Welcome to Debt Consolidation Connection

Household Grocery Budget Tips

October 16th, 2009 by admin

One of the main grocery budget problems is that, for most people, it is easier to eat out then it is to cook a meal. Therefore, the first item to go should be eating out. You can create huge savings in this area, especially if you have kids. The other grocery problem is that we have so many quick foods available to us today that make life much easier for the working family. That is, it is a lot easier to buy a frozen lasagna dinner then to make one from scratch. But this is where the major savings occur (aside from cutting out visits to restaurants of any kind). One of the first ways to save on the household grocery budget is to stop eating out and start making meals from scratch at home. Buying raw ingredients and spending some time making a home cooked meal can not only save money it can also be a great time to slow down the pace and enjoy the moment.

Money Saving Tips

September 22nd, 2009 by admin

If that trip to Hawaii, starting your own business or retiring early means enough to you, there are lots of money saving tip to save more each month. Here are just a few ideas: do not buy clothes that need to be dry cleaned (unless they are business suits), grow a vegetable garden, learn to mend socks and sew on missing buttons, rent a movie instead of going to the theater or play a board game together, making a spaghetti dinner (bottled sauce) is a lot cheaper than eating out, take the family on a picnic at the park or beach for the day rather than take a week-long vacation, learn how to change your own oil and make your own repairs, change your expensive hobby to an inexpensive one, encourage your kids to start their own business (dog bathing, teaching art classes to elementary children, selling your excess vegetables, etc.).

Let’s back-up to one of the above items that can run into quite a bit of money: your hobby or hobbies. But do not think of completely giving up your hobby unless there is absolutely no way to make it less expensive. Now, a lot of hobbies are very inexpensive to start with. Arts and crafts usually do not cost a lot. Simple wood working, once you have the tools, is inexpensive and satisfying. However, if your hobby happens to be a rather costly one, think about how to bring those costs down. For instance, woodworking is a very productive hobby but, if you do not already have the necessary equipment, it can be very expensive. If you have already bought all of your equipment (which is why you owe so much on your charge cards), then all you have to do is cut back on the size of your projects thus saving money on the cost of wood and fixtures. If you are just starting out, you could get a part-time job at a store that sells the machinery if they offer an employee discount. However, be very careful of this. We all know the jokes about men and “more power” in their equipment. A part-time job like this could be just too tempting and end up costing you more money then your pay check comes to.

But what if you really want to do wood working and cannot afford the equipment? Check out the local schools to see if they ever open up their shops to adults in the evening. Ask at stores specializing in wood working equipment if there is a way (perhaps by taking classes) that you can use their equipment. Work out a deal with a friend who does have the equipment.

These same methods work for most hobbies. If you can’t afford a sewing machine, do you have a friend that would help you out in exchange for your doing some sewing for them? If you love water skiing but can’t afford the boat, is there someone that you can go with if you pay for the gas? You all know the saying, “where there’s a will, there’s a way”. We know for a fact that this is very true.

Gas/oil for cars

Some things you can and should save on and some things you can but should not. Changing the oil in your car is one you should not cut back on. We may be unusual as we come from the old-school of car buyers and become attached to our cars.

The most important way that we keep our vehicles running for 10 years and over 200,000 miles is to change the oil every 3,000 miles. Therefore, do not cut back on oil changes. However, you can save money by changing the oil yourself. If you do just average driving of 20,000 miles a year, that is about 6 oil changes. If you pay to have this done at $39.95 each time, this would cost over $240 a year. Changing it yourself with just the oil and a filter (about $20 each time) would cost you only $120 a year. This is a 50% savings on oil changes alone.

Of course, there are other things that need to be done in order to keep your car for 10 years. If you live in snow country, you have to worry about rust. Keeping your car washed every week during the snow months, and paying particular attention to the underside, will keep your car body from rusting out too quickly. Keeping your car clean and waxed will keep a 10 year old car looking like new. Changing the air filter yourself will save money and wear on the engine.

