Spending Flee: Why post-holiday shopping will sabotage you savings

Raise your hand if you used your credit card over the holidays.

This year. Last year. Any year, really.

Chances are that hand is up and would be up for the last several years as the majority of shoppers tend to lean on their plastic during that time period.

What you tend to forget and where most of the money missteps happens are the months after the holidays. Of course, you know most consumers tend to find those after the holiday sales when you save 70 percent off Christmas decorations, for instance, or also the retailers and their propensity to discount clothing to clean off the shelves of their winter gear and start prepping for spring.

But beyond just the merchandise and buying, mistakes after the holidays tend to center on credit and credit cards. More specifically what you do with them, and how they’re used after they’ve, well, been used.

The two worst things you can do with a new line of credit actually reside on opposite ends of the spectrum, and that’s using it too much or closing it altogether. The latter is a natural reaction, particularly if you opened a card to save a certain percentage of a purchase and the really have no interest in using it again. That, of course, is understandable, but you’ll always have that “what if” moment, and closing cards actually allows your credit to take a hit just as much as a hard inquiry on your credit as well.

Typically, what you want to do with store credit cards is use them for the discount and pay them off completely, but not necessarily closing them, either. That said, you never want to forget about the new cards. Sometimes opening a card and letting it sit just means that the creditor eventually will close it on its own due to inactivity so make sure you use it once and a while, sporadically, and then pay it off right away. That element is a must for all store credit cards, too, since they typically care with them a 20 to 30 percent interest rate after the first month when you don’t pay in full.

Naturally, using it too much is the basis on which bad credit stories come to fruition. Every credit story that turns from good faith to a nightmare focuses on opening a card for something as simple as a balance transfer and then you end up maxing it out on things you can’t even remember.

Credit can come in handy but only when it is used correctly and not as a means to gain products, particularly ones that come during the holidays and especially the ones after that time period concludes.

Get Smart: Why successful people keep the process of saving money simple

Do you consider yourself smart when it comes to money? Yes, of course.

The more important question is if you are successful when it comes with money, and that is a totally different skew than being smart or what your opinion of the matter is.

Those who are successful with money, quite frankly, have it. But “having it” doesn’t just mean making good money or being able to finance a couch or a trip to Florida when you want to without worrying about applying for credit or spending money on a flight.

“Having it” means that you make good decisions, long term, about money.

The first question you have to ask yourself: Do you have a built up emergency fund?

And if you don’t, when do you plan on starting one?

An emergency fund is having money set aside for just what it says: if something happens unexpectedly as a result of anything from fault plumbing or carpentry in your house to those braces for your kids that you hadn’t planned on as early as last week.

Being successful with your money also means you realize that just because you have it doesn’t mean you have to spend it: all of it, that is.

Those who have a budget and stick to it are the ones that are able to put money aside, build that fund but also have the peace of mind that they don’t live paycheck to paycheck. In short, they live below their means and don’t push their income threshold to the point where their expenses butt right up against it. If you make $5,000 per month, that doesn’t mean you have to have a mortgage that is $4,000. Living below your means doesn’t mean you can’t have or buy things for yourself, but more along the lines of using the 50 to 50 rule. If you make $5,000, your expenses should be about half of that. You have to remember that those who are successful with money are the ones that have the leftover capital to not only save money but to think about things like upping your retirement contribution or having a plan if that monthly income suddenly gets cut in half. Losing a job or having wages cut is a harsh reality that exists and can happen in an instant.

But, will you be ready? You will and can answer that with an affirmative “yes” if you have budgeted accordingly and lived below or well within your means.

Those who are smart or successful with money know one thing: money is only as good as the person who is managing it. You can gauge your own definition of “successful” but those who have already shown they can be dubbed that will tell you that the term centers on saving, budgeting and having a lifestyle that is conducive what you earn.

How small expenses kill your budget

Every wonder why you can’t save money? Of course you do, in fact it probably permeates through your thoughts constantly particularly when you’re staring at a budget that looks good on paper but you still don’t have money set aside and your bottom line has bottomed out.

What typically happens when you have everything you want from a money standpoint, as far as quality income versus expenses that appear minimal, is you forget to account for the small items, the little expenses that can easily be defined as budget busters.
Food quickly comes to mind as something that we all need as part of our budget but rarely is accounted for on two levels: grocery store and eating out in restaurants.

The latter is the real culprit with the average person spending thousands per year on take out and dine in food that can be easily cut in half by grocery shopping and spending far less to make food at home on your own.

