Traditional wisdom may not help you save dollars

Go through the following lines to know how traditional wisdom can make you lose money in the 21st century.

1. There is no need to turn off the fan in a vacant room.

It can’t be denied that ceiling fan is a cheaper alternative to air conditioners. It helps you save on your utility bill. However, ceiling fan won’t help you save extra bucks by keeping it on, in an empty room. Keep it in mind that ceiling fan helps to cool people and not the room. So, if you leave the ceiling fan on, and think that your room will become cool, then you’re mistaken. Ceiling fan is not an air conditioner, which helps to drop the temperature in a room. It only creates air movement which makes your skin feel cool.

2. Always try to think global instead of local.

There is not a single person who hates to take vacation. However, transportation cost and hotel bookings can put a hole into your pocket. You don’t have to go to an exotic location for having a great vacation. In fact, you can just have a wonderful vacation in a nearby location. This will enable you save both time and money.

3. You need to change oil after driving 3000 miles.

You must have seen your parents to change oil of the car after every 3000 miles during childhood. Your parents must have told you hundred times to change car oil at an interval of 3000 miles. You might have acted as per their advice also. However, do you know that this age old advice does not work any more?

Most experts are of the opinion that this wisdom is completely outdated. This is because the engines and oil quality of the modern vehicles are quite advanced. Car engines and oils are made with modern technology, which allows you to drive up to 10,000 miles without changing anything.

Usually, you don’t need to change oil after driving 3000 miles. However, make sure you go through the car manual to know about the type of oil and the time gap between changes.

Lastly, you must have heard that bottled water is better than the tap water, but not necessarily so. The truth is, the quality of the bottled water is sometimes worse than that of the tap water. The Environmental Protection Agency monitors the quality of water from time to time. On the other hand, the Food and Drug Administration checks the quality of bottled water. The catch is the quality of tap water is more regularly checked than the bottled water.

Tip no 1 – Before getting married, open your communications regarding money.

Marriage is a life turning event. It changes your life dramatically. If you want to lead a happy martial life, then discuss about the financial matters before walking down the aisle. Explain your income, expenses, debt obligations, financial goals and mistakes to your spouse. This will help your spouse to know you better. Both of you can work to achieve individual financial goals. Another advantage of having an open discussion about money matters is that it can help you avoid financial disputes.

Tip no 2 – Settle your debts on your own and avoid being scammed.

When you’re drowning in credit card debts, contact your creditors to settle your debts on your own. Negotiate with the creditors to cut back the principal amount. Don’t rush to a settlement company to settle your credit card debts. This is because a lot of settlement companies don’t abide by the FTC rules. Some charge upfront fees from the consumers while others don’t bother to contact the creditors only. They are only interested in making money out of the cash-strapped consumers.

Tip no 3 – If a payday loan company is making unauthorized withdrawals, then close your bank account.

Have you taken out a payday loan in your state? Is the payday loan company debiting money from your bank account without your prior permission? If yes, then talk with your bank branch manager and close down your bank account. Fill out the required forms and close the account. You can open another account in the same bank. This way the payday loan lender will not be able to debit money from your account. If the bank refuses to close the account, then you can ask the manager to put the account into the ‘deposit only’ status.

Tip no 4 – Find part-time jobs after retiring.

If you’re a retired person and facing difficulty to pay the regular bills, then a part-time job can be a good option for you. A part-time job can help to boost your income. You can earn some extra dollars without doing strenuous jobs. You can use the money for health related expenses. Every one knows that the medical costs are increasing day by day. Your insurance policy may not cover the entire cost. So, you can use the extra bucks to pay off the doctor fees.

Another advantage of part-time jobs is that they help you to utilize your free time. You won’t feel bored. Rather, you’ll be physically and mentally active.

Tip no 5 – If you like watching movies at the theater, go before 6:00 pm.

Do you love to watch the latest Hollywood movies at the nearest theatre every week? Do you love to watch your favorite heroes jumping from one building to other on the big screen? If yes, then you can watch the movies before 6:00 pm and save $10 on the tickets. This means that you can watch your favorite movies by paying less on the tickets. If your budget is limited and you’re taking your girl friend for a movie, then visit the theater after lunch. Your girl friend won’t ask you to purchase pop corns or snacks.

