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13 Ways To Cut Your Spending This Year

Pair of scrissors cutting the word SpendingIf you made some financial mistakes last year, think about 2014 as a “do over.” Now, while the year is still young would be an excellent time to make some changes that will boost your financial bottom line. Of course, before you can begin to slash your spending, you need to know where your money’s going. If you don’t already have a budgeting tool, you need to get one such as Mint. It’s free and is available for use on your computer, iPhone or Android-powered device. The best thing about Mint – other than the fact it’s – free – is that all you’re required to do is type in all your account numbers – those of your checking and savings accounts, credit cards, etc., and Mint does the rest, bringing all your financial information together so you can see exactly where you stand at a glance. Mint will even organize your spending into budget categories and then send you an email alert if you overspend in any of them.

Once you get a budgeting tool, you will need to make a note of all your spending for at least a month, right down to that soda you purchased at work.

It doesn’t work for everyone

You may have hard that old cliché that all you have to do to get your finances under control is just skip that morning latte. However, this doesn’t work for everybody, especially people who never have a morning latte. But here are 13 things that most people could do to save money and avoid overspending.

1. Cook at home more

Most of us tend to eat out too frequently. Suppose you’re a couple and eat out three times a week and spend $30 each time. That’s $90 a week, $360 a month and $4320 a year. Stop and think what you could so with that $4320 – like a nice two-week vacation. Anyone can cook and the Internet is replete with recipes for good-tasting meals that aren’t that expensive to make.

2. Use couponsCoupon Savings

We read recently that you really don’t have to pay full price for anything anymore and this is certainly true of groceries. You could go online to sites like or and find coupons that would save you money on just about everything you buy at the supermarket, especially cleaning and personal care products. You should also get a loyalty card from your favorite supermarket. We get money-saving offers from our store every week and all we have to do is click on a few links and the “coupons” are loaded right on to our loyalty card. Also, make sure you watch for sales on items you can buy in bulk like paper towers, bathroom tissue, shampoo, rice and the like.

3. Drop your landline

We mean this seriously. If you have a cell phone, why do you still need a landline? This can cost $50 or more a month and why? Cancel that service and you could save as much as $600 this year.

4. Review your insurance costs

Auto and homeowner’s insurance is a competitive business. Take a hard look at your insurance bill(s) then go online to or a comparable site and do some comparison shopping. You might be surprised at what you find. Also, check to make sure your insurance fits your needs. Think about your coverage and your deductibles. If you could increase the deductible on your collision insurance from, say, $250 to $500 or even $1,000, you would definitely slash that bill.

Woman talking on the cell phone5. Negotiate with your credit card providers

Check around to see if you can find a credit card with a lower rate than the one(s) you’re currently using. If you find one, call your current card company and ask it to match that lower rate. If it refuses to do so, transfer your balance to that other card.

6. Find a cheaper health club

You really don’t need to spend $100 a month or so on a health club membership. If you shop around a bit you should be able to find a much cheaper one. We have a rec center near us with a great workout facility where we get a card and then buy “punches” so that we’re paying only when we actually use the facility, which puts us in total control or our spending.

7. Pay off your debts

Wouldn’t you like an instant raise of $200, $300 or even more a month? Then pay off your debts. If you have multiple credit card debts, first tackle the one with the lowest balance. You should be able to pay it off fairly quickly. What this will do is free up money you can then use to begin paying off the credit card with the second lowest balance. Do this for a year or two – depending on how much you’re in debt – and you will be debt-free.

8. Stop using those credit cards

Debt is just borrowing from tomorrow to pay for today’s spending. If you stop using those credit cards you’re paying for today, well, today and won’t have to worry about tomorrow’s debt. There is a psychological term called being “mindful.” This simply means stop and think before you do something such as pulling out a credit card. One of the worst things about credit cards is that they are too easy to use. Say that you are looking at an item costing $599.95 and you know you only have $400 in your checking account. It’s just too easy to “card it” and worry about that $599.95 later. But if you’re mindful and think about the consequences of charging that $599.95 you just might decide to take a pass and not pile on more debt.

9. Call your Internet and TV providers

If you ask, you may find that you can get a better deal. More and more people are abandoning cable and satellite television and there are now a number of competitors in the market. Cable and Internet companies are eager to hang onto their customers. This means you may be able to get a deal. The best deals will come from your provider’s customer retention department, which is the one that you call to cancel your service. One person this recently and saved close to $50 a month.

10. Review your cell phone bill

The cell phone carriers are now offering new deals including no-contract and pay-as-you-go plans. If your contract is up see if can find a plan that would save you money. If you find one then should ask your existing provider if it will match that other price or give you a better deal. If it won’t, say sayonara and move to the other plan.

11. Watch that online spending

If you have trouble sleeping at night, it can be easy to go online and start shopping in those wee, small hours of the morning. However, if you’re not careful that type of spending can add up dramatically. One way to prevent this is to unsubscribe from all those email alerts from stores and online retailers that are offering those sweet, sweet deals.

12. Create an emergency fund

Whether you like to think about this or not, you are going to have an emergency of some kind. It could be that the transmission in your car falls out, that you’re in an accident and require hospitalization or you lose your job. If you don’t have an emergency fund, you’ll have to use debt to get through the emergency. If it’s a really serious emergency, you could end up literally thousands of dollars in the hole, which would take you years to pay off. Most financial experts say that you should have the equivalent of six months’ living expenses banked away in an emergency fund. That way when an emergency does occur, you will be able to pay for it without adding big debt.

Family Budget Planning13. Make a budget and stick to it

Whether you use Mint, some other budgeting app or just a piece of paper and a pen, it’s critical to make a budget and stick to it. However, it’s almost bound to fail if you are too stringent with yourself. Be realistic and give yourself an allowance for discretionary spending. Then don’t spend any more than that. Budgeting works and if you’re not taking advantage of it, it’s time to start.

Reasons Why You Do Not Feel Any Financial Improvement

man shoutingAre you still wondering how to improve your finances? Despite the news coming from the government that the economy is getting better, some people are wondering why they are not feeling it. Their financial improvement has yet to be experienced and a lot of them are wondering if the economic news is real or not.

Even if 2013 was a bad year or so-so year for you, let go of the past and just keep moving forward. Of course, you want to make sure that you learn the reasons why you are not keeping pace with the economic growth of the country. It helps to know so you can create a plan that will eliminate the mistakes that you made in the past.

How did the economy improve in 2013?

But before we can look at your personal finances, let us check how the economy performed in 2013. This will help you gauge just how far you have fallen behind in terms of your personal financial improvement.

One of the best indicators of an improving economy is displayed in the employment conditions of the country. Based on the information taken from the Bureau of Labor Statistics (, the unemployment rate in the country is steadily improving. Here are the data to prove this: (average unemployment rate per year)

  • 2007: 4.6%

  • 2008: 5.8%

  • 2009: 9.2%

  • 2010: 9.6%

  • 2011: 8.9%

  • 2012: 8.0%

  • 2013: 7.3%

Although the unemployment rate has yet to reach the pre-recession level, it has steadily improved since it reached the peak in 2010. Hopefully, this will continue to improve so more and more people will get their jobs back – or be employed for the first time.

