Clearly, you have decided that you’d rather not be one of these people. However, you have come to recognise that your finances are not as healthy as they once were, and the only option left to you is to cut your spending.

Assuming your situation is not teetering on the edge of doom, there are many things you can do to avoid over-spending and to reduce your current spending by significant amounts – and none of them involve going hungry.

Clear out

We all have plenty of unused or unwanted items lying around our houses that we forget about – because life’s easier that way. However, if you take the time to go through these and decide once and for all what you want to get rid of, you can de-clutter your home and get some extra cash in your pocket.

Music Magpie is a fantastic site for getting rid of your old CDs, DVDs and games and making some extra cash in the process. This helps your finances in the process as you can put the money you’ve made towards any debts or expenses.

Refill

Most of us waste plenty of money every week by grabbing a quick convenience drink from the shop on the way to or from work. It may not seem like much but this unnecessary expenditure adds up.

Instead, consider buying a high quality reusable bottle and fill it with filtered water.

Water is better for you anyway, but if you can’t resist a sugary drink then buy them in larger quantities when they’re cheaper and transfer some into your new reusable bottle. It’s better for your pocket and the environment – who can argue with that?

Get your reward

No matter where you buy your groceries, most of us go to the same shop all the time due to convenience or loyalty to certain brands. Check online to make sure you are getting the best available deal on your shopping. Make sure you are signed up to the customer rewards programs offered by your local supermarket.

It’ll take a few seconds of your time to fill out the form and every time you use it, you’ll gain points to spend on shopping or fuel.

Don’t neglect your freezer

Next time you make dinner, consider making far more than you need and then freezing it. Pretty much everything can be frozen and will be just as good when you defrost it for dinner another night.

Doing this saves you time and money as you can buy in bulk and your preparation time for the next meal is next to nothing – perfect for those lazy days when you can’t be bothered to cook but can’t afford a take-away.

Keep a Savings Account

If you have not already done so, open a savings account and begin saving money. Also, make sure you do not forget to add money as frequently as possible. Whenever you have a few extra dollars, you can deposit them directly into your savings account. Budget your money wisely and even if it seems you have extra money to spend, just put it off to the side and place it in your savings account because you are definitely going to need it in the future. When you open the savings account, be sure to ask the bank about interest. Some banks will allow your savings account to grow interest for as long as you keep it.

Contribute to a 401K Plan

Many employers offer the option of a 401k plan for employees. If this is being offered to you, take advantage of the opportunity and get started right away. Contribute as much as you can towards the 401k plan so that your current taxes will be a bit cheaper and so that you have money saved away for your retirement in the future. You may also be wondering, “Should I roll over my 401k? Maybe into a Roth IRA?” This is something that you can consider. It is most commonly performed after you have left a job that originally offered the 401k plan. You would be able to open a traditional IRA, which is an individual retirement account, and then roll your 401k over to a Roth IRA as a replacement.

Cut Corners Now

If you are planning to retire within the next few years, you may want to start cutting corners now, as this will help you to save money for the future. Cutting corners includes eliminating unnecessary expenses for products and services that you really do not need and can live without. It would also include budgeting and trying to use coupons to save money on shopping trips, especially when you are headed to the grocery store. There are many people who are able to save a good portion on their grocery bill due to the fact that they are using coupons that they have found in the local paper or on the web.

When you plan to retire, it is important that you know and understand your finances. You may have to cut corners now to start saving money for the future, but in the long run, it will be worth it. It is important that you have the necessary funds to survive off of so that you can retire from the workforce and enjoy life as a retired individual without the stress and wondering of how you will afford everything.

1        Get Financially Literate

Not every wealthy individual has an MBA. In fact, many of the wealthiest individuals do not even have a college degree. Have you ever heard of Bill Gates? Knowledge is power, and it is important to become knowledgeable with regards to money and finance. You do not have to attend a college or university to acquire this knowledge. Read everything you can get your hands on like books, magazines, and newsletters. Pick the brain of every successful person you know. Put life’s lessons to work for you. Things you have already experienced can be useful in making smart investment and business decisions.

2        Grow Your Money

Save for investing. If you save one hundred dollars per month for a year, you will have $1200. If you invest $100 per month, you could end up with $1300 or more at the end of twelve months. That’s an important difference. Think of growing your money as an obligation. Contribute weekly, biweekly, or monthly as if it were a debt. After all, it is no less important to pay yourself than your car payment.

