Hope for your financial life and beyond

The Best and Worst Places to Save Money When Getting Out of Debt

Lets assume that you’ve finally decided getting out of debt is a priority. You know that saving money in the monthly budget by cutting expenses is a key component to the debt payoff process. But where do you start? What is the best place to start chopping away at your budget?

getting out of debt

The Headache Factor Equation will help you determine which spending categories to cut first.

Not all categories are created equal. For some expenses, you can find money savings quickly. Others are going to take a little more time and effort. Some budget cuts will be easy to endure while others might lead to some family frustration at the lack of spending for that category.

In order to better identify the best places to save money in the monthly budget, I’ve created what I call the “Headache Factor Formula.” This equation takes into consideration three factors that are each scored on a scale of 1-5, with 1 being positive and 5 being negative. The lower the cumulative score of the three factors the better when determining where to start saving money first.

[Read more…]

6 Key Areas Small Businesses Can Save Money Today 

Small businesses, more than any other type of business, have been hit especially hard over the last year. In fact, the effects of Covid-19 have wiped some small business owners out. They have been forced to close their doors as a result in the disruption of their business.

zoom meetingSmall businesses often operate on small budgets. In contrast, big brands like the Walmarts and Apples of the world have more ability to throw money at whatever project or marketing campaign they feel like. Consequently, small businesses more so than big businesses must remain diligent and work within their budgets. If they don’t, it can result in financial disaster.

Financial problems are difficult to avoid any time but even more so in difficult economic environments. Quite simply, saving money is more important now than ever before for small businesses.

So what is a small business to do? What areas can they focus on to try and cut costs? What will help them stay within the confines of their budget, whether operating in good times or bad?

Here are six key areas where your small business can start saving money immediately.

[Read more…]

Emergency Fund Basics: The Step On Which All Other Success Is Built

If you are just getting started with the “getting-my-financial-act-together” bit, you might not know where to begin. Have I got good news for you. It’s time to cut through all the clutter and for you to realize one important truth. The first step to success in all other areas of personal finance is creating an emergency fund of cash. Then you need to save it for a crisis.

emergency fundThat may seem like a bold statement. I can attest though, from personal experience, having money set aside strictly for emergencies is the #1 strategy that has propelled my wife and I forward in paying off debt, saving for retirement and college and investing in the stock market.

Why is that you ask?

Because it’s a fact – emergency situations in life are going to come. We cannot escape them. So it just makes sense that we learn how to manage through a crisis.

If we don’t have cash that is easily accessible to take care of the emergency the moment it hits our door, then we are really only faced with one alternative – going into debt to deal with the situation. And it’s this constant accumulation of debt that hinders our ability to accumulate great wealth over time.

You must break the going-into-debt-to-solve-the-emergency cycle.

In this article, I’ll outline the basics of having an emergency fund. You’ll learn when to start one, what to use it for, how much to save and the best ways to fund it.

[Read more…]

How to Make Sure You Never Need a Car Loan

My wife and I have recently bought a new car. It was used but new to us. The best part about the whole deal was that we didn’t have to take out a car loan.

We paid cash.

car loanNow, we are both in our forties and well established financially. So you might think this purchase was a piece of cake. On the contrary, it wasn’t. It took us two years of preparation to be able to buy this vehicle. But it was worth the effort to avoid needing a car loan.

How did we do it? I’ll share that in a minute and show you the steps to take to never need a car loan again. But first, let’s look at the reasons why people feel the need to take out a car loan in the first place.

[Read more…]

10 Futuristic Money Saving Ideas That Are Already a Reality

Technology is changing the face of the world as we know it and it’s doing so at lightning speed. For example, think about this article. Ten years ago the platform on which you discovered it was either non-existent or looked totally different. Fifteen years ago you might not have been able to even conceptualize the device you’re using to read it. Twenty years ago you wouldn’t have anticipated this information – and many other things you need to know – being so readily available.

The mainstream financial services industry has not moved at quite the same pace. Traditional banks have not led the process but followed along with the sort of lag you’d expect from an old Windows PC. A major reason has been security concerns. It’s been challenging figuring out how to make financial services immediately accessible without compromising the safety of the huge amounts of money involved.

But the non-traditional financial services companies have made big strides. And with increased safety, it’s becoming easier to innovate ideas that save you money. The following 10 startups have produced some of the most revolutionary money saving ideas out there.

[Read more…]

Keep Your Emergency Savings Fund Under Your Mattress?

What should you do with that emergency savings fund money you’ve been accumulating?

I don’t know. Why don’t you just keep it under your mattress? That’s probably the best idea.

(Cricket noise…)

April fools! (Sorry, just couldn’t resist.)

emergency savings fund under mattressNo, no, no…a thousand times NO! Please don’t keep your emergency savings fund money under your mattress. That’s one of the worst places to keep cash around the house. Under the mattress or the bed will be one of the first places a burglar looks for valuables.

Now there is nothing wrong with keeping cash around the house. You might need some for a spur of the moment issue. Banks aren’t always open and you might not be able to get to an ATM. But you don’t want to keep the emergency savings fund around the house.

Why?

[Read more…]

My 6-Yr. Old Has Earned 100 Dollars and We Are Opening a Savings Account

This past Saturday my 6-yr. old son and I made a trip to our local bank. This trip wasn’t for me though. He was there to open his very first savings account.

savings jar with $100 bills His first deposit was for $103, a very cool amount of money for a six year old to already have. The best part about this money though is that it was earned. All of it came from commissions he has earned from doing work around the house.

My wife and I don’t give our kids allowances for reasons that I’ve shared before. We believe in giving commissions. We developed a chore sheet with assigned tasks for each child based on their age.

Our kids do the assigned work they’ve been given each week and they get paid for that. Don’t complete the work and they don’t get paid. It’s as simple as that. I think that accurately reflects what will take place in a real world work environment.

Teaching Kids About Savings and the Bank

We start our kids out with doing paid chores at age five. So for one year and a few months now Doot-Doot (our 6-yr. old) has been doing five chores per week for which he gets paid five dollars. Two dollars goes into his savings jar, two goes into spending and one dollar goes towards giving.

[Read more…]

“O Lord Jesus It’s a Fire!” – Saving For Emergencies

o lord jesus its a fireEver walk to the refrigerator, maybe to get you a cold pop, and when you opened the door the light did not come on and there was no cold air? Or maybe you’ve been BBQ-ing, the fire got too hot and you burnt the chicken. Guess we are going out for dinner.

Maybe you’ve had an unexpected bout with bronchitis that required expensive medicine. Or you suddenly remembered it’s back to school time and the kids had no shoes to wear for PE class. Perhaps something bigger has happened like a house fire where you were displaced from your home and possessions for a time.

Our reaction when crazy life events happen is basically to say, “O Lord Jesus, it’s a fire!” and then we do our best to put the fire out. Usually that requires the spending of money to make the situation right or normal again. The question for us then is “How can we be prepared when the fire comes?”

[Read more…]