In terms of the average hourly earnings, the reports a steady increase even as the unemployment rate had been rising. There were months when it was going down but on an annual average, the statistics are steadily rising. Here are the data to prove this: (average hourly earning per year)

  • 2007: 20.9

  • 2008: 21.6

  • 2009: 22.2

  • 2010: 22.6

  • 2011: 23.0

  • 2012: 23.5

  • 2013: 23.9

These figures along indicate that the US economy is indeed in a better place than it was before. But how does the consumers feel about it?

A recent poll done by say that various economic indicators prove that the country is indeed on the mend in 2013. It was a good year for financial improvement in the country. The highlights of the report are as follows:

  • Economic Confidence Index: improved from -21 in 2012 to -16 in 2013. Overall, the change is a positive 5.

  • Job Creation Index: improved from 18 in 2012 to 20 in 2013. This accounted for a positive 2 change.

  • Average consumer spending: improved from $72 in 2012 to $88 in 2013. This accounted for a positive $16 improvement.

The same site also reports that in January 2014, the economic confidence went even higher at -14. This is a good sign of further growth for the economy. The question is, are you feeling all of these financial good news?

Reasons why you may not be improving financially

If the answer is no, then we need to start searching for the reasons why it is so. While the economic growth and recovery may not give you an immediate financial improvement it should at least provide you with some level of relief. In most cases, the reasons for your continues financial slump might be your own doing. Remember how the bad spending habits in the past got you into trouble? You never realized it until it was too late. If you do not check yourself right now, you might be losing out on the financial opportunities that are cropping up because of the economic growth in the country.

Here are some areas that you may want to look into.

  • Budget plan. Start with your budget plan. If you do not have one, that is probably one reason why you are not feeling any change in your financial situation. This plan is one of the most basic tools that you will need to improve your money management skills. Create one if you have not yet started on the habit. If you already have one, check if it is still aligned with your goals. Budgets need revision every now and then as our needs change.

  • Credit balance. One of the clear signs that you are not improving is when your debt continues to pile up. When it is decreasing, then you are on the right path. If not, then this is another reason why you are not feeling any financial improvement.

  • Spending habits. Ask yourself: are you living within your means or have you been failing your budget? If your answer is no, then this means you are still incurring debt and that will not improve your finances in any way. If you are living within your means, you need to step it up. You need to start living below your means. That will free up some money to improve your financial stability.

  • Savings account. If your savings are not increasing, then your financial security may be in danger. If you have no savings at all, then you are in trouble. One emergency situation is all it takes to ruin your financial life. Do not let this happen. Grow your emergency fund and continuously contribute to your retirement fund.

  • Investments. Lastly, how are your investments? This is the most proactive thing that you can do to reach a significant financial improvement this year. Learn how to invest and put your money where it will go. Your savings account will not be enough to keep up with the average inflation rate. Only investments can make this happen.

What to do to improve your finances this year

Obviously, if you really want to improve your finances in 2014, you have to stop making excuses for yourself. Here are the three common excuses that people usually make that hinder their financial growth.

  • I do not know how to invest. This is a lame excuse. There are so many articles, guides and informative materials online that you can use to help you learn how to invest. You will never learn if you do not read about them. Also, experience is the best teacher. You will never learn how to invest if you do not try it.

  • I have too much expenses to have enough to save. This may seem like a valid excuse but if you think about it, there are ways for you to try and lower your expenses to make room for saving. Even if it is just a small amount, you should still save it. Soon, that will grow.

  • I am earning too little to invest. This is another poor excuse. Investing will help you earn on the side. Sacrifice some of your expenses for a couple of months so you can use the money to invest.

Financial improvement will take time and effort on your part. If the economy is improving and your personal finances are not, then that is a clear sign that something has to change with the way that you are managing your money. Stop making excuses for the mistakes in the past. It is time to move on to pick up the pieces of your financial life. Just make sure that you will implement the right financial habits from now on.

Why Spending Never Works Out The Way You Plan

frustrated looking womanThe lessons learned from the 2008 recession prompted most of us to seriously consider financial planning. One of the things that we kept a close eye on was our spending. In truth, those bad spending habits that we got used to became our financial undoing. We spent beyond our means by using credit cards recklessly and it cost us a lot of money. For some of us, it led to losing some of the assets that we hold dear. It meant letting our homes go into foreclosure, selling our cars and even skipping the usual entertainment expenses that made us really happy.

Thankfully, financial plans can help us curb the bad habits that led to our money’s demise. But be very careful. Even if you create the most promising plan there is, you need to be able to implement it. A lot of us started strong with our plans but unfortunately, not everyone was successful in applying it in their lives.

A plan is necessary to keep your finances under control and this article will try to analyze why your spending never worked out that way you planned it to.

Comparing your budget with your spending plan

In most cases, your spending plan is confused with a budget plan. Some articles actually refer to them as one and the same. But you need to know that they are two separate concepts. Budgeting is the first step towards financial independence and your spending plan will serve as your action plan to connect them.

Here are other concepts that will help you differentiate the two.

  • Spending plans will be more appealing to follow because it does not have the restricting image of a budget plan.

  • Budgets will tell you how much you are allowed to spend for a specific expense category. The spending plans will allow you to control that total amount to satisfy your actual needs.

  • Spending plans can help you detail your wants and needs. A budget plan is more concentrated on your expense categories.

  • Budget plans will help you define what is left for your discretionary income. Spending plans can map out where you discretionary income will go.

More importantly, your spending plan will help define the different patterns that you have in your life. You can see when your housing costs spike and when food prices go up. It can help make your future financial plans more accurate.

Reasons why your plan for monthly expenses is not working

Now that you know how to differentiate a budget from a spending plan, let us identify the possible reason why it can fail you.

It does not include everything. We’ve mentioned how this plan is actually more detailed than your budget. You have to make sure that it includes all the expenses that you usually make. This is how you ensure that it remains true to the restrictions of your budget. You do not want to end up spending more than what you are allowed to. Ideally, your purchase plans cover a period of one month. Make sure that you include your annual and seasonal expenses too.

It failed to indicate your priorities. Another reason why this plan can fail you is when you did not indicate your priorities. This is very important to keep your plan from concentrating too much on the mundane expenses that make you happy. The whole purpose of planning is to ensure that you will not miss out on all your expenses. Put the priorities high on the list and make sure you understand the factors affecting them. In fact, published an article that indicates how every generation usually have different priorities. For instance, Baby Boomers lived after the second World War and it made them heavy spenders compared to other generations. Millennials witnessed how the 2008 recession crippled their parents and grandparents financially, that made them more cautious about credit – especially credit card spending.

