Now is a time when most Americans are living pay check to paycheck and some are still out of work or have just returned to the work force. It is a time of frugal spending and of catching up. It is more important now than ever to have a financial plan of attack to get yourself back on track and figure out a way to put a little something away for the future. Here are some tips from NPR financial experts to help you along the way.
You Can’t Buy Happiness
Those with expensive cars and clothes and watches do not achieve a higher level of happiness than those who own or purchase inexpensive things. The “high” you get when purchasing these items wears off after a few weeks, but the feeling of security and the reduced stress that comes from having a substantial amount of money in your savings account is a feeling that lasts and brightens other aspects of your life. Shop smart and realize that we live in a time where quality is not always defined by price. You can purchase a used car that has safe and reliable technology for a fraction of the cost of a new vehicle. A car that was purchased ten years ago is still going to be a good car because they are simply made better now. ‘Be Richer’ By Learning From Parents’ Mistakes
Spread your money around
The FDIC Federal Deposit Insurance Corporation has a limit on funds available to be insured if a bank were to go under. These limits are put in place to protect both the bank and the consumer. The current limit is $250,000. If you have more than that much money in savings or available to you in your banking accounts, make sure you spread it out and do not exceed the $250,000 limit in one account. If something was to happen and your account was over, you would only be covered to receive the limit back. It is better to be safe than sorry. Money Coach Gives Tips On Personal Finance : NPR
Do not Rush Becoming a Homeowner
When buying a home you need to be able to take 20 to 30 percent of your income and be able to apply it towards your mortgage, but you must be able to do so comfortably. If it seems like you are unable to commit to this amount, it is an indication that you may need to wait a while longer or find other sources of income before making such a large and expensive commitment. You may be tempted to rush into the purchase of a home in order to reap the tax benefits; however you will profit more by being smart and strategic about your purchase. Money Coach Gives Tips On Personal Finance : NPR
Put Money Away for your Tax Fund
We are living in a time where many people have been out of work for quite some time and those with the ability and the drive have gone into business for themselves. One thing that many who follow this path do not consider is the considerable amount of taxes they are required to pay at the end of the year when they are self employed. What you should be doing is putting some money away every few weeks or once a month, doing this consistently, and leaving it untouched for the sole purpose of paying your taxes at the end of the year, by doing so you will not leave yourself in a position where you owe a lot of money that you don’t have and you have to go into debt to pay it. Recreate A Habit Of Saving, Says Finance Expert : NPR
Start a “Confidence Fund”
When most people are living pay check to pay check, or have just recently come off of a long stint of being unemployed, it is important to develop a plan to get yourself back on track financially. This means you must come up with a strategy for getting current with your bills and paying down that debt. Once you have a plan in place and you feel like you have things under control, it is important to start putting a little away each month in a “confidence fund.” This fund is in place to give you confidence, quite simply it is there as a symbol of your hard work and financial progress. Recreate A Habit Of Saving, Says Finance Expert : NPR
Save. Really Save.
Forget all the tips and tricks and the cash back rewards programs, the only way to really save is to put money away with every check. One tip for this is to set up automatic deposits of a portion of every check to go straight into a bank account, but here is where the brilliant part is: make it a bank that is “nowhere near your home,” and don’t get a debit card. Make it extremely hard on yourself to access the money. The harder it is to get to, the less likely you are to touch it. Personal Finance: Tips for Painless Savings : NPR
Make a Car Payment to Yourself
Another great tip for saving is once you have paid off your car loan, continue to make a car payment to yourself of the same amount. Putting this money aside each month and allowing it to accumulate will allow you to put a huge chunk of money down on the next car you buy, or better yet, to pay for it outright in cash. The longer you drive your current car while saving the more you can accumulate. If you are able to purchase the car in full, you will eliminate thousands of dollars worth of interest. Personal Finance: Tips for Painless Savings : NPR
George Gallagher is a devote listener to National Public Radio. He particularly loves their coverage of the economy, student loans, and government regulations. When not listening to Planet Money or Market Watch he likes to read political theory.
