Top 10 Tenants for Creating a Culture of Smart Saving and Investing

Whether from a family-centric view or the entire society, smart savings and investing isn’t just a process. According to reports, the average American household has about $15,355 in credit card debt, much more if you factor in mortgages, personal loans, student loan debts, and vehicle loans. This is an expensive fact of American life. How can we change it? What will it take to create a culture of savings and investing instead?

#1: Teach Kids Smart Money Management
Even from a child’s perspective, money management should start with savings. Instead of spending a whole dollar, teach children to save half of it.

#2: Instant Gratification Isn’t the Best
From turning on the laptop to purchase something desired instantly to buying from a smartphone, it’s easy to spend money. Instant gratification, though, is not necessarily the best for people. It teaches to spend without regard to savings. How often do you make a purchase only to wish you didn’t a day later?

#3: Move Away from Credit Use
Credit cards are a key reason people face debt. It’s often considered the smart decision to use credit for everyday purchases, in fact. However, moving to a cash-based payment system within the home, for example, teaches better money management. You can’t buy it if you don’t have the money on hand to do so.

#4: Access to Easy Investing Tools
People are very digitally focused today. If you provide access to digital ways to save and invest, such as through the use of apps or online tools, people are more likely to engage in this activity. Going into the financial advisor’s office isn’t likely, on the other hand.

#5: Budgeting Has to Be a Priority
Another key area of concern is creating and sticking with a budget. Online tools are available to help with this. A budget should be a focal point of the monthly money management process.

#6: Tracking Spending
Sometimes, people don’t realize just how much they spend on spur of the moment purchases. From stopping to pick something up at the grocery store to getting a cup of coffee on the way into work, tracking how much is spent is essential.

#7: Rewards for Savings
On a society level, creating a system that rewards people for saving and investing, much like it does for using credit cards, can help to show people the value of making this change.

#8: Create Long Term Goals
Not only do financial advisors have tools to tell people how much money they need to save to achieve retirement goals, but so does most of America. The need to use such tools to plan savings is growing.

#9: Access to Education Is Essential
From credit unions to community colleges, there needs to be more focus on teaching everyday people how to invest and the rewards that it offers.

#10: Teach the Consequences
It’s also important for people to see, visually, the consequences of not saving. Education online or otherwise should showcase what happens when people don’t save, the cost of debt, and the cost to their future.

At the height of the recession, Americans were very conscious of their money. Now that the economy has improved, it appears many Americans have gone back to bad habits. Creating a culture of savings is anything but easy to do. However, it is one of the most important changes society needs to benefit in the long run.

10 Tips for Increasing Your Salary

Most everyone wants to make more money, but not many people have a strategy for making that happen. Here are 10 tried-and-true tips for increasing your salary.

Be aggressive when negotiating salary raises

Don’t be shy about asking for what you expect to be paid. Document your achievements, and use your documentation to support your claim that you’re worth more than the salary your company is currently paying you.

Compare your salary

Before asking for a salary increase, know what you’re worth. Find out how valuable your skills, experience, and knowledge are. There are plenty of websites where you can research this; however, try to find one that is region specific. Be sure you compare apples to apples.

You can evaluate salary rates through the following sites:

Become a trusted advisor and expert

Learn about the trends and developments in your career field. Attend industry conferences, read industry publications, and meet regularly with experts in your field who are willing to mentor you. Learn all you can about your company and the line of business in which you work, then put all this knowledge to work by being an indispensable expert for your management and peers.

Be visible

You can have extensive background and skills in your career field, but that doesn’t do you any good if no one knows who you are. Take on challenging projects, or work assignments and make sure management (including senior leaders) are aware of your contributions. Make sure to speak up during meetings too. All too often people miss this type of opportunity to demonstrate their knowledge and skills to an influential audience.

Keep learning

Create a development plan that includes training and certification programs that lead to a promotion. Consider taking online learning courses and don’t forget to find out if your company will reimburse you for job-related education expenses.

In today’s world, there’s no reason not to keep up with desired skills. There’s a wealth of information available on the web if you put in the work to find quality (and credible content). Here are just a few resources to consider:

Make sure additional degrees are worth it

Some people make the mistake of going back to school to get an additional undergraduate or graduate degree without first considering whether it’s worth it. If you plan to stay with your current company, find out if the company values education as much as it values experience. You may find that you already have the same educational background or degrees as senior management.

