Your Fridge and Your Pocketbook are Closely Related!

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What could you do with an extra $200 each month?

Do you ever wish you had just a few hundred extra dollars in your disposable monthly income? Would you use it to help pay down debt?  Or maybe you’d set it aside in savings? I’m sure most of you are nodding your head, quietly agreeing that a few hundred extra dollars each month would be a nice help to your overall financial situation.

Did you know that your fridge and your pocketbook are very closely related?

Just recently I read an article that cited an NRDC (Natural Resources Defense Council) data on Americans and food waste. Here is the staggering number: Americans throw away 40% of their food each year (this includes home and restaurant.) A typical American family ends up throwing away close to $2,300 worth of food each year. That’s nearly $200 a month!

There is no going around it. We have become a nation of waste. We throw away food. We throw or give away perfectly fine clothing just because we’re bored with it and want something newer and trendier. We waste hours of our time on TV, video games and other forms of unproductive entertainment. Anywhere we turn there is waste!

But what if we turned that waste into financial opportunity?

Just by reducing your food waste you can most likely add $50-$200 to your monthly budget which would give you a $600 – $2400 annual raise!

How about fasting from a new wardrobe for a while? According to the Statistic Brain, on average women spend around $60 per month on clothing while men spend around $35/month on clothing.  That’s nearly $100 a month per family, not including children!

Or what if you took back a few wasted hours each day and used them to create side income for you and your family?

If you take an honest look at your spending, I’m sure you’ll find waste areas that, with a little bit of discipline, can be turned into new-found income!

Here are few great apps that can help you stop food waste: What’s In My Fridge? and Fridge Pal.

6 Must-Teach Financial Lessons for Teens

Teaching Teens about Money

Teach them the simple 10-10-80 money rule: Whatever “income” they earn, teach your student to save 10%, designate 10% towards a charitable cause of their choice, and to live on the remaining 80%.  This simple money rule will cultivate in them the habit of regular saving (which is one of the secrets to long term financial success), to be generous (those who give tend to lead much happier, content lives) and to live within their means.

Delayed Gratification: According to Stanford University research, children who practice delayed gratification have much greater chance at succeeding in life.  You can help your young adult acquire that habit by instituting a 30-day waiting rule on purchases.  Any new item will go on a 30-day waiting list.  This will help your young adult develop patience, will give him the time to consider “do I really need it?” and will give him room to compare prices and look for bargains or  sales.

Budget basics: Have a plan and track it regularly: Sit down with your student and help her put together a simple financial plan (budget). There are great FREE online apps, such as Mvelopes.com, to make this process easy and fun. Mobile friendly apps with frequent reminders and warnings will help her stay on top of every penny spent or over-spent! Having a written plan is just the beginning.  In order for the plan to work you need to measure the plan against the real results. Encourage your student to check their on line budget every day in order to make sure that the budget categories and the funds available in the bank account are aligned.

Help them learn from your mistakes: This may not be very comfortable, but granting your young adult an honest look into your finances can teach them much more than you think. If you’ve made mistakes like taking on too much consumer debt, buying more home than you could afford, or allowed spending to get out of control, than you can use those mistakes as great lessons. Take your son or daughter out for dinner and have a great heart to heart conversation. Show them how those mistakes have impacted you in the past or may still be impacting you today.

Teach them about establishing credit: Consumer credit scores will become very important to young adults, so teach them about credit scores and what can help them establish or destroy their credit.  Depending on how responsible and teachable your child is, you may consider adding him / her as a user on one of your credit cards to help develop a habit of responsible use of credit.  You can also pull a FREE credit report from any of the major credit bureaus’ and show them what type of activities are helping or hurting your score.

Investing basics: To help your young adult learn about investing, you can introduce them to simple ideas like opening up a CD or ROTH IRA. Ask your personal banker to explain those two options to your child. You could go as far as giving your son or daughter a specific amount of money and help them start a simple investment account through one of the major investment firms. Once a sum of money is designated, you could ask your child to do some homework on what type of stock, bond they’d like to buy and why. Once invested both of you could have fun watching the fund grow!

6 Low-Cost Entertainment Ideas

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How to Have Fun Without Breaking the Bank!

