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Should Your Child Opt For A Trade School Education?

electricianWe hear it said over and over that every child should have a college education. We believe this means is that every child should have the opportunity to get a college education but not that every child should actually get one. Children are no more alike than trees in a forest. Each has its own interests, abilities, goals and skills. In many cases this will mean they should, in fact, get a college education. But this isn’t true for everyone. One recent survey revealed that nearly 50% of those that began college failed to graduate. These students likely learned that college just wasn’t a good fit for them and had probably run up thousands of dollars in student loan debts before figuring this out.

The alternative – get a skill

For some children a better alternative than getting stuck on the idea they need a college degree is to determine what they really enjoy doing and if this aligns with a trade such as being an electrician, a plumber or auto mechanic. These trades pay very well, offer a high degree of job security and can be very satisfying for those that enjoy working with their hands and seeing tangible results for their efforts.

Four-year college vs. a trade school

On the average, it costs about $33,000 to get a degree from a trade school vs. the average $127,000 cost of a bachelor’s degree. But the differences don’t end there. It usually takes at least four years to get a bachelor’s degree vs. the one or two years required to get a trade school education. For many young people this would mean spending a lot less

What exactly is a trade school?

A trade or school is just that – a technical school or vocational school that teaches skills related to specific jobs. It focuses on getting students prepared for specific careers instead of teaching liberal arts, business or economics. The careers these schools focus on include jobs such as machinist, welder, electrician, mechanic, truck driver and plumber.

Not much of a difference in earnings

Believe it or not, there’s not much of a drop-off between salaries for those with a four-year degree when compared with those that went to a trade school. Trade school graduates earn an average of $42,000 a year. If you figure a 30-year career, the difference between this and those that got a four-year college degree is only about $90,000. In addition, trade school grad began working two years earlier than college graduates, which means two more years of income. At $42,000 a year, this adds $84,000 to the trade school graduates lifetime earnings so that at age 52, the typical college grad will have earned only about $6000 more.

The difference in student loans

Another important difference is the cost of financing a four-year college education vs. a trade school. If we assume that students finance their schooling with loans at an interest rate of 4% over 10 years, a bachelor’s degree will actually cost $154,000. On the other hand, a trade school education will cost only an average of $40,000, which means a savings of more than $100,000 just on the degree alone.

It’s tough to export plumbing jobs

A third benefit of going to a trade school is that the jobs your child would get as a result are very difficult to send to another country. It’s relatively easy to export jobs such as information technology or database engineering to somewhere else. But it’s much more difficult to export jobs that involve plumbing, electrical work, welding and the like.

Make sure you’re being realistic

Both you and your child need to be realistic about college. The harsh reality is that college isn’t for everyone. We have a grandson that never did exceptionally well in high school not because he wasn’t smart but because school simply didn’t interest him. When he graduated he chose to go to a trade school where he could learn automotive bodywork instead of going to college. He loves cars, is happy in his career and has received three promotions in the past two years. He is earning such good money that he and his partner have just bought a wonderful new home.

You can’t make it drink

You’ve undoubtedly heard the old adage that you can lead a horse to water but you can’t make it drink. In this case you could lead a child to choosing a trade school but you can’t force him or her to make that choice. But if you’re being realistic and you believe that, for whatever reason, your child just isn’t cut out to go to a four-year college, you can at least find ways to encourage him or her to choose a trade. Failing that, you might insist that he or she goes to a two-year community college where they could earn first- and second-year credits and then transfer to either your state’s university or some other college. Do this and your child might learn that a four-year college education just wasn’t a great choice and that learning a trade might be a better option. But even if your child goes on to a four-year college you will have at least helped him or her spend less on their education, which translates into graduating with less student debt.

Average salaries

If you’re wondering how much an electrician, plumber, welder or auto body repair person earns, the median hourly wage is $25.75 for an electrician, which translates into a median annual wage of $50,510. The median annual salary for a plumber was a bit less at $49,140 (in 2012) but the best of them earned $84.480. Auto body repairers have a median hourly salary of $18.66 or $38,800 a year, which is right below that of computer operators. And welders, cutters and braziers have a median hourly income of $17.66 or $36,700 a year. In comparison, a social worker with a four-year degree in sociology has a median annual salary of $47,121. A person with a fine arts degree – that is able to find a job as, say, a museum research worker – will have an annual median salary of just $48,401. If he or she becomes a painter/illustrator, their annual median salary will be $37,819. And if your son or daughter becomes an elementary school teacher, he or she will be looking at a median annual salary of $52,241. To put this another way, your son or daughter might be much better off becoming an auto bodywork repairer or an electrician than a social worker and definitely much better off than being a preschool teacher.

It’s not shamefulyoung woman thinking

Some parents might not want to encourage their children to go to a trade school, as they would feel embarrassed when their friends’ children go off to a four-year college. But there is really nothing shameful about going to a trade school. Our society would be a far worse place without electricians, plumbers and auto body repairers. These people perform very needed services. It’s what used to be called a good, honest living before we bought into the idea that everyone should go to college. Skilled workers are generally honest, hard-working and dependable people and should be admired for their work instead of being looked down on because they didn’t graduate from a four-year college.

8 Things You Should Know If Your Child’s Applying To Colleges

family with teenage daughterIf your child’s a high school senior we probably don’t have to tell you what an exciting but confusing time this can be. There are difficult decisions to be made, confusing applications to be completed and critical tests to be taken. There’s so much information that must be taken in and considered it could make both you and your child’s heads spin.

If you’re typical, you want your child to attend the best and most prestigious school possible. However, given the price of a college education today – especially at top-level schools – this could mean years and years or debt for your child. It’s important that you don’t get all excited and end up making a choice that costs your child dearly.

If you’re not aware of this, students are now graduating with an average of $33,000 in student debts, which can put a strain on a person’s life for many years to come. If you don’t want this to happen to your kid the best way to handle things is to approach choosing a college as a business decision. Given this, here are at eight things you need to know or do.

You need to have a budget

Determine the amount of money you could contribute to your child’s education and then be honest about this. He or she can then decide in advance how much they’re willing to borrow to get a degree. You might have them check out the starting salaries she or he could expect to earn after graduation and then compare this to the student loan payments they would probably be required to make monthly.

The school may not be as important as you imagine

Does how prestigious the school is play a big part in your child having a great career? Maybe not as much as you might think. If your child is applying for colleges in the top 10 or 20 of schools this might open the door to opportunities that wouldn’t be available otherwise. But there is actually not much of a disparity between the potential earnings of a student from one of these schools vs. other 4-year schools. The Department of Education did a study that found the prestige of a school made only a 2% to 3% difference in the earnings of men and 4% to 6% among women. Compare this with the difference in cost between, say, your state university and an Ivy League school. When you take this into consideration you might decide that a less expensive school that has a good reputation and offers a quality education would be a much better option.

