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Hello and welcome to DrFrugal.com. If you've ever had the unfortunate experience of trying to find information online that has anything to do with money, you know most sites are worthless because they're trying to pawn something. Not here--there's nothing to buy. I've tried my best to only include pragmatic, realistic informtion to help you lead a simpler life by taking care of your personal finances.

Recent Entries/Articles

Massive Oversight: Why huge money problems are consistently missed

You'd be hard pressed to find an individual who has it all figured out as far as money goes.

What you typically get is an person, couple or family that tries very hard and succeeds or fails based on the finest of details but also overlooking the obvious as they tend to their money and working diligently to save it.

The larger scale problems are of the utmost concern, particularly when you consider the penchant for people to miss them completely. And when you talk about those large scale issues, you're talking about money missteps that most try to downplay or ignore, hoping that they'll go away when in actuality they're sabotaging your ability to save at every turn.

One that is hard to come to grips with is being with a spouse or partner that doesn't feel the same way about money as you do, perhaps you're the one content on saving and they have a propensity to spend any time extra money is made available.

The relationship might be strong enough to survive such diverse mentalities, but you can't overlook that money is one of the leading causes of separation mostly due to the fact that your significant other isn't on the same page as you from top to bottom, money wise.

This isn't to suggest that you need to end the relationship because they have a spending problem, for instance, but a frank, honest discussion needs to occur about money before any forthcoming steps or big financial decisions occur. The most amiable way of fixing this problem is giving the more financially sound individual of the two the reigns to start a savings plan, develop a budget and save and spend accordingly.

The other proverbial elephant in the room is your ability to earn money and spend it but without a clear cut initiative to save it based on having no budget whatsoever. Everyone has a family member or friend (or maybe it's, in fact, you) who has a decent job and seems to always have money or the ability to spend but can't quite find that brass ring to be able to save consistently or they're constantly living from paycheck to paycheck. That way of thinking is typically surrounded by not having a budget or any idea what you're actually paying for, other than the big three: house, car, student loan. From credit card debt to utilities to take out food, you have not one clue where your money goes.

The bigger money problems tend to center on a lack of organization or conflicting ideologies about money when second or third person is involved. To be successful at saving money, you simply can't have this or need to take whatever steps necessary to fix it immediately.

.... Keep Reading

Savings Canned: Why aren't you able to save·

If you're someone who has the best intentions when it comes to saving money, but yet you simply can't, you might not want to totally believe that all is your fault.

Chances are you have the right idea, and you realize the basics when it comes to saving money, such as having a budget to follow, knowing that you need to spend less than what you make in order to save and that frivolous spending deserves a second look before you impulse buy, but the question remains do you follow your own advice all the time·

You'd be surprised to know that not being able to save money is more about a mindset and a mentality rather than the nuts and bolts of budgeting 101. Sure, you do need a budget, a guide to follow as you start saving and pay attention as well to what you make and making sure those numbers don't look askew.

But habit also plays a big role in not being able to save the way you'd like to, particularly on those aforementioned impulse buys and not being able, for example, to tell the difference between a want and a need.

Impulse buys, by definition, are those that you don't need but want anyway. They're more expensive than what you would like to spend but you believe that you can justify it at that very moment or you're seduced by it being new, shiny and something you've always wanted (think car, computer, clothing, etc.)

The general rule of thumb why you can't save is that you don't follow the 48 hour rule about impulse buying. If you see something that catches your eye and you believe you need it, wait two days and then revisit the purchase. This works exceptionally well with large ticket items like homes and cars. Sure, you love that they look, smell and are, in fact, new but do you really need brand new when used or a few years old would suffice· Most likely, if you wait and think it through, run the numbers and see how it affects your money, you might be more apt to reconsider.

If you aren't able to save, you might want to revisit a simple rule of thumb: make sure you pay yourself. Yes, you get paid weekly or bi weekly but are you automatically putting 5 percent of that into a savings account. If you're not, you should start and make that part of your budget and expense (yes, you deserve your own line item on the expense part).

Not being able to save doesn't mean you don't want to or have the will to do so but rather it's more about thinking beyond the budgeting box and opening up your eyes to less obvious roadblocks that are stopping your from having money on hand.

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Savings Fanned: Why most are missing mark on saving money

We just can't seem to get it right, can we·

The "we" in that sentiment is the general public, the masses and just about everyone who collects a paycheck every week or two.

The "it" focuses on saving money, specifically having a budget and spending accordingly with the ability to put an emergency fund together so that you can save for unexpected expenses, that rainy day or something as important as retirement.

So why is it we can't save money·

Before answering that question, the cold, hard stats should be equally addressed. Less than half of the population in the United States is saving between five and seven percent of their income, money that should be used for a savings account. The general rule of thumb is that you should be saving about 10 to 15 percent of your salary with every paycheck.