Be a change champion

When things change at work, don’t fight them. Instead, be positive and an early adopter — your adaptability and enthusiasm for change could result in a salary increase. Remember, the one constant is change.

Be open to feedback

Constructive criticism is a great development tool. Ask for it and take steps to improve your performance based on it. Don’t forget to seek feedback from your peers, as well as your boss.

Hone your communication skills

People who speak and write well have an advantage over those who don’t. If this is an area of opportunity for you, consider taking a writing and public speaking class.

*See resources above for available classes

Embrace math

Increasing your salary may mean moving into a position where you have to manage projects or department budgets. This means you’ll have to be comfortable reading financial statements and reports. Brush up on your math skills and take internal or external courses to learn the basics of managing business finances.

There’s no magic formula for increasing your salary — one size does not fit all. It’s up to you to select the combination of recommended tips that fit your career goals. No matter what your situation is, be open to opportunities to develop your skills and gain exposure within your company.

What has worked for you?

4 Tips for Improving Your Credit Score

Your credit score is the key to not only getting approved for credit but also how much you pay for it. In some cases the higher your credit score, the lower your credit card or loan annual percentage rate will be. Some factors that affect your credit score are out of your control. Others are not, so here are four tips for improving your credit score fast.

Fix Errors Fast

Banks, credit card companies, mortgage companies, and other lenders do make errors when reporting your credit data. That’s why it’s important to regularly get and review your credit report. By law, you can get a free credit report once a year from each of the three main credit bureaus: Equifax, Experian, and TransUnion. Every four months order a report from one of the bureaus and start the cycle over the next year. If you find any errors, notify the company responsible for reporting it immediately.

Maximize Your Available Credit

Many people will tell you to close all but one or two of your credit accounts. Otherwise, it looks like you have a ton of credit card debt. Don’t listen to them. Your credit utilization ratio is one factor that contributes to your credit score. It’s based on how much of your available credit you’re using. If you have several credit cards with little or no balance on them, your credit utilization ratio decreases. In turn, your credit score increases. So, keep your accounts but pay off or pay down your balances.

Monitor Your Credit Limits

Reaching or exceeding your credit limits on your revolving credit accounts brings down your credit score. A credit card company might raise your credit limit but fail to notify the credit bureaus. Once you begin using that additional credit, it might appear to the credit bureaus that you’re exceeding your available credit and that will lower your credit score. If a company increases your credit limit, check your credit bureau reports and ensure they reflect the correct credit limit. If they don’t, call the company and have them send an update. Then confirm the correction was made when you get your next free credit report.

Protect Your Identity

Identity theft can wreck all the hard work you’ve done in improving your credit score. That’s why it’s so important to check your credit bureau reports on a regular basis. If your credit score is suddenly much lower than the last time you received one but your credit history hasn’t significantly change, identity theft might be the root cause. Many financial institutions, credit companies, and insurance companies offer identity theft insurance. You might want to check on rates and take advantage of the protection.

Keep in mind that a clerical error at the credit bureau can also create an issue. Someone could very easily have mistyped your social security number. That mistyped social security number might be valid and belong to someone who has a poor credit history. Check your identifying information on your report before assuming identity theft.

Once you improve your credit score, it’s a matter of maintaining your good credit and enjoying the benefits it provides.

Weekly Cartoon: The DMV

Dont want to be at the DMV

I’ve experienced this too many times…

8 Tips to Save on Back to School Shopping

It’s that time of year again – time to buy school clothes, gear, and supplies. As you know from previous years, you can spend a fortune on everything kids need. Here are eight tips on how to save money during this year’s back to school shopping.Watch for end of summer sales

Today’s kids wear shorts, tee shirts, and polo shirts throughout the year – even in the dead of winter. So look for these items at the big end of summer sales and buy them at discounted prices.

Stick to the teacher’s supply list

There’s quite a lot on the supply list you receive from school, so don’t waste money on items not on the list. One way to save is to buy school supplies when they’re on sale at your grocery store. Check the weekly sales paper for pens, notebooks, loose-leaf paper, and other basics. Save time and gas money by buying your groceries and school supplies at the same place.

Hold a back to school swap

Some kids don’t mind wearing used clothing as long as the garments are new to them. Host a back to school swap where families bring gently worn items to trade with one another.

Plan lunch

You can save a lot when you plan lunch menus. See what lunch items are on sale at your grocery store each week and plan lunches around them. If ham is on sale at the deli one week, buy it instead of another deli meat. 