It is not realistic. The third reason it is not working is because it is not realistic. You may want to spend a lot on entertainment expenses but when your needs dictate that more funds should be allotted for your debts, then you should reconsider your plan. Based on the data from the Bureau of Labor Statistics ( last March 27, 2013, the average expenses of households depend on the income. The highest 20% allott 30.2% of their income in housing costs while the lowest 20% spend 40% of their income on the same category. In terms of food, the highest 20% spend 11.4% as compared to the lowest that spend 15.8% of their income on this expense. For personal insurance, the lowest 20% spend only 2.1% – which is very low compared to the 16% of the high income earners. Obviously, the low income earners have to forego insurance to pay for more important expenses. Your spending plan should consider all of these to make it realistic and true to your needs.

It is not flexible. Lastly, your plan may not be flexible and that is the reason why it is not working for you. Most spending plans require changes from time to time – just like your budget. As mentioned, your priorities are influenced by a lot of things and this should be something that you consider carefully. As you age, your needs will change and that should prompt you to constantly look at your spending plan to see if it is still workable.

Tips to create a working plan for purchases that compliment your budget

To be a smart spender begins with a well crafted spending plan. Here are some important considerations when you are trying to make this.

  • Base your spending on your net income – not our gross. Nobody ever sees their gross income. If you base it on this amount, you will always fall short and some of your expenses will end up being unpaid.

  • Always analyze your current spending. What you are spending a few months ago may not be the same as what you need right now. Always check if your spending plan is still aligned with your goals.

  • Categorize your expenses to keep the revisions from being tedious. You can put the fixed expenses first as these are the regular payments that you constantly have to make. In most cases, the amount does not change. These include your rent, loan payments, etc. You also have the flexible expenses that are still necessities but vary in amount every month. Your food, groceries and transportation can be placed here. Lastly, you have the discretionary expenses that are the expenses that you do not need to spend on all the time. These can be your clothing, shoes, and entertainment expenses. When you have to revise your plan, you only have to look at the flexible and discretionary expenses.

  • Make sure your income is higher than your expenses. If not, you will always have to spend some credit to take care of everything. That defeats the purpose of using this financial plan. Trade off some of the expenses that you can live without so you can afford those that you need to spend on. shows that the average household income is at $43,000. With the rising cost of living, this is just enough for a family of 4 to live on. If you want to make your spending less restrictive, you should consider earning more or cutting back. The bottom line is to make sure that you can control where your money goes and the plan that will help you achieve that is something that you can follow consistently. If it is not working for you, review the plan to see if it requires you to make some changes.

Here is a video created by National Debt Relief to help you learn how to budget for your household.

9 Things You Don’t Need To Buy Anymore

The New Year is upon us and with it comes those New Year’s resolutions. If one of yours is to cut costs to save and invest or pay down debt, we have good news. There’s a bunch of things you don’t have to buy anymore and here are nine of them.

1. Landline phonesMan with phone sticking out of head

Are you still paying for a landline? Many people have given them up and have gone exclusively to cell phones. One recent study by the Centers for Disease Control and Prevention reported that two in every five US homes (40%) had only wireless phones. And about 38% of the total US population or 90 million adults are now wireless-only. If we were to give up our landline, and believe me I’ve discussed this with my wife many times, we’d save about $75 a month or around $900 a year. Giving up that landline doesn’t mean you’re limited to just cell phones, either. Skype is free and even allows video chatting from and to any place in the world via your computer or smart phone.

2. GPS devices

I can remember when I was excited to get a GPS navigation unit I could use in my car. It was a little unwieldy to use but certainly easier than juggling maps. Today, you don’t need one of these devices at all and I’m always surprised to see them for sale. In fact, the demand for these systems has basically plummeted. They sold about 18 million here in North America in 2009 but only 7.5 million in 2012 according to recent research from the Swedish firm, Berg Insight. Of course, drivers still need navigation systems but they can be had for a lot less than the usual $70 to $300. Map apps are available for most smartphones and many can be downloaded free. Or maybe your automobile has a built-in navigation system as many of the 2013 model-year cars had them.

3. Cable or satellite TV

Are you still spending $100 or more a month on cable or satellite TV? You don’t need to. Nearly 58 million US households currently subscribe to cable TV but that’s a decrease of 17.6% from 10 years ago according to the research organization IHS. Why is this? It’s due to the many families who have “cut the cable” and gone to lower-costing options such as Netflix and Hulu that offer a lot of the same programs at a tiny percentage of the cost of cable or satellite service. If you have a computer you could buy a Chromecast dongle ($35), Apple TV ($99) or Roku ($39.95) and stream cable shows, sports, news and all kinds of other content to your HDTV and for just pennies a week.

4. Blu-ray and DVD players

The sales of Blu-ray and DVD players were down 20.1% in 2012 from 2011 or down 24.8% from 2010. You really don’t need either of these types of units when you could be streaming movies from Hulu, Amazon or Netflix to you HDTV. If you’re a gamer, you could use your Xbox One or Playstation 4 to stream films to your TV.

5. Two-year cell phone contractsMan interacting with smart phone

Just as cable TV is becoming less and less of a necessity, so are two-year cell phone contracts. The problem with them is that they come with more negatives than advantages. You can’t upgrade to a new phone without getting hit with a big fee or signing another contract. And a number of these plans come with fine print that could leave you paying more than the starting monthly price you were quoted in the store when you purchased the phone. Fortunately, that old consumer’s friend called competition has caused some new options. For example, you could chose to pay full price (the “unsubsidized” price) for a new phone without a contract. The phone will cost you a lot more than one that comes with a contract but your monthly service bill should be about half of what you’re now paying. You can find these devices at stores such as Best Buy, Walmart and Virgin Mobile as well as some of the regular wireless carriers.

6. Desktop and laptop PCs

We see stores still selling desktop PCs and always wonder who buys these dinosaurs. We see no good reason to buy a desktop computer when you could have a laptop and take all of your computing with you. For that matter, you may not even need a laptop, what with all the tablets now available. They offer most of the same functions as a laptop – watching videos, sharing photos and surfing the web – but are a lot less expensive. Apple’s iMacs (desktop computers) start at $1299 and MacBooks (laptops) start at $999, while you can get an iPad for $299. Of course, tablets aren’t for everyone. If you’re a graphic designer or stock trader and need a big screen, you may find it hard to give up that desktop or laptop computer. However, it’s interesting to note that the shipments of PCs worldwide fell 4% in 2012 compared to the year before and that this is lowest level since 2009.

7. Hotel rooms

The demand for hotel rooms continues to rise and so do their costs. The daily rate for US hotels averaged $110.59 in 2013, which is up 4.1% from 2012 and 12.6% from 2010. And it’s expected to increase to $115.68 this year. This has forced many travelers to seek alternative places to stay when they vacation such as renting an apartment or a home in their destination area. These options not only cost less per night than a hotel room but also provide more space. There are services like Airbnb and Vacation Rentals by Owner where you can choose from a collection of homes to stay in. Some of the owners of the apartments and houses even offer free airport pick-ups and drop-offs. However, there is one downside to this and that’s you may have less security.

