Top Personal Finance Blogs
Monday September 24th 2018

Seven Top Car-Buying Tips

car buyingBuying a car does not have to be a complicated process. Take your time and follow the proper steps so that you can feel confident that you are getting the best deal on the right car for you.

1. Research the Worth of Your Current Car

The car you are trading in is one of your most important financial tools when you buy a car. Look online and in your local newspaper for the prices being offered for similar cars. You might get more out of your old car if you sell it yourself rather than trading it in.

2. Shop Online First

The internet provides a great deal of information about the cars that are on the market today. Do some research into the types of cars you are interested in before you visit the dealer’s lot. Find out what kind of prices are offered by several dealers in your area. Look through the manufacturer’s website to see what kinds of options are available on the cars you like.

3. Choosing Between New or Used

Check into the financial differences between new and used cars. High quality vehicles from the past few years can be good purchases, but you might be able to save more money through rebates and other incentives on a new car.

4. Secure the Cash Before You Visit the Dealer

If you plan to purchase your car through a loan, go ahead and apply for the money before you go shopping. Having the loan amount already approved gives you a safe price range to shop in. It also reduces the anxiety of applying for money for a car that you have fallen in love with on a showroom floor.

5. Consider the Differences Between Leasing and Purchasing

Leasing and purchasing each have benefits and drawbacks. A lease will put you into a car without a large downpayment, and the monthly payments tend to be lower than traditional loan payments. Owning your car gives you a little more freedom to make cosmetic changes, and you can keep the car as long as you like.

6. Negotiate the Final Cost

Every car purchase involves some haggling. Be prepared to negotiate by looking up the dealer’s invoice price on the vehicle you are interested in. Collect bids from several dealerships to use as leverage during your negotiation. If you are planning to lease a car, make an effort to learn some of the leasing jargon that the salesperson will use to try to throw you off. If you are hesitant to enter negotiations on your own, think about buying a car through a car-shopping service that offers no-haggle pricing.

7. Resist the Temptation of Last Minute Add-ons

As you are filling out the final paperwork for your purchase, the finance manager will probably suggest that you add on some last minute items. Resist this last ditch attempt to get you to spend more on the car than you intended to. These may seem like small additions, but they can add up very quickly.


Strategies for Saving Money on Health Insurance

With overall health care costs on the rise, finding affordable medical insurance is a priority for most people. Even those who are young and healthy have a difficult time when it comes to buying insurance. The good news is that there are many ways to receive a discount and save money on health coverage. Here are some strategies that will help you get lower rates:

Use the Web

Using the free resources available on the Internet is an excellent way to get health insurance quotes and compare offers from industry-leading companies. The best is that you only need to complete a brief form in order to receive quotes from different insurers. The whole process takes a few minutes, so you will save time and money when shopping for health insurance.

Choose a Family Policy

Married people are more likely to find a reasonably-priced policy than those who are singles. Insurance providers usually offer discounts for buying two or more policies with the same company. Switching to your spouse’s plan may help you save hundreds of dollars a year. However, it is necessary that you do proper research before buying double coverage. In some states, it may be more affordable to get separate plans for you and your spouse. Rates may also differ from one insurance provider to another.

Consider Catastrophic Coverage

Another way to save money on health insurance is to opt for catastrophic coverage. A catastrophic insurance policy is suitable for healthy individuals who don’t need medical care on a constant basis. This type of coverage comes with a very high deductible that can reach $2,500. Unlike indemnity health insurance or managed health care plans, catastrophic coverage does not cover routine check ups, immunizations or maternity care. As the name suggests, this policy only offers protection against a catastrophe.

Use Available Tax Breaks

Individuals who are self-employed can deduct 100% of their health insurance premiums. However, medical expenses have to exceed 7.5% of your adjusted gross income so that you receive tax benefits. If you are permanently disabled, you may apply for federal or state-subsidized insurance plans. There are many programs specifically designed for those with a low income or extremely high medical expenses. Most states have a high-risk pool offering health coverage to low-income individuals. You may also cut costs by going to subsidized local clinics for medications and vaccinations.

There are many other ways to lower health insurance costs. Individuals who pay a year’s health insurance premium in advance qualify for substantial discounts. Joining various groups and organizations can help you save money. You may also consider a Health Savings Account (HSA) in order to spend less money on medical coverage.

