Three Financial Resolutions You Can’t Afford Not to Make This Year

And how to actually keep them

Every January, millions of Americans determine to shed a few pounds and to finally get their finances in order. Unfortunately, most estimates indicate that less than 30 percent of those well-intentioned resolutions make it through the year. The reason most resolutions fail is because a plan is never laid out to help achieve the goal. If you are serious about finally getting your finances in order this year, here are the three resolutions you need to make, along with easy steps to help you actually keep them.

1. Automate your finances.

Why it’s important: If it’s not easy, most of us will quit before the New Year is a month old. The key to effectively managing your money is tracking where it’s going, and how much money you have allocated for specific categories. Paper and pen will do the trick, but be honest with yourself, do you plan on keeping that paper and pen with you for the next year, logging each and every purchase no matter how large or small? The Internet allows you to track all your accounts with no manual effort, and will even do all the math for you. If it’s automatic, you won’t get lazy, and you won’t forget to do it either.

Managing your finances online may also help keep your money safe. According to a 2005 study on identity theft by the Better Business Bureau and Javelin Strategy and Research, “electronic monitoring provides greater safety by sharply reducing time to detection, and potentially eliminates the paper records and mail that are possible avenues to many identity theft cases.”

How to keep your resolution: Set up a secure online budgeting system like Mvelopes Personal (www.mvelopes.com). The subscription service will automatically track your expenses from multiple accounts and credit cards as well as provide you with balances of various savings and spending categories. Seeing where you are spending your money will let you know where you can cut back. Seeing your net worth rise in the net worth tracking feature will keep you motivated. With a 30-day free trial, if you do give up by February, you can simply call and cancel.

Set up automatic transfers with your bank to pay your mortgage and other fixed payments to avoid missing a payment or incurring late fees. Use online bill pay to save on envelopes, stamps, and time (Mvelopes Personal includes a free bill pay service, and most banks now offer bill pay for little or no extra). Set up an automatic transfer to a savings or money market account once a month. Find a high interest bearing account to maximize your savings. Many online banks, such as EmigrantDirect, are currently offering three to four percent APY on savings accounts.

2. Stop paying interest and start earning it.

Why it’s important: According to Bankrate.com, if you charge $1,000 on your credit card, and pay only the minimum payment (assuming an interest rate of 15 percent and a 2.5 percent minimum payment), it will take over 10 years to pay off and cost an additional $757.98 in interest. Conversely, if you were to take only the amount you would be paying in interest each month on that loan and invest it in an account earning ten percent, it would grow to $1,594.92 over that 10 years.
Even if you’ve gotten deep into credit card debt and can’t pay it off quickly, you can save a bundle by lowering your rate, and paying more than the minimum. By dropping the interest rate on your credit card in the example above to 11 percent and paying only $30 a month, you could pay off that $1,000 in just over three years with only $198.85 in interest.

How to keep your resolution: Always pay at least the minimum payment on time, and if at all possible, pay your credit card balance in full each month. Mvelopes Personal has a credit card tracking feature that automatically sets aside the exact purchase amount each time a purchase is made on your credit card to help you pay off the balance in full each month.

If you are carrying a balance from month to month, cut your spending to a minimum and allocate all the extra money you can to paying off your debt. Use the debt roll down principle to quickly reduce your debt. Make a list of all your consumer debts and prioritize them in order of interest (highest to lowest). Pay the minimum on all your debts and pay as much as you can on the one with the highest rate. Once your first debt is paid off, roll that payment amount into the next debt on your list.

Call your credit card issuer and try to negotiate a lower rate. If they decline, let them know you plan to roll your balance to another card and cancel the card with the higher rate. If your credit history is clean, you should be able to find a card with a 0 percent introductory APR. Don’t make any purchases on the new card as often the introductory period ends as soon as you make your first purchase. Be careful the interest rate doesn’t skyrocket after the introductory period, and make sure you cancel the card with the higher rate to avoid simply running up a larger debt load. Check www.creditcards.com to compare credit card offers.

Check your credit reports to make sure they’re accurate. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. You can order your reports online at www.annualcreditreports.com or by calling 1-877-322-8228.

3. Stop procrastinating saving for your retirement.

Why it’s important: Time can be your biggest ally when investing for retirement. For example, if you begin at age 25 and invest $4,000 annually in a portfolio that provides a 10 percent average annual return, then stop contributing after 10 years, your investment will grow to $1,365,818.31 by the time you retire at 65. However, if you procrastinate investing until you are 35, then contribute $4,000 annually in a portfolio with the same 10 percent average annual return, and continue to contribute every year for 30 years until retiring at 65, your investment will only grow to $759,775.11. Even though you contributed $80,000 more over the life of the investment in the second scenario, you still ended up with $600,000 less.

How to keep your resolution: Contribute at least enough to your 401(k) to get the maximum company match. Talk to your HR department to find out the details of your company’s plan. If your employer offers a company match and you are not contributing to your plan, you are essentially turning down a bonus every year. And since your contributions are taken out on a pre-tax basis, as you increase your contribution, your taxable income decreases, meaning you pay less in taxes.

Open a Roth IRA. Your money grows tax-deferred, and just so long as the IRA has been open 5 years or more and you are at least 59 ½ when you start to withdraw, there are no tax penalties for withdrawal. The maximum annual contribution increases to $4,500 this year.

Make sure that no more than five percent of your portfolio for either your 401(k) or your Roth IRA is in a single stock. Diversifying is the best way to ensure maximum growth over time while minimizing the risk and volatility of the market. Select an index fund or target fund for an easy option that requires little oversight. Fidelity, Vanguard and T. Row Price are among the largest purveyors of mutual funds and all offer excellent funds for a variety of investing styles.

From start to finish. Regardless of where you stand financially, the New Year provides an excellent opportunity to review your finances and make improvements. Make sure that this year you don’t just start fresh, but that you also finish strong.

The Real Magic of The Holiday Season

9 Practical Tips to Stay Debt-Free This Year

There’s something magical about this time of year when everything is trimmed with tinsel and various shades of red and green. But if you don’t have a spending plan for the holidays, you’ll likely end the year with too little green and deep in the red.

Here are nine smart money tips to make sure the magic this year doesn’t result in a disappearing act by your bank account.

1. Create a spending plan now. There’s no better gift you can give your family than financial stability. Determine how much you can reasonably afford to spend this year, then determine how much to spend on each individual, not the other way around. Don’t forget to include amounts for decorations, parties, and some of those ‘unexpected’ expenses.

2. Track your expenses to stick with your plan. If you wait until you get your credit card bill in January to see how you did with your plan, you’re almost sure to overspend. Track your expenses using online budgeting software like Mvelopes Personal, or a paper-based envelope budgeting system or spreadsheet, to keep an up-to-date view of your spending. Compare your actual spending to your plan often to make sure you stay within the limits you’ve set.

3. Set a deadline for paying off all holiday expenses. If you charge $800 this holiday season, and then make only the minimum payment on that debt, it would take almost 11 years to pay off and end up costing more than twice the original price (assuming a minimum payment of 2.5% or $10 and an annual interest rate of 18%). Mvelopes Personal (www.mvelopes.com) has a credit card feature designed to help set aside the money to cover purchases made with a credit card so you can pay the bill in full each month. You don’t want to still be paying for the holidays next August.

4. Trim the list along with the tree. In addition to trimming the tree this year, trim your gift list. Instead of sending knick-knacks to everyone you know, send a thoughtful note expressing your appreciation for their friendship. Spend the money you save instead to buy gifts for your closest friends and family or contribute it to your child’s college savings fund.

