Entries Tagged 'Cash' ↓

Did you know that the formal definition for a depression is that GDP drops 10% or more?  Think we’re getting close?  (The Gov’t can also change what is included in GDP…) Well our guess is we’re getting near to one. Along with that, nearly 75% of Americans are also worried that they or someone in their household could lose their job within the next year. The best defense against losing your job and even surviving a depression is to save money, spend less, cut costs, bank the difference, and invest it in safe investments or investments that will make you money in a down economy.

First, cut costs. That includes not just using coupons, but buying less of expensive items, and cutting out unnecessary items. For example, you might be using coupons but using them to buy things you don’t really need in the first place. So, start with what you need, and buy generic if it’s cheaper.

Next, manage your discretionary spending better. Try using the 30 day rule: wait 30 days before making a big purchase, and see if you still want or need the item after that time.

Third, try banking your savings. Saving 20% for example is not worth much if you spend it somewhere else. Whenever you save money, put the difference into a savings or investment account. This way you’ll see the direct impact – wealth – from your efforts.

Finally, put your money to work. While you might be gun shy of stock mutual funds, remember that there are many other options for investing – bond funds, Exchange Traded Funds (ETFs), government backed inflation indexed bonds, and other options. You need to spend some time to learn more about investing types beyond the basic “growth stock mutual fund” since those funds have not only taken a nose dive, but will probably be poor performers in the short run in a depression.

Spend the time to save money and put it in a savings or investment account can not only be safe but help you to build wealth in the event of job loss or other emergency.

If you think you already know where your money goes, and you don’t need a written budget to keep track of it all, my question for you is, How much cash are you saving every month? Usually people spend every last dime, leaving nothing for future wealth building.

To get a handle on your money, and build wealth, you do need some kind of budget. You don’t have to keep track of every single penny – that’s the kind of behavior that leads you to abandon a budget like the latest diet fad.

But by keeping track, you can see exactly where much of your money goes, and how much is wasted on everyday expenditures that aren’t necessary at all. You might find yourself shocked to learn how much the little things add up to. For example, if you spend $4 a day on coffee, stopping on your way to work, that adds up to $1,000 in a year! Seriously, there is no reason not to take a hard look at where your money is going, especially if you want to have wealth for you and your family.

With a budget, you can take control of those little expenses. They are the little ways your money drains away and leaves you broke, or living paycheck to paycheck.

The easiest way to make a budget work, even for people who don’t like budgets, is to set up an envelope system. For all your monthly cash needs, write up envelopes for each one, like groceries, gas, entertainment, medical expenses. Then, each paycheck, put the amount you are budgeting into the envelope. Now, you can’t spend more than what’s in the envelope on each of those items.

For items like rent and car payments, take those off the top first, and send off your check. The cash you have left over is what gets split into the different envelopes.

At the end of the month, if you run short, you just have to wait – or take from another envelope. You can’t use a credit card to make up the difference.

If you have money left over in the envelopes, then put that into a savings account. Use that to start your emergency fund for times when you might have income loss or emergency expenses like auto repair.

The idea is to live within your means. One envelope, or “cost” you might want to add to your budget, is an automatic amount right into savings or an investment account. If you put just $10 or $50 or $100 into your savings each paycheck, that can really add up, and it prevents you from spending that money on wasteful little items. Make sure that’s part of your budget as well.

To keep you focused, try setting specific long and short term goals. for example, a short term goal might be a weekend vacation. A long term goal might be a new car or purchasing a home.

Once you get started with a budget, you’ll find that it really an work, without too much effort, you just have to decide that it’s something good you’ll do for yourself and your future.

Worried about the economy and your job? Looking to save a little extra cash? Need a way to make fast cash easily? There are plenty of ways to make some quick cash when you need it, you need a little creativity and that’s about all!

You don’t have to fall for fast cash scams either. Lots of scams pop up when the economy is bad and people get despreate. The good news ia, there actually are plenty of ways to make money, legit business ideas, for you to bring in money to pur aside for emergencies or help pay the bills today.

Along with saving money and cutting costs in your budget, it’s easier to get ahead when you make more money too. Here are five quick cash ideas, we’ll post more in the future, but these will get you started.

Each one is designed to (1) cost little or no money, (2) be something you can do right away, that (3) puts cash in your pocket almost immediately.

1. Sell your stuff on eBay, or sell books and videos on Half.com. You can sell stuff easily using eBay and turn whatever ou have sitting around into money in the bank. You are required to have a PayPal business account, but that’s easy to set up, click the link and follow the details.

2. Offer to sell for others on eBay. You can take a cut of between 15% and 30% depending on the item, but you can help people who aren’t computer literate or don’t have time to sell their stuff for cash too.