Before you start shopping for medical insurance, take the time to evaluate your needs. As long as you know your options, you will be able to find a plan that fits your budget. Try to determine how long will you need health insurance and how much can you afford to pay every month. If you have pre-existing conditions, then you will get higher rates. Be sure to research your options in order to make an informed decision.


Get Financially Literate for Free

When an individual wants to become financially literate and he doesn’t have any money to do it, he can find several proven ways to obtain this invaluable knowledge for free. This is one of those rare moments when free and convenient meet in the same place.

Take Free Online Personal Finance Courses

There is a plethora of major universities and colleges including Yale, Rutgers and Utah State who offer online financial courses for free to anyone who simply logs onto their educational sites. Some of these courses are basic and consist of only one study module, while others teach aspiring students the most advanced aspects of finance, economics, taxes, accounting, and government financial regulations that anyone could ever wish to learn about.

The more advanced courses require studying online for between several weeks to a couple of months while the beginning courses can be mastered in a a matter of hours or only a day or two. No matter what the level of intensity of the financial education being offered for free online, these are exceptional opportunities for people of all ages to learn the ins and outs of the complex but fascinating world of finance.

Study Free Internet Financial Websites

Sites such as CNN and MSNBC online as well as Money magazine and Forbes all offer free online financial instruction on their websites. Fledgling students can learn related finance topics such as business administration, how to start up a small business, the tax advantages of forming a corporation, macro and microeconomic principles and fundamentals of investment management. Some of this free material goes so far as to teach online students information that top mutual fund and hedge fund managers actually know.

They really go into depth and don’t hold back. As long as the online student is willing to learn and absorb the financial information, it’s all here for him. It’s great for teens, college students, parents, and even grandparents who all desire to learn more about the intricate and fascinating financial world. Many of these sites offer these free learning opportunities as an academic adjunct to what readers of their print version magazines can learn or what viewers of their cable and satellite TV stations can learn if they watch consistently. The free information also helps build up potential readers and TV station subscribers as well.

Read Finance Books from Local Library

Despite the ever present Internet and it’s boundless array of financial information, ambitious individuals of financial informational learning shouldn’t overlook the absolutely free resources of their local, public libraries. The nonfiction stacks have shelf after shelf of both older and up-to-date books on finance. Many are second third, and fourth editions since they’ve become so popular over the many years they’ve been in print. These may be college textbooks or consumer trade versions.

They can be read in the library or taken out to be read in the comfort of one’s own home. It’s all up to the individual financial learner. And with libraries, these books can be renewed again and again if the initial information is not fully absorbed the first or second time before the due date when it needs to be returned. But the amount of free financial information here is simply overwhelming.


Figuring Out Your Financial Goals

Most people have a general idea of what their financial goals are, but they never dig down to the specifics. If you want financial independence, for example, what does that mean? It is important to create a detailed explanation of your financial goals so that you can begin to work seriously toward them. You will have better success meeting your financial goals when you have a better understanding of exactly what they are. The sooner you start, the more you will be able to take advantage of accumulating interest that could speed you toward your goals even faster.

Make a List

Begin with a broad list of your financial goals. Think of big things, like buying a new home or paying for college tuition for your children. Once you have defined the big goals, do some research into possible ways to achieve those goals. If you want to send your kids to college, find out about the tuition and housing rates at some of the schools in your area. Give each of your goals a real number to achieve so that you can create a realistic time frame for reaching that number.

Prioritize

Once you have a good list of goals, you need to decide which ones are the most important. You may not be able to afford to save for college tuition and pay for braces at the same time. Think about each of your goals realistically and arrange them in a manner that makes sense. When they are arranged by importance, you can focus your money and energy on the goals at the top of the list first. Once those goals have been met, you can begin to work on goals that are further down the list. The importance of some goals may change as time passes, so you should update your priorities once every other year or so.

Scrutinize Spending Habits

The toughest part of working toward a financial goal can involve adjusting your daily spending habits. When you start to buy a new electronic gadget, think about how much money you are spending. How far would that amount of money put you toward your goal if you put it in savings instead? How long would it take you to make up that amount of money if you did not apply it to your goal. Find ways to remind yourself of how important the goals are. You should also allow yourself some fun money in your budget so that you don’t feel like you are always sacrificing.