A car can be an expensive investment that only depreciates in value. If you want to live comfortably on a tight budget, it makes sense to take good care of your car and make it last as long as possible.

Car Payment Tips

September 9th, 2009 by admin

Whether you own one, two or more vehicles, this item can save you quite a lot each month. First, if you have two or more cars, do you need that many? Yes, we know it is more convenient, but is it really necessary. Again, there was a time in this country (which still exists in other countries) when families did share things. Is your work and your spouse’s work close enough that you could commute together? Just because your hours are different by a half or a whole hour does not mean you cannot share a ride. It just means one of you will get to work earlier then usual or leave later then usual. Or you can arrive and leave at the usual time but spend the extra time reading a book. If this seems difficult to you, remember that by cutting back to just one car, you will be cutting your car expense (including payments, gas/oil, insurance, and annual registration) in half. That would mean a savings of as little as $500 a year (if one car loan is already paid off) up to as much as $505 or more a month ($350 car loan payment + $100 for gas/oil + $50 insurance + $5 registration). This would be a savings of $6,060 a year.

If this is impossible due to working in opposite directions from your home or one of you works days and one nights, can you commute with someone else or take public transportation to work? Yes, this can be inconvenient and there will be times when your ride does not show up but when that occurs you could still share a ride with your spouse once in awhile. Or what about setting up your own car pool in order to keep your car? That is, find others at work who live near you or live in your general direction that can meet you at a particular place and ride in with you for a couple of dollars a day. Alternating whose car you use each week will still save you some gas money.

Another very important consideration today is whether to give your 16 year old their own car. No, we do not support this idea. Our family has always shared. Giving your teenager their own car is a huge additional burden on a family and doing so can make it easier for your kids to get into trouble. At least you can cut down on the possibility of trouble by insisting that the kids do their homework between school and when you get home from work and then they can use the family car one or two evenings a week to go out.

Again, depending on which method you decide on, you can save from $100 a month (commuting with fellow workers) to $500 or more a month (cutting back to just one car).

Another problem that we have seen is the individual who buys a new car and then finds that he cannot make the monthly payments due to unemployment, illness, etc. When this happens, rather than wait for the bank to repossess your car and ruin your credit rating, first tell the bank what is happening and what you have planned. Then sell the new car in order to pay off your bank loan and buy a used car. Yes, you may have to get by with an old beatup car for awhile but you will be able to sleep a lot better.

About Miscellaneous Cash Spending

August 19th, 2009 by admin

This is probably the next biggest budget destroyer after charge cards. These are all the little (and sometimes big) things you buy with cash that no one bothers to keep track of. This became a big item when ATM’s came into being. That is, if you could only depend on what cash you actually had on you, your only other resource used to be writing a check. And then you would have that check stub staring you in the face forever with the question “did I really need to spend that?” or the statement “I shouldn’t have bought that”. And you had your check book ledger to show you how much you had left in your checking account. With an ATM card and the fact that most people do not keep track of all of their withdrawals, it is very easy to over spend to the point of being overdrawn on your account.

ATM’s have made our lives so much easier and so much more expensive. When our ready supply of cash is gone because we decided to buy a new wrench set or a new blouse, we just stop at the ATM and replenish our supply and make it easy to decide to go out to dinner instead of eating at home. ATM withdrawals have become as misused as charge cards and usually for the same reasons. Although we can learn to restrict credit card usage to just emergencies, the cash is easy to get at. In fact, when you charge something, you probably do not even know what you have for a balance in that account until your monthly bill comes. With an ATM cash withdrawal, you get your money and instantly see what your balance is now accept that most people do not take into consideration any outstanding checks that have not been deposited. Thus you can be fooled into thinking you have more money available then you really do.

