If you don’t have the money to pay for it, don’t buy it!

Make a list of things you do need….. rent/mortgage, utilities, food, medical insurance, car payments etc.  Notice that the list doesn’t include incidentals….. eating out, entertainment, gift giving etc

Using the figures needed for each item listed, add the figures….. does your income allow for payment of these essentials?

With the remaining figure, save half…. start or add to an ’emergency fund’, or a 6-9 month ‘loss of income account, or a retirement account.  These are essential so that should you need new tires, or a dentist visit, or a plumbing emergency, the money is there to cover it.

The 6-9 month loss of income account is just that….. should you lose your job, or be out of work for a time, the money is set aside for the necessities, (rent, utilities, etc)…. not…. eating out, or entertainment.  Just. The. Necessities.

Being able to stay within your budget…… (No debt)…… is your goal…

It takes discipline, but it can be done.

Get started.

Remember….. PAY YOURSELF FIRST !!

Paying yourself first is a must….. it means you think enough of yourself to save for your future.

If you think that Social Security will be there for you…..think again…..  as it stands now, by 2034 those receiving Social Security will have their benefit lowered by approximately 25%.  And with so many people not working (and not putting into the Social Security System, that figure is sure to be more than a 25% cut or happen much sooner than 2034….. it’s common sense.

That said, it’s imperative you pay yourself first.

And, you need to get rid of your outstanding debt.  Pay it all off so that you are debt free with only the monthly bills to pay.  Doing this means you’re not paying any finance charges, thus saving money there…… a no brainer.

Being debt free is a great feeling…… it leaves you financially stress free.

Buying only what you know you can pay for – in full – when the bill comes due is the only way to handle purchases.  So, if you can’t pay for it, don’t buy it.

You may need to squander a bit until you get it all paid off, but in the end, you’ll be so much happier.

Pay Yourself First !!!!

This is a must if you are (or want to be) a serious saver!

Try for 10% of your pay, but if that’s not possible yet then try for 9%.

The idea is to save as much as you possibly can from your paycheck before you start to pay your expenses.  This will mean that while your savings is growing, you are being more careful with what you have left to spend on essentials.

Keeping your savings accounts separate is essential too.  It will keep you focused on what you have saved in each (as they all will need to be at different levels).

You’ll have to decide what your plans are for the future (at least the next 5 years), and what you’d need in money to get to those goals.

You may want to save for college or a home or car…. and don’t forget a retirement account (that time of your life creeps up much quicker than you think)!

Whatever your goals, start saving…… seriously saving.  You have only you to depend on to do this.

It is why you need to think ahead…. set goals….. and start saving to make those goals reality.

Checks and Balances…..

Hopefully, you were able to eliminate all (or at least some) of your outstanding debt. Doing so will bring your Credit Score up, which means that you are more likely to qualify for a car loan or mortgage, or secure that apartment before someone with a lower score does.

And, of course, …… you have peace of mind knowing that your bills are caught up and you don’t have those dreaded balances and finance charges to deal with any longer.  A good feeling.

Kudos to you if you’re all caught up…. with zero outstanding debt on your credit cards. And if you’re still whittling them down, keep doing that…. they too will be a zero balance.

Now is a good time to skim over your budget. Tweak anything you can so that you can put more into your savings…..

Remember to keep your savings accounts separate so you can easily check to see what is in each and where you could add more.

You need that Emergency Account…… at least $1,000.  But preferably $2,000. or $3,000. to cover any emergency that may arise (and they do)…… If it’s there, you don’t have the added worry of “How am I going to pay for that???”  If you do have to use it for an emergency, remember to replace it as soon as possible so it’s always available.

The 6 – 9 month Income Reserve Account……  It may sound ominous, but it can be done….. because if you are suddenly out of work with no income, this is the account that will see you through until you can get back to work.  It will cover only the absolute necessities…. rent/mortgage, utilities, medical, car loan, food…..   no take out, or eating out, no entertaining, live on what you have and live frugally.  You will be glad you did. And this would have to be replaced if it were needed…… so replace any portion of it that was needed as soon as possible.

The Retirement Account….. put as much as you possibly can ….. maybe 5% of your income into an IRA, a Roth, or some other type of Retirement account so it can stay there and gain interest until you retire, or at least age 59 1/2.  This is crucial as you can only depend upon yourself for your retirement income as Social Security may not be available for you.

How well you budget will show up on the totals of these accounts.  You work hard for your money, so don’t waste it spending frivolously.

How you can cut back on gift giving…..

To give and receive a gift is always nice…. it shows the recipient that you appreciate them, what they mean to you, or your appreciation for how they’ve treated you are some.

