• Make a budget and plan your purchases

Budget, that is. If you want to be able to save money during a recession, learn to discipline yourself and your family. Using your plan as a reference, come up with a weekly or monthly budget and then stick to it. By planning your purchases, you are effectively planning your expenses. This will help eliminate the danger of impulse buying and unnecessary spending. Try to look at the bigger picture when it comes to your basic needs. Plan for a week’s worth of groceries, for example, so you’ll have an idea of which items you truly need (and want) and which items you can do away with. To make sure that you maximize your planning efforts, consider incorporating items on sale into your planning. If there are foods on sale that week, for example, why not plan your week’s menu using what’s currently on slashed down prices?

• Improve your grocery shopping habits

With the right shopping attitude, you can reduce unnecessary cost. You can prevent yourself from succumbing into impulse buying. You can do this by creating a list of items to buy before going to the supermarket. One tip is to not go to the grocery to shop when you are hungry. Yes, hunger causes you to buy items you do not need. Buying all the items you need in one go can help avoid using gas for unnecessary trip and also get rids of temptation. Also, before you unloading your cart, check again which items you can do without. You will be surprised that there are just so many of the items that you picked up that you do not really need.

• Keep an eye out for bargains and discounts

Learn to monitor stores for seasonal sales. You’ll save a lot of money by buying items on sale than in their regular prices. During a recession, that’s considered wise spending. Check out store or newspaper ads and don’t be shy about asking for cheaper alternatives, getting store rebates or using discount coupons. Consider buying at discount stores as well. Each dollar you don’t pay is a dollar you save.

• Buy in bulk

If there are items in your house that are often in use (paper towels, canned beans, yoghurt, etc.), consider buying in bulk. Many stores offer items in packs, which means you’ll save money in the long run if you buy them instead of paying for individual items.

• Put off bigger purchases

A good rule of thumb is, if you can’t afford it, don’t buy it. If, for example, you have enough money for a down payment on a new LCD TV but will have to borrow money off your credit card just to tide you over for the next few weeks, it would be really insane to make a purchase. Wait until you can truly, comfortably afford something. The worst you can do during a recession is not just failing to get money saved but also going into debt.

• Cut back on non-essentials

You like soda? You like steak? But do you like to survive the recession? Then, cut on soda, meat and other non-essentials. You do not have to stop drinking soda or eating meat. But if you will only compute how much you can save without consuming any of these as often as you used to, you will see that it’s enough to tide you over.

• Grow Your Own Fresh Produce

If you have been relying on the supermarkets for your daily meals, it’s high time to consider growing your own food. What can be better than taking advantage of your green thumb to avoid having to buy fruits and vegetables? If you are renting, growing vegetables and herbs in pots, also known as container gardening, can be useful. Mint, sage, rosemary, basil and thyme are great herbs for container gardening. If you do not have enough time, opt for low maintenance vegetables. Examples of low maintenance vegetables include garlic, onions, turnips, cabbage, leeks and kale. Now if you have a bigger backyard, growing your own fruits can be fruitful (pun not intended). Although this might require longer time since fruit trees can take at least about two years to yield crops. You can also do better in keeping a wide variety of your fruits and vegetables through trading with your neighbor’s grown fruit trees, vegetables and herbs.

• Make Your Own Meal

If you have the time, learning how to bake can be one great way to spend your free time. Aside from saving money, it can also be one fun way to relieve your stress. Fast food restaurants can be very tempting but if you have the skills (or not, since you can learn to cook), then why not prepare your own food from your own grown fruits and vegetables and home-baked bread. If you think your skills are too limited, the Internet offers many simple recipes that even kids can make. Make your own coffee and you can also brew your own beer if you want.

• Practice prevention, not cure

If you look closely, there are many things you do in your home that are siphoning precious dollars from your wallet. Simple steps such as repairing and maintaining your home and appliances, using more efficient equipment and cutting down on unnecessary consumption can do wonders for your wallet and piggy bank. And what better way to treat a recession than to be prudent?

• Earn extra money

If, after all your efforts, the money you have saved is still not enough, don’t let recession get the better of you. There are times when your efforts are just not sufficient – mostly because you don’t earn enough. Instead of asking for a raise that might never occur or waiting for a promotion to drop on your lap, consider finding other means with which to earn (and save) money.