5. Send an e-card instead. You’ll save on postage and stationery, and many e-cards include animation and music and even interactive games, making them more fun than their paper counterparts. You can include a personalized message, and won’t have to worry about it getting there on time. Try hallmark.com or 123greatings.com for fun, free e-cards.

6. Get creative with your gifts. The best gifts require more thought than money. Gather up some old photographs and frame them. Create a digital photo calendar. Give coupons for babysitting, a back massage, or a day free of changing diapers. Refinish that old rocking chair. Make a warm batch of your famous chocolate chip cookies, or record yourself reading a favorite story for a niece or nephew far away. People will appreciate the personal touch and thoughtfulness of the gift.

7. Shop online. You’ll save time, gas money and possibly your sanity as you avoid the crowded parking lots and long lines. Many retailers offer free shipping for purchases over a certain dollar amount. Have the item shipped directly to the recipient to avoid an extra trip to the post office. Make sure you shop early to avoid paying expensive overnight shipping costs.

8. Step back to clear your head. It’s easy to get lost in the hustle and bustle of the busiest time of the year. Schedule some time to go ice-skating, see the lights, take a warm bath or enjoy a good book and a cup of hot chocolate in front of the fire. Taking a step back can help you clear your head to avoid getting caught up in a frantic spending frenzy.

9. Give to charity. One of the most common complaints about this time of year is that consumerism has hijacked the season. The remedy? Give to those less fortunate. Giving to charity helps keep needs and wants in perspective during the holiday frenzy. Give gently used clothing and blankets to a local shelter or the Salvation Army, or donate some time wrapping and distributing gifts for Toys for Tots or another organization. It may help your children – and you – discover the real magic of the holiday season.

7 Tips For Holiday Gift Giving

by La Tunya Sifford
Avoid the hassles of holiday gift giving this year by following a few simple tips.

1. Make a list of all the people you would like to buy gifts for.
2. Set a budget for each gift that you give
3. Write down gift ideas, Consider holiday gift baskets, or gift certificates.
4. Set a dealine to finsh your holiday shopping.
5. Look online, catalogs, for great deals.
6. Set aside a time and day for you to do you holiday shopping, when you find something that interests you, decide who on your list might like it
7. Gather shipping boxes, tape, etc.... Remember to ship your gifts as early as possile.
   

These tips will save you a lot of holiday hassles, and you can spend lots more time with you family for the holidays.

La Tunya Sifford has a online holiday gift basket website, you can visit http://www.fullmoongiftbaskets.com/holiday_gift_baskets.html for more info on Holiday Gift Giving.

Cut Holiday Bills in Half

Most of us have a certain number of holidays that we celebrate each and every year. That means quite a number of extra "gifts" that will need to be purchased for family and friends.

In a bit, you will learn exactly when to get the best bargains on holiday merchandise, and how you can save you quite a bit off your "gift" shopping bills.

HERE'S WHAT HAPPENS
Every single year, about a month and a half prior to any "major" (popular) holiday, most retail and department stores offer holiday related merchandise. For example, you'll probably find

Halloween Costumes - October
Santa related decorations - December
Autumn and turkey decor - November
Hearts/Candy assortments - February

As each holiday approaches, the majority of the general public rush to buy these high priced "holiday" gifts a few weeks or days before the celebration. Stores expect this. They love the holidays. Why?

Simple. Hundreds and thousands of eager shoppers will come through their door and spend, spend, spend.

KEY TO SAVING MONEY
You can use the 'retailers tradition' as an incredible chance to save money. What is the 'retailers tradition'?

Immediately AFTER any given holiday, retailers clear out ALL holiday relatedinventory in order to make room for the next. Think of it this way, how many of you NEED to buy a Halloween costume after October 31st? Not many right?

In addition, stores do not have the time, space, or manpower to pack leftover holiday merchandise and store it in a warehouse until next year. There is little or no profit in it for them.

Instead, stores advertise HUGE post-holiday sales with discounts generally ranging from 30%-80% off normal retail prices. They need to get rid of the merchandise, and depending on an items popularity, are willing to sell at a very low price.

Here is your chance to stock up on gifts that you KNOW you can give to someone the following year. Remember, nothing perishable of course.

If at all possible, designate a large plastic container as a "Gift Box" where you store all the gifts that you buy throughout the year. To take this idea one step further, keep a list of all the people you exchange gifts with. When you come across a gift for someone in particular, you can then cross them off your list.

TO SAVE EVEN MORE MONEY 
When you go to a 'post' holiday sale, check the prices and quantities of the items you want. Ask the store manager if the merchandise isn't sold within a week, will the price be lowered even more.

Generally, stores do not have much time to clear out inventory and if the merchandise isn't selling, they will lower it to a price that will sell.

If you have the time, check every other day to see if there are any more price reductions. Better yet, ask the manager to call you if the prices get lowered. You might find the manager offering you an additional 20% off just for inquiring for future price reductions.

CONCLUSION
When purchasing gifts throughout the year, you get to put more thought into what you are buying for someone. Your shopping will be done with ample time to spare, and you'll avoid those over crowded mall excursions. At the same time, you'll get holiday related merchandise at 30%-80% off regular retail prices when bought immediately after the celebration.

By the time Christmas or Valentines Day comes around again, you won't find yourself spending $900+ on presents that most likely will be forgotten in a month or two. Try this shopping strategy after the next major holiday. You'll be surprised at how much $40 can buy you.


-------
© Copyright 2005  --  http://www.SavingSecrets.com Get immediate access to over 500+ pages of effective money-saving articles, newsletters, and downloadable ebooks directly at their website. 

The Art of Good Money Management

Good money management needn't be difficult although it can often feel that way.

In fact, there a number of easy steps recommended by most financial professionals to help manage your finances better.

Pay your bills on time to avoid late fees. Don't wait until the red bill turns up!

Make notes of due dates in your diary and remember to allow extra time for postal payments to reach the recipient.

Pay more than the minimum on your credit cards. If you are paid weekly then pay a little each week rather than waiting until the monthly statement arrives.

Read your bank statement regularly. Keep an eye on all your incomings and outgoings.These days identity theft is very common so you need to make sure you are not paying someone else's charges.

Keep your receipts and check them off. This will give you a better idea of what you are spending.

Look around for and switch to credit cards with lower rates. Many credit card companies offer low interest rates for transferring balances from another card.

Follow a monthly budget.This may be easier said than done but if you are sensible about your outgoings then you will find managing your money much easier.

Try to spread big expenditures like Christmas shopping out by making a list and starting early.

At the beginning of each month try to have an idea of any birthday present you want to buy so you can spread the cost of buying them.

Many of the Good Money Management ideas are really just common sense but they do work. Try them for a couple of months and see if they can work for you. Open a savings account and put what you are saving each week or month into it and watch it grow. This can be all the incentive you need to carry on with Good Money Management!

Lorna Mclaren has an information and resources website at http://www.123-debt-consolidation-loans.com where you can find out about all types of Debt Consolidation.

A Debt-free Holiday

For many people, the holidays present a monumental challenge for sound financial decisions. We want to give our friends and family generous gifts so they know our love for them. This admirable desire leads to our overspending, forcing us to face the new-year burdened by additional financial stress. Financially Savvy has a few suggestions to help you start the New Year without the holiday debt.

