Big Financial Mistakes You Don’t Want To Make

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Reality check: there is no such thing as a perfect financial plan. While it may be difficult to achieve perfection in our planning, there are things we can do to avoid making the big mistakes. Here are three examples of financial mistakes that people often spend decades trying to recover from:

Thinking that you don’t need a budget (or it’s impossible to follow one for your situation).

  • “I know that budgeting is important, it just hasn’t worked for me.”
  • “It’s too hard to follow a budget.”
  • “I have a general idea of where my money is going but not a written plan.”

Similar statements are shared in financial planning meetings and during meaningful discussions between friends and family on a regular basis. We all have life goals and a vision for how we think our money should be aligned with those things that matter the most to us. The problem is that the lack of a budget is a major obstacle standing right there in the middle of our path.

Let’s call a budget by its proper name and purpose – it’s really a “personal spending plan.” These spending plans give us awareness of where our money is going and help us prioritize financial decisions. Too many people think budgets are just for those who are struggling to make ends meet. In reality, we all need a personal spending plan and it needs to be more than just a brain cloud of good intentions. It needs to be in writing.

The good news is that it doesn’t have to be perfect. Your budget can be as simple or complicated as you want it to be. Try to make saving, paying the bills, and paying off debt automatic. Then check out automatic budget tracking tools like Mint or GoodBudget to see if one might be worth adding to your budgeting tool chest.

Relying on credit card debt to pay for lifestyle choices.

If lack of a personal spending plan is a problem that can delays financial life goals, then debt issues may prove to be even bigger obstacles on the path to important goals like retirement. For example, Alicia and Tony, a couple in their 30’s, are trying to balance the competing goals of paying everyday living expenses, digging out of credit card and student loan debt, and raising 3 kids. They saw firsthand how seemingly small credit card balances can pile up in a hurry. If not addressed early enough, the financial stress will continue to increase along with that debt.

Initially, they said the combined balances owed on these cards usually never exceeded $2-3k. However, shortly after the birth of their twin daughters, Tony’s job was eliminated. Unfortunately, this major life event did not result in major changes to their lifestyle. Tony eventually decided to start his own home-based business funded in part with personal credit cards and their total balances ballooned to over $35,000. While some of these credit card expenses were for necessary items, most were for lifestyle choices, or “wants” and not “needs,” that could have been avoided.

If you have revolving credit card balances, an innocent night of fun and revelry could end up costing hundreds if not thousands of dollars over time if it’s funded by plastic. We also tend to spend more when we swipe a card compared to simply paying with cash. Credit cards are not necessarily a bad thing, especially if you have the discipline to pay them off in full each month. In fact, you can rack up some nice rewards and let the 34% percent of Americans that have revolving credit card debt help pay for your perks. After all, the average consumer spends $2,630 per year on credit card interest.

The best way to make sure that you’re not using credit cards the wrong way is to create a “24-hour rule” for all purchases with credit. If you can’t pay off your balance in full within 24 hours, then you shouldn’t buy that item. If you can’t manage that plan, it may be time to cut up those cards.

How we choose to manage our personal finances says so much about our life goals, values, and priorities. These financial decisions also demonstrate how we balance living in the moment with the need to plan for future goals. This balancing act can be a struggle and that is exactly why the simple act of creating a basic financial plan can help you stay focused on what matters the most to you. Just remember to avoid making the big mistakes when creating and following your financial plan.

Be sure to utilize First Financial’s free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

*Original article source courtesy of Scott Spann of Forbes.com.

3 Steps to Prepare Your Finances for a Good Year

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January is over and for many of us, that means New Year’s resolutions are almost out the window. But we still have most of 2016 ahead of us. Here are a few ways you can set yourself up for financial success this year and beyond.

1. Adjust your tax withholdings.

When it comes to income tax, the goal should be to come out even. On April 15, you don’t want to get a huge refund or a huge tax bill.

Getting a refund is exciting, and it’s not a bad way to accumulate savings. But remember, that means the government has held your money for the entire year without paying you interest. In essence, you gave the government a free loan. To avoid this situation, decrease the amount of income tax you have withheld by your employer.

