Between daily living expenses and piles of bills, you might feel like your paycheck disappears before your eyes - so why is saving money important? Saving money gives you the freedom to live your life the way you want. Whether you want to upgrade your house or start a new business, you have the power to take control when your financial situation is in good standing. And no matter your current situation, you can learn how to save money strategically to ensure a brighter future. Even a few dollars here and there can really add up over time, and these funds can come in handy when you're strapped for cash. Let's dive into the importance of saving money.

Benefits of Saving

One of the main benefits of saving money is the peace of mind that it brings. A rainy day fund provides protection against life's unexpected obstacles. You can take care of smaller expenses like car troubles and home repairs before they become huge headaches, and you have the freedom to save for bigger expenses like your children's college fund or retirement. Not only will savings set you up for a better financial standing, but better quality of life as well. And saving money isn't just about practicality. While rainy day funds are important, why not start a island getaway fund or a dream car fund? When you learn how to save money, you learn how to take control of your life.

Saving Strategy

Many people complain about financial stress, and when money is tight, it might be difficult to save for tomorrow when you can spend today. That's why it's important to learn how to save money in a way that works for you.

If you're looking for ways to earn some extra cash, developing a stream of passive income is a great idea. But what is passive income - and what can it do for you? Passive income is a way to gain earnings without active participation. While there's no need to clock in or attend meetings to collect your cash, earning passive income isn't as simple as sitting on the couch and getting rich. Find out the top passive income ideas to set yourself up for a bright future!

Market Your Knowledge

Are you an expert with tons of valuable experience? Do you love to create content? Then you might want to consider making an information product. Information products include e-books, online classes, DVDs, and more. These products package your knowledge in an easy-to-digest format, so curious minds can learn from the best. After your product is on the market, you can kick back and enjoy the passive income that results with every sale. However, creating the product can be a challenge. Make sure you put your best face forward and create something you stand by, and buyers will take notice.

Rent Your Space

A spare property can yield quite a bit of money if you're open to renting out the space. From temporary rentals to long-term stays, rental income can be quite lucrative if you're willing to put forth a little effort. This is a particularly effective passive income stream if you live in a tourist-laden area. If you live in a sleepy town, the market might not be there. And while you can earn a tremendous amount of money as a landlord, you could also lose a lot if you run into the wrong tenants.

While most people have the best of intentions, debt can happen to the best of us. From simple overspending to financial fiascos, millions of Americans find themselves in debt every year. But there are ways to climb out of that hole and into a brighter future! In this guide, we’ll go over some of the top causes of debt and how to move on from financial stress. You’ll enjoy debt free living in no time with the right research and techniques!

Poor Money Management

You might be surprised how poor money management can eat away at your finances, no matter how much money you earn. One of the top ways to avoid debt is to avoid spending what you can’t afford to lose. That means keeping tabs on your household income, bank statements, credit card statements, and getting those bills under control. When you track the money coming into your life, you know how much extra cash you have to spend on fun stuff – so you won’t get a serious shock when you get the bill for that impromptu shopping spree!

Life Adjustments

Sometimes life throws curveballs at you that are difficult to predict. Unexpected medical expenses, divorce, unemployment, and other drastic life changes can change your household finances tremendously. While there’s no way to truly prepare for these events, we recommend taking inventory of your savings to stay debt-free. If you haven’t started saving for the future, there’s no time to start like the present. Most experts recommend saving six months worth of living expenses, but no amount is too small when you’re just getting started. Keep adding money to your savings to gradually build a nest egg.

Everyone knows that saving money is important, but not everyone knows how to start planning for the future. That's where your savings account comes in! What is a savings account, and why is it such a great way to build your future fortune? We're here to explain the benefits of savings in simple terms, so you can start collecting interest!

Why Should I Open a Savings Account?

Between checking accounts and retirement funds, you might feel like your paycheck is being split into a million pieces. So, why invest extra money into a savings account? Savings account interest typically pays more than a checking account, which means you get extra bang for your buck. The drawback is that you are limited in the number of transactions that you can perform every month, due to federal regulations. However, this can actually be a good thing for long-term savings. If you are building a rainy day fund, you'll feel less tempted to withdraw money for splurges with your funds in a savings account. And if you're trying to save money for a vacation or a downpayment, you can reach your goal faster from the higher interest accrued.

