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How to Thrive on a Bare Bones Budget

One way to instantly improve your financial situation is to look for ways to earn more money. But this doesn’t change your current financial situation. There are just some points in life More »

Top Excuses: Why You Can’t Save Money

Saving money isn’t always easy. Especially when you’re just getting started. Excuses can come from every direction and before you know it your good intentions turn sour. Luckily, if you can identify More »

Do You Have a Financial Emergency Plan?

If you were to lose your job tomorrow what would you do? Would you be able to immediately find another job? Do you have enough money saved to cover your bills? Nobody More »

Spring Clean Your Digital Finances with These 4 Steps

We live online. Work, social media, blogs, and finances. The huge stacks of paper clutter are quickly diminishing as more and more of our important financial documents are simply stored online. One More »

Winter Savings: 4 Items to Buy in February

In some areas it feels like winter will never come to a close. Fortunately, the light is at the end of the tunnel and before you know it we’ll be heading into More »

 

How to Thrive on a Bare Bones Budget

One way to instantly improve your financial situation is to look for ways to earn more money. But this doesn’t change your current financial situation.

There are just some points in life when you may be required to live on a bare bones budget. This could be from not bringing in enough income or just wanting to save or invest as much money as possible.

If you keep a positive attitude living on a bare bones budget doesn’t have to be a bad experience. It can actually serve as a learning experience and make you appreciate what you have in your life even more.

Here’s how to thrive while living on a bare bones budget.

Cut Expenses Meticulously

When it’s hard to make ends meet the last thing you want to do is take on debt to pay your living expenses. This means you’ll have to be extra careful when it comes to cutting your costs.

When you sit down to map out your budget it’s important that you list your expenses in order of priority. You need a home to live in, food to eat, and running water. Shelter, food, and utilities should always come first. You’ll also need to cover the cost of transportation to get back and forth to work. Everything else is negotiable.

If you haven’t already cut the following expenses out of your budget:

  • Cigarettes & alcohol
  • Cable
  • Phone
  • New clothing (unless necessary for a new job)
  • Eating Out

You’re going to have to temporarily cut out all of life’s little luxuries until you can bring in more income.

After covering the basics throw what you can at any of your current debt.

Be Creative

Living on a bare bones budget doesn’t have to be horrible – trust me, I’ve been there before! When your living on less you’ll be forced to come up with creative ideas for entertainment and other budget categories.

Make it a challenge. Only have $50 a week to spend on food? See how far you can make that $50 go. Buy staples like flour, sugar, milk, and some spices. Be creative in your cooking.

Instead of watching TV take hikes with your kids. Color. Tell each other stories. Write a book.

Keep the Right Attitude

There are only two solutions to not having enough money to cover your bills: cut your expenses or earn more money.

And since you can only cut your expenses back so far you’re going to have to look for ways to earn more money. This gives you an opportunity to create your own side job that will bring in money and provide you enjoyment.

When you focus all of your energy on working toward making a better life for you and your family you’ll succeed. Keeping the right attitude is golden.

What tips do you have for those living on a bare bones budget?

Top Excuses: Why You Can’t Save Money

Saving money isn’t always easy. Especially when you’re just getting started.

Excuses can come from every direction and before you know it your good intentions turn sour. Luckily, if you can identify the reasons why you think you can’t save money you can fix them.

It make take a while to fully get into the savings habit, but if you can rid yourself of these excuses you’ll eventually reach your goal.

It’s My Money – I Deserve to Spend It!

Nobody wants to go without. But when your goal is to save money something has got to give.

Start slow. Give up something small. If you eat out three times per week cut it down two and save the money you would have spent. If you give yourself a certain amount of spending money each week cut it back by ten dollars and stash the money into your savings.

Pinpoint your weaknesses and make a slow conscious effort to correct them.

It’s Not Worth It

“I can only save $10 a week. That won’t get me anywhere.”

But actually it will.

Ten dollars a week equates to $520 a year. No that’s not a ton of money but it could be a great start to an emergency fund. And the important thing is that you’re building a savings habit – that’s what really matters.

Even if you can only save $1 per paycheck, do it. You can always add to the amount you save later but by starting now you’ll develop a lifelong habit.

Small steps in the right direction will get you to where you want to be.

I Need These Other Things

“I need a $20,000 car even though that’s my yearly salary.” “I need designer clothes.” “I need a new flat screen TV.”

No you don’t.

There are many frugal ways to satisfy your needs without flushing your money down the toilet. Buy used cars. Shop at thrift stores. Buy a secondhand TV. I promise, it’s really not that bad.

