Money Matters

For the most part, the majority of us are looking for ways to cut back on spending, save a few pennies here and there, and dream of a luxurious retirement life on a sunny beach somewhere. So, by following a few simple pieces of advice, that day might actually come sooner than later.

Credit CardsIf you have a credit card and you know that you are irresponsible with it, close it, cut it up, do whatever you have to do to pay it off and get rid of it. Another option, is to call the credit card company and ask them to lower your limit to a sustainable, payable amount. For example, if you have budgeted $500 a month for fun purchases, going out, shopping, etc., then have them set the limit to $500 a month and make sure that you pay it off every month. Figure out your budget and work with it... embrace it and be proud to stick to it!If you an do this, then you should take advantage of the credit card system! Many companies offer rewards such as cash back, airline miles, gift cards, etc. Take advantage of these as long as there are no annual fees. USAA bank offers a rewards card that does not have annual fees and you get 1% cash back. This works great if you can be strict with your spending. Take advantage of the cash back around the holidays and you will have a few extra dollars to splurge on something you've had your eye on for awhile.

Shopping

If you have found something that you want to buy, but think that it seems a little overpriced, be patient and shop around. There are a variety of ways to do this. My favorite way is with my smart phone. I have an application that allows me to take a picture of the bar code of the item, then it scans the internet, starting with Amazon.com to find the same item. Instantly, I can see the results and compare prices. If I don't need it right away, I will do a little bit of research on the internet and try to order it. You would be amazed at how overpriced major retail stores are, including Best Buy, Target, and Barnes & Noble.

Organizing BillsI know this sounds completely logical, but what I am about to tell you, many people don't consider. Every month you sit down and pay your bills, or you set up your auto-bill pay by inputting the amount and telling the system which day to send the money. What most people don't consider is the date that they choose to send the money can affect their checking account balance. The longer that you have your money in your account, the more interest you earn on that money. If you have a bill due on the 15th, and you sit down to pay your bills on the 1st, chances are, you pay that bill two weeks early. You just gave somebody else the interest on that money. Back before technology allowed us to pay bills online, I had my bills labeled with the "Send" date and taped to the calendar. I refused to give the electric company or mortgage company those few dollars (or pennies) of interest that I would earn by keeping that money in my account for another two or three weeks.

Building a Budget

Building a budget is a lot easier done than said. Honestly! The one rule is OVER ESTIMATE! Determine what you spend and where, its not that hard. Start with Gas, Car Payment, Insurance, Groceries, Utilities, Mortgage/rent, and fun.

Use your monthly income as a gauge. Determine where you overspend and where you can cutback in order to be able to save.

Teaching Your Kids About Money

When I was 16 and had my first job at a fast food restaurant, I was responsible for paying my car insurance, my pager bill (yes, I am that old and it was the cool thing to do), and save a chunk of each paycheck. When I cashed my first paycheck, my mom came into my room with a stack of envelopes. We sat on my bed and talked about what to do with the money. We labeled the envelopes "Fun", "Gas Money", "Savings", "Insurance" and "Pager Bill". We then decided how much money needed to go into each envelope from each paycheck and wrote it on the envelope. I soon found myself having leftovers from some envelopes, and being so excited to stick the extra cash in the "Savings" envelope. Within months, one of my favorites things to do on a day off was to drive to the bank and deposit the extra cash. I loved saving money. I loved the pride that I felt and that feeling of accomplishment. 

Teaching children to be financially savvy at a young age can make a world of difference! As a kid, I had a piggy bank where I kept my sacred money stash. If I wanted a toy, I was expected to dig into my stash and spring for the toy. Needless to say, I didn't have very many toys, because I learned the value of money at such a young age. By the time I was 18, I had saved up $6,000. I joined the military, and soon after, was raking in a whopping $600 a month. I still managed to save $100 a month and pay all of my bills and have a fun life outside of work. This was all because of my parents teaching me how to manage money at a young age.



These healthy habits paid off as an adult. I am 33 years old and can probably retire by the time that I am 40 based entirely on savings and savvy spending. Now, don't get me wrong. I still have lots of fun hobbies, and enjoy splurging here and there. I have horses, I travel out of country every year, and have zero debt (besides my mortgage on my house). But unlike other people in their early 20's, I chose to save my money so I could later afford all of the great things that life had to offer, rather than use credit to buy it.

If I wanted something, I would find a way to make the money to pay for it. Sell old books on ebay, clean out my closet for a yard sale, or take on a part-time gig.

Another trick that my mom taught me dealt with credit. At 16, I got my first credit card with a  $200 limit.  I would use it for gas and fun, then pay it off every month. So I was building interest on my money as it sat in savings, then I would use that money to pay off my card each month, never incurring monthly fees. This allowed me to build credit and continue to develop good financial habits. Now, I still do the same thing, but I have rewards cards. I get free plane tickets, or cash back just for spending money and paying it off every month all the while, gaining interest on the money sitting in th ebank that will be used to pay the bill.

One last tip: Pay your bills a few days before they are due. Don't pay them early, that will cause you to lose out on interest. Although interest rates aren't phenomenal, its still free money- like finding a quarter or a dollar on the street.