Jobs that can help you earn money in your golden years

Check out some part-time jobs that enable you to stretch your budget:

1. Work at the same company: If you have been a valuable employee in your company, then your boss may not like to lose you. In such a situation, you can work in same company on a part-time basis. You can go to the office for 2-3 days in a week and earn dollars. The best part is you can spend some time with your colleagues. You can share jokes, knowledge, coffee, etc. with co-worker and earn dollars at the same time.

2. Take up a government job: You can become a part-time government employee after your retirement. Government agencies need part-time workers from time to time. You just need to open your eye and search those jobs. Try for those jobs which are there in your locality or state. Work for the welfare of your community and family.

3. Work as a research analyst: If you love to do research works, then you can volunteer to become a research analyst at the local university. You can study data to develop various projects. You can also assist other researchers to gather information for completing the ongoing projects. This job will be interesting if you have a vast experience in researching.

4. Start freelancing: Most companies recruit people on a contract basis. Employers do not prefer to recruit full-time workers for reducing expenses. The companies are recruiting people on a project basis. For instance, a company recruits you for a certain project. You work in the company till the completion of the project. Once the project is completed, you work at another company on another project.

Some companies also pay people on an hourly basis. You work for a few hours and get paid for your work.

5. Handle the customers: Do you have excellent communication or negotiation skill? If yes, then you can think about working as a customer care officer. Some organizations recruit part-time customer care officers. You can contact those companies and work at the ‘help desk’. There are even some companies which permit the customer care officers to work from home. So, you can deal with the customers while sipping coffee at your own home.

If you’re good at household work, then you can very well utilize it to make money. You can help people in decorating their house or maintaining their book shelves. If you can bake yummy cookies and cakes, then you can start a catering service for the birthday parties of your neighbors.

Talk with your neighbors and publicize your skills. After all, this is an era of marketing. No body will know that you’re good at cooking or stitching unless you talk about it. Once people start appreciating your skills and work, you’ll get loads of assignments. Make sure you don’t offer extra discount just because you’re retired. Charge money on the basis of your work and not on your age.

Tip no 1 – “Shop till you drop” is not the mantra you should follow if you want your credit card debts to drop.

If you want to reduce your credit card debt burden, then you’ll have to stop chanting the mantra “shop till you drop“. In fact, you’ll have to reduce your shopping endeavors. You need to visit your favorite shopping stores for purchasing only the necessary items. Plan your shopping trips in advance so that you know about the items which need to be purchased. You can’t afford to waste money on useless shopping. Curtail your luxury expenses by all means, and make it your goal to save money. Use it to pay off your debts.

Tip no 2 – Think local, not global.

You may love to take your family to an exotic island during the holidays. However, this will burn a hole into your pocket. You’ll have to pay a huge amount for the air tickets and hotel bookings. The price of the air tickets is likely to increase in 2012. This means that you’ll have to pay more money in this year.

There are various tourist locations around your home town. All you need to do is take out a map and hop on your car. Take your family to these places instead of going abroad, and save money on your vacations.

Tip no 3 – Keep distance from lavish and high-roller friends.

Run away from the friends who lead a lavish lifestyle. If your friends love to frequently purchase new cars, garments, cell phones and other things, then it is better to stay away from them. They may love you as a friend, but hanging out with them may not be good for you. You may get tempted to indulge into unnecessary expenses. This in turn may lead you to debt problems. You’ll have to choose between your friends and financial health. If you want to stay financially healthy, then keep away from these friends.

Tip no 4 – Discover savings under your own roof.

You won’t have to go to extreme lengths for saving money when you’re facing credit crunch. You can save money in your own home by taking some simple steps. For instance, you can lower the temperature of your room heater to reduce electricity bill. Turn off the lights while going somewhere. Purchase groceries in advance. Use CFL bulbs in your room. Purchase items in bulk to get discounts. Use toilet papers instead of facial tissues as they are cheap. Re-use the old items instead of purchasing new ones.

Tip no 5 – Beware of debt consolidation scams if you don’t want to end up losing instead of saving.

