National Debt Relief - BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

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, 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, 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, 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, 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, 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, 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 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. 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. 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.

2 Types Of Reserve Funds That You Should Save For

two piggy banksThere are several types of  financial instruments that can help you guard against unexpected problems. Having reserve funds is just part of that equation. These funds are meant to help you get over a financial crisis that would usually impact your main source of income. It can also help you guard your household budget against sudden unscheduled expense.

There are basically two types of this saving fund, an emergency fund and a rainy day fund. There are a lot of consumers who are confused between the two and usually mix up one with the other. For some, they believe they are actually one and the same.

But as important as reserve funds are, not all people are saving for the unexpected. As shares, there are only about 38% of American consumers with an emergency fund tucked away for the future. Some may have rainy day funds but with the confusion, they either refer to their emergency fund as their rainy day fund or think that their savings will work the same way as a rainy day money.

Apart from being responsible in using emergency fund, people need to know how to differentiate it from a rainy day fund. Both of these are necessary if you want to keep your financial life secure and protected against the unforeseen expenses. It is hard to control all aspects of your financial plans because there will always be external forces that can have a big effect on your planning efforts. What you can do is to just be prepared for whatever can happen.

Differentiating the two saving funds

An emergency fund and a rainy day fund are two types of reserve funds that you need to understand to prevent overlap of use.  Here are the main differentiators between the two.

  • Emergency fund. This is the more popular between the two types of saving funds. This is because a lot of financial experts have advised time and again that consumers need to have this to secure their budget and deal with financial emergency. Any unforeseen and unprepared financial crisis can topple down your budget in an instant and having an emergency fund is what keeps your finances from crumbling down. This is usually meant for big emergencies such as losing a job or an illness that sometimes entail a medical operation. As such, an emergency fund is measured by how much you spend in a given month. There are a lot of people suggesting that this should be about six months worth of expenses because this is the average amount of time people spend looking for a new job.
  • Rainy day fund. Apart from big emergencies, there are are small ones that can happen in between and using your emergency fund seems counter-productive. This is where the second type of reserve funds come in to the picture. It is supposed to tackle small financial emergencies to separate it and keep your emergency fund intact. This can be anywhere from a broken home equipment, minor home repairs and sometimes even a plane ticket to see a sick relative. With the nature of what it covers, a rainy day fund is usually smaller compared to an emergency fund. It usually anywhere from $1000 to a few week’s worth of expenses.

Why you want to have an emergency fund in your budget

Here is a short video on how to get started with an emergency fund.

Some people would be quick to point out that earning a lot is enough to offset any unexpected financial needs and they question the need to have reserve funds. Having a nice big income will surely help but the work does not end there. If you do have a big income but use them at your heart’s content, chances are you will be in debt after just a small crisis. Here are a few things to remember to convince you about the importance of this funds.

  • Preserves your money. shared that the average savings of a household is at $12,000 – at least for those headed by a 55-64 year old. The scary part is that if they do not have any type of reserve funds to speak of, their savings and probably even their retirement money would go down the drain just to cover an important expense. Having an emergency fund and a rainy day fund helps you keep your finances intact and prevents you from falling into debt.
  • Secures your emergency fund for real emergencies. This has to do with having both an emergency fund and rainy day fund. If you only have an emergency fund and you encounter small emergencies often, chances are your emergency fund will be depleted real easily. And as people have come to realize that emergencies come when you least expect them to, getting caught in a financial emergency with your fund depleted can be really challenging. Having a separate fund to address the smaller needs keeps your emergency fund in tact to address the bigger emergencies.
  • Helps you categorize the unexpected expenses. If you can’t stay on budget because you keep on mixing up the funds and what they need to be for, having two reserve funds will help. It can help you separate the money for trivial home repairs or even a blown out transmission from the more important ones like losing a job. It puts more structure with the way you lay out your monthly household budget.

Ways you can keep yourself from spending your savings unnecessarily

Having a fund for emergency situations is not the end of it but is actually just the beginning of maintaining your finances and keeping them in order. You need to make sure that they are used for their intended purpose. Here are two tips to help you with the proper way to use reserve funds.