Make a Solid Plan

The best way to keep on track toward your financial goals is to create a realistic plan that you know you can follow for the long term. Some of your goals may take years to accomplish, so your plan needs to fit your lifestyle comfortably for a long time. Create a budget that allows you to put a specific amount of money toward your goals so that you can reach them in a timely manner, but don’t make the budget so strict that it is impossible to live up to.


So You Set A Budget…Now What?

Setting a budget is an important financial responsibility every individual should do. A list of total household income and expenses should be calculated and written down in order to get the most accurate picture of a person’s financial lifestyle.

Review and Reevaluate Budget Regularly

Once the initial task of compiling a budget is accomplished, it’s essential to review it several times for accuracy. Check all of the individual items in both the expenditure and income sources categories. See if they’re truthful and be honest. Then recalculate the grand totals several times as well to be certain no unintentional errors were made when using the calculator. Once this is done, and the budget feels totally accurate and honest, then it’s time to put the budget away for a short time. But it then has to be revisited on a regular basis. Every month is a great idea because changes in expenses and income can happen in any given monthly period.

Stick to the Budget

It’s essential to maintain adherence to the household budget. Don’t be tempted to overspend in any expenditure category that was itemized on the budget. If $200 was the average estimated utility bill for each month, then make sure to keep electrical costs down so that it’s only $200 again the next month and not more. Don’t deviate with any other category as well. Don’t feel that more has to be paid on the credit cards or that it’s necessary to double up on the car payment just to try to get ahead of the game financially. Stick to the maximum allowable monthly expenses and also try to maintain the same income levels as originally calculated in the budget.

When a person ignores his once carefully thought out budget. it’s inevitable that problems will arise. There won’t be enough money at the end of the month to pay all bills on time and maintain a strong credit history. Or expenses will get out of hand for unnecessary materialistic temptations that will prevent the person to be able to save or invest the amount budgeted for at each monthly interval. Discipline is the key.

Set Short and Long Term Monetary Goals

One of the best effects of setting up an intelligent and accurate budget is that individuals can gain psychological satisfaction by planning short and long term monetary goals. If $250 a month is dedicated to be saved out of one’s gross monthly income, then a short term goal can be to save a few thousand dollars as a down payment on a car that would help the household out. A longer term goal with this same amount of monthly savings can be to accumulate enough money to help pay for college expenses down the road.

These goals can come right out of an accurate and steadfast budget, and it makes a person feel completely in financial control of his lifestyle instead of living in constant fear about where his next dollar will come from and how he’ll end up never paying for substantial purchases and investments in the future.

It’s not at all difficult to accomplish these tasks when setting an intelligent budget. All it takes is a little bit of determination, planning, discipline, and awareness of an individual’s overall financial picture at a given point in time.


Seven Budgeting Basics

A budget is simply a plan… a plan that you make to tell your money where to go. A written budget will show where every dollar you goes and make your income work for you. Getting started is easier than you might think!

1. Track your spending for a month.

The first step in setting up a budget is to figure out how much money is coming in and how much is going out each month. You probably have a pretty good idea how much is coming in, but you may be surprised to see how much is going out.

2. Categorize your expenses.

You can come up with whatever makes sense to you, but some common categories are:

    • Savings & Retirement

    • Housing & Utilities

    • Food

    • Transportation

    • Medical/Health

    • Personal

    • Recreation

    • Debts

3. Pay yourself first.

Even if you can only save $5 or 10 each week, do it! The quickest way to wreck a budget is not having an emergency fund. When those unexpected expenses come up, you need to be prepared.

4. Figure out where adjustments are needed.

Are your expenses in line with your income? Maybe you found some money leaks… you know, those little expenses like fast food and movie rentals that really add up over a month’s time. You might not be able to do much about your fixed expenses, such as housing and utilities, in the short term; but you can take of control of those money leaks.

5. Reconcile your outflow with your inflow.

If you are fortunate enough to have more coming in than going out, you need to assign it a job; maybe paying down debt or adding to your emergency fund. If your outflow exceeds your inflow, you will have to cut some expenses or create additional income. This is the most important part of budgeting, because it’s the part that calls for action. Don’t forget, this is a process, and it may take two or three months to make your budget reconcile.

