Focusing on Your #1 Financial Priorities for January

So here we are again – a brand new year is in front of us. As is tradition, the excesses of the festive season are swiftly followed by the cutbacks – and sometimes the worries – of January. If you are now counting the cost of one too many splurges in December, now is the time to do something about it.

Your options are limited of course. You can’t return everything you bought in the run-up to Christmas. Gifts for other people and food items will be long since enjoyed and used, so you have to accept whatever you spent as fact. Now is the time to focus on how to pay for it all if you are dreading the January credit card bill that is about to fall through your letter box.

Here are some tips that should help you through this period.

Focus on housing costs first

Some bills are more important than others. The #1 priority for everyone should be paying your housing costs. Nothing else matters if you can’t keep a roof over your head. For most of us, this won’t be the reality we’re faced with. However if you know you’ve got financial problems, make sure you start with getting your mortgage or rental payments sorted out.

Cut out all unnecessary expenses

Be brutal in January. What could you honestly do without this month? Oftentimes the excess of food we tend to splurge on at Christmas is still hanging around now. Store cupboard items and other things with a long expiry date that didn’t get used over the festive season can be brought out now. They will help you reduce your shopping bill this month. Brown-bag your lunches, avoid the coffee shop at work, avoid the January sales, do whatever you can to reduce your outgoings this month.

Need a new card?

If you know you have a credit card bill looming at the end of the month, consider how realistic it is that you’ll clear the whole thing. If you don’t think you can, consider swapping the balance to a 0% interest deal to pay it off with the minimum of fees.

Keep up these great habits throughout 2015

If you wanted to start the New Year by saving instead of spending money, you can still start in the right way. Once you have taken care of your bills by trying to reduce outgoings as much as possible, you can focus on the months still to come. Think about putting away even a token amount of money each week – you’d be surprised how optimistic you’ll feel even by doing this. Small habits can easily translate into bigger savings as you go along.

Of course your first priority will be to make sure you can start the year in as good a financial shape as possible. So make sure you know exactly where you stand now January is here. The steps above will help you get to where you need to be.

How to Invest Money by Avoiding Sales Fever

Many stores hold sales both before and after Christmas to try and lure shoppers in with the promise of great discounts and bargains. However this is not just a time of bargain shopping – it is also a time when you could potentially blow a lot of cash on things you don’t really need.

If you’ve worked hard during 2014 to make sure you’ve been able to save up and invest money in places you’ve never done before, it can be very tempting to splurge once you get to Christmas. This is something we talked about last week. Yet it is also very easy to get pulled in by the many sales tactics that are used to ensure people come in and spend money – whether that’s online or offline.

If you know you’ll be tempted, perhaps the following things might be worth thinking about.

Do you really need it?

If you spot a bargain, take some time before you actually buy it. If you’re in a store, pick it up and carry it with you in case you do decide to buy it. But give yourself time to consider whether or not you really need it. Many sales play on people’s desire to feel like they’ve got a bargain. These techniques could work on you whether you like it or not, so try and cut down on the impulse buys by thinking practically instead.

Look at the actual cash

If you do spend in a store, look at the money you’d be spending instead of paying for items on a debit or credit card. Seeing the actual cash means you get a better idea of how much you’re parting with. It can be a good method of restricting what you buy or helping you realise you don’t need it in the first place.

Set the cash aside

If you successfully refrain from buying something, set the cash aside you would have spent on it. Invest it instead, or simply keep it in a jar for the time being. This will help you realise what you’ve saved. When the amount builds up you can always put it in a savings account.

Window shopping or no shopping at all?

Is it really possible only to window shop when you’re out and about and it’s sales time? Few of us could do this successfully. If you know you’ll be tempted, plan something nice to do at home instead. Maybe arrange a nice dinner with the family, or consider doing something that doesn’t involve going out.

The main thing to remember is that you do not have to participate in any sales before or after the festive season. While it can be good to get things if you are looking for affordable gifts, these sales can lead to unnecessary spending. If you have strict investment and savings plans, these can very easily be wrecked in a short space of time. Make sure you don’t wreck your plans as we ease into a New Year.

