Tag: savings

Why You’re Overspending (And How to Stop)

Compare your monthly income with your monthly spending. Do you notice a glaring discrepancy? Are your earnings in the red? Can’t figure out how you spent hundreds on groceries? You aren’t alone. Overspending is easy to do, and purchases can accumulate in the blink of an eye. Here are some reasons why you’re overspending and advice on how to stop.

You’ve fallen into a bad habit

Do you buy lunch at the deli down the street every day? This is just one example of a bad spending habit. It may be comfortable and convenient to make a daily or weekly purchase, but ten dollars per day, five days a week, four weeks a month equals $200 each month just for lunch. 

The best way to remedy a bad spending habit is to ease yourself out of the habit. For the lunch example, try packing a meal most days each week, and only go out once a week or so as a special treat. You don’t have to quit anything cold-turkey, and easing yourself towards a better spending habit might inspire you to be more mindful of what you buy.

You ignore automatic payments

This one is easy to notice, especially if you subscribe to magazines and newspapers that clog your mailbox. Still, with the rise of streaming services and other digital subscriptions, you may not be keeping track of all the services you subscribe to. It’s easy to let automatic monthly payments slip through the cracks, but those payments are also an easy way to lose money.

Each month, carefully study your credit card statement. Write down the names of subscriptions you used during the month, whether that means watching a movie on Netflix or flipping through a copy of Sports Illustrated. Next to that list, write down the subscriptions you didn’t use. Unsubscribe from the ones that you didn’t touch. You’d be surprised how much money you can save annually just by paring down your subscriptions.

You haven’t disciplined your spending habits

It’s hard to find someone who hasn’t disciplined their spending habits. Whether you fall victim to impulse buys at the checkout line or fill your gas tank before it hits the halfway mark, everyone has a spending vice. 

No two people have the same income, interests, and habits, which can make disciplining your spending habits difficult. The key is to figure out what you’re buying and why you’re buying it. It helps to break purchases up into categories, such as “loans,” “food,” and “entertainment.” Not only will this show how much you’re spending, but it will also reveal what exactly you’re spending your money on.

Steps to Setting Up a 529 College Savings Plan

As a parent, your number one concern is always your children and how you can best provide for them.  While they may be young still, the future of their education is likely only a few years away, and as time goes on, college tuition costs are increasing drastically.  This may concern you, especially if you’re still paying off your own loans from your college days! Luckily, there’s hope, and a great way to get your little one’s future college finances in order.  The solution: a 529 college savings plan. Wondering the best way to set one up? Here are some simple tips:

Pick a Plan that Works Best for You

When it comes to 529 plans, it’s not as simple as just one.  There are two main types of 529 saving plans that you can choose from.  You can decide if a prepaid plan works best for you, or if an investment plan is a better choice.  If you decide on a prepaid plan, you can think of it as a locked-in plan. You generally pay for a year or a portion of the tuition ahead of time, locking in the price.  Depending on your state, the requirement can vary. Investment plans give you the ability to choose how you want to invest your funds, and how you can use the money depending on the institution that’s chosen down the road.

Open the Account

To open your 529 account, you’ll need to submit an application; this can generally be completed online; however, in some cases, you may need to mail it in.  Additionally, you’ll need to choose the right account to work with, whether it’s an Individual (Custodial), Trust, or Business account. From there, you’ll choose the custodian (likely yourself), and the beneficiary, (your child).

Choose the Right Investments

Your investment portfolio is the next step in your process, and it usually depends on your investment preferences.  In most cases, you can choose an age-based portfolio that lines up with the age of your child (beneficiary). This way is usually the easiest way to manage your investments.  You can also go with an individual portfolio that will give you the ability to build your investments on your own, any way you’d like. Either way, you’re able to switch your options and change them if you want to down the road.

Submit Application & Deposit Funds

When your application is completed, either a physical copy to mail in, or done electronically online, you can submit everything with either a check or electronic funds sent to the account.  It’s always important to make sure the submitted information is accurate, or it could prolong the process.

6 Tips for Saving Money

When it comes to saving money, Americans are notoriously bad. Last month CNN reported that “nearly six in 10 Americans don’t have enough savings to cover a $500 or $1,000 unplanned expense” (Vasel). If you are one of the six Americans that CNN is referring to, then you’ll find the below tips useful.

Track the Money You Spend

You can’t save money if you’re not sure how much you spend each month. Every time you buy something make sure you get a receipt. Then at the end of the month tally up all of your expenses. If you’re comfortable with online tools, Mint is one of the easiest ways to track everything in one location. Tracking your expenses will show you where you spend the most money. If you find that you spend too much money on entertainment each month, then you might need to rethink your spending habits.

Plan a Budget

After tracking your expenses for a couple of months, you can create a monthly budget. This budget will help prevent you from overspending. Once you have a budget you’ll be better able to make spending decisions each month.

Start Saving

You should include a savings category as part of your budget. Saving 10-15% of your income each month is a good starting point. If you find that percentage to be too high, you might need to take a second look at your expenses. Think about cutting back on non-essential expenses like buying coffee each day or dining out each week.

Create a Savings Goal

It’s easier to save money when you have a goal you’re saving for. It’s easier to give up your daily latte when you’re saving for a vacation or a house. An emergency fund is another good savings goal. The above CNN article mentioned how unplanned expenses can catch a lot of people off guard. An emergency fund will help you avoid this unpleasant situation.

Pick Your Priorities

Saving money is easier when you prioritize what you’re saving for. For example, if you are saving for a new car you shouldn’t neglect your retirement savings in the process. Once you prioritize your goals you’ll find it easier to start saving money.

Decide How to Save

When most people think about saving money they think about savings accounts. While savings accounts are a great way to save your money, they aren’t the only way to do so. Take a look at this article to learn about the different ways you can save money.