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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.
Far too often, we opine and barter with ourselves when the topic turns to money, more specifically how to save.
You talk about how much you want to save, the ways to do it and the discussions focuses on anything from creating a budget to trying to get a better job. The one aspect of saving money we shy away from is cutting expenses, mostly because that means we'll have to go without and perhaps take away things we enjoy.
The truth is if money is an issue, and you aren't able to save (and don't see that changing any time soon), the path that will lead to money in hand is quite simply cutting expenses, which again is easier said then done.
Expenses tend to fall into two distinct categories: needs and wants. The needs part is easy to determine. Those are things like food, shelter, transportation, utilities and other things you absolutely must have in order to live. You can't take away food or water or other basic necessities but everything else truly is fair game when you're really trying hard to save. Simply put, nothing is off the table (except for the food).
That table should be yours in your dining room and kitchen when it comes to meals, as restaurant dining is a huge pitfall when it comes to saving money or not being able to do so. The average person spends thousands of dollars each year on restaurant dining, and that is on top of spending money on groceries as well. Why would you spend twice on food, when the grocery store is perfectly fine as the first and only choice. Granted, you still can eat out once and a while but five days of week for lunch and another two or three for dinner is prohibiting your from saving money.
Another expense that can go without much pain (or maybe some) is that ballooned cable bill. Even if you keep your internet service at around 60 or 70 dollars per month, you can go the route of streaming services to supplement your entertainment needs and get away with a bill for under $100, a far cry from the average cable bill, which is double that amount.
For some, knowing how to save money doesn't come easy. The easy part, however, frankly is looking at what you spend your money on and change that immediately. There's no thought involved, other than you thinking about what you're losing. Instead, flip that mindset and know what you're gaining: more money saved.
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Everyone knows just how important summer is since that is the time for vacations, getting away and kids out of school and desperately needing to keep them busy.
All of that equates to the propensity to want to spend money in all the right places, but needing to somehow find a balance between overspending and being able to stick to a budget so that you don't hit Labor Day with a non existent savings account.
Most of know the tricks of the trade as far as how to save money on a hotel, by letting hotels vie for your dollar, or perhaps booking a trip during the week as far as flights are concerned. Sometimes buying a plane ticket and bundling it with the car rental also allows you to have a discount on that package.
But the one that tends to throw parents off more so then planning a trip to the beach or a getaway on a fishing trip is just how to keep kids busy day in and day out, without having to spend money on them.
The easy, and more expensive out, is simply taking them to the movies, taking them to amusement parks or other activities that cost money. What about being able to keep kids entertained without spending the proverbial arm and a leg on eating out a restaurants or running up your cable or data bill with movie rentals and smart phone apps for them to play games·
The trick is finding a happy medium where kids don't realize they're not being indulged and yet still have them walk away having fun and being amused in the process. Often overlooked are low cost, parks and recreation programs that tend to be a summer long set of activities for a reasonable price.
In some cases, free activities abound and parents, for whatever reason, tend to overlook them or not even realize they exist. Sure, they might not be a roller coaster, but a lot of times even a community fare is free, aside from food and games but rides are part of the deal as well.
Parents also can't be afraid to let kids do something that is easy but somewhat revolutionary: let them enjoy the toys and games they have or take advantage of movies or books at your local library.
Granted, you don't want kids sitting inside playing video games but what about that baseball mitt, soccer ball or basketball court you have outside. That can't or shouldn't go unnoticed this summer, nor should the slew of movies and literature available to enjoy for free at most local libraries.
Summer can be a money saving pit, but only if you're not paying closer attention to how to have fun and keep from spending too much in the process.
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Have you ever thought about debt and wondered just how much you owe·
Do you have any idea what your debt even looks like, beyond paying that minimum monthly payment every month and not so much concerning yourself with the grand total·
If you answered yes to any of these questions, chances are you're doing adequately with your debt in that you're paying what you need to but not addressing the proverbial elephant in the room.
Your massive amount of debt.
If you don't know how much debt you have, there's a good chance you're swimming in it. Those who are financially responsible with their debt can tell you exactly what they owe down to the last cent, even if that number is so staggering that it is embarrassing.
There are other tell tale signs that you're in a ton of debt, some more subtle than others, while you get those moments when your debt is so bad and the red flags are overt and bright as can be, that you simply can't look away for a second.
