Financial Tips

Improving Your Financial Life is Achievable

The essential element is that you must be committed to improving your financial life. I will show you that it is not difficult. Patience, planning and persistance will get you there. Personal Finance is not taught in school and so many people continually make financial mistakes that can easily be remedied with the right information. My  background is in the financial industry, but you don’t need any special expertise to improve your financial life.

Steps to Improving Your Financial Life

1. Credit Cards.

  • Don’t carry a balance. Credit card rates will quietly but forcefully strip away your ability to save. Only buy what you can afford to pay at the end of the month.
  • If you have a balance and you have some type of savings (bank, brokerage, mutual fund), use that savings to pay off the debt. That savings is money you’ve already spent. If you don’t you’re losing hard earned money. The caveat is if you have a loan rate that is lower than the rate of return you are earning on your savings then it’s ok to carry the debt, for example, if you are about to use the money to buy a home.
  • If you can’t pay off your balance, find the lowest rate that you qualify for and move the debt to that lower rate. Then pay off that loan.

2. Buy a Home, Don’t Rent

  • Why throw rent money into the garbage…”bye, bye”…when you can grow equity and gain a huge tax deduction instead? Most people like what they see when they plug the homeowner’s tax credit (usually quite hefty) into their tax calculator. There is a lot of hubbub about renting making more sense today than buying because the real estate market has gone down.
  • Well remember “Buy Low, Sell High?” Prices are low now. Now is the time to buy. It is a “buyers market” which means you will have more power to negotiate a lower price. Use that to your advantage.
  • Yes, you can buy a home! If you are a first time home buyer, you don’t need much of a down payment. Here is an excellent government resource for learning the process of buying a home. If you thought you couldn’t afford it, check again. You just might be surprised. Where there’s a will there’s a way.
  • The only caveat regarding renting is if you expect to move within a short period of time. In that case, you should calculate which choice makes most sense for you. Here is a calculator that will help you with that decision. Click on the drop down box and choose “Rent or Buy” to access the calculator.

3. Buying Things

  • Ask: Do I really NEED this? Now? If not, don’t buy it.
  • Ask: Can I buy this USED? If so, check out local yard sales, thrift shops, Craigslist, and Ebay.
  • Ask: Can I get this for FREE? Join your local FreeCycle, check out your local library, ask friends, family, neighbors and co-workers if they have what you need (you never know!)
  • If you must buy new, I recommend buying things online. Two reasons: easy to find the best price and you’re less likely to get sucked into buying some “shiny new cool looking thing” you didn’t need when you walked into the store!
  • Remember this: Shopping shouldn’t be a “Hobby.” If you want to be a financial winner, don’t buy into the “consumer game” of “gotta have more, better, shinier, newer” that makes you poor.

4. Food & Drink

  • Cook your own food. It’s healthier and cheaper. It takes more time, but planning ahead can make it efficient, such as cooking once a week and freezing for the week’s meals. Check out Once-a-Month cooking for tips on this technique!
  • Pack Your Lunch – keep it simple and plan ahead. You’ll be able to avoid trans fats more easily this way in addition to saving money.
  • Make Your Own Coffee!!! At a minimum $3 per day times 250 work days a year is $750. Compound that over 10 years ($10,980.84), 20 years ($ 27,831.12) at 5%. Makes you go hmmm, doesn’t it.
  • Refill Your Own Water Bottle. This one is easy. If you can, buy a filter system for your home instead of buying bottled water.

5. Pay Yourself First

    • Invest the Max in your 401k, especially if your company matches. That’s like giving yourself a raise!
    • The main concept in David Bach’s The Automatic Millionaire is to cut out the spending that is not necessary and pay yourself that money instead. He talks about the “latte factor.” See example below.
    • Do this exercize: How much do you spend per day, per week, per month on things? What does that add up to on a yearly basis? What can you cut out? Then pay that into an account you won’t touch.
    • Example:
Item Cost Per Day Cost per Month Annual Cost
Latte $3.5 $105 $1260
Muffin $1.5 $45 $540
Lunch $10 $300 $3600
Cable TV $2.67 $80 $960
Phone $1.33 $40 $480
TOTALS $19 $570 $6840
  • Analyze your spending. Research where you can lower service plans, cancel a service plan, or get a better rate. You’ll be amazed how the savings can really add up. Then you’ll have a downpayment for that home! Or money to pay off that credit card! I like using a simple excel spread sheet, but if you want help, here’s a free online budgeting tool to help you get started.

