Saturday, December 15, 2007

New Years Resolutions

Most people make New Years Resolutions regarding getting in physical shape, or being more organized, well you should make a New Years Resolution, to get your finances more organized and in shape. No more living paycheck to paycheck, and worry about having enough money to pay each bill, or to time your spending so that you don't overdraft the account.

Set up a budget, see if you are going to have any money left over after all of your expenses weekly or monthly, and instead of getting a smile on your face because now you have a few more bucks to blow down on Chippewa Street, or some other local watering hole, set that money aside, and let that money make money for you.

As I posted before, there are investment vehicles for people that don't have high upfront costs to get started with them, Charles Schwab, T. Rowe Price, TIAA Cref...OR if you don't want to start investing in mutual funds, set up one of those online savings accounts I discussed, you can then make over 4% (ING is about 4.2%, and Virtual Bank is 4.6%) RISK FREE. Instead of blowing it on one night of partying, make it last, and make it make money for you.

It might be tough to start saving at first, considering it may not have been something you were that religious about before, but once you start saving, start seeing that bank balance get larger and larger based on your deposits, and then you see the interest payments adding on top of that, it will be a good feeling knowing that you are getting your finances in order, and you are saving for something larger...whatever it is you decided you are putting that cash away for...

Albert Einstein said it best, when he said that he thought that compound interest was the 8th wonder of the world, so at the start of 2008, start that interest compounding for you.


FREE MONEY FOR STARTING TO SAVE

Many banks offer you bonuses to open savings accounts with them..and I have two of the banks here
ING Direct which I have been using since January of 2005, and have never had a problem with them, offers you a $25 when you open up an online savings account with over $250. Its a great deal, ING's online savings accounts are great, I like how you can track your interest earned daily, and it is so easy to withdrawal or deposit money.
Virtual Bank, also is offering a deal for opening up an account with them; fund the account with $100, and you get a $20 bonus, thats not a bad deal either...like ING, both are completely online, and easy to use...easy to deposit and withdrawal cash from.

For both of the bonuses, you need to be referred by someone, so let me know, and I will e-mail you a referral form, and we can both make some money, because I get a few bucks from each of those bonuses...$10 from ING and $20 from Virtual Bank.


ANYONE CAN INVEST

A lot of people have the idea that you need a large sum of money ($1,500...$2,000 or more), to invest in mutual funds. Charles Schwab started a MoneyLink program where you can invest in there funds with an automatic transfer from a checking account to an account with them, and all you need is as little as $100 a month. If you can't swing the $100 a month, T. Rowe Price and TIAA CREF also have waived the minimums on mutual fund accounts for automatic investing. Both TIAA CREF and T. Rowe allow you to start investing with automatic investments into their funds of only $50 a month. Thats a bit over a dollar a day, and I dont like talking about that "Latte Effect" or whatever it is called, but almost anyone can come up with that much a month...thats less than a night out on Chippewa.

Free Checking

In Buffalo M&T Bank started the Totally Free Checking years ago and other banks have followed. People should realize that the checking accounts that they hold that are earning less than .5%, but you are getting hit with $7 fees monthly for having an account labled "Interest Checking", arent worth while. You should open a Totally Free Checking Account at any of the banks, not just local, but now the nationwide banks all have free checking. What you should do after you set up an Totally Free Checking Account is jump on the online bank bandwagon and open up a savings account through one of the online banks to transfer money between the two accounts. I love the online savings accounts because it gets the money out of my hands, and is a few days away if I need it for anything, so it allows you to make the decision on an impulse purchase.

Friday, February 16, 2007

Budgeting

I feel this is the most important part of keeping your personal finances in order. The best way that I can think of to put together a budget is through Excel. The way I do it is I low ball the income (not by a lot, but by a few bucs), and high ball the expenses, this way if you stick to the budget you'll have some money left over. Also, another way that I find it easier to save money is to actually work it into your budget, don't just put whatever money over you have left into savings, actually figure our how much you want to put away each month or week, and work that into the budget.

Income
-Expenses
-Savings
-Retirement
-Spending
=Left over

You can do whatever you want with this money, put it away for a vacation fund, put it into a high interest bearing savings account until you know what you want to do with it.

I read on another blog recently about how you dont want to kill yourself saving and saving for retirement, you are working, so you want to be able to get out there and enjoy some of the money you are making. If you can put together a solid budget, low balling the income and high balling the expenses, that is the first major part of getting onto the road of financial stability.