Recapture the True Spirit of the Holiday
Take a journey back to your childhood and your memories of the holiday season. What made it so special? Not the gifts; the magic of anticipation made this time of year so happy and exciting. What can you do rather than buy to help your loved ones recapture their childhood experiences of this season? For some, the smell of sugar cookies will invoke the fondest memories. For others, their favorite holiday song can bring a smile to their face. Rather than spend a fortune on a gift, call your best friend’s mom to find out what cookies to bake or songs to include on the CD or cassette you create for your buddy.

Set a Dollar Limit
Anyone can spend $150 on a gift that thrills a loved one. Try spending $25 to get the same effect. You have to get really creative and focus on what makes the recipient tick. For many years my father claimed he enjoyed most the gifts that I made or that didn’t cost much but showed I really understood what makes him happy. Parents are supposed to say these things so I never put much credence in his words. I always swore that when I have money of my own, I’d spoil my family. Then I gave one of my friends an inexpensive money clip I found that would allow him to get through airport security without emptying his pockets. He gushed gratitude. I spent all of $10! Set a reasonable dollar amount per person ($25 has served me well but only you know what you can afford) and get creative.

Make a List and Check it Twice
Most of us include on our gift giving list people who would feel embarrassed by our generosity because they didn’t include us on their list. Review your list with an eye towards identifying those individuals that would appreciate a card. Then write a really special message beyond the “Happy Holidays”. Think about the person, what they mean to you, and all that they contribute to your happiness. Looking for ideas on what to say? - check out “The Art of the Letter” by Alexandra Stoddard. People who fall into this category of sentiment include your boss, fellow colleagues, neighbors (acquaintances, not friends you spend much of your time with on a regular basis).

Shop Early and Often
You can’t implement this tip for this holiday season but keep it in mind for next year. In January, I usually pick a theme that drives my gift giving for the winter season. Inspiration comes from a variety of sources. Some themes I’ve done in the past include clean spirit/clean mind, and travel. Equipped with the theme and a list of gift recipients, I keep an eye out for sale items throughout the year that would appeal to my loved ones. By July/August, I usually have the bulk of my shopping completed and just have little finishing touches to add.

For instance, Last year I chose the theme correspondence and communication. Over the year, I purchased note cards, special pens, and such to create correspondence kits for my sisters and girlfriends. I put all the goodies (including postage stamps) in plastic envelopes from the local office supply store so they have one place to go when they need to write a “thank you” or other letter. I clipped from a magazine some guidelines and suggestions about writing “thank you” notes. In all, I’ve spent $25-$30 per person and have very individualized gifts that reflect the recipient’s personality and/or interests.

Use a Check Register for Your Credit Card
Once you set your per-person dollar limit, you can calculate your total holiday shopping budget. Put that amount in a blank check register as your starting balance. Then, every time you make a purchase enter the details in your register just like you would a check. When you subtract your purchase from the available “balance”, you reduce the amount available for future gift purchases. Seeing how much you have available to spend will do wonders for preventing you from going crazy and overspending. When the “available balance” hits zero, you have to stop shopping! Pay off the full balance when you receive your next credit card bill.

Most importantly, remember that most of the people on your list (even the children) just want to spend quality time with you. Somehow, this season became very commercial and focused on the value instead of the sentiment. Together we can change this perception. Let’s bring quality, not quantity, back into the lives of those we cherish the most.

About the Author:
Catie Fitzgerald is a 10+ years veteran of the money management profession and the founder of Financially Savvy. Financially Savvy provides investors with the education and resources necessary to gain confidence in making their own financial decisions. We offer a variety of educational venues including classroom sessions, one-on-one coaching, and online resources. If you have a personal finance question you would like answered, contact Catie at cfitz@financiallysavvy.com.

Holiday Gift Giving Ideas

It's that time of year again, time for traveling, decorating, holiday parties, family, friends, relatives and of course. . . . shopping.

How many of you simply whip out the credit card and start charging every gift you can find, only to dread the day when your statement arrives in the mail? Or are you one of the few that save a little every month just to cover the holiday expenses when they come around?

Before you spend your hard earned money on the latest over priced, trendy gadgets, why not take the time and really think about a gift with special meaning. Something that will remind that person just how much they mean to you.

YOUR HOLIDAY LETTER
Sending a yearly "wrap-up" letter to your family, friends and relatives is a great way to save time and money. Instead of buying expensive store holiday cards and writing individual letters to everyone on your list, design your own holiday letter.

When writing a "wrap-up" letter, remember this is the perfect time to inform friends and relatives what's been happening in your family's life over the past year. Even if something important happened in your life back in February or March, some of your acquaintances might not have heard about it, so let them know.

After writing a rough draft, use your computer (or a friends) to help produce an attractive letter. You'll find that programs such as Microsoft Publisher walk you through step by step so you will have a beautifully designed letter in an hour or two complete with colored graphics.

SIMPLE GIFT IDEAS
Sit down and take the time to think about what each person on your list would like to receive. Of course everyone would love to get tickets for a seven day Caribbean cruise, but very few of us can afford to spend that kind of money on a present.

Here are a few ideas to get you thinking of all the possible gifts that can be aasily put together without the need to spend much money.

Know of anyone entering college? Put together a "care package". Fill it with all the basic necessities a college student might need (or want). Cookies, snacks, toiletries, wool socks, a new college student "manual",  etc... Anything you think a young 18-21 year old student could use while away at school.

Do one of your relatives work in an office?- Put together an "office pack". The key is in the presentation. Find a suitable container and pack it with office supplies, personalized pens, coffee mugs, magazines, Far Side calendar, crossword puzzle book, etc.

CREATE A BASKET
Have you seen the decorative basket assortments that are sold around the holidays?  Why pay $30-$50 for a basket of "goodies" that probably only costs about $5-$10 to put together? Put the basket together yourself, save a fortune, and even add a bit more creativity!

You can find baskets (straw usually works best) at any discount store or yard/garage sales.  Then, simply line the bottom with a decorative cloth (ie: colored  bandana, checked cloth, etc...), organize the appropriate items and trim/wrap with holiday decorations.

You can find all types of holiday arts & crafts ideas in books at your local library or on the Internet. Just do a search at Google and you're sure to come up with tons of ideas. The possibilities are endless. Here are a few basket ideas to get you started:

Coffee Lovers Basket 
Assortment of coffees, mugs, stirrers, creme assortments, Sunday comics

Cookie Basket 
Homemade cookie variety, chocolate/fudge toppings, funny napkins, cocoa mixes

Traditional Jelly Basket
Small jars of homemade jelly, muffin/cornbread mix, spatula, butter & knife

Sweet Tooth Basket
Brownies, cookies, small jars of candy, cocoa mix, peanut brittle, chocolates

Pasta Lovers Basket
Jars of various pastas and sauces, parmesan cheese, pasta ladle, strainer

Fire Starter Basket 
Pinecones, long stick matches, starter blocks, candle scents/oils, ash shovel

Brownie/Candy Jars
An attractive gift, perfect for friends, co-workers, and neighbors. A nice large sized jar filled with either brownies or candies. Attach ribbons or bows to the lid and decorate with puffy paint or simply glue colored pasta shells around the jar. Again, be creative.

Homemade Decorative Cookies 
Great teacher or babysitter gifts. Buy a cookie cut out pattern, add some colorful icing and a few ribbons with a nice card is a special holiday gift.