If you’re in the other camp and receive a big bill, that’s another reason to revisit your withholding amount. In this case, you should increase the amount of taxes being taken out of your paycheck each month.

And if your life situation changes in the middle of the year — for example, you get married or divorced or have a baby — you should also take another look at your withholding amount.

2. Increase your 401(k) contributions.

Are you saving enough for retirement? Now is a good time to review your year-end 401(k) statement or pay stub and find out how much you contributed to your retirement plan in 2015.

At the minimum, you should contribute enough to qualify for your employer match, if you have one. If you have more money available, shoot for the maximum allowable contribution in 2016 ($18,500); if you’re over 50, set up additional “catch-up” contributions of $5,500.

Making these changes early in the year will ensure that you plan your monthly cash flow around your higher contributions. And if you wait until the middle of the year to adjust your contribution amount, you’ll have to save much more each month to reach your savings goal.

Have you had your financial portfolio reviewed lately? We invite you to set up a no-cost consultation with the Investment & Retirement Center located at First Financial to discuss your current finances and future savings goals. Contact us at 732.312.1564, email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com, or stop in to see us at any branch location!*

3. Review your employee benefits.

Check your company’s resources page to make sure you’re taking full advantage of the useful — and often free — benefits it provides.

Review your current benefit elections to determine what coverage — such as health, life or disability insurance — you have in place and whether it’s still adequate. Life changes — again, including getting married or divorced or having children — can be good reasons to adjust your coverage.

If you do need to make changes, ask about your company’s open enrollment period; this is often the only time you can make changes to your coverage, unless you experience a qualifying life event, like the ones mentioned above. On the other hand, you may change your 401(k) options on a fairly regular basis.

Pay close attention to your benefits. Incorrectly selected or overlooked benefits can cost you money.

The Bottom Line

Doing these tasks early in the year can help you commit to improving your finances in other ways during the rest of the year. So don’t wait — tackle these steps today to set yourself up for a financially successful 2016.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Original article courtesy of Anna Sergunina of NerdWallet.

8 Simple Ways to Stretch a Dollar

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Living within your means is the foundation of financial health. But, that’s easier said than done. If you find yourself in the red at the end of too many months, you’re not alone. “Sticking to a budget” is the No. 1 financial challenge for Americans, according to a recent GOBankingRates survey.

To get the best savings advice, GOBankingRates turned to the smartest money experts out there — the finalists of our “Best Money Expert” competition, we asked them:

“What are the best ways to stretch a dollar?”

In response, these experts delivered strategies to save more, spend less and make room in your budget for what’s really important. Click through to read their tips.

1. Go on a Spending Freeze.

Nicole Lapin, a consumer expert and New York Times best-seller author, shared this advice for those looking to get more out of their budgets: “Go on a spending freeze with your partner, colleagues, or best friends.”

To put this spending freeze in action, Lapin suggested looking for everyday ways to spend less, like staying in with inexpensive bottles of wine over heading to the bar, or hosting a clothing swap with friends instead of going on a shopping spree.

Lapin is a big believer in the power of friends to support each other in creating better financial habits. “Create a support system, and help each other,” she said. For example, if you really want to buy something but you have a savings goal, “save with a friend,” Lapin suggested. “She likely has something on her wish list, too, and it’s easier to commit to saving long-term if you go in on it together.” You can even up the ante, and “create a friendly competition around who is doing best at cutting expenses — think ‘The Biggest Debt Loser,'” said Lapin.

You’ll see big results as you work to curb overspending, but a strong support system is key. “As money issues become more intense, a like-minded community will keep you sane and moving in the right direction,” Lapin said.

2. Stop Mindless Spending.

Tony Robbins, a business and life strategist and bestselling author of “MONEY: Master the Game,” said that stretching the value of a dollar means spending it on what will add the most value to your life.

“Focus instead on the returns you’ll reap tomorrow,” Robbins said. “Often you can have the same level of enjoyment, if not more, by doing something simple.” For instance, if you’re getting together with friends, why not skip the $50 restaurant meal and “order in a couple pizzas and beers and split the cost among your group?” Robbins suggested. “Trade one good time for another, save yourself about $40 each time out, and you’ll be way ahead of the game.”