What is Interest?

When you open your bank account, you start earning interest - but what is it? Interest is the money that the bank gives you as an incentive to keep your money there. This is one way that different banks compete for your business, which is why it's such a good idea to shop around when deciding where to open your account. Additionally, there are two types of interest to consider: simple and compound. Simple interest is paid out based on the money that you originally had in the bank. Compound interest pays based on your original amount plus interest, which means you earn interest on your interest! Compound interest is more common, and also preferable if you want to earn money quickly.

If you’re taking the plunge into home ownership for the first time, it can be a little scary, especially when it comes to finances. In order to create your first home budget, you’ve got to crunch a few numbers. The important thing is to be realistic and stick with something you can truly afford. Now that we’ve gotten that out of the way, let’s get started!

How Much House Can You Afford?

To come up with your house budget, begin with the 25% rule, which is that your mortgage shouldn’t be more than 25% of your gross income. Simple enough, right? Sticking this rule can be difficult in more expensive areas of the U.S., so you may need to save up for a higher down payment. Also, if you have existing debt, you should add that to your total and make sure it doesn’t represent more than 29% of your gross income because lenders look at your debt-to-income ratio when they’re deciding if you’re a good risk.

What About Other Housing Expenses?

Remember that lenders want to lend you the absolute max that you can afford, but you’re also going to have other things in your housing budget besides the mortgage costs. Be sure you’re estimating the costs of homeowners insurance, homeowners association fees, maintenance costs, and utilities. And don’t forget property taxes! These aren’t exactly hidden costs, but people don’t always realistically estimate them when they’re making their purchase decision.

Congratulations! You’re about to learn how to avoid wasting money, and it’s going to make a huge impact on your life. There are so many little habits that cause us to spend money on things that aren’t worth it, usually because we’re crunched for time.

Ways to Save Money

Small Stuff:

Little things can add up to big bucks, and they’re some of the biggest ways we waste money. For example, every time you choose to buy an individual bottle or water or soda rather than buying in bulk, you’re paying a major markup. And it’s even worse if you’re buying at a convenience store because prices are much higher than at your local grocery or superstore. Why? Because they can’t command the same pricing from the manufacturers that supermarkets can, and also because you’re paying for how easy it is to run in and out quickly. Speaking of drinks, you can keep the costs of your restaurant bill down simply by choosing water instead of soft drinks, which can add $3 or $4 per person to your check.

Entertainment:

Your cable bill and Internet bills are probably quite expensive. It pays to stay on top of what you’re paying for versus what you use. Always try to renegotiate your plan, and consider cutting the cable “cord” so you pay only for what you watch. Your cell phone plan is another biggie. Take the time to review it - are you paying for minutes, data, and features that you don’t even use? Is there a family plan available that will bring your costs down? Moving your newspaper subscriptions to the online version will keep you in the know and save you money at the same time.

Is buying or renting right for you? Many factors go into the choice to rent vs. buy, so it's important to really weigh the pros and cons of each before you fall in love with a home. Let's start with a quiz to determine whether renting vs. buying a home is better for you:

• Do you have debt? If you do, consider renting. If you don't, homeownership may be in your future.
• Are you staying in the area for 3 or more years? If not, renting is a better option. If so, buying could be a good choice.
• Are you financially stable? If you have doubts, then play it safe and wait until you are sure. If you have money saved and income to spare, you might be ready for a house.

Renting

Most people rent an apartment or house at some point in life. Whether you've just graduated from college or relocating to a new city, the flexibility of this short-term commitment can be a huge asset. And while some people scoff at the idea of paying a landlord, you'll get plenty in return. There's no need to worry about DIY work if the toilet breaks or the roof leaks. Simply call maintenance to have an expert at your door. However, don't forget about renter's insurance just in case of an emergency!