Tempted By a Last-Minute Raid on Your Savings?

You’re nearly there now. With less than ten days to go until Christmas is upon us once again, you may have planned and budgeted for this moment over much of the past year. Now you’re nearly there… and yet this eleventh hour, so to speak, can be more tempting than the rest of the year put together.

You may have had a savings plan in place since January as part of last year’s New Year’s Resolution. If you have, you’ve already gone through weeks and weeks of planning, saving and budgeting. You may well have saved up plenty in your savings or investment accounts over the past few months. Whatever your plans are for that cash, chances are those plans don’t include Christmas splurging. Ideally you’ve got a separate budget for that.

But then Christmas is actually – finally – just around the corner. Lights are twinkling, the festive trees are everywhere, people are caught up buying presents, and everyone is busy. It’s great to be in a position where you’re getting excited about the festive season and enjoying everything that comes with it. Yet one of the things that comes with it for many people is the stress of figuring out what to buy and how much to spend.

Again, planning can get you out of trouble here. However it’s still easy to be tempted to dip into those funds you’ve steadily been building up and investing over the past 12 months. When this happens you can wreck all that good work and those good intentions in moments. Especially if you happen to have a credit card handy.

If you’re in this situation now and temptation is beckoning in some way (regardless of whether it’s in the form of extra gifts, more food or simply ‘stuff’), take a moment to think. This is the best way to ensure you don’t spend January and beyond trying to put all your hard work back together again. It is incredibly easy to wreck your good intentions in moments if you’re not careful. Make sure this doesn’t happen by focusing on everything you have achieved financially during 2014. This should help ensure you don’t blow your hard work in a short space of time. Think about all the individual financial decisions you’ve made and the sacrifices you’ve made to get to where you are now. Think how hard it would be to start over from that same stage again. Do you really want to blow it?

Being able to keep a level head financially at this time of year is crucial. Those who don’t end up with a challenge come January. This challenge normally involves how they’re going to figure out how to pay their credit card bill and stay in the black at the same time. If you want to keep on going with your good efforts, let that temptation naturally dissipate now. Leave your savings and hard work untouched and celebrate the success of your resolution now. Then you can keep on going into 2015 too.

How to Properly Manage Your Money

If you want to invest more money (or even invest anything at all) you have to know how to manage the money you have. If you earn $3,000 a month and you spend at least that, you shouldn’t be surprised when you realise you don’t have anything left to save.

In reality it doesn’t matter how much you earn: the part of the equation that matters most is making sure your outgoings don’t outstrip your income. You have to make sure you always spend less than you earn if you want to keep some back to sink into an investment (whatever it may be).

Properly managing your money starts with budgeting. It also starts with reducing your income as much as you can. It might seem overly picky but it works well to account for every cent you spend. If you pay for everything using a credit card and then pay it off at the end of the month you can end up losing track of what you’re actually spending. This doesn’t bode well if you’re trying to free up some cash to invest in a savings vehicle of some kind.

Of course we’d all like to earn more and there are plenty of ways to do just that. However most people would find it easier to reduce their outgoings before doing anything else, so it makes sense to focus on this first.

Use budgeting tools

If you really want to manage your money well you can make use of a good budgeting tool to help you along. There are plenty of these available online or as software options, so find one that suits you and use it. It might take a while to get into the habit of using it regularly but you’ll be surprised how much information you can get from it.

Don’t make the mistake of thinking small purchases don’t count either. You’ll often find these are the easiest things to strike out of your budget – and they can add up over the course of a month as well. Think about the odd coffee here and there, not to mention a newspaper or maybe a magazine. Even the odd croissant or other treat can add up if you have enough of them over an entire month.

By budgeting and taking account of what you spend where, you can keep track of where each cent goes. This in turn highlights how you can start freeing up some additional cash to put into an investment of some kind. Even if all you do is set up a basic savings account and start putting some cash into that, it could make a world of difference to where you stand financially at the moment.