And what do we use these miscellaneous cash purchases for? Usually the biggest emergency in this small dollar amount will be for a loaf of bread. All the other purchases are usually just casual shopping. It is very easy to be walking through Wal-Mart shopping for a new garden hose (because the dog decided the old one was a play toy) and decide to buy some other “little” things along the way. But these little things can easily add up to over $100.

How can we cut back on this kind of spending habits? And although this is only a habit that can be broken, it is probably the most difficult of all of our possible savings. The first thing to do is cut back on “window shopping”. That’s when you know you do not have the money to spend but, maybe due to boredom, decide to go to a store or mall “just to look around”. These little excursions can cost you a lot of money if you do not have very good will power.

More importantly, you need to allow yourself just so much money a month in cash and, when that runs out, you do not have any more cash until next month. This is very tough to do. A slightly easier method that will help ease your way into this specific allotted amount each month is to keep a small notebook with you at all times. As soon as you reach your car (do not wait until you get home) write down how much you spent and for what exactly. Do this for one month and then go back through that list to see how many of those items were necessary and how many were just fun purchases. We are not saying that you should not make fun purchases. Life is about having as much fun as you can under your particular circumstances. But if you are in serious debt or even enough debt that it bothers you, then you need to spend some time (one year) saving as much as you can so that you can pay off those loans and credit cards.

Once those are taken care of, you will have a lot more money to spend on fun things in the future, and you will be able to spend it without worrying.

How to Cut Your Mortgage Payment, Part 2

July 22nd, 2009 by admin

However, another home mortgage matter that we are often asked about is whether to pay off your mortgage early or not. The main thing to consider if you are thinking about doing this is whether you need that interest payment which is a major tax deduction in order to keep from paying higher income taxes. That is, for most average families, that home mortgage interest deduction is your major deduction unless you have business deductions. If this is the case, you might want to pay your mortgage off early but not too early. For the usual 30 year mortgage, rather than concentrate on paying it off in the next 5 or 10 years which would put a very heavy burden on you financially, you might want to concentrate on paying it off in 20 years instead of 30 years. If you can pay just a small additional amount each month, you can end up taking a year or more off of the length of your mortgage.

One reason for deciding to pay off your mortgage early is to avoid being caught in the situation of wanting or having to sell your house but owing more on it then you can get for it. Therefore, you can’t sell it right now because you would still be paying off the extra amount. But you still want to move so you need to work at getting the remaining mortgage down below what your house is worth on the current market. If you will need to move to different locations throughout the next 30 years, it is a good idea to try to pay something extra on your monthly mortgage in order to pay it down.

If you still want to pay off your entire mortgage in 5 or 10 years, you will need to pay an additional payment each month. Paying two payments a month will cut your 30 year mortgage down to approximately 10-12 years. However, will this help you? That is, what happens in 12 years when you no longer have your mortgage interest payments to declare on your income taxes and thus have higher taxes to pay the government? If, at that point, you will be retired, you should be in a lower tax bracket and may not need the added deduction of mortgage interest. However, if by then you are in a higher tax bracket (usually our careers and pay checks advance as we get older), you may need that extra deduction even more then you do now.

If you want to pay your mortgage off early but not quite so quickly, say in 25 years, just pay an additional amount onto the equity each month. If your mortgage payment is $1,198 per month, you could write a check for $1,225 each month remembering to list on the payment slip the additional equity amount you are paying. This is a particularly good method for someone who is older and is buying a home. If you are 35 years old, you will be paying on your mortgage until you are 65. What about saving for retirement? In this case, it might be better to pay it off even a couple of years early so you will have less expense when you retire.

However, if you are reading these articles in order to cut back on your expenses today, refinancing at a lower rate of interest is the only viable option. If you cannot refinance at this time, you need to look at changing your life style, hopefully for the better, by selling your house (if its current market value is more then you still owe on it) and moving into an apartment.

debtconsolidationconnection.com

Navigation

Recent Posts

Categories

Recent Comments

Archives