Framed Collage
Perfect for any occasion, great for friends or loved ones. Gather pictures of the person you're making the collage for.  Look for pictures of various places you've both been and fun times you've shared. Once you have your pictures, cut and organize them to make an attractive display. Glue them in place, decorate the frame and you have a gift that's a lasting memory. How can you put a price on that?

Homemade Ornaments 
Get a recipe for a hardening clay from any holiday crafts book. A childs' foot or hand imprint creatively decorated make excellent gifts for grandparents or relatives. This is something special that you can only give once. Your kids will quickly grow up.

Family/Children Portraits 
An 8X10 of the family/kids is a perfect gift for grandparents or distant relatives you might not get to see very often. You can even make a holiday frame for it. Look for low prices at JC Pennys or Sears.

Magazine Subscription
Who doesn't like to read magazines? Reasonably priced, magazine subscriptions make excellent gifts. Find out what magazines or interests they have and then every time your friend receives another issue, they'll think of you.

TIS THE SEASON . . . . KEEP THIS IN MIND

All too often, the holidays seem to come and go in a flicker of an eye leaving us wondering if we even had a celebration at all.  Take the time to visit with others whom you do not get to see very often. Spend time with the elderly in your family.

Start a 'tradition' within your family that everyone, including the kids, can participate in. These will all be your cherished memories of the loved ones in your life that no gift can replace.


© Copyright 2005  --  http://www.SavingSecrets.comGet immediate access to over 500+ pages of effective money-saving articles, newsletters, and downloadable ebooks directly at their website. 

Change Jars: Your Ticket to Getting Rid of Your Debt

Many people have trouble budgeting - they get into debt, and they just can't find a place that they can cut out the spending. If you're having trouble doing this yourself, consider a "change jar." Get a jar or container of some kind and stick it on the table next to the bed or the door. Every day, contribute something to the jar.

It could be as little as whatever change you have in your pocket. If you think you can stick with it, shoot for something higher. Put in a dollar or two every day, and just don't touch it. At the end of the month, you'll have racked up quite a bit. Take your change down to the bank or to a converter machine and turn it into cash - then, no matter what, use that money to pay down your credit cards. Taking it to the bank probably makes the most sense - you'll already be there, and you can resist the temptation to go spend the money on something else. You can get coin rolls, or see if you can find a bank that has their own machine. If you are willing to roll the coins, do it - it'll save you the ten percent fees machines charge.

What if you feel like spending the money earlier? Don't. It's extremely important to maintain discipline - getting out of debt is just like a chore. You have to do it, and you have to do it every day. If you start to slip, you need to buck yourself up, or you'll be in credit card debt up to your eyeballs forever.

About the Author
Teve Torbes is an expert owner of an air mattress camping site, who knows a whole lot about air mattress woods. He has also created a valuable directory.

Budget Friendly Halloween Costumes

...by observing you, children learn how to create and they learn craft. These powerful memories imprint a more important message. They come to understand the superiority of the creative tightwad method. - Amy Dacyczyn, a.k.a. The Frugal Zealot

Halloween costumes are so different today. Super heroes, wizards, and cartoon characters rule the trick or treat. It was not too long ago.....ok it was maybe a while ago......when I was a small trick or treater that costumes were much more original.

You were not likely to bump into three or four other characters that looked exactly like you. Oh, you might run into a costume of the same theme, but it would be totally unique by comparison. Of course my mom created our Halloween costumes. You can create unique Halloween costumes and save money by recycling items.



Create your own unique costumes. Remember that Halloween costumes exaggerate to be most effective. So the more accessories, the better. Some easy to make costumes using items around the house, borrowed from friends and/or relatives, or purchased for next to nothing at your local thrift store include:

The little old lady or man - dress accordingly in an older man's (a suit is great) or woman's clothing. A hat is a nice touch. If you don't have a real walking cane you can substitute an appropriate size stick. Add some creative face painting with lots of wrinkles of course. Be sure to add the cracking voice and a prominent limp.

The Hobo - Recycle some unwanted clothing. Paint on or put on patches, rip some areas (especially around the bottoms of pants, ends of sleeves, elbows and knees, since these areas show wear first). Use black or brown makeup to smudge the face a little to look un-kept. Blush the nose to look a little reddish. (hobos get cold outside) Sport the oldest pair of worn looking shoes you can find (or even better, two different shoes) and a tattered hat and you're good to go!

Princess - This is a timeless costume. I think every little girl wants to be a princess at least once. But don't rush out and buy the frilliest costume you see. The princess is merely an expression of elegance. As long as your little girl feels elegant she is a princess. If you don't already have a full length fancy party dress, check the thrift store for a low cost floor length party dress. Just pick one that looks "princessy." Even better, borrow one if possible.

A princess wand can be easily made with a dowel or stick and a cardboard star covered with foil. Add frills with duster feathers or ribbons if desired. Make a crown. You can easily make one using a headband and craft materials. Here's a great tip: Recycle a Burger King Crown. You know the crowns they give out to all the little kiddies at Burger King. You can cover with foil or paint and add beads or gemstones to decorate. They also make a great pattern for a crown if you want to create it out of some other material you have.

Animals: For toddlers: Use one piece pajamas as a starting point. An extra bonus: the pajamas are warm clothing for what is typically a cool weather night in many areas. For example.. a fuzzy white, brown, black, or even pink footed pajama can easily become a kitten, rabbit, or dog. Add a home made tail using scrap fabrics (attach with safety pin), a headband with the appropriate ears attached, or if you use a hooded outfit attach ears directly to hood), some creative face painting using home made face paint (below), and you've got a cute little costume that can be used as a comfy outfit after trick or treat!

For older children use tights or stretch pants, and turtleneck shirts, sweaters, hooded sweatshirts all in the desired color instead of the pajamas. Use desired color of mittens or gloves for paws. Bats, lions, tigers, even a skunk can be created in much the same way as the above animals!

Halloween Costume Recycling Tip: Remove the stuffing from an unwanted large stuffed animal (through a cut slit down back), launder, and use sections of fabic for costume. Or, cut a hole for the face and your toddler may be small enough to fit right in and use for hooded costume.

The Big Baby: This is an amusing costume for an older child. Return to the diaper zone! A bottle or pacifier, a bib, a homemade cloth diaper (over tights or pants of course), and a rattle. Add some rosy cheeks and your youngster will be ready to laugh (or cry) his/her way through trick or treat.

The Graduate - Have an old graduation cap and gown? If it doesn't hold too much sentimental value, you can use it to create a very simple, easy, costume. Create a fake diploma and drape it from the waist tied by a string or yarn of same color or wear like a necklace. You don't want the trick or treater to have to carry it. I've discovered these types of accessories usually end up in Mom's or Dad's hands to carry after a short time.

Halloween Costume Recycling Tip: Any discarded or unwanted work uniform (nursing, military, fireman, policeman) can be used as a Halloween costume.

The Witch - A long black dress or all over black pants with black top can be combined with a witch hat and black cape(make your own if you're crafty). Add black boots and make up face to suit.

Scarecrow - cut up some old jeans and a flannel shirt in scarecrow fashion. Cut sleeve ends and pants leg ends in strips to look tattered. Use straw or an old straw broom's bristles and glue or tape along inside edges of sleeves, pants legs, along bottom of shirt to appear as if bursting out of the scarecrow. Add a straw hat.

These are all good halloween costume ideas and I'm sure you get the picture by now. The idea is to use as many items as you have on hand to create these timeless Halloween costumes. The possibilities are limited only by your imagination.

