Economics Finance

Years ago a couple of psychologist began a study of a group of five-year-olds. Of the many things they were studying was how delayed impulse control affected future success. They asked the group a simple question. Would you prefer one cookie today or two cookies tomorrow? Tomorrow is close to forever to a five year old mind.

The psychologists tracked this group through high school, college and into working life. One key finding was those children who chose to delay gratification, getting two cookies tomorrow, were more likely to graduate high school, complete college and to score higher on a variety of key success measures later in life.

Today, as consumers, we face the cookie question each time we get ready to buy something. We may feel we deserve a reward after working hard and accomplishing a difficult goal. Or we may feel emotional distraught after a break up with our significant other and need to pamper ourselves. Or we may want to feel the envy of others as we become the first to have the latest techno-gizmo on the block.

However, as we get closer to or are in retirement we need to change the way we look at how we spend money. After all, we no longer have a paycheck to bail us out of impulse buys. The money we now spend comes from a fixed source. What we spend today may be needed for something critical tomorrow.

Marketers know how to manipulate all sorts of emotional triggers in consumers. We may have valid reasons for purchasing something, but prior to purchase we should know the true cost of what we are purchasing. Maybe we are getting ready to spend $495.95 on the latest designer handbag or the newest way-cool cell phone. We may tell ourselves that $499.95 is really $500 and the marketers cannot fool us. But what is our total cost?

First there is sales’ tax at 5% is another $24.95. If we charge the purchase and take one year to pay it off at a simple 10% interest that is another $52.50. But, wait. In order to pay off the entire amount we must earn some money first. If we earn money we must pay federal and state income taxes and payroll taxes. This can add up to 30%. We must earn $824.85 to net the amount to pay off the credit card. This cookie is getting to be quite expensive. Continue reading ‘How What You Spend Costs You Double’ »

Grocery coupons combined with weekly store ads are the best way to save money on your monthly grocery spending. Food prices are rising and monthly household budgets are getting tighter and tighter. Coupons are a great way to help you save hundreds of dollars on your monthly grocery budget while still feeding your family in a healthy way. Many stores offer a double coupon that is often available in their weekly ad and can be used combined with a manufacturer’s coupon for the optimal level of savings. There are rules surrounding the double coupon and you need to read the fine print to see how they are to be used. Generally, this means an expiration date during the week of issue and a maximum double limit, such as fifty cents. But, this offers you even more savings just for using the coupons you were going to use anyway.

If you don’t get your local paper then take the time to check with the sales staff of your local grocery stores to find out when the sales ad comes out. Also, ask about whether or not they offer a double coupon and when it comes out. You should be able to find the weekly ad in the store as well as the local newspaper or even in your mailbox. You can ask the stores you shop at for these details, so you know when to find the ads and thus the double coupons. Continue reading ‘How to Maximize Double Coupon Promotions at the Grocery Store’ »

The holiday season is fast approaching, and in today’s economy this is something that is dreaded when it should be something that is anticipated. But, the holidays don’t have to be hard on you or your wallet. Here are some great tips to help you when you begin to budget and start buying gifts for the holidays.

1.) Consider minimize your gift list. A great way to save money is to exchange gifts with fewer people. Maybe you could just shop for immediate family, and everyone else you normally buy gifts for you can offer to just get together with them and do something more personal with them, like getting together for coffee or going to a movie.

2.) Consider purchasing a gift for someone close to you with someone else. For instance, if your sister and you have decided not to exchange gifts this year, but you still want to buy something for your parents, maybe you and your sister could go in with each other on a bigger gift like a new coffee pot or tickets to a show. This way you can split the cost and save yourself so money.

3.) Create a budget. Write down each person you will be buying gifts for and the amount you are willing to spend on each person. Do not go over budget! While this will take a lot of will power, especially if you are a giving person. But, you are not helping yourself save any money if you keep going over your budget.

4.) Do your best to always pay with cash, especially if you are trying to eliminate credit card debt. The holidays will only drag you deeper into debt if you let it. By paying in cash, you are holding yourself accountable and you will see how much easier it is to stay within your budget when you are paying cash for it. Continue reading ‘Surviving the Holidays – How to Save Money During the Holidays’ »

We all promise ourselves that we are only going to spend a certain amount of money for Christmas but we always seem to go overboard. I know that most of us want to give more than we can afford but in times like this you have to be especially careful. Sticking to a budget isn’t that hard it just takes commitment and planning.

The most common mistake people make is waiting till the last minute to do their Christmas shopping in turn leaving them not time to plan for a budget. Remember it is never too early to start thinking about your budget and more important putting that budget down on paper. If you wait until the last minute and don’t write down your budget I can almost guarantee you are going to exceed what you intended to spend.

The smartest thing to do is shop throughout the year while allotting a certain amount of money per check. This takes away the burden of having to stress over money when it comes to the first of December. It can be difficult to use this approach because we always seem to want to give the gift right away. The smartest approach is to set a certain amount of money aside each week. You can either stuff it under you mattress or better yet you could open a savings account specifically designed for Christmas season.

There are other people who count on their Christmas bonus from work to fund their Christmas spending spree. This strategy may work for some because it doesn’t cut into their monthly spending habits but what if you don’t receive that bonus? Everyone knows, especially in these economic times that nothing is guaranteed. Most bonuses are based on the company’s earnings for the year. If the company didn’t do as well as expected you might find yourself in a pickle with a bonus that is much smaller than anticipated or worse, no bonus at all. Continue reading ‘How to Set a Budget For Christmas Shopping’ »

If you’re anything like me you loved to find a bargain. After all why should you pay more for something than you actually have to? Fortunately for us that are plenty of ways to put the money back in our own pockets.

