5 Big Budgeting Mistakes Most People Make

Top-10-Big-Budgeting-Mistakes-in-Travel-2Some people take budgeting very seriously. They budget their money down to the very last cent. Others ignore the subject completely and don’t even bother to look at the big picture every now and then.

Regardless of the situation you’re in, there are five budgeting boo-boos that most people make — and they are big. Let’s review these pitfalls so you don’t fall into any of them.

1. Not Tracking Your Actual Expenses

Budgeting is great, but without tracking it against your actual expenses it’s a useless endeavor. The ultimate purpose of budgeting is to determine if your spending behavior is getting you closer to — or further away from — your life goals. A budget is a dream. Actuals are reality. The dream is nice, but it won’t change your life.  Your actual spending, if you track it and make critical decisions around it, can propel you forward in ways you could never imagine. It’s important to track your actual spending every month.

2. Neglecting Emergency Planning

There are two kinds of emergencies. The first kind are involuntary, as in, “Oh my gosh, my car needs a new transmission!”  The second kind are voluntary, as in, “Oh my gosh, I just have to go to Vegas this weekend!”

These are both examples of unplanned expenses that throw most people off track. But they don’t have to. Here’s why. If you look back over your records for prior years, you’ll probably notice that these kinds of emergencies (voluntary and involuntary) pop up about once or twice a year.  If it’s not one thing, it will be another. You don’t know what it will be or what the price tag will be exactly, but people get smacked with “unexpected” expenses in a fairly predictable manner if they view it on an annual basis.  That’s another reason why it really pays to keep good records.

Look at your past “emergencies” to get a sense of how much goes out more or less each year and divide that number by 12 and set that amount aside every month to cover these costs.

3. Forgetting to Allow for Non-Recurring Expenses

Of the people who do track what they spend each month, few put aside the bills that come in infrequently like property taxes and insurance. That’s why, when people are asked what they think they spend on average each month, they usually undershoot it by 30% or more. And that kind of miscalculation poses a huge danger.

If you retire thinking you spend “X” but actually spend 130% of “X” you’ll be back to work before you can say, “Flippy Burger.” Track everything that goes out. It doesn’t matter how you do it. It just matters that you know what it costs you to live on average each month including everything – even non-recurring expenses.

4. Not Expecting the Really Bad Stuff

Do you budget for the really terrible “what if” scenarios? Part of that includes a family continuation plan and that usually includes a discussion about life insurance. According to JD Power and Associates, 40% of the adult population in the United States has no life insurance at all. And according to that same study, 25% of all widows and widowers (35 to 50 years old) feel their deceased spouses didn’t have enough life insurance.

Make sure you know how much coverage you need, carve out a spot in your budget and then put the policy in place. Term life is very affordable. And don’t let health issues stand in your way.  Each insurance company views your health history differently.  Even if your doctor’s chart is really ugly, don’t despair.  You may be eligible for a guaranteed issue policy.  You have nothing to lose and your family to protect, so put the latte down and take care of this.

5. Not Budgeting Your Top Resource: Time

Regardless of how much money you have or don’t have – time is your most precious resource.  Are you budgeting and tracking it?  Don’t feel bad, most people don’t. Something you can try is to make a daily list of three things you need to get done. Only jot down three things because you want to set yourself up for success rather than failure. Keep that list by your side all day long and don’t unplug your computer until you cross each item off the list. Sticking to your list and plowing through it before doing anything else will yield powerful results. You’ll be more effective and feel less stress — it’s a win-win.

Take a look at the way you spend your time and money. Are you satisfied? If not, which of these budgeting tips offer the greatest potential for you? When are you going to start? Why or why not?

Click here to check out our free financial calculators that are conveniently located on our website. We also offer a number of services that can be helpful organizing your finances and getting yourself back on track. If you’d like to sit down and review your current finances with a First Financial expert, contact us to make your complimentary annual financial check-up today by calling 732.312.1500, email info@firstffcu.com, or stop into any branch and ask to speak with a representative.

