Category Archives: Money

Six Steps to a Happier and More Stable Financial Situation

Six Steps to a Happier and More Stable Financial SituationSimilar to achieving any goal, creating a stable financial situation requires that you make a plan, and then follow through on it. In theory, it’s easy. But as we all know, following through on your decisions can be difficult. Because of that, we’re going to provide you with six easy-to-follow steps that anyone can follow to achieve a happier and more secure financial foundation in their life.

Step 1: Stop Impulse Buying

The biggest reason why some people are always broke is because they constantly indulge in impulse buys that don’t contribute to their financial goals. Whether it be dining out or making online purchases, we’re all guilty of it. But if you can recognize the severity of this problem, you’ll be in a better position to change it. So stop the spending and only focus on what you need.

Step 2: Track All Expenses

How can you possibly develop a solid financial foundation if you don’t even know where all your money is going? By knowing what your spending habits are like, you can then see where there’s some room to save money.

If you’ve never tracked your expenses before, consider participating in the following challenge: track every expense (even tiny ones) for the next 30 days. Mark them down in an Excel spreadsheet. It doesn’t need to be pretty, just practical. Then, after the 30 days are over, cross out what you don’t need and circle what you overspent on. Now you can successfully cut down on the following month’s expenses!

Step 3: Invest in the Future

If you’re in your 20s, you probably don’t spend a lot of time thinking about the distant future. But you should. There’s no better time than now to start planning for retirement. For example, if you start a 401(k) in your 20s, and contribute to it regularly, then you’ll have a hefty safety net in 30 years. Invest money in stocks, bonds, and mutual funds too. If you’re unfamiliar with how these investment options work, then partake in some self-education (it will go a long way towards helping your financial future).

Step 4: Pay Off Current Debt (and Avoid Future Debt)

If you had to choose only one thing to apply from this article, it should definitely be this tip. Paying off current debt, and staying out of future debt, is the best way to better your financial situation. Avoid taking out too many loans or applying for too many credit cards. If you’ve got school debt, focus on paying that off as quickly as possible. The less money you owe, the more you’ll be able to save each and every month. Even if you can only afford to pay $100 a month towards your debt, that’s still a significant amount after three years (12 months x $100 = $3,600).

Step 5: Use the “Envelope System”

This simple, yet, highly effective system can make all the difference in your finances. Here’s how it works: let’s pretend that you have three different expenses that you have to pay each day (gas, lunch, and dinner). Withdraw the exact amount of money that you plan on spending for each one, and place them in separate envelopes (one envelope per expense). Now you’ll be less likely to overspend, and if you do, then you know that you’re probably spending too much in these areas.

Step 6: Pay Bills Right Away

Don’t wait to pay your bills. Sign up for automatic payments and pay them immediately. The biggest benefit to this is that you won’t forget to pay a bill, which can result in late fees. Secondly, you won’t be able to accidentally spend bill money since it’s taken out of your bank account automatically.

Building a more secure financial situation isn’t going to happen overnight. You need to be patient and disciplined. If you follow the six steps above, there’s no reason why you can’t be living comfortably within two or three years.

Cashier’s Checks and Money Orders

My lease is up at the end of the month, and it’s time to find a new place. I’ve been searching for the perfect apartment, and last week, I finally submitted an application for a new place.

They required two checks: a $45 application fee along with a $300 deposit, to be cashed if and when I sign the lease. No problem, right?

Well…you know how I always talk about using ING and SmartyPig as my primary banks? Well, with ING, you don’t have any checks. I can send them online, but I can’t write one and take it with me. My 3 courtesy Bank of America checks ran out long ago, so I was left check-less.

What did I do?

I headed over to the bank and got two cashier’s check to take with me. $14. Damn, but I was in tough spot and didn’t have much of an option. I could have run over to the post office and gotten a money order, but I had no idea what that was or how much it would cost. Plus, I was on a tight schedule and couldn’t risk it.

But what is exactly is a cashier’s check? Let’s dig in.

A cashier’s check is issued by a bank. A customer pays the face value to the bank when it is issued, and in return, the bank writes a check for you. The positive is that the money is guaranteed, because you pay the amount on the check when it is issued. On the other hand, you need to have the funds in your account at the time it’s issued. With personal checks, you can issue a check and the funds aren’t withdrawn

A money order would have been my other option. A money order is similar to a cashier’s check in that the funds are prepaid, and it is more trusted than a personal check because the funds are guaranteed. However, the downside is that the limit on money orders is $1,000. The post office charges $1.10 for a money order under $500, and $1.50 for a money order greater than $500 up to $1,000.

It seems pretty clear that given a choice, a money order is the way to go when you’re out of checks. Next time, I’ll know where to go! And I’ll save a bunch of money too. Knowledge is power!

Wedding Gift Etiquette – Buy A Gift or Write A Check?