  • Set clear restrictions and definitions to what an emergency is. An emergency can be encompassing as it can cover anywhere from a busted light bulb to getting laid off. One way to make sure that use the funds accordingly is to set clear parameters on your definition of an emergency. Understand what incidents would compel you to use your emergency fund and what would be categorized under your rainy day fund.
  • Make it harder to access your emergency fund. This is quite tricky because your reserve funds needs to be accessible and within arm’s reach in case emergency strikes. But it does not mean that you keep them in an envelope with rubber bands with one under your bed and the other under the couch. You can look at putting them in a  checking account or a savings account. This way, your reserve funds can earn a little interest while being accessible at a distance. This can help you think twice before you use the money in frivolous expenses. You can also invest them but make sure it is an investment that can be easily liquidated and will not take weeks to access.
  • Keep communication lines open. This applies specifically for couples who are sharing the same budget under one roof. This is another layer of security that can help consumers think twice before spending the reserve funds. They need to talk to their partner and it has to be a mutual decision when using either the emergency fund or the rainy day fund to address any financial need. This way, two sets of eyes are looking at details that lessens the margin of error and increases the chances of looking for alternatives before dipping into the reserve fund.

Reserve funds are great financial support to help you keep your budget in tact. You just need to understand the different types and how to use them accordingly.

10 Financial Resolutions You Should Make (And Keep) In 2015

This year resolutions conceptDid you make any New Year’s resolutions for 2015? The majority of us tend to make the same resolutions, which are to lose weight, get a new job, quit smoking or get closure on some issue that’s been bothering us. Unfortunately less than a third of all Americans are making financial resolutions for 2015. If you’re one of the two-thirds that have not yet made any financial resolutions here are 10 that should be easier to keep than quitting smoking or losing weight and that could make your life much less stressful.

#1. Make a budget, er playbook

We understand that the idea of creating a budget is not very appetizing. But it’s not all that difficult. All you really need to do is sit down and go through your checkbook and your statements to find areas where you could reduce your spending. You might also want to order your free credit report from one of the three credit reporting bureaus (Experian, Equifax and TransUnion) or get all three simultaneously on the website That way you would be able to see if there are any accounts you should be paying off faster than others.

#2. Pay down your debts

While paying down debts certainly isn’t as much fun as, say, spending a night on the town it’s the best way to get your finances under control. Some experts advise you to pay down those accounts with the highest interest rate first as this will save you the most money. Others such as the financial guru Dave Ramsey suggest you pay off the debt with the lowest balance first. You should be able to do this fairly quickly so you would then have extra money available to begin paying off the debt with the second lowest balance and so on. This is called the snowball method because when you get one debt paid off you should gain momentum to pay off the next – like a snowball rolling downhill. Of course, regardless of which of these methods you choose be sure to continue making the minimum payments on your other debts.

#3. Create an emergency fund

Actually this is something you should do before you do anything else. Most financial experts say you should save the equivalent of three to six month’s salary but the more the better. The transmission falling out of your car or an unexpected trip to the emergency room could set you back thousands of dollars. And in this era of jobs insecurity, losing your job could be devastating. Be sure to sock the money you’re saving away someplace inconvenient like an online savings account so that you won’t be tempted to dip into it for a discretionary purchase.

#4. Increase your savingswoman putting a coin in a piggy bank

Don’t do this until you have an emergency fund and few debts. But when you do the best way is through a 401(k) – assuming your employer offers one. This is especially true if your employer matches your contributions. This is like free money. You might also talk with your bank or credit union to see if it offers any financial planning services or can recommend higher-yield places to put away your savings. If so, you should set up an automatic monthly deduction from your paycheck to that new account. And try to contribute the highest amount allowable to your IRA or any other tax-advantaged savings plan.

#5. Create multiple income streams

We don’t mean by this that you should get involved in something like multilevel marketing. Assuming you have a regular job, you could parlay your hobby or your industry knowledge into freelance jobs or side gigs. You could also sell your unwanted stuff on eBay or your artsy or crafty creations on Etsy. Just make sure you don’t ignore your regular job while you’re pursuing these side ventures.