3        Learn to Accept Risk

The cliché is “no pain, no gain” and if you are going to become wealthy, you must learn to take risks and live with the occasional pain of losing. Steve Jobs, Apple’s founder, lost a quarter billion dollars in one year. When opportunity knocks, you cannot be found cowering behind the door. Many of the world’s wealthiest individuals are entrepreneurs. Entrepreneurs routinely take risks. Of course, you have to understand the risk versus the reward. Each opportunity must be analyzed and the risks and rewards carefully considered. Most of us can rely on our life experiences for direction and guidance. We have all learned there is no free lunch (I hope).

4        Don’t Spend More than You Earn

I know this seems painfully obvious, but as a practical matter, if you have debt, you have it because you are spending more than you earn. Take a moment and get your head around this concept. You have an auto loan because you did not have the money to purchase it outright. The same is true for your mortgage, your college debt, and so forth. I am not suggesting that you forego a home, a car, or an education, but I hope your takeaway is that debt is often a red flag, a signal that you are not living within your means.

5         If You Don’t Have it You Can’t Spend It

You can avoid the temptation of overspending by automating your savings and investment. If you have a 401k plan at work, contribute, at minimum, the amount your employer will match. You can also earmark money taken from your paycheck or checking account for deposit into a savings account. If the money is not in your hand, you are less likely to spend it.

6        Diversify Your Income

It is a common perception to view your earnings as fixed—an amount that needs to be allocated to various obligations like housing, utilities and other recurring obligations. This is a mistake. Alter your paradigm and think of ways to increase your income. If “fixed” is the way you view your income, that is the way it will be. You know that it is imprudent to put all your money into a single investment. All the best financial advisors encourage diversification of investment. Diversifying your income stream is equally important. Consider how you spend your leisure time. Is it possible to use that time to pursue a part-time job, create a passive income, or start a small business? Diversifying your income will help you build your wealth and in today’s uncertain economy is a big plus for your financial peace of mind.

I hope you will take the time to share your ideas on building wealth. Please take a moment to comment. You have some ideas, don’t you?

Bury Yourself in Debt

Regardless of whether it is student debt or fast payday loans, taking on too much debt with no plan to pay it back will put you in a bad position. If you want to set yourself on the track to success, think long-term. Before taking out a loan, ask family members for a short-term loan, but before you do so, make sure you plan to pay it back. The last thing you need is to destroy your support system.

Pay Your Bills Late

Another thing that can ruin your finances is paying your bills late, even when you have the money to pay them on time. Not only will you build up late fees, but it could lead to further inconveniences like losing power or water. The last thing you want to do is to waste hours trying to get your power back on because you simply forgot to pay your bills.

Settle at Your Current Job

At my first real job, my co-worker had been there for 5 years. He was closing in on 30 and had no motivation to move on. It’s not like he enjoyed his job either. He spent most of his time surfing the internet. He also was working for something like $30k a year. That may be fine when you are starting out, but when you are 40, that is going to hurt. Don’t let yourself get comfortable early on in your career, especially if you don’t enjoy your job.

Believe it or not, there are many ways to ruin your finances. It doesn’t take a genius to do it. But, if you pay attention to your mistakes and learn from them, you will be much further ahead than the guy or girl next to you. As I said, sometimes financial success is not about being perfect, but minimizing your mistakes.

If you have never learned about credit, however, you are certainly not aware of how your actions today can affect you tomorrow. You may not know anything is wrong until you go to buy a car or a home and find that you are rejected because of a low credit rating. Don’t let this happen to you. By avoiding these mistakes in your teens and early adulthood, you can establish a solid credit history as an adult.

Mistake #1: Not Making Payments on Time

Regardless of what type of credit you have–a car payment, a credit card or a mortgage–if you do not pay it on time, you are risking your credit in a most significant way. Late payments reflect badly on you and can drop your credit score up to 20 points with a single missed payment. In that instant that you lost 20 points, it will take you at least six months to build it back up–providing that you pay everything on time.

Mistakes happen, we forget to mail a check or simply forget the due date and overshoot by a day or two. It’s not a day or two that hurts you–it’s 30 days or more. If your payment was due yesterday, get online and make the payment today.

If it is financial difficulty that is the cause of missed payments, be smart about it. Millions of people are experiencing financial difficulty due to poor economic conditions. This fact alone has made creditors more understanding and willing to work with you. Pick up the phone and explain your situation. It will still count against you, but they are less likely to report it to the credit agencies if you show them that you are being proactive and presenting a plan to catch up.

Mistake #2: Applying for Every Credit Card under the Sun

It is an invigorating thing to apply for a credit card and be approved. Now, you can buy those gorgeous shoes or that new iPad that you have been fantasizing about. Then, inspiration hits you–why not see how many other credit cards you can be approved for, right? No! Don’t fall into this trap…it’s a deep trap–one that promises to keep you hostage for the next several years of your life.

