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National Simplify Your Life Week 2015

August 7, 2015 By Will Lipovsky Leave a Comment

The first week of August has been designated as Simplify Your Life Week!

This oddball holiday is just gaining traction. It’s why you haven’t heard of it and neither had I until this morning.

Basically, it’s a period of time where we encourage each other to downsize our lives while supersizing our happiness. Since this is a personal finance website, I’ll mostly be discussing ways to simply your money. However, this holiday is much more inclusive than just that topic:

Ways to Simply Your Life

Eat more natural foods. A good way to start doing this is by grocery shopping just the perimeter of the store. That’s where the natural, fresh foods are kept. Staying out the center isles will almost guarantee a thin waist as well. Here’s something else you could try… don’t eat any food with its own commercial! It’s simple but effective!
Turn off your cell phone. When was the last time your cell was actually off? Go ahead this week and turn it off for periods of time. Consider shutting it off when you sleep, for instance. Or shutting it off at 9pm every night. You’ll end the day more relaxed.
Say ‘no’ to one thing a week. Some people feel guilty for telling people ‘no’. But sometimes it’s necessary if you’re feeling overwhelmed and want to narrow down your commitments. There’s nothing wrong with saying ‘no’ sometimes.

Ways to Simplify Your Finances

Hire an accountant. This professional can get you the maximum amount of money on your tax return. They can also save you time, stress, and guesswork. Wouldn’t life be simpler if you just let someone else do your taxes?
Go digital. Many banks will give a .25% reduction on interest (or an increase in interest if you’re saving money) if you opt for electronic notifications. Paper gets messy anyway. If you still have a filing cabinet at home, strongly consider this option. Opening up Google Drive is far easier than digging through a messy filing cabinet!
Declutter. Have you ever wondered why sleeping in a hotel room is so relaxing? It’s probably because there’s little clutter. Yes – get rid of your stuff. You’ll probably sleep better. You can throw it away, gift it, or sell it. Your mind, body, and soul will thank you.
Outsource. If you feel like you’re being run ragged, consider outsourcing some work. This can be done in a variety of ways. The most obvious is hiring a cleaning person. Next, try hiring out your yard work. After that, see if grocery shopping can be done by someone else. Think of all the things you can outsource! I could keep going on for ages. Basically, if there’s something in your life causing you stress, there’s probably someone who can do it for you. Use the time to pursue your passion instead. You’ll probably make more money this way as well! If you can work for $50/hour and hire someone to garden for $15/hour, well…
Use cloud storage. There are plenty of ways to get free cloud storage. With Amazon Prime ($99/year) for instance, you can get 5gb of ‘anything’ storage and unlimited photo uploads. Using the cloud is inexpensive. It’s even free in some instances like with Photobucket, Google Drive, or even Dropbox. Using cloud storage may bring peace to your life. You won’t have to worry about leaving a file on a computer, external hard drive, tablet, CD, thumb drive, etc. You’ll have it all readily available on the cloud. Just remember your username and password and you’re in. How simple is that? It’s simple and so much cheaper than buying your own storage systems.
Bike to work. Biking is good for the environment, your health, and, of course, your wallet. A bike is a very simple form of transport. Think about it this way… a car weighs about 3,500 pounds. The average bike weighs between 19 and 23 pounds. They both do the same job – they move you. If you want to simplify your life even further, consider walking short distances.

National Simplify Your Life week is an invitation to try a bit of simple living for one week. See if you like it. If not, you can always go back. But you’ll probably realize simple living suits you.

Remember, you don’t have to simplify every aspect of your life. If you always like to have 3 cars in your garage – fine! That’s cool! But I’m sure there is at least one segment of your life worth downsizing. What will you downsize?

10 Financial Resolutions Everyone Should Make

January 1, 2013 By Danielle Warchol 100 Comments

While some people think it’s better to avoid making New Year’s Resolutions, it’s important to get specific as possible if you do decide to do make them. If you’re the type where New Year’s resolutions help motivate you to achieve those goals, here are some that you should consider relating to your finances:

Save More

It’s easy to tell yourself that you’re going to save more money, but do you ever follow through with those promises? You might start saving for a month before deciding that you’d rather spend that money on other “necessities”. However, saving can be fairly easy. Even someone living on a strict budget can find ways to cut costs and save a little money. You can start small, such as shoving $5 or $10 away at the end of each month. Some people like to take all the small bills out of their wallet at the end of the week. If you don’t carry cash, have part of your paycheck automatically deposited to a savings account.

