Perhaps you’re battling credit card debt or your lack of follow through on budgeting tips. Maybe you need to work on educational savings goals for your children, or your retirement savings. Whatever the case may be, you must find your method for meeting your financial goals and budgeting needs.
Choose Your Budgeting Style
One of the major elements is in respect to your budget. When you do this, you must consider some important aspects with you and your budget:
- How technological, or “un-technological,” must it be? Consider any devices that you have which could lead to an obvious choice in terms of convenience.
- What features do you need? From the basics that a notebook could take care of, to the advanced features that an advanced program on your notebook computer can demonstrate, there are many sides to this story.
- Do you need to keep multiple budgets?
- Identify any weaknesses you have with keeping a budget, or remembering to use it.
Some of these points will lead you to a certain direction. If you’re old school, you might prefer to stick with your pen and paper. A smartphone that you use every day could mean that an app is right. Take some time to consider how you currently keep a budget, as having something that works well for you is extremely important – how else will you pay off credit cards and save for your children’s education?
The Problem of Motivation
As we continue our casual look into financial methods, another incredibly important issue is brought up with motivation. In financial articles, it is perhaps not spoken of more often. After all, the best budgeting tips in the world will do no good if they are not followed, of course.
You have to take a deep, hard look at the ways needed to motivate yourself. For instance, some consumers needing to cut their expenses down or save more may find success of the following:
- Give yourself a goal. For instance, as part of your budgeting changes, you could invest a small amount into a savings account each month. With that money you could go on a small trip, thus giving you incentive. Or you could be saving for a deposit on your dream home.
- Put your budget in plain sight. You might “see no evil” if you ignore views of your budget. Let yourself see the debt you have on a regular basis; it might drive you to act upon it and remain disciplined.
- Inspiration. Do what it takes to follow through. Maybe you can have your household keep each other honest with spending money, or post reminders (i.e. notes around those high-priced restaurants’ phone numbers). Put a picture of your future trip via the first point.
Overall, there are many aspects that can impact your financial well-being that are not directly about money. The manner in which you keep your budget and motivate yourself with your budget can make a big difference. Approach these items carefully to make implementing your financial plan much easier on yourself. Sometimes you just have to do what it takes when it comes to your budget, and these examples can certainly help with execution and practice of good habits.
The preceding post is a guest post.
The following is a guest post.
There is so much information that a parent imparts to their child. From learning how to walk to riding a bike, there are an unlimited number of tasks to teach children. Often, the concept of money, how to spend it and how to save it can be overlooked.
In order to give your child a head start financially, begin teaching them about money and how to save it.
Why is it important to save money? Kids need to learn why the idea of money is such a big part of their financial future. Younger children may not question the practice. If they have always been saving, they may just assume that is what they need to do.
As they get older they will wonder why they are putting money away that they just can’t use right now. This is a great chance to talk to them about why they are saving.
What should they be saving for? Depending on a child’s age, there are several ideas you want to touch on. The first is saving money for something special. For most kids, this is an understandable concept.
When they walk into a store they immediately look for something that they want. Explain that saving makes it possible to go into a store and be able to pay for something that you want.
Older kids will understand this concept as you mention purchases like a vehicle to drive, college books and tuition or even a new laptop computer. These are expenses that may be coming up soon and they want to have enough money in the bank to be able to make these purchases when the time comes.
It may be possible to explain the idea of saving for an emergency as well to older children. Let them know that as an adult there are always unexpected expenses that come up.
From a car repair to a home repair, these things happen and you want to be prepared. Saving money makes it possible to handle these unexpected moments.
How can they save money? Teach your children to put away a certain amount of their money each and every time they receive it.
Older children may be able to understand the concept of saving a certain percentage.
Younger children just need to be given an amount that they should save each time they come into some money. Whether it is a birthday check from grandma or their weekly allowance, show them that each time that money comes in, some of it is saved.
Where should they put the money they are saving? Money that is saved doesn’t usually go in an easily accessible place. Piggy banks have a slot on the top to put money in, but it takes forever to take the tab out and shake out all of the money.
CFM comments: I remember saving my birthday money, money I got from cutting grass during the summer, and from part-time jobs in high school. Having my dad drive me to the bank and deposit the money and writing the total in a passbook was fun. Those were the days when savings accounts would pay up to 7% interest. I didn’t know as much about inflation or “real interest rates” then.
There has been a lot of hype this past weekend over “Move Your Money” day or “Bank Transfer Day” where the response to higher fees by the big banks is to move money to a community bank or credit union or online bank where fees will be lower. I am certainly not opposed to the idea. In fact, I think it is a good one. As consumers, it is wise to get the most service for your money whether it is banking or plumbing or getting your hair cut.
Personally, I have not been impacted by the proposed fees so I won’t be moving my money until absolutely necessary. I am happy where I am right now with my current financial institutions. It would be somewhat of a hassle to have the automatic deposit changed and make sure that it is working properly to make such a transition.
Instead, I plan to protest against the big banks in another way. I don’t plan on occupying anything, either. So what do I plan on doing?
I plan on living off less and paying off debt!
A Better Way
Look at the amount of interest that you pay to the big banks every month on credit card debt, automobile loans, mortgages, student loans, and other lines of credit. I can tell you that I pay a pretty penny which is much more than $5.
According to the 2010 annual report for Bank of America, the amount of net interest income amounted to over $52 billion! That is a lot more than the amount that was expected to be generated from the $5 debit fee.
Even though I do not have a checking account with Bank of America, I do have a couple home loans (from the Countrywide purchase) and a couple of credit cards on which I pay interest. I plan on attacking my Discover Card first, but believe me that I will be getting around to Bank of America next.
What About Savers?
Maybe you already are living debt-free. My heartiest congratulations. You are to be commended for your discipline and deserve the fruits of your labor. At least you aren’t paying interest to the big banks, but are you letting them use your money for essentially no cost?
I would trust that you have discovered better ways to invest your excess money than depositing it in savings accounts or CDs at the big banks. Peer-to-peer lending might be one of the alternatives to the low yield on savings. Many investors are getting decent returns that rival those of the stock market.
I wonder how many of those who have switched from the big banks carry interest on credit cards that have been issued by the big banks.
Now I don’t plan on figuring out myself exactly how much I can decrease the interest expense by paying off these debts early, but I can tell you that it will add up to quite a bit and will be much more than $5 per month. In fact, the credit cards show me the amount of savings from paying off the balance in three years rather than just making the minimum payment each month.
Of course, making sure that all bills are paid on time and not over drawing the checking account are other fees that should be avoided at all costs. These are the fees that will kill you and contribute to the profits of those big banks which seem to be the subject of such public ire.
Readers: What do you think? Did you move your money? Do you carry a credit card balance? Is there a better way to protest against Wall Street?