Avoid These 5 Things to Save a Little Extra Money

It can be tough to have a little extra money left at the end of the month after paying bills, contributing to savings and retirement accounts, while budgeting for grocery, gas, and spending money.  If you are even coming out ahead you are doing a great job, but there are a few, if you think about, really unnecessary expenses that we continue to shell out money of each month, draining our accounts.

Cable TV

If you think about how many channels you pay versus how many you actually watch, and how often you even watch those channels, it can be upsetting to see how much you are spending on your cable bill each month.  Not that there is anything wrong with watching TV, but cable companies need to figure out a way to make it cheaper before subscribers are totally gone in favor of $10 a month streaming services such as Netflix and Hulu.

Snacks

Not only for health reasons is it good to avoid snacking between meals, but you are essentially spending money on junk food.  Unless you are having the guys over to watch a game and you put out a spread of your favorite gameday snacks, you should avoid at the grocery store.  Not only will you save at the grocery store, but ever stop into a gas station to buy snacks?  Those little bags are triple the price what the full size would have been at the grocery store.

Energy Drinks

Trading one caffeine addiction for another (hey, at least coffee is cheap, and you can brew at home and take a travel mug with you), energy drinks have plenty of poison in them that should be avoided in your body, not to mention spending a few dollars per can, more than what 20oz of sodas would be.  Unless you are a high performing athlete (even that I doubt could be proven that they are more effective), you should stick to free tap water.

Online Shopping

Talk about something else that can be an addiction is online shopping, especially coming from someone who works from home and has access to the internet all day sitting at my desk.  It can be easy to be distracted to go on Amazon, order an item or two, and have it arrive at your doorstep in two days, not even having to leave the house to go to the store.  Do your wallet a favor, and stop the online splurging.

Eating Out

While it is a convenience to have someone else prepare your food, not to mention cleaning up, it comes with an extremely high markup that these days a couple cannot go out to a restaurant and get out for under $40 with a tip, and that is even on the low end.  While it is enjoyable to go out to eat, try only going once a week, or on special occasions and you will see how quickly the money will add up only sticking to grocery shopping and eating at home.

How to Improve Your Credit Score Starting Now

Your credit score is the first impression of you when it comes to lenders, and it can tell a lot about you, if you are a responsible borrower, or if you do not take your finances seriously.  Whether you already have great credit or you are in need of improvement, you should always strive for the best to take advantage of the best rates on the market.

Take a Look at Your Credit Report

The fastest way to improve your score may just be because of misinformation on your report that needs to be cleared up.  You should at least look at your credit report once a year to make sure that all personal information and accounts are up to date.  Keep in mind that reports are usually at least a month behind, so if you just made a large payment or closed an account recently it may not have caught up yet, so not to worry.

Pay Down Any Debt

If you have a spending issue now, the first plan of attack is to stop using a credit card to avoid continuing to rack up the account balance that you are currently not able to pay off, so why keep increasing it.  Cut up the card if you have to, whatever keeps you from spending, and really focus on paying down debt.  If you are carrying a balance over each month, you will be charged interest, so you will need to make large payments in order to see a reduction of the principal balance, instead of the payment all going towards interest charges.

Keep Accounts Open

A common misconception is that once you pay off an account, the first instinct would be to cut up the card and close the account.  While cutting up the card is not a bad idea so you can avoid using the credit card if you previously had a spending problem, but closing the account could actually hurt your score.  A portion of your credit score is based upon the overall debt to available credit, so if the account is closed, you could drastically be reducing your available credit and make your debt situation look a lot worse than it actually is.

Set Up Automatic Payments

The biggest advice to give, is pay on time.  Late payments that are thirty days past the due date can stay on your credit report for up to seven years, so to show lenders that you are a responsible borrower, make sure it is paid on time.  Not only to keep your credit report in check, but paying even a day late can incur late fees or hike up APR, which will make interest charges skyrocket.

Stop Applications

Although it is a small portion, credit inquiries do make up part of your credit score, so every time you apply for a new credit card, personal loan, or mortgage, when they pull your credit, it affects your score.  Try and make sure that if you are having your credit pulled, you are looking to proceed if it improves your situation such as a mortgage refinance to a lower rate, or a credit card with say 0% APR.