Learn the actual cost

If you’ve ever bought a car you know there’s the sticker price and the real cost. The same is true for colleges and universities. The tuition price that you see listed for a school is hardly ever what it actually costs to attend it. In fact, most students at most schools pay a lot less than the “sticker price.” So when you’re checking out a school, don’t look just at the tuition price but also at its average package of financial assistance. You will then have a clearer idea of what it will actually cost your child to attend it. In some cases a school that looks awfully expensive might cost less than a school that appears to be cheap.

money and graduation cap in chainsThink carefully before borrowing money

We know you want to do everything you can for your child so you’re going to want to help with their college education as much as possible. The issue is that you may not be financially able to do this. If you don’t have the cash available to help out with your kid’s education there are loans available such as the federal PLUS loan for parents or a bank loan. However, it’s not a good idea to take out one of these loans. If you don’t have the cash to help your child it might be because you can’t afford to help. If you have to have a loan to finance your child’s schooling this could wreck your budget or even screw up your retirement. Your house could even be at risk.

Know that living at home is best

In 2013-2014 the cost of room and board at a public university averaged $9498 a year and for a private non-profit 4-year school the average was $10,823. Multiply this by four years of school and you’d be looking at around $38,000, which is a lot of money. If you live close to a good college or university you need to seriously consider having your child go there and live at home. If your child really wants to go away to school a good compromise might be for her or him to go to a local community college or university for two years and then go away for the last two.

Be aware that debt could have a considerable impact on your child’s life

As you have read students now graduate from college owing an average of $33,000. Of course, depending on your child’s school it could be much more than this. Studies have shown that a significant amount of debt is keeping many young people from taking critical steps in life such as attending graduate school, getting married, purchasing a home or even having kids. What this means is that it’s best to keep debt at the minimum by selecting a cheaper college and stressing to your child the importance of living frugally and finding part-time work if possible.

Scholarships and grants can make a considerable differenceOne of the most prevalent myths is that only top students get scholarships. Your child should be applying for scholarships even if he or she isn’t in the top 5% of their class. These can be a great source of extra money for your child’s schooling. Be sure to check out sites such as and search through their databases. Your employer, union or fraternal organization might even have scholarships for the children of their members or employees. There is actually a scholarship for golf caddies where we live.

Be sure to teach your child the important skills

You may have spent the last 17 or 18 years doing everything for your kid. In this case it’s time to begin teaching them some life skills. They’ll have a hard time adjusting to life on their own unless you teach them to do laundry, cook, change a flat tire, take a bus, grocery shop or bank for themselves. You also should have the “money talk.” This is where you discuss budgets and frugal living. You need to teach them about credit and debit cards, good money management, debt and why it’s important to have good credit. You might do what some parents have done and give your child a monthly allowance to cover the necessities so they can learn good money management. Almost everyone makes a few financial blunders before learning how to handle money responsibly. It’s much better that your child does this with an allowance than with their student loans that could amount to thousands of dollars.

10 Little Marriage Secrets Your Friends Won’t Tell You

Couple Using Laptop And Discussing Household Bills Sitting On Sofa At HomeAre you and your significant other starting to use the “M” word? Are you asking questions like should we get married? Do you want to get married? When should we get married? Or what would your parents think if we got married?

There’s no question about the fact that marriage can be a wonderful thing. Your husband or wife can be your best friend, your partner, your confidant and, of course, your lover. These are the things your friends will emphasize if you’ve discussed marriage with them. “Oh, yes, marriage is great.” “Marriage is just the best thing we’ve ever done.” Or “you really should get married – it’s wonderful.”

But while your friends are telling you how great marriage is, there are things they’re just not telling you and if they did, you might give the idea of marriage a second or even third thought. Here are 10 of these nasty, little marriage secrets.

Marriage is going the way of the dodo bird

According to the Pew Research Center, the percentage of American adults that have never been married has reached a new high. Two years ago, about 20% of American adults aged 25 and older (about 42 million people) had never been married. This compares with the 10% of those of that same age in 1960. There are several reasons for this. For one thing Americans are staying in school longer. They are also focusing more on their careers after they graduate and then getting married later in life. In fact, the median age for women getting married is now 27 and 29 for men, which is an increase from age 20 for women and 33 for man in 1960. But as you might guess there is one group of people where marriage is on the rise – same-sex couples. This has increased more than 50% to about 130,000 in 2012.

We’re into infidelity

Two years ago a research company affiliated with the University of Chicago found that some 12.3% of all married women and 19% of married men admitted that they’ve had extramarital affairs. While most Americans seem to favor monogamy, many of them would cheat if they thought they could get away with it. An interesting contradiction is that a survey done by the USA Network found that 82% of those that responded said they had “zero tolerance” for cheating but 81%, said they would cheat if they believed they wouldn’t get caught.

We planned our divorce before we planned our wedding

If you’re contemplating marriage have you thought about a prenuptial agreement? A recent survey done by the American Academy of Matrimonial lawyers found that about 63% of the attorneys queried said they have seen an increase in the number of people requesting prenuptial agreements. The major reason for this is probably the fact that so many people are marrying later in life and have amassed a significant amount of assets by the time they get married. This makes the idea of a prenup more attractive.

The more money spent on the wedding, the shorter the marriage

Another interesting fact is that the more money that is spent on a wedding the shorter will be the marriage – at least according to a study done recently by economics professors at Emory University. What they found in surveying 3000 couples is that those who spent $20,000 or more on their weddings were 46% more likely to get divorced than the average couple. In comparison, couples that spent between $1000 and $5000 were 18% less likely to split up.

Social media can kill a marriage

In the survey done recently by the USA Network, 86% of those that responded said that it’s much easier to cheat thanks to social networking and almost 33% said they had had an emotional or romantic relationship online. How can you prevent this? One thing you might try is setting time limits and boundaries on social media usage. For example, you might agree that each of you will spend no more than one hour an evening on Facebook, Twitter or whatever. But don’t start spying on your spouse’s use of social networking. This not only signals a lack of trust in your partner but if you’re caught could actually get you kicked out of the house.

Money keeps us together

According to the Emory study quoted above, the more money you make the more likely it is that you will stay together. Couples making more than $125,000 a year are 51% less likely to divorce than those that earn less than $25,000 a year. Of course, there is a strong correlation between earnings and education and people with better educations appear to be more likely to stay married. People with a high school diploma have a divorce rate of 42.8% by the time they reach middle age while only 26.5% of people with a bachelor’s degree or higher split the blanket.

