Finance, Money

10 Money Moves to Save $25,000 in a Year

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice
Money Moves to Save $25,000 in a Year

In an era marked by financial uncertainty and ever-rising living costs, saving money has become more crucial than ever. Whether you are aiming to build an emergency fund, pay off debts, or achieve a specific financial goal, saving $25,000 in a year might seem daunting. With that said, with strategic planning, disciplined budgeting, and smart financial decisions, this goal can be within reach.

Estimated Savings with Strategic Money Moves

  • Automatic transfers: Automated Saving $500/month = $6,000/year
  • Employer-sponsored retirement plan: Contributing $300/month = $3,600/year (assuming employer match)
  • Less entertainment and dining out: Savings of $200/month = $2,400/year
  • Cancelling unused subscriptions: Savings of $50/month = $600/year
  • Shopping for essentials: Savings of $100/month = $1,200/year
  • Negotiating bills: Savings of $50/month = $600/year
  • Downsizing living space: Savings of $200/month = $2,400/year
  • Adopting frugal mindset: Savings on miscellaneous expenses = $100/month = $1,200/year
  • Utilizing coupons/discounts: Savings on groceries and shopping = $50/month = $600/year
  • DIY projects: Savings on home repairs/maintenance = $75/month = $900/year
  • Prioritizing high-interest debt: Savings on interest payments = $1,500/year
  • Consolidation/refinancing: Savings on interest payments = $1,000/year
  • Implementing energy-saving measures: Savings on utility bills = $75/month = $900/year
  • Maximizing tax deductions/credits: Savings on taxable income = $500/year
  • Practicing delayed gratification: Savings on impulse purchases = $50/month = $600/year
  • Aligning spending with values/priorities: Savings on non-essential expenses = $150/month = $1,800/year

Set Clear Financial Goals

  • Define your objectives: Determine why you want to save $25,000 in a year. Whether it’s for a down payment on a house, starting a business, or achieving financial independence, having a clear goal will provide motivation and direction.
  • Break down the goal: Divide $25,000 by 12 to understand how much you need to save each month ($2,083). Breaking down the goal into smaller, manageable targets makes it less overwhelming.

Create a Budget

  • Track your expenses: Start by documenting all your expenses for a month to identify where your money is going. This process will highlight areas where you can cut back and save which is vital during times of high inflation.
  • Set spending limits: Allocate specific amounts to different categories such as housing, groceries, transportation, and entertainment. Use budgeting tools or apps to monitor your spending and stay within your limits.

Cut Expenses

  • Reduce discretionary spending: Evaluate your spending habits and identify areas where you can cut back without significantly impacting your quality of life. This could include dining out less frequently, cancelling unused subscriptions, or shopping for essentials rather than indulgences and in times of high gas prices and where everything is more expensive this is critical.
  • Negotiate bills and downsize: Contact service providers such as cable companies, internet providers, and insurance companies to negotiate better rates or switch to more cost-effective alternatives. In addition, consider downsizing your living space, selling excess belongings, or refinancing high-interest loans to reduce monthly expenses.

Automate Savings

  • Set up automatic transfers: Arrange for a portion of your paycheck to be automatically transferred to a savings account before you have the chance to spend it. This “pay yourself first” approach ensures consistent savings without relying on willpower.
  • Take advantage of employer benefits: Contribute to employer-sponsored retirement plans such as 401(k) or similar schemes, especially if your employer offers matching contributions.

Invest Wisely

  • Diversify your investments: Consider allocating a portion of your savings to investment vehicles such as stocks, bonds, mutual funds, or real estate. Diversification can help spread risk and potentially generate higher returns.
  • Research investment options: Educate yourself about different investment opportunities, risk profiles, and potential returns before making investment decisions. Seek guidance from financial advisors if needed.

Optimize Debt Management

  • Prioritize high-interest debt: Focus on paying off debts with the highest interest rates first, such as credit card balances or payday loans. Allocate extra funds towards these debts while making minimum payments on others.
  • Consolidate and refinance: Explore options to consolidate multiple debts into a single, lower-interest loan or refinance existing loans to secure better terms and reduce interest costs. In addition, contact creditors to negotiate lower interest rates, extended repayment terms, or debt settlement arrangements. 

