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New Year's Resolutions

Next month will begin the start of another new year. Many of us will decide that there are some goals we will want to meet for 2007. Most of us will wander off track from these goals by Valentine's Day. Resolutions are hard to keep, especially if they may be unrealistic or if we try and do too much. It is a much better idea to set out to meet a small goal that doesn't take a whole year. Make quarterly or even monthly resolutions.

Start with your savings. Give yourself a realistic goal that you want to have in your savings by April 1st. That gives you three months to reach that goal. Ask yourself what you need to do in order to reach that specific goal and focus on accomplishing that.

You will have to look at your budget and plan on how much you have to save in order to reach your goal. You may find that you have to cut and save in other places in order to reach that goal. So in a way you are accomplishing more tasks than just reaching your savings goal (You are monitoring your budget and watching your expenses).

Once April comes then you can see how well you did at meeting your goal. If you were successful than you can set new goals for three more months down the road. If you came up short it's ok because you still have time to improve and make changes. Don't be discouraged and set your goal again for July 1st. This time you can make improvements based on the things that you didn't do in the first three months.

You can also set goals for retirement or college education savings. You can go about it in the same way, setting up goals in shorter increments and trying to meet them.

By taking things a little at a time you can accomplish more. It is also easier to stay on task if you look at your goals in three-month increments instead of the entire year. Organization is key. Keep a calendar and circle the date of your goal. On that date review the status of your goals and then set new goals.

Ask for help. Share your goals with your spouse and family. You can use a checks and balance system. That way the entire family is supporting themselves. You may want to share your goals with friends as well, especially if you have to change some of your spending habits. Hopefully they will be supportive and not try and persuade you away from your new spending agenda.

Resolutions are always intended on improving the way we live our lives and if we take a realistic approach to meeting these goals, we may actually still be practicing them come this time next year.


 

   
 
 

December is finally here. Are you comfortably ready to celebrate or are you frantically stressing out and spending too much money? Even with advanced notice and effort the holidays can be hard to save for. Get a head start for next year by heading to your credit union or bank. There you may be able to open up a Christmas Club Savings account.

This is a very simple way for you to be ready for next year’s Christmas spending. You agree to a set amount to be deposited into the account on a specific time schedule. You can agree to do this every week, every month, twice a month, whatever you feel comfortable with. It is probably easiest to set it up to correspond with your paydays and have it automatically transferred into that account before you can spend it.

When you set up the account you can set the date that you want to be able to have access to the money. If you want to get the money before that date there may be a penalty or fee that you will have to pay.

You can start the account in January and have the access date be November 15th. That gives you around eleven months to save some money for Christmas. It doesn't even need to be that much. If you get paid every other week you could take $5 out of every check and you would have over $200 for Christmas spending. It may be more if you find an account with better interest rates.

If you think that this will be a good way for you to finally be able to save for the holidays than begin to shop around. Not every bank or credit union will offer this program. It seems that it has lost a little popularity in the past few years. It is also important to look for the best deals. You may want to find a bank that offers more interest or a minimal startup fee. The first place to look is your own banking institution. They may offer you other incentives since you are already a member.

With any program that involves your money, you will want to make sure that you are well informed before you sign up for the program. Read the details and make sure that you are clear on all of the obligations.

Some accounts may require that you carry a minimum balance. You may also need to make regular deposits or be required to sign up for automatic payments. If you have any concerns about these conditions then you may want to look elsewhere or try and renegotiate the terms.

Though there may be other ways for you to earn more money for next Christmas, you will probably not find an easier way to do so.

Some banks and credit unions may also offer a similar type of account to save for a vacation, car, or other big purchase item. These are smart ways for you to save a little at a time in order to pay for the item in full without having to use credit.
     