If you give it a shot you might find that bargain hunting is actually fun!

If you focus on what you really need instead of buying everything you want you’ll have plenty of extra money to save.

What Do You Think?

We all start at zero and work our way up.

When it comes to saving no amount is too small. The important thing is that you take the time to create a budget and find some money to save. Even if you can only save a small amount you’re taking a step in the right direction by creating a habit of saving your money.

And if you’re looking for extra ways to bring in money check out our posts on starting a side business.

What excuses have you made not to start saving money?

Do You Have a Financial Emergency Plan?

If you were to lose your job tomorrow what would you do?

Would you be able to immediately find another job? Do you have enough money saved to cover your bills?

Nobody wants to think they’ll those their jobs but it’s a reality that many people are waking up to each morning. That’s why it’s so important to think ahead and make a financial emergency plan.

Here’s how.

Start an Emergency Fund

An emergency fund is an essential element to a financial emergency plan. Really, an emergency fund should be an essential part to almost everyone’s personal finances.

There’s no right or wrong answer when it comes to how much money you need though. Some experts recommend having three months’ worth of expenses socked away for emergencies while others recommend having a years’ worth.

The amount of money you need to have saved depends on several factors, such as:

  • The amount of your expenses
  • Income sources
  • Ability to quickly find a new job
  • If you have a working spouse

Personally, I think that six months’ worth of expenses is a good amount to have saved, but what you need may differ.

Network with Others

Making meaningful connections within your chosen field of work is extremely important.

By building relationships now you’ll have people to help you out in the even that you lose your job. The network you build can also bring you new opportunities.

Take some time each week to reach out to new people and get to know them. Broaden your horizons. You never know which person will be able to help you out when you’re in a bind.

Start a Side Business

We’ve covered side businesses pretty extensively. Side businesses can help you increase your savings, pay down your debt, and improve your overall financial stability.

In addition, having your own side business gives you the opportunity to work on the things that matter the most to you.

And if you have your own side business you’ll have an income source to fall back on in the event of a job loss. You’ll also be presented with enough time to work on your business even more and grow your income to the next level.

Start Preparing

You can’t predict the future. That’s why it’s so important that you make a financial emergency plan now.

By having an adequate amount of savings, strong connections, and a side business to fall back on you’ll be prepared for whatever financial situations life throws your way.

Do you have a financial emergency plan?

Hate the Stock Market? 5 Alternative Investing Ideas

Investing is important. There’s no doubt about it: if you want to increase your wealth and retire one day then investing is inevitable.

However, if you fear the stock market then you probably haven’t gotten started. While there’s numerous articles available that can help ease your mind on investing in the stock market, today we’ll talk about some different types of investments you can make.

Here are five alternative investment ideas.

Firearms

Well maintained, quality firearms hardly ever depreciate. In fact we have seen firearm production and sales skyrocket since 2008.

Like any other investment, investing in firearms can be risky. You have to be knowledgeable in the area. In the recent years certain guns have quadrupled in value and are now falling. The more you know the better you’ll be able to make a smart investment.

And as an absolute bare minimum before purchasing a gun as an investment is pertinent that you are well versed on gun safety.

Peer to Peer Lending

Peer to peer lending has brought strong returns for investors since its inception.

If a borrower is unable to get a loan through a bank he’ll often turn to peer to peer lending to get the funding he needs. A peer to peer lending site, such as the Lending Club, will evaluate the borrower based on his financial information. Investors will then be able to see how risky individual borrowers are and will be able to loan money based on risk.

The best part of peer to peer lending is that you can spread your investment over dozens of borrowers, therefore minimizing your risk.

Real Estate

Real estate is perhaps my favorite type of investment.

With real estate there are so many options. You can buy and rent residential homes, apartments, and even commercial buildings. You can also buy properties fix them and then sell for profit.

While the latter is a bit more risky, real estate is one investment with a proven track record.

Invest in a Business

If you have a strong business idea and have been waiting for the moment to act on your idea, now is as a good of time as any.

Investing in your own business can bring you returns that far exceed anything you can gain from the stock market. Starting your own business does come with just as much risk though.

To read more about starting your own business, check out these posts:

Invest in Yourself

Last but definitely not least – you can always invest in yourself. Would taking a course or furthering your degree advance you in your career? Is there a subject you want to learn about that will make your life more fulfilling?

You need to continually invest in yourself to reach your full potential. And investing in yourself can bring a huge ROI.

What unique investments have you made?

