Budgeting for the Holidays Makes Everything Less Stressful

Christmas presents

Yes, you heard that correctly. Budgeting for the holidays doesn’t add stress. In fact, budgeting for these additional expenses actually makes life less stressful because you’re only spending the money you can really afford. So, how about feeling calm and peaceful in January because you made smart decisions instead of experiencing buyer’s remorse?

Where Should You Begin?

Well, first let’s talk about the fact that the holidays are supposed to be fun, and the real satisfaction comes from the act of giving something special, not from giving expensive presents. So, with that in mind, make a list of all the expenses you expect to incur during the holiday season. Try to think of everything that might come up. Your list may include:

  • Family gifts
  • Cards and postage
  • Decorations
  • Christmas tree
  • Other gifts for teachers, gift exchanges, etc.
  • Charity donations
  • Holiday meals

Set Your Limit

Next, take a hard look at the money you have available to cover all your holiday expenses, and decide on your spending limit. Be sure that you’re planning to use only money that you’ve saved up or set aside for Christmas. People often make the big mistake of spending money that’s not truly available.

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Tracking Monthly Expenses Can Lead to Significant Savings!

Piggy Bank Savings

Checking up on your finances is important, but it is only the beginning when it comes to saving money each month. It is also important to track monthly expenses so you not only see where your money is going, but where you want it to go as well. By keeping an eye on your finances, it is easier to create a budget and stick to it, which can lead to significant savings in the long run.

How Can I Get Started Tracking Monthly Expenses?

There are several easy ways to begin tracking monthly expenses.

  • Take a look at account statements - Be sure to look at all of your accounts to see where you have been spending. This will help you get a sense of your monthly cash flow. You need to see how much money is coming in and how much is going out.
  • List your expenses by category - it is a good idea to group your expenses together by category. This way, you can see what areas are causing the biggest hit to your wallet. It may also help you see where you are spending money on things you don’t really need.
  • Adopt a consistent tracking method - A budgeting app is a great way to consistently track your expenses each month. If you don’t like using apps, a simple spreadsheet will also do the trick.
  • Identify where you can make changes - Tracking monthly expenses is a great way to see what has been costing you and what areas of spending are not as bad as you may have thought. Be ready to make adjustments in spending and stick with your plan.
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How to Save on Your Electric Bill

Light Bulb

Is your energy bill costing you a fortune each month? There are many ways that you can reduce your energy consumption, and in turn, lower your electric bill. If you have been wondering how to save on your electric bill, these simple steps and large investments can help you save significantly in the long run.

Reducing Energy Bills: Summer and Winter

One of the biggest causes of outrageous energy bills is heating or cooling your home. When there is a large temperature difference inside your home and outside of it, your home will lose the heat or cool air until the temperature matches the outdoors. The only ways to stop the loss of heat or cool air is to keep adding heat or cool air or insulate your home to prevent it from leaving. Here is where you can begin to look for cost-cutting options for a more affordable utility bill.

Simple Fixes

There are plenty of easy ways to cut back on your energy bills:

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How to Consolidate Debt

Young Family Having Debt

Have you wondered what it means to consolidate your debt. This helpful strategy allows you to combine several old debts into a single debt with a lower interest rate. This can lead to a shorter payoff period or make your current payments more manageable. There are several options available, so it is important to find a method that best suits your needs.

Debt Consolidation Methods

  • Balance transfer card - The benefit of this option is the 0% introductory interest rate. There are a few drawbacks, however, such as interest payments after 12-18 months, a balance transfer fee, and the need for good to excellent credit.
  • Home equity - Home equity offers a lower interest rate than an unsecured loan and you do not need good credit for this method. There are significant disadvantages with this option. If you do not pay off your debts, you could end up losing your home. Repayment terms are also lengthy, sometimes 10 years or more.
  • 401(k) loan - This type of loan is not included on your credit report. With this method, you borrow the money from yourself, and it has a lower interest rate than an unsecured loan. Consequently, a 401(k) loan cuts down your retirement fund, and there are large fees if you are unable to repay the loan. If you happen to leave or lose your job, you must pay the loan back within 60 days.
  • Unsecured personal loan - This type of loan has a fixed payment period, monthly payment, and interest rate. There is usually an origination fee with an unsecured loan, and you have to have excellent credit to receive the lowest rates.