 

 

 

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Debt Cycle

It seems like you can't turn on the radio, TV or favorite webpage without seeing or hearing an ad for a payday loan center. They all promise the same thing; fast cash, no credit checks, easy money in your pocket for whatever you need. Unfortunately, they don't tell you how you can get caught in a web of never-ending debt. They forget to mention that their interest rates can be up in the hundreds. Does it still sound like easy money?

There are many reasons that the payday loan companies tell you why you should use their services. Some reasons play off of your fears while others entice you to splurge on yourself. They may show you a scenario where you need money to pay a bill or for an emergency and you don't have anywhere else to turn to. Their convenience and no credit checks are tempting to individuals who have a hard time getting loans elsewhere.

A payday loan works like this. You go into one of their offices and receive a cash loan for a pre-determined amount. You then write them a post dated check for the amount you borrowed PLUS interest and fees. The date of the check usually corresponds with your payday to ensure that you will be receiving money. If you do not pay back the loan before that date the lender will process your check accordingly.

An example is you go to Johnny's Payday Lending Center* on the 5th of the month and want to borrow $100. You write them a check for $120 ($100 cash + $20 charge) and date it for the 15th of the month, which is your next payday. The lender gives you the hundred dollars cash and you can walk out the door.

It is now the 15th of the month and you get paid but are still short funds. You go back to the Lending Center and they tell you that you can roll it over an additional two weeks for the same $20 charge. You now owe them $140 on the 30th of the month. So you paid forty dollars to borrow a hundred.

Some advertisements will even suggest that you can come to them to borrow money for unnecessary things like vacations, guitars, TVs, clothes, and many other things that should be budgeted. If you don't have the money to buy these things than you should not borrow high-interest money.

If you are between paychecks and need money for a bill, there are plenty of other options out there for you instead of a payday loan.

You can ask your employer for a payday advance. They may be able to advance you the amount you need or even the entire check based on their paying schedule.

Call your creditors and ask them for an extension. Even if you were late with the payment the fees and charges are usually less than the interest you would pay with a payday loan.

Ask to borrow the money from a friend or family. Use a contract and a repayment schedule so you don't strain your relationship over borrowed money.

You can also try and apply for a small loan at your bank or credit union. This will depend on the amount you are asking for and your credit standing. Some banks are more willing than others to work with you.

Even a cash advance on a credit card will cost you less than getting caught in the cycle of payday loans. This works best with a card with a low APR. This should not become a habit however or you will find yourself in a whole different mess.

If you have exhausted all of your options and still think that a payday loan might work for you, take these things into consideration. Only borrow the amount of money you can afford to miss from your next paycheck. Make sure that you payoff your balance on the day that it is due so you don't acquire any more charges and fees. Review your spending and find where you can cut back so that you are not left short of money between paychecks again.

You also need to find a way of trying to put together some funds for your savings account. This will help you if you have an unexpected problem when all of your other money is spoken for.

There may be some of you out there that have already dealt with them and some of you may have even come through it unharmed. It is our advice that you try and ignore the bombardment of ads. They are meant to help you with a temporary setback but can often times become a permanent problem.
   
*A fictitious name and any similarities to an actual loan center is purely coincidental.

 

 

 

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Save on Healthcare

It's inevitable that health care costs will continue to rise. There are many things that you can do to help yourself minimize the costs of healthcare. Here are a few simple tips and ways that you can save some money.

When you visit the doctor or dentist, pay with cash. Some offices give a discount if you pay for your visit with cash. This saves the office money because credit card companies charge processing fees for running your card.

Set up a flex spending account. This is pre-taxed money that you can put into an account that will cover any costs that are not covered by your insurance. At the beginning of the year you decide how much you want for that year. Then an amount is taken out of each paycheck and can be used on predetermined expenses.

So, if you are in the market for new glasses or your kid needs braces and you know your insurance isn't going to cover it all, this would be a good idea. The one stipulation is that if you do not spend all of the money in the account for the year than you will lose it. You may want to schedule some appointments towards the end of the year or stock up on some medical supplies.