The article source was written by Neal Frankl for FOXBusiness.

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Back to School Shopping Strategies to Spend Smart

back-to-schoolSo here is the deal: it is impossible to avoid back to school shopping. The plain truth is you need to get certain supplies to make sure your child is prepared for back to school season. This can become quite expensive, as children seem to need more and more every year. But savvy spenders know that there are several tips and tricks you can follow in order to save big. You don’t have to be a shopping guru or expert in order to save, you just need to know where the deals are, and the places you can save a few pennies. Below, you will find back to school shopping strategies to spend smart and save big.

You will find that these tips are simple to follow and don’t require a great deal of know how or time. Give these tips a try and see how easy it is to shop smart and save big. Take a peek!

1. Get your child involved.

Explain to your child what the difference between wants and needs are. They won’t be able to get every single item they want and you should be able to tell them that. Before shopping, make a list with your child based on the list the school provides. Make sure your child understands what they will be getting to prepare them for school and what can wait.

2. Eliminate gimmicks.

Teachers will tell you that things like sparkly erasers, light up pencils, and other fancy items can be a distraction. They are not only a distraction, but they are more expensive than plain items. Instead, forget about these back to school gimmicks and keep things simple. It costs less.

3. Keep your supply list in the car.

While you are running your errands, you will want to keep your list on you should you run into any deals. If you don’t have your list, you could miss out on a hot deal. Keep your list in your car or in your purse so if you come across a sale or a free with rebate deal, you have your list to see if you need it or not.

4. Buy basic supplies in bulk.

You can buy basic supplies such as paper, pencils, and notebooks in bulk. Warehouse stores are perfect for buying these items for less and having enough to sustain you for the rest of the year. Do the math and make sure the bulk price beats the a la carte price before you shop.

5. Negotiate a group discount.

Gather the other parents at school and see if you can rally together to save. A group of parents may be able to negotiate a group discount from a local office supply store. Contact stores in your area and see if they are open to the possibility of this. Then, contact parents and get the ball rolling.

6. Stock up and set up a home store.

Buy items on sale, free with rebate, or in bulk and then gather them in a storage bin. Keep the bin in a safe place where they can be shopped during the year as they are needed. That way, you are not having to run out and buy items during the year, possibly spending more.

7. Help your school and yourself.

Ask if your school participates in a program like OneCause. If so you can shop for supplies often receiving a discount and special coupons. Plus with your purchase, your local retailer will donate a percentage to the school of your choice. It is a win/win!

See how easy it is to save money on back to school? With these back to school shopping strategies you can learn how to spend smart and save big. These tips will help you make the most of your cash and stretch your shopping dollar. Give them a try and see how quickly the savings add up for you!

*Click here to view the article source.

College Saving Secrets

These days, it’s probably a toss-up who’s more nervous about college: you or your child. Graduates leave school with an average of $26,600 in debt — but you don’t have to leverage your 401(k) if you want to contribute. All it takes is a little planning and help from your teen to cut costs and minimize loan payments.

Do Prep Work

Assess your retirement savings. Invest in yourself first: Start putting money into a 401(k) or Roth IRA before contributing to your child’s college bills. “You can’t take out a loan for your retirement,” says Carol Stack, coauthor of The Financial Aid Handbook. “And you don’t want to end up relying on your kids to support you.” Use an online calculator like the ones on our website to find out how much you should be setting aside each month. By keeping your savings goals on track, you may have more leeway to fund your child’s education.

Discuss your contribution. It’s not easy to talk about finances with your children, says Stack, but if your teen is counting on you to help pay for school, he or she has to know whether and how much you plan to give each year.

Save without budgeting. If you’re maxed out on what you can set aside for college, consider signing up for a rebate plan. Sallie Mae’s Upromise program offers as much as 8% back on your purchases, which can then be applied toward tuition. Before your teen enrolls in school, the rebates can be transferred into a 529 plan; after your child graduates, the reimbursements can be put toward loan payments. (Grandparents and other relatives can also sign up).