You can’t be too old to get a divorce

While you might think that by the time married couples reach their 50s they would’ve gotten past the idea of divorce but this is not necessarily true. Adults that are 50 or older accounted for more than 25% of divorces in 2010, which is up from less than 10% in 1990. The good news is that the national divorce and annulment rate fell from four per 1000 people in 2000 to 3.6 per 1000 people in 2011. So more people are staying together and for longer.

The cost of our wedding left us broke

Do you know the average cost of a wedding? In 2014 it was $29,858 according to a survey that was done by of 20,000 brides. This includes an average of nearly $13,000 for a venue (including the necessary food), more than $5500 for the engagement ring and $2400 for a photographer – and this excludes the cost of a honeymoon. Why is this? Couples that marry later are more likely to be spending their own money. This means they no longer have to stick to a budget set by mom and dad.

It was her idea to split up

Women initiate two thirds of divorces according to the Marriage Project. This is because, for one thing, divorce laws tend to favor women with regards to child custody. A less kind hearted explanation is that women are more likely to have unfaithful husbands than husbands are to have unfaithful wives. In addition, women have become stronger and more independent over the past 30 years, and are more confident that they can stand on their own. Many of them have well paying jobs so that the idea of being on their own doesn’t seem as frightening as it might have 30 years ago.

We sort of screwed our guests

Finally, as our economy has improved there has been an increase in destination weddings that have more lavish ceremonies. This means that the poor folks on the guest lists are spending more money accordingly. In fact, this year guests were projected to spend about $592 per couple on the average per wedding. Plus, they were dropping another $109 on gifts per wedding. One of the results of this is about 43% of us say that we have declined attending a wedding for financial reasons. This is based on a poll done by the nonprofit organization American Consumer Credit Counseling.

Love conquers all?

There is the old saying that love conquers all but this may not necessarily be true. What conquers all in marriage is usually a combination of hard work and compatibility.  But then as Jenna McCarthy points out in the following video, for women the secret to staying married might be as simple as making sure you’re always thinner than your husband …

Painless Ways To Manage Your Holiday Spending

Decorated Christmas tree and giftsI know the holiday season must be here because the day after Halloween I saw Christmas decorations at our local Walgreens. It feels like Thanksgiving kind of got lost in the mix but be that as it may, holiday time is at hand. Most of us will soon be embarking on our Christmas shopping and that’s where the danger lies. We all want to do great things for our family members and friends but this can come at a severe price – if we’re not careful about our spending. So here’s the dichotomy – how do we do everything we want to do in gift giving without breaking the bank? Here are six fairly painless things you could do to manage your holiday spending.

Keep records of your spending

There are a number of smart phone apps available that will track your spending versus your budget so that you’ll know how you’re doing. We like as it’s very easy to use and will both track your spending and help you develop a budget. If you overspend in any category – whether it’s gift giving or grocery shopping – Mint will send you an email alert so that you can adjust your other categories accordingly. When you keep track of your spending, you will better manage it and also keep from duplicating gifts or, worse yet, not having enough money left in your budget to buy a gift for an important relative or friend.

Plan ahead

Check out your debt before you make your shopping list. Do you have some savings put aside or an emergency fund? It’s best to start your holiday shopping by understanding what you owe as this can help you determine how much you can afford to spend. If you haven’t done this recently you should sit down and spreadsheet your debts with their minimum monthly payments, due dates and balances. You might find that you could pay down some of them, which would reduce your monthly payments and free up additional money for gift buying.

Once you know where you stand financially, make a budget and a shopping list that will keep your gift buying under control. That way you won’t wake up on January 1 with a “holiday shopping hangover.”

magnifying glass on credit reportNote: If for some reason you think you might need additional credit to fund your holiday shopping be sure to first get your credit score free on a site such as or While this won’t be your true FICO score it will be close enough for you to know how potential lenders would view you.

Cut out some of the people on your list

We understand it’s tough to cut kids off your gift list. Christmas is just such a special time for them. However, you might be able to cut some of the adults off it. For that matter, if you have limited finances, you could ask your adult family members and friends if they would consider a gift drawing where you put everyone’s names in a hat and then each person draws a name and buys a gift for that person. This way instead of having to buy small gifts for, say, 10 people you could buy one really nice gift for one person. Or you could suggest forgoing gifts entirely with some of your friends or “minor” relatives. You might be surprised to find that they think that this is actually a very good idea.

Don’t buy until you’ve browsed

Once you’ve made your gift list, go online and browse your favorite stores. Use this information to make a gift budget. Next, you will need to decide exactly how much you’re willing to pay for every item. For those gifts that are “must haves,” you might have to buy before Thanksgiving Day and Black Friday and Cyber Monday to get both selection and price. And when you’re figuring out your budget don’t forget to include holiday entertainment and holiday meals.

Buy online

If you’re not buying at least 50% of your gifts online, you’re losing money. Sites such as, eBay and usually have better prices than what you’ll find at your local retailers, plus you probably won’t have to pay your state’s sales tax, which could be as high as 7% – depending on where you live. If your state sales tax is just 4%, do the math. If you spent $500 online vs. buying locally, you’d save $20, which might be enough to buy something for your great aunt Martha. Be a careful shopper and you should even be able to get free shipping.

Cut your other spending

It’ll be easier to buy gifts without breaking the bank if you cut your other spending so you have more money for Christmas. This could be easier than you think if you follow these six tips.

Comparison shop on the spot with tools such as RedLaser

Comparison shopping is always a good idea and thanks to today’s smart phones it’s now easier than ever. There are apps available such as RedLaser that allow you to comparison shop right in the store. It’s available for free on Android, Apple and Windows phones. All you do is scan the product’s barcode and RedLaser will show you where you can find the lowest price – online or in stores. We know of people who say this little app has saved them thousands of dollars.

Dine out less

You can have more money available for holiday shopping without busting your budget simply by eating out less. A $10-grass fed hamburger at your favorite pub is really enough to buy about six hamburger patties you could cook at home. If there is some reason why you must eat out, use coupons.

Cancel unused memberships

If you stop to think about it you might remember that you have some memberships you are no longer using. They might be for a gym, a health club or some online service. Canceling them could save you $50 or more that you could then use to purchase a special gift for your spouse or partner.

