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Best Ways to Boost Savings in 2017

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If adding to your rainy day fund was placed squarely at the top of your financial to-do list, you are in good company. According to a GOBankingRates survey, nearly 69% of all Americans have a dismal savings account balance, meaning $1,000 or less. When faced with a financial emergency that requires quick affordable cash on hand, you do have options available to you, such as this auto title loan service in Los Angeles. However, even a grand or two may not be enough to get you through until the next payday. Building up savings is an admirable goal, but it can be difficult to know the best route to take to boost your savings power this year. Don’t worry; the savings tips below will help you build a savings account you can be proud of.

Get on the Tech Train

Technology can be your best friend when you’re attempting to reach a financial goal. Several mobile and desktop apps exist that put you in the driver’s seat of your saving, and spending. Budget apps like Mint offer easy methods for analyzing your daily and monthly buying habits and suggest how you might curtail your spending so that you have more to save. Automated savings apps like Digit and Qapital put saving in the forefront of your mind through behind-the-scenes transfers and savings rules based on your tendencies and budget. One or a combination of these digital tools can street you in the right direction while you work to increase your savings account balance this year.

Seek out a Higher Yield

A simple method to boost a savings account balance is to give your money a chance to work harder for you. This can be done by transitioning some or all of your current savings to a high-yield account. Some financial institutions, mostly those found online with no branch location, offer a higher interest rate on traditional savings accounts than brick-and-mortar location. Without the added expense of overhead, online banks pass savings down to banking customers by way of higher rates on savings, certificates of deposit, and money market accounts. Before making the switch, be sure to check for any account fees, minimums, or other restrictions on the new savings account that might damper progress toward your goal.

Set a Realistic Goal

It’s fairly common knowledge that establishing a goal of any kind takes some forethought. It’s even more important when it comes to financial goals, as they often involve several aspects of your day-to-day life. If you’ve already set a savings goal for yourself, spot check the dollar amount you are aiming for to ensure it is attainable. That may require a review of your budget to ensure the funds are each month or pay period, or it may require an analysis of your timeline for reaching said goal. If you have yet to set a dollar amount for your savings goal or a timeline for hitting the mark, start there. The only way to know if you’re making progress is to know what you’re trying to achieve in the first place!

Automate It

One of the best moves you can make toward reaching a savings goal is to pay yourself first. Everyone has bills to pay to utility companies, landlords or lenders, and insurance companies each and every month – why not add yourself to the list of people owed? Setting aside funds for your financial stability should take place automatically each time you get paid. If you’re nervous about setting up a scheduled transfer into savings, start small with an amount you know you can easily afford. As time goes on, you’ll forget that “bill” is paid each pay period. That’s the perfect time to increase the amount and start the cycle again.

Beefing up your savings this year doesn’t have to be a point of contention. Instead, grab hold of one or more of the tips listed above to kick start your savings habit, and ultimately, work toward reaching your near- or long-term savings goal.

Filed Under: Money Tagged With: savings

Personal Finance – 3 Ways to Invest Your Savings

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A couple of years ago, I started questioning what I was saving my money for, I am not a frivolous spender nor a reckless gambler when it comes to finances but I decided to look into ways in which I could use my savings to grow my wealth. I’ve since used the money that I have saved, or at least some of it, to take advantage of various financial opportunities that I wanted to share, so if you have saved up some money through the years then here are some tips on how to put it to work.

Stocks and Shares

A slightly different way to invest your cash when it comes to the stock market is to trade the stocks themselves as opposed to betting on their rise or fall. Naturally when it comes to owning stocks, you will only want the price to grow and the real trick is knowing when to sell them. Stocks are a slightly more secure way of investing your cash than spread betting as should the price go down, you can simply keep hold of your shares in the hope that they will once again rise. Many stocks offer dividends which can give you a small payout each year and act as something of a loss insulator should prices drop. From a tax point of view, you will pay capital gains of between 25-39% on any stocks sold in their first year and around 15% after the year is out. Like spread betting, you can start trading with as little as $100.

Spread Betting

Spread betting, in a nutshell, is about gambling on the future price of various markets such as currency, oil, commodities and stocks and shares. One of the biggest bonuses of this type of investment is that spread betting is considered by the government as a form of gambling and as such you will not pay taxes on your profits, an appealing option and one that can prove to be very fruitful. You will naturally need to have a firm grasp of the markets to which you will be betting on and be able have good analytical skills in order to see which way the market is heading. You can start out with companies such as ETX Capital with just a few hundred dollars and you can bet on prices for the day or even a longer period of time. Spread betting is exciting and can be a great way to grow your wealth.