Debt consolidation is an effective debt repayment instrument. It helps you to become debt free within a certain time period. The debt consolidation industry is soaring since thousands of people are getting entrapped into the debt cycle. There are some genuine companies that offer debt consolidation programs to the cash-strapped debtors. However, there are some fraudulent companies which cheat people in the name of debt consolidation. These companies promise to relieve your debt burden but actually don’t do anything. So beware of the debt consolidation scams while consolidating your debts. Work with a company that has been in the industry for at least 5 years.

Unconventional tips to save more in 2012

Check out some uncommon tips to squeeze extra dollars from your wallet

1. Say no to automatic banking: You may get stunned to read this tip. After all, automatic banking helps you to pay your bills on time. It probably saves you the late fees and penalties. Nevertheless, the automatic bill payment system makes it quite easy to overlook what you’re actually purchasing and spending.

You need to see the bills to know how much you’re spending in real. When you take out cash from your wallet and pay the bill, you realize how many dollars are slipping away from your monthly paycheck. From next time, you’ll try to reduce your bills by taking several steps.

2. Mark the shopping day on the calendar: If you’re an impulsive buyer who loves to splurge on whims, then stay way from the shopping malls for 6 days in a week. Mark a particular day on the calendar for your shopping endeavors. Visit the stores and complete your shopping on that day.

Try to be little bit organized about your spending. Create a purchase list before hitting the store. You can prepare and update the list during the remaining 6 days. If you prefer to shop online, then list the items on an Excel sheet. Bookmark the websites from where you’ll be purchasing the items. Make sure you purchase all the things that are there in your shopping list. This may help to curtail impulsive buys to some extent.

3. Rent instead of purchasing things: If you don’t need to use a particular item on a regular basis, then you can rent it instead of buying the thing. In 2011, the annual cost of owning a car (considering one drives 15000 miles in 12 months) was more than $8000. If you need to make frequent road trips, then you can rent a car at $7.75 an hour. This is much cheaper than owning a car.

4. Avoid shopping via cell phone: It has been found in a popular survey that individuals tend to shop more through their cell phones than computers or laptops. The result of the survey reveals that individuals spend 30% more while shopping through the cell phones than that of the normal computers. So, uninstall the shopping applications on your cell phone now.

It is said that people spent around $25 billion on online shopping during the last festive season. If you’re one of those people who received hundreds of lucrative shopping deals in your mail and accepted them with a hearty smile, then it is time to have a reality check. It is quite easy to be tempted when you receive good shopping offers in your mails. After all, who does not want to purchase items on discounts?

It is true that the discount offers can help you to save money on certain items. However, they can also exhaust your cash-reserve on useless items. The result of a recent survey shows that nearly 58% of the online shoppers have made purchases because of the marketing mails. Around 8% of the shoppers have purchased things due to the social networks.

The figure proves that the marketing emails and the social networks control your shopping impulses to a great extent. Turn off the email notifications that excite you to spend dollars. Try to avoid following retailers in the social networking websites. This will help you clean your mails and protect your wallet.

Tip no 1 – When you’re married, try to work together to end debt.

You pledge to share everything with your spouse after taking the wedding vows. This means that you can share both your happiness and problems with your spouse. Don’t hesitate to talk about your financial troubles with your spouse. Tell your spouse about how much you owe to your creditors. Your spouse can suggest some effective ways to solve the problem.

Your spouse may arrange money from somewhere to pay back your creditors. Other than that, your spouse may take up a second job to increase the family income. You can use this money to pay off your debts.

Tip no 2 – Wait for a few weeks before making any investment plan this year.

2012 has just begun. You have plenty of time to make investments. Don’t invest all your funds at the very beginning of the year. Wait and watch how the markets are performing. It is predicted that the stock market may plummet during summer. There may be a stock market crash in the next few months. Down Jones may drop to 5000 within the next 2 and half years. So, if you have received a financial windfall, then don’t invest in the stock market right now. Wait for a while and find out how things turn out eventually.

Tip no 3 – Try out some new forms of growing the money other than saving through the traditional options.