As you can see, there is a lot to focus on here but budgeting sits at the very top of your to-do list. If you really want to invest some cash, start managing your money as best you can from today onwards.

How Far Can You Trim Down Christmas Spending?

It’s that time of year again: there are less than 6 weeks to go until Christmas and more and more people are starting to spend on the gifts they’ll give to friends and family members.

It’s also the time when some will be busily making homemade gifts that won’t cost as much money. Many would say the festive season has become a huge commercial exercise to bring in money. They’d be right. Certainly, if you’ve been saving and investing hard all year this is the one time when you might be tempted to put your own investment plans to the side. You’d do so in the spirit of generosity of course, but that generosity leads many people to start the New Year in debt.

If you don’t want this to include you, it’s time to consider how to create a memorable Christmas without going into debt at the same time.

Can you trim down your food spending?

In most cases the answer will be yes. Even if you’re catering for a large number of guests on Christmas Day you can still take steps to reduce the spread you lay on. Most people buy too much over the festive period and a lot of things are thrown away. Pre-plan as much as you can and look for deals to keep costs down.

Can you trim down the amount you spend on gifts?

Again the answer is usually yes. You can set budgets with everyone you buy gifts for, or alternatively consider the homemade gift route. Some people shy away from this but there are great gifts that are highly personal and don’t cost much either.

If you can knit, opt for scarves and hats. If you are good in the kitchen, homemade mince pies, Yule logs and other treats go down a storm. Either that or look out for some pretty jars and layer up some seasonal recipes in them, complete with instructions for the recipe attached. Another great idea is a hamper or basket you create yourself. Hampers are great gifts and they’re a lot cheaper (and more personal) to put together yourself.

Plan ahead

Planning your budget, your time and your list of things to do will ensure you spend less. No doubt you set investment goals earlier in the year; they’ll probably still include putting money away in December. If this is the case don’t be tempted to fail at this late stage. Instead, make sure you know what your income will be between now and Christmas and work with that – once you have taken all your deductions off of course.

Even if you haven’t even started to think about the festive season yet, you still have several weeks to make the most of saving money and still planning a great Christmas. Many people opt to go down the homemade gift route every year once they’ve tried it once. It has a tendency to get really popular among others too – and since many of us are on tight budgets it could be the best idea yet.

Saving Money By Choosing the Right Credit Card

Do you have one or more credit cards with an ongoing balance on them? If you do you could free up more cash each month by managing that balance properly.

No one should be paying a hefty amount of interest on their credit card balance each month. In fact you could end up paying far less than you are right now, simply by shopping around for a balance transfer offer. This gives you the chance to transfer your existing balance onto a new card, often with 0% interest on that balance for several months. This could be anything from three months through to a year or more, depending on the deal. There will likely be a fee for transferring the money but if you do your sums the fee could well be much lower than the amount you would have paid in interest throughout the same period.

What does this mean for you in the long run?

It means you can pay the same amount of money each month to reduce your credit card balance faster. We’ve said before that reducing debt is far better than saving money, because you’ll never earn as much in interest on your savings as you would pay on your debts. This means the sooner you can get rid of your debt on your credit card, the sooner you can put that cash towards your savings plans.

Supposing you don’t have any outstanding debt on your credit card?

If this is the case, it’s a good place to start from. You may still benefit from swapping to another card though. For example you could find a card that offers cash-back or points to collect if you shop at one or more particular stores. If you make all your purchases on that card and pay the entire balance off at the end of the month you won’t pay interest. You could also earn from the card because you’ll get the cash-back or other perks as a result of using it.

Credit cards are often seen as problematic. They can be if you don’t use them responsibly. However if you focus on using them for your own advantages as discussed above, you could actually make them a key part of your savings strategy.

The key is to make sure you are in control of your credit card use. The ideal way to use one is to pay for everything on it during the month, earn cash-back or some other perks as mentioned, and pay it off before any interest falls due. This means you will automatically be earning something from it each month instead of having to pay interest on it.

