5 Ways To Fight Those Overspending Bad Habits

Image by Food Thinkers via FlickrYou have made up your mind to get out of debt. All your spending and expenses are laid out in you new budget. You are going to be different from almost half of all Americans who don't even have a budget. You have a plan.

The problem is old habits are hard to break. You used to be unorganized and didn't even know where all your money went. The reason for that was you were a splurger. You saw something you liked and you bought it. You didn't care about a budget or saving, you wanted it and you wanted it now.

The budget process is a lot like being on a weight loss plan. You plan to eat less and work out at the gym but that chocolate cake sure looks good. The temptation is very strong and it takes a consistent effort to not eat the cake. The same is true for your budget. Old temptations to buy something you know is not on the budget is an old habit that is hard to break. It is possible that you may never be free from the old habits, so you need to understand how and when these temptations come up and form a plan to avoid them.

Human behavior is a hard thing to change, so we have to set up roadblocks to this bad behavior. If we were on a diet we would not have a chocolate cake on the kitchen table, so also we must remove items that cause us to spend to much.

1. When making a large purchase, talk it over.
Before you go out and spend money on something talk it over with someone you respect. After talking it over with someone you may realize that you don't need to buy the item you want. You may see another or cheaper alternative to your need. Plus this delaying of the purchase may just put you off to it altogether.

2. Put an item in your budget for these splurge purchases.
It's you emergency cushion for slip-ups in your spending. Planning on your future mistakes will allow the mistake to not mess up the rest of your budget. If you don't mess up use this money as a reward for getting through he month successfully.

3. Stash your savings in penalty rich accounts.
Penalty rich accounts are accounts like Ira's or 401(K)'s where withdrawing from them trips a penalty and income tax payable. When you think about the money you will be losing upon withdrawal you will think twice about using it.

4. In your mind pretend you already own the item.
When in the store shopping you may see something you want to splurge on. You know you shouldn't, but you are going to anyway. Trick yourself by holding the item as you walk around the store. Soon the need to purchase the item will pass and you will put the item down.

5. Leave your money and credit cards at home when you are shopping.
When shopping just bring the cash you need to get the job done. You have physical removed the most important thing from the purchasing equation, your money. No money, no splurging. It may seem childish, but you are in a financial mess and drastic steps need to be taken.

Learn from your mistakes.
More people than ever are filing bankruptcies, don't be a part of that statistic. Be creative about fighting your spending issues. It's hard, but in the end it will be worth it.

The Best Place For You To Work May Just Be Under Your Own Roof

Image by Let Ideas Compete via FlickrThe traditional job market is expected to have slow growth for many years to come. This has forced many people to find work in the most unlikely place, their own home. There are indications that business are hiring, but they are hiring workers on a contract basis.

Let's face it,our slow economy is going to be slow for quite a while longer. Businesses are not hiring because they just don't have the work or just don't have the money to hire full time employees. Their only option is to hire part time, contract based employees.

The benefits of part time or contract workers to the employer are many. They don't have to pay for the usual expenses like health care, social security, 401(K)'s, and actual office space. Hiring outside help, is a big savings for the company.

The facts.
The facts are online employment middleman Elance is showing tremendous growth. The increase is 50% higher than last year. They have had over 48,000 jobs posted in the last 30 days.

There has been a reboot of the way companies hire people to do their work. The Bureau of Labor Statistics states that 68% of hiring in 2010 was in the form of contract based freelancers.

This kind of freelance work is the bread and butter of the younger generation just entering the workforce. The freedom of working from home for multiple employers is highly appreciated.

Many people have pounded the pavement, sent out resumes, and have gone interviews only to be disappointed. Many of them should have stayed home and started a freelance business.

Many online sources can get you the work you have been looking for. With the expansion of the information age and telecomputing, you will never have to leave your home to go to work, again.

There are many sites to find work, but the biggest is Elance.com. There you will find work consisting of programming, designing, writing, marketing, administration, consulting, and finance. There are othe websites so search around to find the perfect job for yourself.

Some key skills are needed to make working from home a good experience:

• Enjoy your work. If you don't love it, it will show.
• Sure working from home has a lot of perks. But make sure you like the work you are doing. Do the thing that you are most qualified for otherwise you may tend to lose interest. 
• Make sure you are educated with home tech. Like computers, fax machines, and printers

To make working at home easier you must have a basic knowledge of your computer and it's peripherals. Getting online and being able to cure a sick computer or business machine is a must.

Are you a self starter?
You have to be a self motivated person to work at home. You won't have someone looking over your shoulder every day.