3 Signs You’re Not Cut Out for the Freelance Life

In today’s economy freelancing is a popular way to earn extra income. And, many people who start out with side hustles are eager to freelance full time.

Freelancing has many advantages: you can set your own schedule, diversify your income, find ideal clients, and earn much more money than a day job allows. However, some people want to portray the freelance life as all puppies and rainbows and this simply isn’t the truth.

While there are many advantages of being a full time freelancer there are also many disadvantages that you should consider. Here are three signs that you’re not cut out for the freelance life.

You’re Looking to Do Less Work

One common misconception about freelancers is that they sit around in their pajamas all day watching TV and browsing the internet. This couldn’t be farther from the truth.

Anyone who is building their own freelance business will have to put in much more work to get started than they currently do at their day job. If you’re not willing to put in 40-60 hours per week in the beginning of your business you’ll have a hard time finding enough clients to replace the income from your day job.

In addition it can also be hard to draw the line when it comes to working at home. If you don’t set a consistent schedule for yourself you might find it difficult to say no to work all the time. You have to be able to set appropriate work/life boundaries for yourself.

You Don’t Want to Work for Anyone Else

When you freelance you get to set your schedule but most freelance businesses are based on serving clients. This means rather than working for one person you’ll be working for multiple people.

You’ll have multiple people to please and multiple projects to complete. Yes, if you don’t get along with a client you can drop them but in the beginning most freelancers take any work they can get.

You Think You’ll Be Rich

You see income reports online from super successful freelancers who make thousands of dollars per month. You start daydreaming about the day when that will be you.

The problem is that the majority of freelancers aren’t making thousands of dollars a month – especially when just starting out.

It takes to build a successful freelance business and the day that you make five thousand dollars a month freelancing might never come.

Final Thoughts

If you’re self-motivated and willing to work hard to establish yourself you can create a successful freelance business. However, you need to be realistic before quitting your day job. It will take time to build you client base and subsequently your income.

If you’re ready to take on the freelance life start building a savings buffer and work on getting clients on the side. When you’re income starts increasing and you can pay your bills off your freelance income then quit your job. Just make sure it’s what you really want before you cut ties with your employer.

Spring Clean Your Digital Finances with These 4 Steps

We live online. Work, social media, blogs, and finances. The huge stacks of paper clutter are quickly diminishing as more and more of our important financial documents are simply stored online.

One of my goals for the year was to get more organized and of course – save a little money. Getting digitally organized with your finances can clear mental clutter and turn your finances into a fine tuned system.

Here are four steps you can take to spring clean your finances and become more digitally organized, all while saving a few bucks.

Track Your Spending in One Place

I have an excel spreadsheet to track my spending, a Mint account, and an account with Finovera – which is similar to Mint. Total overkill.

Really I don’t need to do much tracking when it comes to my spending. I can plan out my budget, and give or take a few dollars, pretty much stay on target. But when I want to take a quick glance at my budget categories it would be nice to pull up a graph or spreadsheet and see where I’m at.

Having too many accounts is confusing. It takes far too much work to type each purchase into a separate account which makes the likelihood of following through pretty low.

Since I’m liking Finovera’s calendar feature I’m going to give them a fair shot. They can track my debit card spending and at then at the end of each month I should be able to easily input my cash spending.

Go Paperless

Switching to paperless billing can get you a pretty nice discount. And, if you’re paying your bills online already then there’s no reason not to go paperless.

Start with your insurance. Discounts for going paperless on your insurance billings are usually around 5 percent. This could save you an easy couple of hundred dollars depending on what you pay.

You can also go paperless on some utility bills, credit card bills, cable bills, and phone bills.

Set Credit Cards on Automatic Bill Pay

I made a pretty big mistake a couple of months ago. I received my normal credit card statement by mail. I have one bill automatically paid by it so there’s a recurring monthly charge of $45.

Instead of paying the bill immediately like I normally do I sat it on my desk. It got buried underneath a book and I completely forgot about it. Only after the bill was already two days late I discovered that I hadn’t paid it. And guess what? I got charged $30!!

I went ahead and set that credit card bill on autopay. I never use it so it’s only $45 a month. This way I won’t have to worry about paying a huge late fee or interest on my small charge.

If your credit card bill fluctuates and you’re worried about not having enough funds in your bank account to cover it set your account up to automatically pay the minimum payment. You can always go back and pay more on the card but you won’t have to worry about being hit with fees and interest.

Savings & Investing – Transfer Now

Another financial trap that’s easy to get caught into is saying that you’ll transfer money to your savings or investing account later only that day never comes.

