All Financial Matters

Is it just me or do paychecks seem to be spent as soon as we get them? Then you look around and wonder where the money went. We have probably all had that problem at one time or another. Here are five ways to help you save more and spend less each month.

1. Have a financial plan. We all need one. Plan to save or you won’t save anything at all. Before you spend a dime on anything else, put aside ten percent of your paycheck at least once a month. It would be ideal to do it with each paycheck that you earn in a month, but sometimes that is not possible. Start with a goal of one paycheck and work your way up. To keep from forgetting, you can have the money deducted from your check and sent to a savings account each pay period. That way, you don’t even have to think about it. It is done before the rest of the money is deposited in your checking account.

2. Grocery shop with a shopping list. Have you ever gone to the store for one or two items and come out with a cart full of stuff? Me, too. A list is like a blinder. It requires you to locate the things written there and ignore everything else. When creating the list, look in each cabinet and cupboard to see what you need. If you’re absent-minded like me, attach a magnetic grocery pad to the refrigerator and record when you run out of something. Your list will create itself.

3. Clip coupons. Coupons are generated mostly for the grocery store, but department stores have store coupons that offer a percentage or a specific dollar amount off of your purchases. Get that sweater at the end of the season when the store marks clothing down forty percent and offers additional coupon savings. Don’t shop at a store just because it has a coupon. Chances are the price has been marked up before the coupon is applied to make you think that you are getting a deal. Only use coupons for items and stores that you frequent. Stores that offer free discount cards also have weekly specials that, when combined with a coupon, could save you even more money.

4. Don’t impulse buy. Rule of thumb: Don’t purchase anything the first time you see it. This rule goes for big ticket items like cars, furniture, appliances, and electronics. Give yourself time to comparison shop to find the best deal. All the stores of the world won’t sell out of DVD players overnight. Waiting may show that the item you wanted to buy was a want and not a need. In that case, after clearing your head, you might not go back and buy it anyway.

5. Reward yourself. Spending money on something that you want can be thought of as a reward and a privilege earned. Make a list of your “wants”. Prioritize them and save until you can afford to get it. In the meantime, you will have added to your savings account and the discretionary fund for the item you dream of buying. Knowing that there is a pot of gold at the end of the financial rainbow can be a good deterrent to overspending.

Saving money is a good practice. Not only does it make your finances more stable, but there is also money for a rainy day.

When your child’s piggy bank or other money collecting device gets full, it may be time to open an account at the bank. A bank account allows children to keep track of money they have saved more easily. Here are some types of savings accounts that parents may want to consider.

A savings account can be started as soon as a child has money to put in one. Choose a day when you both have some free time and make a trip to your local branch of the bank. Talk to a teller or bank associate about starting an account for your child.

You and your child can open a statement savings account. This account gives both of you a monthly report of all account activity. It includes all of the deposits that your child has made into the account and all of the money that they have taken out of the account.

Read over the statement carefully with your child. Explain the various parts of the statement to them. Show them how much money they had and what they ended up with after interest payments and other account activity. Most statements list withdrawals and the date but not a detailed description of the transaction. You can write on the statement what each transaction was for so that the children get an idea of how they are spending their money.

There are also passbook savings accounts. I actually had one of these when I was in college. Each account holder is given a small book. Each time a deposit is made or a withdrawal is requested, the book is run through a machine that records the transaction on the pages of the passbook. This way, your child finds out his or her new balance right away instead of waiting for a statement at the end of the month. Some kids like that because they can look at their money as often as they want.

Banks are not the only institutions that issue savings accounts to children. Credit unions also have savings accounts available to the children of their members. There are special savings accounts that are designed for kids of various ages. When the account is opened, they receive an ATM card with their picture on it and other free gifts for starting the account.

An ATM/debit card can be used as cash by your child for their purchases. Parents can keep the receipts and teach children how to check them against their savings account statements each month. Allowance money can also be deposited in the savings account each month.

If a child is under eighteen, some states will issue custodial savings accounts. These accounts list the parent’s name as the account holder and the child’s name underneath. The account ownership can be transferred to the child when they turn eighteen.

Savings accounts are a great tool for teaching money management skills. Kids can keep track of their money easily and even use an ATM/debit card to make purchases or withdraw cash.

You’ve recognized that you have a debt problem, and you’ve come up with a plan to get rid of it. You’ve made a budget, you’ve cut back where you can, and you’ve allocated funds to put toward each of your bills each month. You’ve come a long way, but the most important thing is to stick to it for the long haul.

Sticking with a debt relief plan is the hardest thing for many people to do. Part of the problem is that many debtors just aren’t good at managing their finances, and that is part of the reason they got in too much debt in the first place. Others had their debt under control until they lost a source of income, and they have trouble adjusting.

There are things we can do to help us stick to our debt relief plans. Here are some ideas:

* Eliminate the source of temptation. If you have trouble saying no to purchases when you have a credit card in your pocket, put all of the plastic away in a safe place. If just knowing where the credit cards are tempts you to use them, have your spouse or someone else you trust hide them.

