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Why There Isn’t Enough Money To Pay Bills and Save?

Why There Isn’t Enough Money To Pay Bills and Save?

by | Aug 24, 2016 | Blog

Ever wonder why there often isn’t enough money at the end of the month to get all of your bills paid and save money?

You’re not alone. According to a new survey published this week by the Certified Financial Planner Board of Standards (CFP Board), nearly half (48 percent) of all Americans “don’t always have enough money left over to save after paying their bills.”

“Our economy has come a long way since the depths of the recession, but most Americans up and down the socioeconomic scale are still facing significant pressures in saving for today and tomorrow,” said CFP Board Consumer Advocate Eleanor Blayney, CFP®, in a press release. “An inability to start saving early, debt and stagnant incomes are just a few of the factors driving Americans’ financial anxiety.”

The survey found:

  • More than a third (35 percent) of Americans surveyed have seen a significant decrease in household income;
  • A little over a third (34 percent) say that the amount of debt they have prevents them from saving;
  • Only half (51 percent) save money regularly on a monthly basis;
  • Roughly 1-in-3 Americans (30 percent) has experienced a job change in the past three years;
  • About 1-in-5 (20 percent) of those polled has experienced a major medical expenditure in the past three years;
  • Half of Americans (51 percent) believe credit card debt is the most important debt to pay off, followed by mortgages (36 percent) and student loan debt (19 percent);
  • More than one-third (36 percent) of Americans anticipate working in retirement.

(While the survey found that some Americans are feeling more positive about the economy as a whole, it’s typically those with a higher net worth who have the most positive economic views. Which isn’t that surprising.)

If you look at the list, it’s clear that a third of Americans have seen a significant decrease in household income, are trying to pay down a mountain of debt, and have experienced a job change in the past three years. Debt, including medical debts or expenses, can eat a huge hold in anyone’s budget.

What can you do? At Best Money Moves, we believe in getting your debt paid down as quickly a possible, and we have tools that help you do that (without trying to trick you into buying something or reselling your information to a credit card company). But here’s the big secret: Throw as much cash as you have at your debt that carries the highest interest rate. And, keep doing that as often as possible, while always being sure to make your minimum payment.

That’s it. There’s nothing more magical about debt repayment than that. Once you pay down a debt, use all the extra cash you’re “saving” each month to pay down the next debt, and so on. What you’ll see is that paying down debts is possible and can be done fairly quickly. You just have to make the commitment to put it first in your financial life.

I will add this: Every time you pay down a debt, you’re saving the interest you would have paid. That interest equals the net interest rate you’re paying. So if your credit card has an interest rate of 15.9 percent, every dollar you prepay will effectively “earn” 15.9 percent. And these days, it’s hard to get that much of a return anywhere, let alone in a savings account.

So, get your debts paid off and start saving for your goals and dreams, whatever they may be.

Ilyce Glink is the Founder/CEO of Best Money Moves, and a nationally-syndicated, award-winning personal finance columnist, best-selling author and radio talk show host. Contact her today to get a free trial and start lowering your employees’ financial stress levels.

 

 

A Big Money Lesson For Only 60p (Less Than $1)

A Big Money Lesson For Only 60p (Less Than $1)

by | Jul 19, 2016 | Blog

More than 30 years ago, as I was packing for my junior year abroad, my mother handed me a check for around $2,500 and said, “This money has to last all year. You’d better start keeping track of what you’re spending.”

And with that, I went off to Wales to study music and literature. When I got there, I deposited the check in my local Barclay’s branch on High Street. The dollar was strong then (close to where it is now), so while my dollars went pretty far, my funds weren’t unlimited by any stretch of the imagination. I had to watch every pound or penny I spent.

For 60p, I bought a small black notebook and stuck it in my pocket. Of course, this was 1984, before the Internet, before cell phones, and certainly before Venmo, PayPal and apps that helped you “save your change.”

What I got was my first big money lesson, and all for only 60p, or less than $1.

