Teach Your Child To Save

How to Teach Your Child To Save

It’s very important to teach your child to save from an early age. This is because the knowledge helps the child to be out of debt in the future. If you are wondering how you can do this, here are tips on how to go about it:

Use Different Envelopes/Jars

Here you need to use different envelopes or jars for everything that your child wants. For example, you should have one jar for a toy and another for a trip.

When saving, you should let the child know that some items require more time to save than others. For example, you should let the child know that it will take her several weeks or months to save for a toy; however, it will take her several months or even a year to save for a trip.

Teach Your Child To Save

Set Goals

Once you are aware of what your child wants to save for, you should set goals on the amount that the child will be saving every week. The best way of going about it is making a savings goal chart.

You can represent each week of the month with a box and once the child sets aside the required amount for that week, she should put a sticker on that box. When the child puts stickers on many boxes, he will see that he is making progress and he will be motivated to keep on saving.

Open a High Yield Savings Account

As your child gets old, it’s wise to introduce him/her to the concept of interest. Here you need to open a savings account for him. You should explain to him what interest is. If possible, you should show him how to identify financial institutions offering high interest rates.

Let the Child See the Value of Money

When a child is old enough, you should let him work in a real job so that he can understand the value of money. During the holidays, you should look for him a place to work in so that he can work hard for the money.

When he gets the money, you should help him in deciding on the amount to save and the amount to spend. Many experts recommend that the child should save up to 50% of the amount earned.

Give Room for Mistakes

Mistakes are learning stones and you should let your child make them. When the child makes a wrong move in how he/she spends the saved money, he will learn and he won’t repeat the same mistake in the future.

Keep an Eye on Things

While it’s wise to open a checking and savings account for your child, you should not allow the child to be the only person who can access it; you should also have access to it. This way you will know when your child is spending money unnecessarily. If you notice unnecessary spending, you should scold your child about it.

Set an Example

It’s said that children learn the most from what they see than what they hear; therefore, you should ensure that you are good saver for your child to follow suit.

Saving for Retirement

7 Tips to Saving for Retirement

Retirement is an important stage in anyone’s life; therefore, you should carefully plan for it. To help you out here are retirement saving tips that you should follow:

Start Early

While many people tend to start saving in their forties, this is wrong. For you to live comfortably during your retirement, you should start early. Financial experts recommend that you should start saving for your retirement while in your twenties.

Start Small

It’s common to feel the pain that comes with saving for retirement; however, you should take measures to reduce the pain. One of the best ways of doing this is by starting small.

It’s recommended that you start by contributing 1% of your pay; however, if the 1% still hurts you should start lower. For example, you can start saving $10 per paycheck then increase the amounts as you deem necessary.

Saving for Retirement

Don’t Withdraw Early

You should not withdraw from your retirement account. This is because doing this before you reach the ripe age (29 ½ years) you will incur a 10% penalty and you must pay income tax on the withdrawal. Withdrawing early also makes you lose the ability of the money to grow through compound returns.

Research

While you may be having good intentions of investing, you should not invest blindly; you should do your research and find out the rules of the retirement account that you want to open. As rule of thumb you should go with an account with great policies that are of value to you.

Know Your Retirement Needs

Different people require different amounts of money for their retirement. You should determine the amount that you need by finding out the amount of money that you need to take care of your annual expenses. From the amount you get, you will know the amount of money that you need to save monthly.

Diversify Your Assets

It’s often said that you should not put all of your eggs in one basket; therefore, you should diversify your assets. Your investments should depend on your age and retirement needs.

If you are young (for example, in your twenties) you should invest more in stocks. This is because you have more time to recover from loses—in case you lose money in your stocks. If you are older (in your forties and above) you should invest more in bonds and other assets that are not as volatile as stocks.

Buy Adequate Insurance

Calamities strike unexpectedly and you should protect yourself from them by buying adequate insurance policies. Here you should buy a number of insurance policies such as health, disability and car insurance. If you have dependents, you should consider buying life insurance. If you are older than 40 years you should avoid whole life insurance.

