Smart Purchases to Make Now

There are some purchases that are just worth it to open up the wallet a little bit and spend the money up front that can actually make sense to purchase the products so they not only last a long time, but save you money in the long run.  Budgets are important in every household, ensuring there are enough funds allocated to every necessary spending category such as the mortgage, utility bills, cars, insurance, not to mention gas, food, and spending money, but when purchases come into fruition, it’s when you may have to decide what is important.

Automatic Coffee Maker

Coffee is one of those expenses that may be deemed “necessary” by those that consume, but if you think about how much it would cost if you actually bought in bulk from Costco, still carrying your favorite Dunkin’ Donuts label, but for $16 for a giant bag of coffee grounds instead of $3 for a large cup of coffee, think about how much you could save a month if you brewed at home.  For around $25 you can get a programmable coffee pot that you can set the timer the night before to be awoken by the smell of freshly brewed coffee to take with you on the road to work.

Comfortable Mattress & Couch

You certainly get what you pay for, and if you buy the cheapest furniture on the market, not only could you have back problems from sitting on a cheap couch or even worse, spending eight hours a day on a poor mattress, not only will you have to replace them sooner than you would if you would have spent the money on a little better quality, you could have lifelong issues.  Think about how much you are in bed, and maybe make your mattress more of a priority.

Updated Laptop

As cheap as new laptops are compared to how quickly they are outdated, it doesn’t make any sense to hang onto anything outdated any longer.  Spending $700 now can get you something that can handle multiple applications, boot up within a matter of seconds, and can be as thin as a stack of papers, making it completely portable and easy to travel with, not to mention take up much space in your home office.  With just about every component being wireless these days, you will find the need for less cords and more of a portable desktop with everything you need in one place.

Formal Wear Built to Last

Sure, not everyone likes throwing on a suit or dress, but in order to succeed on a job interview or look respectable at a wedding without mismatched jacket and pants, or leaving the jacket out for that matter, for a few hundred dollars you can finally purchase a fitted suit that you can be proud to wear, and look good, and donate that old baggy suit that never really fit well.  For the amount of times that you will need to dress up in your life, it is nice to have that one suit that you can throw on, just don’t forget to keep it dry cleaned.

Avoid Making Credit Card Mistakes

Credit cards can be a blessing or an early grave if you aren’t careful.  The stress that debt puts on one’s shoulder can make you feel like quicksand with no escape, so there is definitely plenty of responsibility involved with having one.  To ensure that you are making all of the right credit card moves, try to ensure that you are avoiding any mistakes.  Even the slightest mistake could end up costing your money, as credit score is the major factor in deciding not only your application approval or denial, but what terms and interest rate you are going to be paying going forward.

Overlooking the Due Date

Late payments are extremely damaging to not only your credit account, but your credit report as well.  If you miss your due date you could get a late fee and interest rate hike as early as the next day, but when you hit thirty days is when your credit report is hit and your score is negatively impacted.  Handling your own finances takes work, but much like anything else in life, you don’t want to be late, so it shouldn’t stop with your bills.

Closing Zero Balance Accounts

Depending on the size of the credit card balance, it may have taken years to pay off, which is an accomplishment in itself not having credit card debt any longer, so to give yourself a pat on the back you might opt to close the account to save from using going forward, but this could actually hurt your credit score taking away from your available balance.  If you are looking to avoid using the card going forward you may just want to cut it up, and leave the account open to continue to build to your credit history.

Not Taking Advantage of Rewards

Credit cards are great when it comes to fraud protection, being able to book a hotel or rental car without worrying about a hold coming out of your bank account, but where credit cards really have the advantage are for rewards.  These can be points that accumulate when you make purchases that you can redeem for gift cards, or they could even add up as dollars to receive a check back once a year.  The down side is that the rewards keep adding up as you make purchases, so you want to make sure to not go overboard on spending, especially just for the rewards.

Paying Interest

There’s nothing worse than paying interest rate.  We may not be able to avoid it when it comes to large purchases such as a mortgage, or even an auto loan, but what we can control is spending within our means.  Credit cards do give us the grace period to pay up by the next billing statement, but if you are spending too much and can’t make that full payment, then a balance will carry over and you will begin to pay interest, which depending on the balance, could take years to get out of.

