Buy Holiday Goods Now

Christmas is over which means it is the perfect time to start thinking about Christmas 2012 for those who want to save money. Before you begin rolling your eyes at the thought of having to think about the holiday season when you thought that is was finally over, remember that the better prepared you are before the holiday season starts, the more you'll save when the holiday season arrives. Just imagine how much more pleasurable December 2012 will be if you have all your decorations, ornaments and gifts bought and wrapped long before the 2012 holiday shopping season even begins?

The first thing you need to do is take a quick inventory of all the Christmas items that you have taking special need of anything that needs replacing or you wish you had during the holiday season. This is by far the best time to do this since it is still fresh in your mind so that you don't wish you had it again next year. With your list in hand, head to the stores where all Christmas related items should be heavily discounted.

You should be able to find all that you need to replace and anything that you know that you needed for 50% off or more. Once purchased, place with all your other Christmas and holiday goods and decorations and you will be set to go next year without having to worry about what you may still need. If you buy holiday related gifts for friends or family, this is also a great time to purchase these at great discounts to give for next year.

By beginning early and determining holiday needs now, you'll be in the position to significantly reduce the amount of money you spend on decorations, ornaments and holiday gifts next year. best of all, you won't have the pressure of having to find them with crowded holiday shoppers since it will all already be taken care of.

Clean Out Your Car Trunk To Save Money

Often it is simple little baby steps that can save you money over a long period of time. A good example of that is to empty out all the stuff you have been storing inside of your car's trunk.

There seems to be a law that if something goes into a car trunk, it must remain there indefinitely. As the months go by, the trunk starts looking less like a trunk and more like a storage closet. While your car's trunk may be a convenient place to store all those items that you are not sure where to put otherwise, that storage comes at a price. All those items resting in the trunk of your car add weight, and that added weight costs you money.

If you are the type of person that uses your car trunk as a storage area, make the time to go to your car and empty everything out of the trunk and back seat that doesn't need to be there. In addition to cleaning out the inside of your car, it's also a good time to take off the car rack if you have one. Car racks significantly reduce the aerodynamics of the car which lowers your overall gas mileage.

The more weight that you can shed from the car, the lighter and more fuel-efficient it will be. Emptying out your trunk should save you a minimum of $20 for the year and possibly much more. An added bonus to reducing the weight in your car is that your car's driving performance should also improve.

An added benefit of cleaning out your car is that you will likely find a lot of things that you thought were lost. Keeping it clean can also mean that important papers or other documents don't accidentally get lost in the mess. once your car is clean and organized, it should be much easier to keep it this way and save you both time and energy (on top of money) knowing where everything is.

getting your car and car trunk clean is a great first step in getting all the places in your life better organized and clean. Remember, it's a first baby step.

Credit Cards Have Advantages

There is often an assumption made by people who have gotten into credit card debt that credit cards are terrible. The truth is that they are terrible if you don't pay them off in full every month. If you have the discipline to pay them off each month in full, credit cards have many advantages. A few of these advantages include the following:

Creating A Credit History: Having a credit card that you pay off each month helps create a credit history which will improve your credit score. An improved credit score will allow you to get loans for a car or house at much better interest rates saving you money.

You Get An Interest Free Loan: from the time you buy something with a credit card until the time you pay off the credit card, you get an interest free loan.

Your receive Damage and Loss Protection: When you purchase something with a credit card, you are protected from damage or loss. You do not receive this protection when you use cash.

You Get Theft Protection: If an item that you purchase gets stolen within a specified period of time, your credit card often covers the replacement of the stolen item.

These are just a few ways that credit cards can be advantageous. The key point to remember is that this is only the case if you pay of the balance of the credit card each month in full.

Why You Should Pay Bills Right Away

For those of you who have had late payments on bills, learning to pay bills on time can have a profound impact on your savings so it's an important one to master.

If you haven't had any late payments in the last year, you have already figured out a quality system to get your payments in on time. You should change nothing and continue with the method you have devised that works for you.

If you made even one late payment in the past year, you've made one too many. A single late payment on any bill can have ill effects far beyond the bill in question including a decline in your credit rating and the raising of your credit card interest rates. What you want to do is to make sure you don't have another late payment from this day forward.

In order to achieve this, start by paying your bills the day that they arrive instead of their due date. When you bring in the mail, before you read any letters from your friends, before you look through the advertisements, before you read your favorite magazine, you should sit down with the bills and write out a check for each of them if you don't have an automatic payment system set up with your bank. The next day you will put them in the mailbox and send them off. That's all you have to do to avoid all the money you have paid in late fees in the past. By committing to do this you will avoid all late fees in the future.

