The first and foremost personal financial planning basic that should come to your mind during tough times is about having multiple income streams or at least a second income to cushion upon. Think how efficiently you can manage your time to go for a part-time job. It is the right time to think about adding more credentials to your resume, whether it is a diploma or a certification course. Improving your skill sets will make you easily marketable in the job market. Under any circumstance, Internet could be your last savior! There are plenty of options available on the Internet to work from home; only you need to do a vast research on the web to find a job that suits your skills and aspiration.
Now let’s look at other aspects. Since a country’s troubled economy is mostly due to the questionable decisions and expenditures by its government, as its citizens let’s exploit the maximum possible on our part too. How can you exploit the government funds?
In its welfare effort to stimulate and support needful underprivileged citizens, government provides benefits, grants, and financial aid. For instance, the country/state which I live provides freely almost everything you want to live. The only thing I need to know is whether I qualify for one such assistance, whom, where, and how to apply; the procedures, supporting documents, and miscellaneous information in connection with that.
The same holds good for you. You need to gather information about what you are eligible for and where, when, and how to knock the door of assistance. Do a thorough research about the financial assistance provided by the government and gather all the required information. Check if you qualify for any benefits in the list of assistance programs offered by the government.
The next best way to grab your portion of money from the treasury is by avoiding paying taxes as permitted legally; for eg., saving using tax-advantaged retirement accounts (IRA, 401k), claiming expenses for tax deduction (tools and supplies used in your work, home office, passport for a business trip, job search expenses, union dues, work-related education), tax deduction on dependents (child tax credits), claiming capital losses (loss on sale of stocks, bonds, options), deduction on mortgage interest paid etc. Tax-exempted bonds (eg., municipal bonds) are another source for parking your money for saving tax on your savings and/or earning tax free interest on the principle. If your tax situation is not complex, you can take care of it yourself, may be with the help of a tax software. Otherwise, a shrewd accountant could guide you and save you a lot.
As I said earlier, your primary motive during difficult financial times is finding more income streams without losing the kitty of golden eggs that you already have. If you already have savings left in your hands, let that money work for you! How to make your savings work for you? Invest wisely in equities, bonds, certificates of deposits, small businesses, real estate or any investment avenue that is within your circle of competence to fetch decent returns to get your bread now or to make the power of compounding grow your money at a reasonable rate, for you to utilize it a later date.
There are often free health checkup camps conducted around the place I live. The camps offer anything from basic checkup to fixing up free surgeries at a later date; I’ve seen many benefiting from such camps. Similarly look out for what your community has to offer which could include free workshops, seminars etc. You may find free computer classes, tax preparation services, financial assistance to students, free movies, driver safety programs, first-aid training, dental checkup, may be even free meal program. Why not benefit taking part in such free offers and save money?
To keep employees happy and productive, companies offer a host of tax-free benefits right from free food and free commute to healthcare. Why should you spend out of your pocket if your employer is providing any of these to raise employee satisfaction and retain employees? These fringe benefits could include housing, relocation assistance, parking fees, insurance (both health and life), public transport, education (not necessary to be job related!), daycare etc., where the tax part of all these benefits is taken care of by your employer. Find out all benefits that you are entitled to and never miss anyone of them in your endeavor to save the money in your pocket.
Walking, cycling, motorbiking, public transport, car pooling, etc., should lessen the fuel burden on your wallet. Walking and cycling reduces the energy bill as well as healthcare costs too! If you pool your own car on your way to the office, any money paid by your passengers for gas and expenses is a tax-free income! Accepting transit options offered by the employer would be another good idea. You can save money on gas with good driving habits. It will be worth the effort in knowing which route will take you without turnpikes and bridge tolls.
If you are to have a long-distance travel, say air travel, plan well in advance, may be 3-4 months before, and book tickets early to get good early bird discounts.
As you might know, I hate traveling and prefer working from home for the comfort it provides, saving on outside food, time, fuel, and laundry. If your job can be done telecommuting, why the heck do you want to commute to office daily?
Save money on electricity and lower your electric bills by switching off any electrical appliance when not in use. Utilize natural light and ventilation to the fullest. Think of going green with renewable energy and avail of tax credits, rebates, and savings for solar appliances.
Food from eateries apart from being expensive has its own health risks, and prolonged dependence culminates in unwarranted health hazards due to various preservatives, additives, adulterants, and unhygienic practices. As far as you can, come whatever it may be, don’t eat outside. Food at home is always safe and healthy, served with love and care. Carry lunch to workplace. If you can grow fruits and vegetables around your home, you are blessed because it is hard nowadays to get organically grown fruits and vegetables, without insecticides and articial fertilizers. Fishing expertise can be an entertainer on weekends and a money saver. Attending any invitation extended by friends and relatives to dinners and parties with all the members in the family is a good socializing strategy too.