Leverage Tax Benefits

  • Maximize tax deductions and credits: Take advantage of tax deductions for contributions to retirement accounts, mortgage interest payments, educational expenses, and healthcare costs.
  • Contribute to tax-advantaged accounts: Increase contributions to tax-deferred or tax-free accounts such as Traditional IRAs, Roth IRAs, Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs) to reduce taxable income and grow savings faster.

Practice Energy Efficiency

  • Reduce utility expenses: Implement energy-saving measures in your home, such as upgrading to energy-efficient appliances, improving insulation, sealing air leaks, and using programmable thermostats. Install water-saving fixtures, fix leaks promptly, and practice water-conservation habits such as taking shorter showers and using water-efficient irrigation methods.
  • Switch to renewable energy: Explore options for generating renewable energy on-site, such as installing solar panels or investing in community solar projects. Alternatively, choose energy providers that offer renewable energy options.

Foster a Supportive Environment

  • Surround yourself with like-minded individuals: Seek out friends, family members, or online communities who share similar financial goals and values. Share experiences, tips, and encouragement to stay motivated and accountable.
  • Seek professional guidance when needed: Don’t hesitate to consult with financial advisors, counselors, or mentors for personalized guidance and support. Professional expertise can provide valuable insights and help navigate complex financial situations effectively.

Review and Adjust

  • Regularly review your budget and savings progress: Reassess your financial situation periodically to identify areas for improvement or adjustment. Life circumstances and financial goals may change, requiring you to adapt your savings strategy accordingly.
  • Celebrate milestones: Recognize and celebrate milestones along the way to $25,000. Whether it’s reaching a certain savings threshold or achieving a specific financial goal, acknowledging your progress can boost motivation and morale.

The More You Save, the More Your Money will Compound    

Saving $25,000 in a year requires discipline, commitment, and a strategic approach to managing your finances. By setting clear goals, creating a budget, cutting expenses, investing wisely, and regularly reviewing your progress, you can turn this ambitious financial objective into a reality. Remember that every small step you take toward saving and investing contributes to your long-term financial security and stability. With determination and perseverance, you can master the art of money management and achieve your savings goals.

Finance

12 Financial Steps To Take If You Have Lost Your Job

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Financial Steps

Losing your job can be a challenging and unsettling experience, bringing about financial uncertainties that need to be addressed promptly and thoughtfully. While the situation may feel overwhelming, taking the right financial steps can help you navigate this challenging time with greater ease and stability. Here is a comprehensive guide on the financial steps to take if you have lost your job.

1. Assess Your Financial Situation

Before making any decisions, take a thorough look at your current financial standing. Calculate your savings, outstanding debts, monthly expenses, and any other financial obligations. This assessment will give you a clear understanding of how long your resources can sustain you.

2. Review and Trim Your Budget

Create a budget that reflects your new financial reality. Cut back on discretionary spending, like dining out and entertainment, and focus on essential expenses such as housing, utilities, groceries, and healthcare. This step will help stretch your savings further and minimize unnecessary expenditures which can hurt certainly during times of high inflation.

3. File for Unemployment Benefits

If eligible, apply for unemployment benefits promptly. These benefits can provide you with temporary financial relief while you search for a new job. Remember to follow the application process diligently and provide all necessary documentation.

4. Review Health Insurance Options

Losing a job often means losing access to employer-sponsored health insurance. Research your options, which may include purchasing insurance through the Health Insurance Marketplace, COBRA coverage, or Medicaid. Ensure you and your family’s health needs are covered during this transition.

5. Contact Creditors

If you foresee difficulties in making loan payments or meeting other financial obligations, contact your creditors. Many creditors are willing to work with you to establish modified payment plans or deferments during times of financial hardship which is common now because of runaway food prices and high energy prices.

6. Build an Emergency Fund

If you don’t already have an emergency fund, consider building one as soon as your financial situation stabilizes. An emergency fund can provide a safety net for unexpected expenses and job loss situations in the future.

7. Seek New Opportunities

While managing your finances is crucial, your career is equally important. Begin actively searching for new job or business opportunities. Update your resume, utilize online job boards, and reach out to your professional contacts to explore potential openings.

8. Avoid Impulse Spending

During periods of uncertainty, it’s essential to curb impulse spending. Make well-considered financial decisions and prioritize needs over wants. Avoid making major purchases or incurring unnecessary debt – remember – you are not the federal government.

