Money Management Tips

Often financial planners and debt management consultants will suggest using cash for a period of time to help manage your money. Often when we use credit cards and debit cards, we don’t really see where our money goes. We just automatically hand over the card, sign, and take home our purchases. When you set the cards aside, and you start to hand over each dollar in cash, you’ll be able to ask yourself whether this is money well spent.

Have you ever heard the expression “knowing is half the battle”? Well in the case of money management – it really is! Once you realize how much money you are spending on snacks, lunches, and dinners at restaurants, you may decide it’s not worth it. It may be time to get a good cookbook from the library and learn how to cook at home.

Or maybe you already eat at home, but you have a different vice – CDs, concerts, going to the movies, always having the latest iPod, laptops and Blackberries, online shopping – whatever it is, when you pay in cash, you really see where your money goes and you can make a more informed decision about whether you want to spend your hard earned dollars that way.

Debt management companies suggest that you pay for all of your purchases with cash, even online. How is that possible? Well, the next time you’re shopping online, check to see if the online store offers the option of paying for your purchase directly through your bank account through eBillme, or shop their Debt Free Mall.

Becoming aware of where your money is spent is only the first step to a successful money management strategy. Write down where all the money goes and you can use this as the basis for a budget. Then you can set some financial goals, reduce your debt, and plan for your retirement. It may seem like a lot to get in order, but take the first step today and see where it leads you!

It’s very easy to create a budget when you know where your money is going. It can seem complicated if you’ve never done one before, but really it’s not. All you’re doing is making a list of your expenses and trying to figure out what you’ll spend in each area next month. If you’re not comfortable with spreadsheets, then just use a piece of paper and pen. The point here is to create a plan for how you’d like to spend your money.

When I’m budgeting I like to group things together. I start with the things that happen every month and that I can’t avoid – accountants often call these your “fixed costs”. Then I list all the extras.

• Rent or mortgage payment
• Property tax
• Car payment/bus pass/transportation
• Tuition payments
• Insurance payments
• Phone
• Heat (gas/oil)
• Hydro (electricity)
• Water/sewer
• Internet connection
• Cable/satellite
• Mobile
• Groceries

• Eating out (include all the snacks you eat while you’re out as well)
• Entertainment (include nights out, iTunes)
• Gym memberships/fitness classes
• Gadgets (include iPods, Blackberries, etc.)
• Clothes
• Travel/Vacations
• Others (include anything else that you spend money on)

Just by writing out what all of these things cost, you may have learned that there’s something that needs to change. The next step to creating a budget is to make all of this balance with how much money you earn. Write down how much money you make each month and check where you fall:

1. Does your salary cover your total expenses? If so, lucky you! It’s time for you to retire your debt, and plan for your retirement.
2. Are your expenses higher than your salary? If so, how close are they? Are there small changes you can make to balance your finances? Try to figure out what you can change. Where can you save money? If you’re coming up short month after month, it may be time to get some outside help from a debt counselor or debt consolidator.

You’ve tried only buying what you really need, but you just don’t seem to have the willpower to save money. You just keep spending and you’re not sure what to do about it. You are not alone. Many people are in the habit of constant spending, with the result being that there is no money in their savings accounts when they need it. Isn’t there an easy way to save more money?

Most people spend whatever money they have available. So, the easy trick to saving money is to change what’s “available”. To do this, you can set up an automatic savings plan – this can help you to save your money without always having that nagging feeling when you buy something. You can still buy and spend what’s available, but by automatically saving just a small amount, you can get ready to buy a car, to buy a house, to pay for tuition, or for your retirement. You can even prepare yourself in case hard economic times come your way.

To set up an automatic savings plan, contact your bank or financial institution. Get a separate account – preferably one that is not linked to your debit card so you won’t be tempted to dip into it.

If you’re trying to save money to pay down debt, you can set up an automatic payment plan. Call your bank or financial institution and set up a regular payment to be applied to your credit card or mortgage. The same principles outlined above apply – by not having this money “available” you are less likely to need it for other purchases.

Another easy way to save more money is to create financial goals and write them down. Decide what you want to accomplish this month, in the next 6 months, and in the next year financially. These can be serious goals like saving money to pay down your mortgage, or can be more fun goals like saving money for your dream vacation. Either way, knowing that you have a goal will help you make the decisions required to meet that goal. Post your goals somewhere that you’ll see them every day - your refrigerator, your office wall, your mirror - wherever you know you’ll see them and be reminded to stay on track financially.