Thoroughly examine your medical bills. A large percentage of hospital bills contain errors that cost you money. If you have a hospital visit keep track of all tests and medications given to you.

If you find errors, contact the billing department and request it be corrected and provide them with documentation.

Use generic drugs whenever possible. They are considerably cheaper and contain the same active ingredients. This goes for all of your over-the-counter products as well as prescription medications. You also will want to ask your doctor for any free samples. Physicians receive many samples and can give them to you to help you save money. Many times they come in single servings and are the same thing you were going to be prescribed any ways.

Another way to save money is to skip going to your regular doctor or dentist's office. Instead, go to a clinic whose workers are medical/dental students. If you live in a town that has a dental or medical school you can make appointments to visit them for their service at a significantly cheaper price. This works best if you need a regular check-up or have a cold. Getting your teeth cleaned and examined at a dental school can save you around 50% off your regular dentist’s price.

People spend hundreds of dollars each year on flu shots and over-the-counter medicines to fight the cold and flu. Not to mention the cost of lost wages from missing work. Instead of battling a cold or flu when you have it, try and prevent yourself from ever getting one. It can be as simple as washing your hands.

You can never wash your hands too often but make sure that you are scrubbing before and after you eat, or after visiting the restroom. If you work in an environment with a lot of people or you handle money it is a good idea to have an anti-bacterial rinse-free hand wash.

A trip to the ER is a quick way to shell out a few hundred dollars. Accidents around the home are a main culprit of ER visits. Making your house a safer place to live will prevent you from having unnecessary accidents that lead to expensive ER bills.

Visit the Home Safety Council at www.homesafetycouncil.org. You will find plenty of tips that will make your house safer for you and your family. You can also ask your home insurance company for any information they have on home safety.

Listen to your doctors. Ignoring your doctor's orders can lead to extra visits or procedures. It's pretty simple; if you have the flu and your doctor says you should stay in bed, don't fight it out by going to work. All you are doing is taking the chance of it getting worse as well as passing it on to your co-workers. Same thing goes with a strained or broken bone. Stay off of it and allow it to heal. It's not worth the chance of doing permanent damage.

Maybe you can use a couple of these tips to help you save a little more money when it comes to your healthcare.

 

 
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Let me see your hands if the holiday season is stressing you out a little. Hopefully some of our advice from the past couple of months has helped you out.

Here are a few of my reflections towards some of this month's articles. I would like to start off with my uneasy feelings towards some certain commercials advertising payday loan businesses.

I saw a commercial the other evening where a payday loan business was talking about the responsibilities of smart borrowing. It made a lot of sense. They seemed concerned for the customer and wanted them to know that they were there for them if they were in a financial bind.

I then saw another commercial by the same business where the message was why don't you buy yourself that new electric guitar that you have always wanted. I was speechless. One second they are preaching responsibility and the next they are telling you to buy something with money you don't have and can’t afford but can get from them anyway. It's ridiculous.

I can understand if someone has felt like they have ran out of options and needs a way to get a couple of bucks to keep the lights on. That would be the only way I could justify using a payday loan business. Advertising is a powerful tool and commercials like the ones I mentioned can entice even the most intelligent of us to justify the need to spend money we don't have.

While I was writing the article on twenty-something's, I was asking myself when was I going to take some of my own advice. You might think that since I have an endless amount of resources and advice that I would be the perfect picture of a financially responsible and secure person.

Well, not exactly, in fact I am behind on most of the things that were advised. I do have some long term goals set up and my wife and I are committed to reserving some of our paycheck to savings, but we have barely glanced at our retirement plans.

It's hard to think of something that isn't going to happen for another forty years. That's exactly why we should be looking at it now, because we have forty years to amass a decent retirement fund.

So my resolution for next year will be to begin my focus on our retirement plans. By the beginning of the year my wife and I should have a good lock on what our new budget will settle into.