Buy store brands

We learned some time ago that grocery store brands can be just as good as their more expensive counterparts but cost far less. If you don’t believe store brands can be just as good as big-name brands, consider this. In one recent study 80% of those surveyed said that these brands were “just as good as national brands.” And the savings that you gain when you buy them adds up. In fact, this can be as much as $30 a week on $120 grocery bill. You can also save a bundle at the grocery store by using  coupons. Here’s a short video courtesy of National Debt Relief, with the Coupon Coach that shows how to save with coupons …

Download your music from Amazon or buy used CDs

iTunes is a fun and easy way to download your music. However, it’s much costlier than Amazon. In fact Amazon downloads generally average 78% less than the same music on iTunes. Another way to save money on your music is to buy used CDs then transfer the songs to your iPod, iPhone or your other music player. This will save you about 50% off retail. And if you don’t mind listening to periodic commercials, there is Pandora where you can create “stations” based on your favorite artists and listen to music all day for free.

Choose generics at the drugstore

You don’t have to buy brand-name stuff at the drugstore any more then you need to buy brand-name groceries. Drugstore generics work just as well as the higher-priced name brands. You should be able to save big on items like ibuprofen, vitamins, mouthwash, vitamin E and so forth. For example, the name Acetaminophen might be a real mouthful but it’s the same as Tylenol but a lot cheaper.

Are We Witnessing The Slow Death Of Debit And Credit Cards?

Video thumbnail for youtube video Dallas Consumers Debt Ranks First In The Average Debt Per CityPersonally I love my debit card. In fact, it’s gotten to the point where I can’t imagine life without it. I used to feel sort of ashamed if I used it to buy something for less than, say, five dollars.

Not so anymore.

I now have no problem at all whipping out my debit card to pay for a $1 burger as I drive through my favorite fast food restaurant.

But is my debit card dying a slow death? And what’s the future of credit cards?

Apple’s new app called Apple Pay could end up making both debit and credit cards obsolete. In fact, it could almost eliminate the need for you to carry a wallet.

The way it works is fiendishly simple. If you have an iTunes account, you can add a credit or debt card to Pay simply by entering its security number. You say you don’t have an iTunes account? In this event, all you have to do is open Passbook, swipe down and tap the Plus sign. You can then use your iSight camera to enter the card information or type it in manually.

How it works

The secret behind Apple Pay is the Near Field Communication antenna. It lets you pay by putting your iPhone near a contactless reader while having your finger on Touch ID. You don’t even have to look at your screen to verify that the payment information has been sent successfully. You’ll feel a subtle vibration and hear a beep that lets you know.

When you’re ready to pay for something

Do your shopping, go to check out and then to pay all you have to do is select Apple Pay and then place your finger on the Touch ID. I guess the only way that paying for something could be simpler is if the retailer’s terminal could read your mind.

Here’s a short video courtesy of National Debt Relief with a demo of Apple Pay and more information about using it …

Banks and credit card companies are leaping aboard

When the iPhone 6 launched along with Apple Pay, the major credit card providers –Visa, MasterCard and an American Express – were already on board. A number of the country’s leading banks had also signed up including Citi, Wells Fargo, Chase, Bank of America and Capital One. This means that if you are a customer of one of these banks you can link your debit and credit cards with Apple Pay and use it at any store that accepts this new form of payment.

The alternatives to Apple Pay

All contactless payment requires Near Field Communication (NFC) just as does Apple Pay. This means your phone must have an NFC chip. This is true of most new Android phones as well as some Nokia Lumia Windows phones. If your phone has an NFC chip, there are alternatives to Apple Pay such as Google Wallet and the Isis mobile wallet app, which was created by AT&T, Verizon and T-Mobile. Note: These three cellular providers are in the process of changing the name Isis to avoid being confused with that terrorist outfit in the Mideast.

Be aware that contactless payment works only if the retailer has payment terminals that can read its signals. Unfortunately, not all retailers have these terminals or want to upgrade to them.

It’s the future of payment

While Apple Pay can be used only on the iPhone 6, it’s not the Lone Ranger of walletless payments. For example, recently announced an app as an experiment where people can add cards from their favorite stores as well as gift cards and then check some of their balances on Amazon devices and Android phones. These gift cards display as a QR code or barcode so when you reach the register, the app can be scanned.

Do you use PayPal? It also has some new payment alternatives that include an app that was recently updated for Android, iOS and Windows phones. It allows you to store loyalty cards such as those of pharmacies and grocery stores, as well as your standard PayPal sources.

PayPal has also created partnerships with selected stores and restaurants, including Selsy and Storific. If you have the app, you can order from a restaurant that participates in the plan in advance and pay for your meal` via your smart phone. If you’re eating at the restaurant you can settle your bill via your smart phone and not have to to wait for a check and your server to come back with your Visa or Mastercard. And PayPal’s partnership with Home Depot allows you to pay at the register by selecting PayPal at the store’s payment terminals. In other words, no phone or wallet required.

Apple’s biggest competitor

And there is what’s probably Apple’s biggest competitor – Google Wallet. It allows you to shop in stores with your entire gift and loyalty cards in one place. It even allows you to send money to friends and relatives, which they can spend immediately with a Google Wallet Card.

Google Wallet can also be used at any store that accepts contactless payments. All that’s required is to tap, pay and then go. You can make purchases with your Wallet’s balance or use your Google Card to make purchases tied to your preferred credit or debit card.

Many gift card providers such as Applebee’s, American Eagle Outfitters, the GAP, Old Navy, BestBuy Chili’s, the Coldstone Creamery, Kohl’s and Whole Foods support Google Wallet.

But there is a downside to this app, which you may have spotted. Unlike Apple Pay you can’t use Google Wallet to make purchases tied directly to your credit or debit card. It works only with gift and loyalty cards – at least at this time. Also, Google is a bit hazy about how you enter gift and loyalty card information into your Wallet, However, we assume you would have to manually enter each card’s number and possibly its security code. We can see that Google Wallet could be helpful in the case of loyalty cards such as those from your favorite retailers, but we wonder about gift cards. If you had a card with a balance of, say, $25 would it really be worth entering its information into your Wallet instead of just using the card its self to make a purchase.

The future is here

One thing that all this makes abundantly clear is the future is already here – at least to some degree. Contactless payments are the real deal, especially if you have an Apple iPhone 6. You can bet that Google is working on improvements to its Wallet so that you will be able to link it to your credit or debit card. Then there’s the 800-pound gorilla in the corner – Amazon. It’s Fire HD phone may not be an overwhelming success at this point but you can also wager a lot that it’s also working on an equivalent to Apple Pay. It might be too early to cut up all your debit and credit cards and throw away your wallet but the writing is on the wall. Contactless purchasing is here to stay and is bound to become even more ubiquitous in the years to come.

