Slowing Spending

Slowing Spending. The Key To Your Debt Plan Success

Anyone who embarks on a debt reduction program should know the rules for success. There are two. You need to stop adding to your debt. You need to find extra money to pay it off quickly.

You also need to know the deck is stacked against you. The sellers of goods and services have gobs of information at their fingertips. They know where you live. They have a close approximation of your income. They are aware of your interests. They also know your buying habits.

The information to which they have access is endless. They know the age of your car through its registration. The appliances you have because of the warranty cards returned. Where you shop because of the credit and store cards you have used. How old your mortgage is and what you owe from public recording of the deeds.

Because they have this information, you end up on a number of lists. The sorting and use of these lists are an art and science. It is the source of the mail you receive, the offers you are made, and the advertising to which you are exposed.

This makes for very effective advertising. They can target your “known” wants and desires. Huge amounts of money are spent to convince you to buy this or that product. You have heard how expensive Super Bowl ads are each year. They pay this type of money because it works.

Then to top it all off they make it so easy to buy. If you don’t have the cash, they provide you with credit, easy-pay plans, personal loans; anything to make the purchase possible. Many companies make as much from their financing divisions as they do from selling you their products. So what do you do? How do you fight this financial onslaught and win? It requires effort and advance planning. You need to wring all the value you can from your money. Become adept at making each dollar do the work of two.

You need to budget for purchases. Even if that means that you think about it for just a few minutes before you plunk down your hard earn money. Justify your purchases; do you need it, does it make sense, can you do without? These are questions you need to ask yourself. They may fly in the face of the materialism which surrounds us all, but they need to be answered nonetheless.

You may find using a purchase-checklist helpful. Anytime a purchase exceeds what you have in your pocket tick down this list and see if it really makes sense to buy it.

• How much is it?
• Is this a sale price?
• If so what am I saving over regular price?
• What will happen if I don’t buy it now?
• Can I pay cash?
• Where will the money come from?
• If not cash, what will be the credit cost?
• Is it worth it at the price with the credit cost added in?
• Does the purchase fill a need or a want? (think hard)
• Why do I need this item?
• Why do I want this item?
• Can I justify this purchase to another person?
• What would I say?
• Would I accept these reasons from someone else?

This should help in slowing you down. Couple this with not taking your credit cards with you when you shop. It does take work, but a little extra work is better than being a slave to your debt.

Now with the money you save go to work on your debt reduction plans. Work that side of the equation as hard as you do the spending side. Place as much as you can on your bills. Reduce and eliminate them.

by David Wilding. David Wilding has, for the past ten years, been helping people rid their lives of debt. Through changing their attitudes toward, and their acceptance of, debt in their lives, he has helped many to reach the goal : living debt free. Visit his website http://www.debtattack.com for more ideas, tools, and strategies. David Wilding may be contacted at http://www.debtattack.com or contact@debtattack.com

10 Steps To Improve Your Financial Situation

Here are ten tips you can use to help improve your financial personal financial situation and inevitably save more money:

1. Pay Yourself Weekly
This may seem a bit odd, but this is an excellent way to start building a substantial savings. On a weekly basis, pay yourself $25-$50 and immediately put it in a safe place. You can even open a special savings account where this weekly "payday" can by placed to help minimize or eliminate impulsive spending. Think about it this way, if you paid yourself $25 a week, in two years you'll have accumulated $2600 (not including interest)!!! That's almost $3000 from just putting $25 aside every week! Take advantage of this money-saving opportunity. Simple, yet very effective.

2. Don't Shop
For those of you that love to shop, you may find that this is one tip that could save you hundreds, maybe even thousands every year. Start using the "Need or Want" strategy. Before you spend a single dollar on anything, ask yourself, "Do I really NEED this item, or do I just WANT it??" You may find that many of the items we purchase, we do so just because it "caught our eye" or it was "an impulse buy" or "my friend bought the same thing". All these excuses just add up to wasteful spending. You can probably get by without another sweater, or a new pair of jeans, so just buy what you absolutely need, and pass on those items that aren't necessities.

3. Use Your Bank's Own ATMs
Some banks will charge you money for using other ATM machines. Even though you will be able to withdraw money using your ATM/debit card from literally any machine, banks will charge you $2 (generally) for using a machine other than theirs, in addition to a standard $1.50 charge the machine charges for its use. In other words, if you use the ATM at your local 7-11 to take out $20, you'll most likely end up paying $3.50 in additional charges! If you do that 5 times a month, you'll lose $17.50 for that month, or $210 per year! What a waste! Try and stick with your own bank's ATMs whenever possible.

4. Track Your Spending
Take the time to track your spending habits for one week. Take note of every single dollar you spend, even those sodas and candy bars purchased here and there. This will give you a "birds-eye" view of exactly where your money is being spent, thus allowing you to refine your spending habits to essentially save more money.

5. Lower Credit Card Balances
Another very important tip that many often overlook. Pay off those pesky credit cards as soon as possible because you are losing up to 19% of the total. What a waste of your hard earned money! Keep chopping away at the balances until you get to an amount that is reasonable $100-$500 dollars.

