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How To Rebuild Your Reserve Fund After An Emergency

red crisis fund boxYour reserve fund is meant to be used for emergencies. Let us assume that after you have spent months saving up for your emergency fund, you have finally reached your target amount. This is a great feat because saving can keep your finances from flying apart. Whatever amount you have in this fund can help you get out of another tight spot.

But that is the challenge here. How can you build up your emergency fund once you have spent it for an unexpected event?

When you have an emergency fund, you are actually better than 62% of Americans. Bankrate.com, asked survey respondents what they would do if they are faced with an unexpected emergency that will cost them $500 to $1,000. It is revealed that 57% of the respondents will not use their savings. To be specific, 26% will reduce their spending on other things, 16% will borrow from other people, 12% will use credit cards, and 3% will think of something. $1,000 seems like a very low target for a reserve fund and it appears like a lot of Americans do not even have this amount in their savings.

If you have just spent your emergency fund – you may be in better shape than all these people. Of course, you are no longer as secure as you once were because you blew out your savings. This is why you need to work as fast as you can in rebuilding your reserve fund.

How to build up your emergency fund after spending it

There are a couple of things that you can do in order to get back the amount that you spent in your last emergency. You may be feeling relieved because you had that money saved up when you needed it the most. Imagine what would have happened if you didn’t?

Well to give you an idea, here is a video from Forbes that discusses what it can cost you if you do not have a reserve fund to get you out of tight spots.

We all know that it is difficult to not have the money to get out of tight spots. What you learned from the video should give you some motivation to build it up quickly.

Here are some tips that we have for you.

Revisit your budget.

The first thing that you need to do is to look at your budget plan. If you have to save up for something fast, you need to make sure that it is aligned with your budget. The good thing about putting your saving goals in your budget plan is you can ensure that your allocation will be there each month. If you put it in your priority list, you will be reminded that you have to put aside money for your reserve fund.

Now revisiting your budget would help you identify if you have enough income to set aside to rebuild your emergency fund. If not, you can figure out your next steps in order to reach your saving goal.

Be a smart spender.

The next step on your to do list is to take a look at your spending and to improve it. Since you have to continue spending in order to survive, you should learn how to be a smart spender. Take note that our definition of smart spending is not only saying no to expenses that you cannot afford. That is already a given. If you really want to be smart when it comes to your expenses, you need to learn how to say no – even when you can afford to pay for something. You need to stick to the expenses that are necessary at present. The rest should be invested in your future. Your reserve fund is one of the investments that you can make. Remember the video we shared earlier? Think about what it will cost you if you did not have the emergency fund to spend on unexpected expenses. If you eliminate the unnecessary spending, you can increase the amount that you can save.

Increase your income.

To help you put more money in your emergency fund, you should also look for ways to increase your income. In case your income is not enough to help you build up your funds immediately, you can look for ways to boost your monthly cash flow. If your intention is to simply rebuild your reserve fund, this increase can only be temporary. You do not really have to get a second job or something. But if you can set up a source of passive income that you can make permanent, then that would really help your finances in the long run. However, if you can only set up a temporary financial boost, then that is alright. Among the things that you can do is to declutter your home and sell off things that you do not need. The profit that you will earn can be sent towards your reserve fund.

These three should be enough to help you rebuild your emergency fund as fast as possible. As you work diligently in saving, just pray and hope that no unexpected expense will happen in the near future.

How much money should you put aside for emergencies

After the emergency that you had to go through, you may want to ensure that the next unexpected expense will no longer wipe out your savings. If this means you have to increase your reserve fund target, then that is what you should do.

However, this is something that you need to be careful with. You need to set a reasonable emergency fund target – but at the same time, you do not want to overdo it.

There is an article published on GetRichSlowly.org that tells us something about putting too much money in your savings. This article hinted that you could waste money if you put too much in your emergency fund. This is money that you usually put in your savings account because you want to be able to access it immediately when you need to. The problem with savings accounts is that it only gains you a small interest. If your retirement or children’s college fund earns 23% (as was stated in the article), you might feel bad about the money you have in your reserve fund.

So here is another challenge, how much money should you put aside for your reserve fund?

The answer to that will depend on your personal situation. Your emergency savings will depend on what you need to spend on. According to an article published on BusinessInsider.com.

You need 3 months worth of monthly expenses if…

  • You are a healthy individual.
  • You do not have dependents.
  • You can live well within your means.

You need 6 months worth of monthly expenses if…

  • You have a dual-income family.
  • You have dependents.
  • You rely on variable or commission-based income.

You need 8 months or more worth of monthly expenses if…

  • You have a single-income family.
  • You have or one of your dependents have a health problem.
  • You are old or retired.

This is something that you need to consider if you want to be able to save just the right amount of money in your reserve fund. It helps to just start with your budget. Analyze what you need to do and be very honest with what you need in your financial life. By doing that, you can set up a fund that is enough for what you may require if an emergency happens.

13 Items You May Already Own That Will Help You Save Money

happy woman with raining moneyHave you ever created a comprehensive budget, started out following it religiously and then sort of let it slip away over time? No matter how good our intentions might be our willpower can sometimes just slowly fade away as we see that were not meeting our objectives. However, there are tools available that can make it infinitely easier for you to save money. Here are 13 items that can help you save money that you may already have around the house and, if not, many of them are very inexpensive.

#1. UV-blocking curtains

These curtains can dramatically reduce your heating and cooling bills. They are now available in a multitude of patterns and colors so you should be able to find ones at your local Lowe’s, Home Depot or even a hardware store that will match in your decor. If you live in particularly cold country put up liners in the winter to lock in heat even more effectively.

#2. Ceiling fans

Ceiling fans can help lower both your heating and cooling bills as they run counterclockwise in the summer and clockwise in the winter. This diffuses cooled or heated air so less energy is needed to maintain whatever temperature you desire wherever they are mounted. During times when heat is only moderate the increased airflow created by a ceiling fan might mean you wouldn’t even need to run your air-conditioner.

#3. Grocery and shopping bagswoman with a groceries bag

Why spend $10 for trashcan liners for your laundry room, bathrooms and guest rooms when you can use grocery bags instead? They’re generally the perfect size and reusing them is also good for the environment. When you made your purchases you paid for them so they cost nothing extra. You can even use those bags to clean up after your pet in your yard or the park or keep several in your car for emergency spills.

#4. Toilets with options

Do you think it takes the same amount of water to flush both your number one and number two? If you don’t think so, you’re right. It doesn’t. And the amount of water your toilets use each year just increases your water bill. You could spend $100 and get toilets that have dual flush options, which would mean you wouldn’t have to use extra water unless you needed it.