Have “the other talk.” Choosing a university requires thought and planning. Most teens don’t decide on their top colleges until junior or senior year of high school, says Scott Weingold, cofounder of College Planning Networking. Even then, many make choices based on where their friends are going. “Starting at the beginning of their sophomore year, talk to them about what their strengths and interests are and what they like to do,” he says. “College is obnoxiously expensive enough — now add on that it’s not uncommon for kids to take up to six years to graduate.” So get them thinking in advance about schools, majors and potential careers.

Win the Scholarship Game

Start early. Even if your teen is years away from college, they should apply for scholarships. “You’d be surprised how many there are for elementary school students,” says Mark Kantrowitz, publisher of FinAid.org. Some examples are spelling, art and writing awards — not to mention a seriously lucrative $25,000 Jif prize for the most creative peanut butter sandwich. Find a list of possibilities at finaid.org/age13. Some school assignments (like a science fair project or an essay) can even qualify.

Search online. College students earn an average of $2,800 in scholarships, according to one report, making it among the best ways they can save for school. “Every dollar they are awarded is a dollar less they have to borrow,” says Kantrowitz. The best sites include ScholarshipAmerica.org, Fastweb.com, and CollegeBoard.org.

Here’s how your child can maximize their efforts:

  • Rule #1: Fill out the entire profile. Scholarship “matching” sites find awards for teens by asking them to complete detailed questionnaires about themselves. Answering all the questions, including the optional ones, says Kantrowitz, will yield more results.
  • Rule #2: Apply for (almost) everything. If a student isn’t eligible for a scholarship — let’s say, they just barely missed the GPA requirement — then they can skip it. Otherwise, your teen should pursue all potential matches, says Kantrowitz. “Many applications are essays that require personal statements. The first half dozen or so will be labor intensive, but after that kids can start recycling answers,” he says. Teens should set up a Google Calendar with due dates for all scholarships and make sure they’re aware of how much time they’ll need to complete the paperwork.
  • Rule #3: Beware of scams. The biggest red flag is being asked for an application or processing fee. “Legitimate providers want to give you money, not take it from you,” says Kantrowitz. “Never invest more than a postage stamp.” Also be wary of sites that ask for personal information, like a bank account or Social Security number.

Encourage community service. Schools aren’t the only organizations that value teens who volunteer. “It looks good to many scholarship providers too,” says Lauren Segal, CEO of Scholarship America. “And it can be the tipping point for winning.” Keep in mind that colleges like to see a history of service — not just a few stints started in junior year.

Go door to door. If they’ve exhausted paper and online searches, students can visit local organizations like the Rotary club, church groups and nearby businesses to ask about scholarships. You and your spouse should also check with your human resources departments: “I’m amazed at how many companies offer grants to the children of employees,” Segal says.

Keep your teen’s Facebook account appropriate. According to a new report, about one in four scholarship providers check their finalists’ online profiles. “Companies want to find students who reflect well on them,” says Kantrowitz. “They search for inappropriate behavior and offensive language, and even look at students’ natural writing style to see whether their parents probably wrote the essay for them.”

Strategize Your Search

Target a range of colleges. Include a few options that won’t leave your family or child with too much debt. “You don’t want your teen to fall in love with a school they can’t afford,” says Stack, who points out that the number of students defaulting on their loans within two years after graduation is now 9.1%. (One reason: It’s becoming harder for current graduates to find jobs). But you don’t necessarily have to rule out all private schools, which may have more money to offer than state ones, says Weingold. “Some colleges have generous aid-giving policies, so you never know what you’ll get until you apply,” he says. To estimate how much tuition and living expenses will come to — and to get an idea of how much assistance your family may receive — visit each college’s website and look for the “net price calculator”; all U.S. schools are now required to post one.