It is true that some people are doing exceptionally well amidst the current economic crisis in the country. They are growing money like never before. These people are using new forms of growing money, and this is why they are at such a good financial position. If you’re little careful, then you can also increase your cash-reserve in 2012. Just consult your financial planner and find out the unknown but effective forms of growing money. Try out these new forms along with the traditional options. This will help you grow your ‘money tree’ gradually.

Tip no 4 – Save money and spend family time – rent movies instead of going to movie halls.

Do you love to watch good movies every week? Do you visit the nearest theatre every week? If yes, then you must be spending hundreds of dollars every month. You can save this money by renting DVDs every week. You can rent a DVD and watch the movie with your family members. This way you’ll be able to save hundreds of dollars every month. You can save money on fuels, movie tickets, and pop-corns. Apart from that you’ll be able to spend quality time with your family.

Tip no 5 – Practice the habit of buying things in bulk so as to manage money efficiently.

The big shopping malls and departmental stores give heavy discounts on the items you buy in bulk. So, inculcate the habit of purchasing goods in bulk. A good trick will be to purchase those items which you’ll be using in the subsequent months. There is no point in buying items (in bulk) which will be used once or twice. For example: you can buy toilet papers in bulk as you’ll use them every day. On the other hand, purchasing jewelries in bulk will be a total waste of money. You’ll wear them only once or twice in a year.

5 Things you may not have observed in your ‘money tree’

Here are some little-known facts that you may not know about your ‘money tree’.

1. The market value of your home is less than what you’ve calculated.

Despite the poor condition of the US housing market, homeowners feel that the fair market value of their homes is extremely high. Homeowners feel that they can fetch a substantial amount from the market after selling their houses. However, this is a wrong notion completely.

According to a recent survey, the value of the houses in 2011 has dropped from 2010. Only time can tell if the price of the homes will increase in 2012. The financial experts predict that there will be steady decline in the price of the homes for most part of the year.

So, if you’re thinking to sell your home in 2012, make sure you estimate the value of your house correctly. Renovate your house from time to time to keep it in a good condition. Present your home in a good condition to the potential buyer. Otherwise, you’ll never be able to strike a good deal.

2. Your car is not as valuable as you think it is.

You may love your car like your own baby, but it does not mean that others see your vehicle in the same respect. You may think that your car is extremely valuable, but the lenders and insurance company may not share the same sentiment.

It has often been observed that people miscalculate the value of their cars. Usually, around 3% of the used cars are found in a good condition. However, nearly 32% of the car owners believe that their cars are at a great condition. You can consider your car to be in superb condition only when it has no technical or mechanical problems.

Adjust your insurance coverage as per the condition of the car. Keep in mind that the value of cars decreases with time. So, you can never expect to sell your car at the original purchase price. No one will be willing to pay you that amount of money.

3. Your child can obtain a greater financial aid.

Most parents find it difficult to pay the high tuition fees of their children. The cost of education has increased in the last few years. However, when the time comes to apply and obtain financial aid, most parents make dreadful mistakes.

Some parents think that their children won’t qualify for the financial aid. They tend to rely more upon the scholarships. They assume that their children can qualify for scholarships easily. However, they forget that thousands of students apply for scholarships. There is a stiff competition. Their children may lose scholarship to others.

If your 2 kids are studying at the same college, then their chances for qualifying for a financial aid are extremely high. In such a situation, you should apply for a financial aid without making any delay. It will be a grave error to depend too much upon scholarships.

4. You deserve more than what you’re earning right now.

Are you confident that you’re paid well? Is your employer paying you as per your capability? There is a great probability that your wage is not right.

Some employees think that their wage is not good. They deserve much more. There are also other employees who underestimate their value.

You can find out your correct value by conducting a research. Find out what people are earning at similar positions. For example: if you’re working as a criminal journalist, then your job will be to know what the other reporters are earning in your state.

If you find that your salary is much below than what other reporters are earning, then you can ask your boss to hike your wage.

5. Your retirement fund is adequate for your family.

Your retirement fund may not be enough for spending the golden years comfortably. You may be pretty satisfied with the amount deposited in your retirement savings account each month. However, this amount may not be sufficient for leading a comfortable retirement life.

