Six Signs You Need To Modify Your Current Budget

It takes a special discipline to be able to start and keep a budget. Setting aside money for a 401(k) plan, groceries, bills and allowances can be a drag, especially if there's no money left after the essentials. But before loose spending can even be worth talking about, make sure the current budget is realistic for everyday needs.

Never enough money for groceries

If you're buying high-priced foods, such as frozen prepared meals, this will eat into money quickly. Instead of grabbing a frozen lasagna meal, buy tomatoes, pasta noodles, spices, cheese and other necessary ingredients. While you may only need about half of these items to make an entire pan of lasagna, the rest will be left over for other meals. Keep this spending habit in mind for any frozen dishes. Make the meals yourself, and freeze what's left to save on groceries. 

Can't afford to fill up the car gas tank

There's a minimal amount that you can do about toll fees and regular auto maintenance, but there is something to be done about gas-spending prices. Use smartphone apps, such as Gas Buddy, to keep track of which gas stations have the best prices for your car. There's no need to drive several neighborhoods over to purchase gas, but at least do comparison pricing to find the best prices in the area. Also, check auto websites for coupons, such as money off on oil changes, tune-ups and for spending a certain amount on larger chargers.

No money for smaller bills because of larger bills

Maybe paying a lump sum for rent all at once will eat into expenses for the next two weeks. Try setting aside half of the money for rent or a mortgage for one pay period and the other half when it's due. This way you have a better opportunity to avoid late fees and other everyday living expenses that are short-changed because of bigger bills.

High electricity bills

Some electricity programs, such as the Multi-Family Home Energy Savings Program, are providing real estate companies with supplies for a more eco-friendly home. Make sure your landlord is doing the same for apartment dwellers. Using eco-friendly equipment like compact fluorescent light bulbs or CFLs may cut down on electricity bills and payments to replace supplies that would last far more hours or even years. 

Short on allowance money for kids

There are plenty of chores for children to do around the house, but if the issue is having the money to spare from your budget then reach out to friends. Teenagers usually need more money, especially around graduation and senior prom time. Ask friends if they need extra help around their offices. Consider after-school programs or summer jobs to help kids learn about expenses. The more they learn about how money works, the more they'll respect you trying to spend wisely.

Higher bills for credit cards

Depending on the credit card, even one late payment can modify the monthly rates. If you're spending more than you're paying, it's time to cut up the credit card. Initially it may be difficult to do so because credit cards come in handy when a wallet is empty and a checkbook has a zero balance. But if the balance continues to get higher and you're late on payments, it's time to reconsider.

Creating a budget is much easier than staying on budget. Avoid throwing out unrealistic numbers that you know you'll never meet, at least on your current salary. But if you set a monetary amount for a budget, stick to it. When you've got that down, then it's time to use these ways and others to figure out how to stay within that budget. Over time it'll become second nature even if it's initially an annoyance. Be sure to talk to financial professionals if you don't know where to start or are in too much debt right now.

Informational credit to A C Waring and Associates Inc.

Four Financial Skills you need to Master

For many people the idea of having more than enough money may seem foreign to them. According to a recent UK money habits study, 53 percent of people in the United Kingdom struggle to make their monthly payments and only 46 percent of people have a monthly budget. 

It is possible to have enough money to pay your bills each month and build up a healthy savings account as well as a retirement fund. 

But, if you want to become free from financial stress, there are financial skills you need to master first.

If you are on a low income, make sure to take advantage of money help such as grants and benefits, this can reduce certain financial pressures which can help you avoid the temptation of loans, especially short-term loans.

Pay off your debt:

One of the first things you need to do is pay off any debt you have. If you don’t have any debt, keep it that way. Credit cards and loans can be tempting. The idea of paying for something later is appealing, particularly when you aren't making very much money. The problem with this is that interest rates compound daily which means you could end up paying a lot more than what you actually spent.

If you are currently in debt, cut up your credit cards and start paying down your debt as quickly as possible. Say goodbye to paying extra fees and interest rates for things you've already enjoyed.

Have a budget:

You cannot be financially successful if you don’t have a budget. Unless you are using 100 pound notes as dish rags (and if you are, stop it and send a few our way…) you need a budget so that you know how much you make and you know how much you spend. 

Trying to become financially sound without a budget is like trying to build a tower without instructions, you may be sort of successful, but you’ll have success much faster if you have a guide. Kick Jiminy Cricket to the curb and let your budget be your guide.

Live on less than you earn:

This principle actually ties in really well with paying off your debt. One way to avoid debt and to avoid the strain of living month to month is to start living below your means. Basically, spend less than you make. If you always spend every pound you have, you’ll never have anything left over to invest.

Credit cards give you a skewed perception of how much money you actually have, which is why so many people up end deep in credit card debt. The money you are spending isn’t actually yours. Look at your income and find ways to reduce your sending so that you can save at least 10 percent each month.

A simple trick to living below your means: automatically deposit a certain amount from your checks each month. Withdraw it in cash and store it under your mattress or transfer it to a separate account that’s more difficult to access. Pay yourself first.

Invest wisely:

Once you have eliminated your debt, work on a budget and spend less than you make, you can begin making investment options. Investments make your money work for you. Because investments can be tricky, and even a little scary, it’s usually best to work with a professional advisor who can help you create the right investment portfolio. 