#5. A clothes drying rack

The one appliance that can really run up your electric bill is your clothes dryer. You can reduce that bill by getting a clothes drying rack and drying your clothes on it. You’ll be doing something good for the environment as well as saving money. You should be able to find a folding drying rack at your nearest home goods or superstore.

#6. Rechargeable batteries

How many things do you have around your house that just eat batteries? If you’re typical the answer is probably at least a dozen. There are flashlights, appliances, smoke detectors, cameras, TV remotes, radios and, of course, your children’s’ toys. While rechargeable batteries cost more and generally mean frequent recharging, they will save you money over the long term. And there’s an nice bonus. You won’t get that feeling of frustration when you find you’re out of some type of battery you need to replace the two that just died. And do remember to unplug your battery chargers when you’re not using them as anything plugged in will require electricity you’ll be have to pay for.

#7. A cooler

Will you be meeting with friends soon? Think about picking up items from the store and stock them in a cooler. You could then meet your friends at a garden, beach or park instead of spending money to meet at a restaurant. Many parks, aquariums and zoos allow you to bring a cooler stocked with food from home, which can save you a lot of money versus buying stuff when you get there.

#8. Coffee pot

Stop those daily runs to Starbucks or your favorite neighborhood coffee bar and you’ll save hundreds if not thousands of dollars. You could also have friends over and serve them freshly brewed cups of coffee in place of going out for costly weekend brunches.

#9. Crockpot

If you don’t believe you have time to cook and have been in the habit of picking up takeout meals on the way home, you could make that a thing of the past. Get a crockpot, toss in some meat and vegetables in the morning before you go to work, turn it on low and you’ll have a great meal waiting for you when you get home from work. If you have extra portions left over just freeze them for another day, which would mean yet another meal you wouldn’t have to cook.

#10. A blender

If you have or get a heavy-duty blender you can make your own juices, smoothies and if appropriate baby foods. You’ll both save money and get the flavor you like exactly right each time. You can lower your grocery bill even further by blending in-season vegetables and fruits.

#11. “Smart” power strips

If you run your computer and multiple devices such as a printer, a laptop and a stereo from your desk then a “smart” power strip is a must. It will focus power usage on the items that are in use and reduce the amount of energy it sends to the others, which means eliminating “ghost charges.” And while you might think that unplugging gadgets when you’re not using them to be a time waster you won’t think so when those charges aren’t so “ghost” and you see how much they increase your electric bill.

#12. Home entertainment subscriptions

Are you regularly spending anywhere from $15-$25 to see a movie on the big screen? A better alternative would be to have your entertainment at home through Netflix, Amazon Prime or some other entertainment subscription service. Plus, at-home entertainment can be a cool option for a fun evening with friends or a date night and will save all of you money.

#13. A library card

family reading a bookThere is no reason these days to go to a Barnes & Noble and spend money buying books. And while it may be very easy and convenient to download e-books you can do without them as well by checking out books at your local library. Many of them maintain subscriptions to popular magazines and have DVDs available. You may not be able to check out the magazines but you should be able to take the DVDs home and enjoy a free movie with your friends or kids.

Financial Planning Tips For A Debt-Free Vacation

woman on a hammockFinancial planning should be a big part of your preparations when you want to enjoy a great vacation this summer season. Although a lot of people travel during the holidays, the bulk actually happens during the hot season. This is probably caused by the availability of the students in the family. After all, it coincides with their vacation from school. In fact, some people go on a vacation after a student in the family finishes a milestone in their education (e.g. graduating with honors, etc).

Apart from that, we all know that vacations are also very important for workers. According to an article published on LATimes.com, an employee working full time spends 42 ½ hours each week in labour. That is more than 2,200 hours of work each year. Based on the data provided by the Bureau of Labor Statistics, 7% of employed individuals work more than 60 hours each week in 2014 – which is more than 3,100 hours of labor every year. If you are working that much, then taking a week off to go out and relax is a must.

Now the thing about going on a vacation is that it costs money. Some people would choose to skip the vacation because they would rather earn money instead of spending it. However, you need to understand the benefits of going on a vacation. It is believed that people become more productive if they take some time off to recharge. Not only will you be resting your body, you need to relax your emotions and calm your mentality. All of these can be achieved if you only take a vacation from your usual tasks.

Your concerns about the money you will spend during your vacation can be solved if you dwell on some serious financial planning first. Do not just plunge head on just because you feel you deserve it. Although it may be true that you deserve the break, you need to make sure that it will not ruin your finances in the process.

How to prepare financially for a debt-free vacation

The big question is, how can you financially prepare yourself so you can go on a debt-free vacation? The key is to plan ahead.

A spur of the moment vacation may be exciting but if you will charge it to your credit card, then you will lose the excitement once it is over. In fact, that debt that you will incur may even put a damper on your travel adventures. Why not aim to go on a vacation that you will enjoy without incurring any debt? That is possible – as long as you prepare for it months before the actual travel date.

Here are some tips that will guarantee that you will have a debt-free vacation ahead of you.

Set a budget.

First of all, you need to set a budget for your vacation. Give yourself some room to prepare. A few months of financial planning before the actual travel can really save you a lot of money. It will also give you time to consider the different options that you have when it comes to your destination and the activities that you will pursue.

If you start preparing in January every year, that will give you 6 months worth of preparation for your summer vacation. If you can put aside $500 a month, you will have $3,000 to spend on your vacation. Set that as your target. Work around this amount when you plan your vacation.

Save up for your expenses.

Now that you have set the budget, you need to come up with strategies to save money. Decide if you will cut back on your usual expenses or you will earn more. If you can do a bit of freelancing during your free time, you can add your earnings to your savings. If you know how to bake cookies, you can sell some to your colleagues and ask them to support your vacation fund. It should be a fun way to save up for your summer travels.

If you can save up a higher amount than the budget that you have set, that would be even better. At least, you have extra money to spend on your vacation.

Scout for discounts.

When planning your vacation, you need to get as much discount as you can. According to TravelPulse.com, almost 60% of those traveling usually exceed their summer budget every year. Try not to commit the same mistake. If you have $3,000 as your target amount, work around a budget of $2,500. That means your food costs, board and lodging expenses, travel costs and activity fees should be within this amount. The extra $500 should be allotted for unforeseen expenses. There will always be miscellaneous costs that you need to prepare for. If your budget seems too small, you simply have to look for discounts that will allow you to enjoy your vacation despite limited funds.

Financial planning early on will benefit you because you can see a lot of discounts when it comes to hotel bookings, airfares, etc. If you book months ahead, you can get huge slashes on the regular price.

Tips to enjoy traveling on a low budget

In case you do not have enough time to save up for your vacation expenses, financial planning can still help you a lot. There are a lot of frugal fun activities that you can enjoy this summer, if you know how to look for them.

Here are some tips that you can use to help you plan your vacation.

