Procrastination, the Thief of Time

My biggest hurdle/obstacle/annoyance with building my investment portfolio isn’t bills and it isn’t the economy. It’s not other people. It’s not how little I make. It’s more basic than any of those: it’s procrastination.

Yeah, the one thing that has prevented me from having tons of dollars in the bank or invested is simply the fact that I put it off until “later”. We all do it! I found a great post about procrastinating and how to stop. It’s simple, actually.

But from an investment standpoint, think about all the money you’ve lost out on because you didn’t start sooner. So start NOW! Even $5 per week MATTERS and will matter a huge amount in just a decade.

So let’s say you stop procrastinating and you decide that right NOW you will set up a Sharebuilder or ING Direct account, and fund it automatically with $5 per week. Basically, that’s $2600.  With compound interest (4%) it would equal more than $3100. The possibilities with investing in stock could be even better.

So get started today. It’s worth it!

How to Make Sure You Have Money When You Need It

Have you ever ran into a situation in which you needed some cash – but didn’t have it? We all have probably encountered this at one time or another. When a car breaks down or when there’s an unexpected expense, people without cash have to turn to credit. And we don’t want to do that.

To alleviate financial hardship and more indebtedness due to relying on credit, there’s a better way. It’s just not instant and “easy” like buying everything on credit. The smart investment solution? It’s simple.

Save in small amounts on a regular basis, using an automatic scheduled deposit into an account that you absolutely do not check. Never! Just let the account accumulate money.

The funds you are saving are intended only to be used as an emergency account. Your best bet is to set the investing on auto-pilot and let the money accumulate.

Make A Budget And Stick To It!

The best way to take control of your finances is to make a budget. Not only do you need to write down everything but you need to make a plan to tackle your debt and reduce your spending. There are four major factors in budgeting:

• Fixed Expenses

• Variable Expenses

• Debt Reduction

• Savings

Track your fixed expenses so you know precisely what must be put out each month.

Track your variable spending to see how much you’re spending.

Write down all your debts and plan to tackle them one at a time above and beyond the minimum payment.

Plan to save money for a rainy day.

If you cannot balance your budget, it’s time to cut costs somewhere. Most likely, this will be in your variable spending. Set a strict budget for yourself so you can get ahead of the game. This may take sacrifice and discipline but is the surest way to get out of debt fast.

Three Things To Do With Extra Money

Ok ok enough of the negative stuff I’ve been posting. You want to know what you CAN do with money, right? So here it is.

When you come into extra money either from a bonus at work, a second job or a nice little windfall of some sort, it can be tempting to just spend it. It can also be that you’re feeling your conscience tell you to do something really ultra responsible with it.  Why not do both?

Split the money into three and put each portion towards something specific.

The first 33%: Pay down your debt. Put the money into paying off a credit card balance or adding extra money to a bill. Don’t reduce your payment next month! Keep things going.

The second 33%: Put money in the bank. Hopefully you have a savings account. Put this money away for a rainy day or for savings or into one of your silo funds. A silo fund is generally a fund designated for something specific like a vacation or a new gadget.

The final 34%: Spend it! Have fun once in a while. It’s really smart to pay down your debt and save money for a rainy day but live a little too!

Be Faithful to One Credit Card

Reasons To Choose Just One Credit Card

Most people find that they need a credit card. It’s a sad thing that it’s sometimes seen as more valuable than cash.  This scenario applies to reservations and security deposits more than anything and when you spend with a credit card, you have to be careful to factor in the interest you are going to pay. Whenever possible, don’t carry a balance on your card.

For the instances when you need a card, hopefully you’ve shopped around for one with a low interest rate and minimal (if any) membership fee.

A very important tip to debt reduction is that you should only have one credit card. If you have one credit card, you’ll only have one credit card payment each month. Keep a low credit limit and shop for a card with a good interest rate and do your best to keep the card free and clear. This way, you have it for reservations and for emergencies but are not using it to live on.
The more credit cards you own, the greater chances you have of uncontrolled spending and having to pay mountains of money in interest fees.