There are two sides to a sound financial strategy, managing your savings and managing your debt. Your savings and investments are your future, but it’s hard (and boring!) to plan for the future when you have things you need and want today. If you’re looking for some easy ideas to better manage your savings and investments, you’ve come to the right place.

1. Get better interest rates on your investments
2. Hire a financial planner
3. Get more information before making important financial decisions like buying vs. leasing a car, or buying vs. renting a house
4. Talk with someone to make sure you have the right insurance
5. Protect your hard earned savings by preparing a will (or by having one drawn up on your behalf)
6. Consider an estate plan if you have a substantial amount of savings

Have you ever heard the expression “It takes money to make money”? Well, when it comes to investing, often it’s true. You may sleep better at night knowing that your investments are secure or guaranteed, but often this type of investment comes at the expense of the big gains some people get with riskier investments. It doesn’t always have to. If you want secure investments, you can still try to get more interest.

Shop around to see who has the best rates and approach your current provider to see if they will match these rates. If they won’t, as soon as you’re able to without incurring a penalty, take your money over to the new provider with the better rates. For higher interest rates in your equity or other investing, talk to your certified financial planner.

Financial planning and debt management can be very complicated. A certified financial planner can definitely help you to set attainable financial goals, to reduce your debt, and to invest your savings. But your financial planner needs to be right for you.

If you are generally very careful with your money, look for a conservative planner who you’ll be comfortable with. If you have a lot of money and are happy to take big risks with it in the hopes of big rewards (but understand that you could lose it too!), then look for a broker or financial planner who is known in the industry and is connected to people making those kinds of deals.

The Certified Financial Planner Board of Standards recommends that before hiring a financial planner you:

1. Find out what experience the financial planner has
2. Find out what qualifications the financial planner has
3. Find out what services the financial planner offers
4. Find out their general approach to financial planning
5. Find out which team members will be working with you
6. Find out how you will pay for their services
7. Find out how much their services will cost
8. Double check if the financial planner has any conflicts of interest with you
9. Double check if the financial planner has been involved in any public actions for unethical or unlawful decisions
10. Get a contract in writing

If you’re interested in finding a daily money manager, AADMM.com might be able to help.

Most people need insurance on:

Where they live: Most people have coverage on their houses or apartments that protects them in case of fire or theft – even if they rent. If you own your house it can also be important to get liability coverage in case someone gets hurt on your property. Many insurance companies offer a comprehensive property insurance package.

What they drive: If you drive a car, motorcycle or van you need to have insurance on that vehicle. A comprehensive package should cover against theft, damage caused by accidents, and casualty/liability in case someone gets hurt by the vehicle.

Themselves: Health insurance is very important to have because a serious illness can strike you at any time. Look for a plan that covers a range of illnesses and allows you to visit a facility close to your home or office. Travel insurance protects you in the event that you have an illness while traveling abroad. Life insurance provides money to your family or dependents in case you pass away. It can be particularly important if you have a lot of debts and are the main breadwinner for your family. Alternatively, if everything you own is paid for and you have no dependents, it’s possible that life insurance isn’t critical in your situation. Critical illness insurance provides coverage in the event that you get a critical illness and are unable to work. Again, this type of insurance is particularly important if you are the main breadwinner and have dependents.

An insurance broker can help you figure out what your personal needs are. Insurance brokers aren’t affiliated with any one particular insurance firm – they are regulated by the state – so your broker can help you get the best rate by checking with multiple firms on your behalf. An insurance agent is different – they are a representative of an insurance company, so they are trying to sell you insurance from their firm. Stick to a broker if you can find one in your area. Insurance brokers can help ensure that you have the correct coverage for all your money management needs.

In today’s world, it’s easy to get into the habit of thinking we need the biggest and best of everything. After all, we work hard so we deserve the best, right? Well, yes. The trick is not to always buy the best, but to instead shop within your means and buy the best you can afford.

If you’re looking for debt management or debt consolidation tips consider:

1. Are you paying too much for your car or your mortgage? If you’re having trouble keeping up with the payments, you may need to re-evaluate your lifestyle and bring it more in line with what you can truly afford. It’s not an easy decision to make, but it could bring you great stress relief once you’ve acknowledged the situation.
2. Are you addicted to the night life? Socializing and seeking entertainment is necessary for our work-life balance. The trick is not to overdo it.
3. Are you in denial? If you find yourself making excuses for your lack of debt management skills, you may need to seek the help of a financial planner or debt management service.

Don’t worry. With a little soul searching you’ll find ways to reduce your spending. If you get off track, take a step back, take a deep breath, and start again.

