TIP: Two ways to make the biggest impact on your credit score are 1) make your payments on time and 2) keep your balances low.
I recently paid down a balance on one of my credit cards with some savings. It was a tough choice because I know I'm supposed to keep 3 months of expenses in savings (gee, if it only it had been that much), but it seemed useless to have money in savings earning so little when I'm paying so much for credit cards. Anyway, I'll be curious to see how it impacts my credit score. It also reduced my minimum payment, so now I'll continue to make the higher payment and more of my money will go toward paying off the principal balance, lowering my finance charges. (That's called Snowballing, by the way. I should blog about that debt reduction strategy one of these days...)
For more ways to improve your credit score, see this article on our website. It's part of our Balance Financial Fitness program.
Showing posts with label saving. Show all posts
Showing posts with label saving. Show all posts
Thursday, April 2, 2009
Friday, March 20, 2009
TIP: Buy in bulk for the best prices
SAVINGS TIP: Buy your items in the largest size container available for the lowest cost per unit. The same holds true for cleaning products and dog food too. Plus, larger sizes use less packaging and are kinder to the earth.
Everyone is always touting the benefits of buying clubs like Costco and Sam's Club. But I've found that I end up blowing my whole grocery budget on big quantities of items and I miss certain things on my list. Then, of course, I end up with a few extra impulse items, too. I wonder if it really equates to savings. Maybe it does if you commit to only buying the things you normally would buy.
What do you think?
Everyone is always touting the benefits of buying clubs like Costco and Sam's Club. But I've found that I end up blowing my whole grocery budget on big quantities of items and I miss certain things on my list. Then, of course, I end up with a few extra impulse items, too. I wonder if it really equates to savings. Maybe it does if you commit to only buying the things you normally would buy.
What do you think?
Sunday, October 28, 2007
Is the Latte Effect Really The Problem?
Shopping malls and retail stores are always packed, and there is a new restaurant on every corner. Everyone seems to be wearing designer shoes, jackets and jeans and sipping $4 lattes. Credit card commercials are constantly promoting splurging and, U.S. consumers have been more than happy comply.
So what's the problem? Why do so many middle class Americans with so much stuff say they feel so squeezed? If they are consumed by debt, isn’t it their own fault? I have always thought that many times we are responsible for the financial situations that we find ourselves in. After doing some reading on the topic I now wonder if our personal needs and consumption choices are really the problem.
Bankruptcy law expert and Harvard University Professor Elizabeth Warren spent a lot of time crunching the consumer spending numbers for her popular books, "The Fragile Middle Class” and “The Two-Income Trap.” In both, she makes this point: Despite all those $200 sneakers you hear about and the long lines at Starbucks, consumers are actually spending less of their income — much less — on discretionary items like clothing, entertainment and food than their parents did. In fact, after taking care of essentials like housing and health care, today’s middle class has about half as much spending money as their parents did in the early 1970s, Warren says.
The basics, our life essentials, now take up close to three-fourths of every family's spending power (it was about 50 percent in 1973), leaving much less left over at the end of the month.
Even though household incomes have risen about 75 percent since 1970, most of that they say, is the result of a second earner, generally a woman, joining the work force. In many cases that added income has been swallowed by rising fixed expenses, such as child care and housing costs, because many people try and buy more house than they can actually afford. The average family now pays at least twice as much for housing compared to what our parents paid in the 1970s.
Four in 10 Americans don't have even one month's worth of savings for use in case of an emergency, according to a survey by HSBC Bank published in 2006. And even with two incomes built into the family budget, the odds of a household getting hit by a layoff have doubled in the last generation. The combination of high housing debt, rising health care costs, lack of savings and greater exposure to unemployment has left many families in a dangerous financial position.
I see the biggest problem being that the largest portion of our budgets are spent on fixed costs like housing, has risen much faster than wages and inflation. That means mortgages, more than lattes, are the source of many of our financial problems.
I now think that the "latte factor" is only being used as a way to distract people from the real changes in the economy.
