Discover Debt Freedom!

Saving enough money to be able to handle most of the issues that occur in life can be very difficult for many people.  They may believe that they do not make enough money to be able to save any significant amount in their savings account or they may be constantly taking the money out of their savings account to pay for other items that they believe that they need.  Saving money can be accomplished by anyone at any income level, as long as they are dedicated to creating a system for saving and sticking to it until they have reached their financial goals.

1 – Trim The Fat From Your Everyday Expenses
Most people have many things that they spend money on each day that they could trim from their budget and possibly never even miss.  Instead of purchasing lunch at a casual or fast food restaurant each workday, try taking your lunch with you to work and pocketing that $5 or more that you are spending each work day.  At the end of the year, you will have saved over $1,000 simply by changing your eating habits and taking your lunch to work each day.

2 – Find Alternate Forms Of Entertainment
Cable television is one of the biggest expenses in a household and many people do not watch the television enough to justify all of the channels that they are purchased with their cable package.  Many movies and DVD box sets of television shows can be purchased at a reasonable price and there are a number of stores that specialize in reselling used DVDs at an inexpensive price.  If you are only watching a few hours of television today, consider getting rid of that expensive cable package and investing in a collection of DVD’s of the shows and movies that you really enjoy watching.

3 – Reduce Your Energy Consumption
Energy bills for the home can take a large bite out of your available finances each month.  By using some simple energy saving methods, such as replacing old weather stripping that may be letting heat out of the home, turning down the thermostat a few degrees, or turning off the lights and the television set when you leave the room, you could be saving hundreds of dollars on your energy bills each year.

4 – Reduce Your Gasoline Consumption
Over the last five years, the price of gasoline has skyrocketed to levels that have never been seen before.  By carefully planning your day, you may be able to reduce the amount of miles that you drive and the amount of gasoline that you consume each day.  Plan to run errands on the way home from work so that you are not making a separate trip or plan to carpool to work with a coworker on certain days of the week in order to save a significant amount of gasoline each month.

5 – Reduce The Number Of Brand Names That You Purchase
Many people purchase brand name items, not because they are better, but because that is what they have been programmed by commercials to do.  Many store brands and items that have no brands are just as good as the name brand items, but cost a lot less because you are not paying for the name and the advertising associated with the product.

Are you interested in getting out of debt and stopping the monthly payments you must make to your creditors?  If so, you are in the company of about 75% of the population that has found themselves with more debt than they are comfortable with.  There are certain steps that can be taken to eliminate the debt that you have and prevent you from accumulating more, which is the only way to truly realize debt freedom.

Step 1 – Changing The Way You Think About Debt
In recent years, debt has become an acceptable way to get the things that you want quickly, instead of saving up for the items over time as our parents did and only purchasing the things that you can afford.  This has translated into the highest level of consumer debt in history and millions of people across the nation filing for bankruptcy protection from crushing debt.  In order to become debt free, you must begin to think of debt as something to be avoided at all cost and conduct your life accordingly.

Step 2 – Stop Digging The Hole That You Are In
The biggest step in eliminating your debt is to stop creating more debt.  You will never eliminate the pile of debt you have accumulated if you are adding to the total each month by purchasing more items.  If you have credit cards, put them away somewhere that they are not easily accessible and stay away from the stores where you know that you always purchase more than you intended to.

Step 3 – Make All Of Your Payments On Time
Nothing increases debt faster than penalty fees on an account and you are not receiving any benefits from the extra money that you are paying to the companies.  Penalty fees assessed against an account for paying the bill late can range from $5 for the cable bill to $39 for a credit card bill.  If you are being assessed numerous penalty fees on several different accounts each year, you could end up paying thousands of dollars extra to these companies in a very short period of time.

Step 4 – Cut Out The Convenience Fees
There are many different things that people do without thinking that could be classified as a “convenience fee”, such as the $2.50 paid for the convenience of using an ATM that is not branded to your bank or the $4 paid for the convenience of purchasing a coffee instead of brewing your own at home.  Over time, these convenience fees can add up to thousands of dollars that could have been saved by taking a few minutes out of your busy schedule to do things for yourself or to plan ahead for the things that you will need throughout your day.

