Category Archives: Saving

Don’t Become a Slave to the Spending Demon

This morning, on the way to work, I was listening to the radio and they were talking about the new iPhone 6 that will be coming out very soon.  A joke was made about how Steve Jobs is still pimping people from the grave.  I laughed and thought no more about it until I got to work and realized that perhaps there was some truth to that statement.  It’s pretty evident that we live in a culture of consumerism where everybody and everything is constantly vying for our money.  I get an average of 100 emails a day from sites such as Groupon, Rue La La, Wal-mart, Ebates, etc. all advertising the latest and greatest gadgets.  There’s always a sale and they’re constantly trying to get you to spend, spend, spend….and if you’re not careful, you’ll surely fall headfirst into the spending trap.

So the big question is how does someone save in a culture where there is so much pressure to just buy everything in sight?

Below are some ways to steer clear of the spending demon:

Just say “No” 

It’s just one simple word…right?  How hard could it be to just say “no”?  You’d be surprised to learn that this particular word has caused a lot of grief where most are concern.  How many times in your life have you been told “no”?  “No you can’t have this….no you can’t have that”.  When you were younger, you thought you’d just die when your parents told you “no” you can’t have those new pair of Jordan tennis shoes that all your friends at school are wearing. Let’s just be honest….the thought of not getting what we want makes most people cringe. Statistically speaking; most people have a hard time saying “no”.  Why?  Because psychologically they view this word as something negative.  However, learning how to say “no” is one of the best words you could ever say. Saying “no” is a part of being successful….it isn’t easy though.  Nothing in life that’s worth anything is easy.  Saying “no” actually takes discipline especially where spending is concern but once you get the hang of it, you’ll appreciate it.   Saying “no” allows you to think long and hard about whether or not you really want or need to purchase a particular item.   It’ll save you a lot of heartache and pain and keep you from regretting those impulse purchases. So make it a priority to start saying “no” to spending and saying “yes” to saving.

Learn to be content  

Now that you’ve developed the skill to say “no” you now must learn to be content with what you have.  Learning to be content is learning how to be satisfied and knowing when you have enough. You don’t have to have the latest and greatest gadget or piece of clothing contrary to popular belief….you can’t take it with you when you die.  Most people have a very unhealthy relationship with money.  They feel pressured to maintain a certain lifestyle that validates them with their peers or colleagues.   There’s more to life than just money.  Remember money can’t buy everything. It can buy you happiness for only a certain period of time, however eventually you’ll long for something deeper. People need people to survive….no man is an island.  I wouldn’t want to be stranded on a deserted island with a million bucks if it meant that I couldn’t see my family again.  Life is about developing genuine loving relationships.  It’s about spending quality time with the one’s you love.  Focus on developing an attitude of gratitude and learn to appreciate the people and the things in life that don’t take money to enjoy.

Become a smart Shopper 

Getting what you want shouldn’t cost you an arm and a leg.  Learn to coupon or find other smart ways to get it for less. There are plenty of websites that help you match up coupons to the store circulars in your area. Most items go on sale after a certain time so if you develop some discipline you’ll get a better deal if you wait.  No matter what you purchase, make sure you do it with cash and stay away from debt. There’s no faster way to get in a boat load of debt than by using a credit card. People who use credit cards for their purchases end up paying far more for an item than if they used cash.  Why? Because the majorities of people don’t pay the full balance off at the end of the month so they incur interest and believe me, interest does add up.  Don’t be naive when it comes to debt.  In addition paying with cash will help curve impulse spending.

So take the time to do research and find the best deals on the things you want to buy…you’ll be surprised at how much you can save. Being a smart shopper means developing discipline by being a good steward over your finances.

Develop a savings strategy

Whoever said that saving money is easy was wrong.  It takes discipline to be able to save money because the mind-set in this country is just the opposite.  The more stuff you have the more clout you get.  The more you go into debt to drive those nice fancy cars and wear those nice expensive clothes and live in that big old house that you can’t afford, the more people will respect you….or at least that’s what most people think.  If you’re ever going to become financially independent then you’ll have to change the way you view money…i.e., your mind-set.  You’ve got to become intentional with your savings.

See Money Savings Strategy Below:

Step 1 – Set a written goal to save a certain amount of money by a certain date. Make sure the goal is in plain sight where you can refer to it often.