A will is a legal document that tells people what you want done with your things after your death. It can be very difficult emotionally to create a will, but it’s important that you do so – particularly if you have children or dependents. Without a will, you can’t tell people who will be in charge of administering your affairs after you’re gone – if you don’t decide this, then the Court will choose an executor on your behalf and this may be someone that you don’t want performing this important duty. Without a will you can’t decide how your things are divided, and a properly drawn up will can help with tax savings.

Any person over the age of majority can create a will with the help of a legal adviser.

Payday has come and gone, and once again you’re scratching your head wondering where the money went. Poof! It seems to disappear as fast as you get it.

If you’re thinking about your best debt management solutions, now might be a good time to really think about how much money you’re spending. The following debt management tips are designed to make you aware of where you’re spending your money. When you can see in black and white where those dollars are disappearing, it’s easier to come up with a smart debt management solution that works for you.

1. Keep track of every cent you spend for one month. Yes, it’s a lot of work, but you only need to do it for about a month. That means keeping track of every cent including the money you spend on all of those little extras like gum, magazines, newspapers, coffee, donations, gas, etc. Don’t forget to include the big stuff like mortgages and car payments.
2. Immediately stop using your credit card for everyday purchases. Shopping online? Look for shops that offer the eBillme option where you can securely pay with cash instead.
3. Your bank can help you get a personal line of credit as a way to consolidate your debt and better approach your debt management issues. They typically have lower interest rates than other loans. You can use them to pay off your high interest rate credit cards and then work towards staying out of credit card debt going forward.
4. Find a debt counselor or debt management company. Some of these don’t even charge for their services – see if you can find a free one. They can look at your personal situation and try to figure out the best approach for you.

These are just a few ideas to get you started. Remember, it can feel overwhelming to be in debt, but you can take steps to get out of it. It takes strength and courage to ask for help when you need it, but debt counselors spend all day helping people in exactly the same spot as you are – they know what to do and can often be very helpful very fast.

It’s easy to get into debt - impulse shopping, trying to keep up with wealthier friends and family, and sudden emergencies can easily rack up huge debts on your credit cards - but with a little bit of work you can dig your way out to the point where you don’t owe anybody anything. What a relief to stand on your own two feet!

Instead of this feeling of freedom, most people are deeply worried about their finances. The average American family has over $8,000 in credit card debt. If you owe that much to credit card companies with high interest rates, you might think that debt management is pretty much impossible. You might find yourself scrambling to meet the minimum payments, or using one credit card to pay off another.

Before you panic, there are a few things to consider:

1. Visit your bank or credit union for help. Chances are that they can consolidate all of your loans into one – sometimes as a line of credit. You still have the debt, but it’s probably at a much lower interest rate than all of your credit cards combined.
2. Work at paying off this line of credit. Show your bank that you’re serious - Get rid of all high interest credit cards and keep one for emergencies only.
3. Seriously, it’s for emergencies only – don’t use the card unless it really is an emergency.

Take the first step today. Contact your bank to find out if they can help you consolidate your debt and get your finances back under control.

Financial consultants often suggest paying cash for a month or two to help see where your money really goes.

Ever heard the expression “knowing is half the battle”? Well in the case of money management – it really is! Once you realize how much money you are spending on snacks, lunches, and dinners at restaurants, you may decide it’s not worth it. It may be time to get a good cookbook and learn how to cook at home. Or maybe you already eat at home, but you have a different vice –CDs, concerts, going to the movies, always having the latest iPod, laptops and Blackberries, online shopping – whatever it is, when you pay in cash, you really see where your money goes and you can make a more informed decision about whether you want to spend your hard earned dollars that way.

Debt management companies suggest that you pay for all of your purchases with cash, even online. How is that possible? Well, the next time you’re shopping online, check to see if the online store offers the option of paying for your purchase directly from your bank account. eBillme, a cash payment option, is the safest way to shop online.

Becoming aware of where your money is spent is only the first step to a successful debt management strategy. Write down where all the money goes and you can use this as the basis for a budget. Then you can set some financial goals, reduce your debt, and plan for your retirement. It may seem like a lot to get in order, but take the first step today and see where it leads you!

The very mention of debt management brings to mind drastic measures such as cutting up all of your credit cards, selling off half your furniture to pay bills, or attending debt management support groups. In reality, debt management can be handled with small, simple changes to your lifestyle.

To begin thinking about debt management solutions, get out a calculator and figure out what you spend every month on coffee. Now, add to that the amount of money (approximately) that you spend on take-out lunches every week, or every month. Do you take the car when you could easily have walked? That’s more money coming right out of your car’s tailpipe – especially as gas prices continue to soar.