Even if it seems early to pay the bill, you are far better off paying it too soon than accidentally forgetting it and paying too late. By paying bills the day your receive them, you will actually save yourself both time and money. That is, you will free up time that you would have wasted if had placed the bill somewhere to pay later. You will only look at the bill once and you will never have to spend the time searching for where you placed it again.

Get Your Credit Card Interest Rate Lowered & Annual Fee Waived

Here's a money saving method that will ultimately save you tens of thousands of dollars over your lifetime. In today's challenge we are going to take the first step in learning how to ask for savings.

To begin, call your credit card company and ask for one of the following: a) to have the credit card interest rate you're charged lowered, b) to have your credit card annual fee waived or c) both a and b.

The first thing you need to do is to find the number of your credit card company. It should be on your credit card or on your credit card statement. When you call, you want to say something like:

Hi. I have used your card for the last 3 years and have been happy with it. However, I recently received a competing credit card offer with no annual fee. Would it be possible to have my annual fee waived?

or

Hi. I have used your card for the last 3 years and have been happy with it. However, I recently received a competing credit card offer with a much lower interest rate (have a percentage rate in mind in case they ask). What is the best interest rate that you can give me?

If you are currently paying a annual fee and a high interest rate, feel free to ask about both in your call. One of two things will happen: 1) you'll get your annual fee waived or a lower interest rate or 2) you won't. While it will be great if you do, the result is not nearly as important as actually getting up the courage to make the call because when you learn to ask for discounts on a regular basis, even if they don't all work out, many will and you will save money.

Take the challenge. Get up from the computer and go to the phone right now. Even if you're a bit nervous, that's fine. Just commit to making the call and ask for a better deal.

Save On Prescription Drug Costs

By Megan N.

Almost everyone cringes at the thought of spending hundreds of dollars on prescription drug. Shelling out for expensive drugs is an especially grueling experience for seniors, and those who take multiple types of medicine daily. Because these costs can add up to hundreds out of your pocket every year, the first method for is to be proactive. Know which medicines are absolutely necessary for your health, if there are any alternatives, and whether or not your insurance covers them.

When it comes to being prescribed new drugs, remember that talking to your doctor can mean a world of difference. Doctors would rather have a conversation with their patients about drug costs than see them skip out on filling prescriptions or stop taking important medicines all together due to lack of money. Usually they can offer alternatives, including generic versions of drugs that can be a fraction of the cost. They may also be able to give samples which can reduce costs.

In fact, before you even make it to the doctor's office, it makes financial sense to check up on a few different but similar drugs that could provide alternatives to the one your doctor is likely to prescribe. Call your insurance company and ask the copayment on each one, so that when you reach the doctor's you are armed with knowledge. Tell your doctor what you've discovered financially about these drugs, and your doctor can tell you what the differences are medically. You could save yourself hundreds each year by choosing a drug with a smaller copayment and less restrictions than its alternative if there are no major differences in effectiveness.

Another two simple ways to cut prescription costs are by prescription coupons and trying different pharmacies. Buying prescription medication is a lot like shopping for the best price on milk -- different stores offer various incentives and discounted prices to retain you as a customer. You can also look out for money saving programs, like the one offered by AARP, which help fill the gap that some coverages don't.

The best defense against prescription drug costs is speaking up. Often, your doctor, neighbor, or family members can recommend pharmacies, discounts, and alternative drugs that will keep more money in your pocket.

How To Break A Soda Habit

If you are anything like I once was, you may have a terrible (health wise) and expensive soda habit. I tried for years to break it and failed miserably each time. Then about 5 years ago, I came up with a method that worked, and eventually cut my $1000 a year soda habit down to $0.

My main problem was that when I tried to quit drinking soda, I always felt deprived. The deprivation had me always thinking about it and at some point I would cave in and start drinking soda again. I had to come up with a way so I didn't feel deprived.

My simple solution was to say I could drink as much soda as I wanted, but I had to drink a full glass of water before I could. The result was that I didn't feel deprived of my soda since I could have as many as I wanted, but drinking a full glass of water before each one made it so I didn't drink nearly as many each day.

After a month, I made the rule that I had to drink 2 glasses of water before drinking a soda, and that eventually increased to 4 glasses of water over time until I was in the habit of drinking water instead of soda. I'm not sure it that will work for you, but it is certainly a set of baby steps that are worth a try if you are looking for a way to break this type of habit.