8. Credit cards with miles or pointsLong line of credit cards (generic)

Some of the credit card providers have been boosting their rewards or points programs the past few years. But it’s now better to stay away from any cards with these rewards. Why is this true? Many of them require their cardholders to spend more money to receive the same “free reward” they would have earned previously with fewer points. In addition, many of these rewards cards come with annual fees that can range from $30-$75. What you might consider instead is a credit card that comes with “cash back.” This is a much more straightforward deal. You spend a certain amount of money on the card and get anywhere from 1% to 5% cash back. Plus, you can spend the cash anywhere you would like instead of being tied to airline miles or certain offers.

Digital photo camera9. Digital cameras

Remember when those little, sleek-looking, point-and-shoot digital cameras were all the rage? They made picture taking — you should pardon the expression — a snap. But today the demand for these cameras is slowly disappearing. It’s estimated that about 11.5 million were sold in 2012, which is down 44% from the prior year. This is according to the Consumer Electronics Association. The problem is that cameras are having an identity crisis. If you want top-quality photos you could enlarge to sizes like 2′ x 3′, you would want one of the larger DSLR cameras. If not, you would probably be happy to stay with one gadget – your smart phone – that also takes pictures. Plus, there are now cameras designed for specific kinds of people like those thrill-seekers who choose cameras such as a GoPro that captures action instead of just still pictures.

4 Bad Habits That Could Be Costing You Hundreds Of Dollars A Month

stack of cashEveryone has habits. Some of them are good, some not so much. For instance, the habit of walking 30 minutes a day would be a good one. So, too, would be the habit of good money management. That’s a wonderful habit. On the other hand, overspending is a terrible habit – so bad that most people won’t even talk about it. Beyond this, there are four other bad habits that could be easily costing you several hundred dollars a month.

Fast food

Are you and your family in the habit of eating fast food several times a week? You know this is bad for your body. It not only does bad things to your waistline but also to your wallet. Suppose, for example, that your family of four is eating at fast food spots two times a week and that each visit costs between $27 to $30 – or an average of $57 per week. That’s $228 a month you could save by creating a new habit of not eating out. Instead, you could prepare some meals in advance for those busy nights. Then instead of paying $60 twice a week to enjoy the convenience of fast food, you would cut this to maybe $10 a meal – and the food would be better for your family, too.

Girls’ or guys’ night out

If you’re a woman do you hook up with your gal pals a few times a month? Or if you’re a guy, are you meeting your buddies regularly for a couple of drinks? If so, you’re probably racking up a bar tab of anywhere from $40 to $60 per night out. What you could do instead is make a new habit of creating your own appetizers, buying your adult beverages and watching movies at one of your homes – instead of out howling at the moon. In 30 days this could save you $160 and you should still have a great time.

ATM and other bank fees

How many cash withdrawals do you make a week? If you make just two at non-network ATMs (those not owned by your bank) you’re probably paying a charge of $2.50 or even more every time. Do you have one of those types of checking accounts where you are charged a fee whenever your balance drops below some amount such as $5000? This could be an additional $7 a month. You may also be paying a maintenance fee for your savings account. You could drop this habit very quickly by going to a new bank that doesn’t have those kinds of fees. It’s likely that you can find one that doesn’t charge you when you use another bank’s ATMs and doesn’t tack on extra charges to your checking and savings accounts. This could save you as much as $66 a month.

Buying off your list

A fourth bad habit that can cost you money is buying off the list when you do your grocery shopping. Today’s supermarkets are great at offering impulse items at the door where you walk into the store or at the end of their aisles. If you are in the habit of falling victim to impulse purchases, you need to create a new one, which is to make a list of what you need and then never deviate from it. This is something we actually need to work on. We often go to the store for bread or fresh produce and then leave with a cart full of stuff we had never intended to buy. If you can learn to say “no” to those tempting items or add-ons, you could save as much as $200 a month. If you’d like more tips on how you could save money on your groceries, here’s how one woman does it – as well as why to buy in bulk at discount warehouses like Sam’s Club.

Lending money to family members

Are you in the habit of lending money to family members? Economic times are tough and many Americans are turning to family members and friends for loans instead of going to the big banks for money. If you expect the money to be repaid, the key is to treat any loan to a family member or friend as a business loan and keep the emotions out of it. If you treat a loan to friends or family members as a business transaction, you can keep yourself from damaging an important relationship due to money. You might feel inclined to help out one of your loved ones with money but it’s important to communicate openly about your expectations of repayment so that no one is left in the dark. Here are a few steps you could take if you want to provide financial support to a friend or family member.

1. Don’t expect to be repaid. If you’re going to loan money to a family member, assume you’ll never see it again. That’s not to say you won’t. It’s a matter of expectations. If you don’t expect repayment and the loan isn’t repaid, you won’t be angry or disappointed.
2. Expect repayment to be slow. The number one reason why people get loans from family members and friends is because they can’t get a loan somewhere else. Unfortunately, when friends and family members borrow money they don’t view the loan as seriously as if they had gotten the money from a bank. What this translates into is that they may feel more casual about paying you back.-
3. Do a checklist. If you plan on lending cash to a friend or family member, put together a checklist of questions to answer before you make the loan. This can include “has the person asked you for money before?.” “If so, was it paid back?” “Were you paid back in a timely manner” and “how likely is it that you will be paid back this time?” And be sure to ask the person who is requesting the loan how he or she plans on paying back the money. This is critical because most people will have good intentions but their income is already tied up in paying their other obligations so how do they intend to pay you?
4. Write out a contract. Last but not least, write out a contract holding the both of you accountable. This can eliminate many of the problems linked to loaning money to friends or family members. Make sure that the contract includes the question of payments, especially what will happen if the loan goes unpaid.

woman thinkingHow long does it take to make a new habit?

The problem with trying to make a new habit is that it isn’t easy. Conventional wisdom says that it takes the average person between 21 to 28 days to build a new habit. But this may be an urban legend as there is research showing it could take as long as 66 days. This means that if you were to make a resolution about not eating fast food it could be nearly nine weeks before that new habit becomes fully ingrained. And this assumes you don’t get distracted at some point and forget it. Fortunately, there are experts who say it’s possible to build habits faster. In one project called “tiny tasks,” people executed three tiny little tasks each day for five days. The idea behind this was that it taught them the process of creating habits. Once they knew how to create a habit, they could then leverage the little habits into larger positive changes in behavior. As an example of how this works, if your goal were to do 10 push-ups a day you could start by doing just one each day for five days. This would help you create the habit of doing push-ups and you might then be able to move on from one a day to the 10, which was your goal.

How to Jump Start Your Family Budget For 2014

calculator with text how muchDid you notice what happened to JC Penney? It started when the company hired a new CEO who had been in charge of Apple’s retail operations. His name is Ron Johnson and he apparently believed that he could turn JC Penney into an Apple-type store. The problem was that he couldn’t accurately foresee the consequences of this major change, which caused the company to lose most of its customers and is still trying to dig itself out from under the rubble this caused.


