September 22, 2018

Stop Buying What You Can’t Afford

Stop Buying What You Can't Afford

Make a budget and live by it. Start with a good, honest pencil-and-paper look at your income and outgo.

All of a sudden you’re finding that your credit card balances are totally beyond your ability to pay? Time to take control. Debt is a big factor when you need a credit score that will allow you to buy a home, a car or other big-ticket item, so stop debt in its tracks.

You begin the battle against debt by assessing your spending. Are you buying what you need or letting wants win the game? Before buying an item, be prepared to defend it as a genuine need. The latest eye shadow kit or a trip to the spa probably can’t pass the test. You may argue that you work hard and deserve the occasional spree, but you have to count the sacrifice if you give in to that philosophy too often.

Make a budget and live by it. A personal finance app can be a big help. But start with a good, honest pencil-and-paper look at your income and outgo. Don’t fudge because that will inevitably gum up the works as you try to make the math work. Start with the items that are essential, such as rent, utilities, insurance, food, clothing (within reason) etc. What is left is your discretionary money. Wisely used, it can help you achieve some of your goals. Start a regular savings for emergencies and then carefully plan what you will do with the rest. Circumstances change, so visit your budget frequently and make adjustments as necessary, keeping the needs vs. wants factor clearly in mind. Invest when you are able to do so. The future comes fast.

Put your credit cards away. A credit card or two can expedite shopping, as long as it is controlled. If you can’t keep on in your wallet without facing serious temptation, don’t do it. Take you card only when you have in mind an item that is duly budgeted for and resist the urge to go beyond that. If you are one of the many Americans who have no idea what their credit card debt is, go to and look at the balances. Limiting the number of cards you have helps reduce the likelihood of overusing your credit. Credit card companies offer all kinds of incentives to keep you in their ranks, but don’t let the perks overwhelm your practicality.

Stop today making excuses for your wretched personal finances. If you think you don’t have time to make a budget, you could be forced into spending more time trying to find a way out of debt. Get honest with yourself. If you need professional help getting a handle on your finances, it is available. Whatever steps you need to get yourself on an even keel, take them.

Do-It-Yourself Can Save Bucks

Do-It-Yourself Can Save Bucks

Reassess your budget periodically to see if there are items you could eliminate or undertake to do on your own rather than pay to have them done

How many ways can you think of to save money by taking care of home maintenance items, making your own clothing, your baby’s food and dozens of other projects?
You can save lots of money if you go about it right.

First on the list of don’ts is the obvious: Don’t undertake DIY projects unless you know what you are doing. Free courses through local schools, colleges, libraries, stores, sewing centers, etc. can prepare you for routine home upkeep chores. Book stores have shelves of how-to books and there is a website for any job you could imagine. Don’t start a project until you’re sure you can finish it.

Stick with things you are genuinely willing to tackle. If you are put off car repairs by the smells and dirt, leave it to the experts. Focus on projects you want to undertake and have reasonable expectations of success.

Start small. Re-roofing an entire house is a huge, dangerous and expensive undertaking. Start with a small section of roof on a garage and see what the reality of the full job would be.

Lawn care might be a good place to start. If you have been hiring it done, enlist the help of family members and do it yourself. Don’t assume you have to do every bit of every job yourself.

Reassess your budget periodically to see if there are items you could eliminate or undertake to do on your own rather than pay to have them done.

Sell (or donate) items you no longer need. Keep track of their value to use for tax deductions. Items that have value as collectibles can be offered on eBay.

You will multiply the value of Do-It-Yourselfing by putting the money you saved into your regular savings or into a separate account for emergencies.

Save On Entertainment

Save on Entertainment

A theater hoping to fill the house may begin selling “rush” tickets a couple of hours before the performance

Americans love to be entertained and they spend a lot of money for the pleasure. Here are a half dozen ideas for spending less and enjoying it more:

If you’re planning a night out for live entertainment, wait until the last minute to purchase tickets. A theater hoping to fill the house may begin selling “rush” tickets a couple of hours before the performance. Consolidated discount ticket booths are popping up all over the country. Or make a direct call to the theater and ask if they discount tickets right before show time. Of course, if you know a performance is likely to sell out, keep your plans flexible.