  • Concentrate on what will make you happy. Start by identifying what will really make you happy. For instance, if you are dreaming about vacationing in the Caribbean, think about the factors that make that particular place appealing to you. Is it the beach? Is it the warm weather? Is it the beautiful scenery? Believe it or not, there are places in the country that will give you the same views and climate without it costing a lot.
  • Opt for staycation. This simply means enjoying what you have at home. If you follow the first tip, you should be able to find a great vacation spot without traveling a long way. Based on an article published on NYTimes.com, domestic vacations are on the rise this year. Analysts believe that Americans will choose to spend their vacation money exploring their own country. If you choose the right spot, you could end up having a low budget vacation without sacrificing the rest and relaxation that you are aiming for.
  • Book your tickets ahead of time. As mentioned, an early booking will give you more chances of getting a discount. Most airlines and even hotels give out discounts for those who will book with them ahead of time. This is one of the reasons why you need to start your vacation’s financial planning months before you want to take a leave.
  • Lower your expectations. We all want to stay in a 5 star hotel but we have to realistic. If you will only stay there to sleep because you plan on roaming around the whole day, then why spend so much on a hotel? Opt for the cheaper lodging options that are decent but not as extravagant. The same is true for your other expenses. Like if you need to rent a car, be reasonable with what type of vehicle you will lease.
  • Be smart about your food expenses. Part of the joys of traveling is tasting cuisine that you rarely get to enjoy. However, that does not mean you need to eat out all the time. If you can book accommodations that will allow you to cook, then that will save you a lot of money. You can cook your own meals – at least breakfast and dinner, and then have your lunch in one of the restaurants in the local neighborhood.
  • Set aside your budget for major expenses. If you plan to visit local attractions that have entrance fees, you may want to set aside the money for these expenses. Place them in separate envelopes and label them accordingly. This will not only keep you from spending them on other things, it will also help keep your finances organized.

These financial planning tips will really help you cut back on your summer budget so you can have a debt-free vacation.

Be A Millionaire: How To Grow Your Personal Net Worth

raining cash on businessmanIf you want to be super rich, you need to be focused on growing your personal net worth. Take note that this is not just about the amount of cash that you have. It involves your overall value. When computing your net worth, you need to consider your cash, investments, assets and other factors in your life that add to your value.

Some Americans think that their lives never really improved after the Great Recession happened. But if you look at the statistics, you will realize that there is a rise in the number of millionaires all over the world. According to the website WorldWealthReport.com, there are 14.6 million millionaires around the world as of 2014. In North America, there are 4.68 million millionaires – up by 8.3% from 2013. The most number of millionaires can be found in the Asia-Pacific region with 4.69 million of them. The number of millionaires in this regions increased by 8.5% compared to 2013. The region that comes in third when it comes to millionaires is Europe with 3.99 million millionaires, up by 4%. Even Middle East (0.61 million) and Africa (0.15 million) have more millionaires now with a growth of 7.7% and 5.2% respectively. Only Latin America have less millionaires now at 0.53 million – a 2.1% decrease.

You see, regardless of the economic conditions, some people just know how to manage their resources so it will grow and make them millionaires.

3 steps to grow your net worth

You will find a lot of tips and steps and techniques all over the Internet that will teach you how to become a millionaire. The truth is, there is no one-formula to getting rich. People like Warren Buffet, Donald Trump, Robert Kiyosaki and all the other successful individuals out there have different get-rich methods. What works for one may not necessarily work for you. This is why you need to be careful when you are looking for tips to improve your financial situation.

If you think about it, becoming rich begins and ends with financial management. You will never be a millionaire unless you know how to manage your money well. Not only that, you cannot stay a millionaire if you fail in money management as well. But apart from financial management, there are three steps that will help you grow your personal net worth.

Step 1: Get rid of too much debt.

The first step is to lower your liabilities. When it comes to financial liabilities, the first thing that comes into mind is credit. The truth is, debt is not all bad. Millionaires believe that there is such a thing as a good debt and they know how to use it to their advantage. But you need to know which debt is sucking the life out of your finances. You need to find them and end their association with your money. They will only bring your personal net worth down. High interest credit card debts are on top of the list. You can continue to use credit cards for a more convenient shopping experience but make sure that you can afford to pay it in full when the bill comes. The idea is to keep the high interest rate from touching your balance. That is how you are wasting money when you let credit card debt get out of hand.

If you lower your debt balance, you will also raise your credit score. This will open up a lot of financial opportunities for you – like a low interest rate on a loan that will help you finance investments.

Step 2: Secure your future.

There is a simple way that you can secure your future and that is to save. You need to save up for your emergency fund. You need to start contributing towards your retirement fund. You also have to think about the college fund of your kids so you can help them stay out of student loans. The last fund can also be for your own education so you can qualify for a higher compensation at work. All of these funds should be considered if you want to grow your personal net worth. Those who start contributing to their retirement fund while in their 20s will most likely be a millionaire by the time they retire. That is the beauty of compound interest.

When it comes to your emergency fund, this will secure your future – especially against debt. If you borrow money because of an unexpected event, that cannot be considered a good debt. In most cases, debts borne out of emergencies are done out of desperation and that usually means you are on the losing end. Good debts are those that are well planned. To make sure that you will never go into any unplanned debt, just build up your emergency fund.

Step3: Invest your money.

The most proactive way to grow your personal net worth is by investing your money. Putting your money in a savings account is not really considered an investment because of its pitiful interest rate. You need to literally invest your money in stocks, bond and mutual funds to help make it grow as the economy of the country continues to recover. According to an article published on CapGemini.com, High Net Worth Individuals invest their money in different ways. The survey known as Global High Net Worth Survey , revealed that the net worth of HNW individuals are divided into 5 categories: Equity (27%), Cash (26%), Real Estate (20%), Fixed Income (16%) and Alternative Investments (10%). As you can see, most of their wealth is kept in equities. This is because it has the best chance of growing there.

Learn about investing because this is a great way for you to increase your personal net worth. There are both low-risk and high-risk investments that you can dabble in. The rule is, the higher the risk, the higher the potential for growth is.

The millionaire mindset will help improve your wealth

Take note that completing the three steps discussed above does not guarantee that you will become a millionaire. It will help improve your personal net worth but whether or not it will make you a millionaire is still uncertain. That will depend on how you will manage your money after you have invested it. You still need to practice the right financial management skills and at the same time, apply the millionaire mindset.

In the website RichHabits.net, Thomas C. Corley revealed the 5 habits that help make people rich. The author spent 5 years studying 233 millionaires to determine the reasons why they are currently successful. Mind you, these are not millionaires who were born rich. These are self-made millionaires. They worked hard to be where they are and if you want to be like them, you need to implement the following habits.