Pay Yourself $1.00 Game

If you are having trouble saving money, I have found that playing a pay yourself game works wonderfully and it's easy to implement. Basically, you pick something that you do around the house and charge yourself every time you do it. Turn on the TV, pay $1.00. Do the laundry, Pay $1.00. Open the refrigerator, pay $1.00. Each week take the money collected and place it into a separate savings account. It's amazing how fast the savings can add up.

It's also an effective way to keep you from being lazy. If you feel you are watching too much TV, charging yourself to do it will help discourage you from doing it so much. Give it a try and I think you may be surprised at how effective this baby step can be.

How A Towel Can Save You

No, this is not a reference to The Hitchhiker's Guide to the Galaxy. Much like the the simple washer savings baby step, I loved this idea because it only takes a second and it isn't something that I would have thought about on my own.

I live in a community where I can't line dry my clothes outside and I haven't reached the level where I am comfortable with wet clothes lying all over my house to dry. That means that I use my dryer and according to dryer tips there is an easy way to reduce the cost of each dryer load by 10%.

After throwing in all the wet clothes that have come out of the washing machine, take a big, fluffy, dry towel and throw it into the dryer with all the wet clothes. As this fluffy towel tumbles in the dryer with all the wet clothes, it helps to absorb the moisture in the wet clothes which allows them to dry more quickly. In the end, you get your clothes dry in less time and save a bit of money in the process.

I started doing this about a week ago and it seems to work just as claimed. it's one of the easiest 10% savings I have found in a long time.

Throwing on Cold Water

I love finding little baby steps to improve my finances which take very little time or effort to accomplish. This baby step does both in a matter of seconds and can save about $100 a year according to washer tips.

All you need to do is take a stroll over to your washing machine and turn the wash cycle switch so that it's pointing to a "cold – cold" wash. I have been doing this for a few weeks and I can't tell a difference in the cleanliness of my clothes at all. Unless your clothes are terribly dirty, I highly doubt that you will see a difference either.

It is the cost of heating the water that is the most expensive part of washing clothes. When the washing machine is set to "cold - cold" there is no cost to heat the water, and this is where the money savings comes from. A small and easy baby step that I took to help improve my finances.

Dave Ramsey Baby Step 3

Once you finished Baby Step 1 and Baby Step 2, you are ready for Baby Step 3 which is to put aside 3 to 6 months worth of expenses into your savings account. This will be your full emergency fund. Take the time to look at your monthly expenses and figure out how much money you would need to live for 3 to 6 months if you lost your job. Whatever amount you come up with is how much you should have in your full emergency fund.

The important thing to remember is that this money is for emergencies only such as any unexpected incident which would have a major impact on you and your family. This emergency savings should be kept in a money market account so that it can easily be accessed in an emergency. The key to remember is that this money is not investment money, but insurance money for you to use when the unexpected things in life happen.

Dave Ramsey Baby Step 2

Once you finish Baby Step 1, the next step according to Dave Ramsey is to make a list of all your debts, excluding only the house. This debt list should be ordered from smallest to largest and the smallest debt balance becomes the number one priority. According to Dave, you shouldn't worry about interest rates and focus only on the debt amount. If two debts happen to be the same amount, then you should list the debt with the higher interest rate first.

Dave calls paying off the debts this way a "debt snowball" and he likes this order because it allows you to have pay off some of your debts quickly which should give you motivation about getting out of debt. Dave understands that paying the higher interest rate debts will save more money, but feels that paying off debt is not always about math. A lot of it is emotional and about motivation. He believes that personal finance is 20% knowledge  you know in your head while the other 80% behavior. With this in mind, he believes that once you are able to get rid of the lower debts, you will see the results you are producing and stay motivated to get rid of all your other debt as well.

Dave Ramsey Baby Step 1

When it comes to finances and baby steps, many people often think about Dave Ramsey's 7 baby steps. Over the next few weeks I will be going over each of them and you can decide whether they are a good approach for you. The first Baby Step in Dave Ramsey's program is to save up a $1000 emergency fund.

 

Everyone really should have an emergency fund for the unexpected events that happen in life to all of us. The amount of the emergency fund probably varies from person to person depending on their situation and lifestyle. $1000 is definitely much better than having nothing at all and creating an emergency fund is a good place to begin financial baby steps.

Saving Money For Your Child's Future: A Different View

A few days ago, I had lunch with a person in the local community whose opinion I respect quite a bit. He has two adult children, only one of which attended college straight out of high school, and both of which run their own business.

What I wanted to know from him was how exactly he raised his children to be such independent, self-motivated, entrepreneurial people. What he told me really surprised me, and it made me think a bit about whether I should be contributing to my children’s 529 plans or doing something different for their future.