Wedding Gift Etiquette“So what do you want for a wedding gift?”

I remember peopled asked me this a ton right before our wedding, and I’m sure all engaged couples get this question.When people pose it, they’re looking for a simple answer. “Please buy me four Egyptian cotton towels in mushroom from Bed, Bath, and Beyond,” they’d like me to tell them. Or, “We really like the copper pots from Williams-Sonoma,” they want me to say.

But most people don’t say that.

First of all, if they really wanted to know, they shouldn’t be asking the guy in the first place. They should ask the woman instead. My wife would have the perfect answer. She’d be able to tell them exactly what we (read: she) wants, exactly where to find it, and exactly how much it costs. It was the same with our engagement gifts. I usually replied with a generic, “Oh, I’m sure we’ll love whatever you get! We’re just thrilled you’ll be there to celebrate with us.” Why? Because wedding gift etiquette makes me cringe. The gifts aren’t the reason we’re getting married, so asking what I want makes me uncomfortable.

How Much Should I Spend On A Wedding Gift?

This is my main apprehension to doling out any truly useful wedding gift advice. I don’t know how much my fiancée’s friends from college can afford to spend, and it’s downright tacky to ask. In many cases, our friends are young(ish) professionals, just finding their professional footing. I’d hate to tell them that a $60 waffle iron was what we were eyeing, only to find out later that the money spent on the gift severely stretched their budget. In other cases, I have a general idea of what someone can afford – say, family members like aunts, uncles, or cousins. I know my cousin, a lawyer, is doing well in his career, but that doesn’t mean I should take advantage of it.

The answer to the question, “How much should I spend on a wedding gift?” is inherently personal – and, inherently intangible. A 2009 article from CBS News broke down suggested wedding gift expenses this way:

Co-worker and/or distant family friend or relative: $50-$75
Relative or friend: $75-$100
Close relative or close friend: $100-$150

That’s the average, though. According to proper wedding gift etiquette, the scale of the affair is not supposed to factor into the gift-giving decision. That is to say, if one of your co-workers has a five-course, sit-down dinner at a country club while another has a buffet reception at the local VFW hall, but you’re equally close with each, it shouldn’t affect what you buy (ie, you don’t have to “pay for your plate”). However, the cost of living is far higher in Washington, DC, than it is in Roanoke, Virginia – meaning the same $75 gift may look thrifty in the Capitol and simultaneously luxurious three hours to the south.

Buy A Gift

Another question I’m getting a lot these days has to do with exactly what type of gift my fiancée and I want to receive. Namely, do we want a physical gift or just money?

The easiest answer is to simply point guests to the wedding registry. After all, that’s what it’s there for. Months ago, we spent a painful (don’t tell my fiancée I said that) afternoon using one of those barcode-scanner-things to load up our registry. Now, while I can’t say I paid all that much attention to what my fiancée actually scanned, I can tell you – with certainty – that there’s a lot on that registry. Some of the items were cheap; things like place mats and hand towels and napkin rings were less than $5 each, and some were these great gifts.. Other items, like our bedding set and cutlery, were far pricier. Some of my friends who have gotten married have even registered for furniture or their honeymoon, allowing guests to donate an amount they’re comfortable with to the newlyweds.

That’s what makes registries so ideal. They’re kind of like a matchmaker, a gift middle-man, ensuring that the bride and groom get exactly what they want while giving the guest the opportunity to select the ultimate price tag without broaching wedding gift etiquette.

Write A Check

The fact is, the decision to buy a gift isn’t for everyone. For one, guests traveling from out of town may be encumbered by a bulky gift. For others, like a cousin with a new baby, it’s just another thing to add to an already busy to-do list. And I realize that other than to me and her, this isn’t the biggest day in world.

That’s where giving money as a gift comes in to play. A friend of mine let it be known through word of mouth that she and her husband-to-be wanted cash for a wedding present. When it was all said and done, their extensive guest list of more than 200 had given them a whopping $15,000 in cold, hard cash (and slightly less-cold, less-hard personal checks). A college buddy and his wife intentionally created a small bridal registry, so their wedding guests would have no alternative but to hand over a check.

Some wedding guests don’t like giving money as a gift because it feels impersonal, sterile, antiseptic. Likewise, many engaged couples don’t like asking for money because it’s perceived as tacky, uncouth, and greedy. The bottom line, however, is that for many couples, cash is king. For a couple starting their lives together heavily in debt, it can be far more freeing than a food processor ever could be. For a couple looking to buy a house, the windfall of several thousand dollars in wedding gifts can mean the difference between a loan approval or denial – unless, of course, banks are now accepting bone china as part of an acceptable down payment.

Readers, what are your rules for giving wedding gifts? Do you follow a specific formula?

Updated August 17, 2015 and originally published May 7, 2012.

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