So what's the problem? Why do so many middle class Americans with so much stuff say they feel so squeezed? If they are consumed by debt, isn’t it their own fault? I have always thought that many times we are responsible for the financial situations that we find ourselves in. After doing some reading on the topic I now wonder if our personal needs and consumption choices are really the problem.
Bankruptcy law expert and Harvard University Professor Elizabeth Warren spent a lot of time crunching the consumer spending numbers for her popular books, "The Fragile Middle Class” and “The Two-Income Trap.” In both, she makes this point: Despite all those $200 sneakers you hear about and the long lines at Starbucks, consumers are actually spending less of their income — much less — on discretionary items like clothing, entertainment and food than their parents did. In fact, after taking care of essentials like housing and health care, today’s middle class has about half as much spending money as their parents did in the early 1970s, Warren says.
The basics, our life essentials, now take up close to three-fourths of every family's spending power (it was about 50 percent in 1973), leaving much less left over at the end of the month.
Even though household incomes have risen about 75 percent since 1970, most of that they say, is the result of a second earner, generally a woman, joining the work force. In many cases that added income has been swallowed by rising fixed expenses, such as child care and housing costs, because many people try and buy more house than they can actually afford. The average family now pays at least twice as much for housing compared to what our parents paid in the 1970s.
Four in 10 Americans don't have even one month's worth of savings for use in case of an emergency, according to a survey by HSBC Bank published in 2006. And even with two incomes built into the family budget, the odds of a household getting hit by a layoff have doubled in the last generation. The combination of high housing debt, rising health care costs, lack of savings and greater exposure to unemployment has left many families in a dangerous financial position.
I see the biggest problem being that the largest portion of our budgets are spent on fixed costs like housing, has risen much faster than wages and inflation. That means mortgages, more than lattes, are the source of many of our financial problems.
I now think that the "latte factor" is only being used as a way to distract people from the real changes in the economy.
Tuesday, July 3, 2007
Paying for your child's college education - Learn about your options.
Saving for college can be one of the most challenging financial goals and it is important to take advantage of every opportunity to put extra money into your child’s college fund.
Our number one goal is to raise our son to be good adult... AND, to make sure that he is well-educated so he is prepared to have a good future.
As young as Zach is (in the fall he will be going into first grade), I already have his education in mind, particularly, how we'll save for his education. After all, just like any investment, the earlier we start the better.
I started saving a little ($100 a month) several years before he was born, but I have no idea if it will be enough and the money is not being put in a typical education fund, so it may not even be used for that. I may end up needing that money for retirement or another one of life’s many expenses.
At this point I think it is definitely time for us to put together a more definitive plan for Zach’s education. We still have several years to make sure that we have enough money saved, (or enough to at least get us started) for Zach’s education.
Several financing methods for saving for college are available. Some are even tax-deductible.
529 College Savings Plans lets us earn stock-market returns on college savings. Our contributions or investments are set aside and can even grow tax-free.
I like the fact that the money is set aside for the specific purpose, and incurs no penalties if withdrawn for that purpose. Also, several people can contribute to one beneficiary. This is a good vehicle for grandparents and other family member who wish to contribute small amounts of money, (even a $25 or $50 birthday or Christmas check is helpful) to a college fund.
Take advantage of the opportunity to join us on Thursday, July 19th, to get the facts about College Savings Plans. Our seminar starts at 6:00 pm at Hawthorne’s Naperville Branch, located at 1519 North Naper Blvd, in Naperville. Click here to register for the seminar today.
I like the fact that the money is set aside for the specific purpose, and incurs no penalties if withdrawn for that purpose. Also, several people can contribute to one beneficiary. This is a good vehicle for grandparents and other family member who wish to contribute small amounts of money, (even a $25 or $50 birthday or Christmas check is helpful) to a college fund.
Take advantage of the opportunity to join us on Thursday, July 19th, to get the facts about College Savings Plans. Our seminar starts at 6:00 pm at Hawthorne’s Naperville Branch, located at 1519 North Naper Blvd, in Naperville. Click here to register for the seminar today.
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