1. The first tip I want to share with you is when making purchases online. When you get to the checkout have a good look around to see if there is a box that says something like “enter promotional code” or “enter voucher code”. If there is bingo! This is the company telling people who have these codes were to enter them to get their discounts.

Of course what this is also saying to anybody that doesn’t have the codes is “hey we have discount vouchers go forth and seek them out!” so now all that remains is for you go and enter into Google the name of the company and the words voucher or promotional code in quotation marks. Then with any luck you will find a code that you can use yourself. Continue reading ‘My 5 Crafty Ways to Save Money’ »

1. One of the most valuable personal money management tips I can offer is to use a budget planner. Having a visual idea of your finances makes the process of keeping track not only easier but more accurate and of course also provides you with that important feeling of control.
2. Opening an online savings account offers you a much higher interest rate than a branch account. Having no branch or ATM access also means you are more likely to keep your savings than dip into them on impulse as withdrawing from this type of account requires transferring the funds into your normal bank account and usually takes at least 24 hours.
3. Don’t save at the expense of your social life, but don’t let your social life stop you from saving. Studies show that people who include an allowance in their budget for enjoyable activities are more likely to stick to their budget and therefore save more in the long term. When you resent your budget and feel restricted by it you will be more inclined to break it and ultimately loose track of the entire thing. Remember, life is all about balance.
4. Review your budget on a regular basis. By establishing the habit of sitting in front of your budget planner and bills one night a week you will be developing a habit that ensures you are always on top of things. In time you will begin to notice ways in which you can improve your budget while freeing up more cash, or perhaps notice a few leaks that need to be plugged before they get out of control.
5. When it comes to regular savings, change your mindset. To illustrate; when you receive a bill in the mail you know you can’t avoid paying it, there is no way around this, it is a social norm. Start thinking of your savings account as a bill that must be paid and even if that bill is only $5 a week; pay it before you do anything else.
6. These days most people (in the first world at least) receive their pay cheque as a direct deposit into their bank account. Decide on an amount of money you can reasonably save out of each pay and ask your boss or payroll department to split your pay cheque with a set amount going straight to your savings and the rest going to your normal account. With that small amount out of sight it is also out of mind and you won’t miss it. Continue reading ‘10 Super Savvy Personal Money Management Tips For the Household Budgeter’ »

Have tried to sit down and work out a budget? Have you found that it is often more difficult than you have imagined? It can be mind boggling and often much more difficult than you can believe but it is not impossible. It is often best to start out by using little steps than if you start by leaping into a very strict budget.

Start by looking at the budget as a starting point. Use the budget to reach a small goal, and then reorganize your budget to reach a bigger goal and so on. If you can work into a budget you will find it much more attainable than if you trying to use your budget to reach a high goal that may take years to reach.

Start by controlling your budget to reach a small goal. Let us say that you want to start an emergency fund. You want to start by building the fund with $500.00 and you set up the budget to put away $100.00 each month. At the end of 5 months you will have met your goal and you can begin to set a higher goal each month. That goal will be met in a short period and then you will find that more difficult goals can be met with the same attitude.

Building a budget is often like taking a step and each step can help you get to the top of the stairs. You want to use your budget to help you get control of your debt, save for your emergency fund or other financial problems that you may be having. If you have some debt such as medical expenses, you can find that using your new found budgeting skills to get those kinds of problems under control quickly. Then by continuing to use those skills, you can get any other debt such as credit card debt reduced to a much more manageable level. Continue reading ‘Working Out a Budget’ »

Budgets are stretched beyond breaking point these days and this whole recession experience is new to many younger people, who may be just building a home environment and starting to raise their families. Certainly, there’s pressure on everything you do and you must strive to cut down on your costs as much as possible. This certainly includes the need to reduce utilities, which can often be the biggest cost of all.

One of the most important things you can do to reduce utilities is to use a programmable thermostat. These are not very expensive and, let’s face it, who remembers to turn up and turn down the thermostat when you are retiring at the end of the day, or coming back into the house after being away. You can certainly pay for the cost of the thermostat in a short space of time and its a wise investment.

We have so many appliances in our modern home that we are definitely spoiled. If you look back a couple of generations ago, all of the tasks we took for granted were performed by hand. If you really want to make a difference and reduce utilities, consider taking a leaf out of their book. Wash dishes by hand, for example and if you live in an appropriate area, try hanging the clothes out to dry. They will smell a lot fresher and last a lot longer. Continue reading ‘Go Out of Your Way to Reduce Utilities’ »

A lot of friends and acquaintances ask me how I save so much money and stay in great shape without even working out. The answer is always profoundly simple and always catches them off guard. Whenever I give them the plan to do it, they end up saving 300 dollars a month, minimum. If you want to save hundreds of dollars per month (or per week depending on your habits), as well as get in great shape, here is exactly how I do it:

You’ve got to cook meals at home using some key ingredients from grocery stores that you need to start picking up. For example – if you grab a drink at a coffee shop or starbucks in the morning, and get a crappy fast food meal on the way to, or back from work, you’ll already save 300 dollars (and your health) by switching it up. Here are they key ingredients you need to work it:

Beans (canned, any variety you enjoy)
Eggs
Bread
Tomato sauce (pasta sauce, jarred or canned)
Pasta
Oil (olive oil or canola oil)
Basic spices, such as salt, pepper, oregano, basil, etc
Vegetables that are ON SALE, such as potatoes, onions, peppers, etc
Meat (beef, chicken breasts, drumsticks, thighs, etc, fish) that are ON SALE Continue reading ‘Eating Cheap – How to Get by and Eat Well on 20 Dollars Per Week’ »