Have You Started Saving or Shopping For Christmas Yet?

AH! Christmas is less than two months away!

I know it is only Halloween, but it shouldn’t come as a surprise to anyone that Christmas is so soon after Halloween every year.

Unfortunately, people always seem to be surprised by how quickly Christmas sneaks up on them.

The worst surprise, however, is how much money gets drained from your paychecks (or hopefully your holiday targeted savings account) in the next two months.

Start Saving Now

If you don’t have any cash set aside for the holidays yet, you had better get started saving now!

Depending on your family, I wouldn’t be surprised if you spend hundreds or thousands of dollars above and beyond normal expenses in the next couple months.

If you’re already running your household on a tight budget, you need to start planning now.

The best way to save for an event like this is in advance, so take a portion of each paycheck and put it into a separate holiday fund.

Figure out how much you want to, or more likely will end up, spending and then divide that by the number of paychecks until you’ll spend the money.

It’s that simple to figure out how much you need to save!

How To Find The Money To Save

Even if you don’t think it is possible to find any money to save, I think you’d be surprised at what you can cut back on. The first step is to see what you can cut out of your normal expenses for a couple short months.

It won’t be forever, just until you can save enough money for the holidays. After all, you don’t want to charge up credit card debt or have to skip any other debt payments.

A common area that many people can save money on in the short term is food and dining out. Use up the food that has been sitting in the back of your pantry or freezer and give your grocery bill a break for a couple weeks or, if you’re a food hoarder, months.

If you normally go to fancier sit down restaurants, try to downgrade to a less expensive restaurant for a couple months.

Better yet, if you want to save even more money cut out half of the meals that you would normally eat out at restaurants. You could even go as far as quit dining out at all if you need to cover a large holiday budget in a short period of time.

Start Over Again In January

If it was tough to save enough money for Christmas in just a couple of short months, then January offers the best opportunity to make things easier on yourself next year.

After you total up how much money you spent on the holidays this year, simply divide that by the number of paychecks you’ll receive before the next holiday season.

Why is it easier to start in January? The amount you have to save per paycheck is much, much less when you have 12 months of paychecks to spread the cost out over, rather than just two months.

Do you save up for the holidays throughout the year, or at least a couple of months ahead of time? If not, are you going to start now, or at least start in January for next year?

5 Simple Financial Concepts Will Change Your Life Forever

Managing your finances isn’t rocket science.

In fact, it is super simple once you boil it down to a few simple concepts.

The problem is, you may not initially like the results of following these concepts.

If you can stick to these pieces of advice, you’ll be well on your way to successfully managing your finances.

Track Your Finances

While most people would be better off actually following a budget, tracking your finances is the absolute minimum you can get away with. You need to keep track of all of your income and expenses in one form or another.

Personally, I use Quicken and Personal Capital to manage most of my financials needs.

I use Quicken to keep track of my day to day expenses and income, also known as my income statement. At any time, I can pull up a history of all of my spending to see exactly where my money went.

I can also check to see if a certain spending category is getting too high and needs to be put into check.

Personal Capital is where I keep track of my assets and liabilities, also known as my net worth or my personal balance sheet.

Spend Less Than You Earn

Spending less than you earn is one of the most simple rules to understand, but often one of the more difficult rules to follow.

It is absolutely imperative that you follow this rule if you want to live a financially successful life. Spending less than you earn is the only way you can save money for big goals and invest for your future. Ideally, you’ll spend much less than you earn.

Thankfully, there are two ways you can make that happen. You can either spend less money, the less fun way, or you can earn more money. More on that later.

Plan For Known Future Events

Do you know your car will eventually need to be replaced? Do you know you’ll be getting married one day? Do you know you’ll want to eventually own a home?

Once you have an idea of what you want to happen in the future, it’s time to take action. Start saving for those things today so you can be prepared when they arrive.

You can live life without car loans if you plan. You can have a wedding without going into debt. You can save enough money to put 20 percent down on your first home.

Surprisingly, some people even save enough money to pay cash for their first home. It’s rare, but it can be done.

The biggest key to preparing for these goals is figuring out when you think they’ll happen and about how much they’ll cost. Divide the cost of the future event by the number of months left until the event happens and you’ll get how much you need to save each month.