What are the disadvantages of renting? You might deal with rising rent costs from year to year due to inflation and property value changes. That means higher costs for you without any benefits. Additionally, there are no tax breaks for renters. That can be a huge factor in more established workers, though not as big of an issue for those who are just starting a career. Some people dislike the lack of control in a rented space. You can't make changes to the property, you might have loud neighbors, you might have an undesirable parking situation. There are a lot of things that are beyond your control.

If you find yourself with a sudden inheritance, you might feel overwhelmed! While this large chunk of change can make a huge impact on your finances, it's important to learn how to protect inheritance from creditors who might try to collect on your sum. Let's say you want to use your funds to finally buy a house, but you're concerned that your past debt will whittle your inheritance down to nothing. What are the rules of inheritance, and how can you use them to your advantage? Let's go through the hypothetical steps.

Check Your Credit

Is your credit score perfect? Less than perfect? Non-existent? Before you jump the gun, it's important to check your credit score to be sure. You might be surprised if you've been expecting the worst. Everyone can check their credit score one time per year for free from each of the following bureaus: Experian, Equifax, and TransUnion. While these records should be up-to-date, unpaid medical debt doesn't appear until it is sent to collections. Keep that in mind if you are wrestling with any costly hospital visits. And be sure to examine your credit report carefully. Even the best businesses make mistakes, so it's crucial to report any inaccurate listings with the bureau to prevent a simple error from costing you the prime credit score that you deserve.

Weighing Your Options

Now that you know your credit score, you are better prepared to make a game plan for the future. If your credit score is in the prime range, you're good to go! Feel free to apply for a mortgage the traditional way and find the house of your dreams. But if your credit score isn't ideal, you have a few options. If your credit score is pretty dire, you might only qualify for high-interest loans that burn through that inheritance quickly. You might find that waiting and improving your credit score can save you money in the long run. If your credit score is merely less than perfect, then you have to weigh the pros and cons for yourself. Consider consulting a financial advisor and explain that you want to learn how to protect your inheritance the right way.

Getting your very first credit card is an exciting time of financial independence, but it's important to proceed with caution. We've all heard horror stories of people racking up debt by being a little over enthusiastic with fresh plastic. However, it's easy to make good decisions if you use common sense and do the right research. Find out how to handle your finances like a pro with our first time credit card tips!

Choosing the Best First Time Credit Card

Before you select your plan, it's important to assess all of your options. While there's no definitive best first time credit card, some options will be much better than others for your unique needs. How do you choose the right credit card? Here are a few tips to point you in the right direction:

• Rewards Cards: Rewards cards give you something back when you spend, like cash back or travel miles. Depending on your spending habits, you might enjoy the kickbacks from an incentivized credit card.
• Low-Interest Card: Don't have much credit to your name? A low-interest credit card has a low APR, which helps you build credit slowly while learning the ropes of good financial planning.
• Rotating Category Cards: These credit cards feature different cash back options and rewards rates depending on the time of year. You could reap big benefits if you can keep up with the criteria of the month, but if you don't want to plan that much, you might not see the benefits.

Understanding Your Options

You've picked the category, but what do all these terms mean in the fine print? Be sure to take a second glance and scan for the following:

If you have prime credit, then you have a winning ticket toward securing the investments that you need toward a bright future. From auto loans to mortgages, those with prime credit are often rewarded for their smart spending.

But if friends and family have less than perfect credit, you might soon find yourself wondering "What is a co-signer on a loan?" Co-signing a loan allows someone with good credit to help out someone who isn't as financially secure. While this can be a lifesaving gesture to those who are building a new life, co-signing a loan is not without risk. Find out whether or not you should co-sign in our guide to personal finance. Does co-signing a loan affect credit?

What are the Perks of Co-Signing a Loan?

Sometimes good people end up with bad credit. Maybe your spouse is working off college credit card debt, or your son or daughter has no credit history at all. In these cases, you can become a co-signer to a loan in order to look more appealing to lenders. This can help pave the way for your friend or family member to become more independent by securing that car, home, or other investment that they need for a better tomorrow.