Breakdown of Options

  • With a 0% balance transfer credit card, there is no interest during a promotional period, and you can transfer all of your other credit card balances to this one card. To qualify, you will most likely need a credit score above 690. This method is great if you make a budget to eliminate your debt during that interest-free introductory period.
  • If you own a home, you have the option to take out a line of credit or a loan on the equity in your home. A line of credit works much like a typical credit card and has a variable interest rate. A home equity loan has a fixed interest rate, and it is a lump sum loan.
  • If your employer sponsors your retirement account, it may not be the best option to select a 401(k) loan unless you have already ruled out other methods. A major benefit is that a 401(k) loan will not appear on your credit report, but penalties and taxes are extensive if you are unable to pay back the loan.
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How to Open a Bank Account

Bank Account

Although it may seem like an intimidating process, opening a bank account is actually quick and easy as long as you are prepared. Be sure to have the required documents on hand, whether you are applying online or in person, so that the process runs smoothly. Wondering how to open a bank account or which account is right for you? Read on below for quick tips.

Should I Choose a Checking or Savings Account?

Deciding on a checking or savings account is a matter of personal preference depending on your financial situation.

A checking account may be right for you if you are looking to:

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Financial Advice: Learn How to Apply for a Credit Card

Credit Cards

A credit card is far more than just a piece of plastic. Credit cards are incredibly convenient forms of payment that allow you to make transactions nearly anywhere, and when used correctly, they can help you build your credit as well. But, some people find themselves frustrated when they fail to get approved for the card that they want. We've done the research to find out why people get approved and declined, so you can fill out that application with confidence. Find out how to apply for a credit card successfully below!

Credit Score

Do you know your credit score? This single number can have a major impact on the approval or denial of your application. Generally speaking, credit card companies want to enroll customers with good or excellent credit. That means you should shoot for a score of 690 or higher for the best luck. If you fall below that threshold, you might consider an option like a secure card that can boost your credit score over time.

Debt Level

Your credit score isn't just about how much money you have, but also how much you owe. Your debt is accounted for nearly one-third of your total credit score, so it pays to get into good habits. If you constantly max out your credit cards, this may affect your ability to get another card. Try to keep your balance under 30 percent of your credit limit. Then, don't forget to pay off your balance as fast as possible. Options like payday loans or cash advances can be valuable lifelines if something unexpected drains your finances, so you don't fall behind.

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What are the Best Ways to Establish Credit?

Credit Score Sign

Your credit score is a small number that can have an enormous impact on your life. From the cars that you drive to the homes that you own, your credit history can open - and close - many doors to opportunity that greatly affect your quality of life. That's why so many are on the hunt for the best way to establish credit. The good news: It's easier than you think! In this guide, we'll walk you through some of the steps that you can take to boost your credit score. With a little research and hard work, your financial future will be brighter than ever!

Building Credit

While some people jump right into credit card applications, it's wise to start with a secured credit card to safely build up your credit. Just what exactly is a secured credit card? It's a credit card that is backed by a cash deposit, so it's considered very low risk for both you and the lender. While secured credit cards are usually not a long term solution, they are terrific tools to build your credit in the short term. Once you've established yourself as a responsible cardholder, you can get a traditional credit card much more easily. Consider researching different secured cards online to make sure you choose a reputable company with low annual fees. There are many different companies to explore.

Additionally, you have a few other avenues to boost your credit score. Credit-builder loans were designed specifically to help new customers build up their credit, so you could check into your credit union or bank to see if this service is offered. If you need extra funds to get your account started, consider services like cash advances to get the ball rolling. You could also pair up with someone who will act as a co-signer or will give you authorized access on their credit card. Just be sure to talk openly and honestly about the terms of the partnership before you sign anything!

