Don't Let Open Enrollment Pass You By
Open enrollment is the time to make changes to your benefits package. You can drop some of your coverage or enroll in additional plans. If you have recently married or have had a child you may want to consider changing some of your coverage options like increasing your life or disability insurance. You may also want to atke advantage of your Flexible Spending Account to cover health and day care costs. These plans can save you money in the future, and are worth taking the time to figure out if they are right for you.
This weekend take a few minutes to sit down and go over your benefits. Determine if you want to continue where you are or if you want to add or drop any of the plans. It is also a great time to think about increasing your retirement contributions.
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Quit the Credit Card Cycle
Are you stuck in the cycle of credit card debt? It may start with you putting a few unexpected charges on your card and then it grows to a point when you are relying on your card to cover some of your bills and the groceries. If you stepped back from the situation and you looked at your budget, would you be able to make it without the credit card payments you make each month. You may even be saving money. But you're stuck with those payments and you don't see a way out.
It is possible to get out of the situation. The first step is to stop using the cards. The second is to get on a strict budget and stop all unecessary spending until you get control of your payments. That means cooking at home and keeping your shopping to a minimum.
Next you need to find some extra money to use to pay down the credit cards. While you can cut back on your budget, to really jumpstart getting out of debt try to find additional extra money. You can do this by selling something or getting an extra job or using money that you received as a gift to put towars the balance on your credit cards.
Once you have done this you need to stick you budget and work each month to paying down the balance on your credit cards. It is possible to live without using credit cards and without debt.
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Are You Ready for the Holidays?
The holiday season is just a month away. It is a time to give gifts to others and a time when many people overspend and break their budgets. Many people just funnel the excess onto their credit cards and take a few months to pay them off in the next year. This year is the year to make changes and to stick to a Christmas budget. This year you can make the changes necessary to not overspend.
Coming from a family of six kids, yes six, we have always drawn names at Christmas. This has made Christmas shopping much easier. I think my parents instituted this quite early on because the sheer volume of gifts received was overloading the house. I like it because it means that we can spend a nice amount of money on our individual (and now family) instead of splitting the money up and giving five not so great presents. You may want to think about instituting this in your family.
Another good idea is to start with a list and take time to shop around for the best deal. Don't forget to look online for good deals as well.Starting early will help you to find the best deals and get the most for your money.
What are your best holiday shopping tips?
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Why Are You Hanging on to Your Student Loans?
Student loans can take forever to pay off. Most people set up a payment plan when they are first looking for a job and the payments are fairly low. Then they continue to make those nice easy payments once they begin to earn more money. It is too easy to stick with the status quo when it comes to paying off the student loans.
The student loan payment may not seem like that much money, but think about what you could do if you had that extra money available in your budget each month. A few hundred dollars can add up quickly if you are trying to save money, or it could help you be able to finally afford a home. The extra money may give you a little bit extra to spend on the things that you enjoy most.
You should add your student loan into your debt snowball and work on paying it off as quickly as you can. You will save money on interest the sooner that you pay off the loan. Since the itnerest rates on student loans are lower, it makes more sense to have the loan at the end of your debt snowball. The interest you pay is tax deductible up to a certain point, and this is another reason to put the student loan towards the end of the snowball. However, it is not a reason to continue to hold onto the debt. You can only claim a portion of the interest, and it takes a percentage off of your taxes.
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Are You Afraid to Invest?
Fear is the biggest thing that holds people back from doing something. Investing is an essential part of wealth building. It can be intimidating to begin investing if you don't understand the stock market or the different products you can choose from. In a volatile market it can be scary to put your money in when you are not sure if the stock market is going to recover.
First you should realize that the stock market generally makes money over long periods of time. So your investments should be consider for long periods of time, at least five years if not longer. Second different mutual funds have different levels of risk and the higher the risk the longer you should plan on leaving your money in. If you are looking for shorter term investments then you should choose less risky stocks. Additionally as you near retirement you will want to transfer a portion of your portfolio to lower risk investments.
Mutual funds have less risk than a single stock since the funds are spread over several stocks instead of just one. You should look at the rate of return over a ten year period as well as any fees associated with the mutual fund. This information should help you choose a good stock for you.
Finally you can also use a financial advisor to help you choose and understand your mutual funds. Your financial advisor should explain the pros and cons of each product and allow you to make the decision. If you feel a lot of pressure from him, you may want to find a new financial advisor to help you.
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Is Debt a Big Deal?