5 Smart Ways to Use a Tax Refund

Tax time can be a little stressful.  It is when you take a look at all the documents, expenses, and hopefully receipts, over the past year to see where you fall.  The goal would be to have a $0 refund, which meant that you paid enough taxes during the year and received the most in your paycheck, but if you are lucky to get money back, try and spend it wisely.

Home DIY Projects

If you have not already been thinking what you wish you could do around the house if you magically came across some money, well this is your lucky day, so spend it wisely.  With buying some higher-end paint, you can bring new life to a room, and adding a fresh coat of white for the trim and doors to really made it pop.  Replacing the worn-out carpet can be fairly inexpensive to do as well.

Build Up an Emergency Fund

If you ever heard your parents say “put it in the bank”, this is one of those times when you get a little money that you want to spend, but need to hold onto it.  Experts have long said that you should have between three and six months’ worth of expenses on hand in case of a job loss or event where you need money to fix an appliance or car repair.

Decrease Debt

If you are carrying a credit card balance over month-to-month there is plenty of interest being charged that could have been used elsewhere, so it is always good to pay off the balance each month, but in the event, that you have not been able to, then you should pay down debt with a tax refund.  Some cards can have an APR of 16%, so most of your monthly payment could just be going toward interest and not putting a dent in the principal balance.

Take a Vacation

I am cautious saying this as it seems that I may be giving a nudge to blow the money but that is not it at all.  If you stick to a budget and live frugal the rest of the year, then you may be in for a long overdue vacation that you are able to take for free with a tax refund.  After all, it is important to save, but life experiences are as important to others as well, so make sure to still live life, without breaking the bank of course.

Donate to a Charity

Sure, this may not be the first idea that comes to your head when you see a check made out to you come in the mail and get you excited, but your donation could go a long way for those in need.  There are endless numbers of charities that are out there, so give to one that you are most passionate about, whether it be child, animals, or research.  If you are wondering what is in it for you, besides given to someone less fortunate, you will be able to write-off on your tax return, getting a little back when you file next year.

5 Hidden Fees to Watch Out For that Could Be Adding Up

As if we do not have enough everyday expenses that add up to huge monthly costs that eat up our paychecks and hold us back from building up that retirement savings.  Sure, it is our own fault it we splurge on spending and not focusing on sticking to a budget, but some are just unavoidable that are not displayed in the beginning, but give a huge shock when the final total is added up, so keep your eyes peeled at some of the common hidden fees.

Event Ticket Purchases

Take it from someone who attends a lot of concert and sporting events, that most of the ticket charges are extra fees.  Whether it is from the venue’s site, Ticketmaster, or third-party sites such as StubHub, it is nothing but fees, charging upwards of 30% of what the face value of the ticket is, by the time you add in service fees, delivery costs, and even added-in parking costs.  Do yourself a favor and try and buy all tickets in-person, directly at the venue’s box office to avoid any extra fees.  This way you are able to attend more events, and it is comforting seeing the ticket say $25, and it is not actually $40 by the time you add in all of the extra charges.

Extra Hotel Charges

Speaking of extra charges, when it comes to booking a hotel room, the actual room rate is not bad, but by the time you add in the taxes, it really boosts the price up.  If you are looking at rooms in Las Vegas, for example, keep in mind the extra “resort fee” which can be upwards of $30 per day added to the daily room rate.  Since all of the sites have their own fees, try and get the best final rate between the hotel’s website and all of the various travel sites.

Inflated Cable Bill

You see the ad for cable where you get it for $20, but add in a decent cable package, HR, DVR, not to mention internet and you quickly build up a hefty monthly fee.  Wait until the promotion period is over and you will really see your bill skyrocket, reaching $200 a month, and you will start dialing customer service right away to lock you into a better deal, just make sure you continue to escalate the call to someone that will give you the best deal, even if it is sending an email to the CEO’s office to help.  Most locked in periods are for two years, so savings over 24 months can really add up.

Banking Fees

This is the reason that I switched to a credit union.  There are no monthly “maintenance fees”, or minimum balance requirements that can see $10-20 a month in unnecessary charges to your account that can otherwise be avoided going elsewhere.

Airlines

When you book a flight, do not ignore the extra $30 each way to add in baggage, not to mention if you want to select your seat beforehand.  A $200 deal you think you can be getting on a flight quickly turns into $300 after taxes and baggage.