All dramatics and kidding aside, it is a very real trap that people encounter. While you may be thrilled that hundreds or even thousands of dollars are at your fingertips, you have to remember that this money must all be paid back, with interest. Credit card interest rates are notoriously high, unless you have stellar credit, and even then you can expect interest rates to be a little off-putting.

If you must, stick to one credit card only and use it when it is absolutely necessary. Those gorgeous stilettos or that brand new flashy piece of technology can wait until you have saved up for it. That way you’ll appreciate it more and not cringe when your credit card statement arrives.

Mistake #3: Maxing Out Your Credit Cards

Regardless of the amount of credit you are approved for, refrain from spending it all in one place, or even two or three places for that matter. Running up your credit card hurts your debt-to-income ratio and also shows lenders that you are irresponsible. You want to use it sparingly, of course, because if it sits in your wallet, the lenders are not making any money at all and that will hurt your credit as well. Spend wisely and your lenders will reward you, by not only reporting favorably to the credit companies, but also by increasing your credit limit periodically.

It’s a tough act, balancing your credit so that you achieve harmony between your lenders, the credit agencies and your bank account. By learning responsible habits at a young age, you are certain to carry them through your adulthood and maintain credit that most people only wish they had.

Do you have any tips on how to keep people from destroying their credit? Tell us about your experience in the comments section.

Signs of Healthy Finances

Since I realized that my close friend might benefit from positive examples, I thought I would provide a list that might be able to help all of you.

Spend Less than You Earn

The only way to improve your finances is to spend less money that you earn. This is the only way to accumulate wealth. If you are spending as much money as you make (or more), your financial situation is only going to get worse. Don’t let this happen to you. Either make more money or spend less.

Debt Free

A family without any debt is a family with healthy finances. While most financial advisers will forgive debt for a mortgage, almost all other debt is bad debt. Getting loans may be a great way to get out of a bad situation for a short term (like getting Aspire loans for people with bad credit).

Emergency Fund

Having an emergency fund, regardless of how large it is, is a great sign that you are prepared for the worst things to come. This is a must have for families. The simple truth is that you have to be prepared for the worst things in life. If you don’t have this extra money set aside, you’re setting yourself up for disaster.

More Money in Cars than Investments

This is one of those nontraditional measurements of success, but if you have more money invested in your cars than retirement accounts, this is not a good sign. Not only are cars depreciating assets (meaning that you are losing money), but this also means that you are spending money on a car instead of your future. The next time you think about purchasing a new car, stop to consider how much money you have invested in your retirement account.

While it may not be possible to meet all of these requirements at first, they can provide you with a goal to shoot for. It might be time for you to consider if you are in the best position with your finances.

How do you measure up?

• What are mutual funds?
• Are mutual funds a good investment vehicle?
• How safe is this type of investment?
• How do I choose a mutual fund company?

Mutual Funds Defined

Mutual funds provide the opportunity for many investors to pool their money and purchase a variety of stocks, bonds, or other securities. Mutual funds are akin to a co-op. Mutual fund companies can specialize in stocks, bonds, or other securities. They may invest in one type of investment, say bonds, or they can invest in all types. Some mutual fund companies have other unique areas of specialization. You can learn about the fund’s investment mix and philosophy from their prospectus. The fund hires a manager to oversee the portfolio and make purchases and sales in accordance with the terms of the prospectus.

Are They a Good Investment?

One cardinal rule every investor should know and obey is this: “Don’t put all of your eggs into one basket.” Mutual funds are, by definition and structure, diversified. Acquiring a diversified portfolio can be an expensive and time-consuming task. Buying a wide variety of stocks, bonds, or securities is expensive. Then you must ask yourself, “How much time can I devote to researching potential investments?” Most of us would have to answer, “Not enough!”

The beauty of a mutual fund is they do the research and the buying. As an investor in the fund, you acquire a share of its overall value. The fund manager handles the diversification, acquisitions, and sales. This allows you to acquire a diversified and well-researched portfolio by simply buying shares in the fund. It is, quite probably, the best way to invest for the individual with limited knowledge of the markets. It is unquestionably the least expensive mechanism for acquiring the diversification that is so necessary for your peace of mind. The best argument for holding a diversified portfolio is to imagine what would have happened to your net worth if all your money was in mortgage-backed securities when the housing bubble burst.

Are They Safe?

