12 Money Saving Tips To Help You Stick To Your Budget

BudgetI think we’ve all been there at some time or another. We pay our bills and wonder “where did all the money go?” In these tough economic times budgets are stretched to the limit. Here are some practical tips that can help you save money and stay focused on your budget:

1. Have a clearly defined budget.
The best way to stick to a budget would be to have a clearly defined one, that means it needs to be written down. Know how much you want to spend on everything every month. Call it a spending plan to make it more fun. Prepare your plan for spending and then stick to it. In case you overspend on something, make up for it by cutting back elsewhere.

2. Careful with those credit cards.
Carry only one or two credit cards (or better still, none) with you and use them as sparingly as possible. Only charge those purchases you can pay off fully in the next month.

3. Utilize Rewards programs when available.
Get a card with a rewards program so that whenever you use your card you end up earning points which can be redeemed for discounts or freebies.

4. Shop during sales.
Make it a habit to shop only at sales. My goal is to never pay more than 50% of the retail price. Buy your Christmas and birthday gifts when clearance sales are going on. Target and Walmart have huge discounts on toys after Christmas, so stock up for the following Christmas and for birthdays throughout the year.

5. Buy secondhand to save money.
Put your mother’s ‘old is gold’ advice to good use. Garage sales, second hand cars, electrical equipment, cell phones etc. are great as long as you manage to find them in good condition.

6. Eat the majority of your meals at home.
Eating out frequently is a huge waste of money. Not only do you pay exorbitant prices for the food, but with the taxes, tips and everything included, it does add up to quite a bit. Eat at home as much as possible, and save yourself loads of money.

7. Carpool to work or when dropping your kids off at school.
Avoid taking the car if you only have a few blocks to go. Walking or public transportation can be great alternatives.

8. Make a grocery list every time you go shopping.
It seems like such a simple thing to do, but having a written grocery list can help to keep your budget in check. Prepare your menu ahead of time and make your grocery list from that.

9. Look for deals, coupons, and specials before you buy anything.
Look for deals and promotional offers before you buy anything. Apply this principle wherever possible- right from plane tickets to when ordering pizza.

10. Avoid shopping on impulse.
Give yourself a day to think before you indulge yourself in something expensive. You may change your mind if you rationally think about whether you actually really need it.

11. DIY is a great way to save money.
Learn to do basic repairs around the house. Start a garden in your backyard. Paint the walls yourself instead of hiring someone.

12. Set reminders to pay all your bills on time.
Late fees and extra charges on your bills are unnecessary expenditure and are best avoided.

Love and Loans Can Be a Volatile Mix

Love and MoneyThe following article is a guest post.

Should you give financial help to a family member or friend in need? It can be enormously difficult to say no to loved ones, particularly adult children or one of your siblings when they find themselves in a desperate situation with no savings, investments, credit, or other resources to get themselves out of the bind. Even if you can spare the money, you need to consider how the relationship will be affected should your loved one be unable (or unwilling) to pay you back.

An alternative to directly loaning money

If you want to render financial assistance to your loved one but your budget won’t allow an outright cash loan, a guarantor loan might be just what you need. In such loans, your family member or friend is the primary borrower, but their promise to repay the loan is backed up by your good credit and your contractual agreement to repay the loan should they prove unable or unwilling to do so. There is some risk involved, but the fact that the borrower has primary responsibility to repay the loan, and that their performance will directly affect their credit standing, could motivate them to make good on their agreement. Should the borrower fail to repay as agreed, you would essentially assume their role as borrower, and how well you are able to meet the loan agreement’s terms will affect your credit score, and by extension your ability to get future loans and credit.

One important point: Being a co-signor or co-borrower is different than being a guarantor. If you’re a co-borrower, you are a partner in the enterprise for which the loan is intended, and should therefore get a share of the benefit, such as sharing ownership in a car or house. If that isn’t the case, don’t sign on as a co-borrower. The down side is that you will be legally responsible for the entire debt – not just your share – if the other person doesn’t make repayments on the loan. Should neither of you be able to pay the debt, you will most likely both end up with a default listing on your credit report, which will make future borrowing considerably more difficult for several years. You could end up needing to get a guarantor loan yourself.

Do your research before making a commitment

If you have carefully weighed the risks involved with being a guarantor for somebody’s loan, make sure that both you and the borrower have a thorough understanding of the commitment you are about to make. It starts with choosing a lender. Today there are many lenders who cater to people with less than stellar credit, but not all lenders are alike, and it’s important that you choose the one that can give you the best deal. Even with the limitations inherent in a guarantor loan – such as higher interest rates – some lenders will give you a better deal than others. Transparency regarding rates and fees, so that you are able to make an apples-to-apples comparison of what different lenders have to offer, is paramount, but might not be a strong suit on the lender’s website. Good customer service is also important, but like transparency, you will be better informed if you can find objective information and reviews, which are more likely to appear in places other than content that is published by the lenders themselves.

What to do if you get in trouble

Say you have lent your friend or family member money or agreed to act as guarantor on a loan for him (or her), but it is becoming pretty obvious that he is not going to keep up his of the deal. How can you best convince the person to live up to the agreement without allowing the situation to escalate to the point where the two of you become estranged from each other? There are several things you can do; here are a couple of examples.

Give the person a gentle nudge – It is possible that the person has been preoccupied with other matters, and has simply overlooked their commitment. In such cases, a friendly, even humorous reminder might be all it takes to get the situation resolved.

Offer to set up an alternative repayment plan – If the person is experiencing a short-term cash shortage, you might offer to cover the payments for a brief period, with repayment at a later date, or by some sort of barter arrangement, whereby you hire them to handle some projects you’ve either been unable to do or that you simply don’t want to do. You might even get the person to pick up the tab for lunches until the amount in question has been repaid. In any case, you need to be clear as to what is expected.

There are any number of other ways that the loan can be brought up to current, but it is essential that you are both clear about the details, and that you can resolve the situation with your relationship intact. A worst-case scenario would have you seeking a judgment against the non-paying person, but you would do best to avoid such an alternative. If it just doesn’t look like you are going to get your money back, it might be better for your peace of mind, if not your finances, to simply write off the debt and consider it a gift, if you can afford to do so without compromising your own .well being or harboring resentment over having lost the money.

Some people insist love and money don’t mix. They can sometimes mix successfully if handled with great care and with full recognition that they are a potentially volatile combination. Whether it’s a direct loan, a co-signed loan or a guarantor loan, think carefully before committing yourself to helping someone out financially, no matter how much you may love the person in need.