Maybe you’ve carefully crafted a budget that accounts for every penny that comes in each month. Or maybe a budget seems like a waste of time to you. Either way, impulse buying can have a negative effect on your financial picture.

There’s nothing wrong with buying something we want every now and then if we have the money. If you work hard for your money, you should be able to spend some of it on things that make you happy. But when we don’t carefully consider our discretionary spending, we may end up doing too much of it. This can leave us saddled with debt, scrambling to pay bills or skimping on the savings.

There’s a simple rule that can help us avoid impulse spending. Instead of buying something you want as soon as the thought crosses your mind, wait a month before you make your purchase. A month might seem like an eternity when you want or feel that you need something, but unless it’s food, shelter, clothing or water and you don’t have any, it can probably wait that long.

Waiting a month before buying has several advantages:

* Once a month has passed, you can more clearly evaluate whether or not the purchase is wise. When we first see something that appeals to us, it is exciting. We may get the feeling that we need it right then, when in reality it’s something that we may never even use. Waiting a while will give that euphoria time to wear off, and we’ll be able to look at the purchase more realistically.

* You’ll have time to do some research. A month is more than enough time to check prices from a variety of sources. You can also look for alternatives that might better suit your needs. When it’s decision time, you’ll be much better informed.

* The price on the item you’ve got your eye on could go down. Electronics often experience a drop in price a few months after they hit the market. So if you’re interested in a newish gadget, waiting could save you money. This is also true for clothing, so if you see something that you love mid-season, waiting a month could give it time to hit the clearance rack.

In today’s fast-paced society, it’s easy to get in the mindset that we need things right now. This way of thinking leads to impulse spending. By slowing down and giving ourselves time to really think things through, we can avoid spending money on things that we could do without. And if we do find that we really needed the item, we can buy with confidence that we won’t regret the purchase in a week or two.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

Do you have things sitting around that you’re not using? Most of us do. There are a few ways we can get rid of these items. We could have a garage sale, but pricing and organizing things takes up a lot of time. We could take it to the landfill, but that’s wasteful if someone else could use it. Or we could freecycle it.

Freecycling is a movement that encourages people to give the items they don’t need to those who can use them. It’s a great way to get rid of clutter, and for the recipient, it’s a great way to save money. But how can those with things to give away connect with people who need them? Through a local Freecycle group!

Freecycle is a non-profit organization that utilizes email groups to facilitate giving. Founded in 2003, Freecycle originally consisted of a few dozen team members who drove around the Tucson, Arizona area trying to find homes for unwanted items. Organizers realized that email would be a much more efficient means, so they set up the first mailing list. The concept spread like wildfire, and today there are Freecycle groups all over the United States and in over 85 other countries.

There are Freecycle groups in most cities, as well as many rural areas. If there is no group in your area, you can apply to start one. All group organizers work as volunteers, with the support of the organization.

How Freecycle Works

In order to use Freecycle, you must join your local group. Links to groups in your area may be found on the official Freecycle website (Freecycle.org). Most groups are run through Yahoo Groups, which makes it easy for any member to post messages to all other members. Some groups allow anyone to join, while others require moderator approval. Just follow the instructions provided to sign up.

Once you’ve joined, you can post offers. This is generally done by sending a message with the word “Offer” in the subject line, followed by the item name and location. Provide any pertinent details, and let members know if you wish to be contacted in any way other than email. Those who are interested can email you through the group. Once the item is given away, the giver is asked to post a message stating that the item has been taken.

Anyone in the group may respond to an offer, but it is up to the giver to decide who gets it. There is no rule stating that items must be given on a first-come, first-serve basis. The only requirement in most groups is that all items be completely free, and that nothing illegal or adult-themed is given away.

Members may also ask for items they need. If another member has the item, he can contact the requester and arrange for pickup or delivery. While there is no requirement to give items away, members are encouraged to both give and receive gifts.
Joining Freecycle provides opportunities to both get rid of our “junk” and receive things we need for free. Membership is also free, so there’s no risk in joining. Go ahead, give it a try!

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

It feels great to get a raise. It makes us feel like we’re being rewarded for all our hard work. It provides an incentive to keep doing a good job. And most of all, it puts more money in our pockets.

It can be tempting to start spending more money when we get a raise. Just a few extra dollars on each paycheck can make it possible to go out to eat once a week or start building up your wardrobe. But saving that extra money offers more long-lasting benefits, and it is relatively painless.

Think about it. You’ve probably been living on the pay you received prior to your raise for a year or so, and you survived that year. It’s not much of a stretch to be able to survive another year without that extra money. Of course you wouldn’t want to turn it down, but why not put it away to build an emergency fund, a college fund for the kids or a nest egg for your retirement?

And just imagine how much money you could save if you saved your raise every year. If you received the same percentage raise each year, you could put away over twice as much out of each check next year as you did this year. The following year, you could add a little bit more to it than you did the year before. As long as you can live on the same amount of money, you can increase the amount you save each year.

While you’re saving your raises, consider adding your bonuses to your savings as well. It’s tempting to go out and spend like crazy when we get a windfall of money, but it’s smarter to save it. Bonuses are money that we usually do not include in the budget, so we probably won’t miss them.