How to Financially Plan for the Birth of a Child

The birth of a child is said to be a miracle, but it is a miracle that we can even afford children in this day and age.  If it is your first child, you are in for a rude awakening.  According to a recent study by the U.S. Department of Agriculture, the cost of raising a child born in 2015 until the age of seventeen is $233,000, or $13,000 a year, and that does not include the cost during pregnancy or the whopping costs of college.  Before your little one is born, try and plan for what will likely to be a huge hit to the wallet.

Budget

Having a household budget is important no matter the size of the family.  It may be a little easier to budget if you are solo or even married, but throw in children to the mix and you will begin to adjust on the fly.  Babies bring extra expenses that come with medical bills, but as the child gets old you will need to factor in food and activities to monthly costs.  It is no wonder that two-thirds of American’s fail at a successful budget.

Start Saving for Day Care

As soon as you find out you are having a baby, it would be a good time make sure not only that emergency fund is built up, but that you begin to save for day care.  With most day care centers charging upwards of $60 per day to care for your child, for working parents that will add up to huge costs over the course of a month.  Figure around twenty working days, you can plan on spending the cost of an extra mortgage payment a month.  Maybe you have a relative or friend that is retirement age that wouldn’t mind being paid a discounted rate.

Try and Make Other Sacrifices

Like any successful budget to work, you will need to reduce unnecessary expenses so that at the end of the month, there is more money coming in than going out.  Well throw in having a child, and you will need to continue to cut spending even further, most likely reducing some of your priorities.  If concerts are your thing, maybe you go to a few shows a year instead of all of your favorites.  Eating out is probably the biggest money saver, so if you really try and stay strict on going grocery shopping and only going out to eat once in a while, you will see the savings add up.

Life Insurance Premiums

If you are looking to leave your spouse and baby with a comfortable means to live on for a while due to your unfortunate passing, then setting up a life insurance policy right away is a must.  Premiums will begin to go out the older you are, so if you are young, healthy, and free of tobacco, then you could probably get a good thirty-year policy for around $40 a month, which is not bad knowing that at least your family is taken care of if something were to happen.

New Homeowner’s Be Sure to Take Advantage of These Tax Breaks

Owning a home is exciting, gives you a sense that you have “made it”, but that soon wears off as the constant home improvements start to kick in.  While you start to contribute much of your take home pay towards your new home, at least make sure you take advantage of a few tax breaks to net you a little more in your pocket during tax season.

Mortgage Interest

If you wonder what most of your monthly mortgage payment goes to, take a look at your account statement and you will see that a majority goes to interest and little goes to principal.  As the years go by, less and less will go towards interest, but the good news is at least you can write-off mortgage interest.  Your lender will send you a 1098 form that will show the total interest paid for the year.  It might make you sick.

Property Taxes

Also on the 1098 statement from your lender you will find what you paid in property taxes for the year, and this can also be deducted on your tax return.  The trick is you will have to itemize, but given that you have not added a few extra deductions by being a homeowner, you will most likely benefit from itemizing.  If you have purchased the home throughout the year, you are able to deduct the taxes paid from the date of the sale on.

Energy Efficient Upgrades

Good news and bad news for this beneficial deduction.  The good news is that deduction for energy-efficient improvements will return you 30% for installation renewable energy sources, or 10% back for energy-efficient products purchased between $50 and $500.  Now for the bad news.  Hopefully you had plenty of upgrades completed in 2016, because the credit expires as 2017 begins, so anything completed this year will not be able to be deducted going forward.  For those receipts that you do have for 2016, you will include in the 5695 form.

Home Office Deduction

With so many companies allowing work-from-home, you can not only take advantage of avoiding getting dressed for work and sitting in rush hour traffic, but get a little back on your tax return.  The simplified method would be to take the square footage of your home office and get a calculated deduction.  The regular method would be to figure out what percentage of the home office takes up the total home expenses.  Will be easier to use the simplified option, just be sure that you can prove you use the home office for 100% of work use.

Donations to Charity

Although you do not have to own a home to get a donation to charity credit, but I wanted to make sure I included to be sure that you do not forget this, especially if you owe taxes this year.  If you have had any life changes such as marriage or buying a house it can take a year or two to figure out your optimal tax situation (per paycheck tax payments or getting too little or too much tax return).

