivated and always thinking of new ideas. Those who are successful know the value in networking and you should too.

Take care of your body and mind

Success and wealth involve more than wise investments and big risks; it is also about taking care of yourself. Dedicating time to de-stress through exercise and meditation will aid in the maintenance of your emotions, which, as you can understand, if you allow getting out of control may ruin opportunities for you. When overwhelmed, we tend to make rash decisions. This can, therefore, influence the decisions we make in our finances. Stay on your A-game by keeping your mind healthy and in check.

Don’t gamble

Instead, invest. While it is not impossible to win money from a lottery ticket or the slot machines, you are much better off putting your money into something that is more likely to pay you back. As long as you are not going into it without a strategy. investing in stock or bonds can be quite the financially friendly option.

Track your net worth

Regularly analyzing your net worth is one of those tasks you should do to align your financial goals with your efforts. Wealthy people know this and not only evaluate it; they grow it every year. Need advice on how to improve your net worth? You may find this article helpful.

If you really want to be prosperous, never give up. Start generating multiple streams of revenue for yourself and set yourself up for success by always studying and improving.

Are you following any of the habits above?

Photo: Andrew Gumbel

wealthy people

Who Wants to Be a Millionaire? You Shouldn’t

By 2 Comments

Who Wants to Be a Millionaire
A lot of people claim that they would love to be a millionaire. After all, when the economy is shaky and your bank account is looking low, who wouldn’t like a little more financial security? However, becoming a millionaire might not be all you imagine, especially when it comes to your finances. Here are a few reasons you might want to reconsider becoming a millionaire:

  • Life is not about the money
  • It’s an arbitrary number
  • It fails to take into account other life goals
  • It won’t make you happy
  • It gives you the wrong focus
  • It’s a lifestyle trap

Taxes

Becoming a millionaire means that you’re in a different tax bracket, which means that you’ll end up paying more money in taxes. A lot of people don’t factor in the tax amount when they think about becoming a millionaire. Additionally, while the federal government has set tax brackets, the tax brackets for your specific state vary. Recently, many states have been raising the tack brackets for people who earn more than $1 million in a given year.

More Time Without Money

Having more money means spending more money on your finances. You’ll no longer be able to just your bills and balance your checkbook. With millions in the bank, you’ll have to spend more time budgeting your money, figuring out where to save or invest it, or learning how to manage it. With more money comes more responsibility.

Money Management

While having more money means spending more time managing it, it also means that there’s more maintenance required. While most people maintain their bank accounts by balancing their checkbook or depositing into their savings account, becoming a millionaire means having to do a lot more than that. If you don’t have a lot of knowledge about financial management, you’ll have to work with someone to better understand how to manage your money. Your yearly taxes will be more involved than before and you may have to consider how to invest, save, or donate your money.

Overspending

A lot of people who suddenly come into large amounts of money go out and start buying all the items they once coveted. However, doing so can often lead to overspending and before you know it, you’re no longer a millionaire. How many celebrities have you seen who go from having it all to having nothing because they have poor money management skills or buy too many luxury items? It’s easy to want to spend money when you have it, but letting money burn a hole in your pocket can lead you to financial ruin.

Moochers

If you read any story of someone who won the lottery, started a successful company, or hit millions for one reason or another you’ll almost always hear about how they’re inundated with long lost relatives or friends. Even close friends and family might start hitting you up for money, assuming that since you have millions in the bank you can “loan” some to them without any worries. While it may be nice to have that money in the bank, becoming a millionaire also means that you run the risk of being taken advantage of or people only wanting to associate with you because you suddenly have money.

Stress of Having Too Much Money

While living paycheck to paycheck or having no income is definitely more stressful than having millions in the bank, being a millionaire can also be very stressful. Not only do you have to manage your money more carefully, but you also have to figure out if you want to invest it in stocks or assets, whether you want to donate to receive tax write-offs, or how and where you want to save it.

Millionaire Status

People can become millionaires in a lot of different ways, but no matter how you come into the money you always have to figure out how to keep it. For instance, if you earned your money through a company you have to ensure that the company maintains its profits so you don’t lose that income. If you became a millionaire through winning the lottery or a similar means, you have to worry about not spending all of that money and saving some for your future.