Spend Less

Spending less money is also easier said than done. But a lot of us have the unfortunate tendency of overspending on certain products. Sometimes this occurs because there’s a minimum balance requirement, which often happens at online retailers and tricks people into spending more money. You’ll need to start taking stock of how much money you’re spending and where you can cut costs. For instance, instead of buying that $20 bottle of special shampoo, you might want to try the $5 brand instead.

Pay Down Debt

Paying down debt is difficult, especially if you’ve accumulated so much debt that it seems as if you’ll never pay it off in your lifetime. However, you should make a resolution to attempt to get a handle on your debt. Once you know how much you owe and each payment plan, you can start to create your own short and long-term goals and work toward paying it down. This might be setting aside extra money each week for a monthly payment or taking on extra jobs to make large payments on the interest or principal balances.

Have an Emergency Fund

Emergency funds are important to have in case anything unexpected happens such as a medical emergency, a natural disaster, or the loss of a job. While creating an emergency fund is difficult if you’re living paycheck to paycheck, you can always try and put aside a little extra money. When you receive your tax returns, you can set aside a portion for your emergency fund, for instance. In an ideal world, your emergency fund should be able to cover your expenses for six months. If that seems unlikely for your financial budget, you should plan to have one that can at least cover your expenses for one month.

Create a Budget

Sometimes the best way to keep control of your finances is to create a budget. Mark down all your expenses so you know how much you need for the month. This will help you to see how much you need to save and how much leftover income you have. Creating a budget also gives you a firm number to work with and makes you more aware of how much money you’re spending each month.

Track Your Finances

When was the last time you looked at a bank statement? How often do you swipe your debit or credit card without thinking twice? You should make a habit of tracking your financial statements for a few reasons. For one, it might help you address unneeded spending. You might not realize how often you order takeout until you see it listed on your bank statement. Additionally, looking at your bank statements can help you address any fraud claims. There are plenty of people who never really know how much money they have in their bank account and would never know if someone charged something to their account.

Checking Your Credit

You should make a habit of checking your credit at least once a year. Not only is this a good way to prevent identity theft, but it will help keep you up to date on your credit history and score. A bad credit history can create problems down the road, so if you have plans of buying a home or applying for insurance, you might be able to improve your credit. Free credit reports are available at Annual Credit Report.

Start a Retirement Fund

Many people don’t take advantage of starting a retirement fund when they first enter the workforce. Sometimes it’s because they believe they don’t have to worry about a retirement fund until later in life and sometimes it’s because they think they can’t part with the money. However, one of your primary financial goals should be creating a retirement fund. What would happen if you never saved money for retirement? Do you want to be able to have all your expenses covered in your old age, right? Start putting money into a 401(k) account as soon as you can.

Be Aware of Fees

How many times have you swiped a card somewhere even when you knew you’d encounter a $3 fee? Or maybe you were feeling lazy and didn’t want to go to the grocery store, so you decided to pay the $10 fee for grocery delivery. Maybe you overdrew your bank account and now have to pay a $25 fee. Regardless of the reason, you should be more aware of associated costs and fees with your transactions as this could help you avoid them and save money in the future.

Cash Only

Have you ever considered going on a cash-only budget? Getting rid of your debit and credit cards might help you to save more and spend less. When you only have cash, you’re limited to only spending a certain amount.

What are some of the financial resolutions you’re planning to make this year?

(Photo courtesy of simplyla)

financial resolutions

Skip the Finance Fads

December 26, 2011 By Jennifer Derrick 2 Comments

It’s the time of year when many people resolve to get their finances in order. As with dieting, this is also the time of year when all the fads compete for your attention. You start to see ads for everything including computer software, apps for your phone, programs/groups that promise to solve all of your financial problems, and whole “systems” that promise you control over your money. Books, software, classes, and support groups all compete for your attention.

The thing is, while some of these things might be useful in the right circumstances, the basics of personal finance are unaffected by these fads. There is nothing that any of these systems, apps, and programs can do that you can’t do yourself. When things start touting “never before seen tips,” “success without hard work,” and “a revolutionary approach to your money,” you’d better run away because they are lying.

