budgets http://www.wisebread.com/taxonomy/term/10208/all en-US 6 Credit Card Mistakes That Could Be Ruining Your Credit http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-credit-card-mistakes-that-could-be-ruining-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-585795908.jpg" alt="Woman learning credit card mistakes that could be ruining her credit" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>It's difficult to overstate how important your credit record and credit score are. Not only will <a href="http://www.wisebread.com/what-is-a-good-credit-score-range?ref=internal" target="_blank">good credit</a> enable you be approved for the <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">most attractive credit cards</a>, it's vital for receiving the lowest rates on a car loan, a mortgage, and on home and auto insurance premiums. It can even make the difference in whether you get the apartment or job you want, since both landlords and employers often run credit checks on applicants. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Unfortunately, many credit card users are making big mistakes that are ruining their credit. Since it can take years for some of the most negative items to drop off your credit report, it's crucial to avoid making these mistakes in the first place. Here are six credit card mistakes that could be ruining your credit.</p> <h2>1. Paying Late<strong> </strong></h2> <p>The most important factor in your FICO score &mdash; the most popular credit score lenders use to evaluate you &mdash; is your payment history. It makes up 35% of your score. (See also: <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=seealso" target="_blank">5 Things with the Biggest Impact on Your Credit Score</a>)</p> <p>If you are using a credit card, your first priority should be to <em>always </em>pay your credit card bill on time. While one bill paid a few days late won't cause lasting damage to your credit score, paying late frequently will hurt more. On top of that you'll usually be subject to late fees.</p> <p>Thankfully, there are many tools to help you pay on time. Most credit card issuers offer automatic payments to ensure that you never pay late. You can also request a specific payment due date so you can arrange all your bills to be due at the same time each month. That way you can sit down and pay bills just once a month rather than keeping track of various bills as they come in. Additionally, you can sign up for payment reminders by email or text.</p> <h2>2. Paying Less Than the Minimum<strong> </strong></h2> <p>Paying just the minimum payment on your credit cards will <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=internal" target="_blank">hurt you financially</a>, but paying below that is even worse &mdash; much worse.</p> <p>To avoid being considered delinquent on a credit card account, you not only have to make your payments on time, but the payments must be <em>at least </em>the minimum amount required, which is stated on your bill. If your payment is below the minimum, it doesn't matter if it was on time. The payment will still be considered late, causing a hit to your credit score.</p> <h2>3. Failing to Pay<strong> </strong></h2> <p>Miss a payment for at least 60 days and your creditors start wondering if you're going to pay at all. That's why you'll start to see more serious consequences than a single lapse of a few days would cause. After two missed billing cycles an issuer can impose a high <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">penalty interest rate</a> on the account, on top of late fees. And while those charges alone are costly, your credit will also start to really suffer.</p> <p>A payment that's 90 days overdue is extremely damaging to your credit score and takes seven years to fall off your credit record. At 120 days late, your debt will likely be <a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off?ref=internal" target="_blank">charged off</a> and sold to collectors, which harms your credit score even more. (See also: <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time?ref=seealso" target="_blank">What to Do If You Can't Pay Your Bills on Time</a>)</p> <p>If you are unable to pay your credit card bill for any reason, you should reach out to your card issuer to let them know. You may be able to <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt" target="_blank">negotiate a debt repayment plan</a>.</p> <h2>4. Having High Balances<strong> </strong></h2> <p>After payment history, the second most important factor in your credit score is how much you owe. It accounts for 30% of your FICO score. Maxing out your credit cards, or coming close to it, hurts your credit score.</p> <p>Ideally you want your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> &mdash; the amount of debt you have divided by your total available credit &mdash; to be below 30%. The lower you can get it, the better off your credit score will be. The best way to lower it is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off your balances quickly</a>. (See also: <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off" target="_blank">5-Day Debt Reduction Plan: Pay It Off</a>)</p> <h2>5. Not Having Enough Credit Cards<strong> </strong></h2> <p>The other way to lower your credit utilization ratio is to increase the amount of available credit you have. If you have just one or two credit cards, and you are using up most of the credit lines available on them, you may benefit from having another card &mdash; but only if you can resist the temptation to ring up a bunch more debt on it. Remember, raising your credit line only to add more debt will drop your credit score.</p> <p>Pick a basic, <a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees?ref=internal" target="_blank">no-annual-fee card</a> and then use it once a month or so for a small purchase, such as a tank of gas, that you can pay off immediately. That will keep the account active without putting you in debt. (See also: <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?ref=seealso" target="_blank">7 Questions to Ask to Help Choose the Perfect Credit Card</a>)</p> <p>Similarly, you could request a credit line increase for the accounts you already have. If you've been paying on time, chances are you can get a credit limit increase by simply calling your issuer and asking.</p> <p>Just be aware that credit card issuers will pull your credit report before approving you for a new credit card, and usually for a credit line increase, too. This will result in a hard pull on your credit, which will ding your credit score. Even a few points could be important if you're about to apply for a mortgage, so wait to ask for new credit until after you've done that.</p> <h2>6. Canceling Your Oldest Credit Cards<strong> </strong></h2> <p>Closing any credit card will raise your credit utilization ratio, but closing your oldest accounts harms a different part of your credit score. Your length of credit history accounts for 15% of your FICO score. While an account in good standing will remain on your credit report for about 10 years after you've closed it, it will eventually be removed and hurt your score. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso" target="_blank">5 Times It's Okay to Close a Credit Card</a>)</p> <p>If you don't need to use a card, it may be better to put the card in a secure location, but keep the account open. If the account has an annual fee, you can ask to have the fee waived, or the account changed to a different card without the annual fee.</p> <p>Don't let these credit card mistakes ruin your credit. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-credit-card-mistakes-that-could-be-ruining-your-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg&amp;description=6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg" alt="6 Credit Card Mistakes That Could Be Ruining Your Credit" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/need-a-game-to-learn-to-manage-your-credit">Need a game to learn to manage your credit?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">How to Use Credit Cards to Improve Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score">5 Ways Life Is Amazing With an 800 Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-a-good-credit-score-range">What Is a Good Credit Score and Why Is It Important?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budgets credit credit rating credit report credit score money mistakes Tue, 21 Feb 2017 10:31:29 +0000 Jason Steele 1892848 at http://www.wisebread.com 5 Financial Moves You Should Make Five Years Before Retirement http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-moves-you-should-make-five-years-before-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/older_woman_tablet_91678151.jpg" alt="Woman making financial moves five years before retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Here you are, five years from retirement. The reality of the end of your career is finally hitting home, but you may not feel completely ready to quit work yet.</p> <p>But with adequate planning and preparation, it <em>is</em> possible to feel confident about your life and finances as you approach retirement. Here are five goals that most workers should plan on reaching when they are five years from retirement.</p> <h2>1. Calculate Your Post-Retirement Budget</h2> <p>It may seem too soon, but now is an excellent time to re-evaluate how much money you will need to live on comfortably in retirement. Many workers assume that their expenses will go down in retirement, since they will no longer need to pay for professional clothing, commuting, business travel, and the like. However, depending on how you intend to spend your time in retirement, your expenses could go down by less than you anticipate, or even go up if you plan to travel more or enjoy expensive hobbies.</p> <p>In order to calculate your post-retirement budget, start by listing all of your monthly expenses that will stay the same, including rent or mortgage, car payment, utilities, groceries, personal care, taxes, and insurance.</p> <p>Then tease out what expenses you incur from working. These might include car maintenance, professional clothing, dry cleaning, dining out, tolls/parking, and professional subscriptions. Don't forget to include the kinds of purchases that are not necessarily work-related, like convenience foods or getting a stress-relieving massage, but that you will have less of a need for in retirement.</p> <p>Finally, calculate how much you expect to spend on retirement-related expenses, such as hobbies, memberships, or travel.</p> <p>These three numbers can give you a sense of how much you are currently spending, what not working will save you, and how much you need to have set aside for activities in retirement. Now is the perfect time to start scaling back on the monthly expenses that will stay the same if you are worried about affording your retirement activities.</p> <h2>2. Take Advantage of Catch-Up Provisions</h2> <p>Calculating a post-retirement budget is often a good motivator to start putting more money aside for retirement. Don't assume that five years before you retire is too late to do any good. You still have time to grow your nest egg, particularly if you can take advantage of the catch-up provisions in your tax-advantaged retirement accounts.</p> <p>Tax-advantaged accounts like 401Ks and IRAs have contribution limits that put a cap on the amount of money you can place in them each year. For the majority of taxpayers, the 401K contribution limit is $18,000 per year, and the IRA contribution limit is $5,500 per year. However, taxpayers over the age of 50 may contribute a total of $23,000 per year to their 401Ks and $6,500 per year to their IRAs (as of 2016).</p> <p>Coming up with that kind of scratch to send to your retirement account might be a tall order, but don't forget that both 401K plans and traditional IRAs are tax-deferred. That means you can deduct your contributions from your annual taxes, thereby lowering your current tax burden.</p> <h2>3. Pay Down Your Debt</h2> <p>Entering into retirement while carrying debt can seriously weigh you down, so the five years before retirement is a great time to tackle it.</p> <p>Start with your consumer debt, such as credit cards or a car loan. These are probably charging higher interest than you could earn through any investments, so <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">eliminating all of your consumer debt</a> will help your money go further and save you a great deal over time.</p> <p>It's also a good idea retire your mortgage before you stop working (although you should prioritize paying off consumer debt before your mortgage). Owning your house free and clear in retirement offers you more options to handle whatever happens next.</p> <h2>4. Calculate Your Social Security Benefits</h2> <p>All of the arcane details of claiming Social Security <a href="http://amzn.to/2bKOeVe">could fill a book</a> (ahem), but it is a good idea for workers nearing retirement to get a basic understanding of what benefits will be available to them based on various retirement timelines and spousal coordination.</p> <p>In order to determine your benefit, the Social Security Administration uses a complex formula to adjust your earnings to account for average wage changes (this is known as indexing), and then calculate your specific benefits. The Social Security website offers several user-friendly calculators and applications to help you figure your potential benefits. Specifically, the <a href="http://www.ssa.gov/planners/benefitcalculators.htm">SSA benefits calculators</a> allow you to enter your information to learn what you can expect from your benefits.</p> <p>In addition, signing up for a &quot;<a href="http://www.ssa.gov/myaccount/">My Social Security</a>&quot; account can provide you with a great deal of specific information about your particular earnings record and projected benefits. It's an important planning tool for anyone within five years of retirement.</p> <h2>5. Start Planning Your Income Withdrawal Strategy</h2> <p>Many retirees don't really think about how they'll draw down their assets in retirement, assuming that they can just take a small 3% to 4% of their nest egg each year.</p> <p>There are two problems with this scenario. First, if you have a less than robust nest egg, the small percentage you have to live on might not be enough. Second, if you have to withdraw money during a major market downturn, your nest egg may not recover.