Start-Ups

There are more businesses being created than ever before and if you have an eye for what will become successful then you could stand to make a healthy profit by investing in these businesses during their early years. Start-ups rely heavily on private investment and if there is a new business entering into an industry that you are already familiar with then you could be best placed to invest your money in their new idea. Ensure that you negotiate a good contract for your investment as there are a lot of risks with new businesses, 54% fail within their first 3 years and the last thing you want is for your investment to turn sour.

Filed Under: Money Tagged With: Personal Finance, savings

Stop Predicting The Future, You’re Terrible At It!

By Frugaling 7 Comments

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Coffee and Journaling

We humans are really good at convincing ourselves of our “upper hand” — that we can see the “truth” when others cannot. We repeat stories of winning hands, the right stocks, and big paydays with our closest friends. Examples and supposed successes of prediction are trumpeted in our skewed media landscape, too.

For instance, CNBC and other financial news networks feature stock chartists who create lavish drawings of candlesticks, moving averages, and support levels. Lines are drawn and circles made on fancy touchscreens. When a stock fails to perform as predicted, it’s written off as a statistical anomaly. And nobody returns to the err. The reality is that any stock-picking strategy is fallible because the herd knows about it (or soon will). These technical mavens’ moves are already priced into stocks.

Scientists can also be poor predictors of future technology and advancement. As an astrophysicist, Neil deGrasse Tyson, explains, “…what happens is, if you try to go too far into the future, there is no way you are going to predict the cross-pollination of ideas and fields that produce things that are not extrapolations of anything going on at that time.” He exemplifies this technological development with the iPhone, as it wouldn’t have been created without GPS satellites, cell towers, and the commercialization of space. Variables needed to coalesce and come together to make the idea possible. Predicting each of these individual components is nearly impossible.

Predictive ability chart
Variability shifts from 0 to ∞ across time. From short to long-term periods, our ability to predict what’ll happen next suffers. Also, what do you think of my chart-drawing skills? 😉

Psychologists are another fallible group that’s highlighted for near-telepathic powers. Popular culture seems to hold high esteem for their predictive abilities. They are depicted as readers and savants of the mind. Watch what you’re thinking, they might just read your body language, thoughts, and emotions! The reality is that psychologists aren’t fantastic at predicting behavior; slightly better than the lay public, but that’s not saying much. At their best, psychologists center on past behaviors as predictors of future behavior. Much like the stock chartist or scientist, psychological/behavioral prediction is sort of like analyzing an historical stock market chart and looking for patterns.

In failing to see our losses and failures of prediction, we risk creating confirmation biases. These psychological tricks of the mind make us think we are right — that our hypotheses have time and time again come true. We repress our failures in favor of successes, but in doing so, jeopardize our ability to accurately plan for the future. That’s when we stand to lose boatloads of money.

The fact is, we are fallible creatures. Seemingly, we are basically limited by the amount of knowledge available on the world. At a long enough timeline, nearly everyone fails.

By accounting for predictive limits, we can protect and preserve our wallets. Now, it’s all about what we do with this realization. These are five fast rules for managing your money without genius predictions:

1. Budget based on present day information

The present day includes your current income and expenditures. If you’re budgeting for a car, Christmas presents, or anything else, your budget should account for today’s income — not chances for the future. This will always keep you within limits. Unfortunately, many people use pay raises and predicted promotions to account for future purchases. This mentality can lead to excess debt and complicated repayment plans. Avoid the drama by budgeting based on today’s information — not what tomorrow might be like.

2. Be careful with retirement predictions

Companies like Betterment and Wealthfront have some sexy chartists! They beautifully illustrate the capability of compounding interest and continued investments in average performing stock markets. However, this tends to smooth over the swings of market swings and does not account for the unexpected. In fact, Betterment has a tool that attempts to predict with 50/50 accuracy how your money will perform over a set period, but it’s better to make consistent investments and look at the principal — not the predicted total.

3. Build up emergency funds

From a car accident to strange toenail fungus, you never know when you’ll need to pay for some extra costs. We cannot predict when an accident or the end of a job could occur. To account for our predictive inability, let’s build emergency funds. Most financial experts suggest people maintain about 3 months of solid income, which would cover expenses while you search for a new job or deal with an accident.

4. Avoid following interest rates

Tens of “online banks” are propping up with teaser interest rates. Instead of chasing the next biggest thing, stick with the consistent. For example, Ally Bank has earned my trust and respect after years of solid performance and service. This online bank doesn’t have wacky fees, gives me free checks, and pays a solid interest rate in both checking and savings. When you find a solid, long-term rate, stick with the bank. It pays to find a good company and then worry about making more income elsewhere — not following the next greatest interest rate.

5. Invest regularly – don’t chase bottoms

This tip comes from one of my hardest investing lessons. When it comes to putting money in the stock market, don’t call bottoms. Humans inability to predict is never worse than right here. If you think the market has crashed, you’ll likely be proven wrong. The stock market has tons of false bottoms and tops. Prediction isn’t generally your friend. Instead, I use average investment amounts and make regular investments. When the market suffers, I tend to invest more. But avoid the chase and focus on making consistent investments.

