10 Ways to Cultivate Cash
TEN EASY WAYS TO CULTIVATE CASH
Gain control of your finances
by Kate Erickson
Saving money for tomorrow is never easy when there are so many expenses for today. But don't let that stack of bills make you feel like you can never get ahead. You would be surprised how a few simple steps can help you gain control of your finances for the future.
1. LEARN THIS PHRASE: "I can't afford it." Say it again--louder. Stand in front of a mirror and look at yourself while saying it. Straighten your posture and stick out your chest. "I can't afford it." Many people are afraid to admit this; they're afraid it'll make them look bad. But see how good you look while saying it, standing straight and proud. There's nothing wrong with admitting you can't afford something. If you don't have the cash to buy it today, save until you can afford it.
2. SEPARATE YOUR WANTS FROM YOUR NEEDS. You want a latte, but do you really need it? A cup of coffee with some cream and a spoonful of cocoa will, with a little imagination, fulfill the craving and costs pennies compared to a coffeehouse latte.
Do you really need another pair of shoes or earrings or that outfit in the window of that shop downtown? Or do you simply want it? Be careful--by wanting something, you may deceive yourself into thinking you need it. But your needs are quite simple--food, shelter, adequate clothing. On the other hand, your wants can send you into bankruptcy.
3. CHANGE YOUR VIEW OF MONEY. In their book, YOUR MONEY OR YOUR LIFE, Joe Dominguez and Vicki Robin suggest that before you buy anything, you calculate the real cost. For example, if you make $25,000 a year, you take home, after taxes, about $9 an hour.
Whenever you see something you want to buy, stop and think how many hours you need to work to pay for it. You have to work four hours to buy a $36 blouse; two hours for a pair of $18 earrings; and nearly two days for a $120 video game machine for the kids. When you look at something in terms of how many hours you have to work in order to buy it, you're better able to decide whether it's worth it.
4. PAY OFF CREDIT CARDS. If you're carrying $5,000 in credit-card debt, you're probably paying at least 18 percent in interest. That's $900 a year. At $9 per hour, that's two and a half weeks of working each year just to pay the interest. Stop using credit cards, and begin paying at least the minimum monthly payment plus the interest.
If you're in a situation where your credit-card debt is overwhelming, there's a wonderful organization available to help--Consumer Credit Counseling Services. They'll work with your credit-card companies to reduce your interest rates (in some cases to zero), and put you on a payment plan to free you of credit-card debt within five years. Call them today at 800-762-1811.
5. STOCK UP ON SALE ITEMS. Take advantage of supermarket discount cards and coupons. Shop at warehouse and discount stores. You can save $10 to $20 a week. That's $500 to $1,000 a year.
6. BROWN BAG YOUR LUNCH. Going out to lunch each day with co-workers can be a lot of fun. But it's also expensive. It costs at least $5 a day or $1,300 a year. Take your lunch three days a week and save nearly $1,000 a year.
7. CUT OUT THE MORNING TREAT. Do you really need a latte and muffin every work morning? It's a delightful way to start the day, but is it worth $1,000 a year? Reduce it to three times a week and save $400.
8. CURB TAKE-OUT DINNERS. One of the worst parts of the day can be leaving work only to be faced with making dinner. It's so much easier to grab something on the way home. Nutrition issues aside, it also adds up to big bucks. An average take-out bill for a family of four is $20. If you buy take-out once a week, that's $1,000 a year. Cut it down to every other week and save $500.
9. BOTTLE YOUR CHANGE. Whenever you have change in your pocket or purse, toss it into a jar or wide-mouth bottle. After a year, count it up. People report saving $150 to $500 by doing this, and using the money to take the family on vacation.
10. SET UP SAVINGS PLANS FOR THE FUTURE. Kids' college education and your own retirement are expenses you're going to be faced with down the road. Even if it's only $25, set money aside each month to save for these events. In order to maximize your rate of return on these accounts, you'll need to consult a financial advisor.
Kate Erickson is a Registered Investment Advisor with Linsco/Private Ledger in Ft. Bragg.
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