* Write down all of your expenses. Many planners have budget pages you can use for this, but a notebook will work just fine as well. Writing down the exact amounts that we spend and what they were spent on holds us accountable, making us less likely to slip up.

* Close accounts when they are paid off. An account with a zero balance can be too much temptation for some people to withstand. If you think it will be too much for you, simply close the account and be done with it. Keeping only the account with the lowest interest or most favorable terms will allow you to obtain credit easily enough if you need it after you’re all caught up.

* Shred credit card and loan offers as soon as you get them in the mail. When you’re already in too much debt, the worst thing to do is to acquire the means to take on more.

* Don’t beat yourself up if you slip up. Just pick up where you left off and keep paying down that debt. Too often, debtors make mistakes and decide that it’s just too hard to pay their debts off, so they go back to their old habits. But one mistake is not the end of the world, and if you keep trying you will eventually eliminate your debt.

Coming up with an effective plan to pay off your debt is quite an accomplishment. Sticking with it can be difficult, but it is imperative if you want to get rid of your debt. By getting rid of temptation and holding ourselves accountable for our spending, we can greatly increase our chances of success.

Few people go into debt with the intention of getting in over their heads. Most of us borrow to get the things we need and want, with every intention of paying back every penny. But sometimes things do not work that way.

In some cases, debt problems can be attributed to poor financial management. But sometimes even the best money managers end up in too much debt. Here are some reasons that debt management may not work:

1. People lose their jobs. Job security is not what it once was, and an increasing number of people are becoming victims of downsizing or outsourcing. An unexpected job loss can be a source of financial hardship, making it difficult to pay bills for necessities, and leaving little or nothing to pay debts.

2. Health problems cause money troubles. Accidents can render people unable to work, as can a variety of illnesses. Between the lack of income and the medical bills, people whose health has taken a turn for the worse often find themselves unable to repay their debts on schedule.

3. Unexpected expenses arise. Sometimes people have expenses creep up on them that they haven’t budgeted for, causing them to be unable to pay their usual bills. Expensive car repairs are a common expense that we may not be aware of until it becomes a necessity. Weather could cause property damage that is not covered by our insurance, or appliances that are not under warranty could suddenly quit working. All of these things can put a damper on our financial plans.

4. We don’t keep adequate savings. Many financial problems can be avoided, or at least made less burdensome, if we have some savings to fall back on. This is one area of the budget that many people either don’t think about or do not take seriously. Making room in the budget to put some money into savings each month is an asset to any debt management plan.

The same problems that often cause us to get into too much debt in the first place can also derail us when we’re already in too much debt and trying to get out. When these things occur, it may become necessary to seek outside help. Consolidating our debts may make things easier, but sometimes even that is not enough. When all other options are exhausted, some debtors end up filing for bankruptcy.

The best way to manage debt is to keep it under control in the first place. Putting money into savings can help for when unexpected things occur. And if all else fails, we may need help in reorganizing our finances. Getting our finances back under control may be difficult, but the peace of mind we gain from doing so makes it all worthwhile.

If you’re drowning in debt, it makes life much more difficult. You have trouble getting credit for the things you need, and you probably spend a lot of time trying to juggle your finances. And then there is the matter of debt collectors calling day in and day out.

Debtors often avoid answering the phone when debt collectors are calling. They don’t want to be reminded of how much they owe and how far they are behind, because they simply don’t have the means to pay their debt. But what they don’t realize is that debt collectors are often willing to help them get back on track.

It’s true that creditors want their money. That is why they are calling you. But it’s also the reason that they will often work with you. They are often willing to lower interest rates, reduce monthly payments, or waive late fees to help you. Many creditors realize that by helping debtors, they are more likely to get payment in full than they would by making demands.

How to talk to debt collectors

When a debt collector calls, it’s important to tell them about your circumstances. Whether you’ve had problems that were no fault of your own or just spent too much and got in over your head, letting them know that there is something keeping you from paying them is important. They will be much more willing to work with you that way.

Once you’ve explained yourself, they may offer assistance. Listen to what they have to say, and if it sounds doable, accept. If the debt collector does not offer a solution, ask if there is any way that your interest, payments, or fees can be lowered to put them within reach.

If the person you speak with is not helpful, ask to speak to a supervisor. It could be that the person calling does not have the authority to extend the assistance you need. Once the supervisor is on the line, explain your situation again and tell him or her what it would take for you to be able to get your payments current.

What if they won’t help?

In some cases, debt collectors are not willing to be of assistance. If this happens to you, try to work something out with your other creditors so that you can afford to make payments to everyone. If that doesn’t work, you may need to talk to a credit counselor. They have the clout and experience necessary to work out deals with creditors that consumers may not be able to.

No one likes to talk to debt collectors, but sometimes doing so can be beneficial. It certainly doesn’t hurt to try. You just might be surprised at how willing they are to help.