</p> <p>Instead, you can plan ahead with the bucket method for retirement income, which starts with the assumption that retirees will have to ride out some market volatility during their retirement. With this method, you split your portfolio into separate income &quot;buckets,&quot; each of which will be intended to handle a different time period in retirement. A common allocation would look like this:</p> <h3>Bucket 1: Years 1&mdash;5</h3> <p>This will be the money you live on in your first years post retirement, while the majority of your nest egg remains invested in longer-term assets. Since you want both stability and liquidity in this time period, the money in this bucket will be placed in cash equivalent assets, such as CDs, U.S. Treasury bills, and money market funds.</p> <h3>Bucket 2: Years 6&mdash;15</h3> <p>You won't be tapping this money until you have gotten a few years into your retirement, so you can afford to be a little more aggressive with your investments. This means your second bucket will generally consist of a mix of bonds and stock, leaning more toward the safety of bonds. You want to reasonably protect your principal here, but still allow your money some room for growth.</p> <h3>Bucket 3: Years 16+</h3> <p>You can afford to be aggressive in this bucket of your portfolio, since you have time to let your money grow. This bucket will consist of higher-risk/higher-return assets, such as stocks and other types of equities, since you have at least 15 years to both ride out market volatility and reap potential benefits.</p> <p>Five years before retirement is the perfect time to start planning your retirement income withdrawal strategy, so you can make decisions without feeling the time-crunch of a looming retirement date.</p> <h2>This Is Your Victory Lap</h2> <p>The five years before you retire can be a challenging and emotional time. Feeling prepared for the financial aspect of retirement can give you the freedom to enjoy the last few years of your career.</p> <p><em>Will you be ready to make these key retirement moves when you're five years away?</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-financial-moves-you-should-make-five-years-before-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Financial%2520Moves%2520You%2520Should%2520Make%2520Five%2520Years%2520Before%2520Retirement.jpg&amp;description=5%20Financial%20Moves%20You%20Should%20Make%20Five%20Years%20Before%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Financial%20Moves%20You%20Should%20Make%20Five%20Years%20Before%20Retirement.jpg" alt="5 Financial Moves You Should Make Five Years Before Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-crucial-social-security-terms-everyone-needs-to-know">13 Crucial Social Security Terms Everyone Needs to Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement approaching retirement budgets catch up contributions cost of living debt end of career goals income social security Fri, 26 Aug 2016 09:00:15 +0000 Emily Guy Birken 1779929 at http://www.wisebread.com 6 Money Moves to Make the Moment You Decide to Buy a Car http://www.wisebread.com/6-money-moves-to-make-the-moment-you-decide-to-buy-a-car <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-money-moves-to-make-the-moment-you-decide-to-buy-a-car" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_new_car_87292815.jpg" alt="Couple making money moves before buying a new car" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The beater you are driving now spends more time in the repair shop than on the highway. Or maybe you're sick of trying to time bus schedules or schedule Uber rides. Whatever the reason, it's time to upgrade to a new set of wheels.</p> <p>Unfortunately for most people, a new car comes with a new monthly auto loan payment. And these payments can be high. Kelley Blue Book reported that the estimated average transaction price for new cars hit $33,845 in May 2016. That's an increase of 3.5% from the same month in 2015.</p> <p>Fortunately, you can prepare for this added cost, and all it takes is a bit of research and planning on your part. Here are six money moves to make the instant you decide to buy a new car.</p> <h2>1. Check Your Credit Reports</h2> <p>You want an auto loan with the lowest possible interest rate, so that your monthly payment is as small as possible. And of course, you'll qualify for lower rates if you have strong credit.</p> <p>But before you start shopping for a new car, check your three credit reports (one each maintained by the national credit bureaus of Experian, Equifax, and TransUnion). You can order one copy of each of your reports free from AnnualCreditReport.com. Check carefully for any mistakes &mdash; fixing a mistake could immediately improve your FICO credit score.</p> <p>Knowing the information that the credit bureaus have on you and what your credit score is will give you an idea of whether you can qualify for a low interest rate now, or whether you should work to improve your score before you start hunting for a new car.</p> <h2>2. Call Your Insurance Company</h2> <p>If you are ditching an old car and upgrading to a new one, your auto insurance premium might rise. If you are buying a car for the first time, you'll need to purchase auto insurance before you can hit the road. And you'll need to know, for budgeting reasons, just how much you might expect to pay in auto insurance premiums.</p> <p>Your premium will vary depending on a host of factors, including everything from your age and driving record to the type of car you buy and where you live. So call either your current insurance agent or, if you aren't yet driving, an insurer licensed to do business in your area to get at least an estimate of how much you'll be paying each month or year in insurance costs.</p> <h2>3. Tweak Your Household Budget</h2> <p>You should have a household budget that you follow each month. Adding a new car payment means that you need to tweak that budget. Study your current budget to determine how much of a car payment you can afford. When you start shopping for cars, don't look at any that will leave you with a monthly payment that exceeds that amount. Having a new car is fun. Having a new car that you can't afford is not.</p> <h2>4. Pre-Apply for Financing</h2> <p>When you buy a new car, the dealer will offer you its own financing plan, meaning that you can take out a car loan directly from the dealership that is selling you your vehicle. But the smarter move is to go to your dealership with a preapproval letter from an outside lender.</p> <p>A preapproval letter states that a lender is willing to provide you with an auto loan. The letter will also state exactly how much money this outside lender is willing to loan you.</p> <p>It's good to have another loan option when you're at the dealership. The dealer will still want you to take out a loan from its own finance department, so the dealer might offer you a loan with slightly better terms, including a lower interest rate, as a way to compete. And if your dealer can't come up with a better offer? You can simply finalize that loan from the outside lender.</p> <h2>5. Gather Money for a Down Payment</h2> <p>You'll want to come up with the largest down payment possible when financing a new car. The more cash you provide upfront, the smaller your auto loan will be. And a smaller loan means lower monthly payments.</p> <p>So before shopping for a car, spend some time saving. It's long been recommended that consumers come up with a down payment of 20% of their car's final purchase price. For a car costing $25,000, that comes out to a down payment of $5,000. However, a smaller number of buyers today are actually providing that 20% down. Edmunds reports that consumers in 2015 provided an average down payment of just 10.5% of their car's final purchase price.</p> <p>Don't be one of those consumers who skimps on the down payment. Wait to buy until you've saved up enough cash for a bigger one.</p> <h2>6. Build an Emergency Fund</h2> <p>New cars come with a host of new expenses in addition to that monthly car payment. You'll face insurance costs, gas prices, and repair and maintenance bills. AAA estimates that the annual cost of owning and operating a vehicle in the United States is $8,558. That is actually a six-year low, but shows that owning a car is far from cheap.</p> <p>Make sure that you can afford these extra costs by building an emergency fund <em>before</em> you start car shopping. It's a sounder financial strategy than paying for such unforeseen events as car repairs or emergency home repairs with a credit card.</p> <p><em>What steps do you take when it's time for a new car?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/6-money-moves-to-make-the-moment-you-decide-to-buy-a-car">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-having-a-paid-off-car-is-surprisingly-great">5 Ways Having a Paid Off Car Is Surprisingly Great</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/can-too-many-credit-cards-hurt-your-credit-score">Can Too Many Credit Cards Hurt Your Credit Score?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-before-leasing-a-car">What You Need to Know Before Leasing a Car</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage">Make These 5 Money Moves Before Applying for a Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easy-ways-to-calculate-your-new-car-budget">7 Easy Ways to Calculate Your New Car Budget</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation auto loans budgets credit reports credit score down payments emergency funds financing insurance new car Wed, 13 Jul 2016 10:30:08 +0000 Dan Rafter 1748332 at http://www.wisebread.com 5 Shopping Habits to Nix Before You Turn 30 http://www.wisebread.com/5-shopping-habits-to-nix-before-you-turn-30 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-shopping-habits-to-nix-before-you-turn-30" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_bags_000051645128.jpg" alt="Woman learning shopping habits to nix before turning 30" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Once you're in your 30s, people will expect you to have smarter shopping habits. Not only is it wiser to spend your money responsibly, but once you hit the big three-oh, you will need to focus your savings efforts towards retirement and buying a home.</p> <p>Ditch these five bad shopping habits before you leave your 20s, and you will find that it is much easier to save money and hit your financial goals later in life.</p> <h2>1. You Buy What You Want</h2> <p>As an adult, it is time to realize that there are going to be many things that you <em>want </em>to buy. However, it is important to buy things you truly <em>need </em>rather than everything on your wish list. For example, you need groceries &mdash; but you do not need that tray of sushi or bottle of cold-pressed juice. Cutting out frivolous spending on whims and splurges will drastically change your finances.</p> <p>This is not to say there is never room for splurges. Instead, budget a set amount of money each month that can be spent however you wish.</p> <h2>2. You Use Credit Cards Wrong</h2> <p>Credit cards can be helpful in your finances. However, if you are just pulling out your credit card every time you make a purchase, you are more likely to overspend and put yourself in a situation where you're living paycheck to paycheck. Using credit cards wisely is the key.</p> <p>A smart way to use your credit card is to write down all of your purchases as if you were balancing a checkbook. For example, if you want to use your credit card for groceries, utilities, gas, and dining out, then set a budget for each one. Then you add all those budgets together, and every time you swipe your card, you deduct the cost from your total budget &mdash; either in a small notebook or on your phone's notepad. It might look like this:</p> <p>$850</p> <p>-$75 for electric bill (2/19)</p> <p>__________________</p> <p>$625</p> <p>-$5.50 for fast food (2/23)</p> <p>__________________</p> <p>$619.50</p> <p>Once you reach $0, stop using your credit card and pay off your balance. This allows you to benefit from the convenience of a credit card, without going into debt.</p> <p>Also if you plan on using a credit card for majority of your spending, then you need to get a card that will give you a decent amount of return. Consider using a credit card that comes with an annual fee, because those cards <a href="http://www.wisebread.com/the-5-best-credit-cards-with-annual-fees">usually come with better rewards</a>.</p> <h2>3. You Don't Pay Attention to Your Budget</h2> <p>Financial experts are quick to push the idea of budgeting on others as a simple way to be in control of your finances. The truth is that budgeting is harder to stick with than it sounds. To stay committed to your budget, try establishing budget ranges rather than a set number. For example, budgeting $350&ndash;$425 per month on groceries allows for natural fluctuations, such as a good sale or having guests over for dinner.</p> <h2>4. You Emotional Shop</h2> <p>Feeling sad? Go shopping. Excited about a new job offer? Go shopping. Have nothing else to do on a Saturday? That's right, go shopping. As silly as this sounds, many people allow their feelings and mood to dictate when they go shopping. Shopping when you are stressed, bored, excited, or depressed are all easy ways to overspend and buy items you do not need and will not use.</p> <p>This is where it is important to stick with a budget, and to evaluate what you are buying. Perhaps you are in Target, and you see a really cute dress. Before putting it in your cart, ask yourself if it is in your budget. Do you really need it? Do you have anything else like it at home? Realize when emotions are dictating your shopping habits and overrule them with logic. The best trick to try is walking away from a purchase for a day or two. If you still want the item later and it fits in your budget and needs, then go buy it.</p> <h2>5. You Don't Shop With the Future in Mind</h2> <p>As you enter your 30s, you should consider the future for each major purchase. For example, if you are planning on having children in the next two to three years, perhaps a small car is not the wisest decision. The same principle goes for buying houses, furniture, and more.</p> <p>You should even consider the future with minor purchases. It can be as simple as paper towels going on a sale. Since it is predictable that you will use paper towels in the near and distant future, you should buy several months' worth rather than just one package. Remember to exercise balance when it comes to bulk buying, though. You will need paper towels for the rest of your life, but that does not mean you should buy a whole a year's worth!</p> <p><em>Which shopping habit do you think is the most important to leave behind once you hit your 30s?