Consider getting a part-time job, work extra hours, do selling on the side or offer your skills as a freelancer. The extra income you earn, along with your recession-powered money-saving plan, will help you make enough until after the tough times are over.

If you are going to try to get the interest rate knocked down, information is your friend. You will have far more success if you can show the lender a better interest rate being offered by another lender. Look for marketing pieces by other lenders on the same or similar loans.

There is really only one definite way to cut down the interest rate on the loan. It has to do with points. If you have a pool of cash at the time of application, you can attempt to buy down the interest rate by paying more points at the outset. While lenders are receptive to this approach, most people do not have large piles of cash lying around. Scraping enough together for the down payment is usually a sufficient problem. Still, there are other ways to save money on your mortgage.

If a lender is charging you points on your home loan, they are highly negotiable. Lenders view points in a more flexible manner. The higher the value of the home you purchase, the more a reduction in points can save you money. If nothing else, you have nothing to lose by asking for a quarter or half point reduction.

The following Video may help you understand more about the mortgage rate and points and how they are tied together.

Cutting the best deal possible at the time you apply for a mortgage is critical. Even small concessions by the lender can save you tens of thousands of dollars over the life of the loan.

When going to a restaurant:

• Always use coupons. I can’t stress that enough. There are many ways to find them. The Sunday paper usually has coupons for a few restaurants. Many restaurants send out coupons in the mail hoping to get you to visit them. The Entertainment Book has coupons for many restaurants. The restaurant’s own website might have a coupon that you can print out and bring in. Sometimes you will find coupons in their take-out menu. You will be able to save a few dollars just for taking a few seconds to look for a coupon.

Read more : Saving Money With Coupons

• Share a meal. If you’re going out to dinner, many times you can get away with ordering one main course and an appetizer or salad and sharing them with your partner since the portions are so large. By splitting them, you will save a lot more then if you had each gotten your own meal, plus you will get more of a selection since you’ll get to taste both an appetizer and an entrée.

When going to see a movie:

• If you want to go to the movies, consider going during the day, or in the early evening. These are all considered matinee showings, and you will usually pay about half of the price you would pay at night! It doesn’t sound like that big of a savings, but if you go to the movies just once a month, you can save $54 a year per person. You’ll save even more if you go more often.

• If you want to save even more money, you can wait for few month and rent the movie once it goes to DVD. Many websites will allow you to buy packs of 10 DVD rentals, and you will end up saving anywhere from $0.50-$1.50 per rental. This can really add up. If you rent one movie per week, you can save up to $78 a year! Also keep an eye out for coupons that allow you to rent one and get the second free.

There are many other simple things you can do to save money when going out to enjoy different forms of entertainment.

Accommodating a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit and end up payments on groceries you bought two years back on credit, with a further 10-18% interest on it.

Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

Success at building an emergency fund depends on consistency of saving money on a regular basis, and resisting the urge to dip into this rainy day fund for non-emergencies. This money should be kept separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point. A substantial part of this emergency fund account should be invested in low risk funds. This ensures that your investment does not lose its value in case you need the money. Also, it should be extremely liquid, to give you access to the cash easily and quickly if you need it.

The size of the special savings account will depend on your personal situation. It is prudent planning to have at least three to six months salary in the reserve in the event of a loss of job, medical emergency, short-term disability, etc. You will have to decide on an appropriate amount based on following factors:

• Your dependents and fixed monthly expenses. For examples, if you are single with no obligations, and have a reliable support system of friends or relatives during a financial crisis, you might not need a substantial amount stashed in this fund. This is opposed to someone who needs to pay nursing costs for his aging parents and supporting a young family. The more people you support, the more likely you are to have unexpected or unplanned costs.

• You should also take into account the degree of difficulty you would have in finding a new job if you lost the present one. In case of a two-income household, the contribution of both parties should be weighed while calculating how much you should keep aside.

The following calculator will help you estimate how much do you need for emergency fund.

Title:	How Much Do I Need For Emergencies?
Description:	Use this calculator to help determine how much you need to set aside monthly or as a lump sum to create an emergency fund.

