Simply Junior

I would like to share with you my thoughts on how to get out of debt and start saving money. I hope you enjoy it.

Whatever your income, whatever your priorities for your money, there are millions of people living happily on less than you earn. This logically means that not only is it possible to enjoy a great lifestyle on your income, but it is also practical.

Lots of people spend around 102% or thereabouts of their income, that is they are not saving anything and in fact they are slowly going backwards.

Have you ever received a pay increase only to find that your lifestyle does not noticeably change but the additional funds just disappear? Like you have holes in your pockets! I know the feeling, it has happened to me, and quite a few friends.

A different friend of mine went to a mortgage broker and consolidated all of his loans to one large flexible loan with all the features of his other loans rolled into one. He used to have a home loan, personal loan, car loan and several credit cards and now all accounts are linked to a central account that is at home loan interest rates and has his home as security . This arrangement can work very well resulting in the saving of hundreds of dollars a month in interest as it did in his case. But he was no better off either!

Yet another friend had his wife return to the workforce after their kids were all at school. Their household income in this case increased over 80% overnight. But. guess what, after a couple of months they too found that they were no better off.

Why is it so? It seems that without some discipline and a plan our spending habits just seem to automatically adjust to use all the money, and a bit more! If you have easily accessible cash or credit you are more likely to spend it. Most of us like spending money or at least are tempted. ‘Hide’ it and you are less likely to be tempted.

Remember before Credit Cards most of us had to save up to buy that special something. Idea : Pretend that you did not get the raise or pretend your wife did not go back to work. Then put the proceeds into a separate bank account (or get your employer to do it) and carry on as you did before. You will not miss the money!

This simple idea can be the start of an effective budget With some prioritizing and fine tuning as outlined below the results can be staggering.

Most people do not have a budget. Every successful business has a money plan. This is what a budget is, a plan for your money, you telling it what to do instead of it telling you what to do. With a budget you can set and achieve your financial goals. You will also get a better view of what your money can do for you now and in the future.

Usually people just pool all their funds and simply take it and spend it without regard to its priorities or limits. At any one time they do not really know if they can afford to or should buy something. For example a night out with friends could jeopardise the next weeks rent or mortgage payment , but they may go out and be blissfully unaware or unconcerned about their bank balance. They could well get a nasty surprise later.

In this day and age of economic crisis, every single penny that you spend counts (unless you’re a self-proclaimed millionaire). And for a lot of people, nowhere else do they see themselves losing more money than when it comes to driving. A few years ago, I made the mistake of being young and naive when it came to buying my first car. Everything that you are supposed to do when buying a car the right way, I pretty much went the opposite direction. As a result, I ended up purchasing a brand new Jeep Liberty (which is considered a small SUV). No sooner had I purchased this car, then the economy decided to take a swan dive. Gas prices shot up, and I saw my checking account drain out fairly quickly.

I’m not the only one who has found themselves in a predicament when it comes to driving. Millions of Americans everywhere who made poor choices in the types of cars that they purchased have felt the pinch. Shortly after I got my new Jeep, I switched careers and had to commute thirty minutes to almost an hour at times just to get to work one way. In total, I was putting over forty miles on my Jeep each day just going back and forth to work, not to mention wasting gasoline sitting in traffic.

After a little while and a couple of negative hits at the bank in my checkbook, I began to get frustrated. Why couldn’t I keep any money in my account? After all, I was pretty sure that the only things I was spending money on were gasoline, food and bills. I did some investigating and soon discovered that I was right. I was living as frugally as one could- even sacrificing social events that other people my age were having fun with- all in an effort to save money that wasn’t getting saved. So where was it all going? My car.

That’s right. I discovered that on average, I was spending over $400 a month in gasoline just to get back and forth to work! This didn’t even count the gasoline that it took for me to fill up to run other errands around town, etc. After I tacked in my monthly car payment and car maintenance (I.e. oil changes, miscellaneous, etc.), I was spending close to $1,000 PER MONTH on my car alone. I started to figure that short of getting rid of my car (which I couldn’t do), I would have to drive it less because my paycheck that I was receiving was literally getting handed over to paying for my gas to get to work.

I wasn’t even breaking even. I started thinking about applying to a different job because it didn’t make sense for me to drive so far and not see the fruits of my labor. It was actually costing me money to go to work! Luckily, my situation improved, and I didn’t have to do anything drastic, but it just goes to show how the choices we make can really come back to bite us!

There are only limited ways to have more spending money. One way is that you need to have more income. Income comes in the form of wages, salary, rentals, interest and saving. Spending money can come in the form of essential expenses as well as spending on wants and desires. There are ways however, to reduce spending in order to have more money to spend. What? Sounds gibberish…let’s take a look.