Barter for a better financial aid package. You don’t have to accept a college’s first offer, says Weingold. Call the school’s financial aid office and explain why your family still can’t afford the expenses. If your teen has received a better package from another university, write an appeal letter, including the offer, to her first-choice school, which may match it.

Cap your borrowing. Ideally, your child’s student debt shouldn’t be higher than their yearly starting salary, says Stack. The average income for college graduates is about $42,000 and varies depending on career; visit naceweb.org to see a range of salaries. Another strategy: Keep debt below $31,000, which is the maximum you can borrow over a four-year-period through federal Stafford loans. Unlike private loans, government ones have fixed interest rates and more safety nets, plus they offer some income-based repayment plans and loan forgiveness.

Article Source: Familycircle.com

7 Tips for Saving Time & Money When Shopping Online

Ever wonder what the real experts know that you don’t when it comes to online shopping?

Little tricks of the trade that make the buys better, the discounts deeper and the whole experience of online shopping even smoother?

It comes down to a few smart strategies, a little organization — and the willingness to walk away from sites that skimp on consumer must-haves, like convenience and security. These days, when it comes to retail goods, shoppers are making more than one out of every six purchases online, according to statistics from the National Retail Federation. And that number is growing. Want to make your surfing, clicking and buying quicker, cheaper and easier? Here are seven insider strategies:

1. Get the coupons, skip the spam.

What’s the difference between getting a big discount and missing out entirely?

With online shopping it can be a matter of timing. Most online shops “release coupons on the second of the month or on the 27th or 28th,” says Hillary Mendelsohn, author of “the purplebook” online shopping series.

“So that’s good to know, timing-wise,” she says. While coupon codes are great, stores don’t always release them to coupon code aggregating sites, Mendelsohn says.

Her strategy: She registered for a free email account and uses that address to sign up for coupons at the stores she regularly shops. When she’s ready to buy, Mendelsohn logs into the email account and does a quick search for that store. What she has instantly: All its coupons.

“This is a great way of not having your [regular] email box filled with spam and being able to access the deals you want all the time,” Mendelsohn says.

2. Consider automating regular buys.

Have something bulky or heavy that you buy regularly?

Instead of lugging it home yourself, consider setting up an automated order, says Mendelsohn, who uses Amazon’s “subscribe” feature to get her kids’ favorite tea by the case every other month.

“I don’t have to place the order, and I get a discount,” she says. “And it’s free shipping. It makes a huge difference, and I don’t have the schlep it.” What it’s good for: “Big things you need constantly” from diapers to dog food, she says. “You save money, you save time and you save schlep energy.”

Free shipping can also sub in for “free delivery” for large one-time purchases, such as patio furniture and ping-pong tables, she says. With all the options for shopping and delivery, it pays to think strategically and “be smart about what you order online and what you go to the store for,” Mendelsohn says.

3. Coupons + discount gift cards = more savings.

What’s better than a coupon for something you need? Being able to combine that coupon with a discounted gift card to amp up your savings.

And while you often can’t use two different coupons on one item, you can use a coupon with a gift card purchased for less than face value, says Michelle Madhok, founder of SheFinds.com, an online shopping site.

Madhok’s tip: Use a gift card search site (her favorite: GiftCardGranny.com) to find a reputable seller for whatever card you need. And stick with well-known, legit companies, rather than individuals, she advises.

You can often buy them for 6% to 15% off face value and many are ecards, so you don’t have to wait for delivery, Madhok says. Then “stack the deal” with a coupon or promo code, Madhok says. Recently, “I used a digital gift card and coupon code on a $300 purchase and ended up saving about $50,” she says. Want to ratchet that up even more? Use a credit card that gives you rewards or cash back, says Madhok. Some cards will even boost those rewards if you buy from certain merchants or use the card’s app or online site as a jumping off point for your shopping.

4. Use alerts to save, not spend.

Be careful about subscribing to those “daily deals,” says Kit Yarrow, consumer psychologist and author of “Generation BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail.”