  • Create multiple sources of income. The first habit is to diversify your streams of income. Do not depend on just one because if something happens to that source, you will be left with nothing. According to the studies done by Mr. Corley, 65% of these self-made millionaires have three or more sources of income. These include rental incomes, stock market investments, side businesses, royalties, etc.
  • Dream before you set a goal. Before you define your goals, make sure you identify your dream first. Your dream will point you to the general direction that you want your life to take. Once you know where you want to go, you can set the smaller goals that will take you there. You can begin by writing down where you want to be in 5, 10, 15 and 20 years time. Be specific about the details like where you want to live, how much your personal net worth should be, etc. When you have these written down, it should be easier to identify what you need to do in order to reach them. Setting your goals around these dreams will make it easier to take action because you have your motivation through your dream.
  • Avoid wasting your time. The article also revealed that millionaires try not to waste their time. There is great value in time and once you waste it, you cannot bring it back. So make sure that every moment spent in your life will count.
  • Find a mentor. Go and find someone that you want to emulate and learn from them. Most of the millionaires in the world attributed their improved personal net worth to their mentors. It could be your parents, a friend, a boss, or a teacher. Find someone that you respect and you know will have a positive influence in your life.
  • Do not quit on a dream. The last habit pointed out by Mr. Corley is to never quit on a dream. An admirable trait of self made millionaires is they are very persistent. When you find an obstacle blocking your way, you either go through it or you go around it. You never stop just because things get a bit too hard. If you fall, you stand up to try again. That persistence will help you grow your personal net worth until you become a self-made millionaire yourself.

Here is a video with 17 tips that will help you get a millionaire mindset. These were created by T. Harv Eker.

Survey Says: Almost Half Of Workers Do Not Have Enough Emergency Funds

piggy bankWhen it comes to saving money, financial experts have always encouraged consumers to think about their emergency funds. This is the amount of money that you will put aside so you have the funds to get you out of unexpected expenses in the future. The use for this money can range between the trivial (e.g. busted transmission in your car) to the serious (e.g. medical illness) expenses.

The irony about living is you will never know what will happen in the future. No matter how careful you are, something is always bound to happen that will get you off track. Even the most careful individual could suddenly end up with an illness or without a job. It is better to be prepared for these events. Apart from being physically, mentally, and emotionally strong, you also have to be ready financially. And the only way you can do the latter is by building up emergency funds.

According the pulse survey results from Bankrate.com, 28% of their respondents will resort to credit in order to pay for unexpected expenses amounting to $500 to $1,000. 16% of the respondents said that they will borrow money from family and friends. This is a great option because these people usually do not have to worry about high interest rates. The same survey also revealed that 12% of their respondents would use credit cards to finance an unexpected expense. This is a dangerous habit because of the high interest rates that oftentimes accompany credit card debt.

If you want to be prepared for emergency expenses, it is important that you save up for it. You do not want to be caught unprepared at the wrong time.

Survey says Americans are not prepared for unexpected expenses

In a separate survey published on Principal.com, it is revealed that almost half of their respondents will find it difficult to find financial resources for an unexpected expense that amounts to $1,000. The survey was initiated by the Principal Financial Group and conducted by Harris Poll among 1,111 employees. These workers come from small to mid-sized businesses. The survey was done to gauge the financial well-being of workers.

The results of the survey revealed that 17% said that it is difficult to produce this amount, 13% said it is very difficult and 17% said it is extremely difficult. That means 47% of the respondents in this survey said that they will have a difficult time getting the resources for an emergency that will cost them $1,000. Imagine if they were faced with a bigger expense – that could very well lead them to a financial crisis.

To prevent this from happening, you need to build up emergency funds that will give you the resources to pay off unexpected financial needs. There are four important reasons why you need this savings.

Emergency funds can help you avoid a crisis.

If you have the financial resources to spend on an unexpected expense, you may very well be able to avoid going into a financial crisis. Instead of letting a situation get out of hand, you can immediately use the funds that you have to quickly solve a problem. Of course, you can only do this if the cause of the crisis is something that you can control. For instance, if you get sick, you will not hesitate to get treated because you know that you have the funds to spend for it. That can keep you from developing a more serious illness.

Emergency funds can help you survive a crisis.

In case you are faced with a financial crisis that you have no control over, your emergency funds will help you survive a financial crisis. An example of this is a job loss because of an economic situation.  Your emergency fund will give you the resources you will need in order to get through the tough situation that you are currently in.

Emergency funds can keep you from debts.

Another reason why you need to save for an emergency fund is to keep yourself from debts. Going back to the Bankrate survey, people who do not have savings usually resort to credit. It is okay if you can borrow money without interest. But what if you have no choice but to loan an amount with a high interest rate? You will be wasting a lot of money paying for that interest amount. You can avoid debt if you have the amount to spend from your savings in the first place.

Emergency funds can give you peace of mind.

Lastly, you need to build up your emergency funds because it will help you life a life that is free from stress. At the very least, you know that your financial situation is one thing that you do not have to worry about – regardless of what the future may bring. This is probably the most important thing that an emergency fund can give you. Even if you are already immersed in problems, you do not have to panic because you have the resources to spend in the meantime. You can concentrate on solving your problems while you continue to have the finances to spend on your needs.

Tips to build your reserve fund fast

According to an article published on NYTimes.com, more than 5 out of 10 American households have less than one month’s worth of income in their savings account. That means if something happens to their job, they can only survive for barely a month before their finances expire. You do not want this to happen so you must be prepared to build your emergency fund fast. The article mentioned that it is possible to build up your savings even if you have a limited income. The thing that you need to overcome is sometimes, psychological. People think that saving up for 6 month’s worth of income is impossible and they give up on the task even before they have started.

You need to overcome this negativity and concentrate on the target amount that you need to reach. There are rules that you need to follow when building your emergency fund and here are some of them.

  • Compute how much you need for emergency and reserve funds. Calculate the amount that you need to save for your emergency funds and your reserve funds. The emergency fund is the savings that will be spent for very serious expenses like job loss, etc. The reserve fund is for the more trivial expenses that you did not plan for. For instance, the gift that you need to buy for the wedding of your cousin, etc.
  • Review your budget plan. It is also important to review your budget plan so you can include the amount that you need to put aside for your savings. It is best to treat your savings like a bill so that you will put money into it no matter what.
  • Downsize your lifestyle. To increase the amount in your emergency funds, you may want to downsize your lifestyle so that you can lower your expenses. At least, this is true if you really want to grow your savings quickly. The more you can sacrifice from your usual expenses, the more you can put aside in your savings.
  • Increase your income. While you are saving on your expenses, you may want to boost that by increasing your income too. Try to earn more by setting up a passive income. You can also sell off some of the things that you no longer need so the profits can be added to your emergency fund.

