Building Your Emergency Fund

When times are good we all feel like the money will always be there for us. We get used to that regular paycheck and almost feel like we don't just earn it we also deserve it. So we spend to our hearts content until the dreaded day comes when the paycheck stops. We think it will be easy to just go to the employment agency show them our resumes and we will be back making more money than ever. Nothing could be further from the truth. The average time someone is unemployed can last a very long time. You may be shocked to find your skills are not as valuable anymore, or worse, your skills have no value! This is where you should have saved at least a years worth of income in your savings account to get you through this hard time. Failing to have an emergency fund is like living in a house made out of straw. The next strong gust of bad times will land you out on the street. So figure out how much money you would need to survive for a year without work and get started on saving that money before you buy that next cup of gourmet coffee.

Commuting on a Budget

If you live in a big city there can be nothing worse than trying to get to and from your place of employment. I used to take public transit buses, trains and subways to get to work for many years. My employer paid for it so I always made sure to take advantage of this great benefit. But for most people its not an option. In most cities, public transportation is a nightmare. The buses may run only every hour and there is no guarantee it will even show up. The most effective means of transportation is still having a car. When you are just starting out in life it is usually best to get a car that is cheap to buy and cheap to maintain. You could buy a car from a private owner but beware. You really have no idea what problems this car has and it could end up being more trouble than its worth. If you go to a used car lot just pay attention to the most crucial things such as how many miles the car currently has on it, the year the car was made and the quality of the interior. Any used car you buy should not have more than 50,000 miles on it. Why? Because most cars began to develop major repair problems at around 75,000 miles and you want something that is going to last you for at least 5 years or as long as you can save for the next car. Also be sure not to buy a car that gets less than 25 miles to the gallon. Gas is pretty expensive these days and you don't want to be filling up a $60 tank of gas every other day. In the end its not a fashion statement to have a car as this point in your life it's about getting to work and getting paid.

Excellent Credit Can Get You Great Cash Back Deals

I went online and read this great article about a cash back offer of 1% cash back plus additional 50% at the end of the year for just making purchases with their credit card. This is way better than the 1% I am currently getting for gift cards. They also pay you $100 bucks if you spend $500 in the first 3 months of getting the card. Be sure to shop around as there all all sorts of great deals right now because so many people are using debit cards instead of credit cards. So if you have excellent credit and always pay your full balance off every month I recommend taking a look.

Credit Card Points

I've never paid much attention to credit card points. I usually used the credit card with the highest limit. Or just whichever one I happen to pull out. You use a certain card and you are given a point for every dollar you spend. Once you have accumulated thousands of points you can buy a gift card or some item through the credit card company website. I always thought it was sort of a gimmick. But I recently discovered it really does pay off! You have to do your research though. I found that my Bank of America credit card didn't value the amount of points as high as Citibank's card. B of A was almost 50% lower which made me realize I should be only using Citibank from now on. So by the end of the year if I accrue $5,000 in spending I get a gift card for $50!! All because I used my credit card to buy groceries, car maintenance, and xmas gifts. Look into the benefits offered by your credit cards and see which one is best for you!

Choosing a College

So you have finally made it to the point where you are ready to get that higher education? The dream of going to college is a big one. Be sure you choose a specific school for the right reasons. You may hear people say a school is good or bad or the best. The school you choose will effect the future and that I can guarantee. What you may not consider is the cost of school. Some schools are a few thousand dollars a year and others are tens of thousands of dollars a year. Student loans are great and you don't have to start paying them back until you graduate. The downside is that the average person ends up paying those loans for the rest of their lives. They pick an Ivy League school and soon find out they could have gotten the same education they wanted at a state school. It comes down to your goals. Do you want a degree to obtain a certain job? Or are you trying to learn a certain skill? Maybe you just love learning? It's really different for everyone so choose wisely and don't focus too much on how fancy the school is. In the end it is about what you want and what you can really afford.

Roth IRAs are Awesome!

It sounds counter intuitive to think that you should take the hard earned money that Uncle Sam has already taxed and stick it in a Roth IRA. I mean you already put money in a 401k that hasn't been taxed yet and hurts you so much less because it's been taken out of your grubby little hands before you saw the final paycheck amount you get to stick into your bank account. Your instinct says, "This is my money and why should I give less money to retirement when it could have been more money given before it was taxed?". Well there is a very good reason. There is NO tax on your Roth IRA when you cash it out. That's right nothing at all. Its a real dream scenario. Compare it to your 401k which is taxed just like income with you cash it out in your golden years. It's nice but not as good as tax free. Now of course you did pay taxes on that money when you first put it in the Roth IRA but 20 years from now that money is gonna grow and grow. That's big money out of Uncle Sam's hands and right into yours. So look into a Roth IRA and start squirreling away those nuts!

Using Coupons

I love using coupons. They save you money just by taking the time to review them, cut them and take them with you when you shop. I suggest sticking with coupons that are going to save you at least .50 cents. Anything less, for me, isn't worth my time and effort. Also consider if you really want that specific item or if a generic will suffice. Usually the generic is cheaper but there are some types of items where you only want the name brand. I've purchased generic peaches and found them not as fresh as the name brand. So I stick with name brand. When it comes to re-fried beans I just go with generic because I add so many other things to my re-fried beans when I cook them so it doesn't matter much on the level of quality. Also, watch out for the buy more than one coupons. If you don't use it quick enough it will spoil plus a lot of coupons are for junk food that you shouldn't be eating so much of. My favorite coupons are for haircuts and restaurants.

Beware of Credit Cards

I only use one credit card. I used to use three or four but I found it so difficult not to overspend. There is a sense that the credit limit you have been given is your own money. Well its not. I wish. And everything seems to go along just fine. You spend the credit card's money and get to keep your own until the end of the month. Then you look at the credit card statement and are shocked at how many zeros there are in the balance due. The worst situation comes when you finally lose that job you really never liked in the first place but you never really saved enough money to last you more than a couple of months. That is when you yell "help!". But it's too late for that and here come the minimum payments and the 17% interest charges. As if that wasn't the worst of it you find yourself spending even more with the credit cards trying to stretch out your savings. The hole of debt grows faster than you can fill it and then you go into denial.

So you know the rest of the story. Take a lesson from the millions of people who have made this mistake. Don't think of a credit line as your money. It is NOT. So save at least six months of your money so you can pay your bills when you lose your job. You will be so glad you did.

Where Should I Invest My Money?

So you've finally saved some money and are shocked that it only earns .1% interest per year at your local bank? Don't be. Interest rates are at all time lows right now plus there is zero risk involved in letting your money sit at a big bank that is FDIC insured. The problem is that the cost of living goes up every year and it rarely goes up as little as .1%. So you are actually losing money every year it sits there because its value is declining. So what do you do?

The best thing to do is to take inventory of what your goals in life are. Do you want to learn a new skill? Invest in your education. How about your own business? Maybe you have a passion for something that interests you and you have learned it can make some money? How about the stock market or real estate? These are some of things that are the foundation for your financial security and growth of your future income. The options are endless but they all involve risk and effort. So don't put all your money in one basket and take your time.

Keep a savings account, a checking account and build that retirement account but also expand into other areas. In the end we all want our golden years to be the best years of our lives.

Where is Your Money?

You will never know how to make and hold on to your money if you don't know where it is. I know you probably have a checking account and maybe a savings account but what about your car or your house. All of these things are money transformed into a physical object. Take the time to make a list of all the things you own and the value of them. Then make a list of all the money you owe and discover your net worth. This will give you a better of idea of your financial health. It's easier to know where you are going when you first find out where you are at.