#6. Have “the talk”

One of the most uncomfortable conversations that couples can have is regarding finances. This can be more awkward than “the breakup talk” but everyone needs to know how things stand regarding spending, debts and savings. This is a financial resolution that’s especially important for engaged couples and newlyweds – to head off trouble in the future.

#7. Get your records in order

If you get your financial records for the year organized now you will be able to file your taxes early. There are great apps available such as Mint that can make keeping your finances organized drop-dead simple. Mint will track your spending and then organize it into logical categories such as food, clothing, entertainment, dining out, utilities and so forth. You could use Mint to create a budget based on those spending categories and if you overspend in any of them, Mint will send you an alert by email. It will even alert you if it finds a financial product better than one you’re currently using.

#8. Cut your spending

The idea of cutting your spending is a very popular resolution but one that’s too vague. If you haven’t done this already go back through your bank statements and checkbooks to see where you could realistically make cuts. Most people find the easiest categories to reduce spending are eating out, clothing and entertainment. You might also get an insurance audit as you could be overpaying on your auto or homeowner’s insurance. You might consider refinancing your mortgage. Interest rates are now basically at an all-time low so if you haven’t refinanced within the last 10 years the odds are that a refi could save you several hundreds of dollars a month. Depending on where you live you might also be able to get an energy audit, which could help bring down your utility bills. Here, courtesy of National Debt Relief are some more tips for cutting your spending and without sacrificing your life ..

#9. Invest in… you

One of the easiest and best resolutions to make is to invest in you in 2015. This could mean taking classes to get a better job or to merit a raise. One great thing about your education is that no one can take it away from you and it could even be tax-deductible. You might also want to sign up for an online class on stocks and bonds to become a better saver and investor.

#10. Make everything as easy as possible

One resolution that’s very easy to keep is to set up automatic withdrawals and automatic bill pay to help you achieve your financial goals. You could also buy and use a program such as Quicken to keep track of your finances. If your bank is typical you should be able to download all your checking and savings account information directly into Quicken so you wouldn’t even have to do much manually. Financial programs such as Mint and Quicken will not only make it much easier for you to manage your finances but will keep you continually on top of where you stand – in terms of the big picture.

Tips That Will Help You Save Money While Shopping Online

add to basketIt feels really good that Christmas is just around the corner. For most kids, they are happily anticipating the gifts that they will receive this joyous season. For most adults, well, they are mostly struggling to manage their holiday spending.

The real struggle in spending during the holidays is how we can save money without compromising the spirit of gift giving. Without a doubt, we will be spending money this season. Despite our efforts to budget, not everyone will be able to follow it to the digit.

This is especially true if up until this moment, you still have not finished your shopping. The stress of completing your list before the actual day arrives can be quite overwhelming. But do not fret because time may be running out for you, there is one way for you to complete your shopping list fast – and efficiently!

Online shopping!

According to an article published on, 27% of the annual online sales in the US happen during November and December. This is because a lot of shopping really happens during this season. In fact during Thanksgiving, online sales were expected to increase by 27% compared to 2013. During Black Friday, there was an increase of 28% in digital sales compared to 2013 – that amounted to around $2.48 billion. Cyber Monday was also expecting an increase of 15% or $2.6 billion.

You see, a lot of people are finding online shopping to be the better option to fulfill their holiday shopping needs. However, to say that you will save money by buying through this portal is not something that you can immediately assume.

4 tips to save more as you shop online

Although some people still prefer to shop the traditional way, online shopping does allow you to take advantage of more savings. But to get those savings, you need to understand how to maximize them.

According to an article published by, 82% of American consumers who bought items via online shopping are satisfied with the whole experience. This is higher compared to the 61% of consumers who said they were satisfied after browsing online and purchasing items in the actual store. With $248.7 billion online sales expected in 2014, retailers have seen the value of boosting the appeal of their online stores. This is according to the Forrester Research done in the US. It is expected to increase by 10% in the coming 5 years.