Remember the library? That’s where people used to go for books. Many of them still do and they also keep current on recorded books, shelves of CDs and other media. Today’s libraries also offer readings, book clubs, film screenings and lectures. Dust off your card and take another look at your local library.

Teenagers and young adults who are looking for entertainment that doesn’t break the bank can often find part-time jobs at sports venues, concert halls or theaters. That way, they can catch the action (without neglecting their responsibilities) while earning enough to pay their way into yet more events.

Regular discount days are a feature of many theaters, museums, galleries, zoos and parks. Some even offer free entry on certain days of the week or during particular hours. Live performance theaters sometimes offer drastically discounted tickets for dress rehearsals.

If baby-sitting costs keep you home, arrange with another family to swap the chore on alternating Saturdays. Over a year’s time, you could save more than a thousand dollars. which you could turn back into entertainment money.

Matinee performances generally are less expensive than night-time performances, so plan to attend during the day rather than paying the higher night-time costs.

Save Money On Food

Save Money on Food

Cooking you own meals can significantly cut the costs of eating. Even fast-food eating out in enormously expensive.

The typical American family of four spends $8,513 per year on groceries. And many families add to that amount by eating out regularly. If you are interested in cutting the amount you spend at the grocery store, file these tips away and follow the advice they offer:

Learn to cook. Cooking you own meals can significantly cut the costs of eating. Even fast-food eating out in enormously expensive. You’ll also save if you cook from scratch and avoid the higher-priced frozen and pre-prepared meals. Not only that, it is likely that you will eat healthier. Book stores have dozens of cookbooks, many of them focused on inexpensive and easy-to-fix meals.

Take fewer trips to the grocery store. Typical American food shoppers go to a store three or four times a week. This means they triple or quadruple the temptation to pick up things they don’t really need. Studies say the frequent shoppers spend up to 54 percent more than those who stock up for a month or more at a time.

Take sack lunches to work. Compare the cost of a $2 brown bag lunch to the average $6 trip to a sandwich shop and you can see how fast you could save yourself some serious money. In this comparison, the savings are about $80 a month or $960 in a year.

Make a list. Impulse buying is sharply curtailed when you have it written down. Sketch out a week’s meals and see that all the ingredients are on hand. Add a few goodies to the list for the occasional treat, but otherwise, stick with the list.

Buy generic. No-name brands are almost invariably less expensive than those that you recognize right off the bat and the quality is likely to be comparable. The experts say you can pocket big savings on such items as canned goods, cereals, frozen vegetables and even baby products such as diapers and prepared formulas. When buying prescription drugs, compare labels so you are sure you are getting the same dose of the active ingredients.

Use coupons. Coupons are good money-savers only if you look for items that don’t cost more than you would find in another brand. Store brands usually cost less. Eateries also offer coupons and you’ll find them online.

Many stores offer information on their shelves or price tags that gives a unit price. Comparison shop using the unit price. Buying in quantity is a good idea for some items. For instance, a pack of 40 diapers may cost f$13. or 33 cents per diaper. A box of 144 diapers at $35 is just 24 cents per diaper. (A word of caution: Although buying in bulk is usually less expensive, it’s a waste if you cannot use the product within a reasonable time. A good deal is not a good deal if it goes to waste.)

Robust Economy? Not For Everyone

Robust Economy

While the economy appears in print as encouraging, there are problems to address before the benefit can blanket all Americans

Unemployment is down. Spending is up. Inflation is manageable. Taxes are down. Demand for new homes is up. Household wealth is higher.

So how come many Americans are not feeling secure, even though the last major recession is nine years in the past? Too many of them are falling into categories where high child care costs wipe out the advantages, or the expanding costs of travel wipe out any pay raises, or those pay raises have not materialized, or . . .

Analysts at Oxford Economics who studied American spending patterns found that those in the bottom 60 percent of earners were drawing from their savings to maintain a standard of living. Many are living paycheck-to-paycheck. Even those who have found jobs as the jobless rate dipped are not feeling financially secure.

Here’s how the current economy looks to these folks:

Even though inflation is not a current concern, the prices of some indispensible items is rising. Gasoline is up 24 percent since a year ago. That can eat away as much as a third of what people hoped to save.