When the children were young (under 12), he paid an allowance for household chores. There was a minimum that had to be done to even qualify for the system each week - so they had to do a certain number of tasks just as a baseline. Beyond that, though, they could earn money by doing more chores: dishes, lawn care, and so on.

Meanwhile, he was investing in a mutual fund for each of the children. Each week, he put a small amount into their fund, intending to use it later to help them out.

On each child’s twelfth birthday, he sat down with them and helped them develop a business of their own that they could manage. One of them chose lawn care and snow removal, while the other one chose math tutoring because he was exceptional at math (and had already completed all of the math courses offered in the school district). He provided them both an equal amount of “seed money” out of their fund to get things started - one of them used it to buy a used lawnmower and a snow shovel, while the other bought a printer cartridge and paper to make flyers. He then guided them on their business, acting basically as a free business consultant to them. The only requirement that he placed on the business is that half of the money either had to be reinvested in the business or invested in something else - they could spend the other half.

In both cases, the businesses thrived. The math tutoring child wound up with significantly more in his fund than his brother, but the lawn care/snow removal brother wound up with a lot of equipment. Both learned quite a lot about how to operate a business.

On their eighteenth birthday, they were gifted their funds. After that, the parents provided no more financial support. The person with the lawn care business took that money, bought a lot of ads and some new equipment, and expanded the business. The son with the tutoring business finished his senior year, then went to school to get degrees in both business and civil engineering on a nearly full scholarship, then worked at an engineering firm for six years while that fund still grew, then used it to put out his own shingle. He now runs an engineering firm.

To me, there is a lot of appeal in this plan. It relies heavily in constant fostering of self-reliance and entrepreneurship in your children, but it also gives them the opportunity to choose education if they so wish.

This doesn’t change my desire to save money for my child’s future, it just makes me reconsider putting the money into a 529. That money has tax benefits if used for education, but an extra tax penalty on earnings (10% more than long term capital gains) if used for non-educational purposes. If you assume they’re going to go to college, a 529 is the right way to go, but if they wind up starting their own business right out of high school - which an entrepreneur might - a 529 is a hindrance as compared to a normal fund.

Post courtesy of Trent Hamm

Money Poem From 6th Grader

A money poem written by a 6th grader for a contest:

M — Millions and millions would be nice.

O — Or maybe you can double that twice!

N — Now that you know you can save in an account.

E — Even if you don't have a grand amount,

Y — You can start a savings account, this way you will never run out!

from Cape Cod Online

College Students Learn Personal Finance From Their Parents

The majority of college students say they learn the most about personal finance from their parents, but less than half of students say their parents make a consistent conscientious effort to teach them, according to a new survey of over 2,000 students and parents conducted by The Hartford Financial Services Group, Inc. (NYSE: HIG).

Parents of college students have a somewhat different view. Nearly two-thirds (63 percent) of the parents surveyed say they definitely see personal finance education as their responsibility and consistently make the effort to teach their children about it, compared to the only 41 percent of students who say their parents did. About 70 percent of college students cite parents as their primary source of information.

The need for better personal finance instruction for young adults is one issue on which both groups see eye-to-eye: Students and parents agree that college students are not well prepared to deal with the financial challenges that lie ahead. Less than one-quarter of students (24 percent) and only 20 percent of parents say students are very well prepared to deal with the financial challenges that await them after graduation. Moreover, more than three-quarters of students (76 percent) wish they had more help preparing for their financial future, The Hartford survey found.

“These findings highlight the fact that many parents are stepping up to the task of teaching financial basics at home,” said Dr. Susan Coleman, Ansley Professor of Finance at the University of Hartford and advisor to The Hartford’s Playbook for Life financial education program. “At the same time, however, students don’t always get the message the first or even second time around. These concepts, which are new to most young people, require frequent reinforcement at home and elsewhere.”

Dr. Coleman emphasizes that acquiring personal financial expertise is a continuous learning activity that should begin at an early age. Parents can initiate and lead the learning process in any number of ways, but, she adds, “It’s important to invest time and effort on an ongoing basis to reinforce those lessons.” She offers parents the following suggestions for raising financially-savvy young adults:

Model good personal finance behaviors. Be a good role model by setting goals, creating a budget, using credit responsibly, and making saving and investing a regular practice. In other words, live your financial values.