Photo: Flickr: Pictures of Money

Money Management Skills to Teach Your Kids: Quick Lessons

By 2 Comments


Money Management Skills to Teach Your Kids

Teaching your kids about money is extremely important! However, it can be a hard task to tackle because of its importance and, well, because they are kids. Of course, kids don’t have bills to pay, and they don’t have an income (usually), but there are ways to teach your kids some basic money management skills through everyday tasks.

It is never too early to start saving and learning about finances. Learning smart spending habits can have a strong impact on a child’s life. The financial lessons children learn today will last well into adulthood.

Here are a few ideas you may want to try to help teach your kids about money management:

Give children an allowance. An allowance is kind of an old-fashioned thing, but it can really teach kids a lot about money. Some people consider it “spoiling” the kids, however, it can really teach them basic knowledge of earning, spending and saving. Oftentimes, parents give kids a weekly allowance for chores and then the children are allowed to spend their money as they please. Of course, you will provide your child with everything that they need. But, if they want something more expensive, they will have to save for it. They will also think twice about spending because of the amount of time it took them to earn that amount of money.

Turn grocery shopping into a lesson. Shopping can pose a great opportunity to teach kids about money. Comparison shopping is something that people often do without really even thinking about it, however, teaching this to a child could really impact their finances throughout their lives. You can teach them to shop by value rather than brand. You can also teach them the importance of shopping with a list. Through these things, you can show them a little preparation can lead to great savings.

Open a checking/savings account for your child. You can open a bank account for your child. Oftentimes, banks and credit unions offer parents the opportunity to open an account in their child’s name. You can also open a joint account with your child’s name on it if your bank does not allow to have their own account. Owning and maintaining an account helps children learn important life skills about spending, saving, earning and

Start a lemonade stand. When the weather is warmer, many kids set ip lemonade stands in their neighborhoods. Parents can use this as a great way to teach their children about financial skills as well as business. It serves as a confidence-building lesson as well as a lesson about money management. Kids can learn how to set and achieve goals, understand profit and pricing and even develop some basic business math skills.

There are many other ways to teach your kids about money management. Sitting down and taking a moment with your children and talking about money could affect their entire lives. It is never too early to start talking about it, there are age-appropriate money lessons for every child.

Money Management Tips for Couples: Have a Sit Down Night

By 1 Comment


Money Management Tips for Couples

Couples often say that their number one problem, or the number one reason they fight, is money. However, there are things you can do to avoid fighting about money. Of course, if money isn’t being handled correctly, it can add a lot of stress. However, if you and your partner have an open line of communication when it comes to cash, you can be free of these arguments.

Even in the best of times, money can be an argument starter. Someone usually ends up sleeping on the couch or possibly even getting the silent treatment. However, if you just talk about it, you can change the way your relationship handles money forever.

Here are a few tips to make talking about money with your honey a little easier:

Set a date, not for your wedding, but to talk about the finances. You oftentimes make appointments to do everything else that it is easy to forget that you also need to sit down and talk about your finances as a couple. It is an important thing to do! When you “set a date,” mark it in pen. Don’t make it something that is flexible because it won’t likely ever get done.

Once you’ve set a date, make sure you are both in a relaxed setting so that this discussion doesn’t end in a fight. Get comfortable, unplug (turn off your cell phones) and get ready for a serious talk with your partner.

You can’t really ease into it. Anything beyond, “Did you pay the dog groomer?” needs a more in-depth conversation. However, you can get a good idea about your partner’s ideas when it comes to finance. You can ask your partner a few of the following questions, and answer them yourself, so that you both can get a better idea about each of your ideas concerning the touchy subject.
• What would you spend a $1,000 tax refund on?
• Which of you is more likely to buy an expensive gift?
• Which of you is more likely to know how the stock market fared today?
• Which of you is more likely to do taxes?
• Which of you is more likely shop for the best deal?
• How do you view money?
• Three best and worst purchases as a couple?
• What is your biggest financial concern?

After you’ve scheduled (and completed) your money talk date, you should be able to reward yourselves. Talking about money and finance as a couple is difficult. You can set up a reward like dinner or a movie and write it on your calendar to remind yourself of the awesome incentive.

You should have this talk quarterly and agree to a few things after you’ve spoken:
• Try to change what one another finds troubling financially
• Accept mutual responsibility
• No blaming
• Be realistic with goals and decisions

Once you’ve been able to have one of these sit-downs successfully, you are on the road to better money management as a couple. Of course, money management starts with yourself, so be sure to check out our other money management tips!