The earlier you start great financial habits, the easier your life will become over time. It is hard to make money and stay out of debt. But, when you realize that as a debt snowball happens quickly, a change of financial habits can create a money snowball.
This happens when you understand the power of a budget pared with saving money and investing in dividend stocks and mutual funds.
There are many types of investments, but here I speak of simple investments that are low risk, low cost and low stress. Once you become more experienced with investing you can study investments that are a bit more complicated.
The major concern at this point is to start great financial habits that concentrate on budgeting and simple investments. At the core of budgeting is to also to learn and practice emergency money skills.
A Change in Financial Habits Can Go From A Debt Snowball to a Money Snowball -Lois
1.How to Get Out of Debt, Save Money with Simple Investments and Budget
Ask your parents or grandparents and they will tell you life happens fast, really fast. Two years becomes ten years, in to twenty years and then thirty. it seems like it all happens in the blink of an eye.
So, if you concentrate, you can get out of debt now, save money, budget and invest. In ten years, twenty years and thirty you will be set financially.
Instead of compounded debt, no savings, a sideways budget and nothing invested, you will have a peaceful financial life.
Because, now you have compounded interest on savings and investing through your dividend stocks and mutual fund investments. Your budget keeps you in top notch financial shape.
These are simple investments, so they are easy to learn, easy to maintain and monitor on your own.
2. It is hard to make money and harder to keep it–stay cautious. That is why budgeting is essential
No matter what you do, it is hard to make money. You have to know the right field to go into, how to get into it with low cost, and how to stay in it.
This takes help and mentoring, so don’t be shy; get involved by asking experienced people in the field for help. Start with those you already know.
You have to understand how to write the right resume and research companies best for you and your career. Then you must know who to trust to show you the right way to navigate your field.
There are good people to look up to and emulate in a business, and those you should avoid. This is one quality that makes successful people successful. Approach people carefully.
3. Money doesn’t grow on trees, so stop acting like it does. It will with Simple Investments
The saddest statement I hear unsuccessful people say is, “if only I believed mentors when they told me it may not last”. In this case, my example wage-earner (a female), made a lot of money.
Because there was so much, and sometimes so fast, she thought she was set for life. She felt there would never be a worry about time or money, because it’s happening now, and it will always happen.
Then time started to creep up on the her and she realized there are no guarantees, but it was too late. Just because she once worked for a great company with a great boss, she didn’t understand things can change quickly.
Now, her next company demands more time, more energy and pays less money per hour. All she can think about is the good ole days her only thought was “money grows on trees”.
Fast forward to now, she got a rude awakening seeing that money doesn’t not grow on trees”. Her mentor told her, don’t give up, keep thinking forward, things will get better.
4. No matter how much money you make you can lose it all overnight
You see the stories of the once wealthy entertainers with mansions and several Mercedes. Then, there are the athletes with beautiful houses on the beach. Entertainers and athletes are not the only ones. But also big business owners or the businessman CEO who lived lavish lifestyles, also once wealthy.
Fast forward a few years, the contracts have dried up, the business went under, and the CEO fell out of favor with the board. All of these previously successful people went from seemingly wealthy to poverty overnight.
Losing their income, their lifestyle and the home and cars that came with it. It happened to them, and it can happen to you.
Therefore, when you make good money, it is important to understand you can lose it overnight too. Live a frugal life, put money away, buy homes and cars the smart way.
Save money, and remember that a debt snowball can happen quickly, but also a low debt money snowball can happen quickly, when you save money and budget the right way.
5. Money grows in simple investments such as mutual funds and dividend stocks over time.
Understand how money works in investments to get the best results. Mutual funds pay compounded interest and high asset stocks can pay dividends as they grow. If you add money to a mutual fund on a regular basis, called dollar cost averaging, you will make even more money.
Passbook savings accounts pay simple interest, but they have a purpose too. Some folks won’t use passbook savings account, but one good use is, they can keep money for other purposes to be used later.
Even your coin and dollar jar has a function for immediate small emergencies.