People who do the best debt management are those who make simple little choices every day. They’re the people who pack a lunch to bring to work, walk or ride a bike instead of driving everywhere, resist impulse buying, and pay cash as much as possible to avoid accumulating debt. Your debt management solution could be as easy as canceling unnecessary magazine subscriptions, or only going to the movies every month instead of every week.

Debt management should be something you can sustain for a long period of time. It’s like going on a diet; if you starve yourself, you’re going to binge. Keep a note in your purse or wallet that says “baby steps” to remind you of the small changes you intend to make on your path to debt management.

A good place to start is paying with cash to figure out a reasonable budget, then setting financial goals and working towards achieving them. Then you can set up an automatic savings plan (or an automatic payment plan if you’re working on your debt), see a debt counselor or certified financial planner, and then plan for your retirement.

Sometimes, the best way to approach debt management is to generate more income. Which means you might consider taking on another job, or getting a new job.

Taking on another job: It doesn’t have to be permanent, but if you’re able to find work on the weekends, evenings, or around the work you already do, it might be a good way to put some extra dollars toward your credit card bills. Whether you’re single, married or have children, it’s probably not going to be an easy decision, but it doesn’t have to last forever. Maybe you can find a new part time job that will help you to learn new skills that can be applied towards getting a better full time job. The key is to make sure that this will actually be helping you financially. Sometimes, when you add in extra travel, food and childcare costs, part time jobs don’t actually pay enough to make it worth your time and effort. However, when it does make sense, this can be a sound strategy for clearing out your debt.

Getting a new job: Another way to earn extra money is to find a job that pays better than your current one. Is there a skill or talent you could capitalize on or develop that would lead to a better career? Look at online job sites to get an idea of what people earn in different fields and think through what you’d like to do. Once you decide on a new career, talk with your friends and colleagues to see if they know of any companies that are hiring for that type of role. There are lots of internet sites that cover how to write your resume, get an interview, prepare for an interview, accept or decline a job offer, and start a new job. It can take a while to make a career change, but the time and energy are well worth it when you secure a better job.

Just like diet and exercise, there are some people who are excellent at staying on track and others who need a buddy to help them along. If you’re the kind of person who can’t stick to a budget, or even create one in the first place, you may want to consider getting help for your credit card debt management. There are all kinds of debt management services available, but unfortunately not all of them are good. Try to find a non-profit agency through your financial institution or a local consumer protection agency. You want to avoid organizations that charge hidden fees or pressure you to make “voluntary” payments toward their “cause”.

A good credit counseling service will really help you with your debt management. They’ll offer good advice, help you to create a monthly budget, and monitor how well you can stick with it. They will even offer you free educational workshops and information. If you look for help with credit debt management through a recognized bank (for example) you’re more likely to find a legitimate organization with highly trained people who can help.

With so many bank, store brand, and other credit cards on the market, it can be hard to pick the right one. Here are some tips for making the best decision for you and your family.

Compare the APRs of at least 3 credit card companies. An APR is the annual percentage rate. This is the interest you’ll pay over the course of a year if you carry a balance. So, a daily interest rate is just the APR/365. Be sure you are comfortable with this. It’s worth shopping around to find the best one since there is a wide range of APRs out there.

Check if the credit card company can change the terms of the credit agreement without your permission. The fine print of your agreement with the credit card company will show whether or not the credit card company can change the terms of the credit agreement without your consent. Usually, they must notify you at least 15-30 days in advance of any change taking effect, but often you won’t notice these changes because they’ll come as a stuffer in the envelope with your bill or statement. The worst part is that continuing to use the card is most often considered to be a tacit acceptance of any new terms and conditions! Be sure to obtain your credit card from a reputable credit card company.

Check if your bank or credit card company charges trailing interest, charges over limit fees or does double cycle billing. Trailing interest is interest that accrues from the time your statement period ends to the time your payment is actually received and processed by the bank or credit card company. You need to clear your balance within the standard grace period of the charges being posted in order to avoid having to pay trailing interest. Over limit fees are charged when you’ve gone over your double cycle billing and are a slightly different way for credit card companies and banks to make more money. When they do double cycle billing it means they are accruing interest over two cycles. Even if you pay off most of the bill, interest will be calculated on the original amount for a longer period of time.