Don't let that little girl cry because you can't find her the purrrrrrrrrrr-fect cat costume. You can create a much nicer one from everyday items and a few craft materials. Chances are it will look more realistic than that store bought costume. As a bonus, many of the costume pieces (i.e. shirts, pants, tights, gloves/mittens) are reusable after Halloween!

A few other Halloween tips:

1. Use spray paints or craft paints. fabric dye, fabric paints and/or pens, to color recycled items to desired color. One year I used silver spray paint to color and entire outfit for my son's tin man costume. We recycled aluminum foil to use in making the hat and the axe. Some silver body glitter on the hands and face put the finishing touches on this costume!

2. Use regular clothing to create an all-over color effect as with the animal costumes.

3. Consider mittens or gloves when you need hand color

4. A gallon ice cream bucket w/handle makes a perfect trick or treat bucket. I save these throughout the year and recycle for hundreds of other uses. Use neon paint or stickers to add bright decorations. This is a good safety technique to make kids more visible while trick or treating

5. Make your own face paint: You will need Corn starch, Water, Cold cream, and Food coloring.

Use several different cups (custard cups, recycled single serve yogurt or Jell-O containers, a foam egg carton) Prepare 1 tsp cornstarch, 1/2 teaspoon each of cold cream and water. Mix different color food coloring in each cup for desired colors

Make your own cream make up:

2 tsp white shortening

5 tsp corn starch

1 tsp white all purpose flour

glycerin (get at drug store)

Food coloring as desired

To make enough for one child's face - Use a rubber spatula, blend the first three ingredients until a smooth paste forms. Add 3/4 drops glycerin for a creamier consistency. Add coloring if desired one drop at a time blending after each drop until you have the desired shade. For easy removal use shortening, cold cream or baby oil.

Remember your Halloween safety. Here are a few, but certainly not all inclusive, reminders of safe trick or treat rules.

1. Small children should always be accompanied by an adult.

2. Use flashlights, bright costumes or decorations to make trick or treaters more visible.

3. Try to frequent the same limited area each year or limit visits to friends and families.

4. Remind children not to eat candy until they get home and have moms and dads check and approve.

5. A safe costume should not block or restrict a child's vision or interfere with mobility. Make sure costumes are of a safe length so as not to trip the child.

Have a safe and Happy Halloween!

---

Author Bio:
Cheryl Johnson is a mother of four helping herself and others beome and remain debt free. Publisher of Simple Debt Free Living - a self-help plan, ideas, and resources for frugal and debt free living. Low cost gift ideas and a wide variety of other money saving tips.

If a Disaster Strikes, Could Your Finances Weather The Storm?

By Preparing Your Finances Now, You Can Minimize Damage Later

By Steven B. Smith

As the process of healing and rebuilding continues ever so slowly in areas ravaged by Hurricane Katrina and Hurricane Rita, many of us are taking a closer look at our own lives. While most of us don’t live in hurricane-prone areas, we are all reminded of the possibility of disaster knocking at our door. Mother Nature may provide the most striking examples with hurricanes, earthquakes and tsunamis, but a house fire, car accident, serious illness, or a lost job could prove just as devastating.

We all hope it never does, but if disaster should strike, money is the last thing you’ll want to worry about. You can make it easier on yourself, and your loved ones, if your finances are in order. Here are a few suggestions to help “disaster-proof” your finances.

Create a monthly spending plan. The US Bureau of Economic Analysis estimates that personal savings as a percentage of disposable personal income was negative 0.7 percent in August. That means the average person spent more money than he or she made in August. If you’re on par for average here, you probably won’t need to wait for Mother Nature to create a disaster, you’re creating your own.

Create a budget, and stick to it. Since budgets are in that same category as diets – most of us begin one every January and are done by February – you need to find one that works for you in order to stick with it. For most of us, that means finding a software program that is automatic and able to easily track transactions from multiple checking accounts, debit cards and credit cards. But even if you use cash and the paper envelope method of budgeting, create a spending plan, and stick to it. Make sure you set aside some money for personal spending for those impulse buys. This will give you some freedom without negatively affecting your overall plan.

Back up your financial records, or use a web-based system. If you are not taking advantage of the Internet to track and control your finances, you may be taking an unnecessary gamble. PC-based systems, as well as paper, can be destroyed in a disaster. In his September 8th column for the Baltimore Sun, titled “Flood might destroy your PC, but not off-site backup files,” Mike Himowitz described how even a broken water pipe or a small house fire could destroy your computer, and the records held on it.

“More importantly, with online banking, you can access your account and pay bills from any PC that has an Internet connection,” stated Himowitz. “One of the main concerns voiced by those who fled their homes to escape Hurricane Katrina is that they have no access to their money and no physical way to pay their bills. With online transactions, your physical location - and the location of the PC you're using - no longer matter.”

Himowitz suggests that using a storage company to provide online backup, although pricey, can be a wise investment. However, for far less money, you can also use a secure online spending management program, like Mvelopes Personal (www.mvelopes.com). It will help track and control your finances, and pay your bills from any computer with an Internet connection – and you don’t have to worry about expensive backup storage.

Set aside the equivalent of three to six months’ living expenses in an emergency fund. An easily accessible emergency fund is one of the single most important things you can do for your financial wellbeing. In the event that disaster strikes, if you don’t have enough set aside to cover basic living expenses, including mortgage, food, and car payments, things could quickly go from bad to worse.

If setting aside this much money seems unattainable, start small. Cut out those daily trips to the vending machine. You’ll be amazed how quickly the money adds up. Use cash gifts, tax refunds and annual bonuses to build your fund. When you set up your monthly spending plan, include a contribution to your emergency fund, and make it automatic.

Your emergency fund needs to be easily accessible. That means in a savings or money market account, not real estate investments or stocks. Select an account with no service fees, which can be as high as $100 a year. Also, make sure you are getting a good interest rate – many online banks, like NetBank, EverBank or EmigrantDirect, currently have savings accounts paying three to four percent – that uses an average daily balance instead of minimum daily balance.

This account should only be used for real emergencies, not holiday spending sprees or other indulgences. If you do draw from the account, make repaying it a top priority.

Give to those less fortunate. Don’t overlook the importance of this one. Overspending all too often comes from our desire – not our need – for more stuff. Giving to charity helps keep those needs and wants in perspective, and in the right category. And if disaster strikes your door, won’t you be hoping others are doing the same? If you are unable to give any money, donate some of your time. Call your local government, or check www.unitedway.org for opportunities in your area.

Create a trust and/or a will. This is one that most people avoid, but by doing it now, you will be taking care of your loved ones. Most people should have both a trust and a will, but you should talk with an estate planner to see which is right for your situation.

Most people believe that a will is all they need. For some that may be true, but it can also force your loved ones to go through a costly and difficult court proceeding, called probate, to get your wishes carried out. A trust usually avoids much of the expensive legal mess, and makes the transfer of assets relatively simple.

To save money, you can purchase software to help walk you through creating a valid trust document, and then simply have a lawyer review it. It will still cost around $200 in lawyers fees, but that’s merely one tenth of what it could cost for a lawyer to draft the document.

Review the documents often, and update them whenever any major changes take place. Make sure your loved ones are aware of the documents, and where they can be found. Always keep copies of all important documents in a separate, secure location such as a safe deposit box.

Preparing now will allow you to take care of what matters most. As we look at the pictures of the damage wrought by Hurricane Katrina and Hurricane Rita, and hear the tragic stories of the individuals whose lives have been affected, we are all reminded that what is truly important in our lives doesn’t have dollar signs attached. But by getting our finances in order now, if disaster does come our way, we can focus our attention on taking care of the things that matter most.