I do not usually put money in donation boxes as they do not evoke much empathy up on me due to the bystander effect. I’m not seeing the needy and those in need will be taken care of by someone else. Any charity that I do will be materialistic like blood donation or charity of labor and nothing related to money. Similarly, to avoid gift obligations, I neither accept gifts nor give out gifts except to family members and close friends and relatives. Why not have a policy of yours in the same lines that could relieve you of the tension of finding money for gift and charity?
Mortgages, auto loans, credit cards – do you know how much they suck your blood out? Interest would be the major outgo from your earnings if you don’t properly plan utilizing and paying back the credit. In terms of exploiting you the most, credit card debt should be the first debt to be retired. Any debt is a trouble invited making you lose your peaceful sleep. Reduce your needs and try living satisfactorily with what you have today than borrowing from tomorrow and live today. As far as possible, don’t go for credit and if you have already availed of the credit, try repaying them soon to reduce the interest outgo, repaying the debts with top priority on high interest debts and tapering off.
Encourage children to perform well in studies, getting good grades and high test scores, to avail of grants and scholarships offered for bright students. Know that you don’t have to fully finance your child’s education if you plan right. For instance, The US Department of Education provides more than $150 billion ($150,000,000,000) of financial aid for qualifying students, out of which you don’t have to repay the grants and scholarships. Hence create early awareness on what to study and how to fund that. Encourage them to be on their own in finding finances for study and applying for them. Keep in mind that the government, colleges, and scholarship providers can only give you aid if you apply for it.
If you are buying a home, try buying a foreclosed home for a bargain. If you are going for a car, why not think going for a used car in good condition to save some really good bucks? If you are having excessive vehicles more than you need for your family, why not sell the abundant vehicles? Review your insurance premiums yearly; may it be life, health, disability, homeowner’s or auto, and hunt for a bargain on the Internet.
Saving money means living an austere life avoiding luxuries and unnecessary spending, consuming as much less as possible. That being the definition, isn’t growing and maintaining a pet is an entanglement wasting money and time? The other entanglements and luxuries that can be avoided include costly vacations, cruises, hobbies, gadgets, etc. Unless professionally needed to empower you with knowledge, in this Internet age, even hardcover books and magazines are luxuries during tough times. Avoid, terminate or do not renew your subscriptions that you think are less important. Same holds good for anything that is a luxury or entanglement.
Apparently home-made food rich in fiber, plenty of fluid intakes, and regular exercise should keep you fit with less visits to your doctor. Frozen, junk, canned foods do the exactly opposite. Excessive salt and sugar extends free invitation for problems. Say no to tobacco. Buying generic medicines over the counter should readily save you some bucks. After the age of 40, yearly checkup with your significant other will help screen potential anomalies at a very early stage itself and hence less expensive to treat.
Window shopping and impulse buying are your foes especially during tough personal financial times. Buying generic goods instead of branded ones should save you a significant amount of premium that you give for branded goods. You can get anything on the Internet at very cheap rates. Look at the online stores for seasonal discounts. Hunt for coupons, discounts, and deals online. Buy at the end of the season or when there is a sale.
Try living in a small house. If you have ample space that is unused, let out the extra rooms. If the interest rates got lower from the time you mortgaged, it would be wise to refinance. Renting a home would be wise instead of mortgaging and should save you a lot of money that you will pay out as interest. Instead invest that savings in growing assets like stocks.
Taking the family out for a movie in the evening is a double expense; you need to spend on movie tickets apart from eating outside. Usually I encourage watching the same movies on TV a few months later, or Netflix is a cheaper alternative. Instead I prefer to entertain my son taking him to the free children’s park nearby along with his mom and making him mingle with the kids there, helping him get rid of his shyness socializing and communicating. You have a lot of entertainment options without spending a dime; free fairs, festivals, carnivals, events, shows, parades etc. Only you should have the time and mind to enjoy and take part in them.
Sell anything that you think won’t be useful anymore. Organize a garage sale. Sell your child’s used books on the first day of the next semester dropping by the same class. List the items you intend to sell on websites like Craigslist or eBay. All these should free up the valuable space at home as well fetch you the much needed money.
Avoiding credit cards and bank accounts that charge annual fees and switching to those that don’t charge anything should save you a good amount of money. Additionally, how about those credit cards that have rewards? Moreover, credit card rewards are tax free! However, go through your monthly statements very carefully because nowadays the banks are stealthfully inserting many fees that may go unnoticed. Credit unions and small local banks give better rates and service. Review your cell phone and cable bills annually and go for the best rates.
To remind you again, our prime motive is to live within means, decrease the expenditure and increase the income. Paying anything that we owe before the dates should increase our credit rating as well as the burden, whether it be bills, dues, fees, or taxes. Paying your debts pronto has another advantage too, it should save you late fees, penalties and fines!
Let me hope every point that I mentioned above is easily adoptable and executable. I am not advocating to be a miser or to lead a beggarly life but if you could think and plan your finances, be money minded, live within your means concentrating on increasing your income, saving money during tough times shouldn’t be a problem at all! Drop by drop, makes an ocean!
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