Want To Increase Your Savings? Live On One Income

couple discussing finances

Couple calculating their budget

You would think that in order to increase your savings, you need to have at least 2 earning individuals at home. In fact, in most households, both couples are forced to have a job so they can make ends meet. Having both husband and wife earning may seem like the family will be better off financially. But did you know that it is possible to grow your savings even if only one person is earning an income?

Unless you are both career-driven, you probably have thought about quitting and staying at home to take care of the fort. If you feel like you are not getting paid what you are worth anyway, this may be a great option for you. A young couple who want to start a family would be talking about this too. Someone needs to stay at home to take care of the kids – especially while they are young. This would be a very good reason to live on one income.

But if you have dreams of buying something big in the future, you know that you need to increase your savings. And if you want to maximize what you can save, you know that the most logical thing to do is to have both you and your partner or spouse working.

According to a the daily consumer spending found at Gallup.com, Americans spend an average of $90 each day. That makes $2,700 a month. That amount does not include any payments made towards the house like mortgages, and household bills. Any expense on cars or vehicles are also not included here. So you can see that this amount is actually higher. That means the average household needs to spend at least $3,000 to $3,500 each month.

Do you think your home can afford to meet this expense with just one person earning a living? And what if you want to increase your savings? Would it be possible with this spending statistic and one income?

It will honestly not be a walk in the park but it is very much possible.

Saving benefits of having one stay-at-home parent

Believe it or not, there are saving benefits if you have a stay-at-home parent in your household. Do not frown upon those who decided to quit their job to take care of their career. They may be saving more money by staying at home instead of working for someone else. If you have the right situation, it may be more feasible to just quit your job.

There was an article that went viral a few months ago that indicated how much a stay at home mom is really worth. This was an article written by a husband with a stay-at-home wife. This article published on WeAreGlory.com gave specific figures that will give you an idea about how much a stay-at-home parent would be earning if we paid them for the work they do at home. Let us enumerate what was indicated in the article.

  • Child caring services. The author started by stating how his wife cares for their son every day. Changing diapers, feeding, playing, comforting, putting to sleep – all of these are tasks that his wife does day in and day out. If you hire a full time nanny to care for your child that way, you have to spend $705 a week or $2,820 a month. In essence, your wife (or husband), would be worth more because they care for your child 24/7.
  • Cleaning services. The one staying at home is usually the one cleaning the house too. This costs $50-$100 per visit – depending on the size of the house and how thorough you want the cleaning to go. If you have pets too – that will cost more. This is easily $100 a week – or $400 a month.
  • Personal shopper. Whenever your wife goes out to run errands like doing the groceries, buying gifts for family and friends, and going to the dry cleaners, that is a career too. The people who do this professionally are called personal shoppers. And they can cost you around $65 hour, for 4 hours a week, that is $260 a week or $1,040 a month.
  • Personal chef. Now this can be costly. A chef preparing 5 meals with 2 servings each can cost $400 or more. To be conservative, the author of the article gave an amount to $240 a week. That is $960 a month.
  • Financial assistant. Most of the time, the one staying at home is the one handling the finances because they know how much money is needed to keep the house stocked and in order. Whoever stays at home will most likely do the budgeting, paying of bills, etc. That sound like the work of a financial assistant who earns around $15 an hour. Assuming this will take around 5 hours a week to organize financial matters at home, that means $300 each month – at the very least.
  • Washer/Dryer personnel. Doing the laundry costs $25 a week. This will means it will cost you $100 a month to have all the dirty laundry in the house taken cared of.

We could go on and on because there are other things that a stay-at-home parent does around the house. But if we stop here, we are looking at a monthly salary of $5,620 or $67,440 a year. If you think about it, that is the amount that you are saving if one of you stays at home. Who would have thought that living on one income is actually a great saving tip?

If one of you earns less than this amount, then quitting your job could make sense. You would be able to increase your savings for future purchases.

How to transition into a one income household

According to the PewSocialTrends.org, there are more stay at home moms in 2012. In 1999, 23% of moms do not work outside. In 2012, that percentage went up to 29%. A lot of those who chose to stay at home are married and thus have husbands who are financially supporting them. These are the women who have consciously decided to stop working to care for their kids. Most of the single or unmarried mothers who are staying at home have done so because they could not find a job – and not because they decided to.

Of course, you have to deal with having a low monthly budget when only one of you is earning at home. While it may seem like a difficult task, it is possible to be happy while in a low income household. You just have to know how to transition to it properly.

  • Visualize how your budget will be like with one income. Before you go ahead and quit your job, create a budget and see how the household will fare with only one income. That way, you can discuss with your spouse if it is feasible or not. Here is a video that you can watch for some tips when creating a budget for a one income household.

  • Make sure you have an emergency fund. Increase your savings first before you quit your job. That way, any unexpected expense will not cripple your budget immediately.
  • Identify the expenses that you can get rid of. Definitely, you need to lower your expenses so you can increase your savings despite a lower monthly cash flow. Try not to sacrifice your savings. You need to have savings so try to sacrifice your expenses instead of your emergency fund. If you have to downsize your lifestyle, that could be arranged. Selling some of your stuff could help increase your emergency fund.
  • Have a plan for your debt. In case you have debts, you need to get rid of them before you live on one income. When you get rid of debt, it is one way to increase your savings too. You are wasting money on the interest amount that you pay towards your debts. Eliminate that and living on one income will be easier.
  • Try to find part-time work that you can do at home. Of course, staying at home does not really mean no income can be generated. There are so many work from home careers out there. You may be able to generate some income by becoming an online freelancer.

With some great financial management skills, it is possible to increase your savings even if you are living on one income in your household. Once you get the trick of budgeting and smart spending, it should all come easily. Not only will you be financially smarter, you have a better chance at creating a high quality home for you and your kids.

Different Ways Your Preteen Can Earn Money This Summer

smiling preteen with a garden rake

If you want your children to be financially literate after summer, you may want to encourage them to earn money during their free time. There are a lot of fun activities that can help them earn extra cash and if they choose the right one, it could prove to be quite educational too. Pointing out the things that they can buy with their own money might motivate your kids to go along with your idea.

Of course, you will encourage your children to earn an income – not just for the sake of having money to spend, but also to help them learn a thing or two about personal finances. The road to financial literacy is long and they will benefit a lot if they start their lessons at a young age.

When children are taught the right financial habits and concepts, they are more inclined to succeed in life. Developing the habits early on will help them make the right decisions at an early age. We all know that among the first financial decisions that your child will make involves student loans. If the right financial concepts and habits are instilled in them early on, they are bound to choose the right path when it comes to their student loans and other college expenses.

According to an article published on USAToday.com, teens are expected to be financially competent before they enter into college. The article cited a study done by the Organization for Economic Cooperation and Development that revealed how the US only ranked 9 out of 18 countries when it comes to teen financial literacy. Obviously, there is a lot of room for improvement – considering the fact that the student loan problem already reached its trillion mark.

