Saving Money, Living Frugally and Setting Goals

There are many people out there that will tell you to put money into money markets and to save as much as possible and to start living frugally so that you can keep saving money. After saving money for a long time and creating what I call a nest egg I and many others like me started to wonder what we were saving money for. Living frugally isn’t just about saving money, it is about spending smarter. Why would you want to spend more money than what you have too and why would you want to save money for no reason? These questions will be answered in this article along with why you should start living frugally.
My nest egg is complete, now what?

Once you got your nest egg completed you probably took a breath of air and a sigh of relief. Your nest egg is important and many people will start living frugally in order to complete this nest egg but why should it stop there? I have told many of my clients that living frugally is about saving money and not just for a rainy day but to purchase things that you need. Retirement is also a good reason to save money and to start living frugally. One you get your nest egg taken care of you should start putting more money into retirement but not all of it since you will still need to survive before you retire. Everyone should have a personal savings account that they can put money into for purchases that they will want to save money for. If one of your goals is to put a down payment on a new car then you can use this savings account to do this. It has been said many times before and even I have said that you need to have a nest egg of three times your monthly income but with the way the economy has gone it has taught me a lesson and now I believe that you need at least a six to nine months saved up.

What should I purchase first with the money I saved?

What you should purchase is up to you but if you really want to purchase nice things then you will need to start living frugally like I have said before. There are a few things that many people don’t understand that they should save for and this all has to do with where you work. If you have to commute to work then you will probably need a car and it doesn’t have to be a new one. Once you save up the money to get a car you will also need to save another emergency fund for if and when that car happens to break down. After you have your emergency car fund, you will want to work towards paying that car off with the money that you saved and then work towards saving money for other things. Another thing that you might want to save money for is a home. Everyone needs a home and there isn’t any point in paying rent for the rest of your life when you can own a home.

Have do start living frugally to get these things and to save money?

Living frugally means that you need to be a penny pincher or tight wad when it comes to your money. Living frugally doesn’t mean that you can’t have any fun but you must learn to only have fun when you have the money to do so and after you create a budget for yourself that includes the amount of money that you want to save. There are many tips on saving money on the internet and in your library. Cable shows and even the news are starting to put tips out there to help people save money.

You can’t take your money with you

I have heard a lot of expressions in my day but “you can’t take the money with you” are still my favorite. This might be true but this doesn’t mean that you should become a splurge hog but you can spend a little bit here and there as long as you do it the right way. Everyone should have a little bit of fun around their life and this is why I think that people should do something for themselves once a month. When you decided what you want to do then you should only spend a certain amount. What I often do is pay my bill off and put money into my savings account for three weeks straight and leave one paycheck open for myself. During the three weeks I find as many things on living frugally as I can. If I have any money left over with my last paycheck then I add that extra money into my savings account.

Saving money and living frugally is all worth it in the end when you realize that all of your efforts will pay off and you can have a lot of nice things as long as you are money smart.

Saving Money for Debt

When you are facing a mountain of debt, it might be tempting to use a debt consolidation loan. However, those can cost you money in the long run as well. Here are some simple tips on how to reduce your debt right now. If you create a budget for yourself and save money where you can, you will be able to pay off your debt without using debt consolidation.
Start walking
Save money and start walking to nearby places instead of driving or taking public transportation. Not only will this promote health, but it also does not require you to pay. You can also invest in a bicycle for the slightly longer trips.

Get rid of unnecessary spending
Cut off any unused or redundant services such as a cell phone versus land lind or cable television service with channels you don’t watch. Clean up your services and save your money for things you use often and frequently. Cut the services that you use once or twice a month.

Watch your expenses
As they say, a penny saved is a penny earned. This goes back to how important a budget is in your everyday life. It is the road map to where you want to spend your money. Some ways to find the extra cash to pay off debt, maybe instead of buying food/drinks at work everyday, you can bring them in with you. If you are spending money in gas but can get to work via public transportation, perhaps it’s time to make the switch!

Call the credit card companies
Look at your credit card bill and see what is the interest rate. If it is higher than 18%, then call your credit card company and ask if they can lower your rate. The worse case scenario is that they say no but if they say yes, then your monthly payment and accrued interests will go down.

A Night Out
Going out once in a while is an awesome idea but watch where you spend your money and how much you spend. Going out to eat should only be once in a while. An alternative to going out for dinner is to invite people over and cook at home. Perhaps popcorn and a movie can be your next social event! — and dinner can be pot luck style!

Recycling
Recycling is one of those things where you just have remember that every little bit counts. If you have been throwing out your plastic bottles, glass bottles and aluminum cans, check to see if there is a refund for recycling them.

Utilize space
If you have an extra bedroom that you can clean out and maybe even put in a cheap bed in there, you can rent out the space to a local college student and earn some extra income that way.

Part-time job
I often take some time to apply to part time jobs at coffee shops just because they are usually really accommodating to students. Even if you can squeeze in 15-20 hours a week, you can pay down some bills or supplement your income.

Odd jobs
Look around and see if you can find anyone interested in paying you to do odd jobs here and there. These odd jobs can consist of mowing the lawn, cleaning the garage, or walking their dog. You will be surprised at what people are willing to pay for.

Pay off loans
Take a look at your monthly payments and eliminate the easier ones first. Rather than paying minimum on all your payments, put together a fund to pay off that debt. This is an easy way to save money by not letting the interest costs build up.

5 Types of Debt Management

There are five different types of debt management programs. Which debt management solution will best work for you will mostly depend on the amount of debt you have and how disciplined you are with your money.
The first way you can approach your debt is with a self managed debt management program. This takes realizing there is a problem or the potential for financial difficulties exists. A self managed debt management solution will not work for you if you do not start early and have some control over your spending habits. This debt management program requires listing all your debts and creating a budget. You will want to pay off the highest interest accounts first and pay as much as possible towards your credit card balances. You may also consider transferring credit card balances to a credit card with a lower interest rate.

The second method of debt management is a debt consolidation loan. You must be creditworthy and will probably have to use the equity in your house as collateral. The interest paid on this loan will be tax deductible. This loan will consolidate all your credit card payments in to one monthly payment that will probably be lower than your combined payments, but the term on the loan will probably be longer. The danger with this type of debt management solution is it will leave you available credit on your credit cards. If you are not disciplined enough not to use it, you will find yourself back where your started-with credit card debt and another loan.

Your third option is to use a debt management counseling service. You will make one monthly payment to this service and they will disburse it to your creditors. The credit counseling service will get your interest rates reduces or eliminated. Collection calls will stop and so will fees and penalties. The debt management credit counseling company will deal with your creditors on your behalf. If you wait until your debt is too serious, they may not be able to help you, so the earlier you can make decisions about your finances, the more debt management options you will have.

Your fourth debt management option is to use a debt settlement company. Most credit card companies will not be willing to make a settlement on your account until your account has been charged off or at the very least is several months past due. In other words, this option is a last resort before bankruptcy. Settling on your accounts will harm your credit, but not as much as a bankruptcy. Debt settlement is when you or a company on your behalf negotiates with your creditors to settle your debts for a lesser amount. This debt management option has gotten a lot people out of debt.

Your final debt management option is to file bankruptcy. With the new laws, this means you will most likely be reorganizing your debts with the help of an attorney and the courts. Today, bankruptcy will probably not give you a fresh start, but it will make things manageable. A bankruptcy will stay on your credit report for ten years.

The sooner you are willing to evaluate your financial problems and consider a debt management solution, the greater you number of debt management options will be. Once you admit a problem exists you will then be able to make plans to correct it.