Five Ways to Avoid the Financial Blues

By: Amanda Bashore Click author's name for more of his/her articles

In tough financial times, most people become increasingly conscious of their spending. While they may not be sure exactly where their money is being used, they’re positive that their wallets seem a little lighter. Saving money each month requires that you examine your priorities and change some perhaps long-standing habits. Oftentimes, bad tendencies have a sneaky way of disguising themselves as necessities. As times change, so must our spending habits. Cincinnati certified financial planner Amanda Bashore offers her top five tips for ensuring you’re always in good financial standing, even when the economy is not.

1.First thing’s first – examine where your money is going. Stash a small notebook in your pocket or purse, and write down every purchase you make for at least a week. Then, break down your expenses into categories like groceries, rent/mortgage, bills, insurance, gasoline and meals out. Most people are surprised to see how much they spend on certain items, like that cup of coffee you pick up daily on your way to work or enjoying dinner at a restaurant a few nights a week. Say you made coffee at home every day and cut back to eating out just one night a week. This could add up to huge savings at the end of the month.

2.Where do you keep your savings? And don’t say in your sock drawer. If your money is kept in a normal checking or savings account, you’re missing out. Financial planners suggest making your money work harder for you by placing it in a high yield savings account, which pays more than average interest. These accounts allow you to earn a small, but safe, return on your investment.

3.Even in tough times, set aside money for retirement. Financial advisers will always recommend that you continually put money in your 401(k) or IRA accounts. If your company has a 401(k) matching program, be sure to take advantage – this can be one of the best and easiest ways to save. When you sign up, the money you save is automatically deposited before it is taxed, which saves you money in the long run. If your company doesn’t have a 401(k) program, an IRA is the next best thing. Money that's already been taxed as part of your normal paycheck will be deposited, with a cap of $5,000 per year for those under 50 years of age, and $6,000 for those over 50. Be cautious of using expenses or a down economy as an excuse for not saving. Always keep in mind that every little bit helps, even if you’re only contributing $100 per month. A certified financial planner can help you determine your best option for retirement saving.

4.Never pay full price. You’d be very surprised at the amount of products and services you can haggle for – nearly everything. For example, it doesn’t take a financial adviser to tell you that paying $100 per month for a gym membership is downright frivolous and much too expensive. When you go in to sign up for a membership, make it clear that you’ve done your research and know the comparable prices of gyms in the area. Sellers will be more eager to win your business if it’s clear you know their competition. This applies to mostly every service or product, from produce at the grocery store to a great couch at a local furniture store. Don’t be afraid to ask for what you want – more than likely, they will bend at least a little.

5.Moreover, don’t pay for things you can get for free! Most people don’t know that they’re entitled to one free credit report each year from each reporting company. This means that you can technically receive a free credit report once every four months. Be sure to visit www.annualcreditreport.com to pull yours. There are also many other services you should never pay for, such as banking, credit cards and tax preparation. All of these can be found for free if you are willing to take a little time to do your homework.

Article Source: ABC Article Directory

About The Author: Amanda Bashore is a Support Advisor at The Asset Advisory Group. an independent Cincinnati financial advisory firm that manages investments for high net worth individuals and their families. She studied finance at The Ohio State University and was a Cum Laude graduate of Wright State University. Amanda is active in many local women’s and young professional programs, including the Cincinnati USA Chamber of Commerce’s C-Change leadership program.