Success with your finances boils down to one rule that never changes: You have to spend less than you earn. It’s the same with dieting. You have to burn more calories than you consume. That’s it. It is one simple rule that never changes no matter how many tracking programs, fads, or crazy approaches you throw at it. Yes, there are tools that can make it a bit easier to track various aspects of your finances or books that can educate you further, but if someone promises a revolutionary approach to financial success or guarantees you success with no effort on your part, they’re lying.

Spending less than you earn sounds easy, but it requires a lot of thought and continuous effort on your part. Any fad program that promises easy or instant success should be avoided. To be successful, you’ll have to figure out how much you bring in and how much you must spend every month to keep a roof over your head, have food in your pantry, and keep everything properly insured. If you can’t currently meet your basic needs, you have to look at ways to cut back or to bring in more income. You’ll also have to figure out how to save for your wants and your future needs. That might mean taking on another job or getting more education. There’s nothing easy or quick about any of it.

And it’s not a one shot deal, either. You can’t just deal with your finances once and forget it and expect everything to continue smoothly. You have to reevaluate your finances every time something in your life changes. If you get a new job, lose a job, get a new house, move to a new area, have a kid, or send a kid to college, you’ll have to go back and make sure that your budget is still working and adjust as necessary.

Does any of this sound like something that can be handled by a fad system rather than plain old hard work? I didn’t think so. Sure there are parts of your finances, like estate planning and investing, that stretch a bit beyond the strict “spend less than you earn” rule, but you can’t even begin to contemplate these things until you are spending less than you earn. That’s the only way you’ll have extra money to invest or to pass on to your heirs. So don’t fall for the fad pitches. Instead, stick to the tried and true rule of simply spending less than you earn.

(Photo courtesy of j_anet)

The Road To Wealth

November 19, 2011 By Guest Writer 2 Comments

This is a guest post by Ashley at Money Talks

The road to wealth may not be a smooth ride, but the fact remains you are either moving towards wealth, or you are moving towards poverty. Everyone moves along this road in one direction or the other. The path to wealth isn’t overly difficult or complicated, but it does take consistency.

Every single thing that’s ever been said or written about personal finance can be summed up in 5 words. “Spend less than you earn.” All of personal finance either deals with the spending, the earning, or what to do with the leftovers. It’s the leftovers that make you rich.

If you earn $5,000 per month and spend $6,000 per month then you are moving toward poverty at $1,000 per month, which is a pretty good clip. The debt will pile up quickly. How long until you can’t make the minimum payments anymore? On the other hand, if you earn $5,000 and spend $4,500 then you are moving towards wealth at $500 per month. You will have $6,000 per year to use to grow wealth. If you can drop your spending to $4,000 or increase your earnings to $5,500 then you can move towards wealth twice as fast.

Your budget is your GPS device. If used properly it will tell you if you are moving towards poverty or wealth and at what speed. It covers the three areas of finance, your earnings, your spending, and your leftovers.

Creating Your Budget

Your budget should include an area where you track your earnings. From your earnings you can divvy up how you would like to spend your money. Rent, groceries, insurance payments, and so on. Include a category for everything you can think of. Getting your hair done, car maintenance, holidays, vacations. Once you have your estimating done it’s time to track your spending. I know it’s the most tedious part of finance but it’s also one of the most critical. We all think we are doing just fine. You might find out things aren’t as rosy as you imagined. Or you might find out things aren’t as bad as you thought. You don’t know until you find out where you are actually spending those dollars.

At the end of the month you will know if you are moving towards poverty or wealth. Do you have leftovers? If not, then you are moving towards poverty. If you broke even that’s not really considered standing still. Unfortunately on the road to wealth there is a pretty strong headwind. If you sit with your car in neutral for too long the wind will slowly push you towards poverty. Things like inflation and emergencies will erode your standard of living over time. If you relied on debt to make it through the month then you are really moving towards poverty.

If you had leftovers, then great job! You are moving towards wealth. Decide how to best use those leftovers. Once you have a small base of savings built up you should work to tackle any debt. If your consumer debt is paid off you can start saving for the future.