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-shopping-habits-to-nix-before-you-turn-30">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-awesome-reasons-to-shop-at-aldi">6 Awesome Reasons to Shop at Aldi</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-are-people-retiring-in-their-30s">How Are People Retiring in Their 30s?!</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-steps-to-starting-a-retirement-plan-in-your-30s">8 Steps to Starting a Retirement Plan in Your 30s</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are">7 Ways Millennials Are Better With Money Than You Are</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping 20s 30s budgets emotional spending impulse buys millennials spending habits Tue, 22 Mar 2016 10:30:07 +0000 Ashley Eneriz 1672234 at http://www.wisebread.com 11 Silent Budget Killers You Don't Notice http://www.wisebread.com/11-silent-budget-killers-you-dont-notice <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-silent-budget-killers-you-dont-notice" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_exercise_gym_000053454904.jpg" alt="Woman discovering silent budget killers she didn&#039;t notice" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you feel like you're constantly going over budget, but can't figure out why? You might be victim to silent budget killers &mdash; those small expenses that you don't consider &quot;expenses,&quot; or perhaps you've forgotten about altogether. Here's a reminder of some sneaky, money-sucking line items that you might want to flag and eliminate in order to put a few more bucks back in your wallet. (See also: <a href="http://www.wisebread.com/13-dumb-little-purchases-you-need-to-stop-making-today">13 Dumb Little Purchases You Need to Stop Making Today</a>)</p> <h2>1. Underused Gym Memberships</h2> <p>I'm a regular gym-goer these days, but for years I just had memberships &mdash; very expensive memberships, in fact &mdash; to facilities that I would visit three, maybe four times a month. I would let them go, because I kept telling myself that I would start going more frequently &quot;starting this month.&quot; But &quot;this month&quot; turned into next month and, well, you know the drill. If this sounds like your situation, cancel the membership &mdash; or at least very least put it on hold (but consider that this will also incur a fee) &mdash; until you've re-committed yourself to an active and healthy exercise regimen.</p> <h2>2. Online Subscriptions</h2> <p>Memberships to online subscription sites can run the gamut from professional social networks like LinkedIn, to entertainment sites like Amazon or Netflix. The problem with these sites is that they always sound good in theory (in that moment when you impulsively signed up because maybe you needed it right then), but now that the need is gone, you're not engaging in them as much.</p> <p>&quot;I see this more with business owners, but it can affect non-business owners as well,&quot; says Amanda Abella, savings advisor at MoneySavingPro.com. &quot;Have you really taken any of those business/health/etc. courses you're paying for? Have you really watched all of those videos you pay for?&quot;</p> <p>If the answer is no, log in and opt out.</p> <h2>3. Music Streaming Services</h2> <p>Honestly, the whole idea of music-streaming services makes me shake my head. Have we all forgotten that the radio is free? Do you really need to hear those obscure songs by WhoKnowsWho right this second? Is it worth the fee you're paying for a commercial-free experience? And are you using it enough to justify the cost? The latter is the most important question, I suppose. If you're getting your money's worth, then okay. If not, it's just a waste.</p> <h2>4. Irregular, But Necessary Life Expenses</h2> <p>&quot;Non-regular but necessary expenses like car tags and renewing dental insurance &mdash; they always seem to sneak up on you, and then you're surprised when they roll around because you didn't budget for them,&quot; Abella points out.</p> <p>There's not much you can do about these expenses, so it's good to have at least a little cushion in your monthly budget to cover these surprises.</p> <h2>5. Currency Exchange Fees</h2> <p>I'll admit that I'm not terribly familiar with currency exchange fees, but you may be if you travel often or own a small business that operates internationally. Alon Rajic, managing director of MoneyTransferComparison, explains more in detail how currency fees could be taking more from you than you should be paying.</p> <p>&quot;If you're an expatriate, an immigrant, a small business owner, or an overseas investor, currency exchange fees are undoubtedly a silent budget killer for you,&quot; he says. &quot;Even fairly financially savvy individuals often check the direct cross-border transfer costs (ranging between $15 and $50 in the USA), instead of focusing on what really matters: exchange rate markups. These markups (the difference between real interbank rate and buy/sell rates) can amount to 3%, 4%, and even 5% of the lump sum exchanged into foreign currency. For anyone transferring money regularly between different currencies, or investing a significant portion of his money in foreign investments, FX fees could very well be the biggest factor affecting personal finances.&quot;</p> <h2>6. Surprise Expenses for Your Child</h2> <p>Every parent knows that children always need <em>something</em>, and that something is not always in the budget. This especially becomes a budgeting nuisance for separated or divorced parents who use a child-support system to pay for their children's expenses.</p> <p>&quot;A silent budget killer for separated and divorced parents usually arrives in the form of surprise expenses falling outside the monthly base support payment they exchange, such as an impromptu dentist visit, class field trip, or friend's birthday party,&quot; says Sheri Atwood, a child support and multi-household finance expert at SupportPay.com. &quot;These little expenses pile up against the extracurricular activities parents are also expected to pay for, but still don't fall under the monthly child support payments, like gymnastics class, baseball gear, and more.&quot;</p> <h2>7. Extra Fuel for Your Car</h2> <p>Gas is much more affordable at the moment than it has been in the past, but it's still not &quot;cheap.&quot; It's also one of those commodities that we can't really live without, and an expense that easily can send your budget overboard depending on how much extra driving you do &mdash; for instance, at the holidays for shopping or playing taxi for the kids. Try to look ahead at any out-of-the-norm driving you'll need to do over the next couple weeks to lessen the impact of falling short elsewhere.</p> <h2>8. Leaving Stuff Running at Home While You're Not There</h2> <p>Electronics plugged in or on when they're not in use, lights on when nobody's home, heat or A/C running when it's not being used &mdash; these are all <em>major</em> money suckers. We're talking potentially hundreds of dollars in misused gas and electric if you're not mindful. To ensure your energy budget stays on track, or perhaps even declines, think about investing in more efficient sources, like LED lights and &quot;green&quot; appliances, and obviously turn off what's not in use right after you're done using it.</p> <h2>9. Automated Payments</h2> <p>You may have automated payments scheduled for items you don't use or no longer need &mdash; like those gym or online memberships &mdash; and because they're automated (which essentially equates to &quot;out of sight, out of mind&quot;), you're letting them slide every month. Stop doing that. Review your automated payments to make sure that everything is a necessary expense. If not, dump it.</p> <p>There's also a chance that you could be charged incorrectly with automated payments if you're not careful. SavingFreak.com's Paul Moyer explains.</p> <p>&quot;Any service where the price can change and you have an automatic payment is a potential silent budget killer,&quot; he says. &quot;Two of the biggest examples are insurance and cable television. With these two services, they will slowly raise your rates until you turn around and find out you are overpaying by 20%-30% without even realizing it.&quot;</p> <p>Provided that eye-opening information, perhaps it's worth investigating your automated payments to make sure everything is on the up-and-up.</p> <h2>10. Auto-Renewals for Membership Sites</h2> <p>One of my biggest pet peeves about membership sites is their auto-renewal policies, many of which require you to return in a certain amount of days to cancel the service &mdash; especially if you're taking advantage of a promo &mdash; or else you're charged a premium.</p> <p>The other scenario is that auto-renewal occurs a year later &mdash; which, granted, is generally preceded by an email warning &mdash; but if you miss it or you're just not expecting it, it can throw your budget out of whack in a flash. As a general rule, I steer clear of auto-renewal options so I don't have to deal with the hassle. Plus, you might not even be interested in whatever it is you're subscribing to a year later, which also is something to consider before signing up long-term.</p> <h2>11. Online Price Discrimination</h2> <p>Did you know that you may be paying more for virtually everything you're buying online based on your location? It's true, and Karen Mesoznik, inbound marketing manager for SaferVPN, claims that you can keep your budget in the black by being just a little more Internet savvy.</p> <p>&quot;One silent budget killer many people don't notice is <a href="https://www.safervpn.com/blog/save-money-on-flight-tickets-vpn/">online price discrimination</a>,&quot; she reveals. &quot;When you browse online, your IP address is your unique identifier, revealing your geo-location. What many online consumers don't realize is that airlines, rental car services, software providers and streaming subscriptions charge different prices according to the information they receive from an IP address. Price discrimination can be avoided by using a VPN (Virtual Private Network) to change your IP address to match that of another country where the cost of services is lower. For instance, booking a flight from Brazil could cost hundreds of dollars less than booking it from the U.S.&quot;</p> <p><em>What are some of the silent budget killers that you've noticed lately? I'd love to hear a few of yours in the comments below.</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F11-silent-budget-killers-you-dont-notice&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%2520Silent%2520Budget%2520Killers%2520You%2520Dont%2520Notice.jpg&amp;description=11%20Silent%20Budget%20Killers%20You%20Dont%20Notice"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/11%20Silent%20Budget%20Killers%20You%20Dont%20Notice.jpg" alt="11 Silent Budget Killers You Don't Notice" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/11-silent-budget-killers-you-dont-notice">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-fun-books-that-will-get-your-kids-excited-about-money">10 Fun Books That Will Get Your Kids Excited About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-fun-facts-about-valentines-day-spending">12 Fun Facts About Valentine&#039;s Day Spending</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-moves-to-avoid-on-the-first-date">6 Terrible Money Moves to Avoid on the First Date</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-resist-the-expensive-once-in-a-lifetime-mentality">How to Resist the Expensive &quot;Once in a Lifetime&quot; Mentality</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-things-that-should-never-cost-more-than-99">11 Things That Should Never Cost More Than $99</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting budgets money money wasters Spending Money Fri, 01 Jan 2016 16:00:03 +0000 Mikey Rox 1630229 at http://www.wisebread.com 4 Ways an Income Gap Can Strain Your Relationship http://www.wisebread.com/4-ways-an-income-gap-can-strain-your-relationship <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-an-income-gap-can-strain-your-relationship" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_breaking_up_000043320308_1.jpg" alt="Couple learning ways income gap can strain their relationship" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Money is the <a href="http://www.cnbc.com/2015/02/04/money-is-the-leading-cause-of-stress-in-relationships.html">leading cause of arguments</a> in married couples. Income disparity, when one person makes much more than the other, can be a surprising source of stress. If you're one of these couples, be on the lookout for these four ways an income disparity could harm your relationship.</p> <h2>1. Holding on to Old Gender Roles</h2> <p>Women are more and more likely to have higher education and a&nbsp;<a href="http://fivethirtyeight.com/datalab/how-many-women-earn-more-than-their-husbands/">higher paying salary</a> than their significant other. However, in heterosexual relationships in which women are the &quot;breadwinners,&quot; the women are actually <em>still</em> doing more housework than men. That doesn't sound like an equal partnership. That might also be why the divorce rate jumps 50% for couples in which the woman earns the higher income.</p> <p>So much inequality comes from not being comfortable to speak up, and worse, tacitly defaulting to your parents' roles. Having a deep and meaningful conversation about gender and money is important in a relationship &mdash; find each other's biases and challenge them. Outdated and unreasonable gender expectations should not dictate what happens in your relationship.</p> <h2>2. Using Salary as Leverage</h2> <p>For many, money equals power. So when one partner earns more than the other, the higher earner can easily become the de facto decision-maker in where to vacation, what to buy for dinner, the kind of house you live in, and what kind of hobbies you partake in. This is precisely the kind of power imbalance that leads to highly toxic relationships.</p> <p>Resolve to discuss medium-to-major expenditures with your partner before making them. As long as you share your household, it's always half theirs. It's also key to encourage your partner's goals. Aid them generously, in faith that s/he would do the same for you if the roles were reversed.</p> <h2>3. Acting Defensive Over Earning Less</h2> <p>Earning less than your partner can make you feel as if you don't matter, because one salary is floating most of the household. This can lead to resentment, or worse, a childlike attachment and dependency on the other to help you financially.</p> <p>Just because your income accounts for a smaller percentage of the household finances doesn't mean that your role in the relationship is smaller. This comes up a lot when one person decides to stay home to take care of the kids. But remember that contribution to the household is not measured by income.