If you absolutely must have food not prepared and cooked in your own kitchen, budget for it. Otherwise, you’ll be fooling yourself into thinking that you have money leftover when you don’t.

Television and phones also tend to expand your budget quite a bit, mostly with the extras that you’re paying for that you don’t need. Is HBO and Starz really worth an extra $400 per year? Do you really need that extra 5 gigabytes of data for your phone or table to stream movies while you’re bored at the office?

What needs to happen is a choice, deciding if you want to belong to team stream and cut cable altogether or stick with cable and let the data and streaming run dry. You can’t, or at least shouldn’t, have both.

Splurging on yourself tends to happen from time to time (or for some, all the time) and no record of that shows on your budget. That $100 massage every month, $60 hair appointment or a multitude of other pampering type items could cost you a few hundred dollars or more per month, yet they’re nowhere near accounted for when you look at your expenses, even though they belong right there with the cable and phone bills.

No one wants to deprive themselves of food, internet, phones or finding time to shop or spend, but doing so has to be part of the budgeting process. A budget isn’t just electric and utility bills or that car payment.
It has to be an all or nothing approach.

Five Ways to Get an Inexpensive Cell Phone

Smartphones are still on the top of the list of the most popular items that fly off the shelves during the holiday season. Manufacturers are always making improvements to them. You can surprise one of your buddies, family members, colleagues or mates with a new smartphone this year. The awesome part is that you won’t have to go broke to do it. The following are five ways you can get a cheap smartphone for someone this holiday season:

  1. Be a Black Friday Early Bird

Black Friday sales are some of the largest and most exciting sales in the world. They are events during which retail establishments chop the prices of their products down to a ridiculously low amount. The only thing you have to do to make it to a Black Friday sale is wake up on time. Some sales start at 12 a.m. the morning after Thanksgiving while others don’t start until about 5 a.m.

  1. Sign a Contract

Signing a contract will get you a free phone every time. All the major providers such as Sprint, AT&T, Verizon and T-Mobile offer fantastic options for smartphones. You will be able to get something with a big screen, a fast processor and a bunch of abilities.

  1. Shop Online

You can find a great deal on a smartphone by visiting an online store. The eBay site is a wonderful place to go because you can sometimes grab the end of a low-bidding auction. Many sellers offer their smartphones with low opening bids.

  1. Charge It!

You don’t have to use your credit card to get a smartphone, but you could take advantage of a finance deal. Many prepaid cell phone stores offer finance deals for people who don’t quite have enough money to buy a smartphone on the spot. Finance options are great if you intend to keep the phone for the finance term.

5. Search for Freebies

Finally, you always want to search the Internet and the weekly circular for freebies. Someone is always offering a free cell phone. You might come across a company that wants to provide its customers with a free cell phone just to sign up for prepaid service. That’s an easy way to get a phone for someone you love.

Many more tips and tricks are available, but these five should help you to put a smile on someone’s face this year.

Why most in debt don’t even realize how much debt they actually have

Dealing with debt isn’t anything new to the masses. Truth is, more than 50 percent of the population is in debt. About 30 percent of that number has debt of more than $10,000 or more.

But as much as debt is part of society and having it has become the norm, where as those who live debt free are the exception to the money management rule.

The real disturbing aspect of debt is that those who have it don’t recognize that it even exists. Call it ignorance feeling blissful or just pretending as though debt and having it is perfectly acceptable, but the fact remains is that the troubling element of not being able to save money and instead borrowing it is that the majority of individuals and families have no idea how much debt they have.

The end result is not only a debt to income ratio that is ridiculously bad, but also a sense that they’ll never get back to even when it comes to money. Even more unsettling is the debt you have may prohibit you from borrowing and thus hinder and downright hurt your credit score.

That score dropping and dipping accordingly comes from such shortcomings that stem from debt such as not being able to pay your bills on time or perhaps pushing your credit card limit to its max.

Whatever is weighing on your credit score, don’t worry. You can raise it quickly and get back up to respectability, particularly if you have a house that you want to buy and a car that you desperately need to get to and from work.

How exactly can you work to raise your credit score quickly?

The first might be to get automatic billing and set up payments that are always paid on time. Something that simple is going to work wonders on getting that score up and you back on track. Furthermore, you might want to start paying down some of your credit cards that are too close to the maximum limit. That will always derail most personal loans 10 times out of 10, but it doesn’t hurt your chances are larger, bigger ticket items, too.

As silly as this sounds, you should apply for a credit card with a modest limit. This will allow you to charge items, but keep in mind the goal is to charge and pay off in full each time. This shows ability to pay on time but more so consistently.