If you’ve been budgeting this past year or for even a few months, you should now take a few minutes out of your holiday festivities to reflect on the consequences of your spending and how well you were able to achieve your goals. Here are three tips that could help you jumpstart next year’s budget to make things even brighter.

Review your expenses

If you have been budgeting, you should be able to easily access information about last year’s spending. If you kept everything together, now would be a good time to sort it out so you will better know what you spent and where you spent it. If you haven’t already created categories for your fixed expenses such as your rent or mortgage, auto loan payment and so forth, you should do so. You should also have categories for your variable expenses, which would include your cable, cell phone service, Internet, and utilities, as well as your other household expenses. If you have a problem creating categories for your variable expenses, here’s a list of the major ones that could help:

  • Home (repairs and maintenance)
  • Utilities
  • Food
  • Family obligations
  • Health and medical
  • Transportation
  • Debt payments
  • Entertainment/Recreation
  • Pets
  • Clothing
  • Investments and savings
  • Miscellaneous or discretionary spending

Of course, these are just the major categories. You can certainly add any other categories you would care to use.

Discretionary spending

One of the most critical categories listed here is discretionary spending. These are purchases you can control. They include everything from a manicure to dining out and from a drive-through latte to a donation to an office party.

The next step

Once you have your categories lined up, it’s time to total them up both by month and for the entire year (or whatever portion you were budgeting). There are two reasons for this. First, this will help you see your patterns of spending and second, you should be able to find at least one category where you could make improvements. You may be able to see patterns that could be anything from a peak in spending in certain months to those dozens of cups of drive-through latte you never realized you had purchased.

Savings progress and your goalswoman inserting coins in piggy bank

Your lifeline is your savings and you should have more than one savings account. If you weren’t able to save as much as you had hoped this year, you should pledge to make 2014 better. Do you have an emergency savings account? That’s critical and it should be at least three months of living expenses set aside in the event you lose your job or suffer some other awful event. Six to nine months’ worth of living expenses would be even better but it’s critical that you have at least three. Do you have just one savings account and dip into it as required? Then you should make creating a separate emergency fund a top priority.

This is where knowing where you spend your money comes into play because it’s where you should be able to see money that could be redirected into your savings. The fact is at least a part of your spending should be in a savings account drawing interest and not in the cash drawer of the store you gave it to. Given this, you need to go back and find those areas where you could cut your spending and add to your savings. Since now is a time of New Year’s resolutions, this would be the perfect time to create new financial goals for 2014. Creating an emergency savings account would be a great beginning but you also need to be saving for college, retirement or that 10-day vacation on Fiji. This means that when you’re creating a new budget for next year you might want to think about setting some extra goals.

Install new financial software

There is an abundant number of smart phone apps and software that could help you get into better shape physically and there are also ones that can help you become more fit financially. Keep in mind that all software is not created equal. You will want a program or application that makes budgeting simpler and not harder. We like because set up takes only a few minutes. You can easily add all of your accounts and the software does the rest. It will let you make a budget with different goals and then see your daily progress. It makes it easy to tweak your budget anytime you want or need to. By the time December of 2014 rolls around, you should find it easier to evaluate the year and set new goals.

Mint is great because it takes the difficulty out of budgeting. It can be used on your computer but also has mobile apps for smartphones and tablets. This makes it portable and shareable between devices. We suggest you sign up for Mint today because it’s free and could help make 2014 your best financial year ever.

Other apps worth considering

In addition to Mint there are some other smart phone apps you might want to consider that do only one thing but do it very well. For example, the app Ready for Zero can help you become debt free. The way it works is that you create a plan to pay off your debts. Ready for Zero will then display your payment progress and even provide you alerts when necessary to help keep you on track.

Your bank may have an app that would allow you to check your statements online, transfer money between accounts, pay bills and even track your spending. If your goal is to save money on your groceries, the Coupons App includes a coupon database along with a widget that will deliver daily deals directly to your phone. It also has a barcode scanner that enables you to compare prices and when you have a coupon all your have to do is show it on your phone when you check out at the register.

Finally, there is SigFig, which is a good introductory app for investing if you’re just getting started. It puts all of your investing information together in one place and offers advice that could help you save money on hidden fees or bad investments.

Financial Disaster Prevention: 3 Keys To Stay Away From Financial Ruin

paper bag with BROKE textWe all know that financial management as a debt solution can work. But did you know that it is more beneficial if you use it as a preventive measure? Instead of waiting for the financial disaster to happen, doesn’t it make sense to stop it from happening in the first place?

That is what we all need to do. To prepare for the uncertain future to so we can make sure that we stay away from a financial ruin. Since it is hard to predict what will happen in the future, that is all that we can really do.

Evidence that we are not financially prepared to survive a crisis

Despite everything that we have gone through in the past few year, it is evident that we are still not as prepared as we ought to be. With all the issues in the government (e.g. government shutdown and debt ceiling) that can lead to a financial disaster, we need to start acting and we need to do it now.

A 2012 report published by the CFP Board (Certified Financial Planner Board of Standards, Inc) and Consumer Federation of America revealed that American families are still trying to get over the last recession. The report entitled 2012 Household Financial Planning Survey discusses how the struggle lies in trying to meet all the financial obligations that multiplied during the recession. Of course, we are referring to the credit payments that exploded in the height of the spiking unemployment rate. A lot of people, being unprepared as they were, had to rely on credit to buy the basic things that their family needs. Now, as the economy is also struggling to give jobs, all these debts are catching on to us and trying to pull us from the financial recovery that we want to have.

The same report cited a study by the Princeton Survey Research Associates International that showed how even in a stable economic condition, Americans are already challenged to meet basic financial goals. These include retirement, college fund, emergency savings and staying out of debt. What more if the economy is not as healthy as it should be?

The other findings of the report from the Consumer Fed and CFP Board includes:

  • Meeting financial goals became even higher in as unemployment, income levels and personal net worth all went against the favor of the average consumer.

  • In 2010, the median family net worth is $77,300 – down from $126,400 in 2007.

  • Financial planning is a vital factor in separating the people who are able to meet financial goals and from those falling behind.

  • 31% of household decisions makers have a financial plan.

  • 35% of households have a plan for emergencies.

  • Those who plan feel more confident when it comes to financial decisions. They also save more and feel that they have better progress in reaching their goals.

  • Regardless of the income group, those who plan have a higher score in terms of being financially prepared, compared to those who did not bother to plan at all.

  • 38% of families are living from paycheck to paycheck while 30% feel financially comfortable (2012).

In another study from the Employee Benefit Research Institute specifically paints a picture of retirement planning. The highlights of the study includes:

  • 28% are not confident about their retirement – an increase from 23% in 2012.

  • Retirement confidence is low because of the daunting saving goal that consumers are forced to meet. 20% of respondents believe they need to save 20% – 29% of their income while 23% need to save 30% or more from their income.