Honey, Our Finances Are Screwed. Oh Yeah And I Love You.

Communicate With Your Spouse About Debt!

Whether you’re the one in control or the one in the dark of the finances in your relationship, you’re not doing yourself any favours by being one or the other.  Both people in the relationship need to know what’s happening with money.  Why?

•    If only one person is controlling the finances, the other is likely to overspend.
•    If you have financial goals, you both need to work at them in order to meet them.
•    For your own financial safety you need access to all your financial records.
•    If your spouse becomes ill or dies, you need to know absolutely everything so you can manage.

If one spouse tends to manage the bulk of the finances, the other spouse should at least have access to everything and be kept regularly informed about the family’s financial situation. This way, overspending won’t happen, goals are being met and if necessary, both spouses have the ability to keep things afloat.

Reasons to Avoid Store Credit Cards Like the Plague

Store credit cards are a negative debt. Not only can they only be used in one type of store but also they most often carry the highest interest rate around.  Store credit cards can be very alluring, especially at the holidays.

There’s a nice lady at the front of the store offering you a free gift if you apply for the card. Don’t fall for it! Yeah I know she’s pretty and she smiled at you, but get a hold of yourself!

There might be an offer at the checkout to save 20% on today’s purchase if you apply for a store credit card.   Don’t fall for that either!

Not only do the store cards put you at a disadvantage from an interest rate perspective but can lead to overspending. Not only will you tend to buy more at that store rather than shop around for the lowest priced product but you’ll pay a lot more for the goods when you factor in the interest.

Credit card companies offer a very low monthly minimum payment because they want you to carry a balance.  It’s much better to opt for a generic credit card that can be used anywhere as you’ll be less likely to spend and when you do spend, you’ll probably save on interest charges.

Department store spending is generally for variable expenditures and using cash for these types of expenses will help you stay on track and help reduce overspending.

Shop Around For The Best Rate!

Whether you are looking for a loan, a mortgage, a credit card or some other financial product, it’s wise to shop around. If you have a good credit history you could have some negotiating power and have financial institutions clamoring for your business.

Don’t Take The First Offer You Get!

The first offer of a loan, mortgage or credit card doesn’t have to be one you jump on. Don’t hesitate to shop around. Be careful about applying everywhere as too many credit inquiries on your credit report can actually do more harm than good but don’t hesitate to see how competitors to your bank or financial institution fare in terms of savings.

Shop Around!

Balance transfers and introductory rates can make it very worthwhile to shop around and be choosy about the financial products you purchase. Do be careful about the timeline for introductory rates and be careful about adjustable rate programs, which can vary significantly.

How to Invest in the Current Economy

As an average American who works 40-hour weeks just to stay afloat, I sometimes find it hard to imagine investing for my family’s future – much less actually doing it. But even though the situation seems hopeless at times (in the light of things such as high gas prices and the housing bubble) there are indeed ways to invest even when dollars are tight.

1. Pay off debt. While not technically “investing”, paying off your debt is probably the best thing you can do. It will allow you to one day get your head above water and actually save money and avoid racking up more debt in the form of interest.
2. Put money into savings. Not the best way to sock away funds, but better than nothing. And if done right it can provide you with some liquid assets that might prove useful. In his book A Million By 30, the author used a savings account for which he had no ATM card, and which he automatically had funds deposited into weekly. Thus, he never looked at it and never touched the funds.
3. Get a DRIP account. Buy stocks on autopilot. It’s easy with a program such as ShareBuilder that allow you to automatically schedule small amounts of money to invest on a regular basis. The advantage of this is you can buy portions of shares if necessary, and by investing regularly you spread out the risk of the ups-and-downs of the stock market.

Even if you put only an extra dollar a day (or $30 per month) toward debt, savings, or investing – it’s better than doing nothing and it may be the start of something bigger and better!