Although efforts are being made to improve the curriculum to include personal finance lessons, we all know that a financially literate individual is shaped at home. That being said, you need to realize that motivating your children to earn money this summer can be a great step towards a successful financial future.

Encourage your kids to make money this summer

According to FinancialEducatorsCouncil.org, financial decision making can be influenced by proper information, giving incentives for good decisions and allowing them to apply the information in real-life situations. When you are in your preteens, the best way to learn about money management is to start earning money.

The best age to encourage children to earn money is during their preteens or tweens. This is the age wherein they shift from being shy to becoming more independent. The idea of earning their own cash would appeal to them so convincing them to get a part time job would not be too hard to do. Of course, you want to make sure that the job they will choose will not suck the fun out of their summer break.

Here are a couple of options for your preteens to earn money this summer.

  • Babysitter. In truth, babysitting jobs for preteens have changed over the years. Parents will rarely leave their young ones with preteens and would opt for older babysitters. However, tweens can be hired to babysit just so the parents can do chores around the house. They simply have to keep the kids occupied to give the parents some peace and quiet for a few hours.
  • Senior helper. Another option for preteens is helping out the elderly. Some of these seniors simply need someone to be with them for a couple of hours so they will not feel alone.  Your child can help out around the house too like sweeping or putting some things around the house in order.
  • Dog walker. Some busy neighbors may be in need of someone to walk their dogs. This is a job that preteens can also opt for. It will only take a couple of hours to do this and can help tweens earn money easily.
  • Pet sitter. Speaking of animals, you can also encourage your kids to look after the pets of vacationing neighbors. Summer is a time to travel for some families and your kids can help look after any pets that will be left behind.
  • Gardener. This job involves simple tasks like mowing the lawn, trimming the bushes or keeping the garden clean. Cleaning the garden can be time consuming – something that some neighbors may not have time to do.
  • Car washer. Another job that your kids can opt for is washing cars. Have them go around the neighborhood to offer this service. It can be a once a week thing – depending on the needs on the person who owns the car.

Once your children starts earning money, it is your chance to teach them smart money management skills. They will be tempted to spend everything at once. You need to stop them from doing this by teaching them the right money habits.

Financial lessons children can learn while earning an income

In a report published on Archives.gov, it is revealed that a lot of kids do not know enough about money management. At least, it is not enough to make them responsible money managers when they grow up.

Since you have started by encouraging them to earn money during summer, you may want to continue by teaching them a couple of things about personal finances.

Here are a couple of lessons that you may want to discuss with them.

  • Value of money. By earning money on their own, you are teaching your children the value of money. They now understand that money do not grow on trees. You need to work hard to earn them. That should keep them from being too insensitive when asking money from you.
  • Budgeting. You may want to give them a lesson or two about budgeting. In case they want to stop working for the summer, you can teach them how to stretch their money so it will last until before school starts.
  • Saving. Instead of spending their hard earned money, you can encourage your kids to save. This is a great lesson for those who have recurring jobs. When they get their first paycheck, encourage your kids to save it so they can buy something more expensive at the end of summer. Or you can encourage them to save the whole paycheck for next year so they can go on a vacation or something.
  • Investing. As you are teaching them about saving, you may want to explain a bit about investing. For instance, you can discuss with them the value of saving up for their college fund. To maximize the growth of the money, discuss with them how investing can help increase their money in ways that a savings account cannot.
  • Smart spending. In case your child wants to spend their money, teach them how to do so in a smart way. While saving is a great idea, your kids deserve to enjoy the money they earned. Let them decide but encourage them to spend their money on things that will enrich their lives even further.

Take note that there are several options to make financial lessons appealing to kids. It does not have to be boring. In fact, there are ways to teach financial lessons through cartoon shows. If your child is interested in sports, you can relate financial concepts to that too. Or you can point out prominent individuals who have made good decisions with their money. You can also discuss individuals who have made mistakes. It really depends on what you think your kid can relate to.

Here is a video that will give you tips on how to teach kids about personal finances.

Use Bulk Buying As One Of Your Saving Strategies At Home

woman with a full grocery shopping bagAre you in need of saving strategies for your household budget? Bulk buying may just be what you need to do.

It is a common practice for manufacturers to reduce the selling price of their products if consumers buy more of them. It is not a problem to lower the cost because most of the time, they save on the packaging of the product. This allows them to lower the price of the product if it is bought in bigger quantities. It is encouraging for consumers to buy things in bulk because they get to spend lower per unit. If you think about it mathematically, it is a great saving strategy.

Recently, there is more confidence when it comes to spending among Americans. According to an article published on Bloomberg.com, the beginning of this year showed a rise in household spending. It is said to be the fastest rise since 2006. This report came from the Commerce Department during the last week of January 2015. In truth, the article began by saying that consumers paused in spending during the fourth quarter of 2014 but it seems that it is regaining strength in 2015. This is thanks to the many jobs created in 2014 that increased the ability of consumers to spend on their household needs.

With that in mind, you will really understand why bulk buying seems like one of the appealing saving strategies at home. Since consumers have the capabilities to spend much at one point, they are opting to buy more at a lower price instead of deliberately limiting their consumption to save more.

However, you need to be careful about bulk buying because there are times when you end up wasting a lot of the products that you bought. That waste is not going to save you any money. Make sure that when you buy in bulk, it will all be used up before the product expires.

Thankfully, there are certain rules that consumers can follow so they can use bulk buying wisely. It still has potential to save money but you need to know how to approach it correctly.

Rules that will help you use bulk buying to save more

The truth is, the average American seems to be intent on spending more on groceries recently. According to an article published on Fool.com, a Gallup poll showed that people admitted to paying more cash on groceries than they did in the past. It is not on bills or other subscriptions. Consumers are increasing their budget when it comes to their grocery shopping.

Whether that increase is because of bulk buying, it is not indicated in the report. But one can assume that if you will increase your grocery expense, bulk buying is one way to do that and you can also save in the process. At least, that is true if you follow these simple rules.