Ways to Save on Buying Clothes (Besides Buying Used)

Sure, we all enjoy going clothes shopping; it makes you feel good to wear something other than the tired outfits you continue to pull off.  The problem though, when does it become overspending and waste vs. a need.  Since we no longer need to do the “back to school” shopping ourselves, how often do you find yourself getting new clothes?  When you need something for the night?  Any every week or so experience?  Or do you just buy when you start to find holes?  No matter how often you purchase, there is definitely no need to overspend.

Take Proper Care to Last

As long as you are not buying clothes that fall apart with a couple of washes, you should be able to make them last quite a while.  I learned the hard way about not turning a couple items inside out, and a sports jersey started to peel off, but had I washed correctly, it would have lasted for years.  Pay attention to the tag on the inside, whether it’s dry clean only or machine wash (learned that the hard way as well).  Care can also matter when it comes to storage.  For sweaters, since you only wear, hopefully, one season a year, by hanging you can create stretches in the shoulders, so those are best to be folded.

Never Shop Without Coupons

This seems like it would be common sense, but a store’s sale, even a clearance, may not be enough.  There are always stipulations on what you can/cannot use when it comes to clothes purchases, but if you can gather coupons before you go, the better off you will be.  Stores like Express always have coupons with spending minimums, such as if you spend $100, you might get $25 off.  That is great, but keep in mind a lot of their items can end in 90 cents so it can sometimes be tough to hit the minimum exactly.

There’s Nothing Wrong with Generic

I know for me these days, my friends and I just wear plain solid color t-shirts, both V-neck and crew, and that is pretty much the extent of the shirt piece of the wardrobe.  That being said, who is to tell if I’m wearing a $40 solid color t-shirt, or a $8 shirt from Target.  The answer, no one.  So why bother spending more than you have to on a t-shirt when no one can tell the difference anyway.  I suppose you can tell a little more with a women’s dress, but I know my wife likes to “accessorize” and she can spruce up and outfit, expensive or less-expensive.

Shop for Need vs. Want

If you find yourself buying something to wear that night, or just because an item is on sale, you may want to evaluate and only go when it is a need.  If you can limit yourself to going once a year especially, but I know that may seem unreasonable, so maybe at least once in the winter and once when it gets warm may be better?

Ways to Save at the Grocery Store

Grocery shopping can be expensive depending on the family size, but still doesn’t compare to what it would cost to go out to eat.  If you can eat your meals at home, pack your lunch, and even brew coffee at home to take on the way to work, you could be saving hundreds of dollars a month.  The grocery store can be overwhelming, but if you have a plan going in, you can be successful and come out saving at the register.

Don’t Leave Home Hungry

The worst you can do to your grocery budget, and probably to your waistline, is go to the grocery store on an empty stomach.  You always hear of those that run in for milk and bread and come out spending $100, and don’t let you be another statistic.  When you are hungry, everything sounds good, so you will load up the cart with plenty of impulse, and most likely unnecessary purchases.  If you can eat a full meal at home you will have a much clearer head and can get in and get out with little damage done.

Stick to the Shopping List

You can also do damage to your wallet if you go in without a plan.  Not only will you probably forget a necessary item or two that you actually went in there for, but you will come out with much more than you needed if you don’t stick to a shopping list.  It can even help to not go up and down each aisle, but to just seek out the items on your list, that way you can keep your head down and focused on the shopping list and not products that stick out for you to buy.

Use the Rewards Card

Sure, the regular price items are probably more so they entice you to use your shopper’s rewards car, but then I guess why not use it.  You can use it for the promo items on sale, but also the more you use it at the checkout the more you can accumulate fuel points that you can redeem at the participating gas stations that will take money off each gallon of gas.  You can also go to the store’s website and load digital coupons to your card that will automatically take money off of the purchased item at the checkout, just the trick is remembering what you loaded, so you may have to print off the list as a reminder.

Shop During the Week

The stores are packed on the weekend, so there is little need for the grocery store to have any additional sales when they already know they’re going to be busy.  During the week, you can find many promos that will take additional money of the sale prices if you buy the ticketed items.  In addition to saving money during the week, you will also find the store less-crowded, especially if you go during my favorite time, which is mid-week, after dinner.  You will hardly see a soul in the store.

