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Financial Resolutions, Mistakes and Accomplishments

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Americans face difficulties meeting short-term savings goals as well as accumulating for retirement, according to a new AARP survey. (Read more...)

 

What's your #1 money-saving tactic?

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Re: Financial Resolutions, Mistakes and Accomplishments

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Setting up a budget and sticking to it. One cannot set up a budget until one tracks their expenses, and then analyze to see where money can be saved.


"...Why is everyone a victim? Take personal responsibility for your life..."
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Re: Financial Resolutions, Mistakes and Accomplishments

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a real easy start up to saving money ( i may have learned this through aarp ) that you wont miss out of your pocket. every $5 bill that you receive/come into contact with, DO NOT SPEND. when you get home for the day simply put away in an envelope. i am amazed at the results, at the end of just 2 months i have accumulated over $110. a pretty signaficant savings for someone who has never had a savings.this really works but you have to have discipline.

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Re: Financial Resolutions, Mistakes and Accomplishments

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We eliminated cable TV and now have free Roku TV. This saves us about $1,200 per year.

Roku offers a variety of TV programs, movies, live news, weather, music, sitcoms, etc.

 

Also, we never buy anything unless we can pay in cash; this includes purchasing cars. This saves on finance charges.

 

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Re: Financial Resolutions, Mistakes and Accomplishments

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We've never had cable tv. We don't eat out several days week like a lot of people do. We don't keep getting the latest phone or gadget. We save up until we have money for a new car and then pay with cash. We do use credit cards but pay them off each month. As long as you aren't constantly spending money on things you don't need you should be able to save something. If you company has a 401 K that they also contribute to then it's stupid not to join the 401 K, that's like throwing away money. Everytime you spend money you should think, do I really need or want this?

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Re: Financial Resolutions, Mistakes and Accomplishments

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I have followed this rule and it really works. I do not buy anything extra for 6 months. This way I am able to pay down debt and realize I really can live without many things that I would normally buy. Make sure that if you have debt, transfer it to a 0% APR card for a year or more. That way you are paying down on principle without added interest. I have halved my debt in a year.

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Re: Financial Resolutions, Mistakes and Accomplishments

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One of the most common financial mistakes we find are with basic budgeting. If you simply take your annual "take home" amount and divide it by 12 months, then you've just set yourself up for financial failure; at some point during the year. Let me explain why and the solution I use for my family and my clients:

Why:

If you audit your monthly spending for each month throughout the entire year, you will find that some months are higher, while others are lower. As we tend to spend more money during the major holidays, and summer months, than we spend in the fall and winter months. This is often because of entertaining and vacationing. The solution we found was to look at our average spending for EACH MONTH, over a 3 YEAR PERIOD (it doesnt need to be exact). This will give you an average amount spent in any given month. Then determined what PERCENTAGE of your annual budget is spent in each month, totalling 100%. 

Example:

$75,000 / 12 = $6,250. The question is do you spend $6,250 each month equally? No. Some months (holidays, travel, summer etc.) we spend more. While fall and winter we spend less. Often, in the months we more, we simply use credit cards to make up the shortfall. And in months where we spend less and create a surplus so-to-speak, we tend to think that we simply have more money and thus spend it as usual...

Solution:

Find the average amount (mentioned above) that is spent in each month, then when preparing your budget, reduce the allocated amount in months where you spent less, and allocate the difference to months where your historically spend more. This will help you better prepare for these months where the audit showed you regularly spend more. In closing, this will only work if you stick to the plan! 

 

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Re: Financial Resolutions, Mistakes and Accomplishments

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During the recession many people lost their homes, but the parking lots to restaurants were always full.

I have coworkers that borrowed against their 403b to pay for daughter's weddings.

I have colleagues that borrow against their house to pay off credit cards.

I have friends that continue to support/enable adult children who would otherwise go out and get a job they didn't like.

My stepson took his boys to Disney THREE times by the time they were 6 yrs old... and he had NO emergency fund.... great parenting.

Suzy Orman says if u don't pay urself first, u will not be able to retire.  

 

Create buckets (seperate savings accnts) for: retirement, emergency fund, next car, vacation, etc.  Have these automated so they come out of ur checking account immediately upon getting paid.  Once the machine is turned on, u don't have to think about it.  

Whatever is left over, is what u can go out to dinner with, give to children/grandchildren, contribute towards weddings, etc.

It has to be a team effort.  If ur spouse has an expensive hobby or is a compulsive shopper, u will fail.  Budgets must be made and adhered to jointly. 

 

My wife buys my shirts at thriftshops ... more often than not, the tag is still on it,  we still buy our shoes new Smiley Happy.   We drive toyota's.  We live in a 2/1 condo.  We used to dine out every few weeks, now once/week.  

Our only luxuries are cable and vacation.  We budget 7k/yr on trips.  If a trip will cost over 7k, we skip one yr.  If we need to help family, it comes out of the vacation budget.... not charged to the credit card.  If she wants to remodel, it comes from the vacation accnt ... so we still have formica cabinets!!!

I am a technician and my wife is a seamstress and our net worth hit a million at age 54.  We will retire at 62.  

This is what eating rice and beans gets u.  We didn't want to rely on family to support us, as everyone in our families are struggling to support themselves.

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Re: Financial Resolutions, Mistakes and Accomplishments

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Good job! Make certain that you have a system in place to protect your retirement ahead of the next and coming financial stock market implosion. The last one in 08 literally destroyed responsible individuals like yourself. 

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Re: Financial Resolutions, Mistakes and Accomplishments

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My Dad always used to say "Son, pay yourself 1st!" Unfortunately, it didn't stick until I was in my late 20's. Since then, I've taken 10% of my net salary and put it in savings - then when I have a suitable amount - into investment instruments. The other trick I used was whenever I received a raise or a bonus - it went into savings.

 

Mark

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