Participating in Rewards Programs and How to Keep Track of All of Those Store Rewards Cards

A great way to save money on your daily purchases (and your larger, less frequent purchases) is to take advantage of a store or brand’s rewards program. Signing up for these programs is free and easy but keeping track of the cards and remembering to bring them with you when you shop can be a huge hassle. Luckily there are apps that help you do this. Mobile apps like Key Ring, Belly, Stocard, and Five Stars help keep your cards organized and in one place. Simply download the app to your iPhone or Android and then take pictures of your different rewards cards. The app stores and organizes the cards for you and you no longer have to remember to bring a particular store’s card with you when you shop- just remember your phone!

Some stores and brands like Walmart or Huggies offer a rewards program in a mobile app. Once you download their app, you scan your receipt or enter the receipt number into the app and the app records your points or, in the case of Walmart, your extra savings.

Other apps such as AwardWallet, TripIt, MileWise, and PointsBuzz help you keep track of frequent flyer miles and compare the best itineraries and ways to purchase airline tickets (e.g., using cash, miles, or points).

If you don’t have a smartphone, you can manage your different rewards cards by being sure to use the same phone number and/or email every time you sign up for a rewards program. That way, if you forget the card, the cashier can look up your account using your phone number or email. By always using the same phone number or email, you don’t have to remember which contact information you used for a particular rewards program. Be sure to do whatever you can to take advantage of free rewards programs so you can save money on items you buy regularly.

-Kathryn M.

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Living Within Your Means

Most of us have heard at one point or another that it is important to “live within your means.” But what does that mean exactly? There are a few steps you can take to make sure that you are indeed living within your means.

  1. First, create a budget to make sure you are not spending more money than you are making each month (i.e., not accumulating debt each month).
  2. If you are accumulating debt each month, you need to look at your expenses and see what you can cut. It is important to carefully examine each of your expenses and decide if it is a need or a want. For the expenses that are wants, ask yourself what are you gaining from spending your money on it? What if you didn’t buy it? Would it make that big of an impact on your overall happiness? If not, stop spending money on it.
  3. Keep detailed records of how much money you are spending and if you are really sticking to your budget. You may be surprised how much you spend in one area or another. Then find ways to trim those expenses instead of cutting them out completely.
  4. Set savings goals for the items that you want but can’t afford at the moment (i.e., a big trip or car purchase). Be sure to track your progress towards your goal and have a timeline to make sure you are on track.

It is easy to get caught up in the moment and stray from your budget or make that big purchase without having the funds but it creates more debt and stress than it is worth. By living within your means, you are able to have the essentials and some “wants” without the stress of accumulating debt.

-Kathryn M.

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Live Below Your Means and Beef Up Your Checking Account

I just had the chance to read two interesting articles in a recent edition of the Wall Street Journal.  The first article was an opinion piece written by Ashleigh Brooker.  Ms. Brooker made the argument that it’s always smart to live below your means, or essentially to only spend up to 80% of your income and save the remaining 20% no matter what your income level is.  This way, you provide a cushion for times when you may lose your job and have to live on one income or no income, or for times when an emergency arises such as an illness, or disability.  She provided a couple of examples of situations where individuals either had to move and needed extra time to find a new job (thus living off one income for a short while) or when a grandparent moved to be closer to his grandkids, but had to accept a lower paying long-term position.  By living below your means, you provide yourself with greater flexibility.

The second article I read was a summary of recent research conducted by Joe Gladstone, a research associate at the University of Cambridge.  He had the chance to look at how happiness levels change in correlation with levels of wealth.  His interesting finding was that there was a significant correlation between a person having more money in his/her checking account and the person’s happiness level.  This correlation existed regardless of the overall wealth level of the individual.  Thus, in reading these two articles, I immediately thought—if you live below your means and save 20% of your income, you can put that 20% of your income (or some portion of it) into your checking account and that may boost your happiness level.  Not a bad plan!

-Allison G.

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How to Create a Budget & Stick With It

Creating a budget for your household is very important but can feel like an overwhelming task. Here are some steps to help you get started.