Whatever your debt situation is, you can fix it. Whether you’re talking about $50,000 in debt or a few thousand, it is about not only coming up with a plan to eliminate it but first just knowing exactly where you stand.

The Art of Couponing

Coupon usage has become a way of life for most modern consumers. The practice is necessary for every family that is living in this crumbling economy. The Internet has a vast number of coupons that patrons can use to obtain everything from food to clothing to electronics and more.  With the soaring popularity of coupons, though, many sites have sprung up to meet the need and the vast majority of them are worthless.  We’ve sorted through all of the big ones and left you with a list of the most useful and up-to-date coupon sites.

Promotioncode.org

The promotion code site has a user interface that is attractive and easy to use. Visitors can find promotional codes by viewing the “hot list” of codes to the left of the page or by viewing the various categories.

Keycode.com

The key code site is another site that has a “hot button” with codes that consumers can use. The user interface is vibrant with colors and an easy-to-use menu.

Coupon Cabin

Coupon Cabin is a large contributor that connects consumers with more than 30,000 different retailers in various categories. Some of the retail establishments on the websites are retailers such as Auto Zone, Petco, Nike, Lids, Tanga, PetSmart, Walgreens and more.

Continue reading The Art of Couponing

Young and Restless: Why money and saving it matters in your 20s

When was the last time a 20 year old cared about the future, more so as it relates to money, saving it and, heaven forbid, have a budget in mind if they’re finishing up college for example and embarking on the real world.

The truth is saving money and being financial smart with your cash starts before you even reach college, perhaps as young as when mom and dad doled out allowance on a weekly basis, and you had to make that five dollars last for the next two weeks.

Of course as a kid, that little bit of money might be easier to manage than a first paycheck or initial job out of college. The 20 something year old might still live at home, not have a car payment (you still have that car mom and dad gave you), and have very few if any bills.

What you don’t realize is that from a money standpoint, you are the ideal position, one that you want to hang on to and keep as simple and straightforward as it is at the moment.

The only debt you might be in the midst of accruing is your college tuition and any loans you’ll have. That interest rate, however, is remarkably low and shouldn’t be viewed as an albatross of debt but rather a necessity that helps you land a job out of school.

But in your 20s, fresh out of school and having that first job, now is the time for you to start saving your money, while you’re still nestled in your old room and mom and dad still have a fridge full of food.

For starters, you’ll want to put extra money toward your loans, rather than defer them. Skip a few nights out with your friends and stay in for a weekend here and there, and double up on those school loan payments. That is going to cut the customary 10 year loan for schooling in half, leaving you debt free by the time you’re in your mid 20s.

Even though the average college student accumulates up to $5,000 in credit card debt while in school (this typically is due to needing money while in school and not having a job as part of the equation), you have to understand in your 20s, debt and credit is a necessary evil to build up the latter. That isn’t to suggest that you should be taking on thousands of dollars in debt, but opening up a card and starting to charge and subsequently pay off the card makes sense financially to start showing your credit and paying back loans is credible and capable.

Those in their 20s who start thinking about money right away tend to be the success stories, the ones you hear about retiring in their 50s. If your 20s is a backdrop for excess and wasting cash, you’ll consider that time period a failure when 30 rolls around.

Selection Process: What debt is most important to pay?

Nothing is more of a head scratcher in some ways than credit card, but for a number of reasons you might not believe.

Almost 70% of the population in the United States battles back and forth with some sort of credit card debt, and that debt is the kind that builds quickly, particularly when you’re using credit cards to make every day purchases on things like groceries and gas or for emergency buys like repair on the roof, car problems or anything else that has some price point to it that you can’t afford at the moment.

In times of convenience and crisis, and everything in between, we turn to credit cards. Good or bad, that is the hand we’re dealt.

But that debt, the kind from credit, isn’t exactly going away and your struggle continues as you attempt to pay it off in a timely fashion and refute efforts to want to use the card again and thus only compound the issue at hand.

So with credit card debt not going away any time soon, what exactly is your game plan for getting rid of the debt or at least attempting to pay on the right credit card bill at the perfect time?

The most important element of credit card debt is focusing on two aspects: interest rates and closing accounts. The latter is quite simple: you don’t want to close accounts per say, because it will take a chunk out of your credit score but if your card isn’t carrying a balance and you’re paying a annual fee for no reason, then you’re wasting, not saving, money. So in that instance, canceling is the better option.

