Monthly Archives: September 2016

Valuable Money Tips for All

Whether you have $3 million dollars stashed away somewhere, or you are struggling to pay bills and get a steady income, there are set of principles you should follow no matter what income level you are apart of. When you learn to manage your money wisely, your financial Saving.

Organize Your Finances

This is the most common tip regarding your finances, and should always be first on your list. Organization is key to being successful with anything you do whether it is shopping for groceries or investing in your 401k. No matter what, you need to be on top of your finances and know what to expect in the future. You aren’t going to be able to predict everything and anything life throws at you, but you should always try. This will limit the amount of messes you will have to clean up, and also limit the amount of money you lose in the long run.

Keep Good Records

You never know when you are going to have to go back and re-check a bill or statement that could have a mistake in it. Maybe you don’t know why $4,000 is missing from your bank account, and you want to see if your bank made a mistake. You could buy something online and the company might charge you extra for it, but you simply miss it because you don’t keep good records. You want to make sure you are keeping all of your past receipts so that you can return a purchase if it is a faulty product, or if you simply don’t like it. You also want to write any purchase you make down along with the price, date, and company you purchased it from. This may seem like a tedious thing to do over and over, but it is always worth it in the end. There are also a lot of smart phone apps that allow you to do this automatically and cut the work you have to do. Either way, you want to make sure you are keeping records of anything you do with your finances, big or small.

Look for the Opportunity to Save

Even if you have plenty of money to spend and aren’t worrying about spending the extra money, try to save anyways. You never know when something is going to come up and you are going to need the extra money. If you really aren’t motivated to save the extra money buy taking the few extra minutes to research and look around, then make it a reward system. For all the money you save, you can put it towards something you really want to purchase. After awhile you have the opportunity to buy something you probably would have bought anyways, but now you have the clear mind knowing you aren’t really spending any money considering it is money you saved when buying other products.

Search for Money Making Opportunities

Whether you need the extra money to get from paycheck to paycheck or you simply just want money to spend on the things you want to buy, don’t try and take money from your savings or money that you could have saved for more important things. Disaster can strike at anytime, and you need to be ready. You may be financially stable right now, but tomorrow may not look the same. When you are earning extra money buy selling your old items, or simply working more hours, you have money that you earned to spend. All of your income is money you earned, but it should be put into your savings, bills, groceries, investments, etc. This doesn’t mean you shouldn’t spend any money on yourself, it just means that you should try and make any extra money you can so you don’t have to spend money you don’t have to. You will be more confident in knowing that you aren’t spending away your future, and you won’t end up feeling guilty afterwards.

Predict the Future

Okay, no one can actually predict the future, but this shouldn’t stop you from trying. Always be looking into the future as far as you can without forgetting about the present as well. Try and plan out your financial future into the next 6 months, and then start looking into your short term future. Find out how much money you want saved in 2 months, 2 years, and even 20 years. This doesn’t need to be exact, just a good estimate. You also want to make sure you are including how much you predict you will have to spend, and then add extra for unseen expenses. After awhile you start to see your future unfold and it will come pretty close to your prediction, if you plan well enough.

How You Buy a Car Significantly Affects Your Finances

There are not as many financing options to buying a car these days as in years past. Maybe that’s a good thing! People have asked me, “what’s the best way to buy a car these days?” Here’s a few options, from least attractive to the best.

5) Use your 401k to finance the car.This is about the worst idea on the planet. I had someone actually do this before they spoke to me about it, so it was too late for them. But not too late for you. If you think of just some simple math and compound interest you can easily see that this is the most expensive way to buy a car (or anything else for that matter). Let’s say the car is $20,000. Removing $24,000 from your 401k (because 20% will be withheld for taxes), that $20,000 car is actually costing you about $112,000! Check it out for yourself. I used $24,000 at 8% for 20 years. If you’re a young person and could keep the $24,000 in there for 30 or 40 years, the money lost is astounding. (See my article on the magic of compound interest).

You are using your 401k as a financing tool and seriously jeopardizing your long term goals, especially if it becomes a habit. In general, it just doesn’t make economic sense to use long term savings for short term goals, especially when your retirement is at stake.