Conclusion

These are the tips that you should consider for you to properly save for your retirement. When saving, you should always remember that you and your spouse come first; therefore, you should not avoid saving for retirement in order to send your children to college. Always remember that your kids have more options and opportunities than you do.

Healthcare Savings

How to Save Money on Your Healthcare

Over the years healthcare has become very expensive and many people are unable to afford the best care. The good side is that there are a number of ways in which you can save money on your healthcare:

Pay Out-Of-Pocket

Although, health insurance aids in helping you save money, it does not always work. In situations where you feel that the insurance won’t save you money, you should consider paying out-of-pocket.

For example, if your insurance charges you more than $4 for prescriptions, you should consider paying out-of-pocket in stores in your area. For example, you can buy the prescriptions at Wal-Mart or in any other store.

The reason why you should buy the prescriptions out-of-pocket is because they tend to be cheaper than using your insurance. For example, it’s common to find stores charging $4 for a one month prescription or $10 for a three months prescription. As you can see the cost is lower than using health insurance.

Healthcare Savings

Travel

The costs for procedures, prescriptions, equipment, and physician services vary from one place to another. If your condition is not urgent, you should research and find out the cost at your local provider.

You should also research and find out how much other health facilities in neighboring towns or states charge for the same procedure. It’s also wise to research and find out the cost in other parts of the world. As rule of thumb you should go with the cheapest health facility offering high quality services.

Use Prescription Cards

Many countries have prescription cards that save lot of money. For example, the cards can save you up to 80% of the cost of the medications. To get the cards you only need to approach the card issuing company and you will get the card for free.

You need to load the card and whenever you need to purchase your medications you need to visit a pharmaceutical company that recognizes the card and you will be able to buy medications at lower costs.

Switch to Cheaper Health Insurance Plans

it’s no doubt that insurance plans aid in saving you money; however, if you find that you are struggling in paying for the plan, you should consider looking for a cheaper high-deductible health plan.

Although, this plan will not cover you during the initial part of your care, it will help you in covering things that other plans can’t cover such as acupuncture and this will save you a lot of money.

Seek Expert Opinion

There are many health care professionals who will give you expert tips on how to save money on your healthcare. The expert will also guide you on the best insurance plans to go for, best hospitals to visit, and even the best pharmaceutical stores to make your drug purchases.

Conclusion

Regardless of the way that you use to save on healthcare, you should ensure that the way is legal. When seeking advice, you should ensure that you seek it from a professional who is well versed with medical issues.

Is There Really Such A Thing As Forced Savings?

There are many ways to save money. There are many different approaches to savings. One of the most powerful ways to save is to actually be forced into doing it. Let’s face it, there are two kinds of people. There are people who like to aspire. These are people driven by love, by passion. People who work towards things. And there is the rest of us. The rest of us are motivated by fear. The rest of us only get our acts together when are backs are against the wall. The rest of us likes to procrastinate. The rest of us aren’t really driven by our dreams. We just tend to go from one day to the other. Things only get real for us if there are serious consequences if we don’t get our act together.

There’s nothing wrong with this. If you are this type of person, welcome to the club. Most people are reactive people. Most people only do something if they are forced into it. So if you are worried about your finances, and you feel that you’re not saving enough money, if you feel that you don’t have enough money saved for a rainy day, you might want to consider forced savings. Forced savings is all about triggering the reactive part of your mind. When you are reactive, you are energized. When you are energized, you can get going on things that you would rather do at another day. In other words, it will help you get over your procrastination. Keep the following discussion in mind regarding forced savings.

Nobody Can Force You

You have to remember that the key assumption behind forced savings is nobody can force you unless you make provisions. That’s right. You are stronger than you think. You are more hard-headed than you think. You have a lot of will. Unfortunately, a lot of this is undisciplined. It’s not consciously controlled by you. However, the reality is nobody can force you to do anything without your will. You have to decide. You have to wrap your mind around the concept of forced savings for forced savings to work for you. If not, I’m sorry to tell you but nobody can force you. It won’t make a dent in your finances if you don’t let it. If you want forced savings to work for you, you need to decide to do it.