I believe that automatic transfers can work wonders. But, if you’re budgeting on a variable income it can be hard to make those automatic transfers. Instead just transfer any extra money you receive the day you get.

By transferring money now instead of later you won’t have to live with the regret of not doing it at all.

Final Thoughts

Getting your finances digitally organized can not only save you money but it also helps with mental energy.

Since a good portion of your life is online you might as well take advantage of the free tools available to you. Let free budgeting software do the heavy lifting for you and set up automatic bill pay and transfers as much as possible.

Winter Savings: 4 Items to Buy in February

In some areas it feels like winter will never come to a close. Fortunately, the light is at the end of the tunnel and before you know it we’ll be heading into spring.

If you’ve been looking for creative ways to save yourself some money one of the easiest solutions is to always shop off season.

At the end of every season stores are looking to unload all of their leftover merchandise. In addition, after holidays pass all the themed items quickly get marked down. This means you should make a list of all the things you’re going to need for next year and shop now.

We’ve covered the items you should purchase in the fall. Here are four types of items to consider purchasing at the close of winter.

Winter Coats/Boots/Accessories

You might not purchase new winter gear for yourself each year but if you have children this is a hard thing to avoid.

Winter coats, snow boots, hats, and gloves are now being marked up to ninety percent off as retailers roll out their spring merchandise. Browse the clearance racks for next year’s winter coat for each of your children at a rock bottom price.

If you think you can accurately guess their shoe size for next year buying winter boots is another great way to save a significant amount of money.

Workout Equipment

One of the most common New Year’s resolutions is to lose weight. Retailers know this and stock up on all the latest workout equipment, clothes, and gear at the beginning of the year.

By the end of January most people have completely forgotten about their resolutions and the stores that remained overstocked start slashing prices.

In addition, many people replace their old workout gear at the start of January and need to get rid of their old inventory. Don’t be surprised if you start seeing a lot of workout related equipment for sale on Craigslist.

Valentines Leftovers

Perfume and cologne are two common Valentine’s gifts. You probably noticed dozens of new gift sets containing these items hit the stores mid-January.

Prior to V Day these items had a hefty markup. Now Valentine’s Day is over and retailers need to get rid of their holiday themed merchandise. You can score good deals on perfume, cologne, jewelry, and even candy.

And if you have kids you can purchase them a gift for next year for pennies on the dollar.

Electronics

Retailers are starting to stock their shelves with new electronics that debuted at the Consumer Electronics Show.

Last year’s models need moved out to make room for all the latest gadgets. Look for deals on TV’s, tablets, GPS units, and even computers.

By strategically shopping you can save yourself a ton of money and be prepared for the seasons to come.

What do you buy in February?

3 Dumb Things People Do to Save Money

In this economy we’re all trying to save a buck or two. That doesn’t mean we haven’t done stupid things to save money.

In fact some people repeatedly try to save money by doing things that end up costing them more money in the long run.

Here are three dumb things people do to save money. Have you done any of these?

Using a Credit Card for Points When in Debt

Last year extreme couponing was the fad. This year it’s churning credit cards for their reward points.

And, while getting free money or free travel from the credit card companies seems like a pretty sweet deal it may be costing you more than you think. For instance, many people have the tendency to buy more using credit rather than cash or debit.

And for those with existing credit card debt, using a card for the points is a big no-no. You’re paying far more in interest than you’re earning in points. Save yourself some money and swear of the credit cards.

Following a Finance Gurus Advice to the Letter

Many popular financial gurus have come under fire in recent years. Dave Ramsey for his overly optimistic advice on investing. Suze Orman for starting a prepaid, high fee debit card to “help the poor.” And, Robert Kiyosaki for filing bankruptcy for one of his companies.

While much of the advice these gurus dish out is in fact solid, some of it isn’t. When coming up with your financial roadmap take the expert’s advice in hand but also do what’s right for you.

For example, Dave Ramsey advises to use the cash envelope system for budgeting. I, for one, am terrible with cash. If I have it, it seems like it’s instantly gone. I spend it without thought. When I use a debit card I am much more careful with my money since I know that it will be deducted from my bank account balance.

Lowering Liability Insurance Coverage’s to Save Money

I’m always amazed when people declare that they knocked half the price of their insurance premium by switching companies.

While you can in fact save money by switching companies, extreme savings usually means your coverage’s have been cut.