4) Financing a purchase of a brand new car. New cars are expensive and interest rates are up. The new car depreciates significantly during the first year, so you are paying interest on a constant dollar amount for 4-5 years, but the value of that purchase is constantly declining over that time period. The banks do not adjust the balance based on the value of the car! By the end of the life of the loan your monthly payment isn’t going toward the purchase of a $20,000 car, it’s going toward the purchase of a $8,000 car or whatever it’s worth at that time. In other words your payment remains the same even though the value is declining.

The $20,000 car can cost you up to $30,000 depending on the terms you got, but the car ends up being worth much less than that.

3) Leasing on new car. It’s a toss up whether this is worse than financing a brand new car. Many people justify leasing because they want a new car every couple of years and they can afford to do so. Still, it’s an expensive way to go. There is usually an upfront fee of $999 to $2999 depending on the type of car. There is also some fine print about turn in fees. I’ve seen those as high as $750. You pay them to turn in your vehicle! It’s just crazy. Not to mention the over mileage fees if you are over their 10k or 12k miles per year limit.

All the leasing fees need to be included in the monthly payment calculation over the length of the lease. When you do so, the monthly payment far exceeds the advertised monthly lease rate.

2) Buying a new car for cash. Okay, so you’re wise to all the financing schemes out there and you’ve decided to pay cash for your new car. That is a great goal and makes a lot of financial sense. You can easily save for a new car by driving your older paid off car longer and put the savings into a separate account or Virtual Envelope (see my article on Virtual Envelopes) and before long you will have saved for that new car. You’ll avoid all the financing charges, lease fees, etc and not have a monthly payment – except to yourself so you can save for the next new car.

1) Buy an almost new car for cash. I like this approach the best because the car you are purchasing has already gone through it’s highest depreciation cycle during the first year of ownership. Someone else covered that for you! You get a great price on a car that may only have 8k – 12k miles on it and you’re paying up to 20% less than the original price. You could easily pick up that $20,000 car for about $16,000. Now paying cash is even easier!

Notice the big difference in money outlay as you look at option #5 to #1, there’s about a $96,000 difference. You just don’t notice it because you think you’re only withdrawing $24,000 from your 401k.

Easy Making Money Tips

It seems like every conversation overheard nowadays revolve around the same issue: how to make money. With the effects of the global economic crisis still felt among the population, it’s not uncommon to know that a friend who was lucky enough not to be laid off from work is still having a hard time coping with his/her finances. Mounting mortgages, car loans, food, insurance bills, and whatnot have been plaguing mailboxes across the country, driving citizens stressed and confused on how to make the most out of their dollar. Are you one of them? Well, better read these making money tips that could well be your answer to unpaid bills and growing credit card charges.

The easiest way to earn money would be to sell some of your personal things that you were never able to use or you don’t use anymore. These could be as random as a tennis racket to your old stack of comic books. Selling items like these is the no-fuss way of earning for yourself quick cash without having to leave the comfort of your own room-except of course if you decided to sell it online where you have to have it shipped. Being an online seller can be a lucrative business should you expand to selling personalized products or even by selling certain items that you bought on wholesale.

If you are not a world wide web fanatic, there are other easy making money tips that can benefit you. If you’re into kids, then it wouldn’t be too bad to take on babysitting jobs for a neighbor or a family friend. Babysitting is on everyone’s list for quick cash and it does work. Although you won’t get rich with this kind of work, it will give you that much-needed money. In addition to babysitting, you can also get yourself into the pet-sitting scene. Apart from these, physical tasks such as lawn mowing, pool cleaning, and whatnot are also ideal money-making tasks that lend you the opportunity to establish your name with the possibility of expanding the circle of your clients through referrals and word-of-mouth.

One can also make use of their talent to earn money. If you can play an instrument, why not lend your skills to other people by offering lessons? If you can speak a foreign language, you can also offer your services to folks who are willing to pay just to learn how to speak French or Spanish. These are win-win situations for you because you get to do what you love and share that talent of yours at the same time. This is a great business venture because lessons could extend to days or weeks, which means more financial rewards for you.