With baby expenses and daycare we have had to adjust back and forth and it has taken a couple of months to fix our budget. With all luck by April 1st my wife and I will be on our way to securing our golden years.

Finally, I would like to wish all our loyal readers a wonderful holiday season. Do not stress over the things you can't control and surround yourself with friends and family. As cheesy as it may sound it is the little things in our lives that bring us joy and it should especially be celebrated this Christmas. Presents are nice but they will not last as long as the love you can share with your family.

Until next year, Good luck and Happy Holidays.

 

 
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HEY SENIORS!

You are only 4 months away from graduation.

Do you have your graduation announcements picked out?

Do you have your cap and gown ordered yet?

Have you got your choices for schools narrowed down?

Applications filled out and application fees paid for?

Have you begun to gather the financial aid information you will need?

You still got some time, but these final months will sneak up on you fast.

 
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Starting Sooner than Later

Your in your mid to late twenties and just settling into your first post graduation job. Now what? You can either plan for the comfort of your future or splurge that paycheck on new toys. Even though you may be more grown up there is still plenty of advice you should be listening to in order to make wise decisions.

Your first step should be to set up a plan of action, which includes your personal and professional goals. Start with short-term goals and work your way up to the long-term goals. Depending on your situation you may have to adjust accordingly. It is important that you include others that are close to you in your goals. If you are married or have already started your family, your choices will be affecting more than yourself.

Analyze the debt that you have accumulated so far. How much do you owe on school loans, credit card payments, and any other looming debts. Take each one and figure out how you are going to handle them and when you are going to have them paid off.

If you have student loans than you will want to find a good consolidation loan. Check with the Student Loan Finance Corporation for a good consolidation loan. Don’t go to your bank and ask for a consolidation loan because their rates are generally not as good for student loans as the SLFC is.

This will give you one payment to make each month for your student loans. If you are not yet employed or are struggling to find a good paying job you may want to talk with the loan office and look into a short deferment until you can safely afford to make payments.

Start building your savings account. When making a budget set aside a certain amount that you commit to your savings each pay period. By building a safety net you are insuring yourself in case you have unforeseen problems that would otherwise make you use credit cards or have delinquent bills. A savings account is one of the most important things you can do for yourself. This is why it is usually mentioned in at least one of our articles each month.

Try and stay away from running up any more debt with credit cards. It is possible to live without them. By setting up a solid budget you can allow yourself spending money for things like entertainment and new clothes. If your budget is tight then you might have to hold up on buying a new TV or those new DVDs until your budget can accommodate them. You can either put that new CD on your credit card this week or be that much closer to buying that fishing boat later on in life and spend your golden days on the lake.

It is important that you start planning for your retirement now, because every year that you put it off is money that you are losing. If you are currently employed it might be a good idea to look into investing into an Individual Retirement Account (IRA). This is a good way for you to have money for your retirement. In the June 2006 issue of the Pioneer Pilot we go into greater detail on the kinds of IRA's and what you need to do to start one.

Another way to start saving for retirement is to explore your employer’s 401k plan. This is nice because you can have it deducted from your paycheck and some companies will also match your contributions so it's like getting free money. For more details on 401k plans refer to the December 2005 issue of the Pioneer Pilot.

How important is a new car or buying a house to you? It's not uncommon to get excited about your first job with a decent salary and wanting to buy yourself some things. A new car can cost between $200-$700 and higher per month. If you have a car that runs why not use that money to pay down your debt or stash in your savings. Even if you need a car that runs, look at buying a used vehicle.

If one of your goals is to be a homeowner than you should plan accordingly. Maybe you could start off in an affordable rental and save money to make a down payment. If you are single you can always look for a place with roommates and share the cost and save yourself some money.

Of course, everyone's situation is going to be different. It is important to prioritize what is most important to you and structure your lifestyle in order to meet those goals. By starting out on the right foot you will be making your life more comfortable forty years down the road.

 
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