Step 5 – Save Money For Emergency Expenses
One of the biggest reasons that people fall into debt and remain in debt is that they spend all of the money that they make and do not have a cushion to use in the event of an emergency.  If you have no savings when an emergency financial situation arises, you are much more likely to charge the amount to your credit card, where you will pay up to 30% interest, or you will take out a payday loan, which charges 390% interest packaged to look like a fee and can trap you in a cycle of debt that may take months to release yourself from.  By placing some money aside in a savings account, you can ensure that you will not have to use either of these options when a financial emergency arises.

Planning for retirement is one of the hardest financial decisions for a person to make because there are so many unknown factors that could affect the outcome of the decision.  Many people do not want to put too much into their retirement savings because it could affect their quality of life today, but do not want to under fund their retirement because that will make it harder to live comfortably during their retirement.  So how much should an individual put into their retirement savings?

The Rule Of Retirement Funding

A good rule of thumb to use for determining the amount of money an individual should be putting into their retirement savings is to save 10% for the basic needs, save 15% for comfortable living, and save 20% to be able to travel.  This rule of thumb is intended for the people that begin to save for retirement at age 30 or before and is a pretty good measure of how much money you will need to maintain your current lifestyle during your retirement years.    If you are starting to save for retirement after the age of 30, you will need to add 5% to the amount of money that is recommended for saving in order to be fully financed when you reach retirement age.

The 10% savings rate that is recommended to cover the basics will ensure that the person will have their basic needs taken care of during their retirement.  This includes housing, utilities, food, and clothing, but not much else.  If you are not making very much money, or your family obligations do not leave a lot of extra room in the budget for retirement savings, then saving 10% is a good beginning to make sure that you have some money for retirement.

To maintain your current standard of living, experts recommend that you save at least 15% of your earnings in a retirement savings account.  This will ensure that you have enough money to cover the basics, plus some extra cushioning for emergencies and small luxuries.  Although this will not allow you to live a life of luxury during your retirement, you will be comfortable and be able to handle any small emergencies that come your way.

If you would like to travel around the country or see distant lands during your retirement, then you should be saving at least 20% of your income in a retirement savings account each year.  Traveling can become very expensive and, even if you only plan one or two trips each year, the expense of traveling can quickly deplete your retirement savings.  By following this retirement rule of thumb, you can make sure that you will be living comfortably and have the funds to do the things that you would like to do after you retire.

Short term savings are very important for life’s little hiccups, such as repairs to your home or medical bills for an unexpected illness, but many people are unprepared for these minor emergencies because they do not have any savings in the bank to use for these issues.  Unexpected expenses are a major cause of people falling into debt that they cannot get themselves out of or credit card bills that continue to mount each month because of the steep interest rates charged to the purchases made with the credit card.  With six simple steps and a little bit of time, you can remedy your situation and begin to build up your short term savings account.

1.  Add Up Your Monthly Expenses
Before beginning a savings program, you must first calculate how much you are spending each month on all of your normal expenses.  This should include both large expenses, such as your monthly mortgage or rent payment, and small everyday expenses, such as paying for gas to get back and forth to work.  It is important to be honest about the amount you are spending for each item in order for the calculation to be accurate.

2.  Multiply This Number By 6 
Multiplying the number reached in the previous calculation by six will give you the total amount of money needed to maintain your current lifestyle for six months.  This is the recommended amount of savings that every person should have in the bank according to many financial experts.

3.  Add Additional Funds For Unexpected Surprises And Upcoming Expenses
It is always a good idea to pad your short term savings account with a little extra just in case you’ve forgotten anything in your previous calculations.  If you know that your child will be needing braces in the next few years or that you will need to replace the water heater in your home, add the cost of these items into your short term savings calculation as well to ensure that the money will be available when it is needed.

4.  Comparison Shop For A Place To Stash Your Cash
Different banks and different banking products will often offer different interest rates for placing your money into a specific type of account.  Because your short term savings will (hopefully) remain in this account for a significant period of time, it is important to get the best return on the money being held in the account.  Shopping around for the best interest rate will help your money grow more quickly and give you an even larger cushion for unexpected life events.