6. Automobiles

  • Buy and Hold. If you must buy a new car, then care for it well and hold onto it for as long as you can. Get the shortest term loan you can afford.
  • Buy Used! Buy through the newspaper or Craigslist. Seek out mature people who have all the maintenance records for the car. Seek out automobiles that are known for longevity like Toyotas, Honda’s and Volvo’s. Go to Edmunds for more auto research. Subscribe for future post on How to Buy a Used Car.
  • Shop Online for the best insurance rates.
  • Plan your driving route when doing errands to drive the least amount of miles.
  • Can You Fix it Yourself? My dad just saved $1300 by changing his own air conditioning coolant on his truck. The mechanic gave him a $1300 estimate. The coolant cost $50. Savings: $1250! If you can’t do it, maybe you have a friend who can help you out and swap a favor in return.

7. Entertainment

  • Public Library: Free books, videos, and music! What a concept! You can usually reserve what you want online and then pick it up quickly on your way home from work or during Saturday errands. If there’s something you love, then you can always buy it later…preferably used.
  • Turn off the TV. Can we Talk? How about some good old conversation? Wasn’t that the best part of your early romance? Isn’t that what we love about when the power goes out? Schedule it and do it! At least once a week!
  • Boombox + Friends + Potluck food & drink = FRUGAL FUN!!! Try it!
  • Nature is Calling: Go discover the local nature walks in your area. It will make you FEEL GOOD!
  • Check your local paper online for free fun things that are going on, like live music, plays in the park, art shows and so on.

If you found this helpful please Share It below with a digg or bookmark to Delicious.

Subscribe to Life Learning Today for future articles on Simple Budgeting for Hopeless Spenders, How to Buy a Used Car, and Investing Made Easy.

Comments are always welcome. Please let me know what you think Leo, Clever Dude, and Ririan.

Thank you to recent commenters: Robinson, Dave, and Brian.

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photo by: LendingMemo


Comments

  1. 1
    Lizzie (Rippin-Kitten)
    May 11th, 2007 at 2:51 pm

    It’s very timely that I found your blog and read this post. My husband and I are in the beginning phases of looking for a house and thinking about ways to conserve cash. Your post reaffirmed all of the ways to save that we came up with!

  2. 2
    Psychic advice
    May 11th, 2007 at 7:42 pm

    A very informative post. Some good ideas here. One I can think of is don’t gamble.

  3. 3
    Ginene
    May 11th, 2007 at 8:54 pm

    Great tips!!! I am always looking for ways to save money. My husband calls me cheap but I like to budget. I have one credit card but its only for credit purposes but now that I bought a house last year I really don’t need it. I got it to improve my credit score, which it did and now I don’t use it. I just need to find ways on making extra money.

  4. 4
    agentsully
    May 11th, 2007 at 11:04 pm

    Lizzie – that’s so awesome! Glad this was helpful. Your site is fun.

    Psychic – you’re right. Gambling is one to avoid.

    Ginene – It seems like there is usually the spender and the saver in most relationships. Stay posted for more financial articles here at Life Learning Today. You can subscribe to make sure you don’t miss any.

    Thanks everyone for stopping by!

  5. 5
    Tisha
    May 12th, 2007 at 7:05 pm

    I’ve saved so much money carrying around my own water bottle and other food items, sure hubby made fun of me when I packed food for our trips but gobbled it all up when he got hungry and was happy we didn’t have to pay a fortune at the rest stops;)

    great and helpful advice Agent!

  6. 6
    agentsully
    May 12th, 2007 at 9:09 pm

    Hey Tisha, Nice to have you back. I’m the same. Packing the snacks. The men are always saying “what’s taking you so long” before we leave on a trip, but they’re always the first to also say “did you bring something to eat?” Mmmm. :-) It’s all good.

  7. 7
    i.nconspicuo.us
    May 15th, 2007 at 12:18 am

    Great article… now, if you can only to get all of America to read it you might be able to solve the problem of everyone in our country being in debt!

  8. 8
    AgentSully
    May 15th, 2007 at 7:34 pm

    Inconspicuous- thanks for the comment. It would be great to help some more people in America. Maybe digging it to the front page could do that! :-)

  9. 9
    Sean
    May 21st, 2007 at 3:24 am

    I am practicing some of the tips that you post here, I can tell these are really helpful.

  10. 10
    AgentSully
    May 22nd, 2007 at 3:11 pm

    Thanks for commenting Sean. Cute baby pics on your blog!

  11. 12
    Pipe Smoking
    May 23rd, 2007 at 10:58 am

    It’s really astounding how much $$ is wasted on frivolous things like eating out, coffee, snack machine, etc. Most families can find $100 extra in their budget by watching these types of purchases.

  12. 13
    AgentSully
    May 23rd, 2007 at 7:10 pm

    Thanks for the comment PS. Good to have you visiting!!