6. Use cash.

This is especially important for variable expenses like groceries, clothing, and entertainment. For example, withdraw only the amount of cash that you plan to spend in a shopping trip and discipline yourself to spend only that amount. Spending cash is much more painful than using your debit card!

7. Stick with it.

Your budget won’t be perfect the first month, or probably even the second month. It takes time and persistence to develop a written plan that will work for you. Keep in mind that your budget will change over time, hopefully for the better if you pay off debt or increase your income.

A budget is a powerful tool that you can use to change your future. A certain amount of self-discipline is needed, but the effort you put forth will be worthwhile as you take control of your money.


Never Pay for Music Again!

With the online options for free music these days, it doesn’t make much sense to pay for your music anymore. You can tell a website your favorite song and it will play only songs you love. You can make a playlist of your favorite songs and play it for free. You can even watch music videos for free. Given the options available, you can enjoy a lot of great music without spending a dime.

Online Streaming Music

Services like Pandora and Grooveshark offer streaming music to your desktop 24 hours a day. Each service puts a different spin on the musical experience, though. With Pandora, you choose a type of song that you like and then the service will put together a playlist of songs that have similar music styles. Pandora won’t allow you to listen to a specific song immediately, but it is a great way to find new bands that you will probably love. It’s amazing how well the site nails it when creating a good playlist.

Grooveshark playlists are just the opposite – you select every song that you want to hear. Once you create a playlist, Grooveshark will show you the playlists of other listeners who chose the same band you did. You can discover some great new music by exploring the other bands on another listener’s playlist. The downside of this service is that they don’t have every song, but chances are they have the one you are looking for.

The YouTube Option

Almost any song and artist you can name has been uploaded to YouTube. You can find official videos from the music label, slideshows created to accompany the songs, or remakes by random YouTube users with a wide range of talents. If you want to listen to several songs in a row, you can create a playlist that will automatically play the next video when the first one is finished. It can take some time to create a few hour’s worth of music, but it is fun to browse through the different video interpretations of some of your favorite songs for free.

Don’t Forget the Library

Not every library is online, but your local library is home to a wide range of music that you can borrow for free. Many libraries still offer vinyl records for purists, as well as cassette tapes and DVDs. Borrowing an album from the library is a great way to get free music.


10 Personal Finance Basics

What are the big things you are going to need to buy in the next few years? A car? A house? Financial goals are not as hard to establish as you may think, and they are the only realistic way to work toward the things you really need in life.

1. Identify Reasonable Goals

Financial stability means different things to different people. Figure out what you want to do with your money that would make you feel the most comfortable in the long run. Make a list of the goals you want to accomplish in the next ten years, and then make a list of the average expenses of each goal.

2. Prioritize

Once you have your list of goals put together, look at each item and rank it in order of importance. For example, sending your son to college would probably rank higher than taking a cruise to Alaska. Rearrange the list so that the things you want the most are at the top.

3. Make the Tough Choices

Not all of your big financial goals are going to fit nicely together. You may have to sacrifice one in order to keep another. Remember that every dollar you spend on one item is a dollar you won’t have available to spend on something that might be more important to you in the long run.

4. Plan Ahead

Give yourself plenty of time to achieve your financial goals. Take advantage of savings accounts and investments that will help your money grow over time so that you will have more when you need it later.

5. Practical Considerations

Remember to include goals that will help keep you and your family financially secure. Think about creating an emergency fund for unexpected expenses. Begin to build tuition funds for young children. Create retirement savings that will take care of you in your older days.

6. Include everyone who is Directly Affected

If you are married, make sure that you discuss your financial goals with your spouse. Talk with your children about the financial goals that include them.

7. Begin Right Away

Getting your finances in order is like going on a diet. It’s really easy to say you’ll start next week or next month and then never get around to it. Once you choose to create a solid financial plan, put it in order and start using it as soon as possible.

8. Maintain Discipline

Daily spending is the hardest to control. Every time you think about making a big purchase, remember what your goals are. If the goals are really important to you, they will be enough to keep you from blowing your cash on something you don’t really need.