Filed Under: Make Money, Save Money Tagged With: bank accounts, Checking, cnbc, future, Investments, management, money, Neil deGrasse Tyson, Prediction, Psychology, savings, science

Save 20% at Starbucks Every Day!

By Frugaling 7 Comments

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Starbucks Coffee Savings

Search for how to save money at Starbucks, and you’ll find millions of results. People love finding ways to cut their costs at a place they love. Some go to Starbucks to meet friends or to grab a quick pick-me-up at lunch. And for many, it’s a daily habit: wake up, grab a coffee, and drive to work. The company has carefully crafted a strategy of home, work, and Starbucks. Their goal is to have you spending significant amount of time at their retail stores.

Personally, I have a couple cups of coffee each day. Sometimes they’re from Starbucks, and sometimes they’re not. As a frugal person, it’s hard to see any purchased coffee as a thrifty choice. It’s not. To brew a pot of coffee might cost $.40-.50. If you get a tall coffee at Starbucks, that’ll set you back about $1.89 (and that’s just for a plain coffee). Of course, the frugal choice is staying home, but sometimes I like going out and grabbing one on the go. Sometimes there’s just something wonderful about working in a coffee house.

Regardless, my ultimate goal is to save every dollar and dime I can no matter the place. People tend to criticize Starbucks for being “too expensive,” but a cup of coffee is pretty reasonably priced. If I go anywhere else in town, I’ll be looking at about $2 or more for the same size.

It’s been two years since I last wrote about saving money at Starbucks. Much has changed with the company and my wallet since then. Nowadays, I can save 20% or more at Starbucks — every day. Here’s how you can, too.

1. Start with a cash back card (6% savings)

To achieve this level of savings, you must start with a cash back credit card. Personally, I use the Blue Cash Preferred card from American Express. This card is designed to give you 6% at grocery stores, 3% for gas, and 1% for everything else. I only use the card for grocery and gas purchases (bonus tip: the Amex card even works at Aldi to save me an additional 6% on groceries).

Now, you might be wondering how Starbucks could ever be considered a grocery store. How could someone actually net 6%? The answer takes a couple more steps to understand. Stick with me.

2. Buy an eBay gift card to purchase a Starbucks gift card (10% savings)

At a local grocery store, look at their gift cards aisle. If they’re like mine, you’ll find tons of options from Amazon, Chilis, and even Starbucks. But you don’t want to buy a Starbucks gift card yet; albeit, that’d net you a cool 6% rapidly. Instead, we need to buy an eBay gift card.

After buying an eBay card, search on their website for a Starbucks gift card. You’ll find tons of offerings. A good rule of thumb is 10% — that’s the expected discount off the face value of the card. This process takes time. To purchase an eBay gift card, then a Starbucks gift card, and wait for it to arrive at your home might take a couple weeks. For me, it’s worth it because I know I’ll eventually go to Starbucks again; when I do, I want to save.

3. Register for Star Rewards (5% savings)

In the last couple years since I wrote about saving at Starbucks, they changed Star Rewards. The process involved some chicanery, but the bottomline is they devalued their entire program. For every dollar spent, people earn two points. Once earned, you can buy almost anything with a reward (how about a venti fancy-frap or calorie-packed pastry?).

Based on my coffee calculations, it now takes 35 cups to get a reward. Ouch! This miniscule savings does help, though. By registering the card with an established reward account, you’ll save about 5%, conservatively.

4. Bring your own tumbler (5.3% savings)

I bring a reusable tumbler before I ever scan my rewards card. Thankfully, Starbucks provides a hearty 10-cent discount each time.

Want to look like you just got a Starbucks and be frugal, too? Starbucks sells a reusable tumbler for $2 (and I believe it’ll count for Star Rewards as a purchase).

Order a tall coffee for $1.89, and then it becomes $1.79. Ten cents might be laughable, but over time these costs add up. By using a tumbler each time for coffee, you’ll be saving about 5.3% more. If you forget your tumbler, order a short coffee (8 oz) to save about $0.10 off a tall.

5. Take advantage of free refills (50% savings)

Most coffee places don’t offer free refills. For registered Star Rewards members, cups of coffee can be refilled for free. Now, a $1.79 cup of coffee can become $0.90. Or, $0.60 if you really are looking to get your coffee buzz on!

Even without the refills, Starbucks becomes a solid option for those looking to have a cup of coffee while out on the town, crossing the country, or just looking to get a little work done. By combining these strategies, I save over 20% every day at Starbucks.

Do you go to Starbucks? What tricks do you have to save at coffee shops?

Filed Under: Save Money Tagged With: Cheap Coffee, Coffee, Coffee Shops, Cup, Save Money, savings, Star Rewards, Starbucks

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