Believe it or not, shopping and saving at the same time is possible. You just need to be aware of the techniques that will make it happen. Here are 4 tips that you may want to look into.

  • Use discount and coupon codes as often as possible. This is a direct way to save money through online shopping. The competition of online retailers can be quite fierce. That is why you can expect that they will be sending your promo codes every now and then. For the online stores that you love to buy from, make sure that you are part of their email list. During the peak season, they usually send their loyal customers with promo codes that will help reduce the price that they have to pay when shopping online. The email alerts might end up as additional junk in your mailbox but believe it or not, there is bound to be a couple of useful codes in there that can be beneficial to you financially.
  • Compare prices. Comparing prices will always save money in the long run. That is because you can choose, not only what is cheaper, but also what item has the higher quality. Getting the best value for your money is always a great way to save. However, comparing through traditional stores is harder because it is physically exhausting. But when you do it online, you do not have to move anything but your hands and fingers. It is faster, easier and very convenient to shop this way.
  • Be aware of clearance sales. Were you aware that even online stores have clearance sales? They really do! And the best part about it is, you do not have to deal with the crowd that usually comes with the clearance sale version of traditional stores. You can enjoy the lower prices without having to worry about long lines and crowded stores. It is a win-win situation.
  • Try to avoid returns. Although you were able to save money by shopping online, make sure that you purchased the right items. That is because the process of returning wrong purchases will reduce the cost efficiency of online shopping. For some retailers, they will get you to pay the full shipping price for the returned item. That is why you have to be very careful and to double check the item you will purchase before you click on the “Buy” button.

These four tips should help you save money as you shop for your holiday needs online. While this may be the cheaper alternative, take note that you still need to exercise the same habits that is expected of you when shopping in brick and mortar stores. You still need to shop with a budget in mind. You also have to come up with a shopping list to help you focus on what should be bought or not.

How shopping online can help you save money

In general, online shopping is a great money saver for a lot of reasons. However, it is surprisingly not the main reason why consumers spend online. According to an article published on, convenience is the main reason why people shop online. If you have ever been to a store during Black Friday, you will understand why. You can get lower prices online without having to deal with the people that is clamoring for the same low priced item. You can sit comfortably in your chair, drink your coffee and get everything you need while saving money.

Of course, that does not mean the price is not important. It still is. In fact, price comes second in the reasons why some consumers prefer to shop online. It is still one of the reasons why those who want to practice smart spending usually include this in their shopping habits.

If you think about it in a business point of view, you will understand why shopping online comes out cheaper. Retailers can lower their prices simply because their overhead expenses are not as great compared to the brick and mortar stores. They do not have to hire a lot of manpower to keep the store organized. In fact, a well built online store may only need one person to manage the site. Everything else (e.g. shipping) can be outsourced and that is another cost saving technique for online store entrepreneurs.

These reasons and more make online stores more inclined to lower their prices or give out discounts. Their profit margin is a lot higher.

In a consumer point of view, there are also reasons why you can save money if you choose to shop online. Aside from price comparisons and lower retail prices, here are some important savings you will get out of this shopping option.

  • You get to save on time and energy. Instead of wasting your time dressing up, going to the store and dealing with the long lines, you can complete your shopping list in a relatively short time. You save money on gas too. Not only that, you can immediately take care of other stuff after you buy the products you need online.
  • Product information is easier to come by. Online retailers take a lot of effort in providing information about the product. The downside of buying online is that you cannot physically touch the product. You have to rely on the text and photos on the screen. But think about it. When you are in a traditional store, you have the actual product in your hands but do you really understand what it is that you are holding? The product might end up having something that you cannot tolerate and that can lead to you returning the product – which is a waste of time and money.
  • More focused buying. When you are in a traditional store, you will see a lot of things around you. Some of them will more than likely get you to spend on things that you do not really need. You might chance upon a sale item or something unnecessary that is being offered, the chances of you buying it is higher compared to just shopping online. An online store will not bother you with other products – you can go directly to what you want to buy and leave it at that.