Tips to Improve Credit Score Even on a Smaller Income

Whether you make a million dollars per year or are living off of minimum wage, you are still responsible for your debt obligations.  Credit score is a huge factor in securing not only the best interest rates on the market, but can make or break even getting a mortgage, apartment rental, leasing a car, or could even cost you a potential job.  Even having a small income can’t be an excuse for lacking credit, so you should strive to have the highest score possible.

Make Payments On-Time

First and foremost, if you have monthly bills, pay them on time.  If you don’t, not only will you get late fees, but if you are thirty days late, they will show up on your credit report and severely damage your score, taking years to come off.  A large portion of your credit score is based off of history, so you want to show lenders that you are a responsible borrower when it comes time to application time, where any dip could cost getting you the best rate, which in turn will add significant amount of interest to your payments.

Come Up with Extra Money to Pay Down Balance

It is important to make sure you are out of debt, and I understand that making huge payments to pay down that balance can be tough on limited income, but in order to boost your credit score as your debt decreases and your available credit increases, you may have to come up with extra money somehow.  Now that it is summer, there are always opportunities to pick up a second job, but beyond that, you can have a garage sale, sell items lying around the house on Craigslist or eBay, or even donate items to get a tax break at the end of the year.

Keep Accounts Open, Even with Zero Balance

As you start to pay down and finally pay off credit card balances, your first instinct may be to close the account once it’s at zero balance, but that actually could be a mistake.  By paying the balance down to zero, you now have more available credit and no debt, which will boost your score, but if you close the account you are essentially taking away all of that available credit, so your score could actually decrease as a result.  If you are worried you may still use the card once it’s at zero, you can always cut up the card and still keep the account open.

Don’t Apply for New Credit

When you apply for loans, cards, etc., having your credit pulled is known as an inquiry, and while it may only reduce your score by a few points, having too many credit inquiries on record could give lenders the impression that you are looking to charge up your accounts, so it is best to only have your credit pulled when you are certain you are going to go through with the account, and that you don’t plan on continuing to open accounts afterwards.

Tips to Stay Out of Credit Card Debt

It is so easy these days just to either hand your card over for a purchase, or even worse, shop online, where you can buy with a few clicks, or even faster if using Amazon and you can make a one-click purchase.  It can be easy to fall into credit card debt, so much in fact that according to a recent study by NerdWallet, the average American household has more than $16,000 in credit card debt, and $779 billion for all U.S. consumers.  In order to prepare to be financially free by the time you hit retirement age, although it may seem like too far away to worry about now, you want to ensure you stay out of credit card debt today.

Spend Within Your Means

Sure, it can be easier said than done, but you should only spend what you can afford.  If you don’t have the money in your bank account now, don’t buy it, plain and simple, and if you want it, save up for it.  Either having a budget, or at least tracking your purchases will help in seeing exactly where your money is going, even taking a step further in analyzing purchases line by line and seeing if they were necessary.

Use Cash Instead of Plastic

With the ease of using your credit card everywhere you go, you can continue to run up charges over the next month until you receive the statement in the mail, and it’s from there you have to figure out how you are going to pay that balance by the statement due date.  A good way to avoid the credit card is to give yourself a cash allowance, sort of like what your parents gave you as kids, only being able to spend what you have until the next paycheck, and maybe seeing that cash transaction leaving your hand and into the register will be enough to give an impulse purchase a second thought.

Cut Up and Leave Account Open

If you just can’t seem to break the habit of using your credit card and you find yourself having one too many shopping sprees, you can cut up the credit card (and throw away the pieces so you can’t piece together to still shop online).  If you do lose the card, it is important to leave the account open, no matter the balance, even if it is at zero, otherwise closing the account would reduce your available credit and actually ruin your credit score when you think you are doing yourself a favor.

Remember What It’s Like

I used to have trouble with credit cards, and my motivation to stay on track is that I remember what it was like before, with the weight on your shoulders, wondering how you will ever get out of debt.  Fortunately, I was able to come out ok, but I never want to be in that position again, so if you had the same experience, or even if you have not, listen to us, and stay on course.

