Witnesses to Financial Disaster Plan Better
Millennials take the recession’s lessons to heart.
Get the latest tips and tricks to help you save money effectively
Being able to save money effectively is essential. Savings provides the foundation to achieve your goals and helps you get out of living paycheck-to-paycheck. But how do you achieve healthy savings on a tight budget with all your bills and other obligations?
These articles talk about the latest tips and techniques for saving money effectively. Learn better ways to set money aside consistently and the best strategies for making it grow so you can reach your goals.
Millennials take the recession’s lessons to heart.
Unless you can find a celeb on Twitter to pay, yes.
He got a late start on his career and financial goals, but he’s making a comeback.
A reader is intrigued (and skeptical) about the rules and promises that come with these offers.
Between the food and the vet, maybe your furball needs a new year’s resolution too.
If you dig a little deeper into your fixed expenses, you may find they’re not so fixed after all.
Is the traditional retirement age going away? Most Americans are planning to work long after hitting 65.
The civil rights activist’s financial advice and opinions have often been overlooked.
Miami and the surrounding Florida Keys has the richest area code in the nation. The mean household income is almost half a million dollars.
Some states are pretty good at teaching financial literacy to young people. Unfortunately, not enough of them are educating young people on basic money management.
But in order to reach his goal, he worked and saved big time — and also lived like a pauper.
Did you spend 2017 awake at midnight, worrying about bills? Create a budget and sleep debt-free.
Credit rejection, warning signs, credit score, bargains and more.
Don’t make promises you can’t keep. Make money instead.
Nearly half of prospective homebuyers born in the ’80s till the mid-90s don’t know where to begin.
The Pacific Northwest is going to be pretty pricey in 2018, as Seattle and Portland will see the biggest spike in cost of living.
She went from an “utter failure” to a successful businesswoman.
Here’s how to fly cheaply without getting taken for a ride.
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The people who have 401(k)s say they are the best way to retire comfortably, even though many people don’t know how to handle managing them.
Making a financial New Year’s resolution is helpful even if you fail at it.
How one man spent 65 days in Europe for less than the cost of a Starbucks run
Americans are getting priced out of everywhere, except in a few states where most residents own homes and can afford to live well.
With a little ingenuity and hustle, you can pay cash for unexpected expenses instead of racking up credit card debt.
If you’re a young homebuyer, stay landlocked.
Home prices are climbing so fast, your down payment will need to catch up.
Sadly, Hanukkah and Christmas are over. While we’re still officially in the holiday season until New Year’s Day, you’ll notice the seasonal smiles will slowly start being replaced by somber faces. What has changed? I call it the annual Holiday Debt Hangover. Like all hangovers, this one starts long before you start feeling bad, and […]
We hit the streets to ask people about their money resolutions for 2018 and explain how to make resolutions you can actually keep.
He didn’t accomplish a lot, but I’ll give him credit for this.
More than half of undergraduate students believe college is more expensive than they originally planned.
He also paid it all off — but it cost him some memories.
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Money-free weekend, $100,000 in scholarships, free money, side hustles and more.
Retirement is too complicated, and no one knows how to get ready for it financially.
One weekend left for Christmas shopping. Be careful out there.
Parents are underestimating the cost of college for their children by tens of thousands (and sometimes hundreds of thousands) of dollars.
Older people are easy victims to scammers, who are targeted more than other age groups.
This roundup is full of financial festivities, failures, and funnies.
Many shoppers are using store credit cards for purchases, but don’t know how bad that is hurting their wallets.
He went looking for an apartment but found something else…
A reader is upset that her otherwise thrifty boyfriend goes crazy at the end of the year.
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A new Bank of America study proves it.
Spending wisely on a wedding doesn’t make you an unromantic frugality robot.
Many Americans are letting valuable points go to waste.
How have they socked away so much money?
Hawaii has 539 times more debt than Washington DC.
He worked nights and weekends to become an entrepreneur.
A reader is deep in debt, but one plan is better than the others.
Unfortunately, most don’t know enough to take advantage of it.
Anytime you can set up a system to work without you, it’s more likely to work. If you have to remember to set aside money each month before you spend it, it’s less likely to occur. So, you want to make savings automatic.
The best idea is to ask your HR department to split the Direct Deposit for your paycheck. Allocate 5-10% of your income to deposit directly into your savings account while the rest goes to checking. This way, you don’t even have to think about setting money aside. Otherwise, set up a recurring monthly transfer from your checking to your savings account.
Your first savings goal should be to have a $1,000 balance that you maintain in your main savings account. This should be the minimum balance that you try to keep in the account so you have funds to cover most emergencies. Then you can use the funds if your car breaks down, you have an expensive home repair or an unexpected medical bill.
As you’ll see below, this is not the full financial safety net you need. But it’s a good, solid first milestone that you can aim to achieve.
A true emergency fund is big enough to cover all your bills and necessary budgeted expenses for up to 6 months. This means you can be out of work due to unemployment or a medical issue for half a year without facing financial distress. You don’t have to rely on high interest rate credit cards to cover your expenses or take out costly payday loans.
Total up all the necessary expenses in your budget and multiply by three. This gives you the next savings milestone you should aim for after your basic $1,000 emergency fund.
A traditional savings account typically has an interest rate of less than 1%. In fact, 1% is considered a “high rate” when it comes to savings accounts. The problem is that such a low rate means it takes a long time for your money to grow. You’ll be lucky if you ever achieve your goals with such little growth.
In order to save money effectively, you must make those savings grow effectively. This means you need better growth rates than your basic savings account can offer. Without more robust investment tools, it will be hard to achieve stable long-term savings.
If you don’t like the risk of the stock market and you prefer to start small, look to cash equivalents first. Cash equivalents refer to any investment that you can easily convert to cash. This actually includes basic checking and savings accounts, as well as investments like Money Market Accounts and Certificates of Deposit.
Money Market Accounts function like savings accounts, except they usually have higher minimum balance requirements. The applied interest rate is usually higher, too. In fact, most MMAs work on a tiered rate system. This means the more you save and the higher your account balance, the higher your rate of return, too.
CDs are a type of short-term investment that also offer better rates for saving. You deposit a certain amount of money that matures over a certain term; typically, terms range from one week up to five or ten years. At the end of the term, you withdraw the money or let it roll over for another term. This type of savings can be good to hit specific goals like we will describe below.
Think about savings in terms of specific goals that you want to reach. For instance, you would have your basic savings and emergency fund, long-term retirement savings, and then savings that you allocate for certain purposes. This will help you save strategically and ensure the money doesn’t get spent.
So, let’s say you want to buy a car next year. You have $3,000 in savings that you want to use for the down payment. If you put that money into a 12-month CD, it can grow for a year and it’s not sitting in your savings account where it can get spent. Allocating savings this way helps ensure you can pay for specific goals with less need for financing. You can also pay for things like vacations without high interest rate credit card debt coming home with you.
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