Tweaking Your Budget

Whether you are moving towards wealth or poverty, it’s time to tweak the budget. If you are moving towards poverty aim to slow your speed. If you are borrowing $1,000 per month then aim to borrow $500, then $250, then break even. It might take time to plug the holes. I’d rather see you just slow down on your race to poverty than to feel it’s too big a job to turn around and therefore give up. Once you are at the break even spot, spending exactly what you make, then try to start saving some money. Be on the lookout for ways to cut spending in your budget while at the same time looking for ways in life to increase earnings.

Once you have some leftovers you can always work to find more, but keep your money in balance. You always want to have some fun money too. There is still room for fun on the road to wealth!

Are you moving towards wealth or poverty? Do you use a budget to keep track of your money?

Ashley writes at Money Talks. Her mission in life is to help people get control of their money. If you like this article you should subscribe to her feed, follow her twitter account @MoneyTalksCoach or like her Facebook Page.

This is a new series on SavingAdvice where we highlight different bloggers around the Internet. If you are a blogger and would like to be highlighted on SavingAdvice, feel free to contact us. Image courtesy of SixTwo Point of View

8 Ways A Recession Can Benefit You In The Long Run

June 26, 2009 By Amy L. Fontinelle 4 Comments

In the midst of a recession, it’s easy to feel like things will never get better. The news is filled with reports of layoffs and stock market declines, the atmosphere at work is somber, and talk about the economy even makes its way into the TV shows you watch to get away from it all.

But instead of just sitting around and feeling miserable or doing nothing and hoping for the best, there are steps you can actively take to improve your financial situation during a recession, when money is tight, that will continue to help you in the long run, when things ease up.

Learn strategies for reducing your taxes

If your employment situation and your life situation are very simple, there probably isn’t much you can do in this area. However, once you get into things like home ownership, long-term relationships, and earning self-employment income or running your own business, tax planning can save you major cash. You may not be able to afford a fancy accountant, but you can probably afford to buy a book or two on the subject.

Develop better savings habits

When the money is rolling in, it can be possible to ignore your spending and still manage to save some money every month. Or you might be so convinced that you don’t need to worry about money that you’re spending way more than you should. Having less money, or just wanting to be more conservative, make it a good time to put yourself on an automated savings plan. Once you get in the habit of paying yourself first, chances are, you’ll stick with it, even when times improve.

Refresh your job search and interviewing skills

It’s easy to get comfortable at the same job and not seek out opportunities to move up or move into a position you’d enjoy more. Layoffs, or the prospect of layoffs, can give you the push you need to explore options you wouldn’t have otherwise. Don’t assume that a recession means you have to take a step down the ladder or take the first job you can get.

Become a more frugal shopper

It’s easy to ignore a buck here and fiver there when you have the luxury of extra cash. When you don’t, it makes sense to learn how to get everything you need for the lowest price possible. Once you acquire this skill, you won’t want to go back to wasting money, even when you have the extra cash again, and the savings will really add up.

Learn to enjoy leisure time without spending money

You already know that spending money doesn’t guarantee a good time, and that spending money and then not enjoying yourself is a lot worse than doing a free activity and not enjoying yourself. So start having friends over to watch your favorite TV show instead of going out for dinner. Take advantage of the many “free” community activities provided by your tax dollars, like the library, public swimming pools, bike paths, neighborhood parks, and summer concerts. (True, swimming requires a bathing suit and biking requires a bike, but most people already own these things.) Go to meetup.com and find some people in your area who share a similar interest or hobby (a free one) like hiking, political activism, or volunteering. Engage in the social activities offered by your church or synagogue.

Learn frugal skills

Take the time to learn skills like cooking, cleaning, home improvement, gardening, and lawn care. Instead of habitually paying restaurants to cook your lunches and dinners, a housekeeper to clean your house, a plumber to unclog your drain, and a landscape company to mow and edge your lawn, do it yourself–especially if you’re out of work and have extra time. You’ll save money and get some exercise.

Find ways to reduce your recurring monthly expenses

Health insurance, car insurance, homeowners insurance, phone service, the cable bill–all of your recurring expenses are worth looking at once a year to see if they can be lowered. Perhaps your car has become so old that you can drop your collision coverage. Maybe you’ve gotten married and can get on a spouse’s health insurance plan and drop your individual coverage. Maybe there’s a cheaper phone plan available, or one that closer fits your needs. Life situations change, and product pricing changes. A lot can change in a year to make your old plans less suitable for your needs.