  • 46% claimed to have calculated what they will need to retire.

  • Only 2% (workers) and 4% (retirees) think that retirement planning is the priority financial concern.

  • 55% of workers and 39% retirees are admitting to having problems with the amount of debt that they owe.

The list goes on and on but the bottom line here is that our financial life is still in chaos and not everyone is planning for it. Some of us may be going through debt relief programs to help deal with debt but beyond that, we have no plans at all. What you have to understand is that a financial disaster will not spare you just because you are already struggling with your debt and finances. You need to start working on some preventive measures before bad things start happening.

3 keys to prevent yourself from financially sinking

Fortunately for you, there are three factors that can help you avert a financial disaster. At the very least, it can soften the blow in case the crisis is initiated by something that is beyond your control (e.g. stock market crash, etc.)

Changing your bad habits

The first of them is changing the wrong habits that got you in a financial crisis. These include overspending unnecessarily, not living on a budget and taking on too much credit.

In the last few years, the Bureau of Labor Statistics have noted how the average expenditure in an American household have grown over the years. In 2010, the average expense is $48,109. It grew in 2011 at $49,705. Finally in 2012, the household expense is now at $51,442. You may argue that the cost of living is steadily rising too. Well here’s proof that we are not learning from our mistakes. In the category of food expenses, we are spending an average of $3,921 eating food at home and $2,678 eating outside. Instead of just skipping the meals outside, we could save more just cooking our meals at home. While there is nothing wrong with eating outside, you need to calculate carefully how that affects your overall financial standing and that goals you are trying to reach in the future.

If you want to prevent an impending financial disaster, you have to start correcting the habits that are wasting your limited resources.

Adapt a vigilant mindset

We do not want you to be paranoid or anything but we do want you to be prepared. Having a vigilant mindset will keep you from assuming that things will always be great financially. It is not like you need to be a pessimist but just keep in mind that things can go wrong and you need to be prepared for that possibility. In every financial decision that you will make, ask yourself how you can cope with any payment involved with it in case your finances turn for the worse? What are you willing to sacrifice to keep a debt from overcoming your life? It is okay to be risky especially when you are investing to grow your money. But always do it within reason. Balance being risky and conservative at the same time.

Draft a back up plan

This is a plan that you will have in case something happens. It will tell you what to do in case your job or business goes under. This plan will tell you the type of frugal lifestyle that you will have to adapt into so you can maximize what finances you have without resorting to credit. This will help protect you and guide you even as your emotions are swirling around you. This plan will help you take one step at a time towards recovery – even before you know it. Sometimes, events leave us dazed and it helps to have an emergency financial plan that is keeping us from financial disaster.

In truth, surviving a financial crisis may be difficult but it is not impossible if you are well prepared for it. You never know what happens tomorrow so stop making excuses for yourself. You have to act now and start making these preparations.

Here is a video from National Debt Relief that we hope can help you provide a safety net for your family.

10 Good Paying Jobs That Don’t Require A College Degree

two men negotiatingHave you ever heard the Willie Nelson song, “Mamas Don’t Let Your Babies Grow Up To Be Cowboys?” The reasons for this are pretty clear. Being a cowboy is a hard job and the pay is poor. The one thing that can be said for it is that you certainly don’t need a college degree to herd cattle. Fortunately, there are jobs that also don’t require a college degree but that pay very well. In fact, you could get most of these jobs with nothing more than a high school diploma

Air Traffic Controller

If you would like to make the maximum amount of money, have only a high school education and can handle stress, you might want to become an air traffic controller (ATC). While many controllers come from a military background, you might be able to snag one of these best paying jobs without it and the median annual wage for an ATC is, are you ready for this, $108,040. That’s more than many college graduates and even college professors earn.

Commercial pilot

Like air traffic controllers, many commercial airline pilots come from a military background. However, also like ATCs, that’s not necessary. You would need to have non-degree, post-secondary education (think flight school) but once you’re hired you’d be looking at a median annual salary of $92,060.

Administrative Services Manager

This job requires only a high school education or the equivalent and has a median annual salary of $77,890. If you’re wondering what an administrative services manager does it’s plan, direct and coordinate the supportive services of an organization. While the duties of an administrative services manager tend to vary from company to company, they can include keeping records, planning and maintaining facilities and distributing mail. You could get one of these jobs with just a high school diploma or the equivalent.

Nuclear Power Reactor Operator

If you’ve ever watched The Simpsons, you’d know that this is probably what Homer Simpson does although he hardly ever actually works so it’s hard to know for sure. In any event, a Nuclear Power Reactor Operator controls or operates nuclear reactors, which means moving control rods, starting and stopping equipment, monitoring and adjusting controls and recording data in logs. The job’s annual media wage is $75,650 and it requires just a high school degree or equivalent.

Elevator Installer and Repairer

This may not sound like a terribly glamorous job but the pay is pretty sweet as its median annual wage is $70,910. As you might guess this job includes installing, fixing and maintaining escalators, elevators, moving walkways and other lifts. Once again, the only educational requirement for this job is a high school diploma or the equivalent.

Power Distributor and Dispatcher

If you think you’d enjoy controlling the systems that generate and distribute electrical power, you might want to be a power distributor or dispatcher. The median annual salary for this job is $68,900 and it requires just a high school diploma or the equivalent (think GED).

Detective or Criminal Investigator

If you watch any TV at all, you know what a detective or criminal investigator does. But did you know its median annual wage is $68,820? That’s pretty good for a job that theoretically requires just a high school education. However, in real life, you’d have to first be a patrolman and many police officers now actually have college degrees in areas like criminology.

Casino Manager

As you might guess, you don’t start as a casino manager. This is a job you’d work up to, maybe beginning as a dealer or croupier. It has a median annual wage of $66, 960, which isn’t a lot when you consider the fact that this job can be very demanding and requires extraordinary customer service skills, the ability to be a leader, an aptitude for math, and the ability to handle a lot of different responsibilities. It does require some college but no degree.

Power Plant Operator

This job means controlling, operating or maintaining the machinery required to generate electrical power. It requires just a high school diploma or equivalent and has a median annual wage of $65,360.

Electrical Powerhouse Repairer

This job consists of testing, repairing or maintaining electrical equipment in substations, generating stations and in-service relays. Its median annual wage is $65.230. While you could get one of these jobs without a college degree you would need a postsecondary non-degree award.

Jobs in healthcare

If none of these jobs appeal to you, consider a career in healthcare. It’s far and away the fastest-growing industry in America, thanks to the baby boomers, many of who are now entering their golden years or those years that require a lot of healthcare. Most healthcare jobs do require either certification or a two-year associate’s degree. Eight of the better-paying of these jobs include:

Cardiovascular Technologist

Cardiovascular technologists and technicians have a mean average wage of $47,000 a year. This job requires two years of training. Cardiovascular techs use imaging technology to help doctors diagnose cardiac (heart) and peripheral vascular problems in patients.