Forced Savings Works Best For People Who Have A Tough Time Saving

If you have a tough time saving on your own free will, you might want to get into forced savings. If you have a tough time actually planning ahead and executing that plan regarding savings, you might want to try forced savings. In other words, it works best for reactive people. There are certain people that if they have a dream, or if they have a vision, they will put all their energy and everything they have to make that dream and vision come true. Sadly, most of us aren’t like that. Most people are reactive. We tend to just drift from day to day and then things happen. If we want our dreams to materialize in many cases, we need to force ourselves to do it. If you’re dreaming of saving a lot of money so you can invest and grow your wealth, you need to look into forced savings.

Make Sure You Don’t See Forced Savings

The best way to do forced savings is to do automatic deductions in your payroll, as many deductions as possible. Also, make sure that some of these deductions go straight into an investment fund. This form of forced savings works because you don’t miss what you don’t see. When you see money in your account, you feel entitled to spend that money. Of course, you work hard for that money so you feel entitled to the benefit from that money. However, if you don’t see your fool’s earnings and a lot of it is automatically put into forced savings, you are forced to make do with what’s left over. This is the beginning of a big savings account.

Thinking In Terms Of Alternatives Is the Key to Living Frugal and Happy

Frugality is defined as getting the most value out of every dollar you spend on an item or a service. Frugality must never be confused with cheapness or miserliness. A cheap or miserly person does not want to spend money. At all. That is not frugality. Frugal people are okay with spending money, they have no problem spending money. However, they are going to make sure that they get every red cent of value from the money that they do spend. It is very interesting that people who actually waste a lot of money tend to be cheap people. Why? They do not get maximum value from the stuff or services they buy. Thy may pay the bottom dollar for everything they spend, but they are really not enjoying the full range of benefits they could be enjoying if they paid a little more. This is the key to frugal living: maximizing value while reducing cost. One key way to making this happen, is to always think in terms of alternatives. Keep the following discussion in mind, so you can further train yourself to develop a frugal mind set.

Always Remember: You Are Not Stuck With One Option

Frugal people are always able to maximize the value and the benefit they get out of every hard earned dollar they spend, because they assume that there are options out there. Notice that I used the plural of the word options? That is right. There are many alternatives out there. The reality is, if you assume that you only have one option, guess what, you will only have one option. However, if you assume that there are many different roads that lead to the same solution, guess what, you will see many alternatives. Frugal people always assume that there are alternatives. This is why they are always able to get maximum value while spending less money.

You Have More Time Than You Think

One key aspect of living frugal and happy is that you have more time to make a decision than you think. When you assume this, you avoid scarcity tactics. This is one of the most tried and proven sales tactics out there. The salesman will tell you “…available until supply lasts…” or “…limited stocks…”. This is supposed to trigger that sense of scarcity that all human beings have. You have to remember, our mind sets evolved during our hunter and gatherer days. During those times resources are scarce. So, if you see a good value in front of you, you take action immediately, otherwise, you are going to stave. When a sales person says “…available for limited time only…”, they are trying to appeal to that hard wired sense of scarcity. It works all the time. However, it doe not work with frugal people. Why? They assume that they always have more time, and guess what, they are absolutely correct. That sales person that says to you “…hurry now because stocks are limited…” is probably just pulling your leg. That item that you are looking at will probably be available for another day, or even another week, or maybe another month or another quarter. Do not let sales pressure tactics using scarcity push you into making a decision that you might regret later on.

How Much Will You Use It, And What Will You Use It For?

