Improving Your Financial Life is Achievable

The essential element is that you must be committed to improving your financial life. I will show you that it is not difficult. Patience, planningÂ and persistance will get you there.Â PersonalÂ FinanceÂ is not taught in school and so many peopleÂ continually make financial mistakes that can easily be remedied with the right information.Â MyÂ background is in the financial industry, but you don’t need any special expertise to improve your financial life.

Steps to Improving Your Financial Life

1. Credit Cards.

Don’t carry a balance. Credit card rates will quietly but forcefully strip away your ability to save. Only buy what you can afford to pay at the end of the month.

Credit card rates will quietly but forcefully strip away your ability to save. Only buy what you can afford to pay at the end of the month. If you have a balance and you have some type of savings (bank, brokerage, mutual fund), use that savings to pay off the debt . That savings is money you’ve already spent. If you don’t you’re losing hard earnedÂ money. The caveat is if you have a loan rate that is lower than the rate of return you are earning on your savings then it’s ok to carry the debt, for example, if you are about to use the money to buy a home.

(bank, brokerage, mutual fund), use that savings to . That savings is money you’ve already spent. If you don’t you’re losing hard earnedÂ money. The is if you have a loan rate that is lower than the rate of return you are earning on your savings then it’s ok to carry the debt, for example, if you are about to use the money to buy a home. If you can’t pay off your balance, find the lowest rate that you qualify for and move the debt to that lower rate. Then pay off that loan.

2. Buy a Home, Don’t Rent

Why throw rent money into the garbage …”bye, bye”…when you can grow equity and gain a huge tax deduction instead ? Most people like what they see when they plug the homeowner’s tax credit (usually quite hefty) into their tax calculator. There is a lot of hubbub about renting making more sense today than buying because the real estate market has gone down.

…”bye, bye”…when you can and gain a ? Most people like what they see when they plug the homeowner’s tax credit (usually quite hefty) into their tax calculator. There is a lot of hubbub about renting making more sense today than buying because the real estate market has gone down. Well remember “Buy Low, Sell High?” Prices are low now. Now is the time to buy. It is a “buyers market” which means you will have more power to negotiate a lower price . Use that to your advantage.

Prices are low now. which means you will have more . Use that to your advantage. Yes, you can buy a home! If you are a first time home buyer, you don’t need much of a down payment. Here is an excellent government resource for learning the process of buying a home. If you thought you couldn’t afford it, check again. You just might be surprised. Where there’s a will there’s a way.

If you are a first time home buyer, you don’t need much of a down payment. for learning the process of buying a home. If you thought you couldn’t afford it, check again. You just might be surprised. The only caveat regarding renting is if you expect to move within a short period of time. In that case, you should calculate which choice makes most sense for you. Here is a calculator that will help you with that decision. Click on the drop down box and choose “Rent or Buy” to access the calculator.

3. Buying Things

Ask: Do I really NEED this? Now? If not, don’t buy it.

If not, don’t buy it. Ask: Can I buy this USED? If so, check out local yard sales, thrift shops, Craigslist, and Ebay.

If so, check out local yard sales, thrift shops, Craigslist, and Ebay. Ask: Can I get this for FREE? Join your local FreeCycle, check out your local library, ask friends, family, neighbors and co-workers if they have what you need (you never know!)

Join your local FreeCycle, check out your local library, ask friends, family, neighbors and co-workers if they have what you need (you never know!) If you must buy new, I recommend buying things online . Two reasons: easy to find the best price and you’re less likely to get sucked into buying some “shiny new cool looking thing” you didn’t need when you walked into the store!

. Two reasons: easy to find the best price and you’re less likely to get sucked into buying some “shiny new cool looking thing” you didn’t need when you walked into the store! Remember this: Shopping shouldn’t be a “Hobby.” If you want to be a financial winner, don’t buy into the “consumer game” of “gotta have more, better, shinier, newer” that makes you poor.

4. Food & Drink

Cook your own food. It’s healthier and cheaper. It takes more time, but planning ahead can make it efficient, such as cooking once a weekÂ and freezing for the week’s meals. Check out Once-a-Month cooking for tips on this technique!

It’s healthier and cheaper. It takes more time, but planning ahead can make it efficient, such as cooking once a weekÂ and freezing for the week’s meals. Check out Once-a-Month cooking for tips on this technique! Pack Your Lunch – keep it simple and plan ahead. You’ll be able to avoid trans fats more easily this way in addition to saving money.