It will be hard for me but I can see that the time is coming when I will have to cut up that trusted friend of mine – the debt card.

Tell Us Your Generation And We’ll Tell You Your Financial Mistakes

We don’t have a crystal ball but if you tell us your generation, we’ll tell you the mistakes that you’ve made or are most likely to make. That’s right, there are some mistakes that every generation makes.

frustrated woman with a paper and calculatorFinancial mistakes made by twentysomethings

People in their 20s have a number of things in common besides their age. Most have just either left home or finished college and are starting out on their real lives. They also tend to make the same mistakes. For example, one of the biggest mistakes made by people in their 20s is putting off debt repayment. You need to start paying off your student loans as quickly as possible as this will keep you from having to pay extra interest over the years. Plus, do you really want to still be paying off your student loans when you’re in your 40s or even your 50s?

A second financial mistake made by twentysomethings is not thinking about retirement. We understand that age 55 or 65 can seem like a long way away but that’s actually a good thing. The more time you have to save for retirement the more money you will be able to save and the more money you will earn in interest. You should be putting at least 3% of your annual salary into a 401(k) or a Roth IRA. Do this and the future you will be eternally grateful.

A third mistake is to avoid making investments. You may not have a lot of money to sock away but it’s important to get started. Your bank probably offers a free investment advisor to help you choose your investments. If not, just pick an index fund and get started. But above and beyond all, get started.

The mistakes made by thirtysomethings

If you’re in your 30s one mistake you may be making is short term financial planning. Whether you think this or not, you are going to really zoom into your 40s. Don’t let these next years slip by. You should be setting goals for the next five, 10 and even 20 years. As an example of this, your unborn or very young child may be years away from college but now is the time to start preparing for these expenses.

Trying to keep up with the Joneses is another mistake that’s almost always made by people in their 30s. You might think it’s fun to compete with family members and your peers but you need to understand that when that relative or friend comes home with a new car all he or she is doing is taking on new debt. The fact is that people who have nicer things are not necessarily better off financially than you and in fact might be worse off.

What’s better is to take pride in how your savings account is growing and not that you have the newest car or toy?

Many thirtysomethings have made the mistake of going back to grad school. In some cases it can be a good idea to get an advanced degree. And in today’s economy, many people are finding it hard to get a job in their field and they are returning to school to try to fix this. The problem is that this only increases your student debts and you might find your new degree doesn’t really lead to a better job or a higher salary.

Have you bought more house than you really need? This is another mistake commonly made by people in their 30s. We understand that it can feel great to buy that first home. And it’s a good investment. But don’t make the mistake of buying a house that’s too big for your budget and your needs. Do this and you’ll not only have a bigger mortgage, but you’ll also have higher taxes and bigger utility bills. A better idea is to start smaller and then move up as your needs and your net worth change.

House with cash on the roofFinancial mistakes made by fortysomethings

By the time you reach your 40s you’re probably well entrenched in your career and the idea of changing to a new one can seem very scary. But it’s a mistake not to consider this. If you want to change careers you don’t necessarily have to start at the bottom. You have good, valuable experience that should help you land an equally good job in a new career.

A second financial mistake made by people in their 40s is about their mortgages. You’ve probably been paying on your mortgage for so many years that it’s just become automatic. However, you should now start looking at your end goal. Could you do something to payoff your mortgage even faster? Maybe you would like to pay it off before you become an empty nester. If this is the case, you need to determine to increase your monthly payments to achieve that goal.

If you still have credit card debt this is yet another mistake made by people in their 40s. What you want to do at this time of your life is to get rid of your debts as much as possible. There’s no way to know what will happen to you in the next decade. You might lose your job, see your kids go away to college or be hit by big medical bill. To prepare for these emergencies, you need to not have any debt hanging over you.

Finally, people in their 40s often make the mistake of not having a will. We understand that thinking about your own death is not a fun subject. However, you need to have a will. This is the only way you can control what happens to your money and your other assets when you die. A will also makes sure that your loved ones are not left confused as to what they need to do if something were to suddenly happen to you.

Fiftysomethings and their mistakes

Unfortunately, one of the most common and worst mistakes that people in their 50s make is dipping into their savings. You should have a retirement fund that’s fairly impressive by now and it can be tempting to use some of that money, especially if you’re facing a financial pressure such as paying for your kids’ education or helping support your aging parents. What’s best is to leave your retirement money alone and figure out some other way to deal with any new financial pressures.

It’s also a financial mistake to underestimate what retirement will cost you. Today, the biggest cost most retired people face is healthcare. Whether you like to think about this or not, you have to plan that you might need long-term care in your 80s. This can cost as much as $6000 a month so it’s important to understand this and plan accordingly.

Third, it’s a mistake to let your children use you. We understand that you want to help your kids but they do need to develop some financial independence. You could start with small steps such as refusing to pay for their car insurance or taking them off your family cell phone plan. And, of course, they should eventually pay you rent, which can be a great way to encourage them to move out on their own.

What The Health Insurance Companies Don’t Want You To Know

Man looking frustratedNow that open enrollment is here you might be wondering about Obamacare and what the future holds for your healthcare insurance. Well, it looks as if some of the kinks have not yet been ironed out. For example, the insurance companies are still not sure of what to charge you. As you may know insurance companies can’t charge sick people more than healthy people or refuse to cover them. They’re also limited in what they can charge older customers versus younger customers.

Obamacare or the Affordable Care act has, in fact, made insurance cheaper for those that don’t buy insurance through their jobs but via the individual marketplace. However, without the health-based pricing of the past, which excluded some consumers and helped the insurance companies control their costs, thet are finding it harder to calculate their premiums. In addition, there is the P word, which is that insurance companies still need to turn a profit as many of them are public corporations and have to answer to their shareholders. And some of them are having a hard time balancing this versus the mandate that their plans offer stability, affordability and accessibility.

If you can figure out the math you could get a tax break

More than 5.4 million people this year selected insurance through the federal government’s marketplace and of this 87% selected a plan that included tax credits. In order to qualify for these credits, peoples’ income had to be equal to or lower than 400% of the 2014 federal poverty line, which was $95,400 per family of four. The problem here is that the size of these credits was based partially on consumers’ estimated income for this year. If your actual income doesn’t match what you estimated – which is probably a common occurrence, especially if you’re self-employed – you will have to report the difference when you pay your taxes for 2014. And if you received too much in subsidies, you will be required to pay back the difference. Plus, experts believe this confusion is very likely to occur again during this year’s open enrollment.