Step 2 – Next, set up a budget.  Most people dread doing a budget because they feel it puts too many restraints on them but a budget will hold you accountable which will ultimately help you stick to your savings plan; however the budget must be realistic….you’re only shooting yourself in the foot if it’ not.  Don’t leave anything out….and yes you do need to include spending money in your budget but be reasonable and remember the point is to save money.  It’s okay to tweak the budget every now and again to ensure that you’re on track to reach your goal.  The main thing is that you must stay focused and don’t deviate.

Step 3 – Third, automate your savings. The amount that you set aside for savings in your budget should be the amount you have automatically drafted out of your checking account into some sort of savings and/or retirement account.

Step 4 – And finally, rinse and repeat.  Stick to this strategy and you won’t go wrong.  Once you’ve experienced the satisfaction of reaching your savings goal, you’ll have the confidence to do it again and again and again and before you know it, you’ll become a Super Saver!

What money saving strategies do you implement to save money and not become slave to the spending demon?

 

Are you a Super Saver?

I love talking about money and I like making lots of it too!  I guess that’s why I affectionately named my blog “My Take on Money” because it gives me a platform to talk about one of the things that I’m most passionate about….Personal Finance (PF).  I’m so addicted to PF that I’ve decided to become a professional at it by embarking on a journey to become a Certified Financial Planner (CFP).  So don’t be surprised if from time to time you stumble upon a starchy article about the importance of estate or retirement planning, however, I do promise to throw in some entertaining articles from time to time… don’t worry. 🙂

Because I love personal finance so much, I’m constantly setting goals.  One of my favorite goals is saving money of course.  In fact, I like to think of myself as a Super Saver.  I’m sure there are a plethora of varying definitions out there of what a Super Saver is, but here’s my definition.

A Super Saver is a person who has gone one step beyond being a normal saver (whatever that might be). They find creative and innovative ways to save money.  I like to call it putting your “savings on steroids”.   Instead of saving the normal 10-15% of their income, they’re saving 35+% without causing undue stress or feeling deprived i.e.,  they’re still enjoying life and do splurge every now and again, but  they’ve somehow managed to find a formula that works to help them achieve their financial goals effortlessly.

So based on my definition above, are you a Super Saver?  Yes, no…maybe so?

Characteristics of a Super Saver:

  • Frugal – Super Savers are Frugal.  Frugality is their middle name..it’s a way of life, not a single occurrence.  They find ways to cut cost every chance they get, however they’re not cheap, there’s a difference (we’ll get more into that in another article). They don’t run out and get the latest and greatest gadgets as soon as they come out….they use wisdom and wait a while before purchasing in order to get that same item heavily reduced.  They learn to do without or adjust to certain things such as opting for Netflix or Hulu Plus in lieu of having cable.  They’re the ones who will car pool to work, shop in thrift stores and use coupons with every item they purchase.  Super Savers are money conscious and hate overpaying for items.
  • Goal Oriented – Super Savers know how to set goals and stick to them.  They’re laser focused.    Keep in mind that your goals need to be realistic and attainable, so don’t set some outrageous feat that you know you’re not going to be able to achieve.  It’s best to chop your goals up into a series of smaller steps.  This will make it easier to obtain and keep you from getting discouraged.
  • Disciplined – As you probably already know, everybody is not cut out to be a Super Saver because most are not willing to make the sacrifice.  It really takes discipline to accomplish anything worthwhile. Super Savers are not easily swayed off the beaten path. They set a goal and stick to it….they do not succumb to temptation. A shiny brand new car or a 50” flat screen TV will not be their demise.  They are not easily discouraged and they definitely are not trying to keep up with the Jones.
  • Budget Conscious – They know how to budget extremely well and are constantly finding ways to squeeze what they can from it to sock away towards their savings goal.  I’m not advocating that you starve or deprive yourself of the things you really need or want, I’m saying that Super Savers adhere strictly to their budgets to eliminate the urge of impulse purchases.  Impulse purchases can destroy a budget.
  • Innovative and Creative – I know that sometimes saving and sticking to a strict budget can be hard to do, not to mention, it can boring and a bit monotonous…that’s why it’s wise to find innovative and creative ways to save.

