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11/07/16 Personal Finance , Saving # ,

My Stupid Impulse Purchase of the Week

My Stupid Impulse Purchase of the Week

No one plans on making impulse purchases. That’s what they are — an impulse. But it seems like every week or so I make a stupid impulse purchase that makes me wonder if I have any control over how I spend money.

My latest impulse purchase: Coffee.

It was $5 for a small bag of raspberry chocolate I saw by the checkout counter at Marshalls. Here are the reasons that ran through my head of why I should buy this wonderful sounding coffee:

  • I like coffee.
  • I like trying new things, including different types of coffee.
  • I like raspberries.
  • I love chocolate.
  • Raspberries and chocolate together sound awesome.
  • It’s only $5.

What makes it a stupid impulse purchase is that it was lousy coffee. And that I wasted $5. Continue reading

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10/28/16 Minimalism , Saving # , ,

How I Save $1,000 Per Year With 3 Quick Phone Calls

How I Save $1,000 Per Year With 3 Quick Phone Calls

When I got laid off from my job eight years ago, one of the first things my wife and I did was look for ways to cut expenses. The monthly combined cable TV-landline phone-Internet bill stood out the most as an easy way to save $1,000.

Unfortunately, there weren’t many options to cutting the cable cord then, so we stuck with our monthly cable TV bill of around $100 for four more years until we finally got rid of it. We also eventually got rid of our landline phone, and now each have a cellphone.

So with two parts of the three-part cable company bill eliminated, that left us with only Internet service to pay for. It was a service we needed — I started working at home as a freelance writer and needed Internet access to work — so killing it wasn’t going to happen.

If the cost wasn’t going to be eliminated, the next-best thing to do was to negotiate a lower price with our Internet provider. It’s a task I took on with gusto, mainly because I like negotiating prices and getting a deal, but also because it just seemed like a ripoff to pay $80-something a month as a long-time customer when new customers were paying half that.

3 phone calls per year

The negotiation is as simple as making a quick phone call that lasts about five minutes.

I call our Internet provider once a year and our newspaper twice a year for the lowest price each offers new customers. I have to call the New York Times and haggle twice a year because it only offers discounts for six months at a time. Continue reading

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10/17/16 Saving #

How to Handle Financial Emergencies

shopping for insurance

For most of us, financial emergencies are an inevitable part of life. Cars break down. Someone needs urgent medical care. Layoffs happen.

Here are some guidelines to follow when crisis is unavoidable.

First, Define Emergency

Sometimes, we shift into crisis mode for no reason.

Don’t deplete your savings account to buy Christmas presents or rent a limo for your daughter’s prom. Neither is an emergency expense. There are 364 days to plan for the holidays. There are 18 years to save for the prom.

True emergencies pertain to health, a well-maintained roof over your head and transportation to your job.

Respond Well

How you respond to a money crisis could determine whether you land on your feet or face decades of mounting debt. Maintaining a positive attitude is crucial.

The worst thing to do is panic. Making rash, emotional decisions could affect your financial health for years to come. Resist the temptation to tap easy resources for fast cash. A cash advance on your credit card will incur a fee, and the interest charge – which starts to accrue immediately – could be as high as 20 percent. Payday loans are even more exorbitant.

Another poor reaction is denial. Refusing to look at financial statements or deal with creditors will only make matters worse. Instead, confront the problem and work to rectify it.

Take These Proactive Steps

1. Seek Counsel

Talk about your problems with someone you trust. This might be a parent, close friend, minister or banker with whom you’ve had a long relationship. Be open to the wisdom of others. They may suggest ideas that you hadn’t thought of.

2. Contact Your Creditors

Letting your creditors know about your situation will save you a world of hurt down the road. Let’s say that you were in a car accident and missed a lot of work. A few phone calls might prevent a negative mark on your credit report.

Credit card companies may accept an interest-only payment or waive late fees for a month or two, especially if you’re a long-time customer in good standing. A bank or credit union might be willing to defer a house or car payment to the end of the loan term. Utility companies will usually extend the grace period or offer payment plans. Most work with other agencies, like United Way, to help struggling people keep the lights on.

Even the IRS will set up a payment plan if you owe taxes.

3. Change Spending Habits

Continuing to spend as you normally do could result in a car repossession or home foreclosure.

Make an itemized list of your greatest needs:

  • Food
  • Housing
  • Health care or prescription medicines
  • Utilities
  • Transportation to your job
  • Childcare

Make mortgage and car payments before you pay credit cards. Everything else can wait.