Understand How Money Works In Investments for Best Results -Lois
6. Your emergency money can be kept safely in a passbook savings account.
It’s important to be able to borrow from yourself if you have an emergency so you won’t have to go to the bank and take out a loan. Taking out a loan for an emergency creates another emergency.
It’s even worse when you have to ask others to borrow money. Borrowed money makes for broken relationships in many cases. Borrowed money should be limited to those who are close to you and vice versa.
When the debt snowball of money borrowing starts, you can get backed into a wall with your finances. This does not have to happen if you just take a small portion of your monthly earnings and put them away for a rainy day.
Get savings auto deducted and pretend the money does not belong to you – that will make it easy.
7. Your emergency money is for your emergency, not your friends and not your family.
A big problem some people have is they don’t keep their personal business to themselves. When you don’t, you have a tendency to brag about things no one else should know about.
Be proud of yourself for your financial accomplishments, like building an emergency fund, creating a great budget and learning simple investments. But, keep it to yourself, people will not ask to borrow money they don’t know you have.
This way, you do not run the risk of not having needed emergency funds because you loaned them to someone who did not repay you.
8. Constantly Improve your knowledge, your skills, and your Income.
Grab every chance you can to increase knowledge in your field. Read books, talk to mentors, take classes offered by your employer, and attend conferences.
The more you know the more of a valuable employee or business owner, you become. As you become more valuable, you can rightfully ask for more money or create more income.
Things are constantly getting more expensive, so if you have the right employer or small business practices, your income should keep rising from year to year.
9. There are very few people you can trust, especially with your money and finance.
There is no law saying you have to trust anyone with anything you own, anything you do, or what you invest in.
Educate yourself, do lots of research and know your options, when it comes to everything. Do not put your life on autopilot and do things because they seem good or someone else does it.
Understand money and finance, as though your life depends on it, because it does.
There are very few people you can trust with your money, even professionals. You need to know what investments are available and right for you. If your company has a 401k plan, it’s a good idea to invest in it, understand it, and know your options.
If you want to start a supplemental retirement plan, understand the best investments that are right for you also. So, if you choose an investment advisor you will know what they are doing with your money.
And understand when they are on the right path for you, they don’t always work for your benefit.
Great Financial Habits In Summary
Budgeting, saving money and simple investing seems easy. But, believe me if it were more people would do it, so I am here to help you. It is hard to make money and hard to keep money, some wealthy people lose all of their money overnight.
Starting with this knowledge will help you to be careful and stay safe. Instead of building a debt snowball, understand that when you do things right it is just as easy to build a money snowball.
This happens when you use budgeting, and then onto investing in dividend stocks and mutual funds skills as a way to build wealth.
Your investments should be low cost and low risk as you are learning and growing in knowledge. It is all a matter of habit, starting great financial habits early, will make creating great finances easy.
Emergency accounts seem simple so it is easy to put it off until you have an emergency and you realize you could have been prepared. Do not wait; do it now. The peace of mind you will get with an emergency fund is phenomenal. Keep learning, keep building and keep moving up the pay scale, no matter what you do.
The Talk with Your Family About Avoiding Financial Waste
If you have a family, the first thing you need to do is to get them to understand how avoiding financial waste helps a tight budget. Then, discuss what it means to live on a super-tight budget.
Tell them they may not get many of the things they want, but they can get some.
A super tight budget is something that does not mean misery, it means you must be careful. This is a part of life, not bad, not good — just necessary to keep the budget moving in the right direction.
As a matter of fact, you can tell them, because cost of living is high, everyone, in every income bracket lives on a super tight budget.
The Talk with Yourself if You Are Single And Budgeting on a Tight Budget
Stop waiting for prince charming. He does not exist. Sure, you have the chance of meeting a nice guy. But you will be better served in preparing yourself to take care of yourself first.
If you happen to find a nice person you have a lot in common with, then you will be prepared for the relationship. Until then create your own super tight budget for success.