And sadly, we're not even close to that number or the total percentage of people actually able to save anything at all.

Financial experts can bat around this theory about saving money and budgeting all they want but two key contributors are what drive our ability to save: automatic deductions and the economy.

If you want to save money, you should make it a point to put aside that 10 or 15 percent automatically with each paycheck and then stop thinking about that money altogether. You have to act as though you don't have it whatsoever, almost as if paying yourself that percentage is like paying another bill. You wouldn't ask Verizon for their cell phone bill back so why should this be any different·

Economically speaking, the better the economy is the more we tend to spend, so the minute you start feeling overconfident about your financial situation, you have to reign in that propensity and penchant to want to forget about counting pennies and instead start spending and charging at a moment's notice.

The lack of a savings account or emergency fund only adds to the plight put forth by those who are trying to save. The proverbial "catch 22" is that if you don't have money to put aside because you have to pay bills, then you can't even think about having a savings account and thus the struggle continues.

The only way to have money to put aside is to rethink and retool your budget so that you can cut expenses and start having money leftover to save. The budgeting part of this equation has to be recognized as the real catalyst to catch up what time you've lost living at or beyond your means.

.... Keep Reading

Debt Plea: Staying out of debt isn't as hard as you think

As much as we opine about money, we agonize over saving it and wonder aloud why we don't have more of it, all of our financial goals and dreams are at our fingertips if we actually come to one very important money saving realization.

It really isn't that hard to stay out of debt. Now, I realize we're saddled with plenty of cliches and jargon as far as debt goes, such as "you have to spend money to make money," but this isn't about a rich investor or a home buyer that has gone into business purchasing property but rather the individual, the couple, the family that is trying desperately to save money and live comfortably, versus the alliterative and that is going from paycheck to paycheck and hoping to make rent or mortgage and keep the bills afloat from one month to the next.

The fact remains that staying out of debt is more about understanding two elements of saving money: budgeting and subsequently living within the means of your income.

Debt truly surfaces because you want more than you can actually afford (i.e. keeping up with others) or you have no idea what you're spending and then when it comes time to pay bills or look for money for emergencies, you realize that you don't have anything saved due to the lack of a budget and spending too much, and thus you start to dip into credit cards, lines of credit or borrow money, when all the while you could have been saving your own.

The budgeting part is quite easy, although it is truly remarkable just how bad we are at it, as a whole on average. Budgeting is the simple act of knowing what you spend versus what you make but just having an idea of it isn't good enough. You have to write this information out, have plan and know down to the very last dollar what you are earning and if you can afford a certain amount for a mortgage, car payment and other expenses that might be out of your pay grade at the moment. A budget also allows you to cut expenses that are either too high and don't justify their value (i.e. cable television) or figure out areas of it that you can cut back and alter slightly to save.

Debt is everywhere and with that comes temptation to spend, or in this case overspend. When you realize that budgeting and smart decisions aren't difficult and yet are the backbone of saving money, all the financial freedom in the world will be kindly waiting at you doorstep.

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Fixer Upper: How to really manage and pay off debt

As much as anyone from financial advisors to friends will tell you their method of managing and paying off debt, there really is no right answer.

Think of it like a math problem from school, and how some teachers would dock you points for getting the right answer but the way you got there (the infamous showing your work) wasn't how you were taught to do it by said teacher.

At the end of the day, as an adult who is trying to manage debt and budget properly, the most important element of credit cards and unsecured debt is paying it down and eventually off. How you get there really doesn't have the proverbial right answer.

But there are, in fact, some strategies that are universally lauded as being fairly spot on for how to manage debt. Of course, budgeting will always reign supreme as far as debt is concerned because the two go hand in hand.

Those who aren't afraid to tackle debt, and that simply means writing it out to see the big picture, know that their budgeting and going without and managing expenses versus your income, so that you can focus on paying more than the minimum payments, is key.

The best method of debt control and paying it off starts with the reverse pyramid effect. You start with the balance that is the one with the highest interest rate, and then you begin paying on that first, over and above the minimum. As far as the other debt is concerned, you pay the minimum on that until that first balance is paid off, then move on to the next highest interest rate in terms of credit.

Another way of looking at debt is focusing on smaller balances with high to medium interest rates and paying them off first with the most money leftover after you budget. This allows you to see progress being made, which goes a long way to help that feeling you have that you'll never see the light at the end of the tunnel. For some, they can't continue to pay and not see any results, so this method of debt repayment shows that there is hope.

No matter which path you take, know this: the budget has to run parallel with your debt repayment goals. You can't have a budget that is even, meaning your expenses are covered just barely by your income. That simply means you're allowing yourself to make nothing more than minimum payments on your credit, even though you're missing out on how to maximize your repayment plan altogether.

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