For starters, if you're getting phone calls from your bill collectors that you owe money, you're probably carrying quite a bit of debt. You also want to check your debt to income ratio to see if it's in the ballpark of the 70 and 30 range (the latter number being the percentage of debt you have in relationship to your income). In addition, you're carrying too much debt if your balances owed are put up against the total amount on the card. A $4,900 balance on a $5,000 credit card is bad news, especially if more than one card is like that.
Debt also becomes an issue when worrying about it starts to change how you act in life beyond the checkbook and savings account. If you are having trouble focusing or you worry about debt so much to the point that you can't work or you're productivity is taking a turn for the worse, you can't ignore those signs, either. We often don't think about the stress of debt and if it keeps us up at night and thus changes or attitude, mostly for the worst.
Finally, if you find yourself using credit card or taking out more loans to pay other debts or loans, you're not really getting to the root cause of your issues, and that is ultimately eliminating your debt or simply budgeting better in that regard.
If you aren't really at liberty to take your debt head on, or you're so concerned with it that you ignore it, that's a sign you have too much debt and a major money overhaul needs to happen.
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The perception among most is that saving money is hard, when in actuality the complete opposite can be true.
Sure, you'll have months when the roof blows off or your car quits on you, and finances tend to tighten a bit at that point, but if you've saved and paid attention to budgeting your money, those aforementioned expenses can be covered with little fret on your part.
For the most part, saving money is a balancing act that some navigate like a tight rope over the Grand Canyon. They know exactly how to save and what they're spending, and won't deviate from the plan. When something unexpected arises, they're prepared with their savings account waiting in the wings.
Viewing money as a struggle just means your perception is off, and that you're not in tune with your spending habits or being able to find subtle, less obvious ways to save.
Energy costs are a prime example of how some people know that only a few degrees up or down on their thermostat can save you hundreds each year or that buying an energy efficient appliance might cost more up front but can save you thousands based on the amount of electricity they pull.
That same group that is thermostat conscious also will tell you that they have been able to save by cutting back on take out or eating out at restaurants. If you're spending $200 to $300 per week on your grocery bills and another $200 on restaurant dining, something has to give. That grocery bill should be a gateway to packing lunches or eating and cooking dinner at home, not having the food sit and potentially be wasted while you're hitting the drive thru or forgoing pots and pans and clean up for a faster, more convenience yet expensive means to have dinner.
And on that same vein, don't make grocery shopping a stock up trip, particularly on food that you're not going to get to for years or could spoil. Having hundreds of dollars sitting in your pantry or cupboards is dead money, like a business that has too much money sewn up in inventory.
Instead, run a tight ship in the kitchen and at home. Buy what you need and plan your meals accordingly so you're not over buying and looking at cans, packages and other items on shelves that is money sitting and could be more pertinent for something else (like a savings account).
While saving money isn't a given, it doesn't have to be so laborious that you simply throw your hands up and let the status quo become your customary way of living when it comes to money.
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The question that most of the world faces as they continue toward retirement is plain and quite simple: are you going to have enough to retire·
The real issue stems from whether or not you're doing two things well at the moment: saving money and putting enough away toward retirement·
The savings part would seem pretty obvious if you've spent your working years putting aside money by having a budget and keeping track of income and expenses and making sure the entire financial pot get stirred as you take the extra money and not only have it set aside in a savings account but also allot enough toward a retirement account, whether that's in the form of a company 401K or an IRA you started on your own.
But as much as we know we need money saved for retirement, how exactly do we make sure it all goes down as planned· Are there any trick toward saving and having enough money when you retire·
The average retirement account fluctuates between $120,000 and $160,000, which hardly seems as though that can last you from the age of retirement and beyond. Two numbers that you can't ignore and should heed centers on your age and the amount of money you should be saving in totality as it relates to your income.
Those who believe and hold close to them that retirement and starting to save for it has no number as far as age go would be correct. The best route you can take is starting to save the moment the opportunity becomes available, even if that is in your 20s. The mentality should be the sooner the better, particularly if you get a job where the company matches you dollar for dollar retirement wise. In your 20s or even 30s, retirement needs to be a high priority.
Furthermore, you shouldn't be stingy with it and how much you set aside. Generally speaking, you should be saving about seven to 10 percent of your total income toward retirement when you're in your 20s.
Now, one of the things that you want to steer clear of as far as retirement and savings go is borrowing from your 401K, an all too common practice. Borrowing should be a last resort, particularly if it is ill advised and for something that isn't a home repair or a major event that you desperately need cash for without a question.
Retiring is the dream of everyone, being able to say they worked hard and was able to enjoy their post work happenings. But that thinking needs to be apparent well before you call it quits thus taking the pressure off of yourself a few years before you actually go.
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