Steven B. Smith is president and CEO of In2M Corporation and author of Money for Life: Budgeting Success and Financial Fitness in Just 12 Weeks! www.in2m.com jeff.stevens@in2m.com

Personal Budgeting Software is Money Magic

Personal Budgeting Software is Money Magic

Does your money seem to pull a disappearing act each month? Does your credit card statement continually leave you wondering when and how you could have spent that much? What about that cash you took out from the ATM the other day - could you possibly have spent it already?

Let's face it. Managing your personal finances (even with personal budgeting software) can be a difficult task - especially when on a tight budget. Every time you turn around, there's another bill to pay, and before you know it, your entire paycheck has been spent - and then some! Soon, you find yourself drowning in the financial demands of everyday life, and the vicious cycle of living paycheck to paycheck - or worse yet, living on credit - has begun. You ask yourself, 'How did this happen to me?'.

If you are finding it increasingly difficult to juggle the many different financial aspects of your life, you are not alone. The fact is, in today's modern society, the average consumer is forced to allocate the money from one stream of income to more than 30 different sources! From mortgage payments and health insurance to childcare services and credit cards, it's no wonder money appears to continually vanish before our eyes. But what if there was a way of reducing the invisibility of your spending? Away of budgeting your money in a simple, pain-free manner while still achieving that so-called state of 'financial freedom' once and for all? Thankfully, now there is. There is a great new online personal budgeting software system that solves these problems and makes it easy.

I found a great online personal budgeting software system called Mvelopes Personal. Mvelopes Personal is the new affordable and easy-to use online personal budgeting software system sweeping the world of personal finance. It is the answer to all your budgeting woes. Mvelopes' unique budgeting concept offers a straightforward method to manage your finances. It enables you to spend your money more efficiently and still enjoy what matters most to you in life. The secret is to know where your money is going and eliminate spending on things you don't really care about.

Here is what Reporter, Jane Bennett Clark of Kiplinger's Personal Finance, said:
'If you don't like keeping lots of cash round the house, you could set up an online system with Mvelopes, a service that links up with your bank and uses envelope icons to apportion your paycheck and keep track of spending. Mvelopes avoids much of the data entry of other personal finance programs and gives you a visual cue of how much money you have left in each category. When you're over budget, the line item turns red.'

Isn't it about time YOU take control of your finances and embark upon the path towards financial freedom?

To learn more about how Mvelopes can help you to start making better spending decisions, or to sign on right away for your one month free trial offer, visit the Mvelopes homepage at www.mvelopes.com

Simply the best way to manage your spending!

Mvelopes Personal Offers New Approach to Spending Management

Hello everyone. Thanks for all the great responces I have been receiving to this blog. Today I just wanted to post some information on the budgeting system I use as the foundation to my personal finances. If you have followed this blog for long you know that I tell everyone I can to use Mvelopes because it has made such a big difference in my own finances. So today I am doing a full-on write-up on Mvelopes.

In2M Corporation recently announced the launch of Mvelopes^® Personal Web-Client 2.8. The web-based application offers the anytime, anywhere convenience of online banking in a one-stop financial management center that users can access from home, work, or on the go. The program allows users to plan for, track, and control spending, eliminate and avoid debt, pay bills, and monitor net worth.

Mvelopes Personal is the latest player in the personal financial management (PFM) space that Quicken^® and Microsoft^® Money have dominated for so long. But Mvelopes doesn’t necessarily consider itself a competitor to Quicken or Money – at least not directly. “Mvelopes really approaches spending management from a different paradigm than traditional software programs,” said David Neddo, senior product manager for Mvelopes. “Other programs simply track spending to let you know if you’ve reached your goals. Mvelopes helps you reach your goals by giving you up-to-date and accurate information, when you need it most – when making spending decisions. Mvelopes does more than simply allow you to view spending patterns, it helps you create them.”

Breaking the Mold

Unlike other PFM programs that simply track your transactions in an account register and show your ending balance, Mvelopes divides the money in your accounts among separate virtual spending “envelopes” such as groceries, mortgage, entertainment and savings – each with its own register and balance. So when a user looks at her money to make a spending decision, she doesn’t just see a checking account total, she sees exactly how much is remaining in each specific spending envelope. The idea is that by viewing the envelope balance instead of a checking account balance, you can see that although a specific purchase may not adversely affect your account, it can adversely affect your ability to cover other expenses, such as a car payment, groceries, or your daughter’s birthday.

The service links directly to your bank account(s) and automatically receives your transactions in real time. The transactions can then be assigned to the various spending envelopes to give you a visual snapshot of exactly how much you have left in any given category and how long it has to last. If you overspend, the budget category turns red alerting you that you need to adjust either your spending plan, or your spending.

Because the service is web-based, users can log on to view and update their spending plan from any computer with an Internet connection. Couples can simultaneously log on at different locations and go over their finances together over the phone. Unlike traditional software programs, users aren’t tied to a single computer. “I recently received a letter from a retired couple touring the country in their RV who use a computer at any local library to keep track of their finances and pay their bills while on the road. They love the freedom and control it offers them. We even have users in the military, serving in Iraq, who have been able to access Mvelopes through local Internet connections to coordinate with their spouse back home,” said Neddo. “Mvelopes really does allow for anytime, anywhere access.”

Mvelopes Personal also boasts a credit card feature that allows users to properly manage their credit card spending, avoiding costly service fees and high interest rates. When a user makes a purchase using a credit card, upon assigning the transaction to a specific spending envelope, the program automatically reallocates the transaction amount from that spending envelope to a credit card repayment envelope so the user isn’t tempted to spend the money elsewhere. When the bill comes, the exact amount due is sitting in the credit card repayment envelope to be paid in full. You can even pay the credit card bill using the included online bill pay service.

The prepaid subscription service, which is supported by over 8,000 financial institutions, is available starting at $7.90 a month*. According to In2M, that places the cost of Mvelopes Personal at roughly a third the price of either Quicken or Money once you pay for the additional features that Mvelopes includes standard. Important features include:

• Electronic envelope approach to budgeting
• Automatic transaction retrieval
• Anytime, anywhere access
• Credit card management
• Full-featured bill pay service
• Net Worth tracking
• Live customer support, and unlimited personal budget coaching

“Every so often a product comes along that changes the paradigm in a given industry,” said Neddo. “Mvelopes Personal is bringing spending management into the twenty-first century.”

Product Pricing and Availability

Mvelopes Personal is a prepaid subscription service available at www.mvelopes.com or by calling 1-866-367-4686. Plan prices are as follows:

• 2 Year Plan: $189.60 billed every other year (equivalent to just $7.90 per month)
• 1 Year Plan: $129.60 billed every year (equivalent to just $10.80 per month)
• Quarterly Plan: $39.60 billed every 3 months (equivalent to only $13.20 per month)

10 Tips To Stay Debt Free This Christmas

Christmas can be a financially stressful time for many people and that takes the fun out of the festive season. The funny thing about Christmas is it occurs every year and at the same time every year! So with a little bit of planning you can take the stress out and stay debt free.

Here are my Top 10 tips to get you on you way:

PLAN
Write a list of the friends and family members you wish to give a present to. Next decide on your total budget for Christmas presents. Next to each name add a maximum dollar value for the gift and ensure the total does not exceed you budget! If you have ideas for gifts start listing them now - it will help your shopping trips be more focused.