Here’s why: They present a sudden deadline, plus an element of competition, she says. “People make hasty decisions when they feel like they’re competing with other shoppers.”

“I’ve found that shoppers tend to end up buying more, and they also buy less-satisfying things through this process,” Yarrow says.

When alerts can save: After you buy. Set up a price alert for the item and if the price drops, email customer service about a refund of the discounted amount, says Madhok, who used this recently to save $70 total on two separate buys. “Usually, they’ll honor it within two weeks” of purchase she says.

5. Make the most of that shopping cart.

If you want to save a few bucks, that shopping cart is valuable real estate.

“Pre-load your shopping cart with items you’re hoping to buy, in order to snap them up quickly if they go on sale,” says Yarrow.

“Most sites don’t empty your shopping cart if you’re a registered user,” she says. “So when they go on sale, you’re ready to go.”

It gives you time to rethink your buying decision, too, she says. “This process also helps shoppers make better decisions because it forces a ‘cooling off period.'” Want an extra incentive not to spend? Consider the cost and hassle of returning before you click “buy,” says Yarrow. And find out who pays return shipping.

6. Find out upfront: Available or back-order?

Shopping under a deadline? Check back-order before you pay, says Leslie Linevsky, co-founder of Catalogs.com.

Ideally, sites should notify you that something is out of stock when you place it in your shopping cart, she says. But not all of them do. Some notify you after you’ve given your card information, but before they bill you, Linevsky says. Others may not tell you at all. So keep back-order in mind as you shop and look for indicators that your merchandise is actually available. If the site doesn’t disclose if an item is in stock, call before you place the order, says Linevsky. Or go to a site that makes it plain, she says.

7. Practice safe shopping.

If you really want to save time and money, it pays to be as safety conscious online as you would be at your neighborhood mall.

Some smart habits:

  • When you’re supplying personal data (such as your name, address or card number), make sure you’re on a secure, encrypted page, says Frank DeBlasi, co-founder of HooplaDoopla.com, a cash-back shopping site.
  • If the URL has an “s” (for “secure”) after the “http,” that means “any information you send is being transmitted securely,” he says. “You never want to shop anywhere that doesn’t have that.”
  • Likewise, you don’t want to use public or office computers for shopping. Information can linger, even if you think you’ve erased it. (Not to mention that some employers actually monitor your keystrokes.)
  • Skip the public WiFi, too, says DeBlasi. “You never know the true level of security of the network you are connected to,” he says. “On your home network, you have control of the level of security.”
  • And watch how you pay. “Always use a credit card when you purchase online, not a debit card,” DeBlasi says. With a debit card, if something goes wrong, you’re fighting to get back cash that’s already missing from your account, he says. “When you use a credit card, you have a middle man in the transaction. And the money isn’t removed from your account.”

Article Source: Foxbusiness.com

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How Much is Your Habit Costing You?

bad-habits-resized-600We all have little habits that tend to drain our finances. Perhaps it’s soda, online games, cigarettes, magazine subscriptions, gambling, wine, or movies. No matter what your poison, if it costs you time or money, it should be examined closely.

Health and moral concerns aside, the wise consumer will examine his or her habits to determine if the benefits outweigh the costs, or if cutbacks are necessary to restore a healthy balance in one’s budget. One of the first steps in this process is to determine what you get (the benefits) out of your habits, and try to place a monetary value on those benefits.