Registered Nurse

The median average wage for a registered nurse is $67,720. They coordinate and provide patient care and provide emotional support and advice to patients and their family members. To become a registered nurse requires an associate’s degree in nursing, a diploma from an approved nursing program or a bachelor’s degree in nursing.

Respiratory Therapist

These therapists work with patients who have a problem breathing because of a chronic respiratory disease such as emphysema or asthma. They also offer emergency care to people who have had a heart attack, stroke, drowned or that have been shocked. The median annual wage for a respiratory therapist is $54,280 per year. This job generally requires at least an associate’s degree but it’s common for respiratory therapists to have both associate’s and bachelor’s degrees.

Physical Therapist Assistant

The median average wage of a physical therapist is $37,710. They work under the direction of physical therapists and help patients who are recovering from illnesses, injuries and surgeries to regain movement and alleviate pain. The job typically requires a high school diploma and on-the-job training.

Diagnostic Medical Sonographer

Diagnostic medical sonographers have a median average salary of $64,380. A sonographer uses specialized imaging equipment (commonly called sonogram, ultrasound or echocardiogram) to diagnose and evaluate several types of medical conditions. An associate’s degree is usually required for this job or a postsecondary certificate.

Dental Hygienist

This occupation has a median average wage of $68,250 per year. To become a dental hygienist generally requires an associate’s degree in dental hygiene. Dental hygienists must also be licensed by their states. As you may know, dental hygienists examine patients for oral diseases, clean teeth and provide other preventative dental care

Medical Records and Health Information Technician

These are the people that manage and organize health information data in both paper and electronic systems. In addition, they use various classification systems to categorize and code patient information for reimbursement from the insurance companies. The median annual wage for this job is $32,350. You would typically need a postsecondary certificate to get a job as a medical records and health information technician. You could also have an associate’s degree and many employers require professional certification.

Surgical Technician

Surgical techs are often called operating room technicians. They assist in surgical operations, arrange equipment, prepare operating rooms and assist doctors and nurses during surgeries. Surgical technicians have a median annual wage of $39,920. An associate’s degree or a post-secondary certificate is generally required for this job.

 Median income by state

If you’ve ever wondered about median incomes by state, here’s an infographic that answers this question.  As you might guess, the states with  the highest median income are pincipally in the northeast while those with the lowest median incomes can be found in the south. So if you live in Mississippi or Arkansas and would like to earn more money, you might consider moving north.



Learn All About Personal Finances From … A Board Game?

monopolymanYou’ve probably played Monopoly®, either as a kid or with your children. It’s been a popular board game for more than 110 years. Elizabeth Maggie is credited for having created the game in 1904. However, it was probably in existence as early as 1902.

A little known fact about Monopoly

One of the interesting facts about Monopoly is that every street on its board actually exists (or did exist) in Atlantic City, New Jersey. We say “or did exist” because a few of them have been swallowed up by hotel casinos. One enterprising person created a video consisting of photographs of all the remaining Monopoly streets in Atlantic City.

Learn personal finance from a board game?

You’ve probably never thought of it this way but you can actually learn a lot about personal finances from this game.

First, there is a banker/auctioneer. He or she handles the money and doles it out just as do bankers in real life. The banker handles auctions, again just as a bank would in real life. The banker holds title deeds, pays out salaries and bonuses, sells houses and hotels to the players and when required loans money on mortgages. He or she collects all fines, taxes, loans and interest. In other words, the banker is very powerful just as bankers are in real life.

It’s the same objective

Second, the object of the game is the same as what most people want in life, which is to become wealthy. And the way you do it is by making smart investments. What Monopoly teaches is that it’s important to buy the right properties and in everyday life it’s important to make good investments. Another lesson to be learned from Monopoly is that it’s best to diversify or to buy properties that have different values. You shouldn’t buy only the most expensive Monopoly properties such as Boardwalk or Park Place as this would limit your ability to collect rents and ultimately to buy houses and hotels. In real life, you shouldn’t invest only in high-yield bonds or a few mutual funds as this could limit your ability to have a variety of different investments to protect yourself from economic down turns.

Luck  plays a part in both

While it may not be good to admit this, luck plays a part in Monopoly and in out lives. The dice determine where your piece lands on the board, which governs the properties you can buy. And luck plays a certain part in our lives. People who are born to wealthy parents stand a better chance of being successful than people who are born in poverty. There is even a certain amount of luck involved in when you were born. People who came of age in what’s called the “post war economy” of 1945-1970 found it much easier to get jobs and start their careers because our economy was expanding and there were fewer people competing for jobs.

“Smarts” are important

In Monopoly it’s important to play “smart.” The game’s primary objective is to get monopolies or to own all the properties in a set (all properties of the same color). When you play Monopoly you have a finite amount of money. You have to make good decisions as to which properties to buy and which to pass on. For example, if you were to land on an inexpensive property such as St. Charles Place you need to decide whether it would be a good investment or you should wait and hope to land on a better one like Marvin Gardens or New York. In real life, you’re often faced with the same type of decisions. For example, if you decide to invest in real estate, should you buy a cheap property and hope to do a “fix and flip” or wait until you can afford something better where you could get a higher return on your investment.

Spend your money wiselystack of cash

In Monopoly if you go on a buying spree early in the game, you may quickly learn that this could be a big problem later on if you land on a property you need for a Monopoly but don’t have the money to buy it. The lesson to be learned here is to keep a cash reserve to tide you over in the event of an emergency or if you suddenly discover a great investment opportunity.

Random elements

What happens in Monopoly if you land on Community Chest or Chance? It will be a random thing that can be either something good or something bad – just like life is full of random events. If it’s bad, it’s probably going to cost you money. The lesson this teaches is that again, it’s important to have an emergency fund in the event something bad happens to you. In Monopoly if you run out of money you’re out of the game. Running out of money in real life won’t necessarily kick you out of the “game of life,” but could force you into bankruptcy, which would have very bad financial consequences.

Spending your salary

In Monopoly every time you are fortunate enough to pass Go, you earn a salary of $200. You then get to decide how you will spend the money. You could use it to buy a house or you might decide to save it. In Monopoly you will soon learn it’s not good to squander your salary on cheap properties or by putting houses on properties that don’t generate much rent. After you’ve played the game several times, you will know how to better manage your money. The same can be true in real life as it nay take you a few years and some hard knocks to learn to be a good money manager

That dreaded income tax

If you land on the Monopoly square labeled Income Tax, you can either estimate your tax at $200 or pay 10% of your total worth. And you must make that choice before you add up your total worth. Of course, today the idea of paying $200 in income taxes is pretty laughable. But if you don’t have enough cash to pay the $200 or 10% of your total worth, you may be forced out of the game. The lesson here is to remember that when April rolls around you may be required to pay income taxes and if you don’t have the cash available, you could end up in big trouble. In fact, the IRS might put lien on your house or garnish your salary.

Half their value

If you get in dire straits in Monopoly, you can sell your houses and hotels back to the banker but at just 50% of their value. You can also mortgage properties but again for far less than what you paid for them. The lesson to be learned here is to never sell your home or an investment property under emergency conditions, as you’re likely to get much less than it’s worth.