Budgeting when you are single, will make it easier to budget when you are married. A tight budget is king and always will be for a low budget. If you develop good habits now, you have a better chance of identifying a partner who does the same, before a permanent relationship.
No one thinks they will get divorced or separated after marriage, but many do. The number one reason divorce lawyers’ site as the reason they give is financial incompatibility.
That information was there at the beginning but either, they did not get to know each other long enough or well enough to see it. Figure out how you can live on a tight budget before a serious relationship and do not get involved unless your partner does.
Trim the Fat from Your Spending Budget
Start today, trimming the fat from your budget. You are an intelligent person. There are many places where you can trim fat from your budget. It requires that you be open and honest with yourself.
Take a deep dive into your spending habits and find where you can trim the fat from your budget without starving or not having enough gas or train fare to get to work.
Look in your closet and identify clothes or shoes you have not worn for months. Look in your cupboards and identify things you have not used for years.
These are all things you could have done without, or you can sell off to make money. It will also help you to identify how to trim the fat from your budget by not overspending in the future.
Not All Good Things Are Good for You
There are many things that seem good for you, but if you cannot afford them, they may not be. A case in point; a great car, a comfortable dress, a new apartment – if they are not comfortably affordable – they are not good for you. Analyze everything you think you may need and may make your life better. The goods may make you feel better, but you must have the money.
Remember, when you analyze things you need include all cost. For instance, car buying may include 1. Down payment, 2. Monthly payment 3. Gas cost, 4. Monthly, Quarterly and Yearly maintenance, 5. Insurance, 6. Parking.
Where many people falter is when they leave out one of these costs when the affordability analysis is done. Because of these omissions, you can end up with a product you cannot afford. You can research mostly anything on google and ask advice from family, friends, or professionals you know.
Understanding Finances Is What Makes It All Work
Understanding finances is the key and the easier it will be to improve your finances. Because engage yourself into understanding finances you can live within your means no matter what your income.
The less you make the more extreme you will have to get. I call it guerrilla budgeting. I am not saying that high income people do not have financial problems, they do.
In fact, some multi-millionaires file bankruptcy because they are not careful, live far beyond their means, and do not engage in understanding finances through study.
While other multi-millionaire’s feel they must budget everything they buy and do to stay within a comfortable spending range. Understanding finances by constantly reading, studying, and monitoring their money is the key to their success. No one has an unlimited budget for spending money.
Believe half of what you see and none of what you hear, verifyLois Center-Shabazz
You Can Change the Way You Think About Money
Old habits die hard. Becoming efficient in living within your means with a tight budget and avoiding financial waste is not easy. But you must change the way you think about money if you are having financial difficulties.
If you have a habit of money mismanagement and financial waste it is even harder. But, with that said, there is a lot of help, a mentor can change the way you think about money. It starts with buying the car you can afford, then buying the home or condo you can afford.
And then of course understanding comprehensive financial management is the major key to change the way you think about money. There are many aspects to managing money and avoiding financial waste, even when your budget is tight.
When you analyze your current financial situation, you will find that there are many ways to save money by elimination of waste also. Avoiding financial waste is a major key to living on a tight budget with success.
Do not Take Your Cues from Advertising Propaganda
One of the ways we get confused about buying habits is that we take our cues from the wrong places. This is where many over spenders make their mistake.
They feel they must have everything that is advertised. Advertisers sell a “feeling”, telling you this is how you will feel if you buy this product. Of course, the feeling is always, so-called, “good”.
Do not be confused, you will not feel good if you cannot afford the advertised product. In fact, you will probably feel bad. Not all advertised products are bad, many in fact are good. The problem is the amount of information you get in a 30 second ad is not enough.
Do your research if you like a product you see in an ad. Find out if the product has quality, is within your budget, and does what it says. Most of all, ask yourself if you absolutely need and can afford the product.
Before You Buy Ask Yourself; Do I need this? Do I want this? Can I afford this? And will it last?Lois Center-Shabazz
Finally, Put it Into Action with Help from an Expert
Get help before you need it, and your finances will be in the proper order. Everyone needs help when it comes to changing behaviors and identifying best practices for spending, saving, and budgeting, investing and wealth building.