While saving $40 at a time doesn’t sound like much, this kind of mindfulness adds up. “[Save $40] once a week, and put those savings to work, and you could take years off your retirement time horizon,” Robbins said. That $40 a week adds up to $2,000 a year, which you can use “to harness the power of compounding and help you to realize big, big gains over time.”

“How big? How about $500,000 big?” Robbins said. “That’s right, a half million dollars. How? With the power of compounding at 8 percent over 40 years, that $40 weekly savings — $2,080 per year — will net you $581,944.

3. Always Be on the Lookout for Savings.

“Always look for a way to save, and don’t let saving opportunities pass you by,” said Jeanette Pavini, a finance reporter and spokesperson for Coupons.com. Pavini makes it her mission to help readers find easy and simple ways to save a little everywhere they shop. “There are so many opportunities to save out there, and it typically only takes a nominal amount of effort to take advantage of them.”

“In fact, I almost never make a purchase without applying some type of savings,” Pavini continued. “For example, buy a box of cereal on sale, apply a coupon from Coupons.com, get 2 percent back in credit card rewards, clip the box top so 10 cents goes to my child’s school, and use my grocery store loyalty card so I get points toward gas saving. One box of cereal — five different savings strategies.”

4. Try Envelope Budgeting.

For those who have trouble sticking to a budget, “I recommend that on payday, you take out the dollar amount you need until the next pay period and split it up among your envelopes,” said Clark Howard, host of popular nationally syndicated radio program “The Clark Howard Show.” “When one envelope empties, you either take money from another envelope or you do without until next payday.”

Moving to a cash-only system can help you cut spending and get in the habit of more carefully considering purchases. “Debit cards and credit cards can be the Bermuda Triangle of your wallet because it’s so easy to lose track of finances when you use them,” Howard said.

If you’re more high-tech, Howard said you can try a method invented by his executive producer, Christa. “She hit on the idea of putting money into different accounts for different purposes,” Howard said. “Today, she has three checking accounts and one savings account.”

5. Stack Discounts to Lower Your Grocery Bill.

Kyle Taylor, founder of popular personal finance blog ThePennyHoarder.com, gave this personal finance tip to families looking to stretch their dollars: “Groceries are often one of the largest expenses for families, so it makes sense to start here when you’re looking for ways to cut back.”

For true savings, Taylor’s advice is to look beyond the obvious. “We all know about couponing, but saving money is way easier when you know how to stack discounts.” Instead of settling for using just a coupon to save, you can combine that coupon with other savings strategies to cut your grocery budget down. “Utilizing an all-of-the-above strategy has helped me reduce my grocery bill by more than half,” Taylor said.

A favorite tip that Taylor uses is buying discounted gift cards from sites like Raise.com, which includes cards from grocers like Kroger, Whole Foods and Target. “These gift cards are sold for 1-25 percent below face value, meaning that I’ve saved money before ever stepping into the grocery store,” Taylor said. “I stack those savings on top of my regular coupons and then combine it with grocery rebates from apps.”

6. Get More Money Flowing In.

Of course, the advice to “spend less than you earn” is an equation that has two parts — how much you spend and how much you earn. Entrepreneur and performance coach Josh Felber has made it his mission to help people achieve success by following their passions, and in his view the best way to approach the “spend less than you earn” equation is to focus on the second part.

Instead of trying to stretch dollars, “always have a consistent flow so you don’t have to stretch,” Felber said. There’s a limit on how far you can cut your spending — everyone needs to cover the basics. But if you focus and invest in earning more, there’s no limit on how much your income can grow.

7. Put Your Money to Work.

Another “Best Money Expert” finalist, Robert Kiyosaki, emphasized the importance of getting more out of your money. “Invest it,” said the entrepreneur and author of “Rich Dad Poor Dad,” the self-proclaimed No. 1 personal finance book in the world.

Investing is the key to achieving true financial freedom. “Put your money to work for you … instead of working for money all your life,” Kiyosaki said.

8. Negotiate.

To truly stretch a dollar, never accept an initial price or offer. Whitney Johnson, an investor, innovator and author of bestselling book “Disrupt Yourself: Putting the Power of Disruptive Innovation to Work,” said that you should “negotiate, even when you think you shouldn’t.”