If you can’t save that much, the event either won’t happen, will have to be delayed or you’ll go into debt when it does.

If you don’t know when an event will happen or how much something will cost, make your best educated guess. Then, if you discover something will be different, adjust at that point. At least you’ll already have started saving.

Invest The Rest

When you’re spending less than you earn, there should be money left over. You’re doing something wrong if there isn’t.

You should be investing that money for your future if you aren’t earmarking that money for a specific short term goal.

Whether that means investing in index funds, mutual funds, the stock market, a business or improving your earning potential, the money needs to be invested.

If you just leave money in a savings account, it won’t grow faster than inflation and you’ll actually lose money over the long term in most cases.

Grow Your Income Potential

To accelerate your financial freedom, you can start growing your income. There are many ways to go about this.

You can further your education to help you move up in your career field. You can start a side hustle to supplement your day job income. You can start a business that has unlimited growth potential.

The number of ways you can increase your income are endless. The more you increase your income, the more you can invest and save for your future.

Doing These Thing Isn’t Always Easy

Are all of these pieces of advice fun? No, probably not.

However, they’ll set you up for financial success. Yes, it may be difficult.

Just because it is hard doesn’t mean you shouldn’t do it. Some of the best things in life are challenging.

Being in control of your financial life is well worth the challenge.

Are you in control of your finances? Which step from above do you need to work on?

Don’t Let Finances Completely Control Your Decision Making

should we buy hardwood tile or carpetMany people make decisions simply based on what they want to do.

Then there are the rare people that make a majority of their decisions based on what makes the most financial sense.

While I wish it was easy to tell you there is one correct method about how you should make all of your decisions involving money, there isn’t.

Instead, you have to balance what you want with the money you have available to you and make the best decision you can.

Currently, my wife and I have been trying to make one of these decisions.

Hardwood vs Tile vs Carpet – Which Flooring To Buy

We’re currently considering changing out the flooring in the majority of the living area of our home.

We’ve planned to do this for a while, but now that we’re getting close, we’ve gone back and forth between a few different ideas.

The Short Term Cheapest Option – Carpet

Right now, the cheapest thing to do would be to leave the carpet as is or, if my wife really hates the current carpet, replace the carpet.

Carpet is by far the cheapest flooring option up front for us, but you’ll end up having to replace it sooner than you would likely have to replace an engineered hardwood floor or a tile floor, which are currently our other two options. Carpet can get nasty quickly, especially in high traffic areas.

The Long Term Cheapest Option – Tile

On the other end of the spectrum, hardwood look tile would likely be the most expensive option for us at this point in time up front, but would be the lowest cost over a long period of time.

Once you install it, tile requires very little maintenance and would likely last until we move out of the house or get tired of it. Unfortunately, I’m not a huge fan of tile and I worry the hardwood look tile will eventually look bad as they continue to improve on the current methods.

Our Favorite Look And Feel Option – Engineered Hardwood

Finally, we could opt for an engineered hardwood floor. This prices in between carpet and tile as far as up front cost. At the same time, engineered hardwood floors would last longer than carpet, but not as long as tile would. However, hardwood is my favorite option as far as feel and look goes.

Wood floors will get scratched and dinged over the life of the floor. If it gets bad enough, we may have to refinish the engineered hardwood, but we would only likely be able to do so once before having to replace it due to the way it is made.

How Do We Choose?

So how should we choose our new flooring? Financially, it seems like tile would make the most sense long term and carpet would make the most sense from a cash flow perspective right now.

Ultimately, if it was a truly financial decision, we would go with tile. Fortunately, nothing is just a financial decision.

Buy For Enjoyment

Money is a tool and you should use some of your money to enjoy your life. Granted, you need to make sure you’re living within your means by spending less than you earn and not incurring debt, but you shouldn’t make all of your financial decisions based on what makes the most financial sense.

Keep Cost In Mind

That said, keep cost in mind. While I would easily spend some extra money to buy something I enjoy a bit more, it should still be practical. While I might enjoy having a multi hundred thousand dollar Bentley car, it makes no sense on any level so I’ll never buy one.