So if you still have things to buy for the holidays, don’t waste your time going to a store. Just buy one online and have it delivered to you or directly to the recipient. That should make everyone’s holiday more convenient and joyful too.

Tough Saving Times For Millennials: What Can We Do About It?

man carrying savingsIf you want to keep your finances from flying apart, you need to seriously consider your savings. At this point in time, you should already believe that saving will help you get out of most financial problems. There are times when you are in abundance and most people tend to increase their spending instead of putting more money into their savings. This is not the best way to go about it. When you are in abundance, you should always think about your savings first.

We are all receiving reports that the economy is steadily growing. That means more and more people are getting jobs and have the means to support themselves financially. With more people able to support their financial needs, there should be more money going to their savings account right?

If this is the case, then why are we also receiving reports that Millennials are not saving as much as their parents (Gen X) or grandparents (Baby Boomers) when they were the same age?

According to an article published on, Millennials may be putting aside a few dollars a month but it is not enough to really give them financial security. They are said to be burning more cash than they should be putting away. At least, if you consider the percentage of their savings and spending as compared to how much they are earning. This article cited a report from Wall Street Journal that revealed how the savings rate of Americans under the age of 35 is down by -1.8%. This is probably why a lot of young adults have a lower median net worth after the recession happened.

The question is, why is saving such a difficult task for these young adults? Does it really go to show that they do not prioritize savings as much as they should?

What keeps Millennials from increasing their savings?

If you look at the whole picture, you will probably understand why putting aside money is hard for this generation.

According to, we should not immediately conclude that Millennials have the worse financial behavior when it comes to savings. Citing data from the Census Current Population Survey, the article said that wages may be to blame for the lack of savings of this generation. The rise of wages is quite dismal compared to the increase in health care, housing and education costs. In fact, the article calls it a stagnant wage growth. Across all industries, only health care wages have gone up. The rest have fallen by more than 10% from 2007.

As we all know, your income affects your ability to save more. If you earn less, you get to have less to save too.

After the Great Recession, a lot of businesses suffered financial setbacks. This made them financially unable to raise wages. Not only that, it also forced them to let go of a lot of employees. With businesses trying to reduce overhead costs and a lot of people trying to get a job, new graduates have to deal with a very competitive job market. The result? They have to settle for less when it comes to their income.

There are degree holders sweating it out on jobs that do not require a college degree in the first place. Having a smaller income is definitely preferable to having none at all. With the growing student loans, it is no wonder that new graduates are willing to compromise what could have been a high-paying career.

With incomes compromised, you can see why it is unfair to blame the financial behavior of Millennials for their lack of savings.

Why Millennials really need to save

But despite this difficulty, it does not erase that fact that Millennials still have to improve their savings. There are three important reasons why this generation specifically has to work harder to save up for their future.

Student Loans

The first reason why you have to think about saving is because of your student loans. Most young adults get out of college with this type of debt. Not only is it a hefty amount to pay off, it is also a scary debt to default on. But if you have savings, you do not have to worry about defaulting on this loan.

Saving can complete your debt solution. It works in two ways. If you ever come upon a financial situation that leave you unable to pay off your monthly payments, your savings can come to literally save the day. You do not have to miss out on a payment. You also do not have to bother with any late payment charges.

The second way that it can help is by keeping you from debt. If you need to spend on something unexpectedly, you no longer have to borrow money for that expense. All you need to do is to withdraw the amount that you need from your savings account. You do not have to add to the already burdensome student loans that you currently owe.

Financial Investments

Savings are also important because it allows you to invest your money so it can grow your personal wealth. The only way you can invest is when you have the extra money to put in there. It is tough to invest the money that you need to spend on your monthly expenses. That will only lead to debt. Investments, although it is rewarding is still risky. You need to invest money that you can afford to lose. Because if you lose that investment, it could lead to a financial crisis. You still need to invest since it will help you grow your wealth – but it should ideally be done with your savings to lessen the risk that you are taking.