You may not be able to gather your emergency fund money together at once. Treat it as a financial goal and add to the kitty over time. If you get a tax refund, put it in your special rainy day account. If you get the bonus at work, put part of it in your emergency fund. When your emergency fund is ready, you can live with a peace of mind for the future.

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Many young people live for today, they always spend all of their wages and enjoy their lives while they are still a young adult. They think that they still have many years to save, so why bother about saving money now which they could do later. In fact, when you start save your money matters.

A penny saved is a penny earned, but a penny saved today is a penny earning more.

It is important to start saving as soon as possible for events such as retirement due to the impact of compounding. If you start saving now you will need to save considerably less than if you wait a few years. Use this calculator to determine how much extra you will need to save if you wait 5 years.

Title:	Save Now vs Save Later
Description:	This calculator will show the additional amount you will need to save in order to reach your savings goal if you are waiting 5 years to begin your investment.

The advantages of saving money at your early age:

• The earlier you start once your earns some money, the easier it becomes your habits.

• The earlier you start, the lower amount you need to save monthly to reach your financial goals

• Your saved money can make you money more if you invest them in various investment models

• You would less get stressed about the future with healthy balance in your bank account.

I am sure that develop your savings earlier will also give you a peace of mind for the future and will help you to sleep easier at night.

With the following financial calculators you can set a goal of saving and plan the period of your saving to achieve your financial goals:

Title:	How Much Should I Save To Reach My Goal?
Description:	What are you saving for: a computer, car, boat, summer home, down payment? Use this calculator to determine what you need to save on a regular basis to have the funds ready when needed.

Title:	How Long Until My Savings Reach My Goal?
Description:	Compound interest can have a dramatic affect on the growth of a single deposit. Use this calculator to determine how many years an existing savings account will take to reach your stated objective.

For more financial calculator on savings plan, please refer our related article “Understanding And Developing A Savings Plan” to set a goal of saving and plan the period of your saving to achieve your financial goals.

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The following tips can also help you on your way to becoming a savvy coupon clipper:

Where to Find Coupons?

• Look in the store. You will find coupons in retailers’ advertising flyers, on the shelf, at kiosks, even at the checkout. Sometimes, you can find coupons on the back of your register receipt as well.

• Try samples offered in the store and you’ll often be offered a coupon to take home a package of the products.

• Check product packages. Your favorite brands want to keep you loyal, so you will often find coupons on or in the package.

• Look on the Internet. There are coupon sites where you can print online coupons.  All you have to do is type the search criteria “online coupon” in your favorite search engine and you are on your way to savings!  Here are some examples of great online websites that help you save money:

• CouponSurfer – CouponSurfer has almost 300 coupons from over 100 stores on their web site, for various products from aspirin to pampers.

• CoolSavings – Provides grocery coupons, pet coupons, free samples, travel offers, automotive offers, etc.

• <!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline; text-underline:single;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline; text-underline:single;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> FatWallet – You can find online coupons at hundreds of stores at FatWallet site and their participating retailers where you can earn cash back while you shop.

• Also, pay attention to television commercials.  Many times, companies coming out with a new product will advertise on television and list a web page where you can print a money saving coupon.

However, be cautious online of someone offering to sell you coupons as you do not need to buy them when there are so many available free.

How to Use Coupons

• Organize your coupons in the order that you shop the store to save time and make sure you use them all.

• Make coupon-clipping a family affair–it can be a great math and savings lesson for the kids. Involve them in the process and let them “earn” coupon savings money.

• Use coupons with shorter expiration dates first.

• Shop on double or triple coupon days and use manufacturers’ rebates to realize additional savings.

Coupons can be a great resource for saving your money when shopping. It is one of the easiest ways to save money. Printable online coupon makes your your life easier as you can find them right at the tip of your fingers. Use them smart way in your daily both online and offline shopping, you will be surprised how much money you can save in a year..

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The purpose of a savings bank account not only ensures safe keeping of your funds, it also helps you keep your expenses under control. Use of savings account to save money has become a much-touted concept in recent times. Some banks provide services of savings accounts that can encourage the habit of saving money.

A recent survey revealed that most of the money problems arise out of people’s indifferent attitude towards their own financial reality. In our day-to-day life we can be a little more ambitious and try to save money by coming up with thousands of innovative ways. We can maintain savings account so that we can put aside a portion of their liquid assets that could be used to make purchases later on. On the other hand, nowadays, the Internet provides a clear and impartial information and expert guidance for investors, entrepreneurs looking for ways to save money.