3. Put up a blog online and sell ads. Think it can’t be done? Read this post about how you can make money online with blogging, easily. There are free blog services like Blogger and WordPress, and many sites that now tell you for free how to start writing about what you kow and love, and make money at it. It might take a few weeks to see some money come in, but if you put in the time, it’s doable.

4. Sell services. Can you babysit, fix cars or computers, bake or clean? Look for community swaps, local classified ads, and find folks who need your service right away. You can get business cards for free (small shipping charge) at many online printing sites. Stop at a local chamber of commerce networking event and pass them out. Try asking friends and family for referrals.

5. Make extra cash by being an affiliate. An affiliate sends leads to a company and is then paid a percent of the sale for their help. A great site is Big Crumbs. Big Crumbs allows you to invite friends and family to buy online at a discount. Each time they do, you get a referral fee. You can even get fees from people you bring into the service! It’s a great deal because you can buy discount groceries, restaurant coupons and more, and legit too.

When your retirement money is invested in a really bad market, the first thing you want to do is think about reallocating. Reallocating means changing the portions of your money you have invested in each mutual fund. As you have seen, your 401(K) provider probably lists suggested allocations for your portfolio based on your age, and consists of what percentage your money should be in stocks, what percentage in bonds, and sometimes they tell you a percentage of your 401(K) to put in cash.

But these percentages go out the window in a recession or depression, because you want safety no matter when you are retiring. For the past year, stock prices have plunged. The allocations are probably wrong for your particular risk appetite. And if you call your 401(K) provider or employer, as I have, they will probably tell you, “Stay invested!” or “We feel the allocations are appropriate.”
Well, they really just don’t want you to move your money!

No, you have to learn how to reallocate your stocks on your own – based on a new market, and wait until things change or get better. There is no reason to stay in losing funds when you can reallocate to wait until a change for the better.

Now if you’re thinking of putting your 401(K) into cash, you should understand that that doesn’t not mean taking your money out of your retirement account. this could incur penalties that total a large percentage of your money – so don’t add penalties to your losses.

When you invest in your 401(K) instead put it into cash vehicles. Your broker will offer at least one or two of these accounts, since their plan allows for older workers nearing retirement to move into safer investments. These are the investments you want to take advantage of for now.

For example, if your broker offers a sample portfolio balance for someone within 3-4 years of retiring, use that for the their safest vehicles. some of these might be bond funds (usually government bonds), and some will be savings or money market options.

If you don’t want to take their advice, then see what funds or accounts they do offer, and move the portion of your money you want to protect into these vehicles. this is the way to move your 401(K) into cash, not by withdrawing all of your money. Then as the market slowly gets better, start moving small percentages back to stocks, based on the performance of the stock market. This is the beast way to use cash n your 401(K).

Think you can’t do a budget? Think again. In a recession or depression, having a budget is your best tool to manage money, stay financially safe, and still build wealth.

You’d never see a carpenter who didn’t use house plans to build a house. Without plans, the second bathroom might be completely forgotten when building.

There’s no way an engineer would begin construction on a new technological development without a thoroughly detailed set of design specifications. but for us, when it comes to money, so many of us run our daily lives without any idea about how to manage finances and use a financial plan.

How smart is that, especially when the economy is in bad shape?

The “blueprints” for your money plan is the budget. Using one is critical to reach your financial goals, but also for day to day improvement of your money situation. Without a budget, your financial life will continue to drift all over the map, without reaching goals, without making your and your family more wealthy.

Start your budget by figuring out what your financial goals are. If you’re married, do this with your partner. Look at the long term financial goals as well as short term.

Your budget is then a plan to achieve those goals. Start with a single step, by making a realistic budget that you can live with and stick to, to start building wealth.

It isn’t hard to do a budget – it’s not like a diet. You have to allocate your money each money, to the expenses you have as well as some for savings. Start by listing your income for each month, then underneath list of all of your monthly expenses. Be sure to leave some room for fun items, otherwise you’ll never stick to it. But remember that discretionary spending – items other than necessities – are the reason many people do not reach their wealth goals.

If you are unable to cover all of your expenses each month, start deciding where to cut to fit your expenses into your paycheck. The idea is to live within your means.

and don’t use credit to make up the difference. right now, we’re all seeing the results of that! You want to pay off credit cards, not keep growing the balances. We’ll talk about how to pay off your debt in a future post.

With a basic budget, you can get started putting money aside. Just put some money into a savings account, where you can keep it safe, and set it aside for emergency funds in case you lose your job or have another financial emergency like car trouble or illness. This is the fund that will keep you afloat in really bad times, and help you avoid losing everything.

Living within your means is hard – we’ve been taught the opposite in America – to spend above your means. But we now see the bad outcomes of that – bankruptcy, losing homes, losing jobs. So to make sure you survive a depression or recession economy, start today to spend less than you make, and create a budgets.