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How Much Money Do You Need for Retirement?

Money Savings

While you may daydream at your desk about your retirement plans, retirement is a long way in the distance for most of us. However, it's never too early to think about your future finances. So, how much money do you need for retirement? The answer is a little different for every person, but we have expert guidance to help you make the best informed decision for your present and future goals. Let's go through the steps to calculate what you need!

Rule of Thumb

Few of us want to work well into our golden years, so it's important to think strategically. Your savings need to be significant enough to support your lifestyle, but don't forget about funds from Social Security. Generally speaking, experts suggest that you will need to replace anywhere from 70 to 90 percent of your income through a combination of savings and Social Security. That may be a big number, but remember: You've got plenty of time if you start early!

Retirement Needs

What exactly will you need when you retire? Think about your current lifestyle, and try to imagine a few decades in the future. Your brand new home may be paid in full at that point, but will you want to spend extra time visiting the grandkids or indulging in your favorite expensive hobbies? This may shift your figures around a bit. Don't forget: Once you're retired, you aren't saving for retirement anymore. Make a list of all the different expenses you currently have and think about your dream retirement scenario.

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How Much Money Should I Save?

Money Savings

After your paycheck has been deposited and your bills have been paid, you're probably all set to spend some cash. But, there's that nagging question in the back of your mind: "How much money should I save?" Whether you're a shopaholic or a frugal spender, it's well worth your time to set some money aside for future investments. In this guide, we'll explain how to maximize your savings without feeling strapped for cash!

The Magic Number

While everyone has different income levels and budgets, saving 20 percent of your paycheck is the golden standard for healthy savings. This formula works well for many, but you'll have to do some number crunching to determine if it's right for you. Those in the higher income brackets may feel comfortable saving even more, while those with limited incomes may have to lower that percentage significantly. The important thing is to keep saving, and every little bit will add up with time.

Establish Your Goal

So, why are we saving 20 percent? This is the recommended figure to achieve financial independence later in life. Sure, your golden years may be well into the future, but you can accumulate quite the sum of money if you get into the habit of saving 20 percent of each paycheck. Another figure to keep in mind: Multiply your annual living expenses by 25 to determine the lump sum that you need for financial independence. While that figure may be daunting at first, remember that you have decades to build up your financial reserves. In fact, experts estimate that it takes just over 40 years to reach those goals. And what if you can't reach that 20 percent figure? Any saving is better than no saving, so do what you can. You can also look into options like title loans and cash advances for extra money.

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Real Estate 101: How to Save for a New Home While Paying Rent

House mortgage loan

Whether you've settled into a tiny urban studio or a quaint rental house, renting can be an appealing short-term option for many. However, most renters daydream about that perfect home that they can enjoy for years. In fact, two-third of those surveyed in a Wells Fargo survey reported that home ownership was seen as a major goal in life. What's stopping the average renter from packing up and moving into that dream home? Cost. But with a little planning, nearly anyone can save up a great down payment. Find out how to save for a new home while paying rent!

Eliminate Your Debts

First things first: Do you have any credit card debt? It's difficult to move into your future investments without settling your past debts. Though you may feel like you are two steps behind while sinking money into your credit card bills, this is actually a huge step forward. Credit card debt typically carries a high interest rate, which can put a major damper on your funds. If you eliminate this source, you'll free up quite a bit more money to shift into your savings account. Also, a debt-free slate will make you much more attractive to potential lenders. It's hard to secure a great rate for a mortgage with a low credit score or high debt-to-income ratio. Put your best foot forward and take care of your debt sooner rather than later!

Utilize Your Raises

The next time you score that big promotion, use the pay bump as an easy way to save up for that down payment. Let's say you receive an extra $1,000 per year after your last evaluation. Rather than using your extra income for extra gadgets and goods, consider moving that sum directly to savings. You'll still live comfortably off of your old salary as usual, while growing your house fund month by month. What if you haven't gotten a raise? Don't be afraid to ask for one. Just be sure to do the research on average salaries to show that you mean business.

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