Ten Giant Wastes of your Money

Do you waste money? Do you misuse it to the point that you might as well set it on fire? Do you have money to burn? I am sure you don’t think you do. No one wants to waste money but we often do unknowingly. There are more money wasters out there than I can list in the blog. After you have read my top ten ideas for how we waste money, I encourage you to pass along your own ideas. I will compile them and put your ideas into a future blog. You can respond to this blog or send them to GMeyer@meriwest.com.

1. Unused memberships for which you are still paying. Gym memberships, online gaming, dance clubs, fraternal organizations, etc. These memberships take money from us every month. If we are not using the advantages of these memberships, why are we still paying for them?
2. The social life is cool, but at what cost? One or two nights a week out drinking and carousing can cost you $30-$50 a night depending on the bar. It’s not all booze because when you are out drinking you invariably want to go out to eat. Who’s going to run home and fix pasta after four drinks? Besides, all those cool people at the bar are not at your home!
3. Regularly eating lunch in restaurants or take out. How much does it need to cost before you decide to start making your lunch at home and taking it with you? A cheap lunch of a deli sandwich and a soda can run $7 today, much more if you want something more elaborate. If I eat out four times a week all year long how much does that cost at my (low) average of $7 per day? Try nearly $1,500! It runs about a third as much to bring your lunch regularly.
4.  Style. Addicted to style and fashions? Do you have fashion magazines coming to your door? Is the next thing from your fav designer the next must have fashion addition? Cool your jets. This is a problem for men and women. You can be helped; you just have to admit you have a problem! Now, repeat after me, “I am addicted to fashion!”  Good, now get some counseling!
5. Gas hogs. Have you checked the gas mileage on your car lately? A ten mile per gallon difference, going from 20 mpg to 30 mpg, can be a $1,000 savings at $4 per gallon! (based on US resident avg. mileage of 15,000 miles annually)
6. Cable Premium Services. Do you still have HBO, Showtime, Starz, Cinemax, and the Movie Channel? It may be costing as much as $50 monthly/$600 annually to maintain these movie channels. Is it worth it? A subscription to  a streaming video provider is much cheaper!
7. Tired of paying for cable? Did you know your local broadcast TV stations still broadcast on the air? Modern flat screen TV’s have digital tuners built into them. A $10 rabbit ear  style TV antenna from your local electronics store connected to your Flat Screen can bring in a lot of programming; 54 stations in San Jose alone without a cable box or a satellite dish! Local television stations now broadcast in digital, meaning they have a lot more programming available. What was one channel prior to the advent of digital broadcasts is now 3 or 4 different channels. You want more? Consider internet TV. There are a variety of inexpensive internet TV devices ($100 or less) that work with your high speed wireless internet to bring you 1,000 channels of programming such as Youtube, the major TV networks, and most cable networks. Your Smart TV or BluRay DVD player may have this access built in to it. If you have a fast internet connection and an antenna on your TV, you might be fixed and be able to tell cable and their rising monthly fees good bye. Typical cable bills can be >$100 monthly. Would that look better in your savings account?
8. Still getting the newspaper at home? If you have the internet and a smart phone, is the newspaper necessary? Every news item in the paper was a news item 24 hours ago on the internet. Why do you want old news delivered to your door?
9. Do you buy extended warranties? When you check out of electronics stores with your gadgets, you are often asked if you want the extended warranty. These are unnecessary as the manufacturers generally have pretty good warranties to begin with. The extended warranties have a laundry list of exclusions that often prevent you from using the warranty as it was originally intended. Extended warranties are seldom used and make a lot of profit for the store where you purchased your item.
10. You don’t maintain a budget. You get paid and have no idea where your money goes because you don’t track it or pay attention to it. You hope that payday comes soon as you may be running out of money. That’s no way to live your life! Build a simple budget and use it to control your spending. You will save some money!

Get out last month’s checking account statement and see where your money went. How much was your cable bill? How much did you spend eating out? What was your gasoline bill for the month? You may find some fine incentives that can help justify one or two lifestyle changes that can help you save a few dollars here and there. The only question remaining is, are you ready to make that change? I am sure your savings account and your wallet would be happier. 

5 Behaviors of Highly Effective Savers

Today's blog is a guest blog from the team at Debt.Org. Special thanks to the writer, Alanna Ritchie.

Managing personal finances successfully requires more than understanding numbers and having good accounting skills. In order for debt management solutions to be effective in helping you get out of debt and stay that way, they must be supported by changes in behavior.

Adopting five behaviors of highly effective savers can help to ensure that once you gain control over your debt and finances, you'll be able to keep that control in the long-term. Try incorporating these behaviors into the way you operate your personal finances, as well as your life in general, and you'll be sure to see positive results:

Set Incremental Goals

Setting a huge, generalized goal may end up overwhelming you, rather than moving you forward. Take that big goal – to get out of debt, perhaps – and break it into smaller, very specific steps with a workable, realistic time schedule. For example, when preparing for an upcoming big expense, set a weekly goal for saving for it.

Be a Good Record Keeper

Keeping track of what comes in and what goes out assists you in understanding the effects of your financial choices. When you are working to regain control of your finances, being a good record keeper will show you the positive results of your efforts, supplying even more motivation to keep up the good work.