1. Calculate your total income and expenses for a month. Start by looking at your paystubs and add up the net amount from each paystub for a month (your total income). Then write down all of your regular monthly expenses (i.e., rent, car payment, groceries, gas, entertainment, etc.) and add up how much you are spending. You will also want to include irregular expenses (i.e., insurance, property taxes, gifts, tuition, etc.). To determine the monthly cost of your irregular expenses, add up all of the irregular expenses for the year then divide that total by 12.

2. Now that you have calculated your total income and total expenses, you have to figure out if you are spending more money that you are earning or if you are saving money each month. Simply subtract the total of your regular and irregular expenses from your total income. If your expenses are more than your income, then you are accumulating debt each month and need to cut back on your expenses. If your income is more than your expenses, you are saving money each month.

3. If you need to cut back on your expenses or would like to save more money each month, then you should examine all of your expenses and figure out where you can save money. A good way to start is to separate your expenses into essential and non-essential groups. For the essential expenses (i.e., rent, electricity, food, etc.) are there ways you can save on those bills? Using coupons or shutting off lights and unplugging appliances when not in use can start to save you money. For the non-essential items (i.e., eating out, entertainment, etc.) are there items that you can live without? And what are ways that you can still do the activities that you enjoy but not continue accruing debt? Stopping your Starbucks visits, committing to eat out only once a month, or attending matinees instead of evening shows are great ways to start to save money.

If you start with these three steps, you will be well on your way to creating a household budget and having a more secure financial future. Just remember that sticking to a budget is difficult and it may take a few months before you are able to do it, but don’t give up! There are also apps like Mint and GoodBudget that can help you stick to your budget.

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Payday Loans Are Not the Answer to Financial Problems

When it is still two weeks until your payday and an unexpected problem arises (i.e., you need to fix a flat tire or visit the hospital), it may be tempting to take out a payday loan to make ends meet. Although it may seem like an answer to your immediate problems, it will probably end up costing you more money in the long run.

Payday loan companies charge extremely high interest rates. Some companies also charge maintenance fees and origination fees for a loan even if you borrow as little as $100. Additionally,these companies will generally let you rollover your debt if you pay the fee. This may seem like a nice feature but you could quickly end up paying more in fees than the original amount borrowed. For example, if you borrow $300 and pay $45 in fees and roll over the loan for another two weeks, you will end up paying $390. If you are unable to pay the loan for two months, you will end up paying $360 in fees – more than the original loan amount.

So, how do you avoid needing to take out a payday loan? The best plan is to save each month to prepare for unexpected emergencies. Even if you are only able to invest $20 into a savings account each payday, that money will start to accumulate and could help you make ends meet when money gets tight.

-Kathryn M.

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Financial Advice for the Next Generation

The best way to avoid repeating history is to learn from your own and others’ mistakes. This is especially true when it comes to money management. Online, there is a lot of financial advice available to the next generation. Here are six tips that everyone should follow, especially those just starting out.

1. Plan for the future. Deposit money into a Roth IRA or a workplace retirement account as soon as you start working and have the funds to do so.  Ensure you get your company to match your contributions if they offer this perk.

2. Pay yourself first. Save a certain amount of every paycheck by depositing it into a savings account.

3. Live within your means. How well you manage what you make is key.

4. Know the difference between bad debt and good debt. Any debt that has a lower interest rate than what the money would gain if saved may be good debt. If the debt has a high interest rate, like with credit cards, it is bad debt. Be sure to pay off credit cards and use them sparingly.

5. Keep an eye on your credit score and credit report.  It helps to check in at least once a year with each credit bureau to view your report to ensure there are no errors on it.

6. Be prepared for the unexpected. Set up a rainy day fund with savings you never touch unless an emergency occurs.

-Kathryn M.

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What To Do if a Little Money Comes Your Way

Sometimes a little extra spending money comes our way from either earning a pay raise, paying off a debt, getting a tax refund, receiving an inheritance or gift, etc.  When this happens, it helps to think about how that money can help you create a secure financial future.

If you are in debt (i.e, you have loans, credit card payments, etc.), consider putting that extra money towards paying off the principal of that debt.

If you don’t have any debts to pay off, consider investing the extra money. Depositing the extra funds into a savings account, retirement account, or rainy day fund are all great ways to plan for the future.

Or, if you have a big trip planned or know you will be needing to make a large purchase in the near future, set aside the extra funds for that purpose so that you don’t have to use your credit card to pay for the upcoming expense.

 

 

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