How To Stretch Your Salary When You’re Stuck

download (87)Sometimes your salary isn’t paying quite enough to cover all you wish it could. Maybe you got promoted to an exempt position that looks good on your resume, but now that lucrative overtime bonus is gone. You could have been offered benefits that you truly need (medical insurance, for instance), and on paper it all looks good, but in your wallet there’s not enough cash.

This is where that “B” word – Budget – comes in to help.

All the experts start with an honest assessment of where your money is currently going. If you don’t know where your money is currently going, how can you control its flow? Write down all the ugly reality on paper so you can look it in the face and deal with it.

The problem isn’t automatically solved by a higher salary; it is solved by controlling the way you spend what you earn.

You can see this in the sad tale of many lottery winners whose huge chunks of money are gone in a few years or the way even high earners go bankrupt. This means that you have hope because you can control your cash flow by choosing to work with the real numbers instead of the dream numbers.

Look at the real numbers and come up with a real plan and follow it:

  • Do some research on money management. There is so much wisdom and free advice or seminars out there that your head will spin, but the reality is you have to make it work for your situation.
  • What are you willing to sacrifice to keep that steady salary or those benefits?
  • When you make the choice NOT to spend, remind yourself that you are saying “no” to this thing and “yes” to controlling your cash flow. You are the boss of your spending.
  • Pay the minimum on your bills if you have to, but add a little when you can. Somehow, that extra gives you a sense of power.
  • Allow yourself some “mad money” that you can spend on whatever you like, but when it’s gone, it’s gone until you get paid again.
  • Somehow, keep saving for emergencies. Even a little bit adds up!
  • Sell some stuff and put the money on the biggest bills.
  • Come up with ways to reward yourself that don’t cost money.

Keep a reminder of your plan, and your goals, in view. You aren’t “stuck” with that salary, you have chosen to stay in the position for a reason. Is your reason still valid? Can you ask for a review and a raise? Are you utilizing all the benefits you have? You may need to sit down and crunch numbers with others who are involved with your money decisions, but it will be worth the time and effort that takes to get everyone on the same team in this!


Pension Crisis – Are You Ready For Retirement?

download (86)After working so hard for so many years, many retirees expect to have a very comfortable life after retirement. Most employees who are pensionable feel at ease knowing that they at least have the pension to keep them comfortable after they retire. However, this has not been the case for many retirees; most have retired only to find that they have very little to live on making life quite uncomfortable. Pensions for state public employee continue to face serious issues with funding and this has left many retirees frustrated because the features and benefits expected are no longer guaranteed.

In reality, if you want to have a comfortable life after retirement and you wish to be independent rather that dependent on your children, it would be best that you start preparing for that phase of life early enough. It helps to have savings and investments to back up your pension and any social security benefits you are entitled to. You can only say that you are ready for retirement when you have much more than pension to look up to for that comfortable living. Fortunately, it’s never too late to start preparing for retirement; there are so many small changes you can make today in preparation for a good retirement.

What to do

When preparing for retirement, the first thing you should think about is a personal savings reserve. This will save you from rising living expected that can render your pension insufficient. You also need to remember that social security and pension benefits can only cater for up to 60% of your needs and hence the rest would need to come from income or personal savings.

The other thing you must start thinking about is your health. Remember that as you age, you become more prone to illnesses and they can cost you quite a bit of your pension and savings that you have. Start adopting a healthy lifestyle today and you will have a long life with fewer health issues to worry you and your finances. The last thing you want to do is to run out of money in your last days when you actually need it the most so make every possible plan today to secure that future.

Start reducing debt and as much as possible, avoid getting into any new debt. This is a great approach, especially if you are a decade or two from your retirement. Paying off your debt early before retirement secures you from worrying monthly bills when you retire. Get your debts together and come up with a strategy to start paying them and get your expenses in line so you are able to avoid incurring any new debt.

As far as social security goes, it is advisable that you don’t start collecting your benefits until it is absolutely necessary. These are tempting benefits because they can be enjoyed even before retirement, but it is best that you delay the collecting for as long as you can so you can use them when the need arises. The longer you delay, the larger the monthly check.

Spend Less On Your Car – 5 Tips

download (88)Your car. You need one, we all need one. This necessity means that we are going to spend our hard earned cash on these things. So which ways are there to keep our spending in check in our cars?

Let’s look at a few ways to keep the miles ticking over, and the pounds firmly in your pockets.

1) Insurance.