If you’re out of network you might be out of luck

If you use doctors and hospitals within your plan’s network of medical providers you will have lower costs than if you go out of your network. In fact, some plans wont pay at all if you receive out-of-network care – except in the case of an emergency. There’s an additional catch if you’re covered by policies under the Affordable Care Act. It’s that out-of-network charges don’t count towards your annual out-of-pocket costs. What this means is the cost of out-of-network care can theoretically be unlimited.

Like the old song says, “Shop around”

If you’re currently under an ACA plan, and do nothing you will be automatically reenrolled in your plan for 2015. But you should shop around by visiting your state exchange to see what options are available for next year. Some insurance companies will be leaving the market while others will be entering it or expanding their presence. And some insurance companies have planned on making changes in their premiums.

Your plan may not cover the top hospitals

How do insurers control costs? It’s mostly by controlling what they pay the providers in their networks. While the average hospital is usually willing to discount its rates, this is not true for high-profile cancer treatment centers and top academic hospitals. What this translates into is that if you want to be treated in one of these hospitals, you may wind up out of network.

Smiling doctor in front of his teamYou might need to be a detective to determine whose in-network

You might have to be Sherlock Holmes to determine who is in network and who isn’t. While this might seem like a fairly simple question, you may find you have a problem answering it. The insurance companies publish lists of their in-network doctors but can be sort of lax about keeping them maintained. Even if you do your homework you could find that you’re on the outside looking in if your doctor leaves your network. Unfortunately, this isn’t very uncommon either because doctor-insurance contracts can often be terminated with little or no notice.

You can back down your insurer

Do you believe that your insurance company refused to pay a claim or made an error in billing you? Then you can appeal the decision. To do this you will need to go first to your insurance company. If you don’t get satisfaction there, you’ll have to go to your state insurance department. Where do most disagreements come from? It’s usually about whether or not treatment was necessary or when the language of your plan was unclear. Believe it or not, a very high percentage of disputes that reach the appeal stage are resolved in favor of the consumer.

You may be surprised by surprise charges

You really have no way to anticipate which providers will be involved in your care. As an example of this, you could go for an ultrasound at an in-network center but then get a bill for the full cost of the out-of-network radiologist who read your ultrasound. The good news is that many insurance companies now offer cost-estimation tools to help you avoid these unpleasant surprises. You can also call your insurer and doctor before you get a procedure and ask whether any of people involved in it are out-of-network. Of course, in the case of an emergency it’s just about impossible to do this.

You could end up paying more for the “cheapest” plan

Deductibles, copayments and coinsurance are other components of your health insurance bill in addition to your premiums. What this means is that plans with low premiums could result in higher costs for some consumers. One health insurance comparison website, HealthPocket, analyzed the plans available under the ACA and found that the plans with the highest premiums – called platinum plans – can actually be the best buy for some people because their out-of-pocket minimums are low.

Those high deductibles are not going away

If you have a high deductible plan you will have relatively low premiums. However, you may be required to pay out-of-pocket for many services until your spending hits a threshold. After that, your insurance kicks in. This is supposed to incentivize you to shop for better deals, which would reduce costs to the overall system. As you may know, most Affordable Care plans have relatively high deductibles. In fact, the average bronze plan, which is the one with the lowest premiums – has a deductible of $4959. You might think that this unfairly burdens you because the costs of medical services are seldom transparent. There have been studies showing that if you might cut back on unnecessary care when faced with higher costs, this can result in a greater expense and complications if you come down with a serious illness.

There are things about Obamacare you don’t know because you haven’t been told. To learn what they are, just watch this video …


The lesson to be learned

The net/net of this is that if you want to get the best plan for you and your family under the Affordable Care Act at the lowest cost, you need to be a very smart consumer. As you have read, you should go to your state health insurance exchange and compare the various plans available along with their deductibles, co-pays and coinsurance requirements – as well as their premiums. Read everything carefully so that you know exactly what to expect before choosing a plan. While this might take time and effort, it’s the only way you can ensure that you’ll be getting the best healthcare plan at the most affordable cost.


10 Things That College Admission Counselors Won’t Tell You

student with a notebook and calculatorIf you’re a high school senior or even a junior the time is near – when you’ll need to apply for admission to the colleges or universities of your choice. You’ll also soon to need to fill out the dreaded FAFSA or Free Application For Federal Student Aid. While the deadline for submitting the FAFSA is not until June 1, the earlier you complete and submit it the better. And, yes, you need to fill it out and submit it even if you don’t intend to get any federal student aid. The reason for this is your FAFSA will be sent to all the schools where you apply for admission and it will be used in determining whether to award you a scholarship, a work-study grant or some other form of financial help.

There are other things you need to know besides the importance of filling out your FAFSA and here are XX that college admission departments just won’t tell you.

1. It pays to be nice to your teachers

Given today’s skepticism about the value of GPAs and test scores, there are admissions department that are weighing more heavily on the recommendations from high school teachers and counselors. And it when it comes to recommendations the most useful ones are the ones that show that you’re intellectually curious and that you contribute to class discussions.

2. We only sound as if we were exclusive

Admission was offered to less than one-third of the applicants in 2013 by 100 US colleges. This can make a school look “exclusive” and it is believed that some schools try to manipulate this rate. The way they do this is by encouraging high schoolers to apply for admission even though they have no intention of intending. In addition, some schools count incomplete applications to increase their applications-to-acceptances ratios.

3. Politics can play a role

Whether we like it or not, the NACAC says that about 33% of colleges and universities consider race as a factor in accepting students. Some of our states have banned racial admission preferences but their schools have been accused of using workarounds against those bans. Unfortunately or fortunately – depending on your parents – one practice that is usually considered legal is “legacy.” This is where the kids of wealthy alumni or powerful lawmakers get special considerations in the application process.

4. We don’t trust it

In this era of “helicoptering” parents, many schools worry that the essays submitted by some students weren’t written by them. The way they weed out ghost writing is by asking students to supply other pieces of school writing that were graded by a teacher. One retired dean of admissions said that “if the essay looks like it was written by Maia Angelou but the school work looks as if it came from Loman, this will definitely raise eyebrows.

5. We prefer students that can pay full price

How many college freshmen come from outside of the US? In 2013 it was 10%. Colleges love these people because most of them pay full tuition. At publicly funded state schools, the higher tuition charged out-of-state students often works to subsidize the education costs for those who live in the state. As an example of this, the in-state tuition at the University of California – Berkeley is $13,000 a year. But for an out-of-state student or foreign resident, tuition is about $36,000 a year.