While there are no sure bets in life, in the investment world, mutual funds have an outstanding track record, albeit some more favorable than others. The safest investments, at the end of the day, are the ones you understand, the ones you deem logical, and the ones you know have stood the test of time. Mutual funds meet these criteria. It is a well-regulated enterprise, falling under the Investment Company Act of 1940. Mutual funds have enjoyed a virtually unblemished record for decades. Many banks are actively engaged in the sale of mutual funds. Under no circumstances should you assume that this fact implies FDIC Coverage, and they are not covered by the FDIC nor any other insurance company! Perhaps the best testimonial for mutual fund companies is that,  although direct investing has become increasing accessible via the internet, mutual fund companies are patronized by more than 90 million people! That said, no one could possibly guarantee that you would not lose some of your investment.

How Do I Choose?

First, decide your investment objective. For example, do you want:

• Safety?
• Growth?
• Aggressive Growth?

If you are near retirement age, you may be more interested in safety than growth.

Conversely, if your prime earning years are ahead, you may want to opt for aggressive growth.

Some investors prefer a mix of all three strategies. The value of mutual funds rests in their ability to provide diversity for the investor of moderate means. The modest investor can use mutual funds to create a portfolio that meets his/her unique objectives.

When you decide on your investment objective, you can single out the companies that market themselves as meeting your objective. You are not done there however! You will want to order their prospectus and read each one. Only then can you make the informed decision your hard-earned money deserves!

Do you have investments in mutual funds? Are you satisfied with your returns? Please share your thoughts by commenting below!

The Beginning: Start Here

Where are you? With your debts, that is. Do you know how much you owe and to whom? You have to know exactly how much you owe, to whom, and if any of your bills are past due. Start with a simple list.  If you want to be fancy, you can set this up in a spreadsheet, but the point is to figure out exactly how much you owe.

The First Steps

1. Make a Plan

Budget is not a dirty word. In fact a realistic budget is one of the most important steps you can take. List all of your income, then list all of your expenses. Yes, all of them. Even that daily trip to Starbucks for your double cappuccino in the morning to get you going. Actually, you may find that little expenses add up to a lot more than you would guess.

Once you have this real list of income and expenses listed, look at the expense column again. Are there are any items you can cut down on or even eliminate entirely. Do you need a double cappuccino every morning. Can you turn that into a special treat instead? How about going out to lunch everyday? Sure, we all like to get out of the office for a while, but that doesn’t mean you can’t bring your lunch occasionally, right? The $2.97 for morning coffee plus around $12.00 to $15.00 for lunch adds up to quite a lot over a week, a month, or a year. Just look, just your morning coffee is costing you $15.00 a week, which is $60.00 a month, which could have been applied to one of your debts!

2. Act on Your Plan

That’s right, now you have to follow through on your plan. So, like in the example above, let’s say you commit to only one cappuccino per week and only going out to lunch on Friday. Put that money you would have spent aside. At the end of the week, it may help to physically take out the money and put it in an envelope until the end of the month. Then at the end of the month, take that money and directly apply it to one of your debts.

3. Pay Cash!

You know that paper and metal stuff we used to use before credit cards and debit cards? It will help you get back in touch with how much things actually cost when you have to pull the money out of your wallet. The problem with credit cards is that often you lose touch with the real cost of things.

4. Go Big!

At least with your debt pay downs. Here is the best way to do that. Pick one debt, and then focus on that one completely. Of course, you will need pay your other bills also, but take that one debt you’ve picked and go all out. Throw every single extra penny you have at this debt. The satisfaction and motivation you will get from paying off even one of your debts will motivate you to continue until you’ve paid them all.

5. Look for Savings!

You can money with simple things like coupons or specials on the things you will end up buying anyway, but remember the pay cash rule. Obviously the savings are wiped out if you use a credit card and pay interest on the purchase.

Conclusion

Debt reduction is an important and timely issue. Start with finding out where you are, and then continue by making a plan and following your plan. If followed consistently, you will find your debt is eventually paid.

What do you think? Do you or people you know have experience in getting out of debt? What did you (or they) do?

Protecting your investment requires diligence through the decades of ownership, but it provides a lot of freedom. Freedom to do whatever you like to the property, where renting would restrict you. Financial freedom to not have to pay rent forever, and live mortgage free after you pay it off. While laying out the benefits of home ownership are not my intention, it is important to note why we all go through the pain of protecting our investment. In order to protect these benefits, there are several things you need to consider:

Perform Regular Maintenance

Some people have misconceptions about home ownership. In fact, there are a lot of major costs that come with home ownership, that are directly tied to maintenance. Every home will need to be re-painted, updated appliances, new roof, among many other things. The years between these items vary, but the necessity is still there. Make sure to take care of these things before the develop into larger problems.