  1. Make sure you stay within the budget. Bulk buying will only bring you savings if you pay in cash for everything in your grocery shopping list. That means you do not go beyond your budget just to afford it. You will not use your credit card and pay only the minimum requirement. That goes against the goal of saving strategies. If you do have to use your card, make sure you are able to pay for everything in cash. This will take some getting used to but with some self-control, you should be able to get great bulk buying deals and still be within your grocery budget.
  2. Buy only what can be consumed in a month. This is the safest that you can estimate. But make sure you still check the expiration of the items you will buy in bulk. In truth, the best items for bulk buying are those that will not expire. Things like toilet paper, trash bags or kitchen paper towels can be bought in bulk without any worry. For household cleaning products, you may want to buy them in bulk but make sure to check the expiration. They do have expiration but it is usually a very long time. Frozen items usually last a month or so as well but try not to make them stay in your fridge for longer than that.
  3. Prepare your menu for the week for food bulk buying. Most food products can last for a week or more so this is a great way for your to buy in bulk. If you make your menu, you can plan to use the same ingredient that will allow you to buy more of it. When you buy more, it is may be easier for you to negotiate a lower price. You can plan a trip to the grocery store every weekend to make your purchase.
  4. Research the best deals. All saving strategies require a good amount of research. Do not think that just because something is packaged in a bigger box or container, it is immediately a good bargain. You have to make sure that you do your research before you make assumptions. Visit other stores or search for the price online. The product that you will buy should be less or equal to the average price that you will find in various stores. If buying a product in bulk will not give you any savings, then you may want to reconsider buying more than a piece.

What you have to realize is that bulk buying will not only help you save on the price per unit. It can also help you save on gas as you only make fewer trips to the grocery. Not to mention the time and effort that you can save – which is quite valuable still.

Other expenses at home that you can save on

Apart from the saving strategies that you can implement in your grocery shopping, there are other ways that you can spend less at home.

According to an article published on USNews.com, everything today costs a little more than it did before. We have the inflation rate to thank for that. The article compared prices in 2015 and compared it to prices a century ago. A home used to cost only $3,200 and now the usual cost is $177,600. A car would only cost $2,005 in 1915 while in 2015, it costs $31,252 on an average. For food, if a person spends $3.51 on a meal in 2015, is only equivalent to 15 cents.

Given that, you know that in a couple of years, prices would rise once more and unfortunately, our wages are not as quick to increase with it. This is why you need to seriously contemplate practice smart spending at home. The good news is, there are a couple of things that you can do to lower your spending.

  • Inquire with service providers if you can bundle your current services. There are some providers who offer both Internet and cable subscriptions in one. These bundled services usually cost less than having two separate subscriptions.
  • Use coupons. This is one of the direct saving strategies that you can use to save on your grocery shopping. Simply allot an hour or so every weekend to search for coupons that you can use to get discounts. Some coupons are generous enough to give you up to 50% off on some products.
  • Remove any extras on your subscriptions. You can also remove any extras in your subscriptions like caller ID or a satellite package. If itis not being used or if you can survive on the basic plan, then just opt for that.
  • Learn to do things on your own. DIY is one of the best saving strategies there is. Cook more so you don’t have to buy take out meals. You can also try to plant herbs in your kitchen counter so you don’t have to buy them in the grocery. Do your own gardening too so you don’t have to hire someone to do it for you.
  • Be energy smart. If you have old appliances, you may want to change them into energy efficient ones. They would cost less when it comes to your monthly utility payments. Things like programmable thermostat can help you reduce your consumption and thus help you reduce your energy bills.

These saving strategies should help you lower your monthly spending at home. That way, you could leave room in your budget for other things like debt payments or savings.

How To Save Money On Everything You Buy

What’s your number one goal in life? Is it to retire early? Maybe it’s to take three months off and tour Europe. Or maybe you’d like to buy a house and wave goodbye to your landlord. Whether one of these is your primary goal or it’s something entirely different there is one thing for sure. You need to be saving money to achieve it. And, of course, the more money you can save the faster you will see that dream become a reality. And, believe it or not, you can save money on everything you buy. In fact, if you put your mind and your efforts toward it you should be able to cut your spending by at least 20%.woman carrying groceries

Save money on groceries

This is an area where you could achieve some really big savings. First, if you’re not already doing this draw up a menu for the entire week and then make your grocery list based on it. In fact, you should never go grocery shopping without a list. It’s the only way to stay on track and buy just the things you need and not those “little extras” that look so appetizing.

Next go online and start looking for money saving coupons. We’d be shocked if you don’t find coupons that would save you money on every item on your grocery list. We’ve seen examples of where one smart woman was able to buy more than $100 worth of groceries for less than $10 – just by using coupons.

Save money on clothes

This one may not appeal to you but you can save a bundle by buying a lot of your clothes used. If you wouldn’t be caught dead in a thrift store there are now many “up-scale” stores that specialize in slightly used high-end clothing. If you just can’t bring yourself to shop in one of these stores at least make sure you buy what you need when it’s on sale. There are always good bargains to be had when stores are clearing out merchandise at the end of a season. Our largest department store was recently advertising $35 shirts for less than $10 to make room for the new summer fashions.

Save money on entertainment

We have movie theaters near us that specialize in second-run films or those that had just finished a run in the regular theaters. If you have s theater like this near you and can be a bit patient, you could see films that cost $12 just a few weeks ago for $4 or less. If you can be really patient you could wait until those films are available on Netflix, Amazon Prime or On Demand for around $6.

How much are you spending on cable or satellite television? Here’s another area where it’s easy to save money. Go online and see what plans your provider offers, find a less expensive one and then contact your cable or satellite company and ask for the cheaper plan. If you’re feeling really gutsy you might be able to cut the cable entirely. Dish now offers a bundle of 20 popular channels for $19.95 a month called Sling TV and with no contract. You can probably get all of your local channels in HD free with just a small antenna. Combine the two and you’d have all your local channels and 20 of the most popular ones (including ESPN) for less than $20 a month. If you have kids you could add on a bundle of children’s Sling TV channels for just $5 more and there’s yet another $5 package for the sports fan.

Save money on utilities

Cutting the cost of your utilities is also fairly simple. If you don’t already have one, you should invest $50 and buy a programmable thermostat. It will probably pay for itself in just a few months and then continue saving you money for many years to come. You can also cut your electrical bill by switching to CFL bulbs and by making sure you turn off your electronic devices when you’re not using them. And when it comes to water you could make the supreme sacrifice and cut your shower time in half.

You’ve probably seen those commercials where one cell phone provider promises to cut your bill in half. Well, if you’re spending $100 or more a month you might want to give that company a try. If you’d rather not switch carriers at least contact your current provider to see if you couldn’t get on a cheaper plan.

Save money on insuranceStethoscope on pile of money

Have you recently comparison-shopped your auto and (if applicable) your homeowners insurance? There’s good money to be saved in this area. Go online to sites such as Esurance and NetQuote, type in your coverages and you might find you can save a bundle by changing to a different insurer. You should also get out your Declarations and review them very carefully. This is where you will find your coverages and how much each costs. You might find you’re paying for coverages you don’t even really need. For example, if you have a car worth less than $2000 it doesn’t make much sense to pay for collision insurance because in the long run it would be cheaper to just replace it.