Ten Valuable Money Tips

Hi, Friends. Today, we need as many ways as possible to KEEP MORE OF OUR MONEY! In this article, I write about 10 ways to save BIG money. I have included a new one… the Money Merge System, which is a way to PAY DOWN YOUR 15 OR 30 YEAR MORTGAGE IN A FRACTION OF THAT TIME. Do a Google on Money Merge System to learn more about it. We have developed our own version of the Money Merge System named “The Self-Implemented Fast Mortgage Pay Off System” which eliminates the middle man “hosting company”, who charges a hefty sum to become part of that system. Stay tuned and join our newsletter to learn more about it.

Renting Instead of Owning. In this day and age, there are few reasons to rent versus owning your own home. Even if you find it difficult to qualify for a mortgage, and in today’s market this is quite common, you can find people who will sell your home and hold paper (be the bank). Many times they will give you an interest rate that is lower than what the banks are currently charging, and will also give you ample time to procure a mortgage from a bank.

Not Having A Home-Based Business. In America a home-based business gives you so many advantages, and tax write-offs we can’t afford not to have one. With a home based business you can write off on your taxes a percent of your mortgage or rent, utilities, car fuel, entertainment and more. You can choose any kind of legitimate business to receive these advantages.

Gasoline Prices. Gasoline prices have are above $4.00 / gallon. I have heard people with large SUV’s or cars with V8 engines saying when they pull into a gas station it easily takes $100 to fill the car which lasts only 2 or 3 days. My 4-cylinder Ford Focus costs approximately $35 to fill and this fill-up lasts about 5 days. Unless you have money to literally “burn”, driving a smaller car will cut your “gasoline” budget down immensely.

Donating To Charities. We really do live in an interdependent world, thus when one person is hungry we have a responsibility as human beings to aid in feeding that person. There are many charities, that are working to make the world a much more humane place for all of us. Many of these charities have 501C(3) status, which means, any donations we make are 100% tax deductible. Overall, we will be much safer, and have more abundance when ALL people in this world have at least the basic necessities in life.

Sales Tax Differences. Buy, especially expensive items, where taxes are less. There are several percent differences in the sales tax in cities and villages that surround one another. We live close to a large city and are frequently there, but I cannot remember the last time we filled up the car with gasoline in the city. The city gasoline taxes add at least an extra $0.10 to the price of gasoline compared to the surrounding communities. Also the sales tax on goods and food is 2 to 4% higher than in the surrounding suburbs and counties. I am not saying we should not support the places where we live, but I believe one of the ways we can put pressure on the politicians to keep taxes down is by not supporting unwarranted tax increases.

Shop From The Internet. Shopping from the Internet saves you (in some cases), sales tax and in all cases wear and tear on your car, gasoline, time and can be a lot less stressful. Many times you can also save in shipping costs if you order over a certain dollar amount. You can buy everything off the Internet from lingerie to the car you drive. Internet shopping is the best!

Discounts On Children’s Classes. Soccer Moms and Dads out there, did you know you could get discounts on children’s classes and lessons for siblings, if you just ask for them? We enrolled Markus (one of our 7 year old twins) in a summer reading program through one of the local universities and decided to enroll his brother Malcolm. By just asking we were able to enroll Malcolm for 50% off! If you are not sure and sibling discounts are not advertised ALWAYS, ALWAYS ask.

Vacation At Resorts or Cruise Instead of Staying At Hotels. When vacationing with the family, staying at a resort or going on a cruise are much better values. Resort condominiums usually include a full kitchen, family and children’s activities and exceptional amenities. Cruises also include all your meals and numerous events and activities for the entire family, depending on the cruise.

Take Advantage of Your Credit Card Grace Period. Would you like to have a 25 to 30 day loan at 0% interest? Use your credit cards for all your purchases and pay them off by the grace period and this is exactly what you get. You also have the added benefit of improving your credit score for future large purchases, when you need top borrow money.

The Money Merge System. The “Money-Merge-System is by far the best money tip, I have for you out of all 10 listed here. This system can allow us to pay off a 15 or 30-year mortgage in a fraction of the time. It has been used in Canada and Australia in the past and now is being used in America. This system is called the “Money Merge System” and to use it requires a homeowner to have good enough credit to take out a HLOC (Line-of-Credit) on their home to implement. There are companies that are selling this system to mortgage holders, however a version of this system, which I call the “Self Implemented Money Merge System” can be done without going through the expense of having your system set up by a money-merge “hosting” company. Stay tuned for a full explanation of this system in future newsletters from ConsciousMoneyAdvice.