Tuesday, May 15, 2018

Spending Habits That Make You Look Broke

At some point in your life or even now you have had at least one bad spending habit. My bad spending habits started in college when I was approved for my first credit card. This type of behavior leads to unnecessary debt and can lead to financial crises such as bad credit, collections, judgments or wage garnishments. 

These habits can be inherited from parents, relatives, siblings or friends. These habits usually start or are implanted in your subconscious as a child and stay with you throughout adulthood.
Determine where the bad spending habits started. Stop these bad habits now will save you time, money and stress in the future.  

Examples of bad spending habits are: overspending or spending more than you earn, impulse or emotional shopping, using payday loans or check-caused stores, using money orders instead of writing checks or using online banking; talking about your purchases and the cost.  Here are x way to stop bad spending habits that make you look poor. 

To stop bad spending habits write down your daily spending on paper and pen, Word or Excel or use a smartphone app. Assess your spending each week to determine areas where you can reduce spending.

Create a budget to track spending or use a budget app. Create realistic financial goals to help you stay on track with your spending. Go on a 30 day spending fast. Stop charging and buy only basic necessities.
Use voice recording, set alerts or reminders when bills are due and any other tasks to help you eliminate your bad spending habits. Seek professional therapy to help change your mindset.

Comparison shop to obtain at least 3 price quotes to find the best deal. Search online and on social medial sites for discounts and specials. Sign up for email or text alerts. Use comparison sites like Amazon, Bizrate and Price Grabber or smartphone apps like BuyVia or RedLaser.

Sign up for email or text alerts about coupons, discounts or specials on item your regularly purchase. Use cash back or rewards points earned to make purchases.

You no longer have to pay full price for any item. You can comparison shop, ask for price matching or negotiate to obtain a lower price.  Reduce temptation when shopping and leave your debit card or check card at home.

Tuesday, May 08, 2018

The Real Cost of Gym Memberships

May is National Physical Fitness and Sports Month. If you type in the word gym, it returns over 630 million search results. This shows that many people are concerned about health and physical fitness. According to research from International Health, Racquet and Sportsclub Association and Bureau of Labor Statistics the average person goes to the gym twice a week. The average cost of a gym membership is $58 per month but prices can range from $10 to $100 per month. Approximately 58 million people go to a gyms or health clubs. 

How to Select a Gym/Health Club
  1. Read the agreement. Some gyms offer extra services that are included in your membership, take advantage of them.
  2. Pass. Ask for a guest pass to try out the facilities before joining.
  3. Comparison shop. Look for deals for memberships online and use coupons from Groupon or Living Social.
How to Negotiate Prices
1.       Set a price you want to pay and offer 10% - 20% less than that amount.
2.       Quote competitor prices to get a better deal.
3.       Ask that the initiation fee and other fees be waived.
4.       Refer friends and family to the gym to get credits on bonuses on your membership.
5.       Ask for the Sales Manager and negotiate. The front desk clerk may not have authority to negotiate.
6.       Negotiate when your contract is about to expire.
7.       Do not accept the first or second offer.

How to Save Money on Fees
  1. Some gyms will offer three to six month memberships.
  2. If you pay by the year you can save anywhere from 20% – 40%.
  3. Some gyms let you sign contracts for a few years in advance.
  4. Find pay-as-you-go facilities.
  5. Look for deals on memberships online and use coupons from Groupon or Living Social.
  6. You may be able to get fees waived or reduced if you pay cash.
  7. Avoid buying extra membership services most are never used.

Tuesday, May 01, 2018

Wise Ways to Invest Your Tax Refund

Did you get a tax refund this year? You are not alone. Many Americans love getting a tax refund each year. A tax refund is the amount of money you over pay in taxes in each year. However, a tax refund is just another way to help the government make money. The money each taxpayer pays during the year is placed in a high interest bearing account and the government keeps the interest. The money given in a tax refund is small compared to the money the government earns each year from the millions of taxpayers in America.

There are only a few instances when you should overpay your taxes; if you want to use the extra money to pay down debt during the year or if you believe you will owe taxes at the end of the year. If you work hard all year long, why do you wait until the end of the year to get back money you earned? Get your money upfront by adjusting your tax withholdings. Consult an accountant to make sure do not end up owning money at the end of the year.

If you are struggling to pay bills or need to get out of debt your tax refund can be a lifesaver. However, it is up to you to determine how to spend it. If you do not come from a wealthy family, you are the only one you can depend on so make wise choices with your money because no one knows what the future holds. It is easy to get in debt and stay in debt, swipe that check card or credit card and ignore the bills. It takes courage to look at your situation and make a decision to do better.

I was $19,000 in credit card debt after graduating college earning $21,000 a year at my first job. I lost my job and was unable to make the minimum monthly payments. I was hired for another job but it took me four years to pay off all of my debt. It was the hardest four years of my life but I learned valuable lessons that a bankruptcy lawyer, credit counselor or financial advisor could teach me. I learned the hard way and those lessons were never forgotten. Remember what your grandparents said and save for a rainy day. Here are four ways to use your tax refund wisely.

Invest $500
·       Buy a mutual fund, some allow you to start with as little as $50 a month
·       Open a discount brokerage account and buy individual shares
  • Open an IRA with a low expense ratio under 1%
  • Open a CD, higher interest rates can be found with online banks or longer CD terms (1-5 years)
  • Open an online high interest money market account that has no fees or minimum balances
  • Open an online interest checking account that earns 2% or more
  • Participate in a DRIP (dividend reinvestment program) to buy stock directly from companies and automatically reinvest the dividends earned from the stock
  • Join an investing club, they usually charge a membership or annual fee to join
·       Pay down debt
·       Start a savings account to cover monthly bills and expenses from 9-12 months

Invest $1,000
·       Start a savings account to cover monthly bills and expenses from 9-12 months
  • Invest in an exchange traded fund or buy individual shares of stock
  • Buy municipal bonds with at least BBB rating
·       Buy 100 shares of a stock priced at less than $10 or buy 50 shares of a stock priced at less than $20, etc.
·       Invest in a mutual fund
·       Contribute to your retirement account

Invest $5,000
  • Open a 529 college savings plan
  • Invest in a low-to-medium-risk mutual fund
  • Invest the maximum in a Roth IRA ($5,000 per year)
  • Buy municipal bonds with at least BBB rating

Invest $10,000
  • Buy a franchise
  • Invest in a profitable business
  • Start a business
  • Buy real estate