With the money saved in the savings account, you can also make some more money. For examples, most of the banks have Money Market Savings Accounts. These accounts have got higher interest rates than the savings accounts.  Online banks provide higher interest rates due to the fact that the banks do not have to pay for buildings and staff.

Many online banking facilities offer you with latest updates on money saving techniques.  By adopting a few resource-saving techniques, you can save your money from flying away from your pockets. You need to learn how to manage your money in order to save it from being wasted in avoidable costs every month.

You can also monitor your personal spending via online banking and stay within your budget. Through debit/ATM card you can withdraw money from the ATM centers of a particular bank which remains open 24 hours a day. Many of the banks also offer Internet banking facility for the convenience of their clients.

So, start saving your money today by a commitment to put aside a portion of your money in a bank account every time you get your salary check.  Increase your personal financial skills adopting a few money-saving techniques and be assured of a peace of a lifetime.

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Most people tend to spend all of their money every month, and they find a hard time saving money, even for those who are free of debt.  They grow to become used to this spending level. It is very, very difficult not to do this.  There are some easy ways to save money from what you already have.

• Pay Yourself First

The best advice to creating savings is “you have to pay yourself first”. It is the truth. Those of you with 401(k)s do not miss that money being automatically taken out of your paycheck. You never see this money, so you do not miss it. That is the idea of paying yourself first.  If saving money is so difficult for you, you can probably have your employer deposit a portion of your paycheck each month into your savings account. Or your bank may automatically withdraw that amount from your checking to your savings each month. This is recently one of the popular bank services that can help you create savings. You never see the money and you don’t have to make any effort to save. It is perfect way to save your money.

If you pay yourself first, you will not have a chance to spend the money. When you sit down to write bills out, do not pay the mortgage first. Pay your savings and then pay your bills. Normally, most people pay their mortgage, cars and other loans first. Then they pay the electric and water. Then they pay what they can on their credit cards. Whatever is left over is spent on living, gas and food. If you do this way, then there is nothing left to save. If you wait to pay your savings last, you probably will not pay it.

You must pay yourself first. Write a check to your savings first, then pay the bills will follow.

• Keep The Change Everyday

Another best way to save money without effort is never spend your change.  We lose a lot of money in just pennies each month.  Every end of the day, keep the change or anything less than a ten in your piggy bank.  You will be surprised at how much in just a month that money really accumulates. You can use the money for small emergency fund, your grocery or gas when money is tight. It is an easy way to save.

• Saving While Spending

When you spend, you can save money as well by purchasing items that grow in value. For instance, if you have extra money lying around, you can invest it in the stock market or in paying off your mortgage early. Use it in ways that make you money. Pay off your debts and invest the rest.

• Really Save Money

When you save money, the key is to really save it. If you buy something on sale, what happens to the money you saved? You probably spent it on something else. Nothing really went into savings. From now on, when you save $10 on sale items, put that $10 in your savings account. When you do not buy a new sweater because you know you need to save, put the cost of that sweater into your savings.

After you know the tricks, saving money is not that hard. It is simply a habit that has to be learned. Experts say it takes two weeks to make an action a habit. Starting today, in two weeks it will be easy to your save money for your future wealth.

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Saving money is not easy for some people, it is something that you can easily forget or ignore. We all too often are saying that there is not enough money to put into savings and we will do it later. But if there is not enough money to put into savings, is there enough money if there is an emergency. By having a savings plan, you can keep an emergency from destroying your finances.

Savings can be anything from a simple savings account to bonds and retirement plans. You may be saving for emergencies, college fund, new home or retirement. Or even for all of them. Whatever your goal is, there is a savings plan that will fit your needs. Despite, not all types of savings are going to work for you. You have to find the plan that fits your own personal financial needs.

The beauty of saving money is interest that makes your money is making more money. You are not just saving your money, you are actually letting it grow. How does this work?

When you put money in a savings account, certificate of deposit (CD) or money market account, you are basically lending the money to the bank. The bank will use your money to make loans to other customers. They are borrowing money from you and paying you interest, while someone pays them interest on the money they have borrowed from the bank.