On average, Americans are working nearly nine hours each day and spend much of their free time caring for others, driving around town, and completing household chores.  With our busy lifestyles and fast-paced schedules, quality entertainment is more important than ever before. We need entertainment and non-work activities to clear our mind and provide a little work-life balance.

Yet paying for entertainment can be extremely expensive; in fact, the average American spends $2,504 on entertainment according to the U.S. Bureau of Labor Statistics. From concerts to movies to sporting events, hiked up ticket prices make it difficult to fork over the cash it takes to have fun. So here are six low-cost alternative ideas that leave you with something to do, without breaking the bank:

Break Out the Board Games- Whether you’re a fan of Monopoly or Euchre, or want to try something new, revive your childhood experiences by breaking out the board games. Extremely cost effective, or even free if you already own the game, board games are a great source of entertainment for groups of friends and families with children.

Pack a Picnic- In 2010, the average consumer spent $2,505 eating away from home, according to the United States Department of Labor. While many eat out for the sake of convenience, going out for leisurely meals is a popular form of entertainment. To save a substantial amount of money, try packing a picnic instead. Not only will you pay less than you would at a restaurant for your meal, but you’ll enjoy the change of pace and spending time with friends and family.

Go Camping…in Your Backyard- When the weather is nice, camping and similar outdoor activities serve as a great form of entertainment for many. Yet by the time you pay for meals, transportation, a campsite and the proper gear, the price-tag on your weekend really adds up. Try something new and camp in your backyard. You can still have the whole experience—s’mores, campfire, sleeping bags and all—for a tenth of the cost.

Take a Trip to the Zoo- Most zoos are either free or reasonably priced considering the wide variety of animals you’ll have a chance to spot. Zoos can entertain young couples and families alike. Try taking a trip to the zoo the next time you need an alternative to a pricey concert or ball-game ticket.

Swim, Bike, Run. Don’t feel pressured to train for a triathlon, but swimming, biking and running are fairly inexpensive activities, especially if you set out the intention is to have fun. Community pools offer reasonably priced one-day passes. Renting a bike, if you don’t already own one, can be an entertaining way to spend a day exploring your town. And if you have the proper shoes, take a jog with the dog, spouse or even your kids.

Sign up to Volunteer. You never have to worry about monetary costs when it comes to volunteering, because it’s typically free and a great use of free time. If you sign up to volunteer for an organization that supports something you are passionate about, whether it be hunger or local kids that need tutoring, you’ll find that giving up your extra time to help others is the most rewarding form of entertainment.

Saving money on entertainment is not always the easiest thing to do because the opportunities that present themselves are typically the most costly of the bunch. You’ll have to do some digging in your local paper and blogs if you are interested in discounted, local entertainment. If you’re willing to be creative and go along with the flow, you’ll have no problem finding low-cost alternatives to high-priced entertainment.

Budgeting for Christmas shopping madness

Debt-free holidays! Start now!

Debt-free holidays! Start now!

Is it too early to start thinking about the upcoming Christmas shopping madness? We think not!

This is a perfect time to start looking at your budget, make a list, check it twice and set financial boundaries, so that you can not only beat the crowd, but most importantly, emerge from the soon approaching holiday season with no debt! Here are three simple ideas on what you can do now to avoid charging your holiday purchases on a credit card:

Set boundaries: Unless you set limits on how much you plan to spend on your holiday gifts, you’re bound to overspend and go into debt. Make a detailed list of people you will be buying gifts for. Set a specific amount for each person and see what the total comes to. This will give  you a clear target to start saving for. Failing to plan is planning to fail, so be smart, make a plan and stick to it! Consider home-made gifts as part of your gift mix to help you balance your budget.

One gift at a time: How about purchasing few gifts at a time instead of doing all of your holiday shopping at once? As soon as you know your spend limits and who you’re buying gifts for, start looking for online and retail deals.  Stress and holiday rush can have a negative impact on your wallet. Taking the “divide and conquer” approach will help you do “smart” shopping rather than “fast” shopping. Your budget will also feel less pressure!