However, getting hardwood floors instead of tile or carpet isn’t anywhere close to buying a Bentley so it’d probably be an okay use.

Ultimately, I think we’re going to end up going with the engineered hardwood flooring. We still have to get a few quotes to make sure pricing lines up with what we think it will, but I think we’ll enjoy hardwood the most.

Additionally, the cost isn’t that much higher over the life of the floor. This will just be one of the areas we decide to spend a little more to get some enjoyment out of our money.

What would you do? Would you go for the most cost effective long term solution, would you go with the cheapest up front solution or would you just save up and pick the option you liked best? Let me know in the comments.

Photo by: Lara604 Text added by: Lance Cothern

How Much Is Your Time Worth To You? Here’s How To Find Out!

how to value your timeWe all have the same amount of time every day. There are only 24 hours, 1,440 minutes or 86,400 seconds in a day.

To my knowledge, no one has figured out how to manipulate, slow down or make more time.

No one has informed me, or anyone I know, of a fancy time machine that can take us back in time, either.

That means we’re limited in how much time we have every day, week, month and year.

No one knows how much time they have left on this planet, but we all know that our time is finite.

To me, that makes time one of the most valuable things anyone can have in their lives. An abundance of time would make anyone richer, instantly.

We all value the time we have left in different ways. Unfortunately, many people do not realize how valuable our time really is. That’s why you must go through the exercise of figuring out how much you value your time.

How To Value Your Time

Most people assume time should be valued in a monetary fashion. If you follow that line of thinking, you need to figure out how to go about setting a dollar amount that each hour is worth to you.

Most people automatically think of their pay rate at their job as how to value their time. To figure out if that is how you value your time, ask yourself if you would work an additional hour at your job at that rate if you were given the option.

Related: Would You Endure Misery For A Six Figure Job?

If you say you would work that extra hour, your time is worth your hourly rate or less. If you say no, figure out how much you would need to be paid to work one additional hour. That amount is what your time is worth.

Of course, you probably would not work an additional 40 hours (a total of 80 hours) at that hourly rate. For most people, each additional hour would have to be paid at a higher and higher rate, as each hour worked takes away from your free time.

Related: Is It Worth The Effort To Work Two Full-Time Jobs

That means that your time probably doesn’t have a flat hourly rate. Instead, your time is valued based on how much free time you have.

You would also want to consider any costs that would be associated with the extra time you work and add those in to your value as well. Whether you’d have to commute to work an extra day or end up buying a prepared meal for dinner, these costs should be considered, too.

Can Time Really Be Valued In Terms Of Money?

Others would argue you can’t value your time in a monetary fashion. Time is inherently too valuable to assign a dollar value to an hour. Instead, time should be valued based on things like experiences.

In this valuing system, you would come up with a hierarchy of how you would ideally spend your time and try to spend the most time doing the things toward the top of your time value list.

Related: Things or Experiences? Which Is A Better Use of Your Money?

Once you have stashed away enough money to spend your free time how you wish, you would quit trying to earn money in order to spend your time doing those more valuable things.

However, if working or doing something that earns money is your highest valued way to spend time, you could work constantly. Some of these people are workaholics while others are extremely driven by a passion project.

Using Your Time Value To Make Decisions

After figuring out how you value your time, you can use that new found value to put things in perspective. Figure out if you’re really spending your time the way you want to.

If you aren’t try to brainstorm ways you can spend more time doing what you wish to while still being able to financially support yourself and your family.

This may mean sacrificing some of your time up front to build enough wealth to become financially independent so you never have to work another day of your life. Alternatively, it may mean giving up fancy cars and taking a job that doesn’t require you to work as many hours.

Life is full of choices. What you do with your time is one of them. Will you be a slave and give away your time for things you don’t really value just to impress others? Figuring this out early will open your mind up to limitless possibilities.

What are your priorities? What do you want to spend the most time doing? Do you have to sacrifice by trading time for money to make things work? Or do you enjoy what you do to earn money to the point where you want to spend time doing it? Let me know your thoughts in the comments below.

Photo by: stuartpilbrow Text added by: Lance Cothern

Sometimes Paying More Up Front Saves You Money

pay more save moneyI hate printers. I hate them with a passion. Why?