A budget will quite often help to free up cash. If you are unaware of your expenses and how it relates to your income this is the most important step of all. Completing a budget will show up your spending habits and give you an idea of just what you actually do with your money. Once you know this you’ll be surprised at how much you can save to allocate to other types of spending. Take a serious look at your power account, your telephone bills and other utilities. Phone the competitors of your usual supplier and see if they can give you a better deal. Often a provider will give you an incentive to change your services to them. This might be in the form of a deposit of say $50 on your first account or a special reduction on rates for a set period. It’s worth taking a look but make sure you are getting a better deal at the end of the day. Grab the remote and look at the cable TV channels you have. Which ones do you have access to that you never watch? Make a list of all of the channels that you can access. Mark off the ones that you watch and those that you don’t. Contact the cable company and see if you can reduce the costs by changing the package you are on. Review your life insurances. While there are certain things that require insuring there may be better options since you took the policy out. Do this with an adviser and don’t just cancel policies. Sometimes you may find premiums have come down or the amount of cover is no longer right for you. If you haven’t reviewed insurances for a long time it’s time you did. Also review your general insurance policies. If you take out vehicle insurance, contents and home cover with the same company you normally get a discount. You can also lower premiums by taking on a higher excess.

These five tips are a start to reducing your expenses so that you have more spending money.

Teenagers are big spenders. They see something they want, they have to have it. The problem with this is that it makes it harder for them to understand the difference between a need and a want.

If they get everything they want when they are younger, they might think it’s a need when they are older. Or worse, they might not think of the important expenses such as bills as any more important then getting a brand new car. They need to understand what is important.

Teach your kids and teens how to manage their money

Teaching your kids how to manage their money is one of the best gifts you can give your kids. It can mean the difference between living a sound life without worrying about money and living paycheck to paycheck with a mountain of debt.

Money management is much more beneficial to them than simply deciding they just need to make a lot of money. Even people making six figures a year are in debt. It’s our spending habits that get us into trouble, not the amount of money we make.

Teach them to plan

If you don’t have the money, you can’t buy something. When your teen get’s his license, he’ll want a car. Instead of just buying it for him, have him save for it. You can even decide to match what he’ll save. In order for him to be able to afford this car, he’ll need to plan out his purchase.

For big expenses and monthly expenses, teach your kids how to budget so that they can avoid taking out credit cards and building debt. If you don’t have a budget yourself, make one so that you can be a good example and show your kids how to do it.

Teach them to track their expenses

With the Visa Buxx Card, your teens can track what they spend their money on. It’s important that they know how they spend their money so that they can adjust it when they are planning. For example, if they need to save an extra $20 per month to save for a new computer, they might notice that they spend that much on snacks that they don’t really need to be buying.

Teen Spending is hard to get a hold of, but when you teach them right now, they can get off to a good start.

Managing time is saving money. When we have control of our time, it makes our load easier, and our lives stronger. When we are achieving a financial limit, we need to understand the value of a dollar. If you are saving money to achieve a goal, it is always smart to store your funds in accounts that include interest on the dollar. Some banks offer more interest rates than others do, so it pays to shop around. If you are investing in short-term goals and saving money for the occasion, you might want to open a different account.

For example, if you intend to take a Holiday Vacation, you will save funds, but keep it separate from your business account. If you have a Mortgage Loan, you might want to review your terms & agreements, since some loans offer vacation packages. In addition, you might want to note that money market accounts and saving accounts are great for short-term goals, such as vacations.

By saving your money in accounts that include interest, it allows you to accumulate addition savings, and your ‘principal is secure.’ If you are opening, accounts to save money for long or short-term goals, be sure the accounts do not have hidden fees, charges, or ‘penalties for early’ withdrawals. Saving money is managing time, so if you are paying fees and charges, or penalties you are spending money and burning time.

No matter what you goals are, it takes money to obtain them. There are no exceptions to the rule. If you are saving for retirement, or to send your kid to college, it is wise to set a goal in the short-term range for one goal and a long-term for the other goal. For example if you are saving funds for college tuitions, you want to set a five-year term agreement with yourself, unless your child is going to college next year.

If you are saving for retirement this is a long-term agreement that you want to invest wisely. Remember times are constantly changing and prices are soaring, so calculate the increases in your time management scheme for the best turn around. This will help you save money and time. Be sure you know what you are getting into to reduce your risks if this is your lifestyle. If you investments are an opportunity to achieve long-term goals, then be sure that you realize that no investment is sound proof. Make sure you keep savings in an account that are not used for your investments, since you will need a backup plan when all else fails.

Likewise, if you are investing your money in lottery tickets, you are wasting time. Unless you are lucky, most people only win a few dollars, so do not include this in your time management scheme, because it will only bring you down once you realize you are wasting time and money. Time management is the process of making wise decisions to achieve goals and flexibility as well as saving money. When you create a good time management scheme, you are well on your way to success.