The perils of bankruptcyman with a lot of worries

If you reach a point where you cannot pay the bank or another player what you owe, you are bankrupt. In the event you owe another player, you must turn over all your properties of value to that person and leave the game. If you own hotels or houses, you must give them to the bank. In return for this you will get 50% of their value in cash that you must turn over to that other player. In the event that you owe the bank, you must turn over all of your assets to the banker who will immediately sell everything by auction except for buildings. As you can see, if you become bankrupt in Monopoly, you will be finished. While it’s not quite as bad in real life, a bankruptcy will have some very serious consequences on your finances. For example, it will stay in your credit reports for at least seven years. It will also stay in your public record for the rest of your life. In a worst-case scenario you could miss out on a great job 10 years from now when your prospective employer see that you had a bankruptcy and decides to not hire you for this reason. In addition, a bankruptcy will make it very difficult for you to get new credit for two to three years and when you are able to get credit it will cost you money because it will have a very high interest rate.

Interesting Debt Quotes That Teaches You A Lot About Money Management

stack of cashQuotes from famous and successful people have a motivating effect that no financial management theory can provide. Debt quotes, specifically, teach us a lot about credit from people who know what they are talking about simply because they have been there themselves. This is probably why a lot of people research quotes and post them somewhere visible to help them get through tough times.

Learning about personal finance management is both easy and hard. There are two phases in your quest to learn how to manage your money wisely. The first involves the theories that will help you understand the principles behind proper financial management. This is usually the easy part. You just have to possess an open mind to accept what the theories are teaching you.

The second part is hard. It is the application of the theories that you just learned. This is where a lot of people struggle the most. You may have the best education about personal finance but if you fail to make the connection and apply it properly, then all will be lost. The reason why people find it hard to connect it because they cannot relate to its effectiveness. They feel that the theories are difficult to apply and they oftentimes lose the determination that it takes to completely solve their financial troubles.

This is where, personal finance or specifically debt quotes come into play. By hearing actual people say what they think or feel is the solution to debt or other financial situation, the principles and theories become more relatable and thus more sensible to apply.

Satirical quotes about debt

Earl Wilson, a columnist and author divided the American population into three types of consumers. He said, “Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid-for-what-they-haves.” It simply indicates that if your possessions are all purchased on credit and you have not yet paid them off, you are not really as affluent as you think you are.

Of all the personal finance quotes that can be found on the web, this article will be focusing on debt quotes. There is no financial issue that is more prominent today than debt. If you want to cure compulsive buying habits, the underlying reason for that is to avoid debt. If you want to save more, the reason is to build up your emergency fund so you get to prepare for unexpected expenses that would have put you in debt. In the end, proper financial habits are meant not just to make your life convenient, it is also meant to keep you out of debt.

Since curing financial habits is tough, we have compiled some satirical debt quotes that might help you realize just how silly being in debt really is. Sometimes, we need to poke fun at ourselves to make us realize that in most cases, taking on credit is not the best course to take to satisfy our financial needs. The irony and sarcasm will hopefully bring some light to your otherwise desperate situation.

Mad Magazine: The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.

Did you know that the American Dream is now referred to as the American Debt? Sad to say, the world perceives us as a nation that cannot reach their goals with our own resources. We always have to borrow money to afford certain transactions. Do we really want that type of reputation?

Bob Hope: A bank is a place that will lend you money if you can prove that you don’t need it.

This really explains the requirements of lenders perfectly. When you apply for a loan, one of the things that lenders will be looking for is your ability to pay it back – with interest. If you think about it, you will end up spending more on the purchase because of the interest. You get the same product – only with debt, you get to possess it earlier. But in truth, you can afford the purchase – you just have to wait until you have saved up enough money for it.

Doug Larson: People are living longer than ever before, a phenomenon undoubtedly made unnecessary by the 30-year mortgage.

Although this is meant to be funny, it is poking fun at the plight of baby boomers. Based on a study released by Securian back in April 2013 titled “Retirement time bomb: Mortgage debt,” 67% of pre-retirees are expecting to carry debt over in retirement. 59% of pre-retirees are sure that they will carry mortgage debt. This is the reason why a lot of them are postponing retirement and some even choosing to work until they drop.

These debt quotes should give you an idea about the credit situation in the country. The amount is still high but the good news is, people seem to be wising up with their credit. For instance, credit card debt is declining and so is the mortgage loans. However, student loans and auto loans are growing and their growth is enough to increase the overall consumer credit of Americans.

Credit quotes from Benjamin Franklin

Let us explore three insightful debt quotes from Benjamin Franklin – one of the Founding Fathers of our country. It should give you a fresh new insight on what it means to be in debt and possibly, the motivation to help you get out of it.

Many a man thinks he is buying pleasure, when he is really selling himself to it. This simply implies that debt, for all intents and purposes, really enslaves you. The fact that it limits your finances and binds your budget is enough proof that it can own you. When you buy unnecessary things, you are not owning them, you are being owned by the credit that you used to purchase them.

Rather go to bed without dinner than to rise in debt. Literally, it is hard to agree because if your kids are hungry, it is difficult to forego debt if it is the only way to feed them. However, Benjamin Franklin probably refers to extreme cutbacks on your spending when he made this statement. It is more acceptable to just live frugally and minimally if that means you get to be debt free.

Content makes poor men rich; discontent makes rich men poor. This is a great debt quote that will help you avoid extravagance. If you think about it, contentment will keep you from trying to have what your neighbors have. It allows you to focus only on what you really need – and not what society expects you to possess. Even if you have a lot of money, if you are not content, you will always aim to have more – and that spending lifestyle can really ruin your finances.

Financial planning to help cure debt

If you are really burdened with so much debt, we strongly advise that you try to put some order into your financial life. This can only be done if you come up with a financial plan that will help you organize your money. The released a study about the Financial Planning Profiles of American Households in 2013 and it showed that consumers are divided into 4 categories:

  • Comprehensive planners. They make up 19% of the group of respondents. These are the households that go beyond the budget and plan for savings and insurance too.

  • Basic planners. This is the biggest percentage with 38%. It reveals that most Americans have the basic financial goals for retirement and college education but it is not as comprehensive as the first group. Some claim to have a budget in mind but it is not really written down.

  • Limited planners. This comprises 33% of the group. This includes consumers who have only a budget or saving goal. Usually, it is not both.

  • Non-planners. Surprisingly, after everything that we went through financially, there are still 10% who do not have any plan at all. They still live the same way – keeping their finances disorganized.

This statistic is a wake up call for most of us. Regardless of what theories you learn, the application is very important in your quest to fix your finances. You may read all the debt quotes available out there but if you fail to implement your learnings, it will be for nothing. And we all know that you cannot implement if you do not have a plan. So you better start working on your financial plans while it is not yet too late for you.

Here is a video from National Debt Relief about how to get out of debt.