For as long as I can remember, I have always had an ink jet printer.

I rarely ever used the printer, but whenever I did, it seemed like the printer would have to clean the printer cartridge or perform some task to waste a major amount of the oh so expensive ink.

Often the ink would have completely dried up right when I needed it most.

I’d then take a trip to Wal-Mart or my nearest office supply store to drop anywhere from $20 to $60 on new ink cartridges that would end up performing the same exact way.

Typically, I might get less than 100 pages out of an ink cartridge, which was an outrageous idea to me.

Why are we paying so much for ink? There had to be a better solution.

We Spent Money Up Front To Save Money In The Long Run

Recently my wife and I decided it was time to have a reliable printer in our home again. We were sick of having to wait to print our documents at work the next day or dig out our awful inkjet printer and buy yet another inkjet cartridge.

So what did we do? We spent some money up front on a printer that would fit our printing needs. We bought a laser printer.

For comparison, the printer we bought cost $120 up front. That is four times more expensive than some of the cheap inkjet printers out there. It’s well worth it to us, though.

Why We Bought A Laser Printer

Laser printers work differently than inkjet printers. The ink can’t dry out. The print heads can’t clog with ink. Instead, we can leave our laser printer for months without printing a page and it should work right away when we decide to print something in the future. Laser printers use a powder toner that doesn’t dry out or clog.

On top of the awesome fact that we won’t have to go out and buy new ink every time we leave our printer dormant for a few months, the toner cartridges print many more pages than an inkjet ink cartridge does.

The toner we’ll need for our new printer will print 1,200 pages on a normal cartridge or up to 2,600 pages for a high yield cartridge. This should save us a ton of money over the long haul. While toner cartridges are more expense than most inkjet cartridges, they’re much cheaper on a per page printed basis.

Of course, our new laser printer only prints in black and white and it doesn’t do an awesome job printing pictures, but we’re okay with that. I can’t remember the last time we needed to print something in color and color laser printers would have easily cost of hundreds of dollars more.

Instead, we’ll just pay $0.59 a page at our local Office Max to solve any color printing needs we may have in the future. I’m sure we can even find a coupon to get a better deal.

How Does This Have To Do With Your Finances?

How does a laser printer vs an inkjet printer have anything to do with your finances? The laser printer was the optimal choice for us and will save us money over the long run. While we don’t spend a ton of money printing, we do spend a lot of money in other areas of our lives.

Think about your car, for example. How much thought did you put into your car purchase? You could have examined every aspect of the purchase to figure out if spending more on a car up front would save you thousands of dollars over the long run.

Related: Never Make A Car Payment Again After Using This Easy Trick

You would need to look at gas mileage, average maintenance costs and many more items to come to the total cost of ownership over the lifetime of the car. Compare that to the other cars you are considering buying and you might find out that the more expensive car up front could save you money over the long run.

The difference could easily be thousands of dollars and most people never give it a second thought.

The same exercise can be run on many other purchases you will make during your lifetime. Think about how huge of a purchase a home is.

You could probably save tens of thousands of dollars by buying the right home that will end up saving you money through energy efficiency and the proximity to the places you spend the most time driving to.

Related: The Definitive Way To Know If You Should Pay Off Your Mortgage Early

What If You Don’t Have Enough Money To Pay Higher Up Front Cost?

If you don’t have enough money to pay the higher up front cost, you have a few options available to you. You may want to consider delaying the purchase until you can take advantage of the most cost advantageous option.

If that isn’t an option, you can buy the cheaper up front option and sell it later to recoup some of your costs and upgrade to the most advantageous option later.

Finally, you could take out a loan if you would still end up ahead after paying for interest. I only recommend this for very well thought out purchases that are needs, not wants, so almost nothing should fit into this category.

A little bit of up front effort can clearly save you a ton of money and frustration over the long run. The bigger the purchase is, the more you should consider the long run in your decision.

What purchases have you made that might cost more up front but save you money over the long run? How did you come to your decision and how much did you save? Let me know in the comments below!

Photo by: Stephen_Clarky Text added by: Lance Cothern