</p> <h2>4. Letting Money Determine Your Partner's Worth</h2> <p>The easiest way to avoid fights is to assign financial contributions on a sliding proportion scale. Instead of letting your partner struggle to pay 50% of the utilities, <a href="http://www.wisebread.com/create-your-first-shared-budget-without-blowing-up-your-relationship">find a shared budget</a> that allows him or her to pay what they can afford. Or, agree on new terms &mdash; like one being in charge of all groceries and utilities, while the other pays the rent or mortgage.</p> <p>Also, it's time to ban the word &quot;breadwinner.&quot; Not only is it divisive, it assigns a &quot;winner/loser&quot; dynamic, which has no place in a loving domestic relationship. If you think less of your partner for doing the dishes, or if you think more of a partner for earning more material wealth, you have set yourself up for trouble.</p> <p>It's time to stop being combative about status. Feeling more or less important is only true if you believe it.</p> <p><em>Is there an income gap in your relationship? How do you get over it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amanda-meadows">Amanda Meadows</a> of <a href="http://www.wisebread.com/4-ways-an-income-gap-can-strain-your-relationship">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">5 Financial Moves You Should Make Five Years Before Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-be-happy">How to be happy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-love-not-money-sort-of">Make Love, Not Money (Sort Of)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Breadwinner budgets gender Households income marriage work Tue, 03 Nov 2015 19:15:54 +0000 Amanda Meadows 1603576 at http://www.wisebread.com 9 Cities You Never Knew Went Bankrupt http://www.wisebread.com/9-cities-you-never-knew-went-bankrupt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-cities-you-never-knew-went-bankrupt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/abandoned_homes_000053069646.jpg" alt="Cities you never knew filed for chapter 9 bankruptcy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know about the massive Detroit bankruptcy of 2013. The once great &quot;Motor City&quot; entered the record books as the biggest U.S. city ever to file for protection. The problems that caused the financial meltdown were numerous, and included a declining population, low tax revenues, high crime, massive unemployment, and of course, the Industrial Age giving way to the Information Age.</p> <p>But what about other cities in the U.S.? You may not know it, but many more have <a href="http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you">filed for bankruptcy</a>. Whether it came about through bad governance, or bad luck, the following nine cities all did the unthinkable, and filed for Chapter 9 bankruptcy.</p> <h2>1. Prichard, Alabama</h2> <p>Nicknamed &quot;The City of Champions,&quot; Prichard did nothing to champion the cause of the South when it filed for bankruptcy in 2009. The problem was the city pensions fund. Back in 2003, the powers that be hired an actuary to do a full analysis of the city's pension plan; they were told, in no uncertain terms, that the funds would be depleted in the summer of 2009. By October of 2009, the city filed for bankruptcy, and the next few years became a living hell for city employees and pensioners. Budgets were not passed, pension checks were not sent out, and Prichard became the embodiment of mismanaged money and ineffective government.</p> <h2>2. Jefferson County, Alabama</h2> <p>Strike two for Alabama. Okay, so it's a county, not a city. But once again, very shoddy mismanagement of government funds, plus a whole lot of unnecessary expenses, led to the most populous county in the state of Alabama filing for Chapter 9 bankruptcy. First, the county authorized a massive and sweeping overhaul of the sewer system in 1996. The updates were needed, but the project was plagued with corruption, overspending, bribery, and a whole host of other problems. There was also meddling with some very risky bond-swap agreements, resulting in a huge amount of debt being piled onto an already heavily-burdened government. By 2008, Jefferson County debt was lowered to &quot;junk&quot; status by Standard &amp; Poor's, and that led to outright bankruptcy in 2011. Of the $4.2 billion in debt, over $3.14 billion was directly linked to the disastrous sewer project.</p> <h2>3. Mammoth Lakes, California</h2> <p>A beautiful mountain town in the Sierra Nevada, this popular hotspot for skiers was forced to declare bankruptcy after a huge property deal became nothing short of an avalanche. It was all over the development of an airport, which was obviously supposed to be a big help for the town's tourism industry. But, after the deal with the developer turned sour, Mammoth Lakes was sued&hellip; and in turn owed the developer some $43 million in restitution. Considering the annual municipal budget for Mammoth Lakes was less than $20 million, they had no choice but to declare bankruptcy in 2012. However, it appears a settlement was reached after the fact, and the town is back on its feet, hopefully with no further plans for a massive airport.</p> <h2>4. Bridgeport, Connecticut</h2> <p>A victim of the deindustrialization of the United States (much like Detroit), Bridgeport suffered from heavy job losses during the '70s and '80s. As the jobs left, the urban center was abandoned in favor of suburban developments, and the decline spiraled from there. After several major upheavals, including a 19-day strike by Bridgeport teachers (over 270 of them were subsequently arrested and sent to jail), things started looking bleak. In fact, it got so bad that a proposal was outlined getting Las Vegas developer Steve Wynn to build a huge casino; how that would have helped is beyond comprehension. But, it fell through, and in 1991 the city filed for bankruptcy. However, despite the filing, the federal court declared the city to be solvent. A kind of &quot;Sorry, deal with it&quot; verdict.</p> <h2>5. Stockton, California</h2> <p>The housing bubble's burst left many towns, cities, and municipalities in dire straits; Stockton was one of those cities. However, there was also a great deal of government excess and financial mismanagement at the center of the Chapter 9 filing. But it was the massive decline in home prices, as much as 70% in some areas, that wiped out the tax base and left the city struggling to pay its debts. Over $1 billion of red ink was stacked up, including money owed to pension plans, civic improvements, and health care benefits. In 2013, the city filed for bankruptcy. Recently, an exit plan was formulated for Stockton and its 300,000 residents. If you have some time to kill, you can read about <a href="http://www.stocktongov.com/government/departments/manager/bankruptcy/">Stockton's Bankruptcy Plan of Adjustment</a>.</p> <h2>6. Gould, Arkansas</h2> <p>One of the smallest places on our list, this modest town in Lincoln County, with just over 1,300 residents, filed for Chapter 9 Bankruptcy protection in 2008. At the time, the government owed over $900,000 to its creditors; a tiny sum, in comparison to the billions of dollars in debt accrued by the likes of Detroit and Jefferson County. But, with only $10 in petty cash, Gould had to declare bankruptcy. Finger-pointing began, and Gould mayor Juanita Stephens claimed the filing came as a result of <a href="http://freerepublic.com/focus/f-chat/2007387/posts">poor bookkeeping</a>, past lawsuits, and &quot;an employee not having submitted payroll taxes.&quot; That's quite the burden to put on one employee.</p> <h2>7. Central Falls, Rhode Island</h2> <p>For the smallest city in the smallest U.S. state, the 2011 Chapter 9 bankruptcy filing was big news. It had been under state control since July of 2010, but could not find a way to resolve its bulging $80 million unfunded pensions and retiree health liabilities. Considering that the city had an annual budget of just $17 million, that's hardly surprising. And of course, the timing was right after the recession, making it even harder to rebuild and raise funds. &quot;Everything was done to avoid this day,&quot; said state-appointed receiver Robert Flanders, Jr. &quot;We tried in vain to persuade our retirees to accept voluntary reductions in their benefits.&quot; That's a tough pill for anyone to swallow.</p> <h2>8. Harrisburg, Pennsylvania</h2> <p>Perhaps the strangest case for a bankruptcy is the one of Harrisburg. It happened in 2011, but the wheels were put in motion in 2003, when the city borrowed over $125 million to rebuild and expand the city's already enormous trash incinerator. It had been shut down by the federal government due to toxic air pollution, but instead of simply starting afresh, the rebuild plan was put into action&hellip; and it started burning money faster than it ever burned garbage. After big delays, contractor problems, cost overruns, and of course, financial mismanagement, the incinerator was finally finished&hellip; but at a cost of over $288 million. It was too big a burden for the city to take, and Chapter 9 protection was the only course of action.</p> <h2>9. San Bernardino, California</h2> <p>Not many people in public office will come out and make definitive and unpopular statements. But two years before San Bernardino filed for bankruptcy, city manager Charles McNeely made a presentation to the council warning of impending financial ruin. &quot;You're headed for trouble, it's a train wreck, you can't keep doing business this way,&quot; said McNeely. He was staggeringly accurate in his predictions, and yet everyone chose to ignore his warnings and go on doing the same old thing. That involved spiraling employee pay, benefit costs, and budgetary gimmicks, coupled with a sharp and continued decline in tax revenues. In August 2010, around two years after the McNeely prediction, San Bernardino had a $40 million budget deficit for the fiscal year, and filed for Chapter 9 protection. McNeely told everyone, and no one listened.</p> <p><em>Has your town gone bankrupt? How'd it affect you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/9-cities-you-never-knew-went-bankrupt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">5 Financial Moves You Should Make Five Years Before Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-dumb-habits-that-are-keeping-you-in-debt">25 Dumb Habits That Are Keeping You in Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">11 Steps to Take When Bankruptcy Is Your Only Option</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peak-debt">Peak Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/another-path-to-recovery-higher-incomes">Another path to recovery: higher incomes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Financial News bankruptcy budgets chapter 9 debt government funding u.s. cities Thu, 06 Aug 2015 13:00:18 +0000 Paul Michael 1510305 at http://www.wisebread.com 10 Tricks You Should Learn From Great Hagglers http://www.wisebread.com/10-tricks-you-should-learn-from-great-hagglers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-tricks-you-should-learn-from-great-hagglers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_haggling_000025294883.jpg" alt="Woman haggling with salesman for new car" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are two types of buyers in the world &mdash; the ones who lie down and take it, and the ones who can take it or leave it. If you're in the former camp, it's high time you learn how to stick to your guns and start shaving precious dollars off things you want and need. To hone your haggling skills, consider these tips from a few experts who know how to get things for less.</p> <h2>1. Establish a Budget and Stick to It</h2> <p>Before you set out on your trip, establish a budget for whatever it is you intend to buy. The goal is to get the dealer to meet you at that price or go even lower, and it's important to have a threshold in mind so you know when to hold 'em and when to fold 'em.</p> <p>Lifestyle expert and Functional Girl, CJ Legare agrees that this is the first step to great bargaining.</p> <p>&quot;Make a decision about how high you're willing to go before engaging the seller &mdash; then stick to it,&quot; she says. &quot;Haggling can be a passionate exchange; you don't want to overpay in the heat of the moment.&quot;</p> <h2>2. Arrive Well-Researched</h2> <p>It's important to know your stuff before you engage in any bargaining, which is why it's important to research the item you're buying. Show signs of uncertainty and, like a rabid dog can smell fear, the dealer, too, will sense your weakness.</p> <p>&quot;Whether shopping for a new car or attempting to lower a cable plan, great hagglers have done their homework and know what the competition is offering, current market prices, product/service specifications, so that they can negotiate with power,&quot; says consumer and money-saving expert <a href="http://www.andreaworoch.com">Andrea Woroch</a>. &quot;You can't get much accomplished if you don't know what you're talking about.&quot;</p> <p>Legare offers an insider tip if this is your first time at the haggling rodeo.</p> <p>&quot;Online reviews can provide a treasure trove of information &mdash; who the fair negotiators are, who has inventory worth paying for, and who to avoid,&quot; she says.</p> <h2>3. Inspect the Item Meticulously</h2> <p>Get a leg up on the deal by inspecting the item through and through. If you find any imperfections at all, add them to your arsenal. Dents and dings decrease the value of the item &mdash; so there's no reason you should still be paying full price.</p> <p>&quot;A flaw is a reality check,&quot; Legare says, &quot;but a flaw that you can work with is leverage that can make the difference between walking away empty-handed or getting a better deal.&quot;</p> <h2>4. Stay Polite Throughout the Process</h2> <p>You know the old saying &mdash; you'll attract more flies with honey than vinegar. Translation: Leave the sour attitude at home if you want to walk away a winner. Even when the bargaining isn't going your way, stay polite, keep a smile on your face, and lose like a winner. It's not the end of the world, and there's always tomorrow.</p> <p>&quot;You won't get anywhere by yelling or being rude. Specifically, this is true with monthly expenses and medical bills,&quot; Woroch says.</p> <h2>5. Flash That Cash</h2> <p>There are times when flashing your money is downright obnoxious (like most of the time!), but when it comes to haggling, busting out the cash isn't always a bad idea. Cash in hand lets the dealer knows that you came to play ball &mdash; and you've got the bills to back it up.