Three New Year’s Resolutions for the Fiscally Minded

Three New Year’s Resolutions for the Fiscally Minded

Tis the season my friends… At this time of year it’s customary to eat as much turkey as is physically possible, lavish each other with expensive gifts, drink large quantities of whatever happens to be left in your drinks cabinet (normally something horrible like Cointreau) and then 6 days later repent everything and promise that this year will be the year you sort your life out and get back to the gym.

With Christmas soon to be here and gone it’s time to set out your agenda for 2012 and start formulating those all important New Year’s resolutions. Most people tend to stick with the same old mantras of ‘I will go to the gym at least once a week’, or ‘I’ll eat salad at least once a week’. As 2012 is looking like it’s going to be another difficult year financially, it’s time to sprinkle a little frugality and pragmatism into those New Year resolutions – after all, a healthy bank balance leads to a healthy peace of mind…

I will not impulse buy on a whim and a prayer.

Everyone is guilty of doing this on occasion, for most of us it happens just around payday. You may decide to go out on your lunch-break, or into town on a Saturday, and then all of a sudden you find yourself attracted to a shiny object and BHAM! You’re at the till handing over your credit card and buying something you don’t really need. Avoid impulse buying in 2012. If you need an item then that’s justifiable, but if you can live without it then don’t buy it – you’ll save lots in the long run by keeping your impulses in check.

I will keep a spreadsheet of all my outgoing and incoming. I will budget like a responsible adult.

OK so let’s be honest, spreadsheets aren’t cool or sexy, but if used correctly, they can be immensely helpful, especially for those living on a budget. Having lived in a shared house for many years I understand the pain of having to keep track of all the bills, as well as the individual debts that build up over time. Believe me, keeping a household account is a lot easier than fretting about how much that bill was, or who owes who what. It also allows you to work out the average monthly/annual cost of certain bills, helping you to budget for the future with a little more ease. Keeping a spreadsheet or a household account is all about sticking to a routine and being ordered. Keep your financial info up to date and stick with it.

I will set aside something every month for a rainy day

Let’s face up to reality here, the western global economy and its’ particular brand of consumer capitalism is unlikely to make a healthy recovery back to the affluent levels of 1996 anytime soon. Even the most optimistic outlook on the global economy suggests that most western economies will either stay stagnant or experience only slight growth throughout 2012. With that in mind it makes sense, if you haven’t already, to start planning for a rainy day. Setting up a standing order or using an online system to filter away a few dollars here and there is simple. Even if you only manage to save a few bucks each month it can still make all the difference for when that rainy day eventually arrives.

Keeping an eye on your finances is relatively easy – sticking to your budget is much harder. It takes a lot of willpower to keep things on track, but savings a little bit here and there, as well as being more fiscally responsible will pay dividends in the long run.

The Importance of Financial Literacy

The Importance of Financial Literacy

We go to school to learn new things. We want to be able to equip ourselves with the knowledge and skills necessary for adult life. Math, Science, English…these are all important subjects. But I believe that the most important subject of all is not taught at universities. Rather, it is taught in the school of life. This is financial literacy.

Financial literacy is defined as the ability to understand the language of money. In order to understand a book you have to be able to know how to read. In the same way, in order to become wealthy you have to be financially literate. You have to be able to understand how money works. Financial literacy can only be achieved through financial education.

There are many people who refuse to take responsibility for themselves. They blame the government, their parents, their boss or some other person for their current financial situation. It may be easier to blame other people but the truth is you are responsible for your life. Like most things in this world financial literacy can be learned. And it can only be learned if you actively seek it out.

Financial literacy is important because it is only through being able to understand how money works that we can conquer it. Most people say, “Oh, money is not important.” Or, “Those who want to be rich are greedy people.”  But this is only ignorance talking. Money may not be the only thing that matters but it does affect everything that matters: education, family, health… Without money how can you take care of your family? How can you send your children to school? How can you go on family vacations?

Making money is a skill. And like most skills, it can be learned. If you want to become financially free the first step to this is financial literacy. The reason why so many people are poor and remain poor is because they don’t understand how money works. They do not know how to handle money. The importance of financial literacy cannot be overstated. If you love yourself and your family, if you don’t want to work forever at a job you can’t stand, then study how money works. Become financially literate and start working on your way towards financial freedom.