9. Consider Freelance or Gig Work

If finding a full-time job proves challenging, consider taking on freelance or gig work to generate income. Online platforms offer opportunities in various fields, allowing you to monetize your skills while seeking permanent employment.

10. Explore Additional Income Streams

Explore creative ways to generate additional income. This could include renting out a spare room, selling unused items, or offering services like tutoring, consulting, or freelance writing.

11. Reevaluate Your Financial Goals

Your financial goals may need to be adjusted in light of your job loss. Temporarily shift your focus toward stabilizing your financial situation and then recalibrate your goals as you regain financial stability.

12. Seek Professional Financial Advice

If you find yourself overwhelmed or unsure about your financial decisions, seeking advice from a financial advisor can be immensely helpful. They can provide personalized guidance based on your unique situation and goals.

Bonus Tip: Skill Enhancement and Networking 

While the immediate focus might be on financial adjustments, don’t neglect the importance of skill upgrading and the power of professional networking during this period. Use your free time to acquire new skills or enhance existing ones. Online courses and certifications can not only make you more marketable but also boost your confidence during interviews.

At the same time, leverage online platforms, such as LinkedIn, to connect with professionals in your field or industry. Engaging in discussions, attending webinars, and participating in virtual events can expand your network and keep you informed about industry trends.

Proactive Financial Steps can Help You Emerge Stronger

Losing your job is undoubtedly a challenging experience, but taking proactive financial steps can help you weather the storm more effectively. By assessing your situation, managing your budget, exploring income-generating opportunities, and seeking professional advice, you can navigate this phase with greater resilience and set the stage for a more secure financial future. Remember that adaptability, resourcefulness, and careful planning are your allies in overcoming the financial challenges that come with job loss.

Finance

Personal Finance Tips to Follow When You Get Your First Job

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Personal Finance Tips

Congratulations! You have landed your first job. It is an exciting time full of new experiences and challenges. Even as you are going about your responsibilities in the new job, you are probably looking forward to your first paycheck and have already begun a list of things you want to buy.

This is the right time to exercise some caution and have a concrete financial plan in place which is vital in a rising cost and tax environment because of new policy. Developing sound financial habits from your first job will stand you in good stead as you grow your career. Here are a few tips on how to manage your money right from the first paycheck.

Write down your financial goals

It’s critical to write them down as that will bring you greater clarity. Make a note of both short and long term goals. It is all right if your goals change at some point or when you have met one of your short term goals. You are doing this to help you plan your budget and to know how much to save and how much to spend.

Make a budget

You know what your income is and you know your priorities. Some expenses are unavoidable. Set aside a portion of your income to meet those expenses. With the leftover money, you can exercise a greater level of control and where it goes. Remember, you have a goal. Put aside another portion of your income towards that goal.

Keep track of your accounts

You may want to do it once a month or bi-weekly. It will keep you on track with your spending without running short at the end of the month. Keeping your checking accounts balanced will also ensure that there have been no unauthorized debiting of funds. 

Start saving

It is never too early to start saving. Set up a retirement fund from your first job. If you are only able to set aside a small portion of your income towards a 401K offered by your employer or any other available retirement funds, it is still alright. Ideally, you should plan to invest 15% of your income to this fund but you may want to consider investing more with higher energy prices and other costs that are rising in this new environment. 

Shop wisely

If you must shop, shop wisely. Make a list of things you need and stick to the list instead of getting tempted into impulsive buying. It will help if you make a separate list of things you want to buy and mull over the items for a day or two. You may realize that you can do without some of them, or at least prioritize your shopping list between the things you need and the things you want. 

Find the best deals

Scouring the various deals online would give you an opportunity to compare prices and choose the best deal. This is a smart habit to cultivate. There are plenty of deals on every item in the market from clothes to household articles. You will save quite a bit of money by doing your research before shopping. 

Irregular expenses

If you have a desire to travel, you may choose to set up a holiday fund and start adding to it with each paycheck. You will enjoy the trip more when you know that you are not dipping into your funds set aside for necessities and other savings.  

Incidental expenses

It is always best to be prepared for the odd incidental expenses that may come up. It could be as small as your phone bills or tips to porters. Or, it could be the odd repair work that needs attention. Keeping such expenses in mind will ensure that you do not sway from your original budget.

Watch your credit report

You do not want to be caught unawares when you are building your credit history. It is essential that you keep an eye on the credit report regularly as it will help ensure that you are not slipping to a lower rating because of some oversight in settling your bills. 