This is the enemy of the pockets of all young drivers, and sometimes older drivers can be stung too. So how can you keep this enemy at the gates? This is a simple fix, use a comparison engine. It’s been said again and again, but it is very common for people to just stick with their insurer. Loyalty will get your wallet nowhere in this game! Make sure you look around, and always keep these pesky insurers on their toes!

2) Driving speed

Keeping your speed low on the motorway can save you hundreds of pounds, per year. If you use the motorway frequently, we are talking in the thousands. Remember, this is all tax free money that you could be using for something else. So remember, the speed limit wasn’t designed for optimal fuel consumption, it was designed for safety. So if you view your driving a little slower as an investment to your back pocket and your future it will help. Keep the speed low, and get to your destination a richer person.

3) Buying costs

Always remember, that with a more expensive car, come a more expensive recurring cost. Your car isn’t just a one off payment. Depending on the group your car falls into, it affects your insurance. If you need replacement parts, or specialist work, that is more expensive. So view your car as a subscription service you are paying. The higher the initial cost, generally the higher subscription cost you are also paying. If you can make do with a smaller “subscription” that will mean more money in the bank, less in the hands of Mercedes!

4) Petrol/Diesel

The fuel you use in your car can have a big effect. These days, the gap is closing between the efficiency of petrol and diesel. But traditionally, diesel cars are more fuel efficient. On the flip side, hybrid or even electric cars are even cheaper! Taking into consideration these could results in a much lower cost of driving for you.

5) Drive less

This may defeat the object of having a car, but often, if you are able to commute to work using public transport, the overall cost of driving will be far reduced. This may not be feasible for your circumstances, but in big cities, this is almost always the best option!


Prior Planning Prevents Poor Performance

images (31)Living a life full of joy and peace requires that you are financially secure. No, not wealthy, no not rich, but financially secure. Don’t get me wrong, I am not saying that the way to joy and peace is money, but you will never experience true joy and peace while being in debt. These are principles that I was taught at a young age.

I was never given an allowance rather, I earned a few dollars by sitting on my father’s lap while “we” drove the lawn mower around. I was taught first, to give back to God what He has blessed us with. Second, wise spending leads to a wise future. Then lastly, save everything I can. Dave Ramsey, a well-known Christian financial expert, was and is my role model when it comes to budgeting money. One of the greatest statements he ever said was, “Know where your money is going before you ever spend it.” It was on this statement that I started my first budget, and it is on this statement that I will explain how to become financially secure at a young age.

No matter what your salary is, budgeting is absolutely necessary. If you have no budgeting system, then you will spend far more than what you think you do. Without realizing, you get Starbucks every other morning, a meal out with friends once a week, a cool piece of clothing that you have been eyeballing lately, a snack and soda at the gas station. Next thing you know, you’ve spent an extra $250 this month; you have no idea where it all went and you are dismayed at why you aren’t able to save any money!

The first step when you don’t have a budget is to save every receipt from every purchase you make over a month. Spend like you normally would, splurge like you normally would, but keep every receipt while doing it. At the end of the month, separate all your expenses by category and gawk at where your money all went. You probably spent $75 on gas and $350 on fast food. Now that you know where all your money is going, you can cut off the fat from some areas, and bulk up in other areas. Gas, bills, food, and housing are essentials (just don’t live outside of your means). So protect these areas of your budget. Make sure that what you are making is covering those essential items. From that point, you can get creative. If you enjoy buying a new outfit once a month, or a Starbucks drink once a week with your friends, write that into your budget. At the end of your budgeting, you have to make sure your expenses and savings match your income.

The second step is to get your money that you plan on spending out of the bank after each paycheck. Working on an almost all cash system will keep you from spending more than you want. Say you withdraw $30 for clothing from your paycheck. After spending $30, guess what? You have no more clothing money to spend from. Use envelopes or folders to organize your money by category. Have a different envelope for each category in your budget: “Tithe,” “Gas,” “Rent,” “Utilities,” “Entertainment,” etc. Then once you have spent all the money in that envelope, you stop spending. This requires discipline.

These are the first two basic steps to becoming financially secure. If you are able to master these first two steps and stay disciplined while doing so, you will start to see joy and peace in your life. Even if you have thousands of dollars of debt, these are the first two steps you must complete if you ever want to get out of that debt. Know where your money is going before you ever spend it. Don’t spend money you don’t have.

Save all your receipts and see where your money is going. Budgeting according to your spending habits and cut the fat. Use cash for your own accountability purposes and once your cash is gone, no more spending.