Where are you wasting money?: Do you know where every penny of your monthly income is going? If you don’t, it’s very likely you are unknowingly wasting money on one or even a few categories. Do a quick 15-30 day check on all your spending. Track every transaction to find out how exactly you’re spending your hard earned dollars. By doing this you’ll be sure to find areas where you spend more money than intended. Once you discover your waste, set those dollars aside in order to have cash available for your holiday shopping madness. Using an online personal finance app, like Mvelopes, can help you discover those waster areas very quickly!

Is impulse buying destroying your finances?

Is impulsive buying destroying your finances?

Is impulsive buying destroying your finances?

Impulse buying is silently destroying financial wellbeing of many American families.

Statistic from the USA TODAY/CNN/Gallup Poll states that spending too much and saving too little is the most common issue that causes strife among married couples.

How about these stats on impulse buying cited by the Mediascope, Inc.:

– Approximately 40% percent of consumer spending is impulse buying.

– Younger consumers with higher incomes have a greater percentage of impulse purchases.

– 90% of people make occasional impulsive purchases.

– Statistics state that 20% of what shoppers buy at the grocery store is bought on impulse.

According to a study conducted by Npower, men spend approximately $41 per impulse buy versus $31 for women.

Npower also found that the average person spends $114,293 in their lifetime on impulse buys. Most common impulse buys are food, clothing, magazines, wine, books, DVDs, shoes, trips, beer, and toiletries, home furnishings, music, clothes for the kids, jewelry, accessories, gadgets, garden accessories, flowers, toys, and day trips.

Living beyond our means has become the norm. Financing our lifestyles with easily available credit is almost expected, and anyone who is living on “cash only” basis is rare species about to go extinct.  We buy more homes than we can afford, we drive cars that drain our monthly budgets and we eat our savings away.

If you suspect that you may be destroying your financial future by frequent impulse buying, here are few tips on what to watch out for as well as few practical suggestions on how to overcome your impulse buying habits.

1. You constantly wish for “just a little bit more.”

Do you find yourself constantly wishing for more?  Is it hard for you to watch others upgrade to nicer cars, bigger homes, better furniture or even pricier, more prestigious private schools for children? If you’re quietly saying yes, then your discontentment may be driving you to impulse financial decision-making.  Reflect on your spending habits and evaluate whether many of your purchases are done out of true need or out of a need to fill in an internal void or social pressures. Decide today that you will no longer live to impress others by spending money you don’t have on the things you don’t really need.

2. You use and abuse credit on regular basis.

Credit has become so accessible that any college student who does not have a steady income is bombarded with offers of easy money.  Do you have a revolving balance on your credit cards? Are you using one credit card to pay off another one? Is your monthly credit card balance growing instead of declining? If the answer is yes, then you are most likely financing a “beyond your means” lifestyle.

Take the next few days, look over your credit card purchases and see exactly what you are buying. Is it expensive clothing? Maybe its time to move to a cheaper clothing line or to live out this famous great depression motto: Use it Up, Wear it Out, Make it Do, or Do Without. Have you fallen for the buy now and don’t make any payments until who knows when offers? Now that the payment time has come, are you struggling?

Whatever “it” is that you are using credit for, first make a decision to stop using plastic. Create a realistic debt repayment plan and do not pick up a credit card until you have paid your balances off and are ready to be a responsible consumer.

3. You aren’t saving at least 10% of your gross pay.

Saving is truly the foundation of healthy finances, yet so few of us actually save.  Do you find yourself saying yes to instant gratification while ignoring the need for having financial reserves? If so, track your spending for the next 30 days and you’ll clearly see where your income is going.

You goal should be to set aside at least 10% of gross annual income. Portion of it may go into a retirement fund while the rest to a regular savings account.

While setting saving goals, focus on both short-term as well as your long-term goals.  Short-term should include having an emergency fund, 6 months of living expenses, a vacation fund, a Christmas fund, etc. Your long-term goals should focus on retirement, car replacement fund, and college funds for your children, etc. Use an online budgeting software to help you create a budget and manage your spending as well as saving.

Harmful spending habits can be overcome. Remember, it isn’t an issue of not earning enough, but an issue of reconciling your spending habits with your income. Understanding your spending and correcting waste will lead you to financial freedom!