You know about the ABCs. They represent the basics of any subject that you must master in order to move forward in that subject. Without the ABCs, you won’t succeed.

Did you know that when it comes to your investing, there are ABCs as well? In other words, if you don’t have a firm grasp on the following basics, you will fail.

Are you ready for them? Let’s dig in.

Asset Allocation

The “A” stands for asset allocation. This refers to how you split your money between the two major types of investments: stocks and bonds.

Why split your money between the two?

Two simple reasons: risk and return.

In the past, stocks have earned a higher return than bonds. Bonds, however, have been less risky than stocks.

Stocks and bonds also tend to move in opposite directions, so that when one rises in value, the other falls. So when you invest in both, you’ll have a nice balance between risk and reward, helping you sleep better at night.

Generally speaking, when you’re younger, you can take on more risk and invest more of your money in stocks. Then as you get older, it’s wise to lower your exposure to stocks and increase your exposure to bonds.

It’s important to allocate your funds across various types of investments, as described in the Core Four Portfolio.

Behavior

The “B” stands for behavior. Specifically, I’m talking about your behavior. You see, while you’re in the process of growing your wealth, it doesn’t matter if the market goes up, or if it goes down.

Why? Because in either case, you should be investing steadily.

Unsuccessful investors buy after an investment has gone up in price, and sell the very moment that it drops.

Successful investors, on the other hand, control their behavior. They don’t panic when the market drops, and don’t get too excited when it rises.

They keep their emotions in check. They buy, and buy, and keep buying for years – until they’ve reached their goal and sell high.

Costs

The “C” stands for costs. This is important because the return on your investment is directly impacted by the cost of that investment. So the more you spend in unnecessary fees, the lower your return will be.

Let’s take a common investment for example: the S&P 500 Index Fund.

Many companies offer this fund. But not all funds are created equal. Here’s proof:

State Farm’s S&P 500 Index Fund has a 0.79% expense ratio. Vanguard’s S&P 500 Index Fund, on the other hand, has a much lower 0.17% expense ratio.

Don’t think this makes a big difference? Think again.

Let’s say you max out your Roth IRA (the current limit is $5,500) every year for the next 30 years. The S&P 500, which is made up of large-cap stocks, is expected to return 7.4% during this period.

Guess how much more money you’d have if you invested in Vanguard’s lower-cost fund.

If you invested in State Farm’s fund, you’d end up with $480,012. That’s pretty good.

But if you went with Vanguard’s fund, you’d end up with $540,337 – $60,325 more.

It’s the same exact fund. But a tiny difference in cost makes a huge difference in your returns.

What could you do with an extra $60,000?

What are some other basics of investing that are important to keep in mind? Leave a comment!

When it comes to money and financial success, most of us tend to focus on having a solid plan that will move us forward. But it’s at least as important to avoid financial mistakes as it is to have plans to improve your finances. In a way, you win by default simply by avoiding mistakes.

Here are five of the biggest financial mistakes to avoid.

1. Adopting a rich lifestyle early in life.

Probably the biggest obstacle to financial success in life is lifestyle itself. The standard of living that you adopt early in life will have a tremendous effect on the outcome of your financial position in the years to come.

If you are able to live on a shoestring – especially when you are in your 20s – you will both avoid debt, and have money available for savings and investments. If on the other hand, you get caught up on the treadmill of consumption that so many people do, you will probably do a little more than run in place for most of your life.

If you have not learned the fine art of frugal living early, now is an excellent time to begin. The sooner that you do, the sooner that you’ll get control of your income and begin to make the long-term improvements that are necessary to find financial success.

No other financial plan you can hatch will have as significant an impact as learning to live on less money than you earn.

2. Flipping major assets too frequently.

This mistake is an outgrowth of the last one, except that the numbers – and the financial impact – are usually much greater. This involves flipping – or trading up – on major assets every few years. The typical assets involved are houses and cars, and the practice has major downsides with both.

Many people flip their cars every five years or so, in part to avoid the expense of heavy repair bills, but also to make sure that they are driving the latest vehicle at any given time. Cars can be an addiction, and if you are buying a new one every few years, you are simply giving in to that addiction. Not only will you be in debt forever, but since the price of cars rises steadily, you are guaranteed that you will always have an outsized portion of your money parked in your driveway.

The impact is even greater when it comes to houses. Once again, many people trade up every few years as a way of going from a starter home to the biggest McMansion they can afford. But each time they make the transition, they are incurring many thousands of dollars in transaction fees. In addition, each trade-up brings a higher mortgage payment, which means less money is finding its way into savings and investments.

Housing and cars are consumer goods, not investments. For this reason, you should seek to minimize the amount of money that you commit to either.