5.  Begin Making Payments Into Your Short Term Savings Account
Once you have determined how much you will need to save and where the best place to put your money will be, it is time to begin an aggressive savings plan to reach your calculated savings goal.  Paying into your short term savings account should be treated like paying a monthly bill and money should go into the savings account before you begin spending money on entertainment or unnecessary luxury items.

6.  Don’t Touch The Account
The most important part of starting a savings account is actually saving it.  After your savings goal has been reached, your short term savings account should remain untouched unless there is an actual emergency, such as the loss of a job, an illness that prevents you from working, or emergency repairs that need to be completed quickly.  After all, that is what the money has been saved for.

One of the biggest reasons that many individuals fall into debt is that they do not have emergency funds available to take care of the emergencies that arise in their lives.  Unexpected expenses can arise at any moment and can be devastating to an individual or family that is not prepared for it.  It is very important for everyone to have an emergency fund and here are a few quick tips for creating one.

Beginning An Emergency Fund

It is very easy to create an emergency fund.  The first step is to calculate how much money you spend on your monthly expenses each month.  It is important to add in some extra money to cover those expenses that are unexpected but tend to occur with some frequency, such as having to purchase a new pair of shoes because the old ones are worn out or spending extra money in gas because you have to travel much farther than you expect.

The next step is to choose a time frame to save for.  Everyone should try to have enough money in savings to cover at least six months of their expenses, in case they lose their job or face a huge financial issue, but many individuals could get by with around three months worth of savings in the bank.  Individuals that make more money should be trying to put more money away, but even individuals that are living paycheck to paycheck will be able to save some money for a rainy day.

Time To Save Money

Saving enough money for a good emergency fund will take some sacrifice on the part of the individual, but it will be well worth it in the long run.  There are many daily expenses in most individual’s lives that they can do without for a period of time and the money saved can be placed directly into the emergency fund so that it can build quickly.  Unnecessary items that many individuals spend money on during their daily lives, such as specialty coffees or expensive lunches out during the work week, can be sacrificed for the greater good of padding your emergency fund.

Many individuals find that the items that they sacrificed to create their emergency fund are not as important to their daily lives as the items first seemed.  These individuals continue to avoid the extra expenses and save more money towards their emergency fund or for things that they desire to make their lives better.  Learning to save money can be difficult for individuals that do not have much experience with saving money, but the skill will help the individual live a better life and assist them in preparing for their future. 

One of the easiest ways for a person to take control of their finances is tracking their spending and their debt.  Many individuals do not know where their money is going each month because they have not kept track of the things that they are paying for and are often surprised to see the amount of money they have been wasting on frivolous objects once they do begin to track what they are spending their money on.  Before any financial process can be put into place to manage your finances, you must track your spending to find out where your money is going.

How To Begin

The first step in taking control of your finances is to begin to track all of the things that you are spending your money on each month.  This includes not only your bills and other major payments made on a monthly basis, but also all of the little things that you may spend money on, such as specialty coffees, weekday lunches, and movie tickets.  Although these items may seem like minimal purchases that would not do much to your bottom line, you would be amazed at how much these tiny luxuries cost over the course of a year.

For a period of at least one month, you should track everything that you are spending money on, from bills to groceries to snacks out of the vending machine.  The easiest way to do this is to keep a pen and a small notepad in your pocket or purse that can be pulled out and updated each time you spend cash or place an item on your credit or debit card.  Tracking everything that you spend money on during this time period can help you recognize trends in your spending habits and areas where your spending can be cut.

The Result

Once you have tracked your spending for a period of time long enough to get a good picture of your spending practices, it is time to find the areas where your spending can be cut to keep more money in your pocket and make a budget that will allow you to save more by spending less.  In most cases, the individual will find multiple areas where they can save money by switching one item for another, such as brewing coffee at home instead of purchasing it from a retailer or bringing lunch from home instead of eating out during the work week.  The money saved from these simple changes can be added to the money going towards your bills or placed into a savings account for a rainy day.

Getting out of debt might seem impossible if you’re dealing with it on your own. Get in touch with experts in debt help and get advice on various debt solutions available such as an IVA, debt management or bankruptcy.