Prepare for the Future

Finally, you need to save for your future. This does not only refer to your retirement. It also refers to your future plans of buying a home, a new car, and other purchases that you want to make. It can also refer to life milestones like marriage or parenthood. These will need money and your savings will help you go through these changes and improvements in your life. Instead of borrowing money, you can spend on these expenses. Or if you cannot save up for the whole amount, like the amount needed to buy a home, you can at least limit the debt that you have to borrow.

How can you save money when you earn so little?

While we know how important it is to save more money, the question is, how can we make this possible? According to, Millennials are showing optimism when it comes to their finances but data shows that a lot of them are living from paycheck to paycheck. That translates to them having just enough for their expenses. The article states that more than half of the young adults are in this financial condition. In fact, 35% of them are still receiving financial aid from their families. How can you start improving your savings if you practically have just enough money to spend?

Definitely, the government needs to help make the job market more stable – something that they say they are doing. With the improvements in employment, you can safely say that they are doing their job. But relying on their actions is not enough. You need to exert effort to improve your own savings.

It is important that you treat your savings like a bill. This will keep you from forgetting about it. Prioritize your savings and do not focus too much on how much you are earning. The truth is, a minimum wage increase is not the answer to your financial difficulties. Here are some tips that you need to consider.

  • Change your lifestyle. Remember that less is more if your income is not sufficient to meet both your spending and saving needs. If you cannot do something about your income, then do something about your expenses. Change your lifestyle if you have to and downsize to spend less each month. Some MIllennials moved back in with their parents to help increase their savings.
  • Plan what you spend. Planning always works. It helps you reach your goals and that includes your saving targets. If you can plan your spending, it should be easy to put aside money to increase your savings.
  • Be wise about debt. You do not have to turn your back on debt because there are investments like a home or business loan that you cannot avoid if you want to improve your financial situation. But make sure you are smart about it. Borrow money if you are sure that you can pay it back. Not only that, the debt that you should take on must increase your personal net worth.
  • Focus on the future. Lastly, always focus on the future. While it is important to live in the present, it is also a must that you prepare for your future. This mindset will help you put aside more money into your savings.

Here is a testimony from a blogger known as the Frugal Girl. Find out how she practices frugal living to help her family survive cheerfully despite a small budget.

Saving Tips For Natural Spenders

woman putting a coin in a piggy bankWe all need saving tips if we really want to get serious about wealth building. It is one of the important habits that you need to learn in order for you to get a head start at growing your personal finances.

When you learn how to save, it does not only mean you have full control over where your money goes to. It signifies that you are financially mature enough to know that you do not have to spend every money that you earn each month. That amount that you are putting aside each month is what you can use as capital to build up your wealth.

Your savings will allow you to invest your money so it can start earning for you. It can also keep you from having to borrow money for emergency situations. While that will not really increase your money, it will at least keep you from wasting it by passing high interest rates. It will also help you save money in the end.

There are so many things that you can do with your savings. But of course, you need to condition yourself to save first.

According to an article published on, being a saver and a spender is actually wired in our genes. This study was done by Stephan Siegel of the University of Washington and Henrik Cronqvist of the Claremont McKenna College. They observed the money habits of Swedish twins (15,000 sets) and found out that they have the same financial habits even if they lost contact with each other. The study revealed that there are those who are natural spenders while there are those that are natural saver too.

Apparently, the natural spenders are those who just cannot leave a store without buying anything. And there are natural savers who just feel guilty whenever they spend their money.

How to save if you love to spend

The study mentioned could mean that no matter how many saving tips you give to natural spenders, it will be hopeless for them to put aside money. While it may be more difficult, we strongly believe that it is not an impossible task to accomplish. It will be like battling your natural born urges, that is true. But that does not mean you can never learn how to save money.

You see, your financial behavior, even if they are truly genetically wired is still technically based on habits that you have formed. And habits, no matter how deep they go can be changed. You do not have to be burdened with them if they are destroying your life.

Having said that, there is still hope for spenders out there. Even if you think that you are doomed to spend every single penny, that can be revised. Here are a couple of saving tips that could be effective for those who are naturally born to spend.