6. Use Your Debit Card Instead of Credit Cards
Get in the habit of using your debit card instead of your credit cards. For the most part, debit cards are accepted anywhere a credit card is accepted, however as you know, with a debit card the amount is taken directly from your checking account whereas credit card usage is billed at a later date (along with a hefty interest rate).

7. Changing Jobs? Roll-Over that 401(k)
When people change jobs/careers they will be faced with a decision to either "rollover" their 401k (retirement plan) or to withdraw it. It will be ever so tempting to withdraw the money since it will be a substantial amount, but don't! You will be charged fines and penalties for an early withdrawal that will cut YOUR total by 40%-60%! That's like giving half of your earned retirement savings away to a stranger. Why would you do that? Even though you may want the money now, resist the temptation and roll it over. It will be well worth it in the long run.

8. Avoid Getting Too Many Credit Cards
Why have eight credit cards? That's just going to provide you with more opportunities to go further into debt. It's fine to keep 1-3 cards to build credit, establish yourself, and for emergencies, but credit cards are double-edged swords. They can help or hurt you depending on your self-control.

9. Check Your Credit Score/Report
It's important to know where you currently stand as a consumer and since your credit report is the most important historical list of your financial past and present, it's a very good idea to check it from time to time. There are a number of places where you can get your credit report, however the most detailed compares information from the top three national credit bureaus: Experian, Equifax, and TransUnion. Once you get your report, look through it carefully to see if all the information is accurate. If there are any discrepancies, get those solved as quickly as possible to improve your credit rating - a score of up to 800. Often times, consumers are unaware of unsettled accounts, or accounts that are still open/active when they should be closed. Pay close attention to this when inspecting your report.

10. Finally: Review - Revise - Retry
Once you start implementing these tips and become more familiar with the money saving opportunities you have, take the time to REVIEW your progress. Check and see where it may be possible to REVISE some of your techniques or where you can implement new ones. Once you have revised your plan, RETRY to see if your results improve. The more frequent you review, revise, and retry your saving ideas, the more "in tune" you'll be with your finances and spending habits, and learn what works and what doesn't for you.


**©2004 http://www.SavingSecrets.com Get credit report tips, hints, and instant access by clicking here: http://www.SavingSecrets.com/creditreport.html

How Much Should My Grocery Budget Be?

How Much Should My Grocery Budget Be?

You talk about a question without an answer! But, I'm going to try to answer it anyway.

First, when we are talking about setting an exact dollar amount for groceries for each family that asks, that's almost impossible. What we can do is allot a portion (percentage) of our income for food.

There again, you have all of the variables like the size of your family, eating habits, etc. Also, a family with a low income may have to allot a larger percentage of their income toward buying food.

The question I would like to ask you is how much are you spending on groceries per month? I would have to say that most people wouldn't have any idea.

Better yet, how much could you be spending on food? In other words if you are currently spending $600 on food for your family let's try to cut that down to $500 or even $400. But first you will need to know how much you are spending now.

This is going to be a real hassle for a month or two because you will need to keep track of your grocery purchases. All of them!

Now, we can make that a little easier but you will need to have your finances set up a certain way. I always suggest that you only use 4 categories for your budget. These are Housing, Other Bills, Household Expenses and Savings.

Your grocery bill would come under that category of Household expenses. If you have your finances set up this way each member of the family will have an allowance each payday for things like car gas, lunches, parking, snacks, etc. Doing it this way would eliminate the need to keep up with each family member's food spending except for the family pizza night.

All you would have to do is save your grocery receipts for about 30 to 60 days and add them up. This should give you a good idea of how much you spend on a monthly basis for food.

When you have this information it's time to start looking for ways to cut that figure down as low as you can and still provide good nutritious meals for your family.

If I started telling just the ways I know of how to save on groceries, this article would turn into a book. There are
endless ways to cut back on your food spending. The best way to start learning is to search the web. Here are a couple of web sites you can start with:

The Frugal Shopper http://www.thefrugalshopper.com

Money Saving Grocery Tips http://homeparents.about.com/od/groceryshoppingtips/

Grocery Saving Tips http://www.grocerysavingtips.com/

With all of that said, the bottom line is that you need to spend what ever it takes on groceries to survive. In too many cases people will pay their bills out of their grocery budget. This won't work. Water, Food and shelter are the basics. Put them first no matter what your bills are or how many times they call to harass you.

I know you are still looking for a dollar amount for your family. If you pin me down I would have to say about 15% to 20% of your income could be spent on food. For a family making $3000 a month that would mean you would set aside about $450 to $600 for food. This is great unless you have teenagers that go through the kitchen like vacuum cleaners.

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Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of the Budget Stretcher web site. Join the thousands of subscribers to The FREE Budget Stretcher Newsletter and get great articles, tips, downloads and a lot of Budget Help by visiting his home page at http://www.homemoneyhelp.com