I had to do it all by hand. Dutifully, I recorded the beer and “still orange” (a non-alcoholic orangeade of sorts) I drank at the local pub. I’d record the pounds I spent buying bottles of full-fat milk (delivered fresh every morning to the local shop from the local farm – before any of us understood the meaning of the word “organic”) and hot butter muffins from the local bakery. At night, we’d go out after the pub closed to the local Chinese take-out and ordered a very greasy egg roll stuffed with bean sprouts, what I’d refer today as an Anthony Bourdain late-night special.

No expense was too little to escape the tracking, and my little black book soon became worn around the edges as I recorded train tickets to London and Inverness, Scotland, the cost of a boat ride across the Irish Sea, entry tickets to museums and dances, dinners out with friends, and a flight to the continent.

I managed pretty well, though when running a bit short of funds in the late spring, I took a job at a local Welsh pub pouring drinks and making fish and chips. I was paid a little and got some tips (but if I’m being honest, I’d have paid them to let me do it – that’s how much fun it was). Still, it was enough to augment my dwindling savings and allow me to plan for additional travel during the summer months, when I found myself calculating whether it would be cheaper to buy a EuroRail pass (which provided unlimited rail travel for a month) or individual tickets. After a bunch of calculations (by hand) and a lot of phone calls at the corner phone booth, individual tickets won out.

When I look back, I think that this little black book set me off on a different course in life. I learned that I could stretch even a tiny amount of money a long way (a “dime into a dollar”). I learned that I could be self-sufficient and that I was just fine with what today I’d call “deferred gratification.”

My first big money lesson. I still have that little black book somewhere. Once in awhile, I pull it out to look at where I spent my money – every penny of it – during that year abroad. It reminds me that anything is possible, if you put your mind to it.

Ilyce Glink is the Founder and CEO of Best Money Moves. She is also the author of 13 books on personal finance and real estate and the CEO of Think Glink Media, a digital content agency.

BUILD A BUDGET AND CONTROL YOUR FINANCES

BUILD A BUDGET AND CONTROL YOUR FINANCES

by | Jun 19, 2016 | Blog

Some would argue that to be happy, you need to be in control of you life. And, nothing makes you feel more out of control than being underwater with your finances.

Debt, shopping cravings you can’t control, loans that wind up costing more than you thought, and being unable to pay your bills at the end of the month – all of these events (and more) make us feel like life is spiraling out of control.

The best way to regain control of your finances is to build a budget. Put yourself on a money diet – which means you have to make some relatively unpleasant choices so that your spending is much more in line with your income.

And while it’s much more fun to just whip out your credit card, debit card, or phone and pay for the next meal or round of drinks, there’s a very real cost associated with that behavior – kind of like a hangover, it’s no fun to face a budget that’s way out of control the next morning.

So here’s what most people do when facing their own personal financial crisis – they bury their head in the sand and pretend like it isn’t going on. And, then they get stuck.

You don’t have to be stuck. You don’t have to feel as though the debt that’s weighing you down is going to be there forever. Because it doesn’t have to be.

You can get your budget back under control by making a few tiny (though tough) choices and sticking with it. It’s like a money diet.

The diet metaphor works because what you’re doing is putting yourself on a spending diet. You’re only going to spend the minimum you can in order to nurse yourself back to full financial health. We know you can do it: You can build a budget and get your finances back under control.

Best Money Moves can help. We have terrific, easy-to-use and understand tools and information that will guide you through each move, along with our Stressometer(R), which can help you figure out what’s causing the most financial stress right now. And if all seems overwhelming, you can call one of our nonprofit Money Coaches for personal, one-on-one guidance.

Imagine that. Help from someone real, who will pick up the phone when you call, and guide you through the toughest period of your financial life. And, it’s all part of the Best Money Moves program.

If your colleagues are in financial trouble, show this to your employer. Ask them to add Best Money Moves to the company’s financial wellness offerings. Our program is affordable, comprehensive and features award-winning information from some of the most distinguished financial writers and authors.

Best Money Moves. We can help! Contact us today for a quote.