  • Get help from a friend. Believe it or not, you can save money through your friends. The power of peer pressure is real. It can really change who you are. You can use this power to your advantage if you really want to be serious about improving your saving habits. Hang out with people whom you know are really good at saving. Let them know that you wish to be a saver yourself and try to emulate what they do. Observe their habits and try to develop the same.
  • Look for a financial adviser. If your friends are mostly spenders, you can turn to a professional for help. Get a counselor and ask them for saving tips and strategies. They may be better than being influenced by your friends because they make a living out of helping people improve their personal finances. That makes them experts. You can tell them your story and they can let you know their professional opinion about what you are doing wrong with your life. They can give you concrete steps to follow that will make it easier for you to develop the right habits that will help you reach your saving goals.
  • Remove things that will tempt you to spend. If your credit card gets you to spend more than what you really need, you may want to remove them from the picture. Using cash to spend is psychologically more painful to do. When you remove the convenience of credit cards, you have to deal with withdrawing physical money from an ATM. And every time you go out on a shopping errand, you should only bring enough money for what you intend to buy. Bring along a little extra for emergencies but make it very minimal. That way, you do not have to spend more than what you intend.
  • Keep your emotions stable before you shop. According to there is a connection between your emotions and how you spend your money. You need balance both your emotional condition so your finances can follow suit. For instance, if you are feeling emotionally high, whether that is positive or negative, it clouds your sense of judgement. This is why retail therapy is one fo the sure ways that you can destroy your saving goals.
  • Pay attention to the little details. Some people make the mistake of focusing only on the major and expensive purchases. However, if you write down everything that you spend on, you will realize that it is the small and inexpensive purchases that is actually ruining your budget. Sometimes, they are so small that you do not even realize their effect on your budget – until is is too late. Remove the unnecessary small expenses and you will find yourself being able to save more of your money.

While these saving tips are effective, you need to commit to them to make them work. That is the key to teach yourself how to save. No matter how against it is from your natural habits, you can change from being a spender into a saver if you only commit to it.

Tips to speed up your saving goals

Working on your savings, especially when time is against you is no easy feat. Apparently, this is what a lot of middle-class Americans are burdened with. revealed that this is a challenge for a lot of Americans – especially the 34% who are not contributing to their retirement plan. You can certainly expect that once retirement age is around the corner, they will be scrambling to put in as much savings as they can so they have enough to retire on.

While it is a daunting task to accomplish, it is not impossible to reach your goal. There are effective savings tips when you have a lot to save for and so little time to do it. Here are some of them.

  • Stop using bloated budgets. While it will keep you from overspending, it will also eat up money that you could have been putting aside. Be accurate and realistic at the same time when you allot a budget for a particular spending category.
  • Use budgeting tools. The key to saving is actually in your budget. Feel free to avail of tools and apps that will help you keep your expenses in check.
  • Live a frugal life. Downsizing your lifestyle is a great way for you to lower your spending so you can put aside more money into your savings. A frugal life will allow you to meet only the basic necessities while putting aside the rest for the future.
  • Love what is free. If you can get something for free, or for a fraction of the cost, that is what you should go for. that could boost your savings even further.

5 Questions To Ask Before You Use Savings To Pay Off Debt

debt and save targetDid you know that your savings can keep your finances from flying apart? In fact, you can use savings to pay off debt. These are only a few of the reasons why this is such an important part of your financial life. In fact, some experts are saying that you cannot be a financial success unless you have some form of savings to your name.

While we are all aware of the importance of savings, sadly, this is a difficult goal for a lot of Americans to reach. According to an article published on, the ideal saving rate is 10% to 20% of consumer’s income. However, a report from the Federal Reserve Bank of St. Louis reveal that the current savings rate in the country is actually 4.2% only. That is not even half of what the saving rate should be. The article also mentioned why it is so difficult for consumers to save. It is because they have too much debt.