Of course getting rid of outstanding balances is the most important step to take prior to being able to use a credit card like this. Make this your first step and you will be taking control of your finances from this moment on. You won’t regret doing it.

Planning a Three-Month Emergency Fund

No one wants to find themselves without a job, especially if they have been settled into a position for many months or even years. Unfortunately it can and does happen – and very often there is little or no warning before it does.

All you can do in this situation is to prepare in advance – just in case it happens to you. This means putting together an emergency fund that allows you to carry on paying the bills for a few months before having to worry about there being no money coming in.

How big should an emergency fund be?

It depends. Everyone’s fund should be different because it will depend on your outgoings. Once you have a list of those outgoings you have something to work with. It might be an idea to write some ideas on how to trim those outgoings if you ever needed to do so. For instance a cable package is a luxury we could do without if need be.

How long should your fund provide a cushion for?

The minimum length of time according to accepted thought is three months. Ideally six months would be superb, but three is the minimum. This gives you enough time to bounce back and start looking for another job.

When should you start saving for your fund?

Now – it’s as simple as that. The obvious question is what you should do if you were to lose your job before you had your three months’ worth of cash saved up. In truth there is always the possibility you could be out of work before you had the required amount put by. Even if this did happen you would still have more cash set aside than if you hadn’t started the fund in the first place. So you’ll always be in a better position than you would otherwise have been.

Where should you put the money for your emergency fund?

Put simply, this is not the time to go looking for an account that provides an excellent return if you tie up your money for a period of time. By all means look for an instant access account that provides you with the best rate of interest you can get, but it won’t be too much. This isn’t the point of the account anyway; the point is to be able to access it quickly should you ever need to do so.

It’s not just cash you’re setting aside – it is peace of mind

Losing a job is a stressful and upsetting experience, especially if you have no idea it is going to happen. In this situation you can feel one of two ways:

  • Stressed, upset and worried about how you’re going to pay the bills
  • Stressed, upset but relieved you have a three-month breathing space

Let’s face it you’re not going to recover from the shock overnight. Your financial cushion will help support you while you recover and while you look for other sources of work. It’s the best cushion you could hope to have.

Smart Ideas for Paying Off a Credit Card Balance

Credit card balances can really eat away at your funds every month. If you don’t have a way to tackle ongoing balances it can be tricky to even think about saving. In fact you should always focus on getting rid of debts like these before you think of investing anywhere else.

We’ve put together some tips to help you save money to put towards reducing your credit card balance.

Look for a no interest transfer deal

They do exist and if you can get one you’ll be able to reduce your balance far more quickly. You’ll potentially save a fortune in interest as well. Look online for good deals and watch out for charges on a balance transfer. It might be better to pay a slightly higher charge if it gets you a longer interest free period than to pay a smaller fee on a shorter period of time.

Pay off the maximum amount you can each month

That balance can be reduced faster than you think if you put your back into it. However it can be tempting to pay off the minimum and free up some cash to spend elsewhere. Don’t do it. This is your opportunity to free up as much cash as you can to help you pay off that balance.

Let’s say your minimum balance each month is $50 after transferring to a no interest deal. Before you transferred you were paying, say, $70 a month. Now is the time to continue paying $70 a month minimum to reduce that balance even faster.

Look for ways to funnel extra cash towards your payments each month

Think of this as a competition. Can you pay off the entire balance before the interest free period ends? Since you can get cards with interest free periods that last for a couple of years or so, this is possible to do. Look at all the ways you can generate a little extra cash. Five dollars here, ten dollars there – it all makes a difference. Switch to home-made lunches instead of eating out every day and put the cash towards that payment. Switch energy providers and cell phone providers and save even more. Look at every possibility to determine how much more cash you can use to pay off a little more of that balance each month.

Added incentive – the feeling of achievement you get as the balance reduces

Here’s a bonus for you. You’ll feel far better when you realise how easy it is to start chipping away at that balance. The lower it goes the more determined you’ll be to put money towards the next payment. In addition you’ll notice you’re adopting smart tactics for saving money and forming new healthier financial habits too.