A Few Easy Tricks to Help Reduce Monthly Expenses

If you are looking to cut expenses down you are on the right track when it comes to saving a few extra dollars a month, in addition to just taking a look at unnecessary expenses.  Sometimes items that you use (or don’t use) could be cut as well, so it might be a good idea to take a look at what might have thought were normal expenses, and see if you can tweak a little.

Cancel Your Gym Membership

So as soon as January rolls around, maybe even December if you want to get a jump on the deals, you write down your New Year’s resolution that you want to start going to the gym to lose a few pounds.  You get into a rhythm, start going regularly and you see the weight start to come off.  Well something happens where you have to miss a day, and then another, and it’s the whole week you haven’t gone.  Well it gets harder and harder to go back once you missed, and pretty soon you are paying every month and not even going.  Save yourself the $25-50 a month you are spending and start to run, or at least walk, cut the grass, and work on your landscaping outside now that it is nice.

Cut the Cable Cord

Speaking of the weather and being outside, what are you doing inside watching TV anyways?  What better time to cut the cable cord then now.  With all of the streaming like Netflix, Hulu, and Amazon Prime, cable is becoming less and less like a priority with the rise of DVR and binge-watching, showing little need to watch live, and therefore increasing the need to cancel the always rising cable bill.  Without the need to pick specific channels to watch, it is less realistic to pay for all of the channels that are going to waste along with the money in your wallet.

Use Cash Instead of Credit

When you make a purchase and hand over your debit card there can be little thought about the money you have in your account and where you will be after the purchase, let alone use a credit card with virtually an endless amount of spending that could occur before you hit your limit.  In an effort to reduce purchases and at least give thought before handing over your card, try using cash instead of plastic.  You can then physically see the money leaving your hand, and only leaving you a certain amount until your next paycheck.

Skip the Bottle and Drink Out of the Tap

Yes, if you buy a case of bottled water from Costco it can only be a few dollars.  If you’re grabbing a couple for work, having after dinner, and taking one upstairs when you go to bed, you could be going through a case every few days, which if you add up over the course of a month or even a year, it could be huge savings if you could just take a water jug and fill up with the tap water as needed.

Now is the Time to Get Personal Finance on Track

I feel that I had a solid education growing up and into college.  I probably could have paid more attention and applied myself a little better instead of having priorities elsewhere, but when it comes to personal finance I feel like it was not that I was ignoring these life lessons; it’s that I was not taught.  This is not to blame my parents at all, I made my own spending and saving decisions, or lack thereof, but as I even studied business in college, I think there was a gap in what really should have been explained; how to set yourself up for financial success.  Whether you are already into your career or just beginning, it is never too late for a little financial improvement.

Create a Budget

If you do not allocate where your income goes, you could be on a spending free for all each month, so not only creating, but maintaining a successful budget is improvement for a little financial structure in your life.  While noting every dollar that is coming in, first take a look at what comes out first; your necessary monthly expenses such as rent/mortgage, utilities, car lease, and student loan payments.  Next comes items that you will need to set aside enough money for, such as food, gas, and spending money.  This is the tricky part, as you will need to figure out how much how much you should, and can, spend without being excessive.

Reduce Unnecessary Spending

This is where the excessive spending comes in, such as going out to bars and restaurants, shopping, and entertainment funds.  If you take a look at your last credit card/bank statement, go over line by line for purchases that were not necessary monthly bills, and circle each, adding up the total spending.  It will probably shock you, so the next step would be to see which items could have been avoided and work towards reducing unnecessary spending going forward.

Create an Emergency Account

While on a strict budget, any sort of unexpected expense can throw your successful planning out of whack, so you want to give yourself a little cushion.  You never know when you might have an auto repair come up, an unexpected home repair needed, or even worse, an unfortunate job loss.  For purchases, it would be nice to have the money readily available so that you do not have to put it on a credit card to try and figure out how to pay for it later.  Experts say you try and have three to six months’ worth of expenses available, though some will say six months may be too much and could have been better spend investing.

Contribute to Retirement as Soon as Possible

Although it may be the furthest from your mind, start saving for retirement as early as possible; you will thank yourself later.  Even if money is tight, if your employer offers a matching 401(k) program, at least put in the maximum company match, otherwise it could just be leaving free money on the table.