Negotiating is one of the best ways to make sure you’re getting the most value for your time, money or other resources. Johnson suggested following this advice, or “else you will earn too little or spend too much.” Fail to negotiate, and you’ll lose out on dollars you could have saved or bigger paychecks you could have earned.

9 Ways to Get Your Finances Ready Before Having a Baby

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Newborns don’t just come with that adorable new-baby smell and impossibly tiny toes — they also carry a hefty price tag. One of the most overwhelming challenges of parenthood is managing the many new costs, which seem to grow exponentially as your child does. If you’re planning to start a family, don’t panic. Here are the eight financial moves to make before becoming a parent.

1. Decide Where to Rein in Spending.

Knowing what your numbers look like is necessary to the planning-for-baby process. Leave out nothing: List all your assets, including your bank accounts, investments, and property. Get a clear picture of your debt, from car payments and credit cards to student loans and your mortgage. That way you have a starting point for your new financial plan.

Next, take a look at your budget (or set one up if you don’t have one) to cut back on unnecessary expenses. Now is the time to trim the fat in your spending, so reassess the costs you take for granted — like your cable or cell phone bills — to make sure you’re getting the best deals.

If you need to curb your spending, make realistic cuts that you can sustain. Otherwise, you’ll likely give up on your cost-saving measures.

2. Devise a Debt Action Plan.

With a baby on the way, it’s more important than ever to get serious about paying down your debt. It will only get harder to do as the expenses of raising a family pile up. Try:

  • The avalanche method: Kill your high-interest debt first — this is often credit card debt. Then continue down your list, tackling the highest interest rates first. This approach gives you the most bang for your buck financially.
  • The snowball method: Pay off your smallest debts first. Having a “win” under your belt early on can help give you the motivation you need to keep going.

You can also do a mix of the two strategies: Start with the snowball method and once you’re motivated by a zero balance, switch over to the avalanche. If you’re unsure of the best approach, you can also use an online calculator to help you strategize.

3. Build an Emergency Fund.

An emergency fund is crucial no matter where you are in life, but it’s even more vital when you become a parent. Conventional wisdom says your cash cushion should be around two to three months’ worth of expenses. Calculate what that means for you (rent/mortgage, food, bills, transportation, etc.), and then figure out what, and how long, it will take to get there. A savings calculator can help.

Padding your emergency fund generally should be secondary to paying off debt, because your debt’s interest can cost you over the long haul. But if you don’t have anything in the coffers, then you should work on both at the same time.

4. Budget for Baby.

Your budget isn’t written in stone; it should change as your life — and family — grows. Start crunching the numbers and adjusting as soon as you find out you’re expecting, or ideally, even earlier. You’ll need to add, at minimum, these basic expenses (based on national averages, which vary by location) into your new monthly budget:

  • Child care (at a daycare): About $972 a month
  • Disposable diapers: $30-$85 a month
  • Formula: $60-$100 a month
  • Clothing: $20-$50 a month

Note: If you want to save for college, you might consider a 529 college savings plan. For example, here is a hypothetical situation to help illustrate this point: To cover 25 percent of a public, four-year, in-state school, you’d need to save $109 a month starting when your child is born. (This assumes a 6 percent annual return and tuition rate of $201,386, which is what SavingforCollege.com predicts will be the average tuition in 18 years.)

If you would like to set up a no-cost consultation with First Financial’s Investment & Retirement Center to discuss setting up a 529 college savings plan or other savings products, contact us at 732.312.1500, email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com, or stop in to see us!*

5. Save for the Big-Ticket Baby Items.

There’s often a big up-front investment for new parents — babies require endless gear. You’re going to need a solid savings plan for those costs alone.

Depending on what’s right for your family, your up-front costs should include the following (these are based on the national average costs, and may vary according to your location or brand):

  • Crib: $120-$850
  • Changing table: $80-$250
  • Car seat: $80-$300
  • Stroller: $70-$900
  • Diaper bag: $25-$200
  • Playpen: $59-$150
  • Swing: $85-$120
  • High chair: $60-$250
  • Bottles: $50-$100
  • Monitor: $40-$60

Remember that people love to give baby gifts, so you may be able to register for many of these items and take them out of your budget.