Amy C. is an interior decoration aficionado and online marketer.  She also likes testing and trying new home and office decorating themes.  In addition to being an interior decoration hobbyist, she enjoys designing calming solar fountains and glass art.  Amy invites you to browse her delightful collection of glass vases

The Great Balancing Act: Self Knowledge and Self Budgeting

What is the key to a healthy bank balance? The answer is contained within the question itself, balance. Balance is needed to enjoy a healthy relationship with money (and when I say a ‘healthy’ that’s exactly what I mean, as it is now well documented that financial concerns have a huge effect on our physical well being.)

Achieving this balance doesn’t necessarily involve filling up your savings account, tightening your belt and waiting for a rainy day, just as it doesn’t involve gratuitous indulgence. What’s sought is an ability to enjoy putting money to a responsible use.

Reaching this goal may mean altering your financial behaviours. However, in order to do this you will first require a level of self knowledge. Knowing your own tendencies will allow you to emphasis your positive traits and then level out you natural flaws.

For example, you may recognise yourself as a shopaholic, someone for whom consumption is a form of recreation, a hobby and often a comfort. If so, spending money for you is a thrill and, like any other activity supposed to provide a thrill, it will offer diminishing returns. You will spend more, enjoy it less and less each time and a vicious cycle will develop.

How do you find balance again? On a practical level you need to restrict the opportunities for impulsive shopping. One very easy way of doing this is simply to avoid the shops. However, you will need to face them at some stage. Using a list will help you focus your attention on only getting things you need, rather than browsing everything you could potentially want.

Take other practical steps. Carry cash instead of cards. When your money is there in your hands, in a tangible pile it is harder to hand it over, to feel to bulk of your wallet diminishing as you walk from one store to the next.

Similarly, as a psychological exercise, go out shopping with no money. Browse as your normally would, get worked up about how much you want to buy this or that and observe how by the time you’ve got home again (to where your cards and cash are safely stowed) you’re desire to spend is already dulled.

On a deeper level you need to confront the fact that you are using spending to fill a void in your life. Try and spend your time in other ways, develop new hobbies and if on some level you suspect the spending is a response to some from of inner turmoil, you need to confront it head on.

By the same token some people have an unhealthy obsession with not spending money. Not wanting to waste money is fine, but some are adverse to spending money at all and want to avoid doing so at every opportunity. This is, in some ways, must as mad as showing no fiscal restraint. After all, money has no value in of itself. Not spending it is, in a perverse way, a kind of waste.

If you think this applies to you or someone you know you may have noticed the person in question will sit in the cold, unwilling to turn the heating up, in ragged clothes, unwilling to get a new set, despite being well in the black.

If this is the case your relationship with money is also unhealthy. You need to learn to enjoy wise spending, look at your disposable income and force yourself to spend a sensible amount of it each month. You’ll notice that there are probably areas of your life you’ve needed to invest in for sometime but have put off with no real reason, much to your own detriment.

Paul Greening is a retired financial adviser who enjoys writing on money related subjects that effect ordinary people, from debt management to life insurance cover.

Setting Short Term Goals for Long Term Savings

Setting Short Term Goals for Long Term Savings

Saving money for the long term can be one of the hardest things to sustain and accomplish over a prolonged period of time. With all the various emergencies, repairs and replacements that can pop up throughout the year it can often be a near impossible task to keep your finances in check. Whether you’re saving for a new home or putting money away to help with your children’s university fees, the setting of short term goals is the one key guideline you must follow if you wish to remain focused and committed to reaching your end target of long term savings.

 Why Short Term Goals?

By setting short term goals you are significantly more likely to reach your targets of paying money into a savings account. This is mainly because shorter goals seem easier to reach, making saving seem like less of a mountain to climb and more of a mole hill. If you can break your long term saving plan down into smaller and more digestible chunks, you will be more motivated to stay on course, as it will actually feel like your achieving something on a regular basis.

How and What to Set as Short Term Goals

Everyone has different motives and reasons for saving, so it’s important to make sure that you set your short term goals correctly so that they best suit you. All of your goals must be realistically attainable and constrained within a set time frame to make sure you keep on track. Setting a timeline of when to have certain amounts saved by is one of the best options you can use. By doing so, you give yourself clear deadlines that can’t be missed, when you do accomplish them, you will also get more of a sense of achievement, helping you to keep saving.