In terms of trying to figure out an alternative for a particular product, it makes sense to ask yourself certain questions regarding the product, because is can shed light on possible alternative solutions. Two key questions that can help you find alternatives are “…how much will you use it?” and “…what will you use it for?”. When you answer these questions, you can figure out alternatives regarding quantity and durability. If you are not going to use an item much and you are just probably going to use it one time or only a few times, and the use is for something that is really not all that essential, you might be able to find very cheap alternatives. These are key questions that you should think about almost instinctively when faced with an option. These are crucial to living frugal and happy.

Alternative Vendors Save You Money

Another frugal mental habit is to always think of alternative vendors. Just because you are convinced that this particular brand and this particular model is a good buy, it does not necessarily mean that you need to buy from the vendor you are dealing with. There might be other vendors that can sell you the same brand and model for a much lower amount of money.

Alternative Methods Will Save You Money

This is where you need to get creative. You have to understand that when you buy products and services, you are really trying to solve a problem, and you probably already know that in this world of many choices, there are many different ways to solve a particular problem. However, there are many different trade offs. Some solutions will take a little bit more time. Some solutions are not that convenient. Some solutions require assembly. Regardless, when you are serious about solving a problem but you want to save some money, it is a good idea to look for alternative methods, alternative products, alternative services, to achieving the same objectives that you would get with the product that you are thinking of buying now. This can save you quite a bit of money.

Considering Renting or Leasing or Buying Used Products

Finally, frugal alternative decision making must always consider renting or leasing or buying used products. You always have to look at the advantages that you get, which normally translate to decent savings, offset against disadvantages. The key disadvantages here is that, the used product might not be in good shape, the used product might break down after a while. Also, leasing might involve long term leases. Keep this option available but always weigh the advantages and disadvantages.

If you want to develop a frugal mind set, and maximize the value you get out of everything that you buy, always think in terms of alternatives. Keep the discussions described above firmly in mind, so you can come up with a frugal strategic decision making process that fits your situation and personality. The sooner you come up with such a decision making strategy, the sooner you can start living frugal and happy.

How To Save And Budget? Always Think In Terms Of Comparisons

A lot of people think that saving and budgeting requires lots of skill. A lot of people think that you almost need to go to a special school or you need to do a lot of research so you can properly save and budget. This is a very convenient way of thinking because it frees the people up from having to put up the effort to adopt the right savings mindset. You have to understand that if you want to figure out how to save and budget, you only need to think a certain way. That’s right, you only need to change your thinking patters so you can know how to save and budget in any type of circumstance, in any type of situation. The people who effectively save and budget do so as a habit.

People who know how to buy only the right things and to put enough away for a rainy day, do so out of instinct. The good news is that this is learned behavior. If they can learn it, so can you. So how do you figure out how to save and budget? One of the biggest ways to do this is to always think in terms of comparisons. When you are faced with a buying decision and you always think in terms of comparisons automatically, you can quickly figure out how to save and budget for that particular situation. Make this a habit. Keep the following tips in mind.

Don’t Assume You Only Have One Option

People assume that when they are looking at a particular product and they decide to buy that product, they assume that they only have one option. Once you assume this, guess what? You are trapped. You fell for the marketers’ trick. And the marketers are basically reeling you in. The reality is that you have a choice. It is a big market out there and there are always many options. You have options in terms of brands, you have options in terms of models, you have options in terms of functionality and benefits. Always keep this in mind. If you are trying to figure out how to save and budget in all types of situations, you only have to adopt the assumption that you have more than one option.

Don’t Assume You Have To Buy Now

Another popular trick that ensures that the people stay deep in debt is that thinking that they have to buy now. You have to buy immediately. If you fall into this thinking, you are not going to get out of debt. You are going to sink deeper and deeper into that debt hole. That is a reality. There’s no two ways about it. If you want to understand how to save and budget, you have to first realize that there is no law. There is no requirement that you buy now.

By giving yourself some breathing space and some time, you can look clearly at your buying decision. You might find the weaknesses in your logic. You might find that you really do not need to buy right now. You might find that there might be cheaper alternatives. This is a crucial step in thinking in terms of comparison. Comparative thinking is a very important part of a. The techniques you have to know so you can know how to save and budget effectively.