Do not feel that you are different. The most successful budgeting folks got help before becoming successful. You can get help too, that is where I come in, contact me now and we can talk about how best you will be served. If you are anxious to get started, you can start here.
Old Habits Die Hard, Change Requires a Little WorkLois Center-Shabazz
Buy Quality Products So Your Products Last
Do not get quality confused with cost. You do not have to spend a lot of money on products or services to get quality. But, if you do not want to replace your product or service often, you must buy quality. The more you replace products the more money you spend in the long run.
This is where products that appear inexpensive cost you more money than a good product. Your affordability index goes down over time due to wasted money. Purchasing the right way is another key to avoiding financial waste, living on a super tight budget, and understanding finances. You must change the way you think about money if you are going to financially successful.
Shop with Cash for the Holiday Season
Save money for the holiday season by shopping with cash, sounds simple but the number or people who shop with credit cards, feeling that their budget is unlimited is huge. You don’t have to fail at holiday shopping just because your neighbor is, or you THINK everyone else is.
Your misery afterwards will only be shared by you, not others. So, when you keep that in mind that will make it easier to shop with cash and save money for the holiday season.
Also considered cash, as a standalone debit card, where you can go to your bank and ask to purchase a debit card with the maximum amount you want to spend. You can also purchase debit cards everywhere these days, grocery stores, drug stores and other places.
Save Money When You Set Aside a Limited Amount for the Holiday Season
If you have saved in a holiday savings account, take the money now to shop for the holidays. If you have not, start a savings account now, you still have time to save for the holidays.
No matter what you plan to buy, there absolutely must be a limit to avoid going into debt. Set your limit and stick with it no matter what. You can find out how much everything cost and do comparison shopping by going online, online price comparisons are quick and easy.
Make Sure You Shop with a List
Take your list with you when you shop. Save time, money and gas by mapping out your route before you shop. Some folks will go from store to store wasting precious gas money, sometimes as far away as 20 or 30 miles.
Know before you go holiday shopping by 1. Knowing exactly what you plan to buy, 2. Know where you plan to buy it, 3. choose several stores in the same location so you don’t waste money on gas.
Don’t Shop During the Holiday Season When You are Tired or Hungry
If you holiday shop when you are tired or hungry, you will tend to over-shop, so you leave the store quickly. Your thought process becomes “muddled” and you buy stuff you would not have bought if you were relaxed and on a full stomach.
And, when you’re tired you will tend to make mistakes due to a cloud in your thought patterns. When you are hungry, your stomach starts to growl, you will think more about getting something to eat than what you are picking up off the shelves.
So, sounds like common sense, but a lot of people just don’t take the time to note whether they are hungry or tired before they go holiday shopping, so a warning to you, “take note” of your condition before you leave the house.
Your Kids May Not be the Best People to Help You Buy Holiday Gifts
Don’t ask your kids for advice on buying gifts for others. Most kids just don’t have the ability to understand the limits you should put on every single gift.
So, you be the “captain of the gift buying ship” and decide what you will buy, and only you decide. Of course, you can ask your kids to give you choices for themselves and let them know you will choose a few holiday gifts from their choices.
Don’t let your kids think “money grows on trees” during the holidays, let them know there is a limit.
Can You Really Afford That Holiday Party?
Holiday parties are all over the place during the holidays. But, before you go all out for your holiday party, ask yourself if it makes sense to spend the money.
To make it an affordable holiday party, you can do a “potluck”, where everyone brings a dish. And to make it less work for you, ask a few friends or family to be on the cleanup crew.
Ask everyone to bring a unisex gift under $10, and pick names from a hat to give a gift at the party. Here I have created at least 3 ways to save money during the holiday season.
Why Holiday Gifts Don’t Always Cost Money
You can teach your kids or grandkids that holiday gifts don’t always cost money. For example, you know that pantry you wanted to clean and organize – let you child know that would be a great Christmas gift to Mom.