Consider whether you’ll actually use those points. A lot of credit cards come with airline or other types of points. These “rewards cards” are not always a great deal – some come with fees and higher interest rates, and some of the points you earn expire. It’s a good idea to do the math – figure out if you will actually earn a reward and use the reward in time. If not, it may be worth considering a cash-back card. These can provide up to 1% of all your purchases in cash back at the end of the year. If you can’t find a rewards card that make sense for your situation, then stick to a standard card and save your money.

Many people are surprised to find out that they can quickly and easily get their credit card interest rates and mortgage rates lowered simply by making one or two phone calls! And it doesn’t necessarily mean you have to go to the hassle of changing your provider.

Here’s how: Look on the internet (try Bankrate.com) or in the newspaper for a provider offering a lower rate (so you know that what you’re asking for is possible) then call your own provider and ask if they will match the lower rate.

If they say “yes”, then great you’re all set. If they say “no”, and you’re not prepared to leave, you can ask them what they are prepared to do to keep you as a customer. If they say “nothing”, you still don’t have to leave. You can simply say “well, I really need to think about whether I want to stay with your company or not” and hang up. Then think about it. Changing financial providers can be a hassle, but for a much lower rate it may be worth it. Just check that the rate isn’t just an introductory offer and that the terms and conditions are similar to your current ones.

Imagine being 80 years old and unable to pay your rent or buy groceries because you don’t have enough money. Scary, but it happens. That’s why it’s extremely important to get started planning for your retirement today. Whether you’re 20, 30, 40, 50 or 60 years old, putting away some money now will help make sure that you can live well as you age. The sooner you start saving, the more you’ll have available when the time comes.

To see if you’re on track for your retirement:

• Figure out how much cash you think you’ll need to live – consider things like food, rent, travel, and so on. Keep in mind that health care expenses often increase a lot as you age.
• Calculate how much cash your current retirement savings will give you.
• Figure out how much more you need to be saving and start an automated savings plan.
• A Certified Financial Planner can assist you in creating a retirement plan. Many banks offer this money management service free of charge. Check with yours to see how they can help you.

If you come into some money and are trying to figure out whether to pay down your mortgage or save for your retirement, your Certified Financial Planner will likely be able to help you do the math to figure out what makes the most sense financially.

You may also want to consider:

1. What is your current mortgage rate? The higher it is, the more likely it’s better for your financial planning to retire this debt.
2. What are the tax consequences of each? Often saving money for retirement has very different tax consequences than putting it down on the house.
3. How much more do you owe on your mortgage? If you can clear out all your mortgage debt by making this payment, the relief of having this all paid off may make this option preferable.
4. How likely are you to save for retirement? If you’re more likely to spend the money than save for retirement, then it may be best to force yourself to put this money aside for your retirement. It may not be a fun financial goal, but it’s really important that you’re able to take care of yourself as you age.

A 401 (k) plan is a retirement plan sponsored by your employer that allows you to save for retirement. What’s great about a 401 (k) plan is that it lets you defer income taxes on all the money you’ve saved and on the interest as well, until you retire and withdraw it.

Usually in the United States, you need to sign up to have some of your wages paid directly into your 401 (k) account. You can then usually choose from a number of investments – mutual funds, stocks, bonds, money market investments, and so on. Sometimes a trustee is set up to make these choices for you and you don’t get to choose which investments you prefer.

A 401 (k) Plan is a great money management strategy when planning for retirement. The tax savings can be very significant over the long term.

Saving for a trip to Europe, a Caribbean vacation, or a cruise – all are a lot more fun than saving for retirement. But, the truth is that life can be pretty hard when you’re too old to work and you’re short of money. The sooner you start saving for your retirement, the better – even if it’s just a little bit. If you’ve never saved for retirement before and are 30 or under, you can try this approach to saving:

1. For the first 6 months, try setting up an automated savings plan of 1% of your income. Your employer may be able to put this directly into your 401 (k) plan. 1% is such a small amount you likely won’t even notice it’s gone, but it will start to add up.
2. For the next 6 months, try putting 5% of your income towards your retirement savings - That’s just 4% more than you were doing before, and remember, you hardly even noticed that 1% was missing.
3. Now that you’re in the habit, take a leap – for the next year, put 10% of your income towards your retirement savings. Many financial planners recommend this amount long term. If your financial planner agrees, you’re already on track! If not, continue to make these steps until you are contributing enough for your retirement.

By making these small steps, you give yourself the chance to get used to saving. If you receive any money you weren’t expecting like a tax refund or lottery winnings, put 50% of the amount towards your retirement – you weren’t expecting that money anyway, and your retirement savings will grow that much faster because of it.