Everyone knows that many retail stores use devious little tricks to entice consumers into spending more than they intend.  Subtle tricks, such as placing the least expensive brands on lower shelves out of eyesight or moving the items that many people come into the store for to the back of the store so that people have to walk by more items that they may buy on impulse, have become more commonplace over the years and some people believe that these tricks have contributed to the culture of debt strangling the nation.  It is possible to beat these stores at their own tricks, but only if you are able to recognize what the tricks are.

1. Avoid Impulse Purchases
Stores position their items in the store with the goal of tricking consumers into buying more items than they intend to.  Common methods such as placing slower moving items in huge piles with brightly colored signs is designed to draw your eye and start you thinking about purchasing the item, and chances are once you begin to think about purchasing an item, you will put the item into your cart.  The way to avoid purchasing items that you do not need is to begin making a list of the things that you need before you leave your home and stick to the list once you have arrived at the store. 

2. Pay Off Store Credit On Time
Many stores will offer free financing for a period of time, typically 6 months to 1 year, in order to draw you into the store and give you a false sense of security about making a larger purchase than you can currently afford.  What many consumers tend to forget is that if the total amount of the purchase is not paid off by the time the grace period expires, the consumer will have to pay interest on the total amount of the purchase from the day that the item way purchased, a move that could add hundreds of dollars to the purchase price of the item.  If you would like to take advantage of a financing promotion offered by a retail store, be sure to pay off the purchase before the interest rate grace period has ended and you have just used the stores money for 6 months for free.

3. Purchase Sale Items And Leave The Store
Many stores use sale items as a way to get consumers into the store where they can be bombarded by all of the other tricks stores use to get consumers to purchase their items.  The sale item may be a great value and save you a good deal of money, but that savings cannot be realized if you also purchase the overpriced items that the store actually wants you to buy.  If you are going to the store to purchase the sale item, go directly to the item in the store, purchase it, and leave.

4. If You Only Need 1, Only Buy 1
Everyone has seen the offers for “2 for $5” or “3 for $10” deals used by some companies to move additional merchandise.  What many consumers fail to realize is that, in many cases, they do not have to purchase multiple items to realize the savings, so that single laundry detergent that is listed at “2 for $6” will only cost you $3 if you put it in the cart alone.

5. Leave The Carts At The Entrance
If you are only running into a store for one or two items, there is really no reason for you to push a cart through the store.  Stores offer carts to consumers in the hopes that they will find more things to put into the cart as they wander through the store looking for the items that they need.  If you do not have a cart to carry the excess items, you are much more likely to leave them on the shelf.

As today’s economic landscape becomes more unstable, many individuals are wondering how they should save for their retirement. As they watch their home values shrink and dozens around them losing their jobs, many individuals are concerned about their financial future and being able to be comfortable during their retirement.

Retirement planning is just as important in a weak economic landscape as it is in a strong economic landscape. The clock is still ticking toward your retirement date and every day that you are not saving money for your retirement is another day that you are not earning interest on your savings.

How Important Is Saving For Retirement?

Some individuals believe that saving for retirement should be placed on the back burner when an economic downturn occurs, with more of the money going to shore up the household finances. If the family has no other options to be able to pay their bills, then more money may need to be diverted from retirement savings into the household budget.

Diverting retirement savings to household finances should be an absolute last resort. The first thing that individuals should do when facing an economic hardship is to see if there are any unnecessary expenses that they can cut from their monthly budget in order to save more money, such as a high cell phone bill, eating at restaurants, or extra cable channels. Many individuals find that they have a lot more money left in their pockets once these expenses are removed.

Don’t Crack Your Nest Egg

The money that you have already saved for your retirement should remain untouched, even if you must reduce the percentage of your paycheck that is going into your retirement savings. It is much more difficult to replace the funds that are taken out of the retirement account than it is to resist touching the account and finding other means to come up with the money that is needed.

Money that is removed from a retirement savings account is no longer earning interest for the account holder, which means that over time, the individual will earn less interest on their retirement savings, even if they return the money to the retirement account within the next two years. The loss of interest that would have been earned on the account if the money had not been touched will be significant and can never be replaced, even if the total amount of the money taken is replaced at a later date.

In an economic downturn, saving money for your retirement is still important to secure your financial future. You may have to go without the extra items that you enjoyed while the economy was booming, but that is much better than not being able to pay your bills or purchase groceries in retirement because you have depleted your retirement savings.