Owning a home has become harder, not easier. Many areas of the country are seeing a dearth of listings in the affordable range. Prices are rising more than 6 percent annually overall and even higher in some areas, increases that effectually wipe out the 2.7 percent increase in most hourly wages. Thirty-year fixed-rate mortgages are growing costlier. Average interest rates have jumped too 4.62 percent, from 3.95 percent at the beginning of this year.

At the root of the problem is the decline of America’s middle class. Wealth is increasingly lop-sided, with the ultra-rich sector growing while those at the other end of the scale see little benefit from the great economy. The top 10 percent of the country controls 73 percent of the personal wealth. The gains are concentrated in the top 1 percent, which lays claim to 39 percent of the wealth.

Where the middle class once included some 40 percent of the overall population, the figure now is just 27 percent. In the lowest 40 percent, Americans have a negative net worth and few have cushions sufficient to offset an emergency. They can’t look to stocks, rental properties, capital gains or home equity to shore up the budget if needed. Hourly wages haven’t risen over the past year for most of them.

Times are particularly tough for people who lack an advanced educational degree. Those who ended their education with high school find themselves scrambling as most of the jobs go to college grads. Those minimally educated make up less then 1 percent of the job gains that have boosted the overall economy.

At the same time, it isn’t all rosy for those with a college degree. Ever-higher student debt has wiped out some of the advantage. Since 2004, total student debt has increased 540 percent to a startling total of $1.4 trillion. That doesn’t include graduate school debt. That debt is influencing the ability to buy homes. Realtors have reported home-buying delays of about seven years among those burdened with education debt. College graduates dealing with debt also tend to delay the start of families, another factor that impedes full economic health in the country.

Children are, in fact, very expensive. Nearly a third of families put out at least 20 percent of their income for child care. Some families go into debt to cover child care expenses. Average cost of care for one child is $10,486 a year and it can be as high as $20,209. Many women have dropped out of the job market to stay home with children rather than pay the high costs of outside care.

The percentage of American women in the workforce has dropped from 77 percent in 2000 to 74.8 percent now. A return to the higher figure would see some 1.4 million more women in the workplace.

So while the economy appears in print as encouraging, there are problems to address before the benefit can blanket all Americans.

Wise Shopping For Groceries

Grocery Shopping

Essential ingredients are placed at opposite ends of the store so you must pass through the inner aisles to reach the dairy products at one end and produce at the other

Grocery stores are strategically designed to tempt the shopper into spending more money. Try to avoid some of the pitfalls by following these tips:

Essential ingredients are placed at opposite ends of the store so you must pass through the inner aisles to reach the dairy products at one end and produce at the other. Try to focus on what you need and don’t spend unnecessary time in the central aisles.

Don’t shun coupons. You can save serious cash if you are willing to spend a little time and effort to accumulate coupons for items you routinely buy. Watch the store’s ads to magnify the benefit of coupons. Staying current with sales will save you money. Be aware, however, that coupons are most likely to give you a break on brand-name products when there may be cheaper alternatives. Don’t buy something you don’t need because there is a coupon.

Toiletries generally are cheaper at a pharmacy than in the grocery store. Stock up with an occasional trip to the pharmacy.

Don’t become addicted to brand names. Often, a generic or house brand is of comparable quality and costs less. Often, they are the same product under a different label. Check the ingredients to be certain you are not sacrificing anything.

Remember that the eye-level shelves are likely to contain the more expensive items. Grocery store managers know that what the shopper sees at eye-level is most likely to catch their attention. Look up or down before buying the first version you see.

If an item you have seen that is currently discounted, but you can’t find it one the shelves, don’t hesitate to ask for a rain check. Some stores offer the option of getting an extension on sold-out sale items.

Don’t go to the grocery store hungry. You’ve heard it before. After work or before dinner is the worst time to go. If it’s possible, shop on weekends.

Eat with the seasons. Not only will fresh products taste better, they’ll be mulch more reasonable priced. If you opt for fruits and veggies that are out of season, you pay for the transportation costs that get them to your store.