Compare Different Options, Different Times, Different Vendors And New Versus Old

Always keep in mind that there are different options you can use to fill the same need. If you definitely need to fill that need right now, keep in mind that there are different times to feel that need. If yo need to feel that need right now, then you have to understand that there are different vendors and you can buy used products. By always thinking in terms of comparisons and thinking this way automatically, you can effectively figure out how to save and budget.

Savings Lifestyle

The Core of Any Savings Lifestyle Is Accepting That Discipline Is Its Own Reward

Usually, when people say the word discipline, all sorts of nasty images come to mind. They think that discipline involves pain. They think that discipline involves like not living to the fullest or not really enjoying life. In many cases, discipline is something that only comes to mind when unpleasant choices have to be made. In many cases, people don’t even think about discipline.

However, if you want to be successful in business, in school, at work, in your relationships, and in other aspects of your life, discipline is definitely required. Self-discipline is definitely crucial when it comes to saving money and planning for the future. Make no mistake about it. The core of any savings lifestyle is accepting that discipline is its own reward. Discipline is the glue that holds together the set of values that you need so you can put away money for a rainy day.

Discipline is what enables you to save money now instead of spending it so you can invest and grow it later. Unfortunately, discipline is basically a bad word for many people. Here’s why.

Savings Lifestyle

Discipline Flies In The Face Of Our Modern Culture

You only need to look at mass media to understand why discipline is not very popular. When you look at all sorts of ads, you are supposed to enjoy life right now, at this very minute. Even if you don’t have any money, go ahead and get into debt just so you can enjoy that product, that service, or that “lifestyle”. Why? You deserve it.

This whole concept of people deserving things even before they earn it is really ridiculous. It’s kind of like eating something before you actually earn it. Unfortunately, thanks to modern credit, this is very possible, and this has resulted in many people declaring bankruptcy and really having very little left over at the end of every month.

The whole concept of not eating dessert now so you can eat it in the future when you are more able to, flies in the face of all these advertising messages. It flies in the face of our modern culture. We are creatures of comfort. We want comfort and convenience right now. However, savings lifestyle cannot take place in this kind of mindset. It cannot take root within this mindset. Discipline is needed.

Life Rewards Discipline

If you were to review the biographies of really successful people throughout history, there is one solid and common trait that they all have. At certain points in their lives, they exercise discipline. They were able to do what is necessary and hard now, so they can enjoy pleasurable things and rewards in the future. Make no mistake about it. Whether you are planning out your academic future, looking at building a career, or you are looking to start a business, you have to have discipline.

This is definitely true regarding adopting a savings lifestyle. A savings lifestyle is rooted in your ability to undergo temporary pain now by not buying stuff or spending as much as you would want so you can enjoy the benefits in the future. Savings lifestyle is not possible without discipline. This is why discipline is its own reward.

Living Frugally

Living Frugally Means Defining Yourself beyond Material Terms

The category this blog post is under focuses on adopting a savings lifestyle. You have to understand that your lifestyle is a reflection of your mindset. If you want to live the right lifestyle which leads to the results that you are looking for, then you have to adopt the proper mindset.

Different lifestyles have different mindsets behind them. Our inner world is reflected in our outer world. If you see a person who is consistently happy and joyful, that is because that person is happy and joyful inside. That is how things work in real life. So if you want to adopt a healthy savings-oriented lifestyle, you need to adopt the proper mind frame.

One key aspect of this is to define yourself beyond material terms. We get into all sorts of trouble if we define ourselves purely in material terms. The most common way people do this is to assume that what they own defines them.

Living Frugally

For example, if you own a Honda, you look at yourself in a certain way. You look at your place in the world in a certain way. You occupy a certain level in the world because of the Honda you own. Now if you own a Ferrari or a Lamborghini, you probably define yourself higher up on the ladder. And you look at yourself in completely different terms. What’s wrong with this picture? The problem is, it is not the things outside that define us. It is the things inside that define us.