If you really wish to lead your retirement years in peace and comfort, then you need to save a huge amount of money every year. If you earn around $60,000 in a year, then you need to have minimum $480,000 in your retirement savings account to sustain your lifestyle.

Use a retirement calculator to calculate how much you need to contribute to your retirement fund every month. Contribute the required amount to your retirement fund every month if you don’t want to spend your golden years in poverty.

Finally, you may think that your credit score is good enough to secure a loan at low interest rate, but the truth may be opposite. The calculation of credit score is a complex procedure plus lots of people have several misconceptions about it. For instance, you may think that your score increases as you close credit accounts. However, the fact is your score decreases as you close down old credit accounts.

Tip no 1 – Take advantage of federal student aid to lower your child’s education cost.

Apply for a federal student aid when your child is at college. The school tuition fees have increased in most states of the country. If you have not opened a 529 savings account for your kid, then it will be very difficult for you to bear the educational expenses. During these times, it becomes more than essential to apply for a federal student aid.

Download and fill out the requisite forms as soon as possible. Gather all the relevant documents and submit them to take advantage of federal student aid.

Tip no 2 – Consider how much you are saving, before you sign up for a debt consolidation program.

A debt consolidation program makes the debt repayment process comfortable for you. It helps you pack back your creditors without making too much financial sacrifice. However, keep in mind that you need to have some money to erase debt through a consolidation program. The counselors will charge a fee for negotiating with your creditors on your behalf. Moreover, they will not pay back your creditors out of their own pockets. You’ll have to send money to the debt counselors every month. This is why it is better calculate how much you are saving before enrolling into a consolidation program.

Tip no 3 – Have regular “financial” family meetings.

Sit with your family members at least once a week. Talk about the family income, expenses, savings, etc. with your family. A weekly meeting will help you know about the financial progress of the family. You can find out if the family expenses have been more than the budgeted income in a certain week. If that is the case, then you and your family can take steps to control the expenditures in the following week. The biggest benefit of weekly financial meetings is that your family can avoid getting into a debt cycle.

Tip no 4 – If you have dependents, get disability/life insurance, a will and an estate plan!

If your spouse, children and parents are depended upon you emotionally and financially, then you need to make some arrangements for their well-being, especially when you’re not physically present in this world. Purchase a life insurance policy to help them financially recuperate after you’ve gone to heaven. Make a will to distribute your assets amongst your descendants. You’d never want that your family fights over money issues when you’re not here any more. Purchase a disability insurance policy for having a steady source of income when you lose your job due to accident.

Tip no 5 – Be a smart shopper and spend money only on most essential things.

A smart shopper is the one who does not waste any money. He/she purchases the essential items from the stores. A savvy shopper will refuse to spend bucks on the items he/she does not need. He/she will create a shopping list before heading to the store and purchase the items accordingly. The shopper will use coupons to get discounts on the items. He/she will purchase the items in advance (especially in the festive season) and take advantage of the sale offers. The main motto of the smart shopper is to buy essential things at minimum cost.

Brace yourself to spend more on 7 items in 2012

Check out the 7 items on which you may have to splurge more in 2012.

1. Fuel: The price of gas may reach $3.50 in the first 6 months of 2012. The political tensions going in the Middle-East countries are largely to be blamed for this. The shutting down of the Delaware oil refinery has aggravated the oil crisis further.

At present, people have to pay $3.32 per gallon. If Iran limits its oil exports because of the latest fights, then the price of the fuels will increase more.

2. Food: If you practically live on beef and pork, then you’ll have to try to control your love for non-veggies a little bit. The cost of the general food items is going to increase in this year. However, the price of the pork or beef is expected to take the biggest hit in 2012. The price of these items is likely to increase by 4% in 2012. This will create an additional pressure on your wallet as the cost of meats has already risen by 8% in the last year.

3. Air tickets: It will cost you more to take a flight in the present year. The price of the air tickets is going to shoot up. If you’re planning to fly abroad during the summer, then expect to find a 10% to 15% rise in the price of the air ticket. Most of the leading airlines are suffering from losses. A hike in the airfare may reduce their problems by a little bit.