9. Give Yourself some Breathing Room

Budget in some walking around money so that you never feel too limited. It’s important to have a little flexibility to purchase less expensive items when you want them.

10. Make Changes as Time Passes

As you and your family get older, your financial situation and goals will change. Revisit your plan every three to five years and make changes so that it fits reality.


Three Core Principles for Smart Money Management

A good money management plan will keep you solvent even in the most difficult financial times. Taking care of your money is something you have to do on a daily basis. Just like dieting, it requires a little bit of discipline and planning to get it right. But a good financial plan can become a normal part of your life, the same way a healthy diet and exercise can become regular parts of your days. Begin with these three core principles and you’ll find that good money management is easier than it sounds.

Live Within Your Means

It sounds simple, but this can be the toughest part of money management. It all boils down to only spending as much money as you make. Credit cards and monthly payment plans are the fastest way to get in over your head with interest rates and revolving balances. Credit cards are good ways to increase your credit rating, and they are good for emergencies, but they have to be used carefully. Never charge an item that you wouldn’t be able to pay off completely within a month, and then really do pay them off when the bill comes in.

Some interest rates are unavoidable. Mortgages and car payments are large enough that can rarely be paid off all at once. You can be careful to shop around for the lowest interest rates and the shortest loans that you can afford. Buying your own home is not always a sound investment depending on where you live. Look into all of your options before you jump into a 30 year mortgage.

Keep Your Money Working for You

Having a savings account is an excellent beginning toward financial stability. Every bank offers a different interest rate for their different types of savings accounts. Find the account that will give you the best return on your investment. Over time, the difference between a 1% return and a 1.5% return can become substantial.

It is also possible to earn money as you spend it. Many credit cards today offer cash back programs that will give you money each time you use the cards. As long as you remember to keep the credit card spending within your budget, you can build a nice stash of money by taking advantage of these reward programs. If you don’t find a program that offers cash back, you may be able to find one that gives you points toward travel or other purchases that will save you money in the long run.

Be Ready for Anything

Life isn’t always predictable. Keeping an emergency fund available for those unexpected expenses will save you a great deal of money and heartburn. Most economists recommend that you keep an emergency fund that is equal to your salary for three months of work. That way if you lose your job or are unable to work for some reason, you will still be able to make all of your payments on time until you get things all sorted out.


The Secrets to Raising Smart Shoppers

Just like any other social behavior, good shopping habits are learned at a young age. As a parent who wants your children to learn to be smart shoppers, you can teach important lessons as a seamless part of each shopping trip. Grocery shopping trips can be educational excursions that provide real life training if you approach them the right way. The main key is to keep your kids involved in the process. It is much easier to just make your list and pick up the items as fast as possible, but spending just a few extra minutes can give your children tools that they will use for the rest of their lives.

Engage Kids in the Planning

Make the kids part of the process. Invite them to help you create the week’s shopping list. You can discuss which items are necessary for the week and which items you don’t really need. Even young children will have an opinion about what kind of food they want to eat over the next week. Let your kids help you find and clip coupons for the items on the list. Building a good list and sticking to it is one of the most important parts of living within a good budget.

Be Firm about Extra Items

All children try to add something extra to the shopping cart while you go through the store. Grocery store shelves are designed to catch a kid’s attention and tempt them to grab something that’s not on the list. Never give in to these unplanned purchases. Remind your kids that the list has everything you need and stay firm about sticking to the list. Ask your kids how they plan to pay for the item if they become overly insistent on the purchase.

Talk About Your Choices

Don’t just toss the items on the list into the cart and keep moving. You’ve already talked about the things you want to buy, but once you are at the store, there are still choices to be made. Explain why you decided to buy one type of cereal rather than another. Show you kids how to compare fruits and vegetables. Talk about the different package sizes as well as the different prices so that your kids understand how to find the best overall value. You don’t have to give a speech as you choose each item. Just a few words as you place it in the cart will begin to give them the idea of how to think as you shop.

Model Polite Interactions

When you need to interact with store employees, do it in the way you would like to see your children interact with them. Be polite and respectful at all times. If you seem dismissive of store clerks or cashiers and treat them as if they were only there to serve you, your children will treat them the same way as they get older. Friendliness will gain you better service and make the trip less painful for everyone involved.