It’s extremely important to have adequate liability coverage on your home and auto policy. You never know when something bad will happen, and you need to be prepared. A company isn’t really saving you money unless they are giving you an apples to apples quote. Many people are oblivious to the fact that their new insurance provides less coverage than their older, more expensive policy did.

The next time you’re looking to save money on insurance, have your policy in front of you before making the call. Slashing your coverage’s to save a couple bucks is just not worth it.

Those are three dumb things people do to save money though I’m sure many more could be added.

What is the dumbest thing you’ve ever done to save money?

Make Money Buying Individual Stocks

Over the weekend a family member and I got together for some stock speculation. We each ended up putting a few hundred dollars spread among three different stocks.

For us this was purely for fun. We each wanted to see if we could pick some winning stocks. And, truth be told our criteria for purchasing these stocks was pretty shallow.

Only after I set my account to purchase the stocks did I decide to do a more in depth research on the criteria I should be looking for when purchasing individual stocks.

While there are many different opinions on what metrics to look for there are also some commonalities. Here’s the consensus of my research.

Start With What You Know

What’s your favorite brand? What products do you use over and over? Which companies have business models that you love?

Start there.

Think about all the companies and products that you and your peers use on a daily basis and can’t live without. Make a list of all the companies that really stick out to you.

Almost all professional investors agree that starting with what you know is the first step in choosing an individual stock. When you buy a stock you’re essentially buying a part of a business. What business do you want own a part of?

Look at Price and Valuation

Most retirement experts advise that individual stocks should make up an extremely small portion of your retirement portfolio. With that said it’s important to note that buying individual stocks can be a pretty big gamble.

Essentially you’re trying to buy low and sell high, that’s why it’s important to look for undervalued stocks.

One easy method to do this is to look at the P/E (price to earnings ratio). To do this simply divide the company’s share price by its net income. Anything with a P/E under 15 percent is generally considered cheap.

The actual price of the stock doesn’t matter. You can find undervalued stocks at both low and high prices.

There are many other metrics for determining if an individual stock is a good buy and you should do plenty of research to determine what metrics matter to you.

Research the Company

Next you want to look through the financial statements of the company. Look at their current debt load, balance sheets, revenue growth, and profit margin.

Also take the time to read more about the company. What’s the company’s plans for the future? Does it seem like there’s much room for growth? Is a good management team in place?

Take your time to soak up this information before purchasing a company’s stock.

Start Slow

Buying an individual stock is a gamble. However, performing your due diligence and properly researching the company will help you make a more informed decision. Beyond choosing a stock you’ll also need to figure out when you should sell.

Start slow. Almost every investor looks for different criteria when choosing individual stocks. You need to figure out your investing style and risk tolerance and come up with a custom plan for you.

How to Make the Most of Your Income Tax Refund

With tax time quickly approaching it’s a good idea to plan out what you’re going to do with your income tax refund.

It’s always nice to receive a lump sum of money at the beginning of the year but if you aren’t careful your money can disappear as fast as you get it. If you plan on receiving an income tax refund this year here are four ways to make the most of your money.

Start an Emergency Fund

If you don’t have an emergency fund receiving a large sum of money via an income tax refund is a great way to get started.

At times it can be tough to maintain enough patience to let money add up a little at a time. By using your income tax refund to fund your emergency savings you get instant gratification. You can continue to add to this account until it reaches your desired level of savings.

Add to Your Retirement Accounts

If you have a hard time reaching the maximum contributions on your retirement accounts each year your income tax refund could be the solution.

Adding a large sum of money to your retirement accounts will help you earn more money and possibly even receive a tax credit for the following year.

If you don’t have a retirement account, now would be the perfect time to start one. There are many online brokerages that let allow you to set up retirement accounts and begin investing.

Pay Off Debt

If you’re in debt it may be a better idea to tackle your debt before you save or invest your money. If you have credit card debt this should probably be the first thing you pay off. Credit card debt usually comes with astronomical interest rates that cost you hundreds or even thousands of dollars.

Figure out which debt has the highest interest rates and start paying it off.

Paying down debt isn’t the most fun thing to do with an income tax refund but it’s one of the smartest.

Tackle a Big Project

Is your furnace starting to tank? Is your kitchen falling apart? Does your car need repairs? If so, use your income tax refund to tackle a big project.

By doing this you can save money in the long run and possibly even earn some sweat equity.

Think Smart

You’ve worked hard all year. If you have an income tax refund coming back, make that money work for you.

Starting an emergency fund, saving for retirement, paying down debt, and tackling big projects are just a few ideas to make your money work for you. Think big and think smart. You’ll be able to get more bang for your buck.

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