Make them stand out

It’s inevitable that school supplies will go missing. Here are some ideas to prevent loss. Buy bright backpacks and pencil pouches or boxes that stand out from other kids’ gear. Get plain white or black 3-ring binders and let your children decorate them with personal photos. Kids love the art project and personalized items are less likely to disappear.

Shop at places that rotate merchandise often

You can find great deals at clothing stores that rotate their merchandise often. Some stores that do this are Old Navy, Gap Kids, and The Children’s Place. These three stores and many others will refund you the difference if an item goes on sale within 14 days of the date you purchased it. All you have to do is bring in the receipt to get your refund.

Browse Craigslist

Visit Craiglist and shop for clothes. You’ll find some great deals on gently worn items. You can also sell items. Why not make some cash on brand-name outfits that your kids no longer want to wear?

Hold off on buying gear

Have your children use last year’s backpack and lunch box for the first week of school, so they can see what the trends are. If you buy gear before school starts, your kids may want something completely different after they see what all the other kids are using. 

Back to school shopping doesn’t have to cost a fortune. Use these great ideas and save!  What tips have worked for you? 

Weekly Cartoon: Deadbeats?

Funeral debt collector

I guess funeral homes don’t have deadbeats?  Or do they?

4 Financial Tips for People of All Ages

Understanding how to manage your money is important to your financial success. However, most people don’t learn the basics of personal finance in school. Those who do probably forget most of what they’re taught before getting their first “real” jobs. Here are four personal finance tips that will help you live comfortably now and in the future no matter what age you are.

Use Self Control

Impulse buying is a temptation everyone falls victim to every now and then. Credit cards and loans make it easy to buy something as soon as you want it instead of saving for it. That’s not to say that buying on credit is always a bad thing. Most people can’t afford to buy a car or a house without getting a loan. For everything else, ask yourself whether you really need it. “Do I really need this new pair of shoes? Am I willing to pay interest on the latest and greatest tablet when my current one works just fine?” Credit card spending is a bad habit to get into unless you can pay your bill in full each month. Otherwise, you may be paying for the items you purchase with your credit cards for several years.

Here’s a trick I used for many years. I would ask myself if I would take out a loan for this purchase. The answer was usually “no” — especially when I was going out to eat. But when you use a credit card for your purchases, that’s exactly what you’re doing. The next time you reach for your credit card when buying a sandwich ask yourself if it’s worth taking out a loan with a high interest rate.

Take Control of Your Finances

Many people are intimidated by financial matters, so they consult with others for advice. Some people get great advice. Others don’t. Some fall victim to financial advisors only interested in making a buck. Some fall victim to well-intentioned Uncle Henry who made his fortune 50 years ago but isn’t in touch with today’s financial realities.
Take control of your finances and read a few books from reputable personal finance authors. How do you find reputable authors? Do some online research. Many contributors to Money, Fortune, and other reputable financial websites have written books. Avoid authors who write about “getting rich quick.”

I have heard a lot of great things about Dave Ramsey’s book, Total Money Makeover. You can buy a copy direct from his site here.

Start an Emergency Fund

“Pay yourself first” is something most financial planners advise. No matter what you owe to others, create an emergency fund and put some money it every month. It doesn’t matter how much. Budgeting a specific amount from each paycheck is the best way to build your emergency fund.

Your emergency fund will help you pay for large, unexpected expenses instead of relying on credit cards or loans. Saving for emergencies will help you save in general. Soon you’ll find yourself saving for vacations, a new home, or even retirement. Remember, no one asks for disaster, but things happen. Better off being prepared.

Guard Your Health and Wealth

Rising medical costs are certainly making insurance premiums higher, but think about how much a trip to the ER could cost you. That broken arm might cost you thousands that you don’t have and put you at risk financially. Take a little time to determine how much health and medical insurance you need and shop around for the best rate. Then take care of yourself. Eat healthy and get regular exercise.

Once you’ve protected yourself, protect your assets. Be sure you have renters or homeowners insurance. Don’t forget about disability insurance which will protect you if you’re unable to earn income. Many companies offer disability insurance to their employees at a minimal rate through payroll deduction. Find out if your employer offers it and take advantage of it.

I learned the value of these benefits after my motorcycle accident. I was very fortunate that my employer offered this type of coverage because I was able to pay my bills while I was recuperating.

What tips or advice would you offer?

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