Give your best effort.
You must always over deliver on your freelance work. Many times your work is given a score on free lance websites. A bad review may make you unhireable in the future.

The bad economy has caused a shifting in the standard job. The new norm is independent contractors and free lancers.

Top 10 Ways To Get Ready For Retirement

Image via WikipediaAccording to the United States Department of Labor, less than half of all Americans have figured out how much they need to save for retirement. In 2009, 13 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate. The average American spends 20 years in retirement.

1. Save early and often.
If your saving for retirement already, don't stop. If you haven't started yet, what are you waiting for, get going. The fundamental reason to start early is that it will have time to grow. Just putting money in an account isn't enough, the miracle of compounding will transform your weekly deposit into a large amount when it comes time to retire. It only works if you start early.

2. Know the amount you need to live on in retirement.
Retirement is not cheap. Experts say that you will need 70% of your pre-retirement income to maintain the same standard of living you enjoy now.

3. Participate in your retirement plan at work.
If your place of work has a matching 401(k), make sure you contribute all you can to it. The matching is free money in your pocket. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate.

4. Look into your employers pension plan at work.
If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth. Before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer. Find out if you will be entitled to benefits from your spouse’s plan.

5. Educate yourself about basic investment knowledge.
Educate yourself about the different ways to save your money. Put your savings into different kinds of investments. Learn how diversification and why investing in different places helps your overall rate of savings. Learn about your plan’s investment options and ask questions. Financial security and knowledge go hand in hand.

6. Do not touch your retirement savings.
If you withdraw from your savings early you will lose your principle, interest, and it's compounding power. You may even incur tax penalties for an early withdrawal.

7. Put money into an Individual Retirement Plan.
You can put up to $5000 per year into an IRA, when you are 50 or older you can put even more. When you open an IRA, you have two options – a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA.

8. Find out about your future Social Security benefits.
Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement. You should receive a Social Security Statement each year that gives you an estimate of how much your benefit will be and when you can receive it. For more information, visit the Social Security Administration’s Web site or call 1.800.772.1213.

9. Ask lots of questions.
While these tips are meant to point you in the right direction, you’ll need more information. Talk to your employer, your bank, your union, or a financial adviser. Ask questions and make sure you understand the answers.

10. Check out these web sites for more information.

AARP
American Savings Education Council
Certified Financial Planner Board of Standards
Consumer Federation of America
The Investor’s Clearinghouse
U.S. Securities and Exchange Commission

 

Do You Tip For A Job Well Done Or Out Of Guilt?

Image via WikipediaWhen you leave a tip are you doing it for good service? Do you leave the same amount of tip even for bad service? I know I have. I have been told servers are paid a meager wage and the bulk of their income is depending on tips. I know it makes me feel a little guilty that I may be, short changing my server.

Even if I have gotten lousy service I can never work up the notion to stiff someone or leave a small tip. I guess some people are neurotic and need approval by leaving a decent tip. We don't want to be thought of as cheap. So out comes the cash.

Cornell professor Michael Lynn has found in 20 years of research, the main reason people tip is to avoid social disapproval.

What was a shocking fact was that the level of service has little to do with the amount of tip. He found out that the level of satisfaction was influencing only four percent on the decision of how much to tip. Also that our willingness to tip regardless of service was because of a sense that the customer is in a better position financially than the server and wishes to avoid the servers envy. Thus a tip is a payment to reduce that envy, says Professor Lynn. Also that the tip is a way to say, sorry that you have to serve me.

Tipping is a cost of being served

If you think about the pay structure of service people, you will see that tipping is sometimes their only payment for services. Tipping is expected. If restaurants paid the servers a living wage, then the restaurant owner would pass that expense down to you. You would be paying the tip in another form.

Tipping experts say that you should pay a server 15 percent for adequate service and 20 percent for very good service. For poor service you still pay ten percent. Remember that the servers have to pass on some of their tips to the busboys, bartenders, and hostess. Punishing the server, only punishes the others to.

You might think of the waitress, too. It's possible, just possible, the poor service you received was not really her fault. Maybe the kitchen was backed up or she was given too many tables to cover.

If you want to help cure bad service, rather than skip the tip, speak to the manager about the server's behavior or about what was wrong with your dinner.

What about the tip jar?

When you see a tip jar you can feel free not put anything in it. The tip jar is just a way to make you feel guilty by putting it in the open and everyone watch what you put in it. Starbucks, day care, convenience stores, and ice cream stands are not supposed to be tipped. It is optional, if you feel so motivated, put something in.