6. Pump HR for Information.

If you’re expecting, or even just considering having kids soon, talk to HR as soon as possible. In order to fully understand what your leave will look like, find out:

  • The pay policy for parental leave.
  • Whether you can combine your leave with paid time off.
  • Your company’s long-term disability policy, and whether it can be applied to your leave.
  • The benefits entitled to adoptive parents.
  • How long your job is secure.
  • What forms you need to fill out to take leave.
  • Who is going to cover your duties while you are away.
  • The options for transitioning back to work — can you work part-time or telecommute to on-ramp?
  • Finally, get a sense of the insurance changes that will come with parenthood. Find out when and how to add your baby to your health care plan, and see whether your insurance allows you to contribute to a Flexible Spending Account/Health Savings Account or a Dependent Care FSA.

7. Get Your Legal Ducks in a Row.

No one likes to think about these sorts of things, but if you and your partner (if you have one) were to pass away, your estate would go to court for a lengthy process that can cost somewhere in the neighborhood of 5 percent of your assets.

To get your house in order, some of the documents you should consider having include a will, a power of attorney, and a health care proxy. This may save your heirs from having to make difficult decisions for you and help ensure that they’re taken care of: Wills clarify how you want to distribute your property after death, and they declare a legal guardian for your children. Power of attorney gives authority to another person to make decisions on your behalf about your property or finances. A health care proxy lays out who will make medical decisions for you if you can’t make them for yourself. Make sure you have both primary and contingent beneficiaries listed on all of these so that your wishes are as clear as possible.

You also should consider creating a living trust — a legal document that provides lifetime and after-death property management and lets you transfer assets easily. A living trust is a revocable trust, meaning it can be dissolved or changed at any time. Living trusts are especially helpful for parents of young children: You can include specific instructions within the trust, like how and when your assets will be transferred if you die before you children become legal adults (18 or 21, depending on the state).

8. Know Your Tax Breaks.

Having a kid comes with tons of benefits — unending love and (hopefully) someone to take care of you in your golden years, to name a few. But don’t overlook the concrete tax benefits that you can get as well. These include:

  • $4,000 for an additional dependent exemption.
  • $1,000 for the Child Tax Credit until the child turns 17.
  • $3,000 per child or up to 20 percent of qualifying costs for the Child and Dependent.
  • $13,400 for the Adoption Credit.

Each deduction and credit has specific requirements and can change from year to year, so be sure to double-check your eligibility with your financial advisor. Fun fact: You can claim a full year’s worth of tax benefits even if your child is born on December 31.

It’s always a good idea to start saving for your child’s future as early as possible – open a First Step Kids Savings Account right here at First Financial!** There’s just a $5 minimum to open the account and no fees, PLUS they’ll earn dividends on balances over $100. Stop by any branch location and we’ll help you get started!

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

**As of 7/2/2020, the First Step Kids Account has an annual percentage yield of 0.03% on balances of $100.00 and more. The dividend rate may change after the account is opened. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location. Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties.

7 Money Questions to Ask Yourself in the New Year

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Will you make financial resolutions for 2016? If so, you’re not alone. According to a study done by Fidelity Investments, financial resolutions are the most popular kind of new year self-improvement. Not only that, but they’re also the most successful, with 29% of people surveyed reaching their financial goals and 74% getting halfway there. Compared to the 12% success rate for resolutions concerning health and fitness, planning to get your finances in order seems like the way to go this year!

You don’t want to just make resolutions, though — you want to be part of the 29% that stick with them all the way through the year. To set yourself up for financial success in 2016, you first need to understand your relationship with your finances.

1. What are your financial goals for the year?
A new year often means new goals and milestones in your life, and your financial plan needs to change to keep up with those. Maybe last year you were saving for a trip abroad, but this year you are saving for a down payment on a house. Or maybe you’re edging closer to retirement and need to start saving more aggressively.

Don’t be vague when identifying these goals. A concrete milestone, such as “I want to add $6,000 to my emergency fund” is going to keep you motivated a lot longer than a vague one like, “I want to save money.” Once you know what your financial goals are, you’ll be able to come up with a spending and budgeting plan for how to reach them.