Check out some personal examples:

  • Because of the down slump in the housing market, my property taxes decreased slightly as a result; I received a nice little refund check in the mail from my mortgage company.  What did I do with that unexpected money?  I socked it away in the bank toward one of my savings goals.
  • Another example – I received a credit from the electric company of about $326 dollars from a deposit I made 10 yrs. prior.  They were refunding this credit back to me for being a good customer.  This again was unexpected money that I didn’t spend, I saved it.

Some additional innovative and creative ways to save:

  • Put your savings on autopilot – Have a set amount automatically deposited into a savings account on a weekly or monthly basis.
  • Save your spare change – Empty your change everyday into a jar and watch the money add up.
  • Save the actual money from the use of coupons – If you have a set budget for food and you end up having money left because you used coupons, then you could move the savings into a savings account.
  • Sell unwanted or unused items – This is one of my favorite ways to earn some extra income.  We’ve all got stuff around the house that we are not using that we could sell on Craigslist, Ebay or through a yard sale.  Don’t let that stuff accumulate dust, get rid of it if you haven’t used it.

If you’re not a Super Saver at the moment, but aspire to be one someday, applying some of the characteristics above will put your well on your way.

What’s your definition of a Super Saver?

Kids and Money: Start Teaching Them Early

The other day I was looking at a Clark Howard special on television about “Kids and Money”.  It was very informative and definitely worth my hour of time.  Even though I currently don’t have kids, I still think that it is imperative to teach them about money early so that they will be well prepared for retirement when it comes.

We need to instill a sense of future in our kids. Parents should make it a priority to talk to their children about saving and investing before the world teaches them because they might not like the outcome.  We as Americans have got to change our ways when it comes to saving and spending. As a nation, we are in tremendous debt and it doesn’t look like the guys in Washington are trying to rectify the situation anytime soon.  We can’t wait on the government to find a way to get us out of debt, we’ve got to stop using them as a scapegoat or an excuse for our negative habits when it comes to money and how use it.  We’ve got to take responsibility for how handle money and we can start by teaching our children good financial habits because they are our future and the next generation of teachers, doctors, lawyers and politicians.  They are the ones who will determine what state America will be in 15-25 years from now.

We already know that Social Security and Medicare are changing and might not even be around when our kids get to the qualifying age, so we have to teach them not to be dependent on the government and show them how they can stand on their own two feet without expecting a hand-out. Don’t let your kids develop a welfare mentality.  Show them how to be financially independent by encouraging them to become entrepreneurs and not “slaves to wages”.

Some of the important topics that Clark Howard covered were student loans and how not to get into debt by starting a college fund early such as a 529 Plan or an Educational IRA.  He mentioned that there were plenty of resources available such as scholarships through various organizations but the key is to start early and not wait until your child is in their junior or senior year of high school.

He also talked about kids investing their money to make it grow and that it’s never too early to learn about stocks, bonds and mutual funds.  There are certain banks out there who offer special mutual funds or other investment vehicles specifically for children to invest in and as an added benefit, they waive most, if not all, custodial fees..and this is just the tip of the iceberg. In addition, he mentioned that young adults should stay away from credit cards and other alluring money pitfalls that some deadbeat companies throw out there to attract young naive college students.  Fortunately, it is now against the law for companies to offer credit cards to students younger than 23-24 yrs old….thank God.  I remember when I was in college, I signed up for a major credit card that eventually became a nightmare because I was not prepared and not taught how important having good credit was to my financial future…but one thing I did get was a free t-shirt!  What a price I paid for being financially ignorant….about 7 yrs.

Clark interviewed quite a few kids and he asked them if they had a certain amount of money, what would they do with it.  Some said that they would spend half of it and save the rest, others mentioned that they would give some of to charity and then buy themselves something nice and then save the remainder.  All the answers were pretty good, however, the highlight of the show last night was this little boy who had been saving up his allowances and had amassed a nice little stash of $327 dollars!  This little boy; couldn’t have been no more than 10 yrs old, hadn’t spent a dime of his allowances.  He asked Clark how he could make his money grow because he wanted to be a billionaire.  It was pretty impressive; his parents had started early teaching him about the benefits of saving and it caught on…now the poor kid won’t spend a dime.  It was so funny but truthfully, down the road it will pay-off.  I just don’t want him to be a stingy lonely old man….you do need to teach them to balance it. 🙂

In conclusion, I can’t stress to you enough how important it is to start teaching your kids about money and how to be financially responsible and independent early.  It will be one of the best lessons in life they’ll ever learn and it will yield great results!