6. We need you more than you need us

Would you like to do some negotiating when it comes your tuition? This year the number of high school graduates leveled off at 3.2 million. And it’s expected to stay at that level until about the year 2020. As a result, more colleges will be chasing fewer students. If you are accepted to more than one school, you may be able to do some horse-trading on the cost of your tuition. In fact, you could view it as about the same as if you were to go to an automobile dealer and try to negotiate a better rate for a new car.

7. We laugh that you obsess over class ranking

Less than 20% of admissions counselors think of class rank as being “considerably important.” However, it is more likely to come into play at larger schools where it’s just not possible to do detailed reviews of applicants.

8. You could be admitted but not stay admitted

One sad fact is that about 22% of colleges and universities revoked at least one admission offer in 2009, which is the most recent year that was studied. The most common reason for these were final grades followed by disciplinary issues and then lying about application information. For that matter, the postings put on social media have prompted some universities to reconsider their offers.

9. All grades are not equal

Have you taken college prep courses? If so, the grade you got in them will probably be given more weight than other grades. The reason why schools are becoming more skeptical is due to what’s known as “grade inflation.” The College Board, which is the organization that administers the SAT has research showing that the average GPA for all high school seniors increased from 2.64 in 1996 to 2.90 in 2006 despite the fact that SAT scores remained about flat. This was seen as proof that there are teachers using grades to reward good effort instead of achievement.

10. Were wondering about the SAT

For almost as long as anyone can remember the SAT has been the big benchmark in forecasting how students will handle college-level work. However, today many people argue that the SAT gives wealthier students an unfair advantage as they could afford those pricy test prep classes. In fact, around 800 of America’s 2800 four-year colleges now consider the SAT to be optional. The NACAC endorsed a study done recently that looked at the performance of 123,000 students that had been admitted to college between the years 2003 and 2010. What this study found is about 30% of the applicants had not taken either the SAT or ACT … and that there was no significant difference in college GPAs or graduation rates between those who took on of these tests and those that took neither.

Young black college graduate with tuition debt, horizontalTo borrow or not to borrow, that is the question

Another decision you’ll have to make besides choosing a college or university is how to fund your education. Generally speaking about 50% of students graduating from college needed to borrow money to pay for their educations. Of course, it’s much better if you don’t have to borrow the money and can start plus, life after college free of debt. If this is just not possible, be sure to get federal student loans and not private loans. Student loans have a number of advantages over private ones, such as the ability to change payment programs. For example, instead of staying in the Standard 10-year Repayment program you could switch to Graduated Repayment where your payments would start low and then gradually increase every two years. This can be a real boon if you’re just starting out in your career and are a low earner. Or you could choose one of the income-driven repayment plans such as Pay As You Earn that would tie your payments to your disposable income. Plus, federally backed student loans also offer options such as loan forgiveness, deferment and cancellation that are normally not available in private loans.

How To Have A Happy Low Income Household

povertyAre you struggling with your finances because you come from a low income household? When your income is not enough and you have a family to feed, it can be a bit stressful. And we all know that when there is stress, happiness will eventually go out the window. At least, if you cannot do something about your financial situation, you will soon find that it drains the happiness out of your life.

While we do not want to appear materialistic, it is a fact that the lack of money oftentimes drive couples to a fight. In fact, one of the most common reasons for marital fights involve finances. And we all know we do not fight about abundance of money. Usually, financial related fights stem from the lack of it.

According to an article from, the US poverty rate is already at a decline but it is still a high rate. In 2013, it was reported to be at 14.5% – a slight decline from the 15% rate in 2012. This is still higher than the pre-recession days of 12.3% in 2006.

The reason for this decline is the fact that people are now finding full-time work. However, thanks to the inflation rate and the higher cost of health care, this is not really making a difference for most people. There are still a lot of people that are living from paycheck to paycheck. If you want to improve your financial situation and get out of a low income household, you need to do more than that. You need to find a way to find extra money to propel yourself forward to a better financial position.

But before you can do that, you need to find the motivation to make the sacrifices necessary to reach your goal. And here is where it might become a bit confusing. In order for you to find motivation that will last you until you reach your goal, you need to put yourself in a happy disposition.

The reason for it is for you to be able to set the right goals and change the habits that will make you happy with what you are trying to reach. Take note that finding happiness is more than just getting more money. It is about teaching yourself to value what is important and be content with what is necessary.

4 ways to live a happy life despite poverty

That last part can be quite a challenge because it is hard to find happiness when you can barely give your children what they want. When you are constantly worrying about paying the bills, it is tough to say that you are feeling light and happy about your current predicament. So what can you do?

The key is to determine the simple truths that will help you find financial happiness. Here are 4 tips that might help you get started.

  • Concentrate on the experience rather than your possessions. Not that we are saying that you do not need material things. We all need them. But, you need to learn how to concentrate on the experience that you will get from the materials – rather than from the mere satisfaction of owning something new. A study published on, authored by Leaf Van Boven, said that focusing on the experience will help consumers get more positive memories about their lives. Happy memories are more evident when you have the experience in mind. It is also stated that it will help you foster better social relationships. That is because the experience is mostly associated with something that happened to you and those around you – whether directly or indirectly connected or not. So concentrate on having meals together – regardless of what is put on the table. Concentrate on enjoying cost-free weekends with the family – as long as you are together.
  • Have goals and monitor their progress. The next thing that you can do is to have a goal. A goal is something that will give your life direction. It will give you a reason to get up every morning regardless of the situation that you are in. It is one way to help you proactively motivate yourself further. Make sure that your goal is realistic. Big or small, it has to be well defined and something that you schedule to achieve sometime in your life. This will make it more tangible. As you track your progress, do not concentrate on how little you have. Instead, focus on being thankful that you are able to contribute anything to it at all. Even if the going is slow, at least there is progress.
  • Be close to people with the same situation as you. We mean surrounding yourself with friends coming from low income households too. This is to have someone to talk to and understand what you are going through. You can cheer each other up, find support during trying times and you cannot judge each other because you all going through the same thing. Not only that, you can find things to do together with the same budget. You do not have to work too hard to impress people because they know where you are coming from.
  • Change your mindset. Finally, you want to change your mindset about a low income household. It is not the end of the world. Granted that it is tougher compared to those who have more financial abundance. However, you both have something in common – you can both decide to take control of your finances. You need to accept that you have limited choices and instead of giving up, you take that as a challenge. Start by focusing on what you have accomplished despite your lack of finances. That should help make you feel better about your life.

Happiness, if you ask anyone, is actually just a state of mind. If you are willing to put yourself in a happy position, you do not need a huge amount of money to gain that.

