Thoughts on Debt

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in. Well, the key to it all is devising a budget and sticking to it. Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget. A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that. It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras. Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies. I personally prefer a two savings plan, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV. This is a good way to be able to reward your hard work saving and feel a benefit from it. It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures. For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out. If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job. The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life. Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry. Take the time to work out your budget and you will see how easy it is to keep your finances under control.

These days I think that everyone is becoming more conscious about how they are spending their money.  The companies who have the necessity items and have them for less are about the only one’s that are profiting, as a matter of fact, it seems that overall most companies are really hurting and reports show that we are not buying anything extra these days.  This includes items like clothing, jewelry, electronics and so forth.  We are instead, looking for new and better ways to hang on to our money, and miscellaneous spending is becoming a thing of the past.  There are some very simple ways to go about saving some money, and so here are just a few of the ways that cutting back a little can save you a lot in the long run:

1. Make coffee at home rather than buy it every day. You’ll save about $2 a day or $40 a month. This is $480 a year, and that can be money in the bank.  Depending on where you go, it could be a lot more. 

2. Bring in lunch from home instead of buying it. You’ll end up with at least $5 - $7 dollars a day in your pocket.  That is a $25 per week savings at least, and a savings of $1300 per year.  Now that would make a nice vacation don’t you think?

3. Stop getting delivery of magazines and newspapers at home. Most of the content is available online and you can read it everyday—for free!

4. Shop around for credit card interest rates and consolidate credit cards, if you keep a balance.

5. Use cash or debit cards instead of credit cards and incurring interest charges.  Not only will this save you more money on the interest charges, but you will also be more aware of what you are spending your money on, and how fast it goes.

6. Save your stamps and pay bills online, usually for free.  Most companies will allow you to make payments right on their web site, either using a check or debit card, and most banks offer online bill pay services for nothing as well.  This is a very convenient way to pay your bills, and you can also put them on automatic payment, which is great because this way your bills will get paid on time, without missing payments and accruing late charges.

These days every little bit of savings helps.  It is nice to see the gas prices come down, but who knows when they will go back up again and grocery prices are still high.  So be sure to keep a good handle on your spending the rough economic times are not gone yet.

Now is the time to tighten the belt and to try and set aside some money each week for the future. How is it going? Overall, I do think that people are trying to save some money, but for many people they are not instituting the changes they need to survive. Many people I speak to on a regular basis are complaining about the prices on most items and are talking about cutting back, however, what I am finding is that most people don’t know how to even save some money. In speaking to a woman who has kids and works a regular retail job and so does her husband, she was talking about how even the discount stores are starting to charge really high prices for the everyday items and so she has stopped going to them. She was in the middle of having her lunch and was eating a pre made, store bought lunch in one of those little plastic containers, and I was thinking to myself, you can’t really afford to eat that for lunch. I could buy a pound of lunch meat and a loaf of bread and eat lunch for a whole week, on just what she spent on that one meal. People really need to realize that it is time to start making your own food, bringing leftovers for lunch, and saving money where ever you can. For instance, Food Lion has a commercial on TV that shows a mother and daughter looking at the ad and getting all excited about the $10 meals for four, premade at Food Lion. Now the mother was going to buy fast food. Well, fast food for four people would have run her about $20.00 at Food Lion she can get a spaghetti dinner for 4 for $10. Well, if you bought a box of pasta that costs about a buck (usually less) and another $3 for the sauce (it would be less if you made the sauce), so really you could make this simple dinner, which really only takes about 15 minutes to make for about $6 if you include salad and a drink. The point is, I guess that we really need to start thinking about making meals on the weekends and freezing them, things that are easy to fix and can just be thrown in the oven or something and we could save a huge amount of money. Also, shopping the sales and stocking up, and using coupons. These are all things that can start to add up to big savings. Get the whole family involved, have a weekend cook off and get the meals done for the entire week, plus reap the savings of not settling for fast food or premade, prepackaged meals. You must eat, but you must find ways to cut back the cost of it all. Cutting back means changing our lifestyles and our sloppy ways. We know we will have to eat all week, so we need to learn to plan ahead.