Obviously, if you’re debating between the 10% interest rate on your Visa or MasterCard bill versus the department store card at Target that is carrying triple that rate, you want to take care of the latter.

Those tricky department store cards also spell trouble in the instance where you use them, you get some sort of introductory rate, usually 0% interest for a certain number of months. The key is not getting hit with backlogged interest rates on those credit cards and thus make those priorities so that 12 months or 24 month no interest plans don’t creep up on you at month 11 or 23, respectively, and you’re suddenly on the hook for thousands in extra money on that so called perks card.

Credit card debt is frustrating and can be avoided in most instances, but if you have it, combat that debt with decisions that don’t put you in a non-winning situation where you’ll never climb out of owing money somewhere.

Why that department store credit card is killing your credit

We’ve all been in that situation, the one where the department store credit card becomes too irresistible to ignore.

You know that moment, when you’re in the midst of pushing around a full cart, which wasn’t your plan at the moment, or carrying around enough clothes to fill more than just one closet or how about that trip to Target that led to a complete overhaul of your living room with new end tables, blinds, drapes and TV stand.

In that instance, you simply can’t say no when that cashier or sales representative asks you if you want to open up that store credit card to save a certain percentage off today’s purchase. You gladly take that 10 or 20 percent discount in exchange for opening up a new card. In your mind, you’ve scored the better end of the bargain; you get all the items you wanted for less.

While that thinking isn’t untrue, what happens after that card is opened and used tells the true story if the decision ultimately is one that benefits your financial future.

Credit cards given out by stores aren’t quite as difficult to secure versus the traditional Visa or MasterCard, but that said they come with equal parts benefits and drawbacks as their counterparts.

Naturally, you save money when you open the card and in some instances every time you use it. That incentive only really stands as a positive if you’re paying off that balance on the first try, when that bill first comes in the mail. Those cards have tremendous upside on personal interest rates initially, but once that period come to a close, rates can balloon up to 20 to 30 percent.

Simply put, if you’re not using the store card and then paying them off to to avoid high rates yet still get the benefits of the special deal, then you’re not using them correctly. Those cards need closed quickly, particularly if you’re not using them as well. Having them sit isn’t going to do you any favors both from a temptation standpoint but also your credit as a whole.

As inviting as those retail cards can be, and despite all the rewards (which incidentally only mean something when you actually use them), you have to be selective with the ones you open and use. Furthermore, you absolutely must pay them off right away or before you start to incur interest charges. Those extra charges are going to mean your payment goes up and hopes dashed of ever saving money while still paying your credit card bill on time.

Are you having trouble staying on course with budget?

Everyone says they have a budget, which certainly means that you’re at least trying to save money and spend less. The question remains, however, isn’t so much how good is your budget but are you actually sticking with it the way you planned?

The point of having a budget is implementing it in a way so you can stick to it, plan accordingly and ultimately save money and pad your finances for whatever reason you’re thinking of this week: savings account, nest egg, financial future and retirement.

What tends to happen, however, is budgeting becomes more about saying you have one and less about actual execution. Budgeting is like joining a gym; just because you did one, doesn’t necessarily translate into the other.

Joining a gym doesn’t mean you’re going to go, much the same way having a budget doesn’t mean you’re going to stick with that, either.

So how exactly can you train your brain to stay on course as it relates to your budget and not falling off course?

If you’re overlooking your spending habits, that’s a first sign indicator that you really haven’t fully grasped the idea of a budget. Yes, we know you have your bills and the larger debt that you have to account for on a daily basis. That being said, when was the last time you put putting gas in your car, meals eaten out in restaurants, coffee and clothing on your budget as being worthwhile to track?

Those items and others of that ilk tend to get lost behind car payments, house mortgages, rent on that townhouse or apartment and your cable and phone bills. You have to make sure you’ve planned to add to that budget to include things you spend money on daily, since those add up quickly into thousands spent yearly and you wondering aloud why you aren’t able to save with the budget as it stands.

You also want to look closely at your budget at it pertains to credit cards, specifically how much you’re paying on them. If you’re only paying the minimum payment, you might want to rethink your repayment options. The minimum payment can suffice if your goal is ultimately to build more into your savings account and you have a fixed payment in mind. That minimum might be part of your budget if that’s all you can afford, but checking your budget to increase the minimum means less high interest paid over time, but also the ability decrease overall debt faster.

Budgeting bites the dust typically when you don’t account for all facets of it, or take money saving as being too topical and typical than it really is. The more specific you can make your budget, along with adhering to it, the better chance you have of success.