To help meet your goals you should also try and keep reminders around your home and work place so it’s always fresh in your mind. Temptation is often he killer when it comes to saving, as you will no doubt have urges to spend some cash on new clothes and gadgets from time to time. By constantly reminding yourself of the importance of what you’re saving towards, it will be easier to restrain yourself from any impulse purchases.

When saving towards your goals it is important to consider the money you’re paying in as a bill that has to be paid, rather than a voluntary savings investment. If you do this, then you’ll be less likely to miss out on any payments. Many banks will also set up automatic transfers from your normal account into your savings one if you so wish. This can also save you the hassle of having to move money about on a monthly basis.

Once you’ve set your goals it’s vitally important to keep a regular track on your savings through the use of a spreadsheet. Not only will this give you a better understanding of the money you’ve saved, it will also help in further motivating you, as you continue to watch your money grow.

About the author: Jimmy Dean is a keen finance blogger who writes about clients such as Ulster Bank who have a selection of savings accounts available. He can also be found writing on his own site Money Matey

To Budget or Not to Budget that is the Question

To Budget or Not to Budget that is the Question

We’ve all been enticed by that “awesome new what-cha-ma-call-it” before. So what is it that gets us to pull out our wallets and hand over our hard earned money instead of putting it away into savings? A lot of it has to do with the emotional appeal of whatever it is we’re considering purchasing. In the heat of the moment however, budgeting doesn’t always seem like the best route. After all it would mean passing up the must-have object.

In order to make a clear decision on whether or not to live on a tighter budget and save we have to remove ourselves from the temptation to buy. Go home and think it over before you make a purchase. Let is simmer for a day and see if it still is that important to you. Reaching bigger goals in life, like owning a home, saving for retirement, or paying off debts, take planning and diligence. Here are a few things for you to consider when you are deciding whether or not to change the way you budget:

  • Think about The Future- Achieving major goals in life usually revolves around your income and savings. For example, most of us have a goal to pay off our mortgage and have a retirement fund set up. We will never be able to do this however if we don’t start planning now. Taking a good hard look at where you are now and where you want to be is the first step in deciding whether or not to change your spending habits. Making a budget and sticking to it isn’t easy, but if the goal is important enough to you, then it will be worth the hard work.
  • Self Mastery- If saving money is something that you struggle with, budgeting might be more of a inward reward; a sort of spiritual battle to prove to yourself that you can do it. Plato once said that “the first and best victory is to conquer self. To be conquered by self is a shame.” Everyone has something that they struggle with in life. If you struggle inwardly with something, as I’m sure most of us do, then overcoming that challenging can feel liberating. Self-discipline can bring with it a sense of confidence in oneself.
  • What about the Unexpected?– When you take into consideration the possibility that something unexpected will affect your lifestyle, budgeting may move up on your list of priorities. What if you lose your job, your car breaks down, or you’re going to have a baby that you didn’t expect? In times like these it’s important to have money set aside. Whether you call it a rainy day fund or not, the important thing is that the funds are there when you need them most. There is peace of mind in knowing that if something went wrong you would be able to sustain yourself.

Budgeting may not sound like that much fun, especially when you could have the latest and greatest. But with some careful consideration you’ll find that it is necessary to some degree, and can relieve a lot of stress in the long run. If you’re still not convinced that a plan for savings is a smart idea, then you should attend a budget counseling course to get a more in-depth look at what it can do for you.

Micah Castro is a freelance writer for Alliance Credit Counseling. Alliance is a non-profit government approved agency that offers budget counseling to help you reach your financial goals.

How to make a nest egg from your empty nest

Every parent knows the mixture of feelings that occur when children leave home. There is happiness that they are independent adults and perhaps a little sadness as well.

After all, your life has revolved around them for so long. Now though, you are free to do what you want. With the financial burden lifted, you have both time and money to enjoy.

There could be a whole world of opportunities waiting for you.

As a parent, no doubt you have sacrificed some of your dreams for your children. Well now is the time to let those dreams become reality, whether it involves a new hobby, travel or home renovations.

You have tremendous advantage in being mature and financially more secure. It is an old adage that money creates money and you can benefit from this in many ways.