</p> <p>&quot;One of the best haggling tips I've learned is to 'show the cash,'&quot; says Richard A. Chapo, Esq. &quot;First, know what you are willing to pay. Second, have it on hand in cash. Three, haggle with the cash in your hand where the salesperson or manager can see it. The cash tells them you are serious and ready to buy now, which is ever tempting and often turns a 'no' into a 'yes.'&quot;</p> <p>In addition to flashing the cash, be sure to let the dealer how much you're working with as well. This solidifies that you're serious, but it also gives the impression that if they don't meet your price, you'll most likely walk away.</p> <p>&quot;Great hagglers state their terms and see if there is any wiggle room,&quot; says Mindy Crary, financial planning coach at Creative Money. &quot;[For example], 'You have so many great offerings here and I'd love to buy more than one but I am only working with $X today. Would you be willing to work with me a little?' I once got three vintage rings for the stated price of two on Etsy by using the 'praise + limit + offer' process.&quot;</p> <h2>6. Put on Your Poker Face</h2> <p>Emotion equals weakness, and in business that's a death sentence. No matter how badly you want something, it's critical to keep your cool. Express interest, but that's it. Treat it like any ol' thing that you can get someplace else &mdash; at least in front of the dealer anyway.</p> <p>&quot;When presented with an item you're dying to own/buy or a deal that seems really good, don't appear overly excited or anxious, which may hinder your bargaining power,&quot; says Woroch. &quot;The less excited you are over something, the more the sales associate needs to sell you on it.&quot;</p> <p>Legare seconds that sentiment.</p> <p>&quot;If a seller realizes you're excited about an item, they'll use it to their advantage during the haggle,&quot; she says.</p> <h2>7. Review Your Bills Regularly</h2> <p>Haggling isn't just done at car dealerships and antique shops. Sometimes you need to work people down in other situations, like you utility and cable bills.</p> <p>Woroch says that she haggles every few months to keep her cable and Internet bills down.</p> <p>&quot;I also recently haggled my way out of credit card interest for two months,&quot; she says. &quot;If I didn't stay on top of my bills and review my account, I may not notice those small additional charges that would add up overtime.&quot;</p> <p>It's not a bad idea to take a look at your bills to see where you can trim some fat, too.</p> <h2>8. Don't Take No for an Answer</h2> <p>If you were willing to take no for an answer, you could've just stayed at home.</p> <p>&quot;When a store associate can't help or you're getting nowhere with a customer service rep, it's time to take things up a notch &mdash; ask to speak with a supervisor or manager who has more power to work with you on a deal. Better yet, speak with a retention specialist when dealing with bills like cable, Internet, and mobile phones,&quot; Woroch says.</p> <h2>9. Walk Away</h2> <p>You've lived without the item until today, which means that if the dealer isn't willing to meet your ideal but reasonable price, you can live without it a little longer. Don't be afraid to take your money someplace else. You might just get what you want after all. Woroch agrees.</p> <p>&quot;When shopping for certain goods like appliances, furniture, and cars, salespeople can be pushy and it's easy to lose your ground,&quot; she says. &quot;A great haggler won't be afraid to walk away from a deal knowing that that a salesperson wants his or her business and will likely come running after or call you with a deal.&quot;</p> <h2>10. Provide Loyalty in Appreciation of Great Deals</h2> <p>I know lots of professionals &mdash; event planners and interior designers especially &mdash; who get great discounts on a regular basis from stores around town because they're frequent customers and they're always referring someone new. Mom-and-pop brick-and-mortar owners, in particular, are usually thankful for this practice and provide loyalty discounts accordingly.</p> <p>Lagare's seen it before, too.</p> <p>&quot;Don't underestimate the power of relationship building,&quot; she says. &quot;When you find fair sellers with great inventory, bring them your business regularly and they'll throw you great deals in return.&quot;</p> <p><em>What are some other things great hagglers do? Let me know in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/10-tricks-you-should-learn-from-great-hagglers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-these-8-questions-to-get-a-better-price">Ask These 8 Questions to Get a Better Price</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-retailers-where-you-can-negotiate-a-lower-price">11 Retailers Where You Can Negotiate a Lower Price</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-secrets-to-scoring-the-best-price-when-buying-on-ebay">7 Secrets to Scoring the Best Price When Buying on eBay</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-little-words-that-will-get-you-the-best-price-every-time">10 Little Words That Will Get You the Best Price, Every Time</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-habits-that-kill-your-buying-power">5 Habits That Kill Your Buying Power</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Life Hacks Shopping budgets deals haggling negotiating shopping spending Tue, 07 Apr 2015 17:00:09 +0000 Mikey Rox 1370268 at http://www.wisebread.com 10 Dumb Little Budgeting Mistakes You Need to Stop Making Today http://www.wisebread.com/10-dumb-little-budgeting-mistakes-you-need-to-stop-making-today <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-dumb-little-budgeting-mistakes-you-need-to-stop-making-today" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-frustrated-bills-78426183-small.jpg" alt="woman frustrated bills" title="woman frustrated bills" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Did your budget go bust&hellip; again?</p> <p>Instead of promising yourself that it won't continue to happen, you need to fix the roots of the problem, once and for all. Start paying attention to the small, yet important, details that you are leaving out of your budget. (See also: <a href="http://www.wisebread.com/10-small-mistakes-that-can-ruin-your-finances?">10 Small Mistakes That Can Ruin Your Finances</a>)</p> <p>Here are the 10 dumb little budgeting mistakes that you need to stop making today.</p> <h2>1. Forgetting to Cancel That Membership You Never Use</h2> <p>Do you have a Netflix subscription for several DVDs at a time, only to have a single DVD gathering dust for an entire month? Then you're wasting money. Take a second look at all of those memberships that you pay on a recurring basis. A very common one is that expensive gym subscription that goes unused month after month. If you don't use it, lose it.</p> <p>Also, evaluate your music, movie, and TV show subscriptions and decide whether you should continue it, downgrade it to a smaller plan, or switch to pay-as-you-go. (See also: <a href="http://www.wisebread.com/buy-or-subscribe-how-to-pay-the-least-for-the-media-you-love-the-most?ref=seealso">Buy or Subscribe: How to Pay the Least for the Media You Love the Most</a>)</p> <h2>2. Budgeting Based on Your Gross Income</h2> <p>Let's imagine that you were making $50,000 per year. This would mean that you would count on about $4,167 every month before taxes, right?</p> <p>Wrong! Even before that money hits your bank account, there may be several deductions affecting it. Some of them are mandatory, such as taxes, union dues, and uniform deductions. Others are voluntary, such as 401(k) contributions, health saving accounts, and parking fees. Make sure to budget based on your net paycheck, not on your gross paycheck.</p> <h2>3. Withholding Too Much in Taxes</h2> <p>Talking about paychecks, <a href="http://business.time.com/2013/03/18/why-were-so-irrational-when-it-comes-to-tax-refunds/">75% of Americans are withholding too much in taxes</a> from their incomes. If you're struggling to make ends meet, one possible cause is that you are unnecessarily limiting every single one of your paychecks.</p> <p>Review two year's worth of tax forms and determine what should be the right amount to withhold from your paycheck:</p> <ul> <li>Update your W4 form for changes in marriage status or number of dependents;</li> <li>Stop withholding additional amounts, if applicable; or</li> <li>Adjust your <a href="http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Estimated-Taxes">estimated taxes every quarter through Form 1040-ES</a>.</li> </ul> <p>Develop these three habits every year and you will increase your available monthly cash flow. Remember that the IRS doesn't pay you interest on the money that you withhold from your paycheck.</p> <h2>4. Buying Christmas Gifts on Credit</h2> <p>During January and February, consumer counseling agencies see a <a href="http://abcnews.go.com/Business/story?id=88539">25% increase</a> in the number of people seeking financial help.</p> <p>Too many folks fall for discounts on opening store cards or using credit cards. About 60% of Americans keep on rolling their card balances, maintaining an average balance of more than $11,500.</p> <p>The best way to fix this is by setting a budget for holiday gifts in January and saving up every month to meet that goal. If you have problems resisting the temptation of spending those funds before the holidays, then use a financial vehicle, such as a Christmas Saving account (also known as &quot;Christmas Clubs&quot; at credit unions) or Certificate of Deposit, that blocks access for a set period of time.</p> <h2>5. Forgetting About Your Car Registration Fee</h2> <p>While you cannot predict every single expense related to your car, there are several that you can count on every year. The most important one is your annual car registration fee.</p> <p>This is no small fee and, depending on the weight and year make of your car, can run into a couple hundred of dollars. For example, between my wife's truck and my sedan, we pay about $500 every year in registration fees. That's enough to mess up any month's paycheck if we were to forget about setting an annual reminder.</p> <p>Check with your local DMV, find out how much is your registration fee, and set a reminder every year.</p> <h2>6. Buying a Cup of Coffee Every Day</h2> <p>That morning stop at your favorite coffee shop may be throwing off your budget without you even noticing. If you buy a $3 cup of coffee every weekday, it adds up to $780 over the year. And that's being conservative: in New York City shoppers have reported that a <a href="http://www.humuch.com/prices/Starbucks-Cappuccino-grande/______/102#.VDSW8xZ9LWo">Starbucks Cappuccino Grande costs between $5.01 and $5.30</a>.</p> <p>With what you're spending on coffee in a year you could easily pay off an entire store card or knock off a good chunk of a credit card balance.</p> <p>Instead of buying coffee every single day, look for cheaper alternatives, such as:</p> <ul> <li>Preparing your own cup at home and investing in a good travel mug;</li> <li>Drinking your office's free coffee or starting a coffee pool with coworkers; or</li> <li>Having your own drip machine and coffee bag at work.</li> </ul> <h2>7. Not Negotiating Credit Card and Cell Phone Bills</h2> <p>The path of least resistance is the most expensive one. If you don't negotiate credit card interest rates or cell phone charges, then you are paying more than you have to. A 20-minute call could save you a couple hundred dollars over the course of a year.</p> <p>Don't think that you're being rude for asking for a better deal, you're entitled to do so. Even the Federal Trading Commission provides <a href="http://www.consumer.ftc.gov/topics/shopping-saving">tips on shopping and saving</a>. Do your homework, compare prices from competitors, and negotiate your way into savings. (See also: <a href="http://www.wisebread.com/lower-your-credit-card-interest-rate-and-reduce-your-phone-bill-immediately-and-easily?ref=seealso">Lower Your Credit Card Interest Rate and Reduce Your Phone Bill, Immediately and Easily</a>)</p> <p>The worst that can happen is that they say no, and you get a freebie for your effort. Make sure to ask for one, such as account credit or a gift card.</p> <h2>8. Relying Only on Credit Cards</h2> <p>You need to start paying with cash more often.</p> <p>The convenience of carrying a less bulky wallet or purse is killing your spending power. People paying with credit cards spend <a href="http://www.nerdwallet.com/blog/tips/credit-cards-make-you-spend-more/">12% to 18% more</a> than those paying with cash. Even McDonald's knows this because its customers using plastic spend an average of $7 per order, while those using cash only an average of $4.50.</p> <h2>9. Spending Lucky Money Windfalls</h2> <p>What do you do when any of these happen?</p> <ul> <li>Found a $50 bill on the street.</li> <li>Grandma's sends you a $100 check for your birthday.</li> <li>Surprise bonus at the end of the year.</li> </ul> <p>If you answer: &quot;shopping spree!&quot;, then that's a dumb little budgeting mistake. Like Will Rogers said, &quot;too many people spend money they haven't earned to buy things they don't want to impress people they don't like.&quot;</p> <p>Curb your spending habit and put all those lucky windfalls into your savings account. Even better, use them to pay down debt. If you often have trouble meeting monthly expenses, then use that extra cash to prevent you from breaking your budget.</p> <h2>10. Not Having an Emergency Fund</h2> <p>Not having or maintaining an emergency fund is the biggest of all dumb budgeting mistakes you can ever make. If you don't have one, you're hit with a double whammy.</p> <p>First, you bust your budget by spending more than you have available. Second, you are very likely to put those expenses on a credit card. These are the reasons why you need to build an emergency fund and, of course, replenish it every time that you use it. (See also: <a href="http://www.wisebread.com/figuring-the-size-of-your-emergency-fund?ref=seealso">Figuring the Size of Your Emergency Fund</a>)</p> <p>Remember to save your emergency fund for true emergencies: forgetting about your monthly credit card bill or your annual tax payment is not an emergency.</p> <p><em>What are some other common dumb little budgeting mistakes? