Three Evergreen Tips On Saving Money

Piggy BankThe following has been contributed by a reader.

Who doesn’t like to save money? Unless you are a multimillionaire or a billionaire, chances are that you could use some money saving tips. So here are three evergreen tips on saving money.

Budget

The first step in making a budget is to know how much you spend. So, for a month, record every expense, however trivial – the newspaper, the snacks, the bills etc. Once you have the data, then organize the expenses into different categories such as the mortgage, gas and groceries. Then total each category.

After recording your expenses, you can now go ahead and create a budget to limit overspending and cut back on unnecessary expenditures. Remember to include expenses that occur regularly though not monthly, for example, car maintenance. From here you can set a percentage of your income that will go to savings. Financial wisdom demands that you save at least 15% of your monthly income. You can save more if you wish and are prudent.

Set Saving Goals

Having saving goals not only makes it easier to save but also motivates you to save more. Determine how long it will take to attain a set saving goal. You can categorize your saving goals into short-term goals (which usually range from a year to three years) and long-term goals, which take any amount of time above three years to achieve. Short-term goals may include, but are not limited to: saving to buy a car, starting an emergency fund that will cover between six months to one year of living expenses just in case you are laid off and saving for a vacation. Long-term saving goals, on the other hand, may include: saving for retirement, saving to buy a house, saving for children’s college fees or saving for a major business investment.

On saving goals, ensure you set priorities. Decide which saving goals are most important to you, how long you’d want to save for a particular goal and how much you are willing to put away per month in order to attain your goals. If your priority is saving for retirement, then other goals might enjoy less preference as you work to ensure you reach your retirement goals.

Depending on the nature of your savings objective, there are different savings and investment strategies suited for each. For example, if you are grappling with a short-term savings goal, you might prefer using a regular savings account because it is easily accessible or a certificate of deposit account, which locks your money for a certain time at a set interest rate. If it is a long-term goal, then you might consider using riskier investments such as mutual funds because they are commonly used to invest for long term.

Unfortunately, you should be prepared for some unforeseen emergencies that can distract you from reaching your financial goals. However, it is rare anyone prepares for the worst unforeseen emergencies, including divorce and bankruptcy.

Exercise Financial Fidelity

The primary reason for many financial problems is lack of financial discipline or the inability to delay gratification in the short term. So many people associate happiness with spending money to purchase wares they might not need. It is a somewhat a reflex action but you should practice on how to suppress your urges.

Financial fidelity requires you use your savings for the goal to which they were kept. For example, it is discouraging and imprudent to save for a car for three years then buy jewelry instead. It demoralizes you once you realize the blunder and you might not be as effective in saving again. Note that once you give in to a single impulsive indiscretion, then you open floodgates for more. Through and through, ensure you practice financial fidelity. Don’t spend what you don’t have as that is wont to increase your financial burden by accumulating debts.

If you are in business, financial fidelity demands you plan ahead. In case you run into an economic landmine that will blow up the assets of your business, then protect your valuable assets by considering a Scottsdale Bankruptcy Attorney. The Canterbury Law Group has among many other things, specialized in bankruptcy matters and can protect your assets just in case.

No one can foresee the future, but by practicing the three actions above you will be in much better shape than those who don’t.

photo by: 401(K) 2013

Student Loan Debt Sucks But It Can Be Destroyed

student loan debtWhen my wife graduated from college with her four year nursing degree in 2011 she graduated with over $80,000 in student loan debt. It was a heavy burden for both my wife (girlfriend at the time) and myself. We knew it was a ton of debt and that it’d likely take a super long time to pay off.

Back then our minimum payments were right around $700 a month which was a ton of money. In fact, it was even more than our first ever house payment. We knew we wouldn’t want to pay that debt off for over a decade or longer, so instead of wallowing in our sorrows of our massive debt load we made a plan to pay it off as quick as possible.

Made A Budget

The first thing we did was make a budget. Since we weren’t married at the time, we actually made two budgets, one for myself and one for my wife. Our budget was pretty strict but it was in line with our #1 financial goal of destroying her student loan debt.

Any money that we ran into, whether it was a cash gift or our paycheck, that wasn’t in our budgeted spending got put immediately to pay off my wife’s student loans. The surplus in my budget got put into a savings account to pay her loans down once we got married. Sometimes we’d make as many as four payments to her highest interest rate student loan in one month!

Unfortunately, with just the income from our jobs it would still take many years to pay off the massive amount of student loan debt so we looked at ways to speed up the process. We found a couple ways to make more income that ended up helping us out a ton.

Finding Extra Income

We wanted the debt gone and the quickest way to pay more money toward that debt was to find extra income. Once Tori finally got a job we had her base income to put toward the student loan debt. I already had a job, but I was a salaried employee so I couldn’t work extra hours to earn more money.

Tori, however, was an hourly worked which meant she could pick up extra shifts at work to earn some more money. On top of that, if she worked over 80 hours in a pay period she earned overtime at 1.5 time her base pay which was pretty sweet. Tori picked up extra shifts when she could and we put all of the extra money toward extra student loan payments.

I wanted to help in the debt pay off journey, so I brainstormed some ways to earn some extra money. I got a new job that resulted in a higher salary and less hours which was pretty sweet. Working less allowed me to start doing something I had always wanted to do, start a blog.

I never thought it’d end up making money from my blog, but with a lot of hard work and a bit of luck we started making money! It was exciting because it meant I had found a way to contribute toward paying down the student loan debt.

Both sticking to our budget and finding extra income helped us to pay off Tori’s debt very quickly. In fact, we managed to finish paying off her student loans this year in less than 3 years total!

Did you graduate with ton of student loan debt, or did you graduate debt free like I did? Either way, I’d love to hear your stories about your money adventures. Shoot me an email (adventuringdollars at gmail dot com) or leave a comment below!

Photo courtesy of jscreationzs via freedigitalphotos.net.

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