Mortgage Lingo Requires Study

Mortgage Lingo Requires Study

A higher LTV could represent a greater risk for the lender because it suggests the assets behind the loan are lower

Buying a home can thrust you into a realm where the language is about like being in a foreign country. The alphabet soup of acronyms and the jargon that peppers the conversation can leave you feeling a little lost.

Understanding just one factor, the LTV or loan-to-value component, can be a big help. Basically, it compares the size of the loan you are signing to the value of the home.

The LTV mathematics are relatively simple. You calculate it by dividing the amount of the mortgage by the appraised value of the property. The lender is interested in the LTV because it is an indicator of loan risk.

For instance, on a home appraised at $300,000, if you make a down payment of $40,000, the $260,000 mortgage represents an LTV of 86 percent. In other words, your mortgage is 86 percent of the value of the home. A higher LTV could represent a greater risk for the lender because it suggests the assets behind the loan are lower. Should you default or foreclose with a high LTV, it becomes more difficult for the lenders to recuperate the outstanding balance when they resell the property. Because of that risk, they may charge higher interest in the first instance.

Lowering the LTV has a number of benefits for the purchaser. It will make applying for a loan easier and could lock in a lower interest rate. You may not be required to purchase mortgage insurance, which usually becomes a factor when the LTV is 80 percent or lower. If the value of the property should drop, you could find yourself “under water,” a term applied when the balance on your mortgage is greater than the value of the home.

You can improve the LTV by increasing your down payment, building equity as you pay off the mortgage or by proving that over time, the value of your property has increased. That requires another appraisal.

As time passes, check the numbers to see if your LTV has improved. If so, you may be able to drop your mortgage insurance.

T.J. Maxx, Marshalls Offer Deals

T.J. Maxx, Marshalls Offer Deals

The two stores are affiliated with Marmaxx Group, so they are able to negotiate what they pay for goods and what savings they can offer to customers.

There are good reasons that bargain-seekers shop with T.J. Maxx and Marshalls outlets. The two stores are affiliated with Marmaxx Group, the largest retailer of clothing and home décor in the country, so they are able to negotiate what they pay for goods and what savings they can offer to customers. Their usual discounts are 20 to 60 percent off original retail prices.

They keep prices low by bypassing agreements with their providers to buy back a percentage of the merchandise if it doesn’t sell within a certain period of time. So they can offer customers a lower price than retailers that agree to the “buy-back.”

T.J. Maxx and Marshalls hire aggressive buyers who pay attention to more than seasonal factors. If a product meets the quality standards and they can get it at a good price, they buy it. The practice ensures an ongoing flow of merchandise.

Marmaxx works with thousands of vendors around the world and they use past experience to make quick purchases on bargain items. They may buy what other retailers might consider “odds and ends.” They are not as fussy about such things as size ranges, etc. If they think they can sell the item, they buy it.

Different shoppers have different opinions about the two retail outlets, depending on what they are shopping for. T.J. Maxx offers fine jewelry and accessories and in some of its stores, The Runway is a high-end discount designer. Marshalls has a full line of family footwear and a junior department called The CUBE.

Knowing something about the price tags at the stores can help shoppers find the best deals. A yellow price tag indicates a deep discount; white tags are regular-priced items; purple signifies items from “The Runway” which offers desirable, high-end goods. The latter are harder to find, but there are some available.

Tuesdays through Fridays may be the best shopping days at these stores. Some shoppers regularly bet that the discounts will be more advantageous on Wednesday mornings. January and July are the months when end-of-season merchandise is offered. Prices are adjusted downward more often in these months.

If you comparison shop, be aware that T.J. Maxx and Marshalls don’t do a good job with such information. The “compare at” prices may tend to be inflated. Use the Amazon app to see comparisons.

The stores discourage haggling. Irregular items are clearly marked and the price takes it into consideration. Damaged items may give shoppers some leeway to bargain with management, but expectations should be on the conservative side.

Discounted gift cards are offered in place of coupons, category promotions or store-wide sales. Savings can vary, but shoppers can expect to shave at least another 5 percent off the price by using the gift cards, which are available through websites such as, and The cards can be used at T.J.Maxx, Marshalls and HomeGoods.