– keep it simple and plan ahead. You’ll be able to avoid trans fats more easily this way in addition to saving money. Make Your Own Coffee!!! At a minimum $3 per day times 250 work days a year is $750. Compound that over 10 years ($10,980.84), 20 years ($ 27,831.12)Â at 5%. Makes you go hmmm, doesn’t it.

At a minimum $3 per day times 250 work days a year is $750. Compound that over 10 years ($10,980.84), 20 years ($ 27,831.12)Â at 5%. Makes you go hmmm, doesn’t it. Refill Your Own Water Bottle. This one is easy. If you can, buy a filter system for your home instead of buying bottled water.

5. Pay Yourself First

Invest the Max in your 401k , especially if your company matches. That’s like giving yourself a raise!

, especially if your company matches. That’s like giving yourself a raise!

The main concept in David Bach’s The Automatic MillionaireÂ is to cut out the spending that is not necessary and pay yourself that money instead. He talks about the “latte factor.” See example below.

and that money instead. He talks about the “latte factor.” See example below.

Do this exercize: How much do you spend per day, per week, per month on things? What does that add up to on a yearly basis? What can you cut out? Then pay that into an account you won’t touch.

How much do you spend per day, per week, per month on things? What does that add up to on a yearly basis? What can you cut out? Then pay that into an account you won’t touch.

Example:

Item Cost Per Day Cost per Month Annual Cost Latte $3.5 $105 $1260 Muffin $1.5 $45 $540 Lunch $10 $300 $3600 Cable TV $2.67 $80 $960 Phone $1.33 $40 $480 TOTALS $19 $570 $6840

Analyze your spending. Research where you can lower service plans, cancel a service plan, orÂ get a better rate. You’ll be amazed how the savings can really add up. Then you’ll have a downpayment for that home! Or money to pay off that credit card! I like using a simple excel spread sheet, but if you want help, here’s a free online budgeting tool to help you get started.

6. Automobiles

Buy and Hold. If you must buy a new car, then care for it wellÂ and hold onto it for as long as you can. Get the shortest term loan you can afford.

If you must buy a new car, then care for it wellÂ and hold onto it for as long as you can. Get the shortest term loan you can afford. Buy Used! Buy through the newspaper or Craigslist. Seek out mature people who have all the maintenance records for the car. Seek out automobiles that are known for longevity like Toyotas, Honda’sÂ and Volvo’s. Go to Edmunds for more auto research. Subscribe for future post on How to Buy a Used Car .

Buy through the newspaper or Craigslist. Seek out mature people who have all the maintenance records for the car. Seek out automobiles that are known for longevity like Toyotas, Honda’sÂ and Volvo’s. Go to Edmunds for more auto research. for future post on . Shop Online for the best insurance rates.

for the best insurance rates. Plan your driving route when doing errands to drive the least amount of miles.

when doing errands to drive the least amount of miles. Can You Fix it Yourself? My dad just saved $1300 by changing his own air conditioning coolant on his truck. The mechanic gave him a $1300 estimate. The coolant cost $50. Savings: $1250! If you can’t do it, maybe you have a friend who can help you out and swap a favor in return.

7. Entertainment

Public Library : Free books, videos, and music! What a concept! You can usually reserve what you want online and then pick it up quickly on your way home from work or during Saturday errands. If there’s something you love, then you can always buy it later…preferably used.

: Free books, videos, and music! What a concept! You can usually reserve what you want online and then pick it up quickly on your way home from work or during Saturday errands. If there’s something you love, then you can always buy it later…preferably used. Turn off the TV. Can we Talk? How about some good old conversation? Wasn’t that the best part of your early romance? Isn’t that what we love about when the power goes out? Schedule it and do it! At least once a week!

How about some good old conversation? Wasn’t that the best part of your early romance? Isn’t that what we love about when the power goes out? Schedule it and do it! At least once a week! Boombox + Friends + Potluck food & drink = FRUGAL FUN !!! Try it!

!!! Try it! Nature is Calling: Go discover the local nature walks in your area. It will make you FEEL GOOD!

Go discover the local nature walks in your area. It will make you FEEL GOOD! Check your local paper onlineÂ for free fun things that are going on, like live music, plays in the park, art shows and so on.

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Comments are always welcome. Please let me know what you think Leo, Clever Dude, and Ririan.

Thank you to recent commenters: Robinson, Dave, and Brian.

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