Insurance

If you have a mortgage, insurance will most likely be a necessity. Regardless of the requirements by your lender, you need to have insurance. It’s relatively inexpensive in comparison to the benefit that it provides. Don’t put yourself in a bad situation by trying to save a few bucks with getting rid of home owners insurance.

Home Security

This may not be a necessity, but it is something that everyone should consider. Depending on your neighborhood, home security can be really important for protecting your loved ones. You never know when your house could be targeted and it is often better to be safe than sorry. The last thing you want to happen is to not feel safe in your own home.

When you buy a home, it is something that you need to take seriously. I see too many homes that fail to protect their investment and actually lose money because they did not take care of it. Remind yourself of the benefits of homeownership the next time you are faced with a decision that could affect the value of your home.

1        You Need Nice Threads

You will probably spend the next few months going job hunting. If lucky, you will be invited for several interviews. Making a great first impression matters and appearance is everything. Invest in a good suit that fits really well and makes you look professional. Looking good will also give you a confidence boost.

2        A Good Pair of Shoes

Gone are the days where you can walk around campus in flip flops or sneakers. Say hello to wing tips and pumps. Office shoes can sometimes be considered as devices of torture. This is especially true if you have to send the day on your foot, walking across various floors or standing on the job. Invest in a good pair of shoes that are stylish yet comfortable.

3        Nice Briefcase or Bag

You are dressed professionally in a business suit and tie. Nothing says “mismatch” more than using your old college backpack or messenger bag to carry your things to work. A professional looking briefcase or laptop bag will do the trick. For the ladies, there are some great work totes that have a built-in compartment for files or a computer. If you really prefer using a backpack, switch to an office backpack. It doesn’t have to be made from expensive leather, and there are some great-looking canvas and nylon bags that can do the job.

4        Gym Membership or Home Gym

Health is wealth. No matter how busy you may be, you must always take care of yourself first. Exercise is also a great way to de-stress. Paying for a gym membership can be a great motivation to actually go and work out. You would hate to waste all that money so you would use your membership. A gym membership is also a great thing to have when it’s too hot or cold to be jogging around the park.

5        Pots, Pans and Everything in Between

You are an adult now and as such this is the time to learn how to actually cook. It is a skill that everybody in their twenties should at least have a rudimentary knowledge of. Eating out can be so unhealthy for you, not to mention so expensive. To save time, you can cook big batches of your favorite meals and just freeze them. Buying a slow cooker is also a great way to prepare dinner. You just put all the ingredients in one pot before leaving for work and it will be done by the time you get home.

6        A Financial Plan

As a college student, you probably were not that concerned about the state of your finances. It is only when you are off living on your own and relying on your paycheck that you wished you paid more attention on learning how to balance a checkbook. You might want to enlist the services of a financial planner to help you with your money concerns.

7        Health Insurance

This is an absolutely necessity, even for someone in your twenties. Some companies offer medical and dental plans as benefits, which is great. However, others do not and leave you to shoulder the costs. You should always be covered by health insurance. It is after all, basic protection.

8        A Cellphone

Your cell phone should be with you at all times, especially when you are job hunting. Missing a call from the human resources department can be a career suicide.  Back in college you might have been on a family plan. Now that you are paying your bills, choose a plan that will fit your budget. If you don’t use your phone that much, you can always pay as you go.

9        A Travel Mug (Maybe :-))

Transitioning to a nine-to-five job is one of the hardest things for a recent college graduate. You actually have to wake up early five times a day now. Nothing is more helpful that a dose of caffeine first thing in the morning. For those hurrying to get to work, a travel mug is the best way to enjoy morning coffee. Forgoing your neighborhood coffee shop will save you a bundle.

What are some other things that you think every recent college grad should have?

1        A New Car

Graduating from college is often the justification for most of you when you get a new car. After all, it’s a reward for spending four years of your life inside the university, living in the dorm and eating ramen noodles. You’ve been driving your car for several years now and you deserve a new one that would befit your new status in life. Of course, you need to travel to and from work.

However, you don’t need a new car if your old one still runs reliably and can still get you from Point A to Point B. Even if you take out a relatively long term car loan, you will still be making payments that will eat up a significant chunk of your paycheck. Don’t forget that your car payment is just one part of the true costs of car ownership. You will have to take into account car insurance and personal property taxes. Those amounts will be based on the value of your new car. Since the new car is more expensive than the current one you are driving, expect your total ownership costs to rise dramatically. Heck, with the way gas prices are rising, it would be better if you biked to work.

2        The Latest Computer

Mass consumerism has flooded the market with all the latest gadgets. You tend to covet each new gadget even though your computer is still perfectly usable. While there is a wide range of computers out there in the market, they do cost a significant chunk of money. The younger market segment is also obsessed with buying the latest name brand laptops that cost thousands of dollars.

