Holiday Payback – Part 2

With the 2011 holiday season being deemed a retail “success,” people are struggling with their debt in January 2012. Continuing with last week’s post, here are some ways to cut back reasonably painlessly in order to pay down your debt.

1. Stop buying bottled waters or sodas – Instead of using the vending machine at work or school; buy a 12 or 24 pack of waters or sodas from the grocery store. At $0.75-$1.50 a pop, you can quickly save money by bringing your own from home. Also, remember to refill your water bottles from a fountain. If you don’t like faucet water, invest in a filter and get hundreds of clean refills!
2. Replace your air filters – Remember to replace these in your furnace on the recommended schedule.  They are inexpensive and will help keep your furnace running at its best efficiency. It will not only keep the air in your house cleaner, it will make your unit last longer and save you energy.
3. Reduce your cable television package- Cable and Satellite prices keep rising every year. It is up to how much you actually watch TV, but now-a-days, most of the shows you watch on network TV can be found online for free. Cancel the extra channels that are going unused to free up some cash!
4. Prepare and freeze meals – By cooking in advance, you’ll be less likely to splurge and go out to eat on nights you either don’t feel like cooking or don’t have the time. If they are already prepared, you can just pop them in the microwave or oven and stay in to save the cash. Visit the US Food Safety and Inspection Service website to see what foods can and cannot be frozen!

We’ll have more tips next week to help you save money to put towards repaying that holiday debt! Have any other ideas? Leave us a comment!

Save Money & Eliminate Post-Holiday Debt – Part I

In December, many people loosened their spending reigns and jumped into the spirit of the holidays with SHOPPING! But now, with your credit card bills rolling in from the holidays, don’t wait to pay them off! A survey by Consumer Reports shows that 14.1 million or 6% of Americans admitted to still owe for their 2010 holiday bills. Don’t become part of that statistic! For the next couple weeks, will be giving you some tips that can help you start cutting back on your spending and pay off that post-holiday debt!

1. Consider “couponing” – You don’t need to become an extreme coupon hunter, but keep your eyes peeled for good deals. Check out specialist online voucher websites such as Groupon and Living Social as well as your newspapers and magazines to save money on everything from groceries, toiletries and restaurant meals.
2. Cut back on “small spends” – Think about the small purchases you make on a daily basis that could be making a big impact on your finances. Examples include your expensive morning coffee or lunch out of the office. Write out a list of items you purchase during a normal week and see if you can find a way to cut back. For instance, you could brew your own coffee or pack your lunch a couple days a week.
3. Try some car-free days –If it is possible, see if you can leave your car in the garage a few times throughout the month. You could save a fair amount on gas and car bills if you decide to walk or cycle to work or school. If it is too far of a distance, see if you can find someone to carpool with or check out the local bus or subway systems.

Stay tuned – more ideas to come next week! Have some ideas of your own? Please share! Post a comment below.

Improve Your Odds of Keeping 2012 Financial Resolutions

With the New Year just beginning, why not make it your most productive year yet! Below are a number of tips that can help you become more productive in your life and with your finances.

• Make a Do-Not-Do List – Instead of an average to do list, create a list that says what you will not do. It can be for the day, week, month, or year, but it helps you stay in line. This is a mental break from your To-Do list and can be used for your finances as well. An example would be, “do not splurge on anything without discussing it with my significant other,” or “do not purchase a special coffee today.”
• Be Specific When Setting Goals – The more specific you are about what you want to do, the more likely it is that you will stay committed. For example, saying you simply want to save money this year is vague. If you say, “I want to save an extra $50 a month,” that is a clear and obtainable goal.
• Organize Your Days by a Theme – This is an idea to help you stay focused and organized each workday. When it comes to your finances, pick a day such a Monday, to pay your bills. On Tuesdays, balance your checkbook, and so on. Be creative and leave a few days with no plans to be spontaneous!
• Write Down Your Wins – Whether they are big or small, write down your accomplishments for the day or week. If you have been working hard for a raise, write down the detailed facts to help you make your case when the time comes. Keep these handy in your smart phone, Excel worksheet, or plain notebook. It will keep you motivated throughout the year!

Do you have any other tips to keep you motivated this year? We would love to hear them!

The US and the Top 10 Dumbest States for Financial IQ

The idea of a comfortable retirement seems far-fetched for many, but there is a way to help make that chapter of your life possible – by increasing your financial knowledge and improving your financial behavior.

The Employee Benefit Research Institute in Washington, D.C. recently released a new study that shows the difference in financial literacy and behavior between states around the country.  Here is the top ten list of the least financially literate states and their overall scores. The scores were compiled by adding each states score of literacy and behavior. The highest scores are considered the worst and therefore, part of the dumbest states for their financial IQ’s.