How to Save Your Raises

There are many ways we can put money into savings. But which is the best vehicle for saving raises and bonuses? That depends on your goals.

When it comes to practicality, you can’t beat investing in a 401K retirement account. 401K deductions from your paycheck are tax-free, and you will never have to pay taxes on that money unless you withdraw it before you reach retirement age. Many employers also match your contributions up to a certain percentage or dollar amount, so you’re essentially getting free money.

When you get a raise, you may be able to increase your contribution by the dollar amount of that raise. Or you might have to raise your contribution by a certain percentage. Your human resources department should be able to help you adjust your contribution to meet your goals.

Investing your raise in a college savings account might be a good idea if you have kids. Or you may choose to invest in stocks, bonds, or other investment vehicles. If you have more than one goal in mind, you might choose to divide your raise up among several savings options. If possible, consider having your contributions deducted from your checking account shortly after you get paid so that you’re not tempted to spend them.

If you’re looking for a way to save some money but can’t seem to make room in the budget, saving your raises could be the answer. Instead of adding the extra money into your budget, you can simply send it directly to savings and forget about it. In time, you can save up a substantial financial cushion.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

In tough financial times, saving money is easier said than done. For many of us, once we’ve paid the bills and bought the essentials, there’s just not much, if anything, left to save. Wouldn’t it be wonderful if we could save up at least a little money each month without even missing it? Actually, most of us can.

Some people make the effort to dig out exact change when they buy something. But the overwhelming majority of us just fork over the closest thing we have in paper money. When we get change back, we stuff it in our pockets and forget about it. Once we go home, it often ends up on the dresser. We may forget about it for weeks or months, or the kids might get it and spend it on candy or toys. Just imagine how all that change that we toss aside could add up over time.

Instead of leaving change lying about where it will get lost or pilfered, try putting it into a jar, piggy bank or some other container. Avoid spending it, and use only bills to pay for everything. If you faithfully put all your change in there, you’ll be surprised at how quickly it fills up. You might even find that you need a larger container if you want to save for any length of time!

Try saving your change in this manner for a year. If you have an extra dollar bill or two, feel free to throw that in as well. Just resist the urge to borrow from your fund, and let it keep growing. At the end of the year, you could have enough money to buy something nice or do your Christmas shopping. And if the entire family pitches in, you might even end up with enough money to take a vacation!

Saving change is also a good way to start an emergency fund. It will take some time, but saving up slowly is better than not having any money put away at all. Once you’ve built up some change, you could roll it up and put it into an interest-bearing savings account or a short-term investment vehicle to add a little more to it.

Other Ways to Save Change

If you do not usually spend cash, it’s still possible to save up your change. Some consumers who keep most of their money in a checking account round their checks up to the next dollar when subtracting them in their registers. This leaves them showing less money than they actually have in their bank accounts. It takes some getting used to when balancing your checkbook, but once you get the hang of it, it’s a great way to save change without actually handling it.

Some banks have also begun to offer programs that help account holders save change when using their debit cards. They round each purchase up to the nearest dollar, and transfer the difference into a savings account. Check with your bank to see if they offer such a program.

Even the most careful budgeter can waste change without even realizing it. By making a conscious effort to save your change, you can accumulate lots of extra money in a year’s time. And best of all, you’ll probably never miss a few cents here and there!

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

In a recent episode of Wife Swap, the pseudo wife complained to the husband that he was obsessed with clipping coupons. As they were grocery shopping, he told her he was stopping for a pizza pie for dinner and that he had coupons.

When he came out of the pizza place, she asked him how much he saved on the pie. He told her it was $1.00. Needless to say she lambasted him for buying a pie to save $1.00. He responded by telling her to take a dollar out of her wallet and throwing it away.

The moral to the story is that regardless of how much you can save using coupons, it is worth every penny. Some might argue that buying a pizza pie to save a dollar isn’t worth it. But for this particular family, it was that night’s dinner.

There are a number of websites that offer online coupons – some that you can print for supermarket shopping and others that offer discount to a wide variety of retail stores.

Coupon clipping has become more popular than ever. With the economy in the tank, every penny saved is well worth scouring newspapers for, checking out online coupon sites, and joining free clubs where you can save quite a bit of money using their discounts.

For example, Ebates.com is a wonderful site where you can join for free and receive emails delineating the discounts offered in any given week. During the holidays, one woman saved over $50.00 on discounts for clothing purchased from Macy’s online.

Ebates’ comprehensive site lays out the actual percentage you can save on any item and it explains what items will be discounted. You are automatically taken to the store’s website and the coupon is applied to your purchase.

There are coupon wallets you can purchase in your local dollar store encompassing slots for specific types of foods. After you clip the coupons, you can file them away in this coupon wallet instead of trying to go through loose coupons at the supermarket.

Many years ago, when coupon clipping was at its peak, a woman purchased over $200 worth of groceries and only paid $19.00. The difference was in the coupons.

Of course, you don’t want to buy an item simply because you have a coupon – only utilize those coupons that apply to your everyday meal preparations.

Think about it this way; would you take a dollar out of your wallet and throw it away? We all know the answer to that question. It is worth the trouble of going through daily and Sunday newspapers and circulars and clipping the coupons for future use. The money saved can be substantial.

Brought To You By
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com