And when the day comes that you make the final payment and become debt-free on your credit card, you can celebrate like you’ve never celebrated before. Just keep the spending to a minimum when you do so!

Why is Getting Rid of Debt So Important?

Wanting to invest money is an admirable desire to have. However it may not be the smartest thing you could do if you have outstanding debt. For the purposes of this article we won’t focus on mortgage debt since this is really a different area of concern. With that said you can overpay on your mortgage (if your particular mortgage allows you to) and pay it off in full a lot sooner than you would have done otherwise.

Here though we are focusing on unsecured debt such as that accrued on credit and store cards and perhaps unsecured personal loans. This type of debt can have high interest rates that will suck cash out of your bank account more easily than you may at first believe. If you’re paying 18% in interest on an outstanding balance you shouldn’t be looking for suitable investments to focus on. Instead you should be looking for ways you can reduce the outstanding amount you have on your credit or store cards.

Why is this the first step?

The reason is simple – even the best investment won’t pay more than 18%. If it promises to it is likely a scam. This means you need to get rid of the debt before you can even think about searching for suitable investments.

The first thing you should do to help achieve your goal is to start paying as little in interest on these debts as possible. This might mean consolidating several debts into one. Look around for a credit card that offers zero per cent interest on a balance transfer. You may be charged a fee to transfer the amount; furthermore the amount of time you get interest free can vary. So you have to balance the two areas together to make sure you can get the results you want. It might be better to pay a slightly higher fee to get a longer interest free period.

How much can you pay off each month?

Ideally you should divide the amount outstanding by the number of months you’ll get interest free. Pay off the resulting amount every month and you can be clear of the debt by the time the interest free period ends. This is good news for you and gives you a target to shoot for. At worst, if you haven’t cleared all the debt you’ll have a lot less to pay off than you would have done otherwise.

The money you’ll save in interest can be put towards paying off the debt, so don’t be tempted to stick with a minimum payment. Funnel as much spare cash as you can into paying off your debt so you can get rid of it. Once you’ve done that you can focus on looking for investments that will earn you interest. It is definitely something to shoot for if you haven’t yet put any investments together and you’re struggling to get rid of some debt instead. In a few months’ from now you could be in a much stronger position.

Not Losing Money is Just as Important as Growing It

When it comes to personal finance and the idea of amassing more cash, many people make the mistake of trying to find the investment vehicle that will pay them the most money. While this is admirable in a sense, it isn’t the best route you could take.

You see, some of these people will be leeching money at the exact same time they are looking to invest some elsewhere. Every dollar you lose is a dollar you could be investing elsewhere.

You can lose money in more than one way too. For example you can lose money simply through spending it in frivolous ways. Even if you only blew five dollars a week on odds and ends you really didn’t need, you’d be throwing away twenty dollars a month that could be put into an investment of some kind. Another way to lose money is to put it in a high-risk investment you aren’t comfortable with, something that has a high potential of failing. Very often it is safer to stick with much lower risk investments that will build up your cash over a longer period of time. We know the old story about fools and their money, and it has become an old chestnut for a very good reason!

So if this is the time you start investing for your future, think about the idea of not losing any of your money just as much as you think about investing it. This is an idea that is alien to a lot of people. Many of them think it is better to focus on looking for the biggest and best investment that will deliver profits in the shortest possible time. In reality however it is often better to choose a safer investment plan and to sink money into it regularly. This will help prevent you from losing money and it will also encourage you into better savings habits.

You see, when you become more aware of where your money is going you will see it becomes easier to carry on saving money safely. It becomes a habit and that habit can ensure you are able to carry on building one or more good investments throughout your life. Golden Eagle Coin investments have much to offer the avid reader and enthusiast, check them out.