STICK TO THE PLAN
When you do your gift shopping stick to the plan - avoid impulse buying. That stereo might be a great "bargain" but if it is over your budget you need to keep walking.

I am sure you have great taste in gifts - do you ever buy a gift for someone and buy it for yourself as well? You will get plenty of gifts for Christmas - no need to buy for yourself as well.

START NOW
Rather than waiting until 2 weeks before Christmas and spending all your money in a short period of time start buying now. It is much easier to afford one gift each payday than 10 all at once. Find a good hiding place in your cupboard!

USE LAY-Away
Credit Cards are easy and convenient but if you struggle with debt over Christmas leave them at home! Interest rates on unpaid monthly balances are an unnecessary cost. If you have started shopping early you can pay a small amount each payday off your lay-by without going into debt. Keep your spending manageable.

HAVE A SAVING PLAN
Have a separate bank account for Christmas savings. Many banks have accounts that earn "bonus" interest if you make a deposit and no withdrawals in a month. Many of these accounts have no bank fees. You can arrange for set amounts to be automatically transferred to that account each payday. If you don't see it you can't spend it! If you are comfortable banking online there are also good "virtual" accounts with Credit Unions that pay around 5%pa and allow you to transfer money out of account with no penalty.

THINK OUTSIDE THE BOX
It really is the thought that counts so think outside the box. People love gifts that have a personal touch to them. - make Christmas chocolates, cookies, jam etc to give to friends - give a gift voucher for 10 hours of babysitting - make a donation to charity in their name - give a voucher for 5 lawn mowing afternoons (to be provided by you)

INVOLVE YOUR FAMILY
Discuss your plan to stay debt free with your family and discuss ways that the whole family can be involved. There are no rules - find something that works for your family and keeps Christmas fun. One popular idea is to not buy gifts for all the adults in the family - just the kids. The adults each select a name and buy a gift for that adult on behalf of the whole family. Christmas is about love and sharing not about how many presents you receive. You will probably find other family members feel relieved to be able to reduce their Christmas spending too.

ANOTHER COFFEE?
Start becoming aware of what you spend on "little extras" each week - coffee is my favourite place to start. Buying just 1 coffee a day can cost you $10 - $15 per week … buying lunch each day at work can cost you at least $25 per week. I think you get the point. If you are serious about keeping out of debt this Christmas start taking your lunch to work or having instant coffee …. put the money you save into your Christmas account. You will love how quickly this adds up!

LEAVE THE PLASTIC AT HOME
That's right - leave the Credit Card at home! If it is not in your wallet you cannot charge Christmas shopping to it. It is so easy to accumulate debt without even being aware of it - once you do it snowballs into something much greater than you can handle and becomes a weight to begin the New Year. Use cash or you debit card - you can't spend money you don't have.

BE COMMITTED
You have a choice. If you are 100% committed to being debt free for Christmas then you will make it happen. It takes focus, desire and discipline not to take the easy, convenient and expensive way out of Christmas shopping. 'Those who want to succeed will surely find a way, and those who don't will find an excuse' "a thousand paths to tranquility" David Baird


**********************
Linda Anderson is a Certified Professional Coach working with Small Business Owners and Professionals in Australia, New Zealand and the USA. Linda helps her clients succeed in business and in life by creating strategies to overcome their obstacles to success. Linda brings this passion for challenge, new experiences and adventure to her coaching. You can visit Linda at her website - www.a2acoaching.com

Getting Past the Idea of Budgeting and Saving Money

I'm sure you'll agree that budgeting, saving money, and eliminating debt are very appealing ideas. If effectively tackled, these goals can secure your financial status for the future, and allow you to live a comfortable, debt-free life.

However for some unfortunate reason, these important financial goals hardly ever get accomplished, and most will continue to go through life consistently worried about their financial security, unprepared for what the future may hold.

I have been writing money saving articles and newsletters for http://www.SavingSecrets.com for over 5 years now. After being in contact with a number of readers over the years, I found that many who were interested in learning how to effectively save money simply lacked the foundation to accomplish this.

I am a firm believer that the ability to save and budget is dependant on the plan and approach one takes. Sure many proclaim they want to conserve and save more, but how many actually accomplish this? Saying one thing and actually doing are completely different from one another. Why do you think so many New Year's Resolutions are forgotten and never heard from again?

For example, think of the times you yourself started a new hobby or goal. Were you successful? If not, how long did you stay with this new undertaking? What was your reason for quitting or not following through with the intended plan?

From this short self reflection, you can probably guess the reality most would-be budgeteers are faced with. Even though these individuals have the desire to conquer their finances, for some reason the task never gets accomplished.

What is needed to help guarantee success is inspiration and a solid approach, or what I like to refer to as a "game plan".

Think about it.

If someone wants to learn how to play the piano, realistically, they are not going to just sit down and start banging away on the keys. They'll never learn to play the piano effectively that way!

In order to tackle the process of learning the piano, an eager student will take lessons, purchase "How To Play Piano" books, tapes, cd-roms, interactive software, browse the Internet for tips and related online forums, check local college for classes and instructors, etc..

Who do you think will have more success learning to play the piano? More than likely it will be the energetic individual with the planned agenda and goals, than the dreamer without a "game plan".

Designing Your Game Plan

Once you fully commit to accomplish a particular task, to help improve your chances for success it is imperative that you design and follow a regiment, a well thought out "game plan".

Every task, whether it's for work or pleasure, has some type of goal or objective. If your underlying task is to clean the house, then a specific goal may be to clean the kitchen or organize the cupboards by the end of the day. If your task is to learn how to play the piano, then a goal may be to learn how to play your favorite song within a month or two.

Take notice that the goals provided are very realistic and practical. You want to establish goals that are attainable in a reasonable amount of time.

Before you start planning how YOU are going to tackle the task of budgeting and saving money, take a moment to determine what goal(s) you want to accomplish and a specific time frame for each particular goal. This will give you something tangible to strive for and help keep you focused on task, thus increasing your chances for success.

Here's an example of a practical task along with the respective goals:

TASK: Spring Clean The Whole House

GOALS:
week 1 - kitchen; refrigerator, cupboards, monthly menu, coupons organized
week 2 - garage; organize boxes, Xmas decor, scrub/polish floor
week 3 - family room & bathrooms: cleaned, scrubbed, carpet & drapes
etc...

Putting Your Plan Into Action

Remember the piano playing example mentioned earlier? No matter how many books or tapes you buy to help teach you how to play, unless you devote serious time to practice, you will not improve and you will not accomplish your goal(s).

Your game plan MUST be put into ACTION! Don't let your wonderfully designed agenda get lost under a heap of papers or collect dust on some obscure counter top.

Put your plan into action!

Just like the piano player, you will need to devote focused time specifically to your task in hopes of accomplishing the predetermined goals. Keep in mind that only after serious time and effort is devoted to your cause will any real changes occur.

Best wishes accomplishing your tasks and goals to effectively save and eliminate that ever-present debt! Hopefully this has inspired and motivated you to accomplish your tasks and goals regardless of what they may be.

---

© 1998-2003 http://www.SavingSecrets.com. Get access to 60+ money saving articles, newsletters and creative ebooks you can download, stop by and explore our money saving resource at: http://www.SavingSecrets.com

The Secret of Envelope Budgeting

Isn't it amazing how often we learn about simple principles that, when applied, have the ability to impact our lives in profound ways? Such is the case with the traditional envelope budgeting method of personal financial management. Many have heard of or are familiar with someone who has used this simple system for spending management. The envelope budgeting system has worked exceptionally well for many people in the past. These people understood the basics of the system and how to use it, but many could not articulate the principles behind the system that allowed them to be successful.