4. Increase Income and Free Up Cash

Take a part-time job with a flexible schedule, or find a way to earn online until you catch up.

Sell something. Online platforms make it easier than ever to come into quick cash when every little bit helps. Here are some things you could consider selling:

  • Jewelry
  • Electronics
  • Furniture
  • Fine clothing
  • China, flatware or kitchen appliances
  • Collectibles like baseball cards or comic books
  • Season tickets to sporting events
  • Services like writing or consulting

Ways to save money are staring most of us in the face. Freeing up cash just takes a little humbleness and creativity.

Trade in your car for a less expensive model, or save on gas by taking public transportation.

Go without cable TV for a while, or call your provider and ask to speak to a plan specialist. Explain why you can no longer afford the program you agreed to, and ask if there are cheaper options. Sometimes, unadvertised promotions can reduce your monthly bill by as much as half.

Car insurance companies offer a number of discounts. Doctors and dentists, who don’t like waiting for reimbursement from insurance companies, typically offer a 10-15 percent discount for paying in cash.

5. Don’t Make Matters Worse

Before you refinance your home, tap your retirement account or borrow from a relative, make sure that you’ve gotten sound advice from reliable sources. The decisions you make now have long-term impact.

Remember That It’s All Relative

Finally, it never hurts to put life’s misfortunes in perspective. It’s a plumbing problem rather than a foreclosure. It’s a broken leg rather than heart surgery. It’s a very sick pet rather than a very sick loved one.

Counting your blessings will make money matters seem a lot less bleak.

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10/03/16 Retirement , Saving # ,

Think You’re Bad With Money? Take This Quiz

money

Image: RomoloTavani

Americans are financial dunces, and we may be getting denser. When the Financial Industry Regulatory Authority (FINRA) asked 27,000 adults to take a five-question financial literacy test, only 37% could answer four or more questions correctly. That’s down from 39% in 2012 and 42% in 2009. The quiz asked people questions about compound interest, inflation, and investing.

Our financial ineptitude has serious consequences. Many survey respondents were spending more than they earned, had little money in savings, and were only making minimum payments on their credit cards. Over time, those behaviors can put someone in a financial downward spiral from which it’s hard to escape.

Even worse, many of us may be unable – or unwilling – to recognize our own bad money habits. If you have a steady job and pay your bills on time, you might think your finances are under control. But if you’re frequently surprised to discover you have almost no money in your bank account or are carrying a balance on your credit card, chances are you’re secretly bad with money. In the long run, your careless ways will catch up with you, as you discover you can’t afford to buy your dream house, send your kids to college, or retire. In a worst-case scenario, a financial shock, like unexpected medical expenses or a job loss, could force an unpleasant reckoning.

The good news is you can avoid those consequences if you change your money ways. The first step to good financial health is assessing your financial fitness today. Take this five-question quiz to find out if you’re a financial whiz or really, really bad with money. Continue reading

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09/06/16 Personal Finance , Retirement , Saving , Work #

I’m a Financial Blogger Who Isn’t Sinking in Debt. Is That Bad?

I’m a Financial Blogger Who Isn’t Sinking in Debt. Is That Bad?

 

I’m going to a conference in a few weeks for financial bloggers. Many of the attendees have been in some major debt at some point in their lives, and write about it often and how they’ve overcome it.

Not me. I have three finance blogs — one focuses on personal finance, another on investing, and this one, CashSmarter, is where I share my life lessons on personal finance. Other than a mortgage, I don’t have any major debts and I’ve never been so far in debt to a credit card that I’ve had to pay off thousands and thousands of it down to get my financial life in order.

All of this makes me wonder if I’m meeting my goal of telling a compelling financial story that people want to read about. If I haven’t been $147,000 in debt, or haven’t paid off $26,000 in debt in 18 months — real stories by real bloggers I respect and enjoy reading — how is my story worth reading?

Reading how someone extricated themselves from six figures of debt can be fascinating — even if you’ve never been in that much debt. Anyone with a credit card knows how easy it can be to add more charges to a card, so going into a huge amount of debt isn’t too far-fetched for many of us.

And getting out of it is the typical American tale of overcoming large obstacles to become a success. It’s a life lesson worth reading about for lots of people. Continue reading

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Hi, I'm Aaron Crowe. Welcome to CashSmarter. I'm a personal finance freelance writer who enjoys spending my money wisely and using minimalism to make my money last longer while increasing income.