Costly Money Habits

According to the article found at http://www.marketwatch.com/story/11-money-saving-habits-that-can-cost-you-2014-05-29, there are several money habits that are actually costing you money. Here are a few of those habits:

#1: Purchasing an item just because it is on sale – The first question to ask yourself is would I purchase the item if it wasn’t on sale? If the answer is no, then you probably don’t need the item. Just because it is on sale does not make it a good deal. If you find yourself tempted by deals that you receive via email, unsubscribe from that particular email to help avoid the temptation.

#2: Applying for a store credit card because you receive a discount – Beware of this tactic as many stores require their employees to sign customers up for a credit card. It might be tempting to get 15% off that first purchase, but it will cost you more as you find it easier to buy items and put them on the credit card. These cards often charge high interest rates and other fees.

#3:   Extended Warranty – While it may seem like a good idea at the time, the store offering the discount generally keeps 50% of the warranty cost. There are usually several restrictions as to what the warranty will cover.

#4: Driving farther just to use a coupon – Driving an extra 10 miles just to use a 25 cent coupon just doesn’t add up, yet some consumers think it is saving money. What they don’t take into consideration is that it will cost them more in gas to drive out of the way than it will save them.

#5: Making purchases in bulk – While I have bought items in bulk before, I generally don’t end up saving money. With a small family, purchasing in bulk may not make the most sense especially for food items.   Items may expire before you could use them all so you might end up throwing them away. Also, just because it is sold in bulk does not make it less expensive. Take the time to calculate the actual cost per ounce and compare it to other items. You might find out it isn’t saving money by buying in bulk.

#6: Purchasing the cheapest item – Sometimes it makes more sense to spend more on an item of higher quality that will last longer than to buy the cheaper version. I have bought different appliances over the years and have found that the least expensive items don’t seem to last as long or have the same quality as the higher priced items.

#7: Spending more on credit cards for the reward points – That 3% cash back seems very tempting but you might be spending more than you normally would have spent just to earn 3%. Your rewards points may expire before you earn enough to use them so the additional money spent may not have returned anything at all.

#8: Making lots of purchases on Black Friday – This tip is quite timely considering this post was written 3 days before Black Friday. While you can find good discounts on Black Friday, there may be better times to buy certain items. I generally try to purchase clothing off-season when the items are on sale.   Take into consideration the fact that some items are only offered in limited quantities so the store may be sold out before you can make the purchase.  You might be tempted to buy a similar item that is not on sale if the item you wanted is sold out.

Make sure your money habits are actually saving money as opposed to costing money. With just a bit of research and common sense you will learn to recognize good money saving habits and to avoid bad money habits.

 

Don’t let thieves steal your identity!

It’s that time of year when Identity thieves are on the prowl. They know that consumers will spend millions if not billions of dollars purchasing holiday items for Thanksgiving and Christmas. But don’t let identity theft take the joy out of the season.

Identity theft is considered to be one of the fastest growing crimes these days. Here are few tips to help you protect yourself from identity theft.

Tip #1: Be a smart online shopper. When making purchases online, make sure the website you use is secure. One way to know if the website has taken security measures is by the url address. A website that begins with “https” has an extra security factor. The “s” means that web traffic to and from this website is encrypted using the SSL or Secure Sockets Layer. The way this works is that each message is split into 2 separate parts or keys one of which is public and one private. Each key can only be decrypted using the other key.

Tip #2: Never carry your Social Security Card with you. If your purse or wallet is stolen with your Social Security Card in it, a thief has all the information needed to steal your identity. Also, never have your social security number listed on your driver’s license or give your number out over the phone.

Tip #3: Safeguard your info both online and offline.  According to the PayPal website listed below, use unique and strong passwords and don’t reuse them. Make it difficult for thieves to figure out your passwords. Never throw away important documents without shredding them. Paper shredders can be purchased fairly inexpensively and it is certainly worth the cost to avoid identity theft. https://www.paypal.com/webapps/mpp/security/identity-theft-protection

Use a secure payment system such as PayPal for online transactions. PayPal does not send your private information like bank account and credit card number.

Always logout after you complete an online transaction especially at a public computer or when you are traveling and using Wi-Fi.

Tip #4: Closely watch your bank and credit card accounts. I check my accounts several times each day to make sure no unusual and unauthorized transactions have taken place in my accounts. This is how I have caught identity theft in the past. Usually, I notice before the bank notices. If you find possible identity theft, contact your bank of financial institution as quickly as possible. Your bank will probably put a hold on your account or even close the account to keep the thieves from stealing more money from you.

