Ways People Waste Money

Wasting money is not only detrimental to your overall financial well being, it’s irresponsible. Your house and living expenses make up the major portion of your personal budgeting plan. If you are not careful, they will leave you with little or no money to build financial security, or play with. Just like spending cash unnecessarily, paying for home expenses that are unnecessary is just wasting money. Here are some ways people waste money on household expenses.

Paying for the same service twice.

Most households subscribe to cable T.V. A good portion of cable subscribers also pay additional money for one or more movie channels. It’s not unusual for these same families to rent movies from video stores and/or subscribe to a movie service via mail. In this scenario, there are now three resources included in the household budget for movie viewing entertainment. Which, by the way, is technically a discretionary expense, not even a necessary expense.

You can save by trimming down this expense to one good service that best meets your family’s movie entertainment needs. List and analyze your movie viewing options. Determine which service gives you the most benefit for your money. Then, make an informed decision on which service to keep. Reducing this household expense could save hundreds of dollars per year.

Paying for services that you don’t use or really don’t need.

This is most common with home phone services. Features like call waiting, caller ID, return call service, long distance packages, etc, etc, etc. are extra expenses that you could possibly live without. Is the convenience of caller ID worth a fee of nearly $8 per month? Do you really need it? Eliminating little money leaks like this adds up to significant yearly budget savings. Review all of your household expense bills to see if you’re paying extra for services you don’t need. Eliminate extra services and the fees that go with them whenever possible.

Sometimes making lifestyle changes can reduce expenses significantly. You can minimize costs on essential household expenses by simply being more aware. During Summer months, don’t turn on the air conditioner until you can’t take it anymore. Not using the air conditioner will save the most on home energy expenses. Many gas and electric providers offer energy efficiency evaluations for your house, free of charge. Take advantage of this service to see where you can make home improvements that could mean substantial savings in energy costs. They may also offer suggestions for lifestyle changes that can reduce energy expenses even further. During winter months lower your thermostat a few degrees and dress warmer if necessary.

Review, remove, and reduce expenses to stop wasting money and trim your household budget. Analyze each household expense for necessity and the costs associated with it. Make an effort to reduce each expense to the minimum amount possible, while still meeting your family’s needs. Before you know it you’ll be saving hundreds, if not thousands, of dollars on your household budget expenses each year.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.

Ways To Build Your Financial Future

You’re just out of college, starting your first job. Building long-term financial security is probably the last thing on your mind. But. young people just entering the workforce must not underestimate the importance of financial planning geared toward saving for the future.

One of the best deals is an employer-sponsored retirement plan such as a 401(k) plan, if available. These tax-advantaged plans allow you to make pretax contributions, and taxes aren’t owed on any earnings until they’re withdrawn. What’s more, Roth-style plans allow for after-tax contributions and tax-free withdrawals in retirement, provided certain eligibility requirements are met. Another big plus is direct contributions from each paycheck so you won’t miss the money as well as possible employer matches on a portion of your contributions.

If you’re already participating, think about either increasing contributions now or with each raise and promotion.

If a 401(k) isn’t available to you, shop around for individual retirement accounts (IRAs), both traditional and Roth, at banks or mutual fund firms. Generally, contributions to and income earned on traditional IRAs are tax deferred until retirement; Roth IRA contributions are made after taxes, but earnings thereon can be withdrawn tax-free upon retirement. Note that certain eligibility requirements apply and nonqualified taxable withdrawals made before age 59 1/2 are subject to a 10% penalty.

Teach Children Early About Money

Just as with many other life lessons you will teach your kids, it is important to instill sound money management principles in children. As you attempt to instill other good habits in your youth, do not ignore a vital ingredient: financial awareness. Many children grow to adulthood, lacking the skills and ability to handle money. This can lead to years of unhappiness and hardship.

When teaching your children about money, begin early. The sooner your children develop awareness, the better they will understand the realities of the financial world.

It should go without saying, but your best bet is to lead by example, practice what you preach. You must display financial soundness. Whether you  realize it or not, your children pay close attention to what you say and do. Chances are they will model their behavior after yours.

Save gift-giving for special occasions. Though generosity may seem like a good quality, dumping extra money into their hands, without adherence to a budget, can send mixed messages.

Allow children to control their own discretionary spending. If a child is to learn about money, he or she must sense some meaningful connection to it. Though the parents should advise their kids on sensible spending and saving, they should not dictate how their offspring handle their earnings. The decision should be theirs, on how money received is to be spent, or saved.

If there’s one common mistake when it comes to raising financially responsible children, it is an inability of many parents to properly regulate their own financial lives. Prior to the age of about twelve the average child lacks exposure to finances, except for whatever involvement the parent or guardian generates. Regardless of your own current situation, the way you handle your finances is critical in securing the future financial success of your children.