Save money on food

By this we don’t mean saving money on groceries, which we covered in an earlier paragraph. What we mean here is to save money on restaurant meals, take out and ordering in. Get out a pencil, a piece of paper, your checkbook and your credit card bills and make a list of all the money you spent on this food. If you find you’ve been spending several hundred dollars a month – which is very possible – make a resolution to cut this in half. Try taking lunches to work with you and fixing more of your meals at home. If you hate the idea of coming home at the end of a hard day and then have to fix dinner, just make one big pot of something on Sunday and then serve it several times throughout the week. Or if you don’t already have a crockpot, get one. Start your dinner in the morning when you’re feeling fresh and it will be there waiting for you hot and yummy when you get home tired.

Save money on transportation

If you have a relatively long commute try to find someone that either works for the same company or one close to where you work and that lives near you. Suggest that the two of you rideshare. This could cut your gas casts by 50%. Plus, it would reduce wear and tear on your car and you might even be able to save money on your auto insurance.  An even better idea is to create a carpool with four or five people as this would cut your costs even more dramtically. Here, courtesy of National Debt Relief is a brief video showing how to create a carpool.

If you can’t find anyone with whom to rideshare or carpool check out public transportation in your area. A half hour bus ride can actually be a relaxing way to start your workday.

First, create an emergency fund

What should you do with all that money you’re now saving? If you don’t already have an emergency fund this is where all those savings should go initially. Most experts say that you should have the equivalent of six months of your living expenses tucked away. If that seems too daunting try to save the equivalent of at least three months worth. Whichever you choose, an emergency fund just makes good sense as it’s a way to protect yourself from those un foreseen financial problems of life such as a serious illness, an automobile accident or if you were to lose your job.

8 Simple Tips To Save Money Around The House

piggy bank homeA lot of people are trying out different ways to save money and some of them go to the extremes just to make it happen. Some would try to live off on noodles for months just to get some savings into the account. There are some who will walk miles and miles to and from work just to save on transportation cost.

For those with houses of their own, they also try and look for ways to save up some money the best way they know how. As Statisticbrain.com shares that about 65% of American consumers own a house in 2013, there are a lot of people have to meet big mortgage payments while simultaneously trying to save some funds despite their limited resources.

This is quite a challenge because the mortgage payment every month can easily be the biggest expense in the household budget. Regardless if it is a fixed interest rate, the payments can still change every month. For those that makes escrow payment every month, the taxes and insurance payments can go up and down year on year changing the house payments.

With this expense combined with all other living expenses, there are a good number of homeowners who are having a hard time looking for smart ways to save money. This becomes a lot harder when there are kids involved because the costs at home significantly increases with every child added into the family.

The reason why it is very difficult to put aside money is simply because it is really expensive to maintain a home. Your expenses would include repairs, utilities, and other items that would make your home not just livable, but also comfortable. Saving on car expenses is different because it is smaller and requires little compared to what your house will take from you. The tips to lower car costs becomes easier to follow.

Save funds with simple tweaks in the house

But despite the obvious difficulty, it does not mean you cannot save money through your home. Homeowners need not fret because there are a lot of ways to stop overspending at home. Here are some tips to consider when you are trying to save money at home.

  • Upgrade your appliances. This might sound a little bit counter productive to what you  you are trying to accomplish. If you are trying to save some funds in the budget, the last thing you need is to spend money buying new equipments at home. But there is good reason behind this. The older appliances has the tendency to use up more electricity. Newer appliances can be more energy efficient and can actually help you get the job done (like laundry or baking) at a lower cost. You reap the benefits when you see the bills at the end of the month.
  • Do not compete with neighbors. This is one area in your life that you have complete control over but you sometimes choose to look the other way to one up your neighbors. If you see them pulling up the latest SUV model in their garage, you decide to go the the dealers the next day and get something more expensive just to show people that you have made it. If you see them renovating a new room, you suddenly hire contractors to put up another level in your house. Stop competing with the people around you and save money instead if increasing your lifestyle.
  • Monitor heating and cooling in the house. If you are out of the house, there is no need to heat up the house unless kids at home. Try to adjust the temperature accordingly with the time of the day and the number of people inside the house. This can benefit your electricity bills greatly and save you some funds for the rainy day. There are self regulating temperature controls that you may want to invest in. It could save you a lot in the long run.
  • Check your water use. This is again one of the simple tweaks that people tend to forget and end up paying a lot for water bills. If you do the laundry, try to do it once or twice a week when you already have a lot of clothes to wash. Loading up a full dishwasher rather than making several loads can also save you water which can lower your bills at the end of the month.
  • Fix for prevention. When you see areas in the house that needs a quick fix, do it! Do not wait for it to get bigger and require experts to fix. You can basically address small house repairs like a broken hinge, busted lightbulb or a leaking hose. Bring out the DIY persona out of you and repair small problems at home. It helps you save money by not having to call professionals when you can no longer fix the problem.
  • Cleaning can save you money. More than prolonging the life expectancy of some household equipments, it can also keep you and your family from getting sick. Make it a habit to clean around the house and you can even get your kids to help you out. Make it a family affair to get them used to cleaning their surroundings. Financial fitness can start from a healthy body.
  • Declutter and minimalism is a plus. Letting go of old items that you do not need anymore can help you declutter and even earn a little from the sale. It can also help you save space in the house is one great mental practice for relieving mental stress. Investopedia.com even explains that minimalism is gaining traction as a popular lifestyle with Amercian consumers with the goal of living back to basics.
  • Unplugging can save money and lives. When you are not watching the television, unplug it and not just turn it off. Do you see that little red light on the panel? It means that it is on standby and still consuming energy. Not a lot but still adding to your electric bill at the end of the month. Making this a habit can help you save electricity and even help prevent the risk of short circuiting the appliances which is a leading cause of fire.

What to do with the money that you saved?

Now that you have been able to save money with a few simple tips at home, what do you do with it? Do you paint the town red or set up a dinner date with your friends in that fancy new restaurant that just opened up? Here are some ideas how you can put that money into better use.

  • Add to your reserve funds. This refers to your emergency fund and rainy day fund – both of which helps you face financial problems in the future. The bigger your reserve funds are, the longer it can fuel your budget even with an impacted income.
  • Add to your retirement fund. The sooner you start building up your retirement fund, the more proactive it becomes with the help of compound interest. You also get the chance to retire at a date that you want rather than need.
  • Pay down credit card debt. Credit cards usually have the highest interest rate among all financial credit instruments. The sooner you pay off your debts, the more you can save on interest payments.
  • Put in a college fund. Bloomberg.com shares a report that the student loan payment delinquency increased in the lat quarter of 2014 from 11.1% to 11.3%. This might look like a small increase but it actually represents millions of loan holders in repayment trouble. You can actually help your children attend and graduate higher education debt free by building up their college fund early on.

When you are able to save money, you get the chance to use that amount to better your financial standing. Saving funds from an already tight household budget might sound hard and challenging but it is definitely not impossible.

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