3.       Own Your Situation and Your Choices

If creditors are pressing you or your credit card interest rates have skyrocketed, the bottom line is that such things are a natural consequence of your past behavior. Accept it, own it and deal with it, rather than being angry at the people calling or your credit card company. It will reduce the stress in your life and help you to be more focused on what has to be done. Maybe think of joining a credit union. They normally have fewer fees, lower interest rates on loans, more services and higher dividends on deposits than banks.

4.       Prioritize Properly

Place long-term well-being over instant gratification. Expand your vision beyond what you want in the moment to what you hope for and really need in the future by putting money in savings before you spend any for pleasure. Apply this concept to credit card use. Make financial choices—like putting money in savings or making a credit card purchase only if you know you will be able to handle payments—with the future in 

mind.

5.       Evaluate and Adjust as Needed

Effective savers are good at evaluating their own behaviors and situations and making the necessary improvements. They strive to be honest about their weaknesses and work hard to improve them. That is because they keep their goals and the big picture clearly in mind.

When you make these behaviors a part of how you manage your life and your finances, you'll be able to make the most out of the opportunity that debt settlement or other debt-related solutions offer you. All the work you do to eliminate debt will be wasted if you don't supplement the effort by developing behaviors that will keep you from returning to that position again.

Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.

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Our next Free Financial Education Workshop is this Wednesday. Credit Myths and Repair will explain the top ten myths of managing credit. We will address balances, payments, collections, and judgments.  The workshop is fun and informative. You will learn more about credit than you had ever imagined!

Credit Myths and Repair

6:30 PM - Wednesday, August 28th. 

5615 Chesbro Ave, San Jose CA 95123

To RSVP, please contact gmeyer@meriwest.com or call 408-365-6328

5 Things New College Grads Should Know About Money and Credit

 

Let’s start with five things every new college graduate should know about money and credit. We will end with a few words of advice for new grads facing an uncertain economic future.

1. Everyday, more and more employers are now looking at credit reports as a condition of employment. If you are responsible with your personal credit, you will likely be a responsible employee. Manage your credit well and enjoy the low rates and easy availability of money good credit management brings. You will want this when you buy a car or a new home.

2. Review your credit report annually! Reviewing your report annually for free at AnnualCreditReport.com can keep you abreast of your personal credit situation and help you spot Identity Theft.

3. Paying Bills: Very simple, your utilities need to be paid on time just like your credit card bills. Sure, you can let your light or water bill float for a couple of months and paying them 30 or 60 days late won’t count against you. As a matter of fact, you have 89 days to make your payment and have your account reinstated. However, if you wait to that 90^th day, you are now delinquent. Your water, light, or phone bill amount will now be placed in collection and exist as a negative item on your credit report for seven years whether you pay it or not. (Paid collections remain on our credit reports for the balance of the seven years after payment as a reminder to others that you were irresponsible once or twice or repeatedly depending on how many collections one has.)

4. Social Security: Social Security will exist in a very different format for these Gen Y students. They need to be self dependent and plan for their retirement early. No one will do it for them. In my workshops, I often ask who wants to retire with a million dollars in their retirement account. Of course, multiple hands go up. The point: When your employer offers you a 401k, pension, or any other type of “qualified” retirement plan, simply say “YES!” Start contributing to the retirement account. Put in at least 6%. You won’t miss it, you will save a few dollars on your taxes, and you will be pleasantly surprised when you get your retirement account statements and see it growing. This is especially gratifying if your employer matches your contribution or provides pension plan contributions from profit sharing.

5. Social Media: Restrict your personal information that is shared over the internet. Too many young adults share too much as it is and do not take proper advantage of privacy controls in websites like Facebook. If you don’t want your next potential employer to see your spring break photos of drunken debauchery in Palm Springs or Palm Beach, tighten up your privacy controls, Dude!

I think following these five ideas can save you from living in your Mom’s basement forever.

In my work with recent college students and grads, one of their greatest fears is that they will never own a house. Recent grads are facing a difficult time in some areas with the homes they may want to buy being priced out of site for them due to the current demand. Don’t worry. The average age of a first time homebuyer is 30 years old. Most people I know did not buy a home until they were well into their 30’s. There is no rush to buy a home despite the increases in overall prices. You have time to save your money. You have time to evaluate where you want to live and whether a house or condo would be best for you. You have time to gauge the economy and pick your best time to buy.

I have noticed it and it has been expressed to me by some students, the financial markets are too volatile. Why would they want to put their money into the stock market? They fear the return of the great recession. When I was 21 in 1981 there was a recession on and it was pretty serious. Interest prime rates had risen over 20%. No one could get a decent interest rate to buy a home. Unemployment was 8% and rose to 10% over the next two years. In the early 80’s, we had many of the same fears today’s grads suffer.

What happened? Eventually, markets went into recovery. Unemployment was under 6% by 1988. The stock market doubled, tripled, and eventually grew to 14 times its size by the present day. This didn’t happen in a nice even fashion. It took a market crash in 1988 (22% drop in the Dow in just one day!) and three recessions in 1992, 2000, and 2008 to get here. Financial markets are cyclic and, historically, have always recovered and surpassed previous high water marks. 

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