Tip #5: Only carry the necessary cards in your purse or wallet. Never keep all your credit cards and checkbooks in your purse or wallet and keep them with you at all times. Do not leave your purse lying around and unattended. With today’s use of cell phone cameras it would only take a few seconds for someone to take a picture of all the information on the cards and checks.

Be proactive in trying to prevent identity theft. Your efforts will be worth the trouble!

 

 

So Simple a child can understand it!

So let’s just face the facts.  We teach our children how to play ball, how to ride a bike, how to read, and so on yet many parents do not teach their children the importance of money management.  As parents, we make sure our children have all their needs met and most, if not all, of their wants met.  But why is it that we don’t make it a priority to teach our children proper money management skills?

I have read article after article expressing the need for personal finance and money management skills to be taught in school.  I happen to be fortunate enough to teach high school students personal finance skills.  It is often apparent which students come from families that teach their children the skills needed to manage their finances.  More often than not, though, children have very limited knowledge of money management.  I feel we are doing them a disservice by not preparing them for real life.

I would like to give you a few strategies for teaching your children the financial concepts they need to know.  Let me just tell you from my experience that children are much smarter than we give them credit.  I have found that most students are eager to learn how to handle and make money.  Here are just a few ways you can begin to teach your children important financial information that will help them throughout life.

First, I would introduce the topic of saving money and show them examples of how compounding interest works in their favor.  Here is a good example that can be used to begin with.  Tell your children you will match a percentage of the amount of money they save.  If your child saves $5 a week you could match that with $1.  This would give them $6 per week and would hopefully show them how saving is beneficial but also the interest or amount you match is important for building savings and wealth.

Second, you could take your children to the bank or credit union to open a savings account then make it a priority to take them to the bank or credit union every week to allow them to make a deposit into their savings account.  I remember as a child going to the bank with my savings passbook.  The teller would stamp the date in the book, write in my deposit amount, and then the balance of the account.  This is probably how my interest in saving and earning money began.  Oh, and as an added benefit I would receive a piece of candy!  It was a fond memory that also taught me to save money.

Finally, find teachable moments in everyday life. Use daily opportunities to teach your children money management skills. This is a strategy that I have implemented time and time again. An example of this strategy is having your children help with grocery shopping by making a list of items you need but with a specific budget. Another example is to take your children with you when you are negotiating the purchase of a higher priced item such as an automobile or home. I remember as a child going with my father to purchase a car. At first I thought he was mad at the salesman but I eventually realized he was simply trying to negotiate a better price. My children have learned to negotiate from being with me when purchasing items. They have learned to watch my gestures in order to determine whether or not I have made a good deal.   Teach your children the art of negotiating. It pays off.

Use these strategies to begin the conversation of money management with your children and even your nieces and nephews. Give them a better start in life than you had by being proactive in the area of personal finance. Don’t leave it up to the school systems to teach your children these skills. Our future and theirs depend on the decisions we make today so decide to help the future generations become financially smart! It’s worth the investment!

An Important Factor for Success!

I recently read the article Warren Buffett and Bill Gates Agree—This Factor Was Most Important for their Success found at http://time.com/money/3649878/invest-like-warren-buffett-bill-gates/?xid=homepage. Both Buffett and Gates agreed the factor or trait they credited for their success was focus. Something so simple yet so profound made all the difference in their lives. They didn’t say it was the amount of money they had when they started out or even their education. It was simply to focus on what matters most.

I don’t know about you, but staying focused can sometimes be difficult. With so many different things vying for our attention it is easy to become distracted. I have to admit, though, that when I become completely focused there isn’t anything that can stop my progress towards the goal. If we could apply this one simple change to our everyday lives imagine what we could accomplish!

The ability to focus on a task or goal until completion could yield the type of results that lead to tremendous change and growth. I really enjoy researching topics but can easily jump from one to another if I am not careful. Often we, and I certainly include myself here, have too many projects going at once so we cannot give 100% to any of them. This can affect your family, your job, your friendships, your spirituality, and more.

One example given in the article was how sometimes companies can try to be good at many different things, but fail miserably. The same can apply for individuals. Find what you are good at doing and enjoy doing then focus on becoming the best you can possibly be but without overlooking your family and relationships. Keep things in perspective.

The task for today is to become more focused as an individual. I challenge you to read the article about Mr. Buffett and Mr. Gates and learn from those who have paved the way for becoming the best at what you do. Apply these principles and watch what happens!