Fathers Day Is About Family

Today Is the day we take the time to recognize the fathers in our lives. According to the U.S. Census, almost one out of every three children in our country grow up without their father. When dads are not around to support, families and children can be impacted as a result.

Being a father is about making a conscious decision to be a part of your child's life. Easier said than done.

How do you be a good father? The easiest way to answer that question for me is to look at my own father. He is my role model for a good father. He went to work everyday, he supported our financial needs, and he was there when we laughed and when we cryed. If you can do that, your a good father.

Today's fathers have a lot more to deal with concerning their children and todays issues. But the basics still hold true. Being in your child's life when the tough times come won't cure every woe, but your child needs someone to count and lean on when times are tough.

Fathers Day is the day we take the time to show appreciation and gratitude for our fathers. But as a father, inside my heart, I will be feeling appreciation and gratitude for my family. I am the lucky one.

5 Reasons To Stay Put For Retirement

This is a guest post by Claes Bell who writes for Bankrate.com

It's an idea firmly enshrined in American culture: No retirement is complete without a move to a sunny local primarily inhabited by fellow retirees. After years of work, the thinking goes, retired folks deserve a permanent vacation in a glamorous, sunny locale, preferably near a beach or golf course.

According to a survey commissioned by Del Webb, a retirement community builder, 42 percent of those who turned 50 in 2010 planned on moving for retirement.

But as a Florida resident, I can say with some certainty that when it comes to retirement paradise, reality often comes up short. Years of reading newspaper articles about retired transplants being abused in crooked retirement homes, targeted by fraudsters and trapped in their condos for days on end after hurricanes have left me jaded on the idea of a retirement paradise.

Don't get me wrong. It's not that I believe South Florida is a particularly bad place to retire. Every place presents its challenges for the elderly. What I find fault with is the idea of picking up and moving away for retirement in the first place. Here are five reasons why.

1. What's good for a 65-year-old isn't always great for an 80-year-old. A lot of the problem with the idea of an ideal retirement community comes down to the fact that retirement lasts a long time and so encompasses a lot of physical and financial changes. A place that's awesome for an active, fit 65-year-old who can mow the yard and drive can sometimes be terrible for a 75- or 80-year-old who finds themselves unable to do either.

2. Moving doesn't guarantee a better cost of living over time. It seems like for a lot of folks, the idea behind making the big move is to find a place with a lower cost of living to help stretch your retirement dollars. The problem is, you get enough retirees moving in to an area, and suddenly, the cost of living can rise sharply. Take South Florida, for instance. Between 2002 and 2010, the Consumer Price Index for the U.S. rose 21 percent; in Miami/Ft. Lauderdale, it rose more than 27 percent.

3. Real estate is tricky. For many years, the general consensus was selling your home and buying a cheaper place in a retirement haven in the Sun Belt was a financially savvy move. Not only could you cash out the equity in your old place to fund your retirement, you could also buy a new property with a good chance of appreciating. But as we saw during the housing bubble, housing prices in retirement destinations can be especially volatile. Having my retirement plans hinge on selling my home and having cash to spare no longer seems like a great idea, but even worse is the prospect of buying a dream retirement home only to see the value tank and my net worth crumble.

4. Retirement is a terrible time to leave your support network. A change of scenery may sound appealing for a lot of people who've spent the last few decades living and working around the same old friends and family. But the physical limitations and medical issues that come with old age seem likely to make people more in need of support from able-bodied friends and family, not less. This fact was underscored for me recently, when my wife's grandmother suffered through some serious medical issues lately. The fact that she has a strong support network hasn't just made taking care of her home and getting to doctor's appointments easier, it's also probably saved her life on a couple of occasions.

5. "It's a nice place to visit, but I wouldn't want to live there." Just because I love visiting a place doesn't mean I'll get the same enjoyment out of it after five or 10 years. If I like a place, I'll consider making an annual vacation of it, rather than trying to live there permanently. That way, if I get sick of it, I can just stop going; no real estate agents, movers or mortgage brokers required.

Maybe by the time I'm up for retirement, I'll feel differently. But If I do end up moving, I'll try to target a small, easy-to-maintain condo in a city with really good public transportation, preferably well north of the Sun Belt. That way, being able to maintain a house or drive a car won't be preconditions for me to be able to live on my own. Sunshine may be sweet, but independent living for as long as possible is sweeter.

Claes Bell has covered banking, autos and a variety of personal finance topics for Bankrate.com since 2006. He blogs on autos, banking and CD rates. Contact Claes on twitter, his handle is @claesBell.