It might seem difficult to believe you can get great results simply from focusing on the task of not losing your money, whether it be in small or large amounts. However it is such a straight forward method it is worth trying it even for just a short time, to see how it works for you. In reality though this is a method you should employ for life. The more you realize how logical this idea is and how easy it can be to apply, the more benefits you can enjoy as a result. This works even more over the long term as well, since the advantages tend to add up. Not losing your investment and building it up gradually thanks to compound interest – now that’s a great way to start building up your finances more positively.

Which Investment Goals are More Important?

Every time you set a new investment goal it will have some kind of importance to you, otherwise you wouldn’t have set it up in the first place. However most of us have more than one goal in this area of our lives, and that makes it important to gauge which goals should take priority.

There are no firm criteria that can be used to figure out which goals are most important to you. Sometimes it might be how near the goal is to being achieved that’s important. Other times it might be the scale of the goal and the reason you have set it in the first place.

For instance, your retirement plans are exceptionally important so you’ll want to set a goal to save for them. This is a large scale goal but it may not hold as much importance time-wise as a goal set to save for the vacation of a lifetime. If the vacation is in 12 months and your retirement won’t be for another 20 years, clearly the vacation will take precedence in this case. However it doesn’t mean you should overlook the importance of your retirement funds for the next 12 months.

The truth is that investment goals will differ for each and every one of us. That’s why there is only so much advice you can read on the subject. The best bet is to make a list of your goals and to consider each one in turn to assess which one is the most important to you at any one time. In addition you should remember that priorities can change depending on where you are in your life. As you achieve one goal it will disappear from your list. Perhaps another one will appear. Perhaps the priorities will alter as well. There are all kinds of reasons why your list might change as you go through life: the main thing to remember is the importance of having a list in the first place.

The other good thing about having a list is you can refer back to it as often as you need to. There is something about the act of writing down your goals that makes them more solid, more real in your mind. It’s fine to think about them but you tend to find those thoughts go to the back of your mind and are forgotten about as a result. You don’t want this to happen. By writing them down you can assess their importance more easily, and this means you can take the necessary steps to ensure you always know where you stand.

So if you are wondering which of your investment goals should go to the top of the list, you now know how to do it. You will also find it easier to spot any potential goals that haven’t made it onto the list at all yet. All in all this should make the process of financial goal setting much easier for you.

 

Don’t Just Think Savings Goals: Write Them Down

If you have savings goals planned in your head, you’re doing better than some other people who fail to think of any at all. However you could be doing better still – and all you need to do it is a pen.

This might sound strange but there is a world of difference between thinking about a particular goal (in any area of life) and writing it down. We all know our thoughts are like so much flotsam – they float around up there between our ears and get lost and forgotten so easily. Compare this to a thought that is committed to paper or to a document saved on your computer if you prefer. Ideally you’ll do both and keep copies wherever you are most likely to see them.

Here’s an interesting fact I came across the other day while researching goals. According to one study, if you write down your goals you are 42% more likely to make them happen. Isn’t that amazing? It’s a huge difference when you consider that most goals aren’t reached. Simply writing those goals down can boost your success rate.

Writing down your goals also makes it a lot easier to specify exactly what you want to achieve. For example, let’s say you want to invest more money in the next few months. You could write that down as your goal just as it is, but it isn’t very specific. This is where writing things down can really boost your chances of success. When you see that goal in writing you’ll be motivated to specify exactly what it is you want. You need to look at a time scale to work in. You need to decide how much you want to invest. You also need to think about what kind of percentage interest you want to earn on that investment.

As you can see, written goals make it a lot easier to get the specifics down. You can see them in concrete form and adjust them as necessary. This is far easier than trying to keep them in mind – particularly if you have more than one goal you want to achieve. It doesn’t work well to try and aim for too many goals at once, but there is nothing wrong with aiming for a half dozen or less. Now think about having six goals all in place at the same time – and not writing any of them down. It would be near impossible to try and focus on them all so you could work towards attaining them one by one.

If you have goals in mind – whether they are focused on financial aims or anything else – you can probably now see how important it is to write them down. In fact why not grab a pen and some paper now and get them down in written form while it is still fresh in your mind? Keep them close by and make sure you refer to them constantly. You might be surprised at the results.