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/10-dumb-little-budgeting-mistakes-you-need-to-stop-making-today">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">Build a Better Budget in 5 Minutes Flat</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-save-money-when-you-are-unemployed">10 Ways to Save Money When You Are Unemployed</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-nice-ways-to-tell-your-spendy-friends-youre-staying-on-budget">7 Nice Ways to Tell Your Spendy Friends You&#039;re Staying on Budget</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/16-easy-ways-to-save-100-this-month">16 Easy Ways to Save $100 This Month</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting budgets saving spending Thu, 16 Oct 2014 13:00:07 +0000 Damian Davila 1236726 at http://www.wisebread.com How to Never Succumb to Impulse Spending Again http://www.wisebread.com/how-to-never-succumb-to-impulse-spending-again <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-never-succumb-to-impulse-spending-again" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/shopping-81172431-small.jpg" alt="shopping" title="shopping" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Impulse spending can make it almost impossible for someone to manage their finances effectively. It creates a habitual need to spend and a knee-jerk reaction to sales, products, and advertising. And the result is usually the same: a lack of cashflow, problems saving, and almost always an inability to maintain a budget.</p> <p>But what exactly is impulse spending? How do we define and/or recognize it?</p> <h2>Defining Impulse Spending</h2> <p>First, impulse spending is almost always chronic and recurring. To see something every once in a while and &quot;splurge&quot; is normal. Impulse spending is something that happens regularly and develops into a bad habit. (See also: <a href="http://www.wisebread.com/13-creative-ways-to-avoid-spending-money?ref=seealso">13 Creative Ways to Defeat Impulse Spending</a>)</p> <p>Second, buying on an impulse means that you're making an unplanned purchase that you hadn't already recognized a need for. These purchases might be useful and might even seem wise on the surface, but had you not made visual contact with the item, you probably wouldn't have wanted to spend money on it. In other words, an impulse purchase is made when a product or ad instigates the transaction. Instead of you deciding that you need something and then going to find it, you see a product or service and decide immediately that it warrants your money. Those who struggle with this end up spending a lot of money that they didn't need to spend or that wouldn't have been spent, had they been in control of their purchases. In fact, that's the real goal here &mdash; to be in control of how purchases.</p> <h2>1. Break the Habit With a Freeze on All Discretionary Spending</h2> <p>Impulse spending is a habit, so try breaking it by going cold turkey on all discretionary spending. That's not to say that you can't pick back up after a few weeks, but stick to essentials until you've given yourself enough time to get comfortable spending money on just those things.</p> <p>The goal is to take away your tendency to be a reactive purchaser, before you take the steps necessary to build yourself back into a proactive budgeter. Once you can go into stores and see ads without feeling that twitch making you want to spend money, you're ready to move on. It'll happen quicker than you think.</p> <h2>2. Make a Weekly Budget</h2> <p>Budgeting is one of the simplest and most basic safety nets you have to protect yourself against impulse spending. There are plenty of ways to do it, like using a <a href="http://www.daveramsey.com/tools/budget-forms/">Dave Ramsey budget sheet</a>. But the general concept is to start by writing down both your expected income and expenses for each month. Separate your expenses between the amounts that are fixed (rent, insurance, etc.) and those that fluctuate (gas, groceries). Use what's left to disperse between savings, discretionary spending, charitable giving, or however you choose to divide it up. That discretionary amount will serve as a safeguard to help limit your ability to spend impulsively.</p> <p>You'll know that there's a limit to what you can spend, thereby making you less likely to buy something on an impulse. Instead, you end up asking yourself the question: &quot;Do I really want to buy this?&quot;</p> <h2>3. Practice Deciding What to Buy Before You Leave the House</h2> <p>After breaking with your bad spending habits, a good habit to get into is to always make a list or at least plan in your mind what you want to buy before you shop. This ensures that you're in control of your purchasing and that you're not being pushed around by products and advertisements that you might see. Make sure you decide specifically what you want to purchase and avoid deviating from that plan. In time, you'll be able to shop around in a way that isn't impulsive. But until you get better spending habits established, it's best to never deviate from intentional expenses.</p> <h2>4. Put Potential Purchases Through a Litmus Test</h2> <p>There will be gray areas that come up regarding whether or not you're being impulsive or if a purchase is actually necessary or beneficial in some way. A good way to figure that out is to come up with a litmus test in the form of a few questions that you can use to figure out whether or not you really need to spend money on something.</p> <ol> <li>Is there room in the budget for it?<br /> &nbsp;</li> <li>Is the purchase redundant (do you already have the item or something similar to it)?<br /> &nbsp;</li> <li>Will it substantially improve your quality of life?<br /> &nbsp;</li> <li>Did you want or need this item before you were made aware of its existence?<br /> &nbsp;</li> <li>What really made you want the item (an ad, visual appeal, need, practical use, etc.)?</li> </ol> <p>These questions can help give you a clearer picture of why you might want to buy something and whether or not that purchase will benefit you in a way that justifies the amount of money needed to acquire it.</p> <h2>Be the One in Control</h2> <p>The underlying problem with impulse spending is that you end up losing control of your money. If products, services or advertisements are completely driving you to spend, then you'll never be able to stop, because those things will always be there. While it's true that those things have an informative impact (i.e. you see a product and can tell it's useful), the bulk of the decision should stem from your own needs and decisions. Thus, learning how to avoid impulse buys will go a long way in freeing up your financial situation and putting you back in control of your money. It's well worth the effort.</p> <p><em>How do you control impulse spending? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/how-to-never-succumb-to-impulse-spending-again">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">Build a Better Budget in 5 Minutes Flat</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-creative-ways-to-avoid-spending-money">13 Creative Ways to Avoid Spending Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices">How to Have an Above-Average Life for Below-Average Prices</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of">10 Big Expenses You Can Easily Get Rid Of</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management budgets impulse spending mindful spending spending Thu, 16 Oct 2014 09:00:08 +0000 Mikey Rox 1236048 at http://www.wisebread.com 10 Big Expenses You Can Easily Get Rid Of http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-big-expenses-you-can-easily-get-rid-of" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-thinking-laptop-178850320-small.jpg" alt="woman thinking" title="woman thinking" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're like me, your budget follows the 80/20 rule -- 80% or your income goes to 20% of your spending categories. To knock out the expense of any of these big ticket bills would have an immediately therapeutic effect on your cash flow. Ironically, these big items are also some of the most difficult to part with. (See also: See also: <a href="http://www.wisebread.com/7-unnecessary-household-expenses-you-can-cut-today?ref=seealso">7 Unnecessary Household Expenses You Can Cut Today</a>)</p> <p>Lucky for you, we've got a plan for scrapping them one by one&hellip;.</p> <h2>1. Mortgage or Rent</h2> <p>Everyone needs a place to live, and we are not suggesting that you crash in a van &mdash; down by the river. But you don't necessarily need a full mortgage or pricey rental lease to live comfortably, either.</p> <p>While it's difficult for families to go without a housing payment, single folks should be able to find a creative way to skip paying for housing. This can include taking on a <a href="http://www.wisebread.com/jobs-that-offer-free-room-and-board">job that includes free room and board</a>, staying with relatives (while offering them something in return), or getting a school loan specifically for paying that dorm bill. And there is always refinancing your mortgage to pay it off early.</p> <h2>2. Car Payment</h2> <p>Technology has made it easier than ever to skip the car payment, and many are taking advantage. You can choose a car-sharing arrangement, public transportation, carpooling, or even biking it. My family of eight has opted to maintain a 20-year-old car over the cost of making payments, and we rent a new model from a rental company when we need a more reliable vehicle for going out of town. We save big money.</p> <h2>3. Other Car Fees</h2> <p>Did I mention that having a 1996 vehicle comes with extra perks? It costs just $30 to license and register our vehicle every year. And liability insurance is less than $12 a month!</p> <h2>4. Cable</h2> <p>You can find all kinds of articles on how streaming entertainment can almost fully replace the traditional cable box. We cut the cord two years ago and have never regretted it. The only thing our expensive $97 a month bill got us that the $21 total bill for Amazon, Hulu, and Netflix combined can't offer is live college football games. We listen to the radio when we can't make it to the local eatery to watch the games on the wall of TV's. It's a small sacrifice for the big savings we see.</p> <h2>5. Internet</h2> <p>With most smartphone plans offering Wi-Fi hotspots as part of your plan, it's possible to skip having broadband in your home altogether. This won't work for the homebody who streams Netflix all day, but it is perfect for the person who is almost always in a public Wi-Fi location and only need their hotspot for using apps or checking email. You can also add on extra data for a lower cost per month than buying a contracted plan through many internet providers.</p> <h2>6. College for the Kids</h2> <p>Not all kids go to college, but for those who want to, having a college savings plan can make all the difference. We have straight up told our kids that they won't be getting a fat plan from Mom and Dad when they graduate. We do contribute a small &quot;allowance&quot; that they put into their funds, but the rest of each child's cost will be paid through their own contributions from after-school jobs, gifts, scholarships, and creative use of transfer and dual credit courses. Our daughter, for example, can take classes while still in high school at the local community college for 50% of the tuition cost. These transfer to her chosen 4-year college at 100% credit.</p> <h2>7. Retirement</h2> <p>Yes, you will need something to live off of when you retire, but who said it has to come from a traditional &quot;retirement savings&quot; plan such as a 401(k) or Roth IRA?</p> <p>Since stocks can be just as volatile as other investments, and the funds can't easily be touched until you retire, many are turning to business investments as an alternative. Buying farmland, investment property, or real assets in your own startup can start paying off right away, and the value can increase to well over what you'll need when you retire. As with any investment, there are risks, but since you are involved in the day-to-day of these investments, the chances of another Enron-style scam are limited.</p> <h2>8. A Big Wedding</h2> <p>Big &quot;I do's&quot; can cost in the tens of thousands of dollars, but why? The happiest day of your life doesn't also have to be the most expensive. Invest in a small function, or elope and have an intimate reception with close family and friends. The money saved can be put to more useful things (such as knocking out expense #1 on our list.)</p> <h2>9. Funeral</h2> <p>While not as fun to think about, the same approach for the happiest day of your life can be taken for the last day of your life. Things like satin-trimmed caskets and premier burial plots can take a healthy life insurance policy and whittle it down to nothing; prepaid plans burn money you could easily invest while you're still alive. A simple cremation and memorial service can be a beautiful, but budget-conscious, alternative. Be sure to discuss your frugal wishes with family before you go; or better yet, include it in your legally-binding last will and testament.</p> <h2>10. Baby Delivery</h2> <p>While you can't get rid of all the costs of having a baby, you can significantly cut back by delivering at home. I have no experience in this matter, so I can't say that it's for everyone. Paying an experienced midwife to facilitate a home-birth is known to be a blessing for all involved, however, and if you and baby are healthy enough to try it, the savings can be $5-$15K or more!</p> <p><em>How much can you save by cutting out just one of these high-cost items? We'd love to hear how you got rid of your &quot;80%&quot; in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices">How to Have an Above-Average Life for Below-Average Prices</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-5-apps-can-fix-your-finances">These 5 Apps Can Fix Your Finances</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Lifestyle budgets costs expenses spending Fri, 03 Oct 2014 09:00:05 +0000 Linsey Knerl 1226260 at http://www.wisebread.com 9 Problems You Can't Solve With Money http://www.wisebread.com/9-problems-you-cant-solve-with-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-problems-you-cant-solve-with-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sad-man-looking-at-wallet-94502179-small.jpg" alt="sad man looking at wallet" title="sad man looking at wallet" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No matter how limitless your budget and how strong your arm, there are certain times when throwing money at a problem simply won't help. So take a look at the list below and ask yourself: Are you facing a situation whose solution might require thought and effort, as opposed to more bankroll? (See also: <a href="http://www.wisebread.com/your-money-problems-why-theyre-all-your-fault?ref=seealso">Your Money Problems Are Your Own Fault</a>)</p> <h2>1. A Failed Relationship</h2> <p>A lot of relationships founder on the shoals of money issues, but even those can't be healed by throwing money at them &mdash; what they need is mostly better communication plus a generous dollop of willingness to compromise. And if the relationship problems aren't related to money, throwing money at it won't help at all.