For example, if you like to get a weekly massage, you can list several potential benefits from this activity, like so:

  • Health benefits: Many medical professionals recommend massage to reduce stress, increase circulation, and improve lymph drainage. If your health is compromised, or if you experience a lot of stress in your personal or work life, the monetary health benefits can be extraordinary. Let’s say four massages a week replaces a prescription muscle relaxer. In this case, we could say your monthly massages are worth $80 a month in health benefits.
  • Productivity benefits: In our example, we could imagine weekly massages increase your work performance by reducing stress, allowing you to complete two extra projects a month. The productivity benefits could total $400 a month.
  • Happiness benefits: If your massages bring you immense joy, you are less likely to spend money on other pursuits of happiness, and you can also place a monetary value on how your habit makes you feel. What’s your habit worth to you? How much would you pay to continue it? For our massage example, we could say our happiness value for this habit is about as pleasant as mowing the lawn is unpleasant. If we pay a lawn service $30 an hour, our massages would be worth $30 an hour in happiness, or $120 a month.

That’s a total estimated monetary benefit of $600 a month.

The next step is to calculate what your habit costs you. Not only will you have to determine your out-of-pocket expense (in this case, the cost we pay for the massages), but also such things as the cost of managing negative health impacts, transportation and maintenance costs, and the effect your habit has on your relationships.

  • Out-of-Pocket Expenses: For our massage example, let’s say the cost of a weekly massage is $65 plus tip, equaling $308 a month.
  • Transportation: If we travel 20 miles round-trip to the spa, we’ll estimate it costs you $0.74 per mile to maintain and operate your vehicle, equaling $59.20 per month in travel costs to our support our massage habit.
  • Time: The time you invest in your habit is also considered a deduction. Our massage habit takes up four hours a week, plus two hours of travel time each month. If your time is worth $40 an hour, you’re losing $240 worth of time every month.

For our massage habit example, our total cost is $607.20.

Our conclusion is a weekly massage habit costs us $7.20 a month. Is it worth it? That’s where you need to decide if cutbacks are necessary. If you don’t want to drop your habit, try finding ways to reduce the impact of the overall cost to make your habit a wise choice.

Do you have questions about any of your financial habits or would you like to make an appointment with a financial representative to discuss your financial plans?

Contact a Financial Representative

Article Source: http://moneyning.com/life-style/how-much-is-your-habit-costing-you/

* First Financial is not responsible for the content listed on any external websites.

Take the Stress Out of the Holidays

reduce-stress-holiday-resized-600As soon as we put away our shorts and sandals, we start to feel the pressure of the holidays creeping in. After all, it will be here before we know it, right? But there are things you can do to have a more enjoyable holiday season, and it all comes down to advance planning.

First, put pen to paper and make a written plan, including gift recipients and a detailed budget – both a total budget and a breakdown of that budget by recipient. Once you have your budget, you can begin matching up gift ideas to that budget, and don’t forget to be creative! When you give yourself enough time, you can even plan to make gifts to save on gift expenses. Plus, people tend to overspend more when they shop at the last minute, making desperate purchases – so give yourself plenty of time to get the items on your list. By shopping early, you give yourself enough time to actually enjoy the holidays – and you can shop from a better selection and with fewer crowds.

As you shop, try to keep your distractions to a minimum. That means only go when you are not tired or hungry or have to keep up with family members. Start with the clearance racks and don’t let a salesperson talk you into something you don’t want. And remember, gift cards or charitable donations can offer a stress-free alternative for you, and can be a welcome gift to the hard-to-shop-for person on your list.

When paying for your purchases, try to use cash so you won’t be tempted to rack up credit card debt, and read any fine print involved with special promotions and offers. Always keep your receipts and ask about the return policy. When you get home with the receipts, include a gift receipt with the gift and keep the original receipt in a secure and organized location.

Get togethers can also be stressful at the holidays. Advanced preparation can help alleviate at least some of that stress. You can begin with a written plan, including dates, menus, travel arrangements and the like. Pin down and make arrangements for all the details of your travel as far in advance as possible, and if you are having house guests, start making preparations early for their arrival, such as any home repairs or other accommodations needed. You can even cook many dishes in advance and store them in the freezer, and you can also enlist the help of family members and friends who will be joining you as well.

When the holidays are done and gone, take a deep breath and relax. Treat yourself to something soothing – and then start saving and planning for next year.