10. Texas – 83
9. North Carolina – 84
8. Alabama -  85
7. Ohio – 85
6. Tennessee – 87
5. Kentucky – 91
4. West Virginia – 96
3. Louisiana – 97
2. Arkansas – 97
1. Mississippi – 99

This data shows that states with lower literacy scores, also have lower financial behavior scores.

How can you help break this cycle? Be part of the solution by increasing your own financial knowledge and providing financial education to those around you. The more you know about your finances, the more prepared you will be for unexpected expenses, debt and retirement. In need a good resource? While we generally do not plug our educational programs on the blog, a mention today could be quite helpful. Consider a subscription to our GoodMoneyHabits.com or the college student version, GMHStudents.com. These web-based financial education programs are strictly educational without any products sold and free from any conflict of interest.

To read more about this study, click here for the entire article from AdvisorOne.

Quick Tips to Save Money Before 2012

With 2012 just a few days away, it is not too late to save some money in 2011 and to help your tax bill in the New Year. From MSNBC’s Today’s Money, here are some moves to make to help you save:

• Max out your 401(k) – You can contribute up to $16,500 in 2011. You may have already missed the cutoff date with your employer, but it is important to note that in 2012 it’s going to increase $500. Tell your employer now that you want to up your contribution amount in 2012.
• Add money to your IRA –Many people who are self-employed or small business owners are adding money to their IRA accounts. Individuals are allowed to contribute up to $3,050 and $6,150 for families.
• Pay your tax-deductible bills – This means prepay your mortgage or other bills. You can pay for it for this month and get credit for your 2011 taxes. This can also be done for real estate taxes, student loan debts, and medical expenses. Check with a tax professional to make sure this makes sense for you.
• Make a charitable contribution – In the season of giving, it is nice to give to others but it also helps you lower your taxes. Remember to save all receipts to ensure you’ll get tax credit. Websites such as charitynavigator.com are great tools to see where to donate and all the appropriate steps to do so.
• Use all funds in flex spending account – If you have a flex spending account, with the use-it-or-lose-it requirement, you want to be sure you have used all funds.  If funds remain, consider eligible expenses that you could pick up now for the New Year.  A few examples include certain over-the-counter medicines, certain weight-loss treatments, specialized foods for a medical condition, dietary supplements, and more. Also consider inquiring about picking up prescriptions medicines in a larger volume – maybe 2 months at a time – to use up your FSA funds.  (Note that some of these may require a prescription or letter of medical necessity from your doctor).

It is not to late to save for 2011! For more great tips, click here for an informative video from MSNBC. Are you ready for 2012? Comment below!

Five Financial Tips for the New Year

With 2012 just around the corner, take time to write down your goals and establish a budget for the new year. Here are five tips from CBS Money Watch to help you create a budget and keep on track with your spending for next year.

1. Have a money buddy – A money buddy is someone who you can share your financial goals with. This person should be a frugal friend, who will help you stay on track, like a spouse, best friend, mother, or father.
2. Have a money zone – This is a place in your home where you can go that is away from the clutter and has your financial to-dos and goals.  It doesn’t need to be a big area, just maybe the end of a table with all your bills and pictures of your goals to motivate you to stay on track.
3. Use automatic billing – For reoccurring bills, use the automatic withdrawal option for your monthly payments. Behavioral experts say that people who use this tool to pay their bills electronically, have better a mindset and better financial security.
4. Use cash – While you’re out shopping, pay with cash. Americans can save anywhere from 12-18% of dollars when they pay with cash. The great thing about cash is that you stick to your budget because when it’s gone, it’s gone.  Credit cards make it easy for you to splurge and go over your intended spending amount.
5. Establish a rule of thumb about money- This rule of thumb would be like a benchmark that keeps you on your financial track. For example, set a spending limit by budget category.  If you set a spending limit of $100 for household items, you and your partner will discuss it before spending more than $100 for household items. These benchmarks can help you avoid temptation because you are forced to discuss the cost before the purchase.

For more tips on how to save in 2012, view the entire video from CBS Money Watch here. Do you have any other ideas? Comment below!

How To Avoid Post Holiday Debt

According to recent studies, the average American household has over $15,000 in debt. The best way to do your holiday shopping this season is to avoid accumulating debt in the first place. Since Christmas is less than two weeks away, it is important to still follow a few tips when doing your last minute shopping.