How to level up from a low income home

Despite your pursuit  of happiness despite coming from a low income household, you need to make sure that you will still strive to make things better for you and your family. You want your kids to have the opportunities that were limited to you because of your financial state.

An article from revealed that poverty is still quite high in the US. 14.5% of Americans are living in poverty. That means 1 out of 10 people reading this article might be poverty stricken. The good news is, you can get out of that predicament. Here are some tips that will help you level up from a low income household.

  • Live a frugal life. First of all, you have to start living a frugal life. Face the facts that you have limited income. That means you need to prioritize where you will put your money. Live in a smaller home, get rid of the clutter and buy only what is essential. Frugality, when done correctly will give you a new perspective about your life.
  • Make sure you have extra money. The reason why you want to live a frugal life is so you can lower your spending so you can have some extra money. This is the money that you need for wealth building. It will help you increase your savings for your emergency fund. It will also allow you to invest some of your money to help it grow. Get that extra money and you should be able to grab opportunities that you never had before.
  • Involve the family. Getting out of a low income household will involve everyone in the family. You need to ask everyone to be wise about spending and to find extra money where they can. This is very important. It will keep the load from being too burdensome for you.

Here is a video from Bank of America that will give tips on how you can be smart with your money.

Why Budgeting Should Not Be Likened To Dieting

money and measuring tapeBudgeting is said to be the first step towards financial independence. If that is the case, then why is it that a lot of Americans are finding it difficult to maintain a budget? In some cases, they even have difficulty in starting one.

This is probably caused by the lack of motivation to follow a budget plan. This is especially true if you think that a budget is a lot like a diet.

In truth, there are a lot of similarities between the two. An article on actually discussed various similarities between dieting and living on a budget. In fact, the author of the article mentioned that a diet is defined as restricting one’s food intake. The same is actually happening when you are budgeting. You restrict your spending on some things so you can keep yourself from running out of finances of the expenses that matters most. In general what you want to happen with your budget is to stop overspending your money.

However, there are people who have not been successful with their budgets because they associated it with dieting. That is because in terms of motivation, comparing a budget to a diet is not the best way you should go about it.

3 ways diet concepts can ruin your budget intentions

An article published on in 2011 is titled, “Why a budget is like a diet – ineffective.” In one part, the article discussed how humans are notorious for not being able to follow plans. While there are those who undoubtedly can, there are also people who are incapable of doing so. In fact, some consumers frown upon budgeting as they would a diet plan. The article said that it is because a budget feels so much like dieting – that is why it is met with so much distaste. People end up shying away from budget plans simply because it is associated with diets.

The reason why people are scared to budget in the same way that they are of dieting is because it is oftentimes associated with these three concepts.

You feel you have fewer options

When you are on a diet, you are oftentimes told to eat only healthy meals. That makes your options quite limited. You are not allowed to eat certain food and drinks in order to keep yourself in tip top shape. Unfortunately, a lot of the food that we are told not to eat are those that taste good!

The same is true for budgeting. When you create a budget plan, you are faced with the reality of how much you can really afford to spend. After you identify your net income, you need to divide it among the important expenses that you make each month – for the house, utilities, food, transportation, etc. Whatever is left will have to be put aside for your savings. There is not much room for splurges or unnecessary spending especially when you have debt payments to include in your budget.

However, you do not have to feel this way about budgeting if the few options are the most important expenses that you have in your life. Even if you had to cut back on a lot of things, if the vital expenses are met, then you should not feel that you have fewer options. You just gave up on the spending that you do not really need.

You feel deprived

Since you have fewer options when you are budgeting, you will naturally feel deprived. When you are on a diet and you love to eat junk food, greasy food and all the other fattening stuff, you will feel deprived after entering a diet plan. These are the big no-nos in dieting.

In the same way, following a budget would also mean you have to stop doing the habits that are bad for your finances. Things like impulsive buying or buying things without comparing prices. These practices can be harmful to your finances. Your budget plan will deviate you from these practices and this is why you are bound to feel deprived when you are budgeting.

But just like the first, you do not have to feel deprived if you also focus on your priorities. As long as the priorities in your life are satisfied, you should not feel deprived at all. We make budgets hard to follow because we keep our eyes on what we cannot do. But if you concentrate on what you can now achieve (e.g. bigger savings, room for investments, lower debt balance), then you should not feel the deprivation at all.

You feel the pain

Lastly, dieting is usually associated with a lot of pain. This is mostly caused by the exercise that you need to do while you are regulating your food intake.

In the same way, budgeting could bring you some sort of pain as well. First of all, a budget plan is not a one time effort. You need to constantly monitor it and revise it as your financial needs change. Not only that, if your budget reveals that your current income is not enough, you may be forced to look for a second job in order to make ends meet.

Some people may say that if a budget will force me to work 2 jobs, why would they want to create a budget plan in the first place? While the sentiment is understandable, you should realize that not acting on what your budget plan encourages you to do is only delaying the inevitable. If you are spending beyond your means, you are bound to accumulate a lot of debts. Your budget will save you from that but you need to deal with the sacrifices that come with it.

Tips to make budget plans more bearable

In the end, budgeting and dieting may have some negative things in common but the bottom line is, they are both necessary because they keep you from bigger problems in the future. But if associating one with the other will keep you from incorporating a budget plan in your life, then you do not have to treat them the same way.

A budget plan is still different because it involves your finances. You need to look at a budget in such a way that will liberate you from the threat of a financial disaster. A budget can really improve your finances because it helps you be in control of your money.

According to an infographic found on, more than half of Americans do not have a budget and that one-third is unable to pay their bills on time. There may be a lot of factors involved as to why consumers cannot pay their bills on time but you can bet that one of these reasons if a lack of a budget.

In case motivation is a problem, here are some tips that might help you set up a budget in your life.

  • Start with a goal. This is the best motivation that you can give yourself. It can be to get out of debt or save up for retirement.
  • Go slow. If you discover that you have a lot of expenses that are unnecessary and that you have decided should be cut off, try to do it one at a time. Do not go cold turkey to keep the pain from becoming too hard to bear.
  • Create a timeline for your goal. Keeping in mind that you need to go slow, create a reasonable and realistic timeline to achieve your goal. That way, you will not push yourself too hard or be too relaxed in reaching your goal.
  • Make your budget as accurate as possible. Wrong entries in your budget might lead to incorrect assumptions and thus the failure of your budget.
  • Get support. If things get really tough, you may want to get support from family and friends. Or if you can afford it, go and get professional help. In most cases, the first few steps are always the hardest. But once you get one foot in front of the other, you will find yourself effortlessly following your budget.

To learn how to set up a budget, here are some tips from National Debt Relief.

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