Thursday, January 14, 2016

Tips on Budgeting

To the Tight-Budgeted,
    I am by no means a financial expert, but there are things that I do which I have found helpful with my own finances and planning my future. I won't give advice about investments, just the mentality about the cash you have now or receive. A lot of people have a bad mentality when it comes to cash. They coins as burdensome and a waste. However, coins are what make up the dollar bill which makes up the $5 bill, and then the $10, and so on. It's weird to think, but while we can't really buy anything in the United States for a penny, it's worth a lot to other countries. Also, it can save you time.
    So the United States finally got the chips in the credit cards that Europe has had for quite some time. However, it's slower than the old method and a waste of time if all you are trying to do is pay for a quick snack in the grocery store for lunch. After all, grocery store lunches are more affordable than going to restaurants or even vending machines. And yes, that was tip number one for budgeting. Anyways, in these times, cash is fast, especially if you have exact change, which is a fantastic feeling.
    I mentioned it before that I learned how to use pennies. In fact, my wallet barely ever has more than 10 coins, which is pretty manageable. What you do is occasionally overpay at the cash register so that the cashier will give you a bigger coin instead of a bunch of small coins. For example, if the bill is $4.96 and you pay $5, you will get 4 pennies. If you have 1 penny already, use it with the $5 bill and the cashier will give you a nickel. Since it's the cashiers that always dispense the pennies, and hence the ones that need them, they'll appreciate you giving one back. It's actually less of a hassle for them. The result will eventually be that you will have exact change quite a bit and you don't waste anything.
    My third tip is to have a spreadsheet and track your spending. I find this helpful because it helps you predict how much you will spend in a given month and where you can cut on spending. I know I don't need to pay for car insurance every month, but when it comes, it'll be a lot. Hence, I do need to budget for it every month. If an unexpected fee comes, then I know I can save some money by not going to my favorite pizza place a few times and get the cheaper, and probably healthier, sushi from the grocery store.

    For a bonus tip, I suggest use services like Bing Rewards which give you points for using the search engine. After about a month of doing the searches, you can get a $5 Amazon Gift Card or other credit to different stores and services. The Skype ones pretty nice since you can use it for phone calls. With one being free unlimited calling to US and Canada for a month, you can possibly save quite a bit on your phone bill assuming you are using wi-fi instead of your data plan. This is bonus tip because the service could always disappear or change its terms. However, right now it's pretty useful.

    What about credit card rewards points? Don't bother unless you can fully pay for a big purchase right away. It's a trick to get you to spend more and the conversions aren't favorable even if you don't incur fees. My one praise for Bank of America is that the conversion was pretty simple for 100 points equaling $1. Other banks like Citi make it confusing like crazy. For Citi, you can use the points to pay your credit card bill but it's 133 points for every $1. You can use them on Amazon, but you spend 125 points for $1. You can get gift cards with a 100 points to $1 conversion, but you need 2500 points before you can use it. Considering that you have to spend $100 for 100 points, but you need at least 2500 points before you can redeem... Not worth counting on. The only people who earn money from you using a credit card is the credit card company. Not only because they charge the merchants a fee (Apple Pay adds an additional fee as well), but then they also charge you interest if you cannot pay the full amount right away. In fact, they will charge you as much as they can even if you could and did pay the full amount (Bank of America). If you use cash, then you know how much you can spend.

So there is my quick advice for some better money-sense. Hopefully it helps you out. After all, if you can save a few dollars, that's another meal, which can possibly get you through until you can get into a better situation.
Good Luck,
N. D. Moharo

P.S. Have your own helpful advice you wish to share? Feel free to leave it in the comments below

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