Low interest loans and favorable credit card interest rates are just two of the ways you can decrease costs and therefore increase savings. This advantageous combination gives you the freedom to do what you want.

Perhaps you have always wanted to travel and see the world. Increasingly, ’empty nesters’ are taking their own form of gap year, where they travel abroad and immerse themselves in other cultures.

The Guardian Newspaper reports industry figures that each year, around 220,000 adults between the ages of 55 to 65 set off on this type of adventure. So now it is your turn!

Have you ever felt a desire for a particular place? Perhaps watching a pride of lions rest in the hot sun of the African Bush, or maybe, exploring the Monasteries and palaces of central Europe?

You could experience the elegance and exclusivity of being a guest on the world-famous Orient-Express. It is the height of sophistication, with refined dining, personal stewards and opulent surroundings.

Or maybe you would like to offer your wisdom and knowledge in less-developed countries? Teach English to underprivileged children in Latin America or help build wells in an African village.

Research suggests that these sorts of adventures benefit the individual as much as the people he or she is helping. Learn, discover and experience worlds that you had only ever seen on television before.

If you are planning on being away for some months, consider renting out your home. This can provide extra income, which you can combine with any of the low interest loans, to fund further and even more exciting adventures!

Or maybe you enjoy staying at home but have always admired the sleek, shiny body of a speedboat or racing car? With financial responsibility for your children lifted, why not treat yourself?

There is an old English saying that a person’s home is their Castle, so you could renovate the kitchen, install a swimming pool or landscape your gardens. Perhaps even do all three!

Now is the time to take those long-held dreams and let them live. You have rightly made sacrifices for your children but now it is time to enjoy new and exciting adventures. Bon voyage!

Teaching your Children the Importance of Money and Budgeting

Did you know that the ability to have financial independence lies in your budgeting skills? One of the wisest investments that you will ever make is to not just practicing having a budget but also teaching your children the importance of money and sharing your knowledge with them. Children are easy to teach. They learn what their parents teach them when they are young and have fresh minds. If you want to secure the future of your children, this is a very valuable lesson that you will teach them in their life. Budgeting is as important to you as it will be to them at any point in their life. So, it is crucial that you give your children the right knowledge and teach them the right skills when it comes to making financial choices.

  • Work culture: As a parent, you have the most influence over your children and they will learn from you. They see you and they learn your ways. Maintaining a good work ethic is very important in leading a stress-free life. Teach your children that hard work always pays. Give them smalls chores to do so that they develop a sense of responsibility from a tender age. They will also learn how to get a job done in time. This will help them be a better master of budgeting their finances or for that matter any aspect of their life.
  • Social skills: Teach your children some social skills. Teach them how to get along with others and live in harmony with their friends. This way you will develop their skills to manage in a competitive world and yet be at peace. This will be rather advantageous when they come in contact with other people in business as they grow up. If you notice a certain situation that may be going out of their hands, teach them how best to handle it so that they remember the lesson and learn from it.
  • Law and Rules: Talk to your children about rules and the law. Tell them how important it is to follow the law. This will teach them to be legal in whatever they do. When you abide by the law, you are within certain limits and when you have limits you also need a budget to help you stay within the limit. Let them know about taxes and how it is very important to pay them. Also tell them that sometimes you may not agree with the law but since they are laws you have to abide by them.

Finances: When you talk to your children about budgeting and money and finances, tell them the importance of all of these. Tell them where the money from the tax is being used and how that will be beneficial for them.

8 Ridiculous Ways People Try to Save Money

8 Ridiculous Ways People Try to Save Money

There’s no shame—in fact, many would say it’s financially wise—to live an inexpensive lifestyle. Clipping coupons, buying items on sale, cooking food at home, bringing the leftovers to eat for lunch at work the next day, and shopping at secondhand stores are all simple and unobtrusive ways to save a lot of money in the long run. The line that differentiates “frugal” from “cheap,” is a thin one, however, and you’d be surprised at just how far people are willing to go to save a few dollars. Here’s a list of especially ridiculous ways people try to save money:

Eating food out of the dumpster. Many people try to justify this by explaining that groceries throw out unsold food products the moment they hit their expiration date, and the dates themselves are quite liberally set so that there is absolutely no chance of consumers eating old food. True as this might be, there are other risks with dumpster-diving that people neglect to consider. The foremost risk is that dumpster divers don’t have any way of knowing the true reason why those food items were discarded. For example, that chicken may have been sitting on the counter at room temperature overnight, and is now no longer safe to consume.