Gasoline to power our cars has become a significant expense for many individuals around the world.  From the United States to the United Kingdom to China, the cost of a gallon of gasoline has risen by an outrageous rate over the last year.  Now, average individuals are feeling the pain in their pocketbooks and are looking for ways that they can use to save money at the pump.

Saving money on gas is not difficult if you know the tips and tricks that can save you money and cause your gas to go further.  Although each tip may only save you pennies on the gallon, over time, the savings will add up and the methods will become routine.  Saving all of the money that you can on gasoline purchases will leave you with more money for other purchases.  

1. Shop around for the best price on gas.
The price of gas can vary by 5 cents per gallon or more from gas station to gas station and being able to find the station with the lowest price on gasoline in your area could save you a significant amount of money each year.  There are a number of different tools available to help consumers find the lowest priced gas in their area, including websites that display current prices for the gas stations in the area and text message alerts sent to your cell phone.

2. Stay away from gas stations near the freeway.
Gas stations that are located near to or just off of exit and entrance ramps to the freeway will generally have the highest gas prices because here is where many travelers get gas when they are running low and do not want to go far from the freeway.  Gas stations that are more than one mile away from a freeway exit ramp will have lower prices, causing you to save 5 cents per gallon or more by choosing that gas station instead.

3. Fill up in less affluent neighborhoods.
Individuals in affluent neighborhoods are less apt to complain about higher gasoline prices so many of the gas stations in those neighborhoods will advertise higher gasoline prices than their competitors in less affluent neighborhoods, where the pain is greater at the pump.  Branded gas stations will have the same quality of gas at both locations so purchasing your gas in less affluent neighborhoods will do your car no harm.

4. Use those grocery store gas rewards.
Many grocery store chains have expanded into gasoline sales at some of their stores and will give loyal shoppers a discount on the chain’s gasoline depending on how much the customer has spent at the stores within a certain time frame.  Individuals with a family that they must purchase groceries for will find that they can save as much as $0.50 per gallon per fill-up at the store’s gas station.

5. Use discount coupons.
Some gasoline retailers are offering discount coupons for gasoline and other related items at their stores.  If you are lucky enough to come across one of these coupons, do not be afraid to use them at your local gas station to receive a discount on the items that you by.  Remember, every cent saved is a cent that you can put towards another purpose.

There are many little daily expenses that can add up quite quickly and destroy a person’s attempt to save money.  These daily expenses are generally unnecessary and are merely a convenience for the person that is spending money on them.  If you would like to cut your daily costs and save a great deal of money over the course of a year, then eliminating these items from your daily routine can help you meet your savings goals.

1.  Workday Lunches
The average workday lunch eaten at a restaurant or taken back to the office will cost you nearly $8 per day, for a cost of $40 per week or $2000 each year.  Taking your lunch instead saves these costs and allows you to spend that money on other things.

2. Items From Vending Machines
The average item from a vending machine costs twice as much as the item would cost if purchased from a grocery store.  If you like to have a snack in the afternoon, bring one from home in your purse or briefcase and pocket the difference.

3.  Alcohol Purchases
The average price of a drink from a restaurant or bar is close to 300% more than the actual value of the alcoholic drink if it was mixed yourself in your home.  This is how the restaurant industry makes money on their alcohol sales, and avoiding alcoholic drinks at a dinner for two can save $28 or more off of the final bill.

4.  Cigarette Purchases
It has been reported that the average price of a pack of cigarettes in the United States is more than $4.50 per pack, with the price ranging as high as $7 in some areas, such as New York City.  If you are a casual smoker who only buys one pack a week, you are spending between $234 and $364 for cigarettes.  For individuals that smoke a pack of cigarettes a day, quitting smoking will save between $1638 and $2548 per year.

5.  Specialty Coffee
The average price of a daily specialty coffee on the way to work is around $2.50, costing $12.50 per week and $650 over the course of the year.  Consider brewing a cup of coffee at home and drinking it from a travel mug during your daily commute or once you arrive at work.

By eliminating these trivial items from your daily routine, you can save enough money to pay off a debt, take a vacation, or save up for a wanted item.  The money will begin to add up quickly and, in no time, you will not even miss the items that were given up.