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in.  Well, the key to it all is devising a budget and sticking to it.  Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget.  A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that.  It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras.  Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies.  I personally prefer a two savings plan system, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV.  This is a good way to be able to reward your hard work saving and feel a benefit from it.  It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures.  For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out.  If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job.  The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life.  Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry.  Take the time to work out your budget and you will see how easy it is to keep your finances under control.

Well, we have already arrived at the time and place that we should have been saving for all these years, and here we sit with costs of everyday items rising daily and without a savings it seems near impossible to pay the bills much less save some money.  I am here to tell you it is completely possible to save money, but it does take work and a conscious mindset towards savings.

The first thing that you must commit to is that the money that you save on this and that must be put aside.  You can not take that money and spend it on extras, extras are out.  All the money that you save must be put away for a later need.

1.  Find a bank with interest and little or no fees, and don’t keep too many accounts open this can cost you more.  I have recently found that credit unions offer many more benefits from banks without losing a step.  My local credit union charges less in fees and also supplies me with more interest than any account I have seen of late.  This is savings + interest and is worth looking into.  Also there are banks that offer incentive programs with either cash back or one’s that will match your savings money or something.  Looking into your options is just one way to put a few extra dollars in your pocket.

2. If you often use credit cards, stop.  Consolidate your cards and pay them down or off.  I know this sounds like spending money, but it will save you a lot in costly interest and fees and leave you with less debt which is always good.  Shop around for the best rates you can find, these companies want your business and have the ability to offer you some really great deals.

3. Use coupons for everything.  There are coupons for oil changes, department store discounts, and restaurants and fast food.  Be sure to clip and save all coupons in an organized fashion.  These can really add up especially when they can be combined with sales and discount items.

4. Change all the bulbs in your home to energy saving bulbs.  Especially in the winter this savings will really add up.  Don’t pay retail for your bulbs, go online and find a deal.  You can get 13W bulbs for about $1.50 each so shop around.  This is a big savings over the $4.00 per bulb that they are going for at Walmart.

5. Find more energy efficient ways to heat and cool your home.  Wood is an excellent source of heat and if you have a fireplace on your house it can serve as a good source of supplemental heat.

6. Walk instead of driving.  If you are going somewhere local you can save on fuel costs and get some exercise.  As long as the weather is good take the kids or the dog.  Good bonding time as well.

7. Don’t over mow the yard.  With the cost of fuel being so high, allow the grass to be a little bit longer, and when you cut it, cut it really short to stretch out the time between mows.

You can find other money saving tips on the Consumer Federation of America website.  Just be sure to calculate out your savings and put that money aside.  You will be glad you did, it will add up.

For the past 30 years American’s on average saved about 7% of their salaries. In 2006, the average savings was at -1% and now in 2008 the average American saves about .5% of their annual income. There are several thoughts on the reasons for this trend.

Some people think that it is because the Boomers and Generation X just overspend, however looking more closely at the trend there was a huge increase in family income between 1947 and 1973, sometimes even doubling which left Boomers with a huge amount of disposable income. Now with the rising inflation rate and the lack of savings everyone needs to be concerned. This trend could hit hard.

In the years of the great depression, people knew how to make the most out of every dollar. To conserve and to save was the norm and the better you could do it, the better your family would make out. When these people hit the above time frame, they made a killing. Most went from having a very low income and stretching every dime to making a lot of money, and they kept many of their frugal ways while doing that. They continued to live modestly and put aside plenty of money for savings and investing and they have done well for themselves. Future generations have not learned the value of frugal living due to the fact that entered the world during a time of abundance and there has always been plenty of “stuff” for them, so they do not have the values of saving and conserving that their ancestors exhibited, and therefore as we enter this difficult economic time, no one is really prepared for it financially. They have just been living day to day, knowing that tomorrow will bring more money, but now with the financial slow down, it is truly time to take the examples from our forefathers and put ourselves into a save and conserve mode, and when and if the economy improves, we should still live modestly and continue to save for our futures.

This time of financial difficulty can prove to be a learning experience for us all. Live modestly, conserve where you can, and save every dime that you have available to you. Times are tough but the tough people will see this through.