1. Write down your budget. If you write down how much you can spend on food, gifts, and other holiday expenses, it will help you to remember to stay within that money range. Keep this list with you at all times. A good place would be your cell phone’s “Notes” app!
2. Leave the credit card at home. If you only take cash with you, you won’t be able to spend more than you planned. If you are nervous about carrying around cash, use a prepaid Visa or MasterCard. You can buy these at almost any convenience or grocery store.
3. Comparison shop if you have the time. Although Christmas is right around the corner, sometimes you can still find the best rates for gifts online. Before ordering, look for coupons that might pop up or visit websites such as retailmenot.com to see if they offer any extra savings.
4. Consider personalized gifts. For example, bake cookies for a neighbor that may have company in town for the Holidays. If you can babysit or housesit, consider giving a “coupon” in which a friend or relative with children or pets can redeem for a free night of babysitting or animal-sitting. Since many people are short on time and money, these personalized gifts can sometimes mean more and cost less.

For more ideas on how to save money and avoid holiday debt, visit the Personal Finance page at msnbc.com.

Manage Your Holiday Shipping Costs

The holiday season is also a package season. With the Internet and the availability of online shopping, it is important to watch out for the shipping costs. Because of the time of year, the cost to ship a package could almost double from its normal shipping rate. Here are a few ideas to help you with your holiday shipping!

1. Have your packages shipped to your place of work. Someone is usually always there to sign for it and you don’t have to worry about it being left unattended on your front porch.
2. There is a new program from Amazon called Amazon Prime. It costs $79 per year and includes free two-day shipping on all of your purchases for the year. To upgrade to one-day shipping, the cost is only an additional $3.99. This also offers free video streaming and book rentals for Kindle owners. If you are a loyal customer to Amazon, this is a great tool for you.
3. Try and use free shipping whenever possible. With almost every online purchase, there is a way for you to receive free shipping. Plan early and allow time for your packages to arrive. Also, look out for holiday coupon codes from the store. Many of these codes will give you free shipping or 20% off your entire purchase. That alone could maybe cover the cost of shipping.

Do you have any other suggestions on how to save money this Holiday season? Please comment below!

Three Major Drawbacks of Store Credit Cards

While doing your holiday shopping, you’ll notice the signs that read “apply for a store credit card and receive 25% off your entire purchase.” It sounds like a no-brainer, especially on major holiday purchases. But it is important to remember that there are consequences from opening these credit cards and you should take the time to consider whether or not it’s a good decision for you personally. Remember these three key drawbacks before opening that new store card.

1. Higher Interest Rates – Retail credit cards tend to carry higher interest rates than those issued by Banks. For example, the average rate on cash back credit card is about 16% while a Wal-Mart credit card charges 23% interest. If you tend to carry a balance, these financing charges will cost you more in the long run.
2. Credit Score Impact – Opening new credit cards can impact your credit score. Other factors in your profile will determine the exact impact but it could knock off as much as 25 points of your score! Retail credit cards also are likely to have lower spending limits. This is important because the closer your balance is to the limit, the more your credit score will suffer.
3. Spending Temptation – When opening a new retail credit card, the store will most likely send cardholders special deals and discounts throughout the year. It is great if you are a regular customer, but the loads of offers may prompt you to spend more than you would otherwise. Make sure you stay within your budget to avoid these temptations!

Have you ever opened a store credit card? We would love to hear your story. Please comment below!

Holiday Safety Tips for Your Home

The holiday season is something we all look forward to. But did you even realize that maybe it’s the most anticipated time of the year for thieves? As more and more people get ready for the holidays and vacations, they forget that maybe their homes could fall victim to burglaries.  Here are some safety tips to protect you and your home this holiday season!

• Place your home on “vacation watch” – Contact your local law enforcement and see if they offer the “vacation watch” service. This service has a patrol officer ride by your home for a safety check during their shift. Remember to contact your local non-emergency number, not 911 to discuss this option.
• Make your house look like people are home – Pick up some inexpensive timers for lights and stagger them around the house. Set the timers to be on and off during the times of day that are consistent with your family’s schedule and routine. It is also a good idea to stop your mail and paper service while away.
• Do not broadcast your travel plans– As much as you want to brag about your holiday cruise, do not talk about your plans over Facebook and Twitter until you return. Also, don’t mention it on your home or cell phone voicemail. Another thought is to silence your home phone ringers. Sometimes thieves stake out houses to see if anyone answers the home phone when they call.
• Lock your garage entry doors and remove clickers from cars – It is important to the lock the door from your garage to your home. Garage doors can sometimes be pushed up and can malfunction from time to time. Also, remove these clickers from your cars parked in the driveway. Thieves can easily break a window and use that as access to your home.
• Don’t leave remnants of Christmas morning by the curb – Large appliance boxes and containers show that Santa was good this year, but also show thieves which houses could afford the new plasma T.V. Make sure you break down all the boxes to place in your garbage bins and use black bags to conceal the products.

These are just a few safety tips for leaving your home unattended over the holidays. Do you have any more suggestions? We would love to hear from you. Please comment below!