2. What are your personal priorities for 2016?
Factors other than financial goals should influence your budget, too. Is it important to you to spend time with friends on a weekly basis? Add a “fun” line in your budget for activities like eating out, movies, and weekend activities. Do you want to support the arts in your community? Set aside money for a seasonal subscription to a local theatre or orchestra. Do you have specific causes that you care about? Budget a monthly allowance for donations or charity.

When it comes to finances, it’s easy to fall into the trap of letting your financial goals determine your spending. But life is more than just retirement and mortgages. Give yourself permission to let your personal priorities influence your spending decisions, too. You’ll be happier, more satisfied with your financial life, and better able to stick to the budget you set.

3. Where did you slip last year?
The new year is an excellent time to take stock of what did and didn’t work in the past year — that includes where you didn’t quite follow your budget. Did you eat out more than you should have in 2015? Not save as much for retirement as you wanted? Impulse shop too frequently?

You can’t improve in 2016 until you know where you went wrong the year before. Take some time to look at your spending from the last twelve months and identify the area where you slipped up. The make a plan for how to avoid those mistakes this year. You may need to automate the money that goes into your savings and retirement accounts. You may need to exercise a little more restraint in your spending. Whatever the solution, it will be easier to put into practice once you know what the problems are.

4. What are your mandatory expenses?
Once you know your goals, priorities, and weak spots, it’s time to begin setting up your budget. Start by identifying the living expenses that you must pay every month. These will include your rent or mortgage, insurance bills, utilities, and any debt payments. Budget for these expenses first, subtracting their total from your monthly income after taxes. Whatever is leftover is what you have available for variable expenses.

5. How much can you save each month?
Once you’ve determined how much to set aside for mandatory expenses, it’s time to look at savings. Savings can include long-term goals, like retirement, or short term goals, like a vacation. Identify everything that you want to save for this year, then order them in terms of urgency.

Some goals, like retirement, you should save for every month. Other things, like travel or large expenses, can be saved for one at a time. Once you’ve met one savings goal, you can move on to the next one. When you decide what you’d like to contribute to each goal, the best way to stay on track is to make saving non-optional. Set up an automatic transfer, either from your paycheck or your checking account, to put the money directly into savings as soon as it lands in your bank account. You won’t risk spending it accidentally, and you will ensure that you make monthly contributions towards your savings.

6. What are your spending triggers?
A lot of financial management is about cutting spending — reducing your insurance bill, avoiding credit card interest, eating out less. But all the small cuts in the world won’t help if you don’t know your spending triggers.

Spending triggers are those moments or circumstances that make you pull out your credit card and break the rules of your budget, even when you have the best of intentions. If you want to cut your spending, take some time to identify these triggers and come up with a plan to eliminate them.

If you can’t resist a coupon code when it shows up in your inbox, then you should unsubscribe from promotional emails. If you always want to eat out when you’re stressed, create a new, free routine for unwinding after a hard day at the office. Do you always spend more when you go shopping with a certain friend? Come up with other activities the two of you can do together and leave your credit card at home when you go out. Once you’ve identified your spending triggers and come up with ways to avoid them, you’ll have a much easier time sticking to your budget.

7. Where does your budget have wiggle room?
Managing your finances is awesome, and cutting down your spending to save more is a great goal. But if you are on a strict budget all the time, with no room for any lapses or fun purchases, you risk getting “budget burnout” and slipping back into old, bad habits.

To avoid that, identify the places where you can cut yourself some slack. Maybe you’re giving up eating out but can still treat yourself to a latte once or twice a week. Maybe you’re giving up cable, but you and your roommate can split a Netflix subscription. Allow yourself a few inexpensive extras and sticking to your larger financial goals will feel much less stifling.

Finally, wiggle room also means planning for the unexpected. It may seem smart to put every extra penny into savings and retirement, but what happens when your car breaks down and you don’t have any money for the repair? Leave a little wiggle room for surprise expenses, and you won’t just start a budget, you’ll stick with it.

The beginning of a new year is the perfect time to get your finances in order. Be honest and realistic with yourself as you put together your plan for 2016, and you’ll find yourself on your way to sustainable financial success!

*Original article source courtesy of the Huffington Post.