But if you think about it, that is not the only issue that we have about savings. While it makes sense to get rid of debt first, a lot of people are actually struggling to decide if it is a good idea to use savings to pay off debt. After all, this is already money that you have. Some experts will frown at the idea but if you do the math, you will be losing more if you keep your savings intact and your debt accumulating. Looking at the interest rate alone, debt has a higher rate compared to your savings account. It makes more sense to pay off debt first because you will be saving more in terms of the interest amount that you are paying.

However, that decision is harder to make than you think. Some people need the security of a savings – that is why they opt to keep it intact. But if you find yourself right in the middle of saving or paying off debt, there are a couple of questions that you can ask yourself to help you decide.

Ask yourself these questions before you pay your debts with savings

If you are torn between using your stashed cash to get rid of your debts, there are 5 simple questions that you can ask yourself.

Where will you get the savings from?

There are a lot of savings that you can use to finance your debt payments. According to, debt has a high effect on our retirement savings. In fact, a study done by the Employee Benefit Research Institute revealed that 74.8% of their respondents cashed out their retirement savings after leaving their jobs to pay off debt. Whether you are leaving your job or not, it is never a good idea to use your retirement savings for anything other than your retirement expenses.

Do you have sufficient emergency savings?

Unless you have your emergency fund intact, you should never use savings to pay off debt. This is one of the requirements that you need to have. In case you do not have this yet, you need to save up for sufficient emergency savings. Anything in excess can be used for your debts. This emergency fund can actually help you sustain your debt payments. In case something happens, your reserve fund will allow you to continue paying off what you owe while taking care of that additional unexpected expense.

How much is your debt and the respective interest rate?

In case of multiple debts, list all of them down and take note of each interest rate. In case the interest rate is more than 7%, then you will end up saving more money if you pay off your debts first with your savings. But if you mostly have mortgage or student loans that have less than 7% of your debts, then to use savings to pay off debt is not really that beneficial. The best scenario to finance debt payments through your savings is when you have mostly credit card debt – a debt that can reach up to 36% of interest rate.

Are you expecting any extra money in the near future?

Another question to ask yourself is this: will there be any extra money in your near future? This should be something guaranteed like a commission that is already being processed, a confirmed holiday bonus or your tax refund. If you have this extra money, you can go ahead and use your savings and just replace it with the money that is coming your way.

Is it in line with your financial goals?

The last question that you should ask yourself is whether this move is in line with your financial goals. Smart money management requires you to set goals and that also means your decisions should be aligned with your goals. If you are saving up for a downpayment of a new home, then it might not be a good idea to use your stashed money to lower your debt. But if you need to lower your debt level to have better chances at a low interest home loan, then go ahead and use savings to pay off debt.

Other options to pay back your debts without touching your savings

In case the answer to the 5 questions point you towards not using your savings to pay off your debts, then that is okay. There are other means for you to eliminate debt without touching your savings. published a survey that revealed how more than half of Americans set saving goals. But when it comes to retirement, less than half are able to save through their employer’s saving plans. The current survey revealed that the number of Americans saving is basically slipping – that is why you may want to opt not to use savings to pay off debt. Use other options that will allow you to get out of debt while still adding to your savings.

Here are some of your options:

  • Debt Consolidation Loan. This debt relief program involves you borrowing a bigger loan that can help you pay off all or most of your existing debts. What will happen is you will consolidate your old debts under one low interest loan. That should make things easier to pay off.
  • Debt Management. This is also a form of consolidation – but this time, you get the help of a credit counselor. For a maximum fee of $50 a month, you can enjoy their service that includes a careful analysis of your debts and the creation of a Debt Management Plan or DMP. This plan contains your proposed lower monthly payment plan that stretches it over a longer period. That means you get a lower monthly payment requirement.
  • Debt Settlement. In case you are in need of debt reduction, this is a debt solution that can work for you. The whole idea is to convince your creditor or lender that you are in a financial crisis. Then, you will offer them a lump sum money that can pay for a percentage of your debt. You will ask them to accept this lump sum and have the rest of the debt forgiven (at least anything that this big payment cannot cover).

These are only a few of the debt relief programs that you can use to achieve debt freedom. If you do not want to use savings to pay off debt, then make sure you know your other options.

Mobile Menu