How to Keep Personal Finance Successfully Organized

Usually the end of the year can be a reflection period when it comes to our personal finances.  We take a look at what we have in the bank account, how much debt we have, and wish we could have done things different.  There can always be improvement and it is never too late to start.

Set Up Payment Dates

With so many payment due dates between the mortgage, loan, utilities, phones, and credit cards, it can be overwhelming to keep track of the payment due dates and when to make payments to ensure you have sufficient funds, with enough money left over for everyday expenses such as food and gas.  If you are paid bi-weekly, for example, try to evenly distribute expense payments between the paycheck dates, setting up automatic payments for the best payment dates.  As long as you do not pay late (mortgage and car lease usually have grace periods), paying on or before the due date that spreads out available funds may work better instead of say paying all in the beginning and not having much left for the remainder of the month.

Direct Deposit to Savings Account

If you set aside money for yourself automatically, there will be less temptation to spend it on unnecessary items and prepare yourself for financial success in the future.  Setting up a payroll direct deposit to a savings account will be a great way to contribute every paycheck, building up that much needed emergency fund in case a large unexpected expense were to occur.

Monitor Every Dollar Spent

As you are working on getting your finances in order, one thing that needs to be a way of the past is careless spending.  It is time to get out the bank and credit card statements and monitor every dollar that goes out.  Take a look over the course of a month what the spending was, see if you can separate what was a monthly bill, and what was spending money.

Follow a Household Budget

Now that spending is under a microscope it should open up your eyes just how much money is going out the window every month and it is time to lock up the wallet.  Start allocating funds to needed monthly expenses such as utility bills, mortgage, car lease, and necessary spending on grocery shopping and gas, while still contributing to a savings account.  This should hopefully keep a tighter budget within the household and limit spending to necessary items.  Be sure to still budget for fun, as that does not have to end entirely, just have to be smarter about spending without sacrificing your future.

Keep Track of Documents

As you are about to find out as tax season approaches in April, if you haven’t already started piecing together to prep your upcoming return to see if you are getting a refund, it takes time to gather up all of the documents.  Compiling in a folder on your computer, or even printing out and storing in a file cabinet, keeping important documents such as W-2’s, student loan interest forms, mortgage loan interest statement, charity deductions, etc. in an easily accessible place will help when it is time to file.

Best Ways to Simplify Your Credit Cards

Depending on your discipline with credit cards, they can be a huge benefit by getting cashback using for spending, or the death of you with overspending and interest charges.  Credit cards can be stressful, even if you are on top of your finances, so why make it even worse by juggling multiple cards, due dates, payment balances, and keeping track of which reward is for which card.  Give yourself a break and save a few gray hairs by simplifying credit cards the best you can.

Limit the Number of Cards

Using multiple credit cards for spending can get tricky when it comes to payment dates, balance, and interest on each card, so why not limit to only one card with a balance, while the rest are at zero.  It is important to leave the remaining cards with a zero-balance open, and not close them, as closing could reduce your credit score by lowering the available credit.  If you are worried about using the other cards, then simply cut them up, that way you will not be able to use them, while the accounts will remain open.

Monitor Account Statement

Now that you are down to using only one credit card throughout the month it will be easier to track spending.  Take a look at the previous month’s statement and go over line by line every dollar spent and split up into categories such as necessary and unnecessary spending.  If you need to take it a step further, you could break up the necessary spending into further categories such as monthly expenses, gas, food, although the food spending will most likely trickle into the unnecessary spending, as down the road you can hope to reduce the number of times eating out.

Pay the Full Balance Every Month

Some will say that automated billing payments are necessary in order to simplify credit cards, but that will only work if you are paying the full account balance. Paying anything less than the minimum payment will only lead to interest charges that will take over a majority of the monthly payment and limit the amount of principal balance that will be paid.  By making the entire balance payment you will eliminate any extra charges in interest and start fresh each month, although you will need to make sure the regular spending occurring throughout the month will be able to be paid in full the next month.

Try Not to Ignore Rewards

With so much competition between the creditors trying to win over your business, as long as you have a great credit score, they should be lining up to provide you with rewards in return for spending.  When figuring out the credit card you are going to use regularly, you should pick the one with the maximum rewards, such as cashback, miles, or point for gift card redemption.  If you do not have a rewards card, then it would be worth the initial credit score hit for the application inquiry in order to save on rewards the remainder of the year.