  13. 18
    Jayson
    September 24th, 2007 at 8:43 pm

    Great advice – as usual! I realized the significance of not eating out every night, not buying a drink at every gas station and not buying ridiculous items all the time when we were on a strict budget. I wish I realized these things earlier and read this post when I was a teenager.

  14. 19
    Mortgage Exit Fees
    September 25th, 2007 at 11:10 am

    Good advice – paying yourself first is the key principle in the book “The Richest Man in Babylon”.

    This book is a classic and I would recommend everyone to read it, it has also recently been updated for the 21st centrury (I can’t remember how old it is!) which should make it easier to grasp the lessons within it.

  15. 20
    element
    November 19th, 2007 at 9:26 am

    thanks for advice.These tips are really helpfull.

  16. 21
    Mortgage Guide
    December 11th, 2007 at 1:14 pm

    Great advice! A modest decrease in spending can pay long term dividends.

  17. 22
    Jack
    December 12th, 2007 at 11:54 am

    My biggest thing is budgeting food. Grabbing a snack or hitting fast food kills me.

  18. 24
    ong
    December 26th, 2007 at 4:29 am

    May I add the 1 more way, is not to get ripoff by credit repair people.

  19. 25
    dm
    January 29th, 2008 at 2:10 pm

    Do I really NEED this? Now? & Analyze your own spending . . . work well for me. Combine the two and you could save a ton.

  20. 26
    Loan Guy
    February 8th, 2008 at 8:21 am

    Great info, however not easy to do in today world, it takes a complete change in mindset.
    If you could just stop using credit cards alone and pay for everything in cash it would have a dramatic effect on your finances.

  21. 27
    iva
    February 8th, 2008 at 11:36 am

    “If you can’t pay off your balance, find the lowest rate that you qualify for and move the debt to that lower rate.” I agree,also you can use IVA( Individual Voluntary Agrrangements). It provides a viable alternative to bankruptcy and is therefore for those individuals that really cannot afford to pay off existing debts any longer. An IVA can help because it is a proposal that is sent to all of an individual’s creditors offering a settlement over a period of five years or so. After that period, the debt is settled.

  22. 28
    DailySpends
    February 20th, 2008 at 12:43 pm

    Not carrying a balance on your credit card is easier said than done – but I always try to clear them down! Good tips :)

  23. 29
    Gimme Credit
    March 28th, 2008 at 9:04 pm

    I have to admit, I like buying new cars and keeping them for 4 years or more. But I just recently bought a camry Hybrid, and now estimate that I’m saving about $100/month on gas expenses! So if you have to buy new definitely consider hybrid. At least you can save some dough on gas, and they have excellent resale value so buying new suddenly doesn’t look so bad after all.

  24. 30
    Tenoch
    April 29th, 2008 at 4:48 pm

    also, if when one is actually facing the horrors of being in debt, it helps if he/she tells the problem to friends and family… it pays to air it out to a support group that really care… because a lot of people live in denial when in debt… it pays if you face the problem as early as possible, tell it to people close to you, seek an experts advise… devise a plan to fight your way through debt… no one says its going to be easy… but as they say ‘the best time to start is now’…

  25. 31
    agentsully
    April 30th, 2008 at 3:58 pm

    @Tenoch – I think that’s a great idea about telling others! So smart! Thank you for sharing that!!!

  26. 32
    Loskas
    June 5th, 2008 at 6:12 am

    You have great posts from all the possible categories! :D
    These tips are really helpful. I hope that I can buy a home soon. I am renting one for now.

  27. 33
    CamryHybrid
    July 25th, 2008 at 2:57 pm

    Wow, great comprehensive post! I definitely agree with much of what you said (I’m a huge camry hybrid fan), including cooking your own food and analyzing your spending.

    Once I began tracking every penny that goes in and out of my account, I was able to identify and eliminate drains on my account that I either wasn’t using or could easily do without.

  28. 34
    Niels
    October 16th, 2008 at 9:09 am

    The best tips are in section three and four because of their general nature. Automobiles, creditcards and your house is something that involves a lot of thinking forehand.

  29. 35
    MoneySatnd
    February 24th, 2009 at 6:22 am

    I definitely agree that by making your own packed lunch and not wasting money on little things does add up and then the money saved from this can either be used to pay off debts or you could purchase that new computer or go on a really lush holiday

  30. 36
    agentsully
    March 9th, 2009 at 2:35 pm

    @Money – thank you for your support! We all need to watch our wallets these days!!

  31. 37
    Prepaid Services
    July 24th, 2009 at 1:03 am

    Great tips. I totally agree about buying things. That you have to ask yourself first if you really need that. I actually do that whenever I buy something. Thanks for the tips.

  32. 38
    gary
    January 24th, 2010 at 6:15 am

    yes…proper planing is really essential..i like your content very much ..thanks

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