Give children responsibility for their finances. Help your children accept personal responsibility for their financial situation at levels appropriate for their age. Require them to earn an allowance by doing chores and helping out, rather than just giving them money. Don’t buy them everything; instead, teach them to set goals and save for things they want. And don’t be so quick to bail them out – allow them to suffer the consequences of poor financial decisions.

Help students budget in college. For each year of college, help them determine the anticipated expenses – such as tuition, books, food, transportation, clothes and entertainment – for which they will be responsible. Then, determine how they will pay for those expenses – a part-time job, summer work – and make sure anticipated expenses and income match.

Be candid about credit. Have a frank discussion about responsible use of credit cards before your college student gets bombarded with offers at school, and before he or she gets into trouble. Explain that credit should be used for emergencies – not every small purchase. Also, make it clear whether you plan to subsidize that credit card usage, or whether he is on his own.

Discuss career options. Point out that there are different rewards – monetary and non-monetary – associated with different types of careers. It’s not obvious to young people that different career paths bring various economic outcomes and lifestyles.

Seize teachable moments. College breaks and summer vacations provide opportunities for renewed dialogue about personal finance. Recognize and praise responsible financial behavior whenever it’s exhibited.

“Parents play a crucial role in financial literacy because students get the majority of personal finance information from them,” says Dr. Coleman, “Young people value their parents’ experience and look to parents for this kind of information and guidance. But it’s important to recognize that financial expertise is a life-long goal. Many young people are overwhelmed; they think they are supposed to know everything and are bewildered that they don’t. We must keep in mind that financial skills are acquired bit by bit over the course of a lifetime.”

Few students head off to college with any formal instruction in personal finance. According to a study by the National Council on Economic Education, only seven states required personal finance classes in high school in 2004. Moreover, the study found that students entering college get a failing grade on personal finance knowledge, scoring 53 percent (F) on a basic 24-question quiz on economics and personal finance.

Frustration With Aid Applications

One of the issues with applying for student loans that is often overlooked is the time and frustration that goes along with it. Even at my age, I don't like to become frustrated (and throw a tantrum when I do). The Chicago Tribune has an article on how College aid forms tests families' pain threshold:

If you have just finished applying for financial aid for a college student you might have a few gray hairs.

Filling out a FAFSA—the form required for obtaining low-interest federal loans and college grants and scholarships—is a grueling process. It's so confusing and time-consuming that parents often start to think of their tax return as a walk in the park by comparison.

The good news? There's a bill called "College Aid Made EZ Act" that is intended to make it easier to apply for financial aid by simplifying the Free Application for Federal Student Aid form working its way through Congress. The best option is not having to apply for these loans by saving early, but for those that do, making the process as simple as possible is always a good goal.

14 Ways To Find Financial Aid

While this is not something that I am going to have to worry about since I'm starting my college savings early, that is not the case for everyone out there. Here are 14 proven ways to get financial aid from NextStudent

1. Search Far and Wide
2. Apply, Apply and Apply
3. Remember Cutoff Dates
4. Go Local
5. Be Careful Where You Put Your Money
6. Network
7. Look into Fellowships and Grants
8. Match up Your Interests
9. Serve Your Country
10. Look to Your Roots
11. Go Rural
12. There’s Always Begging
13. Try Again, Ask Your Parents for Help
14. Don’t Fall Behind

Of course, the best strategy is to start saving early so you don't have to worry about any of this when it's time to go to college ;)

Should Personal Finance Be A General Education Class?

Even at my young age, I can see the benefits of making personal finance a required course in both high school and college. This was the subject of an piece at the Daily Trojan college newspaper:

While a student can't earn a bachelor's degree from our fair university without taking courses in writing, global cultures and scientific inquiry, the essential subject of personal finance is totally absent from the curriculum. With all due respect to the academy, understanding how to manage money will be far more important to most upon graduation than understanding the sexual rituals of vanishing tribes in Papua New Guinea...

Some may argue that a school nicknamed the "University of Spoiled Children" wouldn't need to educate its students about money because they already have it; however, the problem with many spoiled children is that they've never known how to make it. With expenses reliably placed on parents' credit cards and the word "budget" absent from their vocabularies, students used to relying on an expense account while in school may face a rude awakening when they become independent.

I'm all for basic financial education for all and I hope that this isn't even a topic of discussion when I reach college age.

Personal Finance Courses Popular In College

Business week has written an article on personal finance courses in college:

Personal-finance classes—for business and non-business majors alike—are in demand among undergrads, who are looking to get a head start on their financial future. Olin's personal-finance course, which is about 10 years old, has grown from 80 students per semester at its start to 200 today.

Let's hope by the time I get there, it is a required class for graduation...