A simple rule to remember: diversify. You’ll still earn money on your investments but with a much lower risk. Essentially, don’t put all your eggs in one basket.

5 Ways to Save Money and Stay Warm this Winter

As winter approaches, it may seem like all you can do is count your losses and accept spending more on your heating bill. While you likely will be running your heat more, you don’t have to be like everyone else and start shelling out the big bucks to stay warm. Follow these 5 tips to not only stay warm but also save money this season.

1. Unplug Unused Appliances

Yes, you’ll be using more electricity this winter to heat your home, but that doesn’t mean you can’t save money elsewhere. Make a habit of unplugging any unused appliance in your home to cut costs on residual use. Even though turned off, appliances like your television, washer and dryer, and other limited use appliances suck power. Unplugging these items eliminates this energy waste.

2. Improve Insulation

Insulation is your home’s primary defense against high energy bills. It is what keep your home from losing the warm air in the winter time and the cool air in the summer. It literally functions as a force field of sorts, against heat loss. Adding in insulation presents an upfront cost; however, the money you’ll save this season and throughout the year will offset that investment. Depending on how old your home is, you may want to consider gutting the walls and replacing the old insulation with something more energy efficient. 

3. Maintain Your HVAC System

Obviously your heating system will cost you money through the winter, but did you know it could also save you money? When your HVAC system is functioning effectively, it wastes less energy, which equates to dollars saved for you. Call an HVAC technician like those from Academy Mechanical Services Inc., to complete a comprehensive inspection of your system and to get recommendations for saving on heating costs this season. A seasonal maintenance checkup is also important to keep your system in good working order.

4. Install a New Thermostat

A thermostat is the key mechanism for controlling the temperature in your home. If you thermostat isn’t functioning properly, you could be wasting hundreds of dollars on heating your home. Consider installing a new thermostat that reads the appropriate temperature to save on heating your home this winter. Also, when selecting a new thermostat opt for one that is digital and can be programmed throughout the day. It doesn’t make sense to heat your home when you’re not there, so set the thermostat to regulate itself with your schedule.

5. Heat Used Space

Most families don’t use all of their home all of the time. You can save a load of cash by only heating the space that is used. Consider investing in a space heater for the room you spend the most time in and heat only that room. This investment alone could save you nearly $200 for the season. With technology today, you can also invest in a thermostat for each room and control the temperature of each room. This way you can keep the heat on in the rooms you are in the most and the heat off if not at a lower temperature in the other rooms. If you have an old home with a fireplace or a wood stove, consider using this to its full advantage. You won’t be able to control the heat in each room, but it will keep most of if not all of your house warm this winter. This way you can turn your furnace down or completely off.

Winter weather does mean that you’ll have to beef up your heat, but that doesn’t mean you have to spend a lot doing it. Implement these tips and you’ll be warm and still save money all season long.

Early Retirement: Are you Ready to Make the Move?

Retiring at any age requires a great deal of planning and effort, and this is even more true if you plan to start enjoying your retired years more quickly. In retirement, you no longer receive the benefit of a regular paycheck to live on, but you still have some living expenses to pay for. In addition, when you retire early, you may not even have access to your retirement funds or Social Security payments. Clearly, you need to cover all of your bases if you plan to start living the good life of a retiree before you reach retirement age. By considering these important points, you can more easily to determine if you are ready to make the move. 

Are Your Debts Paid Off?

Before you can retire, you need to review your current budget to ensure that you can pay for all of your living expenses without a paycheck. You can drastically reduce the amount of money you need to live on when you eliminate your debt. It is best to pay off all of your outstanding credit card balances, car loans, and other debts if possible. Many individuals often find it best to pay off their home mortgage before retiring early, even if this means that they must work an extra year or two in order to accomplish this goal. After all, think how much more comfortably you will be able to live without having to pay a large mortgage payment every month.

Do You Have a Source of Income?

In addition to eliminating your debts and reducing your monthly expenses as much as possible, it is important to consider how you will pay for your recurring expenses. After all, even after you pay off your debts, you will still have to pay for food, gas, insurance, utilities, and other recurring expenses. When you retire early, you will often not have access to typical sources of retirement income, such as IRA distributions or Social Security checks. Therefore, you need to think about ways that you can generate passive income, and this may include through real estate investments, dividends, annuities, and other sources of income. 

Are Your Accounts Funded?

The fact is you can prepare a great budget, and you can cover all of your expenses with passive income sources. However, you also need to ensure your accounts are fully funded before you retire. You may not be able to save as much money in retirement as you do in your working years, though you may still be counting on having a fully funded retirement account when you reach retirement age. You may also need access to an emergency savings account to draw from in urgent situations. Your financial health is important to consider before you retire. 

Have You Thoroughly Prepared for the Future?

It can be difficult to account for factors like changing health status, inflation, economic crises that impact your portfolio, and other factors. The last thing you may want is to head back to work a few years after you retire because you run out of money. You should consider how you can better prepare for events that likely will occur at some point. For example, inflation will inevitably be a factor, and there are inflation calculators and sites like Creditguard.org you can use to better plan for the future. You can also supplement your health insurance with long term care coverage. Finally, ensuring your income stream will increase over time, rather than remain stagnant can also be beneficial.

Preparing for retirement can be challenging, but you need to take extra steps if you plan to retire early. Consider each of these points carefully to ensure you make the best decision about your finances.