The envelope budgeting system as it was used with cash is very simple. In the days before the proliferation of credit cards, debit cards, and other forms of cashless spending, many couples were very dedicated to this system and used it effectively for years. Initially, a couple would sit down together and determine how much cash they would receive each month. This available cash represented the net amount of all of their paychecks for the month. Then, they determined where they would be spending money. Their areas of spending included things that they would purchase and pay for each and every month, and things that they would spend money on only periodically. After completing their list, they took out a stack of envelopes and labeled one for each area of spending. Their next task was to determine the amount of money required for each area every month. For the areas of periodic spending, they calculated the amount they would spend each year, and then they divided this amount by 12. This represented their monthly spending plan.

When they received a paycheck, they would go to the bank and cash the check. Then they would sit together at the kitchen table and divide the cash into different envelopes based on their defined spending plan. When they paid for goods or services, they would simply spend from the specified envelope. Couples always knew how much money they had left to spend and how long it needed to last.

The envelope budgeting system automatically encapsulates four principles that are keys to financial success. They reveal the secrets of how you can achieve financial fitness utilizing the envelope budgeting system.

FIRST: Set money aside in advance

When you commit yourself to use a budgeting system, you become dedicated to living within your means. One of the primary reasons for this is that the envelope budgeting system requires you to set aside money in advance for each of the spending requirements you have, including monthly required and discretionary and periodic required and discretionary expenses. As discussed earlier, many people in America live paycheck to paycheck. This system helps eliminate this problem, because the funding for spending comes from available cash resources that are allocated to spending before the spending takes place. After following this system for just a few months, you can quickly get to the point where you have enough money set aside at the beginning of the month to meet all of that month's spending requirements.

One of the significant problems people face today is not understanding how future spending requirements will impact their monthly cash flow. Have you ever had an annual insurance payment surprise you? Other periodic spending requirements include vacations, property tax payments, holiday spending, gifts, auto registration fees, auto maintenance fees, house maintenance fees, furniture and appliance replacement costs, and so on. As you think about it, there are many things that can catch you off guard if you don't plan ahead. These types of expenses were constantly creating problems for Ryan and Christine. Much of their consumer debt was directly associated with being unprepared for periodic spending requirements.

Most people manage spending by their checking or savings account balance at the bank. Unfortunately, this account balance does not prepare you for the periodic spending needs that will arise in the coming months. It also does not alert you to the spending your partner is planning over the next few days or weeks. So you make independent decisions about how much you think you can spend without really understanding the big picture. This is a very dangerous approach and leads to problems, including bounced checks, frustration, and, ultimately, more debt. Most of the overspending in families can be traced to an inability to incorporate periodic spending requirements into their current cash resources and spending practices. A great example of this is the amount of credit card debt that is created during the holidays or on vacations each year as a result of not having money set aside in advance. Many justify this spending by telling themselves that they will pay the credit card balance next month. This rarely happens, because next month's spending requirements are already based on 100 percent of the cash resources for that month.

The Mvelopes Personal System addresses this problem of periodic spending requirements by allowing you to set aside money in advance of periodic spending needs. For example, if you were going to spend $2,400 on Christmas each year, you would be setting aside $200 each month. To state this another way, if you want to spend $2,400 each year for Christmas, you need to spend $200 less on other things each month. Perhaps your parents or grandparents used a similar system. Imagine how they felt each December when they prepared to purchase gifts for Christmas and the Christmas envelope was full! Imagine how you will feel when you want to take a vacation and know that the money is already set aside in advance. Or imagine how nice it will feel to know that you have money set aside to replace the tires on your car the next time it's required.

SECOND: Spend from how much is left

One of the significant secrets to not overspending is to know daily how much you have left to spend in any area of defined spending. While this seems very simple and even obvious, consider how often you make purchases without knowing how much you can really spend before your spending outstrips your available resources-or how many times you buy something without knowing how it will negatively impact your ability to meet other spending requirements. The unplanned gift purchase had a significant impact on the resources Ryan and Christine had for other spending requirements. When people used a traditional system to make purchases-to buy clothes, for example - they would take the clothing envelope with them. They knew immediately how much they had left to spend and how long it had to last before they funded the envelope again. This information was invaluable in assisting them to make sound spending decisions. If you choose to spend less than you make, then spending from what's left becomes very simple. If there is not enough in the envelope to complete the purchase being considered, the purchase is delayed or another purchase decision is made. Without knowing how much is left, you can only hope that the purchase decision you are making will not negatively impact other areas of your financial life. Unfortunately, you will not know this until it is too late. Knowing in advance how much is left to spend is the secret to making smart spending decisions every day.

THIRD: When you run out, you must make a choice

We all want to be fully empowered to make choices. Often, this is one of the justifications we make for spending money. 'It's my money, I've earned it, and I have the right to decide how to spend it! If I want to purchase that coat, I will, period.' The problem with this thinking is that it often takes choices away later on: because you purchased that coat, you may not be able to purchase the birthday gift you wanted for your daughter.

It is quite possible to run out of money before you fund the envelope the next time. If this happens, you have three options: (1) put off the purchase until you fund the envelope the next time, (2) purchase something less expensive, or (3) purchase the item and transfer money from another area to cover the cost. All three choices will still allow you to live within your means. With the third option, you can determine at the point of purchase which other area of spending you would like to impact. For example, if you wanted to purchase the coat and didn't have enough money in the clothing envelope to cover the cost, you could transfer money from your groceries envelope to cover the cost. If you made this decision, you would do it with the knowledge that you would not be able to spend as much on food this month. There's nothing wrong with having made this choice. Perhaps you know that your grocery needs were less this month than in the past, or perhaps you did not spend all the money in your grocery envelope last month and you have extra. Whatever your thinking, you have to be able to make a purchase decision and understand exactly what impact it will have in other areas of your financial life. Making a purchase choice is great as long as you do it on an informed basis.

FOURTH: At the end of the period, what's left is savings

One of the key principles to securing financial fitness is to save something first. In addition to setting aside a specified amount for savings each month, the system allows you to save the balance remaining in many envelopes at the end of each period. For example, if you have some money left in your groceries envelope at the end of the month, you could take that money and apply it to savings, since you would be funding the envelope with enough money next month to take care of your needs for that period. Many of your discretionary spending envelopes would qualify for this review at the end of each period. Discretionary spending id defined as areas of spending that are not tied to fixed or required expenses. Based on the spending decisions you make in these areas, you may often have money left over at the end of each period. Examples of discretionary spending envelopes include clothing, groceries, eating out, entertainment, and so on. By adding the amount left in each of these areas to your defined savings, you can significantly increase the amount you apply to savings, debt repayment, or long-term investments.

While people in our grandparents' day used cash to successfully implement the envelope budgeting system, it is more difficult today. Many purchases can still be made conveniently with cash; however, we often pay for goods and services using checks, debit cards, credit cards, online bill pay, and even automatic withdrawals from our bank accounts. For some, the cash-based envelopes may represent the best approach for ensuring financial management success. For others, cash may simply not be a feasible alternative. The principles outlined above are not dependent on the implementation tool used. As a result, you can successfully incorporate the envelope process using one of four basic approaches: (1) cash, (2) a paper ledger or computer spreadsheet, (3) a computer-based system, or (4) a combination of these.