10 Life Hacks to Help You Free Up Money

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Screen-Shot-2015-09-17-at-2.15.00-PMAre you looking for ways you can cut down on expenses and put a little extra money aside? Maybe you’re looking to budget more efficiently, fund that big vacation or save for retirement.

This post is dedicated to little tricks to keep more of your money in your pocket. You can have a little fun with these things, too.

1. Call to Cancel. See How They React.

Savings doesn’t always mean going without. Sometimes when you call to cancel a service (e.g. cable, Internet, satellite radio, etc.), they’re very motivated to retain you as a client. After all, some of your money is better than none at all.

If they’re focused on retention, they may give you a reduced rate for a certain period of time or direct you to a plan that costs less without 37 channels that show 20-year-old movies.

Another good strategy in this situation is to research their competition. Tell them you’re switching to Competitor X who’s offering the same or better level of service for $50 cheaper. Play them against each other. Even if they just offer to match, this works to your advantage. You don’t have to take the equipment back.

2. Cut the Cord.

A lot of people are cutting the cord and canceling cable for good. A couple of technological developments happening right now make this very possible.

For starters, you can now get HDTV out of an antenna to watch your local programming. You can also subscribe to multiple services like Netflix, Hulu and even HBO online to get your television for less than you would pay on a monthly basis for a cable subscription.

However, you might run into a problem with sports. Many games are shown on cable, but all the major professional leagues have their own subscription services now. Just be aware you may have to pick and choose sports to make cutting the cord cost-effective.

3. Reacquaint Yourself with Your Local Library

Take some time to browse your local public library. While it is good to see they still have books at the library, they also have a large selection of CDs and DVDs.

You can also check out e-books! Seriously though, your library may have a lot more education and entertainment options than it used to. It may be worth checking out if you haven’t been there in a while.

4. Lunch at the Grocery Store.

Check out your grocery store’s sample selection – it’s worth your while. A motivated person has many choices, often including dessert, from various sample lines. Why do you think everyone is queued up when you go in there on a particularly busy Saturday? They’ve discovered a secret.

“Of course I’ll try the chicken cordon bleu…Why yes! I think I’ll have a butterscotch cookie.”

It’s important to note that the portions are small. You can definitely make this work for lunch, but not dinner.

5. Pay Attention to Those Receipts.

After you’ve done your shopping (and maybe gotten a midday meal in the bargain), it’s time to head to the cash register. However, it’s important to remember the savings doesn’t always stop when you check out.

Many stores add coupons to the backs of receipts now. It’s their way of keeping you coming back for more, but it also saves you money to use those coupons.

6. Get That Deposit Back.

Many states charge a small deposit on the purchase of all bottles and cans. You get that deposit back when you bring them back to the store and feed the machine.

You won’t be able to retire early on the amount you get back, but it will give you some spare change for the drive-through.

7. Save Those Ketchup Packets.

Save those extra ketchup packets from fast-food restaurants. If they give you four sauce packets and you only use two, stick the others in a drawer. They could come in handy when you run out. You’ll also be well-stocked when the zombie apocalypse causes a worldwide shortage of whatever that stuff is they use for onion ring sauce.

8. Rewards Programs.

Many businesses have rewards programs for their customers. You can shop around to see who gives you the best deal. There are programs for things like credit cards, airline miles and grocery stores. Although these are the more traditional ones, you can find rewards programs for all sorts of things like movie theaters, pharmacies, etc.

9. Attend Matinee Movies.

There’s not many things you want to roll out of bed before 9 a.m. on a Saturday for, but it might be worth it for a matinee movie. Different theaters will have different times, but if you go to one of the early showings, you can often get a ticket for $5 or $6.

It can be super cheap entertainment if you manage to run through without succumbing to the smell of the popcorn stand. But there is one trick that could save you a couple bucks: If you and your friend are going to drink the same beverage, don’t go with two smalls. It’s often cheaper to get a large drink and two straws. Just make sure you know whose is whose. Plus, the same matinee strategy will work if you go to the theater for a play as well.

10. Gift Card Sites.

There are sites online where you could sell such unwanted gift cards to someone else at a slight discount to benefit you both. Convert a gift card you’re not going to use into cash and get a great deal on something you would use!