However, unlike your college days, you probably won’t use your personal computer all the time. Chances are you’ll probably be issued a laptop at work and you’ll be spending the majority of your computer hours on that machine. Most of the time, you’ll end up using your smartphone to check email and surf the internet. Your personal computer will be relegated to weekend use.

3        Expensive Furniture

Ikea and Target are often a popular choice for most college graduates because they offer stylish, yet functional furniture at affordable prices. Buying real furniture made with hardwood, real leather, or wrought iron is not practical while you are in your twenties. They are expensive and difficult to move. You also need to take good care of them, and that can be hard to do when you’re splitting the rent with some roommates. Wait until you buy an apartment or house of your own before you purchase some really good furniture.

4        Diamonds And Other Jewelry

It is one thing to receive a pair of earrings or a necklace from your parents. It is another thing to head out to the jewelry store and splurge your paycheck on one of those blue boxes. Yes, buying jewelry can be a good investment, but it is not necessarily the time to be purchasing them. Unlike the previous decades where one had to wear the sparkles, it is perfectly acceptable nowadays to wear paste jewelry. These are made of crystals, beads, and metals that would only cost you twenty to thirty dollars, and many shops in the malls that sell this kind of jewelry.  Just make sure that they match your outfit and are not too funky if you work in a more conservative workplace.

5        Designer Coffee

For young people, status can be everything and sadly, that even includes your coffee habit. You are no longer satisfied with ordinary run-of-the mill coffee. You have to line up at your corner coffee shop and order an espresso with soy and vanilla. A cup of this designer coffee costs anywhere from $3-$6. The more you customize, the more expensive it gets. This can run up to several hundreds of dollars every year.

Think of your twenties as the chance to begin building your net worth. You should only spend on items that would be of true value to you. What were some of the items that you bought even though you probably shouldn’t have?

Here are five ways to keep your marriage happy and at the same time be financially healthy as a couple.

1. Discuss Your Finances with Honesty and Transparency

Marriage is about trust and that includes transparency about money. Technically you should discuss this before getting married. If you haven’t gotten around to doing it yet, then you should as soon as you get back from that honeymoon. Rose-colored glasses should be set aside because marriage is also about practicality and reality.

Lay it all out for your spouse. Declare how much you make, what accounts and investments that you have, insurance policies that you already have, etc. The most awkward part is stating how much debt you have, but you need to do it anyway. Each of you has to be aware of what each other brings to the table. Consolidate all your financial records and keep them  in a safe place for easy retrieval.

2. Set a Budget and the Ground Rules for Handling Money

Having a two-income home doesn’t mean that you can go on a spending spree because you can suddenly afford to do so. Design your household budget together. Both of you should have inputs on how much you can spend on certain things. Set the ground rules for spending, saving, and handling money.

Review your expenses over the last few months to have a baseline when it comes to your spending habits for basic necessities, groceries, clothing, rent, leisure activities, etc. Set the dollar monthly limits per category. Also determine how you will be paying for it–cash or credit card. You also want to determine if there are any accounts that you might need to open.

To make sure that you are keeping within your budget, you will want to track your monthly expenses. Set aside some time each month to discuss financial matters with your spouse and take a look at how your spending is doing relative to the budget. Sticking to your budget takes cooperation, and you should both work as a team.

3. Set Your Financial Goals

Always look towards the future and set your financial goals together. They can be as serious as sending your future kids to an Ivy League university or as adventurous as a trip around the world once you retire. Once you have the goals in mind, estimate how much they would cost you in the future and work backwards from there. To be able to accomplish those goals, you must have a savings and investment plan as early as today. You can find a number of financial calculators that can help you figure out your own financial road map. Also, you will want to consider the services of a financial planner to help you figure things out.

4. Manage Your Debt

If you are old enough to get married then you should be old enough to act responsibly and that includes being responsible when it comes to managing your finances. Don’t act like a single person who doesn’t have a care in the world. You have a fiscal responsibility to your spouse and to the family that you will be having in the future. Think of that before going on a spending spree. You do not want to burden your spouse by incurring unnecessary debt.

On another note, keeping up with the neighbors is bad form. Every couple has a different financial situation and different financial goals. So, don’t compete with your neighbors, especially if you cannot afford it. It’s okay if you don’t buy the latest lawnmower or if you don’t have a membership to the country club. What’s important is that you stick to your budget and stay as debt-free as possible.