Banks charge higher interest rates on loans so that they can pay your interest, while make their own profits.

Interest can seem like a complicated math problem, but it is not hard to understand. Most banks will talk about both “rate” and “yield.”

For example, a $10,000 CD with a 5% annual interest rate (APR) will also have an annual percentage yield number (APY) that is a higher number. The difference between the APR and the APY depends on how frequently the interest is paid, and in what form.

If the interest is paid annually at a rate of 5%, the $10,000 investment with earn $500. Simply multiply the investment amount by the APR to determine the interest paid. When the interest is paid annually, the rate and yield are the same.

The yield goes up as interest is paid more frequently. The interest begins to earn interest along with the original investment. When the 5% CD is paid twice a year, in six months the interest payment is $250. We figure this by multiplying the original investment by the interest rate for half a year, or 2.5%. The $250 in interest will earn $6.25 in interest over the next six months, adding $256.25 at the next six month mark. Compound interest is starting to take over.

In the first scenario, the CD earned $500 in interest in one year. The rate and yield is at 5%. The second CD earned $506.25. The rate is still at 5%, but the yield has increased to 5.06%. It may not seem like a lot, but over time it keeps building up. When shopping around for savings plans, look at both rates and yields.

The followings are saving calculator that you can use to calculate how much the future value of your current savings and how much future income an existing balance and savings plan can provide:

Title:	What Could My Current Savings Grow To?
Description:	Compound interest can have a dramatic effect on the growth of series of regular savings and initial lump sum deposits. Use this calculator to determine the future value of your savings and lump sum.

Title:	Income Generated By A Savings Plan
Description:	Saving regularly can help you achieve your future income goals. Use this calculator to determine how much income an existing balance and/or a regular savings plan can provide.

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]]> http://efinancetips.info/understanding-and-developing-a-savings-plan/feed/ 1 http://efinancetips.info/credit-card-tips-for-shopaholics/ http://efinancetips.info/credit-card-tips-for-shopaholics/#comments Sun, 15 Mar 2009 08:10:01 +0000 admin http://efinancetips.info/?p=62 For some people, credit card is a life savior because credit cards let you spend more than you make. However, you have to always remember that five minus seven equals trouble when you are talking about your budget. If you spend more money than you make, sooner or later you will have money problems. The problem is that you usually don’t realize what you’ve done until it is too late. There is a danger situation behind credit cards misusage especially for shopaholics.

It’s hard enough to keep track of checking account spending, but add credit cards, and spending can get out of hand. How many times have you used your credit cards to buy clothes, impulse items or even groceries, and said you’ll pay it back? But at the end of the month, you have nothing to pay it back with. It’s easy to say you will pay it back next month, or when you get that bonus at work. Before you know it, it’s added up to a mountain of debt month after month.

Credit cards are the first choice and easy way that let you spend more than you make. It is hard to stop spending more than you make once you started. However, it is possible to stop if you want. Start by creating a personal finance budget as a start point. List all of your bills and all of your expenses and your paycheck, then see what you have left over. Do this every day, so you know how much your balance money as of today. Basically, you have to know exactly how much money you have and how much money you already spent for respective month if you want to avoid spending too much. Check your bank account register for three minutes every morning. Write down what you’ve spent the day before. In practice, when we know every day how much we have left, we are able to spend more frugally. But if we both just assume that we still have x amount left, we get into trouble.

If you are a shopaholic, then there are ways to cut your need to spend. The number one way is to never step foot in the store. If you know that you will buy too much other stuff at Walmart, don’t go there for groceries. If you want to go in Hobby Lobby just to look, but know that every time you look, you spend $100 at least — don’t go in.

There is another way to reduce your unnecessary shopping habits, that you need to go through what you already have. When you see how many things you already have, the need for more is decreased.

Everyone has lapses. If you have lived on a $5,000 a month spending habit on a $3,000 income for a while, you may be used to juggling things. And even when it starts falling in, you want to spend that $5,000. You may go out and spend too much every once in a while — you just have to deal with yourself when you do. Then get back on track.

There are people out there that live comfortably on $1000 a month. There are others that make $3,000 a month that can’t make ends meet. It doesn’t matter how much money you make, it’s how you spend that money matter. By keeping close daily track of your income and expenses, you can make it on almost anything.

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