It seems like every other post or thing I write about lately is about debt. There is a reason for this though. Debt is one of the most crippling things when it comes to building wealth. It can also affect nearly every aspect of your life. Many people wonder what the big deal is, but then they realize it when suddenly their credit card payment doubles. Or when they realize that they can't do anything because the amount of debt they have.
Debt can hang over you like a dark cloud. It can affect your performance at work, because you worry about it too much. It can affect your relationships. It definetley affects your ability to plan and save for the future.
It is important to really face your debt situation if you are serious about changing it. And then you need to formulate a plan to take care of it. Then follow that plan with no excuses. The only real solution to debt problems is to get out of debt. The best way to do that is to pay it off. Debt by debt until you are debt free. It is possible and if you commit to it you can make it happen.
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Do I Really Need Insurance?
Every time I see the direct debit for my car insurance, or think about how much we are paying for health insurance, part of me wonders do I really need this insurance? I never use it. So what is the point in paying out of pocket for insurance each month?
But then I think about what would happen if I did need it and I didn't have it. Insurance is there so I don't have to worry if I were to get sick or if I got in a car accident. It covers the basics and takes care of the financial aspects of these stressful situations.
I have had friends who had deal with car insurance issues when they didn't have enough coverage; friends who were robbed while they were at work and did not have Renter's Insurance; and friends who didn't have health insurance and struggled to find a way to pay for unexpected pregnancy or surgery. Once you are in this situation you look at insurance in an entirely different light. Even observing the situation can change your entire outlook.
Insurance is not optional. You should have health, car, and home owner's insurance no matter what. Renter's insurance is very inexpensive and can save you if you have a lot of valuables in your apartment. Life insurance is necessary if you have people who depend on you financially. Don't cut these out of your budget, although it doesn't hurt to shop around for a good policy.
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Banking Tips
My first non-waiteressing job was a bank teller. This was a great job for me. I started when I was a senior in high school and worked all the way through college. The pay was about double compared to what my friends were making, but I think the biggest benefit was everything that I learned while I was working at the bank.
For example one of the biggest ways that banks make money is on the overdraft fees. It never made sense to me to allow myself to overdraw or not to worry since the bank would cover it and I'd just pay a fee later. At more than $25.00 a pop a little $5.00 here or there can add up fast.
I also learned about fees associated with just opening an account. There is usually a way around paying those fees. You can have a direct deposit or find the account with a low or no minimum balance to avoid paying a monthly service fee.
I learned that savings bonds do not offer a great rate of return. That CDs can offer a great rate of return when interest rates are high, but awful ones when they are not. So I can likely find a better place to put my money.
I learned how important it really is to balance your checkbook to your statement and that you shouldn't automatically trust the balance the bank gives you. If you suddenly find that you have an extra $300.00 in your account, figure out why before you spend the money. Mistakes are made, money occasionally gets put in the wrong account and they will be corrected. If you've already spend the money you will end up needing to pay the money back.
Sometimes it is best to resolve things in person and not over the phone, but only if you can control yourself. Going in and talking politely with someone about a mistake will get a lot more accomplished then yelling at them.
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What Computer Software Do You Use for Money Management?
It is important to sit down on a regular basis and look over your budget. Sitting down and planning your initial budget should be the majority of the work. After that you simply need to track your budget and your spending. This may seem like a lot of work, but it doesn't have to be. You can use computer software as well as programs on your cell phone or PDA.
So what do you do? Do you have a program that has changed your life or do you work with a few different programs? Does your program include tracking your investments?
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Are You Ignoring Your Future?
When I don't want to deal with something I find myself ignoring it. I've devised many, many effective strategies to help distract myself from taking care of something that I don't want to. I'll find a good book to read, go play with my kids and actually do my laundry (which is something I usually ignore) in order to avoid dealing with a problem.
But there are things that you just shouldn't ignore. Your finances and retirement being two of those things. Even if you decide to go with your company's retirement plan or you find a financial advisor that you trust, it is important that you regularly check on your retirement savings. You should be able to read and understand your statements and know how much you currently have available to you. You should also realize any rules surrounding your plan and the best way to avoid being taxed on your retirement earnings.
It is also important to consistently put money towards retirement. Your goal should be fifteen percent of your income. This will help you retire comfortably. The earlier you start the better off you will be over time. This allows your money to grow and it gives you time to ride out the ups and downs of the stock market. Don't ignore your retirement savings.
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