5. Make Sure You Have an Emergency Fund

Nothing in life is certain and that includes life as a married couple. You should always make it a priority to build an emergency fund that you can tap into when unexpected expenses occur. One of you might lose your job, somebody might get into an accident, or something in the house might need a major repair. These things are unplanned, and they might strain your finances. If you have an emergency fund, you can access that and still be able to make ends meet without going into major debt.

Money and marriage can be tricky. Finding the right balance takes some time. It is important that you talk about financial matters with your spouse and that you make decisions jointly.

What about you? How do you manage money matters as a married couple? 

With these investment tips, you will be able to get started in securing the future that you want. With time, hard work, and the right know-how, you will be one step closer to being financially independent.

1        What are your goals?

The first step to securing you’re the financial future that you want is to see yourself in the future. Visualize what that future looks like. Each person has different financial goals in live. For some, it might be early retirement, while for other it means owning a good home. For you it might be having a comfortable lifestyle, yearly vacations, and sending your kids to an Ivy League school. Compute how much that dream will cost you in the future. Work backwards to be able to identify the way you will be able to reach those goals. Work with a financial planner if you have trouble with the numbers.

2        Protect Yourself before You Wreck Yourself

One of the most important things to remember is to protect yourself before you start building your net worth. So often, many of you think that it is not a necessary step while you are still hearty and hale in your twenties. When something unexpected happens, you would probably regret that you didn’t make any moves in protecting yourself. Protection involves purchasing insurance, such as disability or life insurance policies. Your twenties is often the best time to get life insurance because you can choose a longer payment plan. Protection also involves establishing wills or guardianships. After all, death does not choose by age.

You should also have some sort of emergency fund in place. This is money that you can tap into for unexpected events. You should always remember to save for a rainy day so that you won’t have sleepless nights trying to figure out where to get the money.

3        Retirement is closer than you think!

Many companies offer 401(k) or other retirement savings plan. This is part of your benefits and you should not let it go to waste. Even if retirement is far off and you don’t even know if you will be staying with the company for the decades to come, you should still start saving for retirement today. Join your company’s retirement plan. To be able to make the most out of it, ideally your contribution should be enough so that the company gives the maximum match.

4        Crawl before you walk… but you must walk.

Knowledge is power and this has never made so much sense. You should always be in the know when it comes to money matters. You should always be in control of your finances and not just rely on passive investment strategies. Learn about financial planning and what methods suit you. Read up on them. The internet is a wealth of resources. Read books and magazines that will guide you through the various investment vehicles available today. Go to a seminar to learn about topics that you are interested in, say, the stock market. Being knowledgeable will allow you to build your wealth more effectively and avoid being victim to various scams.

5        Be Aggressive, Be More Aggressive!

Since you are still young, you will have decades before you will end up in retirement. You will also have more disposable income since you probably do not have a family of your own right now. You can therefore take more chances with your investment strategies. This is the right time to consider being aggressive since you are more concerned with long term growth and increasing your wealth. If you do take a financial hit, you will have time to build your wealth once more.

How about you? What are your investment tips and tricks for recent college graduates?

In “Doomsday Preppers”, the people actually build bomb shelters on their property, teach their kids to shoot and hunt, and stock their shelters with MREs, long lasting shelf stable foods, and household items that can be purchased in large quantities. On “Extreme Couponing”, people, usually women, spend hours a day clipping coupons. They take their superbly organized coupon accordion folders with them to the grocery store on double coupon day and fill their carts with 10 or more of the same item. They walk to the register with $600 worth of groceries and walk out of the store having only paid $150. The $600 worth of groceries typically ends up in a large storage space filled to the roof with shelves over flowing with enough food to last the couponers more than a year.

Yes, you can stock up on groceries to save money, but there is a fine line between saving money by buying 2-3 of an item to use over the month and buying in such large quantities that your car has been exiled to the driveway indefinitely so you can use the garage as a pantry.

So, where do you draw the line? When does buying in bulk become a problem and not a solution? Here are a few more questions you should ask yourself before renting the U-Haul for your next shopping trip.

Do You Have the Time?

Any extreme couponer will tell you that they devote HOURS of their day to finding, clipping, and organizing their coupons. Honestly, do you have a few extra HOURS a day to give to clipping coupons? Not only does it take hours to clip the coupons, but it takes several hours in the store to load up the MULTIPLE carts with the goods and products you’re buying. Do you have time in your day to spend HOURS in the grocery store? Can’t your time be better spent elsewhere?

Instead of spending those precious hours clipping coupons and pushing MULTIPLE carts (you can learn the art of cart trains) around a store, learn how to comparison shop using online copies of local grocery store fliers. Know what you need to get, find out who carries it cheaper, and go there to get it. If the store is out of your way, why not print out the flier and take it to a store that offers price matching…like Wal-Mart.