Take Advantage of 5 Free Things You Always Had to Pay For

As we find ourselves getting older we always look back and say “I remember when…”, sounding like our grandparents did to us when they would say they would have to walk to and from school in three feet of snow, making note of how easy we had it compared to them.   Our kids have it even easier than us when it comes to items that we used to have to pay for that are free now.

Current Events

I was actually kind of sad when I cancelled my newspaper subscription.  My whole life since I was a kid I have known the newspaper to be part of the morning, and even when I didn’t read the paper, could look forward to the Sunday sale papers.  Now, I find myself reading it every day now, but online, for free.  I even remember having the newspaper at the library attached to those sticks.  Let’s hope the website ads are helping to pay for the lost subscriptions, otherwise I will feel really bad.

Checking Your Credit Report

These days you are entitled to one free copy of your credit report once a year from each of the three major credit bureaus:  Equifax, TransUnion, and Experian.  Much like anything you have to enter your personal information, especially your social security number, so you will want to make sure it is a legit site, so if you are not clicking a link off their sites, AnnualCreditReport.com is a trusted site.  The credit score is not included, that will be an additional charge, but with most credit card companies giving your score on monthly statements, you should not have to shell out the extra money.

Every Song at Your Fingertips

This is not talking about downloading songs from pirate sites, that is free and illegal, but something that is free to use and legal (for now), and always a topic of conversation around the industry, is streaming songs.  With sites like YouTube, you can find literally any song to listen to, and with music streaming site such as Spotify and Pandora, as long as you don’t mind a few ads, you are able to listen to stations, genres, and artists of your choosing.

Making Long-Distance Calls

Probably most of you reading this article does not remember having to dial a (1) and then the area code when having to make a long-distance call from your landlines, but I bet your parents remember getting the phone bill in the mail with the outrageous charges and screaming when they see what the damage is.  Now I suppose parents could yell over minutes and data usage.

Directions

It is not only the gas station maps that we used to have to pay for, but I thought it was the greatest when I got my Garmin GPS as a gift, but even those are obsolete a decade later now that we have the free map app on our smart phones, only using the data we have included in the plan.  The other plus is that the app can refresh when maps are updated, giving you the latest possible info.

How to Get Finances in Order to Start 2017

The end of the year is usually a period a reflection, not just where you are with your life, job, dating, but also where you stand financially.  If you have made poor choices when it comes to spending or a lack of saving, then it is never too late to turn things around.  Putting off any financial responsibilities to the future will never leave you in a good position in retirement.  Even if you are in your mid-thirties it may seem like you have all the time in the world, but think about how quickly it has gone by since you have been out of college.  Take a look at your finances and have a great start to 2017.

Use a Budget

Creating a budget to track all of the money going out and coming in is not entirely difficult, but actually sticking to it is another story.  It can be easy to quickly dismiss if a budget is failing, but it actually will take a few months to tweak it to work.  If you are unwilling to remove any unnecessary spending, or have the wrong amount of funds allocated to each area, you may be doomed from the start.

Don’t Forget About You

A recent study by GOBankingRates found that one-third of Americans have absolutely nothing saved for retirement, with a separate study showing the same amount of us have nothing saved in savings account either.  What that means is that if there are no adjustments made now, you will enter your golden years with a penny to your name.  Start taking advantage of company matched 401(k), or invest in either a traditional IRA or Roth IRA to invest in your future.

Take a Look at Your Credit Score

With so many credit card companies offering your credit score free on monthly statements, there should be no reason you could be in the dark when it comes to your credit.  Once a year the major credit bureaus offer a complete copy of your credit report (without a score) free, so you can review for any inaccuracies, especially if you plan on having your credit pulled for a refinance/purchase loan, where higher interest rates could cost you thousands over the course of the terms.

Put Year-End Bonus to Good Use

Getting a holiday bonus is great and the first instinct may be to blow it on something you have always wanted, but before you go running to the store, make sure it is going to good use.  Any extra money should be first going towards paying off debt and setting up an emergency fund.  Only after that should the money be spent elsewhere.

Gather Up Charitable Donations

It can always be scary to wonder how much you will owe when it comes to filing your tax return, so why not have a little extra coming back being able to write off charitable donations.  Cleaning out your closet, garage, or basement could be great places to donate clothes and other household items to those in need.

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