Monitor your progress

Every couple of months, you could study your accounts and compare the expenses incurred. It will give you a better idea as to your spending and saving. You can also plan for an improved lifestyle as you grow in your career and your income increases. 

The bottom line

Armed with these tips, you can feel secure and in control of your finances. No one can have a better idea of your needs and wants. Stay focused on growing your wealth as your income grows while you progress in your career. 

Finance

5 Golden Steps to Upgrade Your Financial Position

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice
Financial Position

Personal financial management is one of the most important, yet ignored topics that need more attention. It is primarily because it is an intimidating topic that most people refrain from going in-depth. What you do with your money today decides your tomorrow. 

Financial or retirement goals cannot be achieved unless there is a strategy backing it. While you might be doing a few things right, there might be scope for improvement. Unless you analyze your present financial status, it would be difficult to develop a plan that paves the way for a better financial future. It is what brings us to the first of five golden steps you can take to upgrade your financial position.

Technically Analyze Your Financial Status

In other words, take out time from your schedule and do the math. Make a list of your assets and liabilities to know your net worth. If you don’t know how to decipher net worth, simply subtract the liabilities from assets (valuation). The figure you arrive at after subtraction is your net worth. It helps you identify the problem areas in your financial activities as well as lifestyle. 

Doing a yearly budget would help you note your growth year after year and keep things in perspective as far as finances go. One of the crucial aspects of analyzing financial status is budgeting. It plays an instrumental role in achieving your short-term and long-term financial goals. 

Budgeting depends on financial projections of income and expenses. If the income exceeds expenses, you’ve surplus money that you can save or invest. If expenses are on the higher side, it requires you to revisit your lifestyle and expenses and see where further cost-cutting can be done. 

Keep Lifestyle Inflation in Check

We spend more when we earn more. It seems like a natural progression, but it isn’t. It is a phenomenon that is widely termed in financial circles as “lifestyle inflation.” As you evolve professionally and personally, there can be certain changes like hiring more help at home or a chauffeur or a yearly overseas vacation. 

However, do not jump into the bandwagon to match the lifestyle of others around you and spend on things you can’t really afford. Stick to your financial strategy, and don’t let peer pressure ruin your financial future. 

Start Saving Early

Spending mindfully means understanding the differences between needs and desires. You might need a new car to commute to and from office, but spending mindfully means buying a car that fits your budget vs. buying a car that disturbs your entire year’s finances which is easier to do in this low tax environment and will be even easier to do when we have a vaccine for the Wuhan virus. Don’t spend on what you want but focus on what you need when pulling out your wallet or signing on that dotted line. 

Ask yourself, can I live without spending on this? If the answer is yes, then it falls in the category of ‘wants,’ and you might need to reconsider your decision to spend on it. When you don’t spend mindfully, you spend more than required on wants and may fall short for what you need. It pushes you into the vicious circle of debt.

Start Saving Early

It can’t be pressed enough how important it is to start saving early. While it is never too late to start saving, sooner you start, better are your chances of achieving your long-term financial or retirement goals comfortably. People who start saving much later into their life may find it difficult to plan their retirement as no matter how much they save. 

It doesn’t add up to a figure that offers peace of mind within the limited time they have before retirement. It then requires uncomfortable lifestyle compromises to secure your future that ruins your present as well. Start saving early to create a financial buffer that cushions your retirement plans and gives wings to your long-term financial goals. 

Create an Emergency Fun

Life is uncertain, and an emergency can strike anytime. Whether it is a medical emergency or if your car needs immediate repairs, the situation requires you to spend money that wasn’t part of the plan or your budget. An emergency fund is created to meet such unforeseen events without letting it disturb your financial equilibrium. 

It would be ideal that you keep at least six months’ worth of living expenses in an emergency fund, but you should try to add more whenever possible. Restraining yourself from touching this fund for lifestyle expenses or wants can be an ongoing struggle, but you need to train yourself to make the right decisions with your money. 

Final Word

Discipline and commitment are two pillars that would help you achieve your financial goals and pave the way for a financially fulfilling life. Building habits that ensure you stay away from unwanted expenses and constantly look for ways to add to your savings and investments is what will bring you closer to living your dream life. A penny saved is a penny earned is a mantra to live by when it comes to upgrading your financial position.