4. Water: Water is life. It keeps us alive and fresh. There is no substitute for water. However, you’ll have to take out a few extra dollars from your wallet for having this necessary item in 2012. It is said that the cost of water will be increased in 2012 in order to raise the revenue. The financial health of the government is known to everyone. So, this move is hardly surprising.

5. Beverage: If you love to drink coffee at various times of the day to remain active, then brace yourself to get a financial blow when you hit the store for purchasing your favorite coffee brand. The wholesale coffee price has increased by 18% in 2011. The popular coffeehouse chains have already started charging more for the beverages. So, next time you take your date to a café, expect it to be a costly treat.

6. Lottery tickets: If you dream to get rich through a lottery ticket, then be prepared to spend more money at present. Some lottery tickets will get costlier from 15th January 2012. If you happen to buy a lottery ticket regularly, then be prepared to spend an extra dollar for it. Some organizers are even increasing the price of the lottery ticket by as much as $2.

7. Postal services: The US postal services are desperate to reduce expenses. They have already closed some post offices across the country. Other than that, they have stopped the mail services on Saturdays. Besides, to offset their losses, the US postal will charge more for the stamps from January 22, 2012 onwards. They will be charging 45 cents on the first class stamps, a figure up by 1% from 2011. The price of the priority mails will increase by 3.1%. If you want to use express mail, then you’ll have to spend 3.4% more than what you used to do in 2011.

The price of the clothes is on an upward trend since the last few years. This year will not be any exception. The average price is expected to increase between 8% and 10% in this year. The cotton clothes will become very costly. You may have to pay an extra 20 bucks for wearing the popular denims in 2012.

Tip no 1 – Be debt free in your holidays, to be stress free later.

Indiscriminate shopping may help you enjoy the holidays to the maxim. You can buy whatever pleases your eye during the holidays. However, once the holidays are over, your friends go back to their respective places, you can be left out with a huge credit card bill in hand. You’ll have to pay the credit card bill by any means. If you don’t have money to pay the bill, then it will create an additional stress upon you. The creditors will call you for getting back their money. Your credit score will be ruined. The creditor may even sue you for non-repayment of bills, after a certain time period.

Tip no 2 – A little risk is good, too much risk is foolishness.

People say that if you don’t take any risks, then you can very well forget to gain something. So, take some financial risks in your life. Otherwise, you won’t be able to gain anything. Procrastination will not help you at all.

On the other hand, it will be a mistake to take too many risks. For instance, investing a small amount of money in the stock market is good. However, investing all your funds in the same market will be a monumental error. You may lose all your money if the market crashes due to a change in the economic policy of the country.

Tip no 3 – Do not waste money buying any extra coverage that you may not need.

Analyze your needs and buy the right amount of coverage. Don’t purchase any extra coverage which you don’t need. It will simply be a waste of money. For example: forgo collision coverage for your old cars. If the car is old and you seldom drive it, then it is better to drop the collision coverage. There is less likelihood of an accident when your car remains in the garage for most part of the year. So, you’ll simply be wasting money by purchasing collision coverage for the old cars. Moreover, even if the car meets an accident any chance, the insurance company will only reimburse you the Actual Cash Value minus the depreciation cost.

Tip no 4 – Prevention is better than cure even in personal finance.

Prevention is better than cure – the same phrase is applicable for your personal finances also. For instance, if you invest in wrong mutual funds or stocks, and realize your mistake when it is too late, then you’ll be in a big trouble. You won’t be able to rectify the situation. You won’t get back your money.

Take steps to prevent any financial debacle. Protect yourself from financial storms. Talk with your financial advisor and find out the weapons to shield yourself from financial disasters. Otherwise, be prepared to lose your hard earned dollars.

Tip no 5 – Invest in forex market wisely to gain profits.

Invest wisely in the foreign exchange market (forex) or you’ll lose your precious money. Forex is a market where currencies of different countries are traded. Don’t withdraw money from your checking account and invest in currency market straightway. Consult a financial advisor before making any investment in the foreign exchange market. Get to know about the investment tricks first. Read articles on forex from different financial websites. Find out the recent trends and go through the latest news on forex. Once you’re well aware of the factors that affect foreign exchange market, start investing.