</p> <h2>2. A Mid-Life Crisis</h2> <p>It's a cliche of the mid-life crisis for a 40-something man to buy a red convertible, but it's not a purchase that's going to solve existential angst. Of course there's nothing wrong with buying a red convertible if you want one, and can afford it. It just doesn't solve any problems. (Not even the practical transportation problems that could be solved with a more practical car, really.)</p> <h2>3. Getting in Shape</h2> <p>Buying a gym membership does not improve your fitness. Neither does buying a treadmill, stationary bike, or elliptical machine. Regularly including appropriate aerobic, resistance, and flexibility exercise among your daily activities gets you into shape. (See also: <a href="http://www.wisebread.com/5-ways-to-turn-your-walk-into-a-real-workout?ref=seealso">5 Ways to Turn Your Walk Into a Real Workout</a>)</p> <h2>4. Acquiring Skills and Talents</h2> <p>Getting good at something is largely a matter of practice, and money is no substitute. Of course you can spend money on books, on classes, on workshops, and on tools, and all those things may be of some help, but they're not going to give you skills if you don't put in the time to <a href="http://www.wisebread.com/how-to-become-an-expert">develop the expertise</a> (and they're certainly not going to give you talent).</p> <h2>5. Becoming Enlightened or Even Just a Better Person</h2> <p>There are always hucksters pretending to be one sort of spiritual guide or another, willing to take your money and show you the true path. There are also people ready to suggest that donating money to worthy causes makes you a better person. You can be confident that neither of those things is true.</p> <h2>6. Natural Disasters</h2> <p>It's very reasonable to spend money in advance of a natural disaster, to make yourself more prepared. A well-supplied pantry can really help you through something like a blizzard or a flood or an earthquake. The right tools and right supplies can turn a disaster into an inconvenience &mdash; or even an adventure. Money can also help some after a disaster is over. But no amount of money will turn back a lava flow, or get a commercial jet to fly through a volcanic dust cloud. (See also: <a href="http://www.wisebread.com/5-emergency-situations-you-must-prepare-for-and-5-you-can-ignore?ref=seealso">5 Emergency Situations You Must Prepare For</a>)</p> <h2>7. Being Blackmailed</h2> <p>You know giving in to a blackmailer's demands just lead to more demands, right? You've seen this movie.</p> <h2>8. Wanting the Impossible</h2> <p>I'd like to spend the next 2000 years learning to be the world's greatest musician, greatest swordsman, and most eloquent Esperanto speaker, and then travel through time to play, fence, and argue with everyone history suggests might have been better at those things than I. Throwing money at that problem will not solve it &mdash; nor will it produce world peace, end hunger (or death, or disease), let me travel faster than the speed of light, or meet friendly aliens from other worlds.</p> <h2>9. Being a Happy Person</h2> <p>Money can buy things that you want, and money can certainly solve some problems &mdash; and if those problems are making you unhappy, then in that sense money can buy happiness. But research shows that <a href="http://www.wisebread.com/book-review-happier">happiness comes from other things</a>. Things like doing good work and having the respect of your peers &mdash; things you can't buy with money.</p> <h2>The Three Questions to Ask</h2> <p>So, when is throwing money at a problem the <em>right</em> choice? I tend to ask myself these three questions before I decide to throw money at a problem.</p> <h3>1. Is the Cost Bounded?</h3> <p>That is, can you know up front how much money you're talking about? Is it a one-time expense, or would you be taking on a new recurring monthly expense?</p> <p>It's easy to make the necessary cost-benefit analysis of a single payment. You have the information you need to decide if the cost is worth it &mdash; and if you can afford it.</p> <p>If you're looking at solving a problem by signing up for a new recurring monthly expense, you're potentially talking about a lot of money. You're also making the analysis a lot tougher.</p> <p>None of which is to say that recurring monthly expenses are never the right answer. Everybody has recurring expenses, and they're a perfectly reasonable way to cover the basic costs of living. But when you're talking about throwing money at a problem, you're usually talking about something less basic (and less long-term) than, for example, solving the problem of being homeless by renting an apartment.</p> <p>The &quot;being a happy person&quot; problem fails this test, because even if this or that purchase would make you happy for a moment, no purchase will make you happy forever. The &quot;being blackmailed&quot; problem fails it as well.</p> <h3>2. Will the Money Solve the Problem?</h3> <p>Arguably, this ought to be the first question. If money won't solve the problem, then there's no point in throwing it &mdash; or even spending it. But in my experience, this question is so often hard to answer, while the other is so often easy, I find it makes sense to start with the other. If you answer that one to your satisfaction, then you come to this one.</p> <p>What makes it hard to answer is getting a clear understanding of the problem.</p> <p>For example, your car has broken down and you can't get to work. That's a problem where throwing money at it &mdash; paying to have your car repaired &mdash; may be reasonable. But don't stop your analysis there. To come to the right decision, you need to be sure you're getting to the fundamental problem. In this case, the real problem is that you don't have reliable transportation.</p> <p>That's important, because making a needed repair does not always turn a car into reliable transportation. If this is just the most urgent of a list of needed repairs, maybe you need a different solution &mdash; a new car, or a good bicycle, or a bus pass, or an apartment closer to where you work, or a job closer to where you live.</p> <p>Most of the other problems listed above &mdash; terminal illness, failed relationship, midlife crisis &mdash; fail this question.</p> <p>That result is often heartbreaking, but it doesn't change the fact that whole categories of problems &mdash; medical problems, personal problems, political problems, social problems &mdash; often cannot be solved with money.</p> <p>Save your money for the problems money can solve. Solve those other kinds of problems (if they can be solved) on their own terms.</p> <h3>3. Is There a Good Chance You'll Get the Money Back?</h3> <p>This is really a secondary question, after evaluating the cost of solving a problem with money. If a problem is clearly solvable, and the solution is easily affordable, you're probably not even thinking about it in these terms. (If the problem is that you're out of flour, and there's a grocery store a few blocks away that will sell you nearly unlimited quantities for less than a dollar a pound, then buying a bag of flour doesn't really rise to the level of throwing money at a problem.)</p> <p>The third question becomes important when the cost of solving a problem with money is so large as to be a major factor in your budget &mdash; or especially if it will significantly impact your wealth.</p> <p>Probably the most common circumstance is when you've sent a check, but it has gone astray. If you're dealing with a reputable counterparty, especially one with which you have an ongoing business relationship, it's usually fine to just pay again. Eventually one of two things will happen. Your first check will probably turn up and whoever has gotten paid twice will refund the extra payment (or credit it to your next bill). Or, if it never turns up, the money will never have left your bank account. (This is a good reason to pay by check. If an electronic debit or money order goes astray, you'll have to involve your bank in tracking the money down.)</p> <p>Another common situation where there's a good chance you'll get your money back is when you have insurance. If your house burns down, your insurance company will probably pay necessary temporary housing expenses. If you're sick, your health insurance will probably pay necessary medical expenses.</p> <p>Many times while traveling on business, I threw money at a problem, confident that my employer would reimburse me for those expenses along with my other business travel expenses &mdash; a legitimate move, because the money was solving a problem for my employer as much as it was solving a problem for me.</p> <p>So sometimes, throwing money at a problem is the right move. But asking yourself these three question beforehand is always the right move.</p> <p><em>How do you decide if money is the answer to a problem? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/9-problems-you-cant-solve-with-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/hate-budgeting-how-a-percentage-based-budget-might-work-for-you">Hate Budgeting? How a Percentage-Based Budget Might Work for You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/73-easy-ways-to-save-money-today">73 Easy Ways to Save Money Today</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-emotions-costing-you-money-take-this-quiz">Are Your Emotions Costing You Money? Take This Quiz</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund">Change Jars and 8 Other Clever Ways to Build an Emergency Fund</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-smart-things-to-do-with-your-settlement-money">8 Smart Things to Do With Your Settlement Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgets problems spending spending strategy Thu, 04 Sep 2014 13:00:03 +0000 Philip Brewer 1202831 at http://www.wisebread.com Hate Budgeting? How a Percentage-Based Budget Might Work for You http://www.wisebread.com/hate-budgeting-how-a-percentage-based-budget-might-work-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/hate-budgeting-how-a-percentage-based-budget-might-work-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/office-work-183612960-small.jpg" alt="office work" title="office work" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>I've heard just about every excuse in the book for not making a budget. I've even excused my own way out of budgeting more times than I care to admit. What I've learned in the process is that just like diet and exercise plans or productivity goals, budgets aren't one-size-fits-all. In other words, the style of budgeting that helps you get your personal finances on track might be a disaster for someone else. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso">Build a Better Budget in 5 Minutes Flat</a>)</p> <p>One very simple and easy-to-follow budgeting style is percentage-based budgeting. Is it a fit for you?</p> <h2>First, What Is a Percentage-Based Budget?</h2> <p>Before we get into who a percentage-based budget is best suited for, let's take a look at how this type of budget works. That'll be easy, because percentage-based budgets are ultra simple. You earn a certain amount of money each month. You set percentage targets for how to divide that money up toward your current expenses, savings, debt repayments, fun, and any other category that's important to you.</p> <p>So what does that actually look like?</p> <p>One very common example of percentage-based budgeting is the 60/20/20 budget, in which 60% of your income is devoted to necessary expenses, 20% is devoted to savings and the remaining 20% can be spent on non-essentials (so, the fun things you want but don't really need). That's just one example though; you can break up your income in any way that works for you. The key is to prioritize your expenses (including debt repayment, if that's an issue for you) while still leaving something for yourself.</p> <p>So is this type of budget right for you? Here are five signs that percentage-based budgeting might just have your number.</p> <h2>1. You Earn a Variable Income</h2> <p>One of the biggest excuses against budgets I've heard is from people who earn a variable income. After all, if you don't know how much money is coming to you each month, how can you decide ahead of time how much to put toward various financial goals and obligations?</p> <p>The answer might just be a percentage-based budget. If you budget by percentages instead of fixed amounts, you help ensure that money always goes toward some long-term financial goals, rather than disappearing to discretionary purchases. The biggest plus, though, is that if you set aside a percentage for fun purchases, you'll always get to enjoy some of your money. And, the more you earn, the more you'll get to enjoy. How's that for motivation?</p> <h2>2. You're a Bit ... Anal</h2> <p>Do you eat the exact same breakfast or lunch every single day? Do you correct other people's grammar? Do you always follow the exact same routine at the gym? Then a percentage-based budget might be for you. Percentage-based budgets are for people who like rules. You don't have to think about it. You don't have to decide. You just divide your money out the same way, each and every month. For some people, that act, in itself, is very satisfying.</p> <h2>3. You're Into Instant Gratification</h2> <p>Some people are minimalists. They don't really feel the need to spend money on a lot of new things, they don't get much of a kick out of eating at restaurants and, overall, the things they enjoy don't tend to cost money. Saving money tends to come pretty easily to people like this.</p> <p>On the other side of the coin are the people who are really invested in going out for dinner with their friends, taking vacations, going to concerts, shopping, and doing whatever else makes them feel they are enjoying their money in the right here and now. Unlike the minimalists, they tend to see their money as a way to enjoy life, and for them, saving money can often take a backseat. If this sounds like you, consider a percentage-based budget. It will ensure that you'll get to spend a percentage of your income on whatever makes you happy every single month. Maybe you're already doing that anyway. The only difference is, with a percentage-based budget, you get to do it guilt free. (See also: <a href="http://www.wisebread.com/lifestyle-inflation-the-ultimate-financial-trap?ref=seealso">Lifestyle Inflation: The Ultimate Financial Trap</a>)</p> <h2>4. You Have a Lot of Financial Goals and Obligations</h2> <p>It's easy to just divide your money up and put it toward expenses and savings and then splurge on the rest, but many of us have financial lives that are much more complicated than that. There are credit card debts and student loans and taxes and mortgages and 401(k)s and IRAs and college educations to think about, right? As it turns out, the more complicated your financial life, the better a percentage-based budget might work for you.