Money Saving Strategies & Financial Tips for 2013

Procrastination - The Silent Killer

When we hear the term “the silent killer” most of us think of things like heart disease or cancer.   While these ailments have certainly earned their notoriety where health is concerned, procrastination has earned its right to this label within the context of a person’s financial well being. 

How many of us have uttered phrases to ourselves such as, “I don’t make enough to put money away for savings every month,” or “I waited too long to start saving for my children’s college education so why bother now?” 

The truth is we procrastinate more often than not, because we can…not because we don’t have a choice.  There are always ways to save if we are willing to sacrifice in other areas.  No amount is too small when the compounding effect is considered, and it is never too late to start saving or to take more interest in your financial well being. 

Some simple things you can start off doing:

°         Review your monthly income and expenses to gauge whether you are spending more than what you make.  If this is the case, analyze your expenses and cut out or at the very least scale back the ones that are not “necessary” (dining out, new clothing, paper/magazine subscriptions, etc…)

°         Put a formal budget in place and hold yourself accountable by using tools such as quicken or www.mint.com to track your progress.

°         Review your current loans and evaluate whether or not you can get better rates (often times car loan rates can be negotiated down or you can find a better rate elsewhere.  There may be an opportunity to refinance, especially at today’s low rates).  There is a great link discussing this in our newsletter. 

°         If you have credit card debt, focus on paying off the card with the highest interest rate first.  You may even be able to transfer the balance to another card with a zero interest offer (keep in mind there is a fee associated with doing so)

°         Start an automatic savings plan.  This can be done various ways.  (1) Have a portion of your paycheck automatically flow into a savings account or (2) Set up recurring transfers from your checking account to your savings account monthly.

°         Pull your credit report and review your current standing.  Your credit score can affect you in so many ways.  Lenders base your rates off of your score, and your score will also determine the rate you get on other loans.  Everyone is entitled to one free report per year.  You can get a free report at www.annualcreditreport.com.  We also discuss this topic in more detail in our newsletter.  Clickhere to learn more. 

°         Explore opening up 529 plans for your kids.  You can start with as little as $25 per child for the Maryland 529 plan, if it is set up as an automatic monthly contribution from your bank account.  Whether or not this makes sense for you will depend upon your specific situation, and consulting a financial advisor is best.  Two sites we see use frequently are www.virginia529.com and www.collegesavingsmd.org.

(Note: Don’t replace saving for retirement with saving for college.  There are resources like financial aid, scholarships, grants, and specific loans tailored for this cost.  You don’t have that kind of flexibility when it comes to retirement.  Make sure you are putting money into the retirement savings!)

Again, these are just a few simple things you can do to get started off in the right direction.  Don’t fall victim to the “silent killer” – procrastination, and do something NOW.