Seriously, how you feel, how you conceptualize yourself, and how you position yourself in the world affects what you do. What you do affects the results you get. So, if you look at the world in the proper terms, then you are able to achieve the kind of results that you want. This does not necessarily mean that you should shoot at to get a Mercedes or BMW.

It can mean that you might be into art, you might be into travelling, you might be into meditation, or you might be into charity. You see where this is headed? Real richness, a real feeling of satisfaction and contentment comes from within. This is why it is really important to separate ourselves from material results.

You have to define yourself behind material terms because the material is really a subset of the internal. The material items in your life are products of the immaterial items. Think about it. Your Mercedes does not define you although your Mercedes is a product of your ambition, your ability to set goals, and most importantly to achieve them.

See how this works? Your Mercedes is really just an outward manifestation. It is like a grade of your ability to take the test of life. Your Mercedes is much more of like an outward sign of the things that you really have inside.

You have to understand this because if you look at your life in terms of the things outside, then you are really losing all perspective. You will have your priorities wrong. Keep the following key questions in mind because they really go into the heart of the matter. They really push you forward in redefining yourself outside of material terms. They form the basis of living frugally.

Who Defines You?

This might seem like a very basic question, but you would be surprised as to how many people overlook this question. They think that they are completely in control of their lives. They think that they are in control of their definitions. In reality, we are more gullible than we think. We are more prone to influence than we think.

For example, there is no rule saying that you should wear your baseball cap a certain way like twisted to the side or turned to the back. But people wear it that way. Why? They got influenced by somebody else. By being aware of who defines you and who influences you, you can then start making progress regarding taking control over your own personal definitions.

Just because everybody is doing something does not mean it is right. A foolish or wrong opinion is still a foolish and wrong opinion, even if fifty million people say it is right. A key step towards defining yourself beyond material terms involves retaking control over your internal definition mechanisms. Ask yourself that question. Who defines you? The right answer is you. Keep working at it until you get to the right answer.

Can You Really Gain Security From Material Things?

As mentioned earlier, the material aspects of your life are actually the products of your internal or immaterial processes. Your mental processes produce the material items in your life. Not the other way around. It was you who decided to buy something. It was you who decided to work towards a goal that ended up with you having enough money to buy stuff.

You see how this works? It all begins with you. The problem is when we get so wrapped up in our possessions that we put our security in the possessions when the security actually begins and ends with us. It is we who decide our priority. It is we who decide how much effort to focus on certain things. When we do this, when we push ourselves, we make things happen.

We lose control over our lives when we give the material things in our lives more power than they really have. If you really think about it, the material things in your life do not really have any power. So why define yourself in terms of your possessions? Your possessions would not exist if it were not for you. Do you see what is wrong with this picture?

The Right Mind Frame for Living Frugally Does Not Need a Price Tag

Leave it to modern American marketing to basically say “Well, if you want the right mind frame, you need to have the right lifestyle.” Of course the right lifestyle has a certain price tag. This is such a pervasive and popular lie that people buy into it again and again.

All you need to do is read a magazine and look at a Calvin Klein ad and you would see that it is not really selling clothes. It is not really selling perfume or cologne. It is selling a lifestyle. Do not fall for this lie. The right mind frame does not need a price tag. The right lifestyle comes from the right mind frame. And you cannot buy the right lifestyle.

If anything else, you buy into somebody else’s illusion. Make no mistake about it. The right mindset produces material gain. It’s okay to have possessions. It’s okay to have stuff. But never for one second fall for the delusion that materials produce the right mindset. You are always in control.

Your possession, how much stuff you have, how much enjoyment you get from your stuff and your lifestyle are all decided on by you. These are choices. These are learned behavior. If you are unhappy, the solution is not to buy more stuff. The solution might be to unlearn the stuff that is making you unhappy and learn the mindset that can make you feel more fulfilled and content.

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