</p> <p>So, let's say you have devoted 20% of your income to savings. You can then subdivide this to cover retirement savings and an emergency fund, or saving for your kid's college and saving for a vacation. You can also adjust how much money is going into each account based on your needs. As you approach retirement, for example, you might want to make your retirement account a bigger priority. The great thing about using percentages is that they allow you to be flexible while still holding you accountable.</p> <h2>5. You Want to Live Within Your Means</h2> <p>In the world of personal finance, percentages are important, and percentage-based budgets don't just help to adjust your spending and saving, they also help you analyze it. After all, if you go to setup a percentage-based budget and discover that your expenses are equal to or exceed your income, you'll know that either your income isn't great enough to meet your needs, or that you're living way beyond your means. Either way, setting up a lifestyle that allows you to devote a percentage to savings each and every month is essential to long-term financial stability. Creating a budget based on percentages will help you see whether you need to practice more conscious spending, live on less, or earn more.</p> <p><em>Do you use a percentage based budget? How has it worked for you? Please share in comments.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/hate-budgeting-how-a-percentage-based-budget-might-work-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-problems-you-cant-solve-with-money">9 Problems You Can&#039;t Solve With Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-smart-things-to-do-with-your-settlement-money">8 Smart Things to Do With Your Settlement Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-scariest-big-purchases-people-make">The 7 Scariest Big Purchases People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgets percentage-based budget spending Mon, 14 Jul 2014 13:00:07 +0000 Tara Struyk 1157261 at http://www.wisebread.com These 5 Apps Can Fix Your Finances http://www.wisebread.com/these-5-apps-can-fix-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/these-5-apps-can-fix-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/finance-app-160888117-small.jpg" alt="finance app" title="finance app" class="imagecache imagecache-250w" width="250" height="137" /></a> </div> </div> </div> <p>They say money has wings and that it tends to fly away before we even realize it. That's a product of the time we're living in, unfortunately. The good news, however, is that some wasteful spending can be curtailed and prevented, and a great way to do that is to use something else that's a product of our time: Smartphone apps. (See also: <a href="http://www.wisebread.com/the-i-knew-it-benefit-of-expense-tracking?ref=seealso">The &quot;I Knew It!&quot; Benefit of Expense Tracking</a>)</p> <p>Our phones do a lot of things that we don't really need on a regular basis, but one thing that they're capable of that we'd do well to take advantage of regularly is tracking our expenses. There are a lot of great apps (free and paid) that allow us to do this without having to sit down at a computer or write in a checkbook. These are the ones worth looking at.</p> <h2>1. Mint</h2> <p><a href="http://www.mint.com/how-it-works/"><img width="130" height="230" align="right" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5123/Mint.jpeg" alt="" /></a>Mint is one of the most popular and widely used apps available for tracking spending, and it's completely free.</p> <p>The data itself is stored in a cloud account where it can be accessed by a number of different supported devices. Either your phone, Internet browsers, and even a Linux application can be used to access your data and track your spending.</p> <p><a href="https://www.mint.com/how-it-works/">It works</a> by keeping all your transactions and balances in one spot and can even pull data from your respective financial institutions.</p> <h2>2. Quicken</h2> <p><a href="http://quicken.intuit.com/personal-finance-software/quicken-mobile-app.jsp"><img width="130" height="230" align="right" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5123/Quicken.jpeg" alt="" /></a>Originally one of the more popular desktop applications for tracking your spending, Intuit's Quicken provides a <a href="http://quicken.intuit.com/personal-finance-software/quicken-mobile-app.jsp">mobile version of their software</a> as well.</p> <p>Some of the more helpful features include the ability to snap and store receipts, syncing with the desktop application, graphical GUI with tablet versions, and secure password protection with encryption.</p> <p>The mobile app is perfect if you're already familiar with Quicken's software and would like to use your smartphone to manage it.</p> <h2>3. iSpending</h2> <p><a href="http://itunes.apple.com/us/app/ispending-expense-tracker/id484100875?mt=8"><img width="130" height="230" align="right" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5123/iSpending.jpeg" alt="" /></a>Graphical reports and a sleek UI give this <a href="https://itunes.apple.com/us/app/ispending-expense-tracker/id484100875?mt=8">free app</a> a lot of appeal for the more casual user.</p> <p>Though it lacks some of the features that you'll find with other apps like receipt snapping or a desktop counterpart, iSpending is ideal for someone who primarily keeps data on their phone with no need to sync with other devices.</p> <p>It handles all the basic spending and expense tracking the average person needs, including custom spending categories, summaries and adding income/expense transactions.</p> <h2>4. Visual Budget Expense Tracking and Management</h2> <p><a href="http://itunes.apple.com/us/app/visual-budget-expense-tracking/id458571562?mt=8"><img width="130" height="230" align="right" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5123/Visual%20Budget.jpeg" alt="" /></a>Assigning budgets to individual categories, managing multiple accounts, accessing overview tools, and taking advantage of easy-to-read pie graphs can all be done with the free version of <a href="https://itunes.apple.com/us/app/visual-budget-expense-tracking/id458571562?mt=8">this awkwardly named app</a>, though it does limit you to 10 transactions per account.</p> <p>Purchasing the unlimited version is $5, which lifts the transaction limit and gives you full use of the app.</p> <p>It's also compatible with iTunes file sharing if you want to import spreadsheets.</p> <h2>5. Spending Tracker</h2> <p><a href="http://www.mhriley.com/spendingtracker/"><img width="130" height="230" align="right" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5123/Spending%20Tracker.jpeg" alt="" />The interface</a> is pleasant, intuitive, and easy to use, offering all the essential features for tracking your spending.</p> <p>Budget mode, spending categories, and reports are all available to you without the pro upgrade, which is only $2.99 regardless.</p> <p>If you do upgrade, you'll have the app ad free and will be able to set up repeat transactions and export transactions. Otherwise, the app is completely functional without you having to pay any money.</p> <p>It's available for iOS, Android, and Windows phone.</p> <h2>Making It a Habit</h2> <p>Expense-tracking apps are valuable tools in your hand, but they'll only make a difference if you make a habit of using them. Work it into your daily routine to either download or manually input your income and expenses of the past 24 hours. (See also: <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget?ref=seealso">10 Sites and Apps That Help You Track Spending</a>)</p> <p>If you keep it up, you'll eventually be able to use reports and graphs to get a clearer picture of how you're spending your money and where you need to cut back or where you could save. It's a time commitment, for sure, but it won't get much easier than being a few swipes away in your pocket. And, let's face it, it's still easier than writing everything down in your checkbook. All hail technology!</p> <p><em>Do you have an expense-tracking app that you like to use? Has it changed the way you handle your finances? Let me know in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/these-5-apps-can-fix-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of">10 Big Expenses You Can Easily Get Rid Of</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-no-budgeting-required">How to Manage Your Money — No Budgeting Required</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-apps-for-busy-working-parents">The 5 Best Apps for Busy Working Parents</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Productivity Technology apps budgets expense tracker expenses spending Tue, 01 Jul 2014 13:00:03 +0000 Mikey Rox 1150925 at http://www.wisebread.com How to Have an Above-Average Life for Below-Average Prices http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-have-an-above-average-life-for-below-average-prices" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/wine-shopping-87333040-small.jpg" alt="shopping" title="shopping" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>The average person is stuck paying the average price for everything. But you're not an average person. You're a unique person. Your choices can boost you above average.</p> <p>A while back, I happened across a chart of &quot;average apartment prices&quot; for different cities, and I was surprised to find that I was living in an apartment that cost quite a bit less than average (and it was a great apartment). (See also: <a href="http://www.wisebread.com/studio-apartment-living-a-5-point-survival-guide?ref=seealso">Studio Living: A 5-Point Survival Guide</a>)</p> <p>It wasn't a matter of great bargaining either &mdash; I have no particular skill at bargaining at all. My wife and I found our great apartment by investing some time and effort. The main things we did were:</p> <ol> <li>Think about what we wanted in an apartment.<br /> &nbsp;</li> <li>Research how those features &mdash; and the features we <em>didn't</em> care about &mdash; affected the price of an apartment. Because everything affects the price of an apartment &mdash; size, floor plan, whether it allows cats, is on a bus line, has washer/dryer hookups, covered parking, a balcony, and so on.</li> </ol> <p>Once we had some data, we were able to pick an apartment that lacked some features that we didn't care about, but that other people are willing to pay more for. Since our apartment didn't have those features, it was a &quot;below average&quot; apartment that rented for a below average price &mdash; even though it had all the features <em>we</em> really cared about.</p> <p>This strategy doesn't work for everything. It only works for things that are unique. Things that are all the same &mdash; a gallon of fuel, a pound of sugar, a month of basic cable &mdash; are going to cost whatever they cost. Things that are unique &mdash; a house on the beach, a used car, a painting by a local artist &mdash; are going to have wildly different prices.</p> <p>You can take advantage of this fact to get a much better standard of living than the average, because while the average person has to pay the average cost for an average item, all that matters to you is the price of the <em>cheapest one you really like</em>.</p> <p>Here are two strategies to focus on.</p> <h2>Emphasize Unique Items</h2> <p>The more of your budget that goes for ordinary mass-market items just like everybody else, the more of your budget you're going to be spending on average (and averaged-priced) goods.</p> <p>Where the mass-market item is cheap, this is okay &mdash; you're not getting an above-average standard of living, but at least you're getting low costs.</p> <p>But the more of your budget where you can satisfy your needs with unique choices that are <em>better</em> than the mass-market choices, the more opportunity you have to live at an above-average standard of living for a below-average cost.</p> <h2>Emphasize Long-Lived and Expensive Items</h2> <p>The extra time and effort involved in finding the above-average choices really pays off when you find something that you can use for a long time.</p> <p>Anything that you can buy once and keep for years is a great candidate for the extra effort of finding one that's above average.</p> <p>Our apartment, that I used as an example above, was a great deal the very first year. But the real win for us has been that it continued to be an above-average apartment at a below-average cost year after year. The effort we put into finding it really paid off.</p> <p>Other things don't justify the effort. Of course, sometimes you'll find an above-average item at a below-average price without a lot of extra effort. We once found some locally grown organic stone-ground whole wheat flour for about <em>half</em> of what ordinary flour cost. We bought all we could carry, and we really enjoyed the bread we baked with it &mdash; but it only raised our standard of living for a few weeks.</p> <p>Of course, making your things last is great even if you didn't get an above-average deal on them.</p> <p>So, get strategic. Look at the things you buy and identify the ones that are unique. From within that list, start with the items that you're going to keep for a long time, and the high-dollar items. That's where the extra investment is going to have the most impact on both your standard of living and your cost of living.</p> <p><em>How have you made strategic purchases to boost your standard of living without boosting your costs? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/how-to-have-an-above-average-life-for-below-average-prices">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of">10 Big Expenses You Can Easily Get Rid Of</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-5-apps-can-fix-your-finances">These 5 Apps Can Fix Your Finances</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">Build a Better Budget in 5 Minutes Flat</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Lifestyle budgets spending standard of living strategic spending Fri, 30 May 2014 08:24:25 +0000 Philip Brewer 1141050 at http://www.wisebread.com