Find creative ways to make extra money

Everyone has something they can do for extra cash outside of a regular job. It can be as small as collecting and selling scrap metal or redeeming soda cans for cash. It can be a little more involved, like selling your old stuff on eBay or having a garage sale. In a best-case scenario, it’s a side job that you can do for extra cash when you have the time–handyman work, babysiting, writing articles–the possibilities are endless. You just have to think about what skills you have and who you can market those skills to.

If you’re tired of hearing about nothing but bankruptcies, foreclosures, and layoffs, start finding ways to brighten the situation. By looking at hard economic times as an opportunity to make changes that will benefit your finances in the long term instead of allowing yourself to make excuses and wallow, you can turn a negative situation into a positive one.

I Shop at Thrift Stores

January 27, 2009 By Jennifer Touchette 14 Comments

It has happened again. Because of the ailing economy, my local television news is reporting another story on how to save money. Very helpful, yes, but what got my ire up was the tone of the broadcast.

This particular story detailed the local rise in people shopping at thrift stores. The report left me with the feeling that these people were indeed ashamed to be at thrift store.

People should not be reluctant to shop at thrift stores or – for that matter – feel guilty for taking the time to look closely at prices and consider how to spend their hard-earned money. We need to start admiring our thrifty habits and be proud of the value we squeeze out of each shopping trip. In short, I’m not sorry to be frugal.

Before I was thrifty

Not that long ago I barely saved anything and spent almost my whole paycheck by the time it was payday again. Where on earth did that money go? I remember how panicked I was. What if my car broke down and needs expensive repairs? What if I lose my job and need to move?

Thanks to our current, more careful purchasing habits, our life is easier simply because we go through our money less quickly. I’ve found we even need fewer things, consume less and, therefore, we save money.

We have simply said “no” to new clothes at every turn, cable television, using the car every time we go somewhere, and buying a new house when we wanted it. Here’s how it shakes out:

Shopping for most clothes at thrift stores – There are a few items I can’t find – children’s pajamas – and some I would rather buy new, like underwear, but the rest of our clothes comes from thrift stores, gifts or hand-me-downs. In the four years we’ve tracked our clothing purchases, thrift-store shopping has been 85% of our total clothes shopping, but just 30% of the total cost. If we had purchased the equivalent amount of clothing from regular retail stores, we could have spent more than $600 per person per year.
Only broadcast television – We live in an area where we are able to get a clear broadcast signal. Thanks to this, we save $45 a month on the standard package of channels. It has been more than 10 years since we have paid for cable, and trust me, we still watch plenty of television. All told, it’s a total savings of $5,400.
Bike to work – My husband took up riding his bike when he was too hurt to run for fitness anymore. During last year’s huge rises in gas prices, this practice especially made sense. In 2008, his biking to work saved us an average of $80 for every fill up on our full-size truck. By halving the need to fill up the truck, we saved $960.
One of us works at home – Talk about saving on gas, clothing and food! This is another big lifestyle change our family took on when we decided to have children. Happily, I have a profession that could translate to home and we were able to cut our childcare costs in half. If I had remained working full-time outside the home, we could have easily spent another $400 per month for the average full-time preschool in our area, which would have been another $24,000 per child for the five years needed.
Movies at home – We love going to the movie theaters several times a year and we always have a lot of fun. However, if we went to a weekly premiere like my husband and I did when we dated, our family would be poorer an average of $40 for every movie (including tickets and refreshments). Today, we rent a movie almost every weekend and try to patronize our local Redbox for the $1 per night movies. Compare $52 a year on movies to $2,080 a year and you’ll see why we steel ourselves to wait until the DVD release.
We chose to stay in our home – We are grateful every month for our reasonable mortgage payment. It is small because my husband bought our house more than 12 years ago. If we had found something we liked and purchased another house two years ago when we were looking, our mortgage payment would have at least doubled. For us, it would have cost another $800 a month, or $9,600 a year.

As you can see, we are penny pinchers for sure. Our lifestyle isn’t full of travel or meals out several times a week, but what my husband and I have is a shared sense of financial responsibility that we hope to pass onto our children.

I urge you, too, to be proud of your thriftiness, not ashamed. It’s a good thing you’re doing. Keep up the good work.