Not turning on the heat in the winter. In the face of skyrocketing fuel prices, many consumers are opting to limit how much they heat their home in the winter. Setting the temperature just cold enough so that you have to wear warm socks and a sweater around the house is reasonable, but a winter jacket and snow pants? Not as much.

Showering only once a week to save soap. No one wants to smell a person who doesn’t regularly shower. Furthermore, the savings are only substantial if you were using expensive soap in the first place. Frugal (and nice-smelling) consumers know to purchase inexpensive shampoos and soaps, and to only use a small amount at a time.

Stocking napkins, toilet paper, and condiments from fast food restaurants. Not only is it stingy, but also it’s theft.

• Spending 40 hours a week clipping coupons. Coupon-clipping was mentioned above as a sensible way to save money, and this still holds true, if consumers are spending only a few minutes each day doing so. Spending 40 hours a week, however, is hardly sensible. Assuming you save $100 clipping coupons over 40 hours, that averages out to $2.50 savings per hour. You’d make more money earning minimum wage at a fast food restaurant.

Eating only oatmeal. Or eating only Ramen. Oatmeal, Ramen, and other similar foods are extremely inexpensive meals (Ramen can be purchased for around 10 cents per pack, depending on a consumer’s geographic location). However, they do not provide nearly enough nutritional value to justify surviving on these foods alone. College students, for example, who subsisted on a Ramen-only diet contracted scurvy because the meal lacked necessary vitamins. Consider instead purchasing inexpensive yet nutritious foods, including fruits and vegetables.

Not using toilet paper at all. You’ll technically save money, but the smell will be infernal.

Spending the whole night searching for a lost stamp. Many consumers fail to consider the opportunity cost of their time; the opportunity cost is the value to a consumer had he or she done something else with his or time, such as working. Hetty Green, one of the first women on Wall Street and known for her extreme miserliness, once spent nearly the entire night looking through her carriage for a lost stamp. She also once traveled thousands of miles to collect a payment of only several hundred dollars.

Mitchell Gavillion recently graduated with a degree in journalism and is currently writing regularly about topics related to saving money. Mitchell has also written about online shopping tips and advice. Some of his online shopping tips were featured on, an online coupon site & blog.

Fighting Over a Blown Budget? Try eBay Therapy

Arguments about the family budget; maybe they happen during the monthly or yearly budget committee meeting (you are having those aren’t you?); or maybe they happen at dinner just before bed.

Regardless of when they happen or where they occur, these disputes always seem to result in mudslinging worthy of a heated political bout. The accusations are inevitably a variation of the same theme: “the reason we’re short on money is because you blew our budget!”

Time to face it: you two are great together, but you both have terrible judgment. Okay, that’s an exaggeration, but you have to admit that on at least one occasion (seriously, just once?), you have each made a poor purchase.

So in an effort to find a compromise, it’s time to recognize each of your lapses in judgment, and maybe even make back some of the money you spent with eBay Therapy. It sounds crazy, definitely simplistic, but it works quite well.

When the discussion starts to get tense, and the “you blew our budget” comments are about to fly, it’s time to do the following:

1. Stop the argument immediately. No, you’re not going to avoid the discussion, just put it on hold until you can find a compromise. The idea is to start the discussion again only when both of you are ready to face facts: a poor purchase is human, and you both have made at least one.

2. Find your Token. Each of you go find an item that represents one of the worst, most ridiculous purchases (between $50-$100) that you made last year. Make it count, find something you really regret purchasing and have gotten little use from.

3. Open your eBay account. List the tokens: auction style, aggressively priced to sell.

4. Sell the tokens. Add the money back into the budget. Now that you are wondering what’s so fantastic about such a simple idea, let’s analyze what occurs.

Cool Down – First, by moving from argument to token-hunting, you lighten up a heated moment and put a little fun into an otherwise stressful situation. Focusing on this new task gives you both a chance to cool down and avoid saying something you will regret.