To receive a gift is a good feeling because it shows how someone appreciates you.  This is all good…… but can be expensive.

Add up all the gifts you give during the year,…. Birthdays, Christmas, Weddings, Showers, New Home, New Baby, Anniversaries, and the list goes on. And, as nice a gesture as it is, it can, get out of hand.

So, don’t pretend you can keep up with all this…… it will put you into debt.

The better plan is to cut back.  Be the person that starts the gift giving conversation with family and friends…. and, surely there will be some sighs of relief it was brought up.

Some ideas are to do a grab at Christmastime….. With an agreed set price point for a gift,  put names in a hat….. each of those who want to, and can, put their name in and draw a name from the hat.  Then, buy a gift for that person only.  This can also be done long distance….. with one person who will add the names to the hat and with a list in hand, draw a name, writing the drawn name next to the first on the list, then the second and so on.  Then either get together, or mail the gift to the recipient.  Each person gives and gets a gift!

Birthday gifts can be  given up to the age of 18.  And children’s parties can be limited to special friends of the child rather than the whole class.

Wedding, showers etc can be given, but set a price limit for each. And Anniversaries can be a nice dinner out.

And remember, its’ always nice to call and wish them well on the special day, or send a card for the occasion….. The idea is to remember the day, and enjoy the giving….. not to worry about how you’re going to pay for the gift.

If you ever wanted to be the boss…. now is the time.

You are in charge of what and how you spend, and how and how much you save.

How you do this, how well you do this will matter down the road when you retire.  So, the sooner you start and how you handle your budget matters greatly.

Set up a workable budget…. and stick to it.  As soon as you find you’re sliding off the budget, find out where, fix the problem, and get back to strict budgeting.

Budgeting means first setting aside income for necessities …. savings, rent/mortgage, insurance(s), food, medical, utilities, car loan etc.

It, however, does not mean eating out or take out (home cooking is far cheaper), or entertainment costs (drinking, movies, etc).  You can still entertain at home with some relatives/friends where they each bring something for the menu.  This will, surprisingly, be as much, and usually more fun than going out on the town.

Cutting back on gift giving (or at least the amount of each gift), will bring a sigh of relief to most. Maybe a grab, where a price is set for one gift. Each person gives and gets a gift at far less expense than a giving a gift to everyone.  All this is easy and doable.

Avoid late fees and finance charge fees on your credit card(s) by only buying what you know you can pay for…in full…when the bill comes in.  The fees you’d pay on a credit card is money that could be put into your savings accounts…..

These are only a couple of ideas, and surely you can add more.

Pay yourself first…… Set money from your income aside for savings….. an Emergency Fund, a 6 to 12 month Reserve Fund (should you be out of work),  and a Retirement Fund(s).

If you pay yourself first, you will always be sure of having savings ready when needed.

Check and Keep Your Credit Score High

Years past there were no credit cards….. everyone paid by cash.  Actually it was a good thing, because if you didn’t have the cash, you didn’t buy the item.  A perfect way to stay within budget.

Remembering back, my Dad was buying a new car. He had the cash and brought it to the car dealer. But the car dealer said ‘you need credit’…. to which my Dad answered, “But I have the cash.”  No…. he needed credit.

He put a down payment of cash towards the car, paying the rest ‘on time’. And he opened up his first credit card (this was in the 1960’s).

The credit card was through a large department store (still open but under a different name). And I don’t believe he ever used it.  However, I did.  I was a recent high school graduate and was working in the city where the store was located.  Dad told me I could use the card (he’d given my name to the credit department at the store, and the rule was (Dad’s rule was):  “You can use the card. Ask me for it and use it for your purchase. When you get home from work, put the card on my bureau, and on Friday (when I got paid), put the money for the item(s) along with the sales slip(s) on my bureau so that when the bill comes in, I can pay it in full.

This was the one and only time he said this. I used the card often, followed his rule, and he had an excellent credit score because of it.

I, however, learned a lifelong lesson……  I learned how to properly use a credit card.  I’ve done so for 6 decades, and never, not once, have I ever had to pay a late fee or a finance charge.  Dad’s advice was the best advice and because of it, I have saved potentially thousands of dollars because I learned from that first purchase.

So, use a credit card, buy only what you know you can pay for when the bill comes in. Pay it in full and on time avoiding late fees and finance charges and when you check on your credit score, you will be pleasantly surprised.

You credit score will allow you (if it’s high), to get a loan, an apartment, a mortgage etc. These places can and do check to see what kind of a risk you are.

If you can’t follow these simple rules, don’t use a credit card!  It’s for your own benefit.