How To Plan A Savings Plan

Savings Plan

Adopt a lifestyle that allows you to save, rather than saving what’s left when your over-the-top lifestyle is dictating the spending.

When the time comes that you are finally a little ahead of the bills and want to make the best use of your financial “leftovers,” how do you proceed?

Saving with a concrete plan in mind will avoid the haphazard trickle of savings that too many people rely on to enhance their investment earnings. A specific objective is preferable to random savings.

Turning things topsy-turvy for awhile may help. In other words, take the savings off the top and pay bills with what’s left, forcing yourself to avoid frivolous or unplanned spending. Obviously, you do this based on long experience of what your fixed costs are likely to be. If left unchecked, our perceived “needs” expand to take up the whole paycheck. Immediate gratification is a disease that grows over time. Curb yourself.

The very best definition of “savings,” in this scenario, is “living below your means.” The urge to spend becomes a habit if you don’t control it. Adopt a lifestyle that allows you to save, rather than saving what’s left when your over-the-top lifestyle is dictating the spending. When you get a raise at work, automatically raise the amount you save, rather than putting the whole increase into lifestyle escalation.

Make it harder to spend. Tuck the credit cards into the back of a drawer for a while and operate on a cash-only basis for awhile. Paying cash makes the expenditure immediate, instead of looking forward to a bill that may seem a long way off.

With tax-filing season in full bloom, plan ahead how to spend your refund, if any. Use the windfall to supercharge your savings. The average return, according to the IRS, is $2,895. Half of that, or at least a good share, would go a long way toward reaching a goal of having three to six months’ of savings as a healthy cushion when things go wrong financially. Having this amount stashed in a savings account or money-market fund, before you start toward other investment goals, is a wise move.
The alternative in a financial emergency is to tap into retirement accounts that may impose a penalty on withdrawals.

Once the basics are set, the next savings strategy is to invest in such things as stocks and bond mutual funds or ETFs. Sticking to low-fee investments such as index funds and ETFs reduced your investment costs, opening the way to higher returns. Over decades that is akin to saving an extra percentage or more of salary each year.

But all of these tracks to greater savings have to begin with a viable plan and then sticking to it, monitoring along the way to stay on track. It’s the only way to assure financial security now and when you are retired.

What Would You Do With An Extra $500

Extra 500

Consider how to get the most benefit from extra cash by looking at short-term investment options.

What if you found yourself with $500 that wasn’t committed to any part of your budget. Could happen. An income tax return, for instance.

Regardless of the source of your windfall, it’s time to consider how to get the most benefit from it by looking at short-term investment options. Having one or more of these in your financial profile is a buffer against the unexpected.

Carefully look at the possibilities before putting your $500 on the line. The most common short-term options

• A term deposit, sometimes referred to as a certificate of deposit, means you put an amount into an account at a financial institution, with a fixed term. Maturity dates can be set for as short a time as six months or extend to five years. Most institutions charge a penalty if you close the account before the term is filled. In most instances, the institution pays a higher dividend on a term deposit than on a traditional savings account. You can increase the value of such a deposit by “laddering,” or opening multiple accounts that mature at different times, anywhere from a year to five years. When a deposit matures, you can flip it into a new term account. Creating a train of short-term deposits allows you to access money when you need it on a regular basis while still earning good dividends.

• Look at mutual funds, an investment program that takes money contributed by many people and putting it into securities. Beginning investors may be particularly interested because mutual funds are easy to understand and to buy. They are affordable and offer a variety of categories and types. Consider where you feel most comfortable placing your $500.

• Peer-to-peer lending puts people with money to invest together with people or organizations that need to borrow that money. These lending platforms operate online, so they have lower overhead and fewer transaction costs. Three- to five-year investments usually earn higher returns. As is usually the case, that means higher risk. It is possible the borrower could default and the debt go to collection, or be lost entirely. Diversity is the best approach. Putting small amounts of money into several loans minimizes the possibility of damage to your portfolio.

Whatever you decide to do with your $500, don’t leap before carefully studying all of the possibilities. Be familiar with the institution in which you intend to invest your money. If you are uncertain, find a financial advisor who is familiar with the answers to your questions.