Your elderly neighbor’s yard may need to be cut and trimmed – let your child know that would be a great gift to the neighbor who watches your house when you are on vacation or who brings in your newspaper when you come home late.
Maybe your attic is cluttered and disorganized, let your children know that would be a great gift to Mom and Dad to have them declutter and organize the attic. These are a few suggestions for “holiday gifts” that don’t always cost money, you can think of more.
Your Holiday Budget Does Not Have to be Complicated
Plan for your holiday budget. When it comes to your holiday budget, please don’t throw “caution to the wind”. In other words, take your holiday shopping serious and you can save serious money during the holidays.
It is easy to get distracted with all the beautiful holiday decorations and Christmas music in the stores. Even if you shop online, which many of us love to do, most of us want that holiday experience in the stores also.
But, be careful, that experience is alluring. But you can keep your head on straight as long as you realize that the atmosphere is designed to make you spend all the money in your pocket and on your credit card.
Save Money with Re-arrangement For Your Holiday Budget
You can re-arrange your monthly spending to include enough gift money for the holidays. Cut back on something you don’t need to buy or do for the next few months, that you have done on a regular basis.
That may be going out to eat once a week or saving money on gas by skipping your weekly card game. You can think of at least a few things you regularly do that you can cut back on for the holidays, then use that money for holiday spending.
Write Down Your Holiday Budget and Your Holiday Gifts
The more you write, the more you save. Writing down your savings just keeps you, your mind and heart, informed about the money you are spending moment by moment.
If you know how much you must spend, in most cases you won’t go over your spending amount. It also lets you know when it is time to leave the store or online shopping site.
The more you write, the more you will become aware of your limits. All you need is a small diary, some cell phones come with a writing pad, you can use that. Also, you can use a word document if your cell phone permits.
Write a Diary of Holiday Gifts and Why Everyone Deserves it
Know who deserves which holiday gift. Make a note of why they deserve the gift. For example,
1. If your son brought his grades up and learned to keep his room clean, 2. If your daughter does household chores without being told.
3. The times your neighbor took you grocery shopping and to run errands when your car was in the shop.
4. When your sister helped you get your car fixed after you lost your job. These are just a few examples, but you get the idea.
The holiday gifts should be in line with the deeds. The holidays are a great opportunity to let folks know that you appreciate them and what they have done for you during the holidays. It is also a great opportunity to teach your kids or grandkids why we give gifts with a purpose.
Set a Holiday Budget Spending Limit According to Importance
You know what your holiday spending limit is. Unfortunately, too many shoppers go over that limit before they realize they put themselves in holiday debt.
Keep the credit card in your pocket. You can use cash or get a debit card with a limit, at your bank. So, if your Holiday spending limit is $500 dollars, you would get a debit card for $500 and keep track of all your receipts and balances left.
Remember That You Don’t Ever Have to Spoil Your Kids During the Holidays
I haven’t figured this out yet, but some parents, grandparents, aunts and uncles, feel it is important to spoil their kids for the holidays. My suspicion is they feel their kids won’t feel loved if they don’t get all the material things they want. Not true.
Love is not gifting it is positive time and attention. So, when you feel you have to buy that over-priced gift or another gift they may not use after a short time, try sitting and have a long thought-out conversation with your child about their life, and what they do when they leave the house, their friends, their favorite interest.
Kids feel important when adults, especially their parents show them they care enough to have a deep and long conservations with them about their interest. So, the gifts should not only be in line with what they deserve, but also, what you can afford.
Who is The Most Important Person on Your Holiday List?
Make a list of your holiday persons. I know this sounds like favoritism and it is, so start at the top and move to the bottom with a list of the most important to the least important people to give a holiday gift to.
The most important may be a spouse, parent or child who has been special to you during the year, the least important may be the holiday secret gift at work. No matter who gets a gift, make sure you keep it in perspective and give accordingly.
I have listed 14 ways to save money for the holiday season, now that I have you started, you can think of more.