Do You Have the Space?

As mentioned at the beginning of this article, people who buy months’ worth of groceries at one time have to have someplace safe to store their purchases. That means that typical storage rooms Those in-kitchen pantries just don’t cut it. Unless you have an actual bomb shelter to stock, you’re going to have to move your car and store your purchases in the garage, an auxiliary storage shed in the yard, or an empty bedroom in your house. Before going on your trip to the grocery store with your coupons in hand, you should consider where your items will end up. Do you have the space in your house, in your life, for the amount of items you’re planning to purchase?

Do You Really Need it?

One of the most popular places to shop for bulk items, without the coupons, is Sam’s Club. Sam’s Club is a store that began as a product distributor for businesses and restaurants, but families and individuals began to recognize that buying bulk items saved them time and money. When it comes to club stores like Sam’s, their bulk items are actually bulk SIZED items, which means that you may go into the store looking for mayonnaise and leave the store with a one gallon jug of mayonnaise (which is a reasonable amount of mayonnaise for a restaurant but not for a single woman).

Do you need a gallon of mayonnaise? Do you need a 5 gallon jar of pickles? Do you need six months’ worth of crackers?

Before you consider buying in bulk, you need to sit down and consider if you will actually use the products you buy BEFORE they expire. If not, don’t buy it, otherwise you’re wasting money rather than saving it.

If you want to stock your bomb shelter with 60 cans of pork and beans, but all means, buy in large quantities. But if you are only looking to feed yourself or your family, consider buying your groceries two weeks at a time using price match options to save time, money, and living space.

How do you shop for groceries? Leave a comment here. 

In Part One I gave you some information on the different kinds of financial secrets people keep and the fallout, and basically told you to give them a single option—get help or no wedding.

In Part Two we will cover the other side of the argument—money shouldn’t keep two people who love each other apart. Really? Well, here are some questions that may go through your mind when considering whether to call off the wedding altogether to save yourself from monetary marital heartbreak.

I DO!

Can your intended spouse’s financial issues be fixed? Can your love for one another really cover a multitude of money sins? Can the trust you lost because of the money secrets be rebuilt? As a human being, I can totally understand the desire to find everlasting love and devotion with that one person, and I know that many will want to find the silver lining in the big dark cloud marked, “Marital Money Problems.” So, let’s look at the positive side of the money secrets issue.

We Can Fix This

If your beloved one is willing to take on the challenge of dealing with his or her past financial mistakes, there may be hope for you two. One of the first things you need to tackle together is to sit down and plan out a way to fix the issue(s). If your future spouse’s problem is debt, you can look into ways to reduce debt and raise their credit score quickly. You’ll need to order their free credit report and go from there. If your intended spouse has issues with gambling or shopping addiction, you need to seek professional help from a qualified addictions counselor. If your loved one is just generally a money idiot, you can enroll both of you (you should be there for moral support) in a money management course.

Generally speaking, most money problems can be fixed, but you BOTH have to be willing to put in the time and effort in order to get the wedding back on track.

Love Conquers All

I do believe that love is the most powerful emotion on the face of the earth, so it can conquer most problems. If you truly love one another and cannot imagine life without each other, then by all means, get married. Love has proven itself through many a marital spat over money, and if your love is strong enough, your marriage will survive your loved one’s past money indiscretions.

Can love conquer the fears, frustrations, and feelings of betrayal associated with gambling addiction? Can love conquer having to add thousands of dollars of debt to your monthly bill payments? Can love conquer the phone calls from the credit card companies harassing YOU for payment of months of outstanding bills? Can love conquer the feelings of anxiety, frustration, and hopelessness that can come with being in over your head financially?

If you think it can, go for it, but be prepared to sacrifice. Don’t think that I am a loveless killjoy; I am just being the Devil’s Advocate here. I am just being honest.

Trust and Credit Can Be Rebuilt

The truth is that if you love someone enough, you will eventually trust them again. Much like credit, trust can be rebuilt over time with careful handling, patience, and responsible actions.

With that in mind, here are your choices. You can get married now and spend the first few years of your marriage without the necessary trust in each other, or you can wait to get married and start your marriage off with at least a thin layer of financial trust rebuilt through hard work on both your parts. Either of these choices is preferable to not getting married to the love of your life, right? Think long and hard about that—you don’t want to make a mistake.

Through Part One and Part Two of this article, I have tried to provide you with unbiased information and options regarding whether or not to proceed with the wedding after uncovering your beloved’s financial secrets.

With this information in hand, what are you going to do about your situation? I would love to know what you think, what you would decide, and if you’ve already made a decision.