Compromise – In addition, you are forming a compromise by admitting that you both have made at least one poor purchasing decision over the last year. According to Jay Slupesky, licensed marriage and family therapist: “sometimes the best solution to a disagreement between partners is to agree on a compromise.”

Each person gives a little on their position and the couple “meets in the middle.” Your tokens provide concrete evidence to the compromise. You each give a little on your position and now that you are on common ground, the discussion can resume on equal footing.

Focus – You limit the scope of the conflict to the point of contention. Unfortunately, financial arguments rarely stay confined to finances.

Mudslinging from other areas of life tends to be brought into play when financial arguments get heated. With eBay Therapy, you focus on the conflict: whether one or both of you blew the budget. Staying focused doesn’t help you prove your side of the argument, but it confines the argument to one topic: finances, and finances alone keep the mothers-in-law out of it.

Liquidate – Look past the argument that got you here and you’ll see another benefit of eBay Therapy: you both made purchases over the years that have real value…to other people! It’s time to start making some spare change off of the trifles that idly sit throughout your home.

So, will eBay Therapy solve all of your problems? Of course not…if you and your spouse are in dire circumstances, it’s time to seek out professionals that will help guide you. But it will help diffuse minor budget arguments.

Nor will eBay Therapy provide cover from an egregious budget violation, such as a new 60-inch LED TV, you’re on your own with that one. But by cooling the situation, compromising with your spouse, and focusing on a common goal, your participation in eBay Therapy is a good step towards a healthy budget and a healthy partnership with your spouse.

This is a guest post by staff writer at PT Money: Personal Finance. Check out the blog to discover more ways to save money, make extra money, and spend money wisely. See the latest review of the best credit card for college.

How has the budget affected you?

How has the budget affected you?

The Government insists that their recent budget announcements are not about raising tax but are about reforming the economy in order to enable future growth. The impact of the budget, however, will be felt by individual UK households with some gaining and some losing and, with a number of fundamental reforms set to take place, the impact will continue to be felt over the next few years.

Longer term changes that the Government intends to make include a complete overhaul of the UK’s tax system with a view to simplification. Consultation will start on merging the income tax and national insurance systems which are currently run as separate entities. The way that direct taxes are calculated is intended to change too, with indexation moving to the lower Consumer Price Index (CPI) rather than the Retail Price Index (RPI). This will have an impact on many, particularly those claiming benefits and pensions.

Savers, however, are in line to benefit with an increase in the Individual Savings Account (ISA) limits which increase from £10,200 to £10,680 in the 2011-12 year. New savings accounts with tax advantages for children called Junior ISAs are also to be launched in 2011, replacing the Child Trust Fund. Those looking for information about savings products can read more here.

In the shorter term, the changes made in the budget will result in clear winners and losers. This includes changes to the personal tax system. The lowest paid will feel the benefit of increases to the personal tax allowance, from £7,475 in the 2011-12 tax year to £8,105 in 2012. More individuals, however, will find that they are higher rate taxpayers as the threshold drops from £35,000 to £34,270 in 2012.

The impact will be felt by those claiming benefits and tax credits too. Low income families will benefit from an increase of Child Tax Credit by £255 with entitlement to tax relief for childcare remaining the same. Tax relief for those on higher and additional tax bands, however, will see a reduction in the amount that they can claim for childcare. Housing benefit claimants will also be affected with reductions in the amount that can be claimed.

There is good news in the budget for some. Vehicle owners will breathe a sigh of relief, albeit temporary, with a 1p per litre cut in fuel duty and delay of the planned inflation-linking of fuel duty to 2012. Council tax payers will also be relieved as council tax is frozen in every council in England. There is good news for first time buyers too with the introduction of a new-build shared equity scheme; aimed at helping some 10,000 families, it will be funded by proceeds from the bank levy.

Smokers will feel the pinch as tobacco duty rises 2% above inflation. Drinkers will also be affected. Beer, wine and spirits prices will rise by a 2% above inflation increase. This will mean 4p on a pint of beer, 15p on a bottle of wine and 54p on a bottle of spirits.

Overall, the impact of the budget on UK households will depend on personal circumstances. What is certain, however, in these difficult economic times, is that there are no resounding victors.

This article was written by Sam. Sam is a finance writer based in the UK and currently works for . Visit Sam’s twitter here.

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