3. Letting your credit card balances accumulate.

Credit cards can be extremely convenient ways to transact business – as long as you pay off the balance in full at the end of each month. Millions of people don’t however, and allow the balances to roll forward into the next month and to accumulate. Once you have several months worth of charges sitting on your credit cards, they become legitimate burdens. And each month your payment is a little bit higher.

It’s important to recognize that credit cards are a financial treadmill. Once you get on and start moving forward, it’s very difficult to get off. The best way to deal with this dilemma is to not ever get involved in it in the first place. But if you already have, make a commitment to putting a stop to it as soon as possible.

Carrying credit card balances is the practice of using credit as an additional source of income. But it isn’t long before they go from supplementing your income to reducing it.

4. Not having – or regularly restocking – an emergency fund.

It’s very easy to get about the business of your life and to do so without the benefit of having a savings cushion. (Which is another reason why credit cards are so attractive!) But having an emergency fund is fundamental to financial success and independence.

The more that you have in savings, the less dependent you are on credit. We can think of an emergency fund as being an anti-credit account – as long as we have one, and it’s well-stocked, we have little need for credit.

If you don’t have an emergency fund, get one started as soon as you can. If you have one, but you’ve allowed it to run a little dry, rearrange your budget so that you will be making regular contributions to restock it. You’ll want to have money available anytime an emergency presents itself.

5. Not maximizing your retirement contributions.

Since retirement is so far off into the future, we often prefer to deal with financial fires that are more immediate. While this is a natural practice, the problem is that these concerns go on year after year, and before you know it you’ve wasted decades of retirement investing and earnings.

If you started saving for retirement late in the game, or have not been entirely committed to it so far, you should work to begin maximizing your contributions from this point forward. Though you will not be able to make up for the contributions that were not made early in life, you can greatly improve your retirement prospects by saving as much money as possible from now on.

Are there other financial mistakes that you think are important to avoid? Leave a comment!

Building an emergency fund is one thing; keeping it intact and fully funded is quite another. There are a number of reasons why this is a problem. Overusing your emergency fund is one of the biggest. There are challenges that come with an emergency fund, and you’ll have to be resolute in your decision and efforts to keep it intact.

Here’s how . . . .

1. Draw a sharp line between real emergencies and imagined ones.

Overusing your emergency fund will quickly drain it. To avoid that fate, you have to draw a sharp line between real emergencies and situations posing as emergencies.

That means defining what is an emergency is and what it’s not. It’s pretty safe to say that the loss of a job, or a large unexpected and uncovered medical bill fit the description of legitimate emergencies. But raiding your emergency fund to pay for a routine car repair bill completely invalidates the purpose of the account.

You may want to consider creating a short list of emergencies, and posting it someplace obvious to reinforce the fund’s purpose. If your reason for wanting to withdraw funds from the account is anything other than what you have on your list, then the account must automatically be off limits.

2. Set up an account to handle predictable expenses.

Imagined emergencies are, very loosely, completely predictable expenses that you haven’t budgeted for. But those are not true emergencies. Because you know that they are coming, you can prepare for them – and you should.

Once you have an emergency fund established, and you have a sufficient amount of money in the account, the next step should be to set up a second account in which you will begin funding expected expenses. Some of these expenses should include:

• Routine car repairs.
• Eventual replacement of your roof and heating and air conditioning units.
• An amount sufficient to cover the deductibles on your medical and auto insurance policies.
• Education expenses for your children.
• Your upcoming vacation.
• Any other predicable expense that will require a large outlay of money.

The point is that if an expense is predictable, it isn’t an emergency. You should be prepared for any expense that you know is coming. You can do this with a dedicated account that you might even refer to as your “budget for anticipated expenses” account, or any other title that will make it’s purpose completely obvious.

3. Avoid debt – it reduces future cash flow and creates emergencies.

As a way to avoid raiding an emergency fund, many will use credit cards as a substitute cash source. This can be tempting, and it certainly will preserve your emergency fund for another day. But it’s doing something else that will undermine the whole purpose of your emergency fund.

Using credit cards will increase future obligations, which will eventually result in more “emergencies.”

That kind of strategy is completely counterproductive to your emergency fund. In fact, the opposite should be true – once you establish an emergency fund, you should be less reliant upon credit, and in a better position to begin paying off debt on a permanent basis.

4. Increase your emergency fund continually.

Think of your emergency fund as being like an airplane – if it fails to move forward, it will eventually crash and burn.

There are several reasons why this will happen. You will have emergencies that will require you to withdraw money from the account. If you don’t replace that money, your fund will eventually be drained and completely worthless. Yet another consideration is the relentless increase in the cost of living. A $5,000 emergency fund today, will likely be completely inadequate in five or 10 years.

The best way to avoid these problems is to have a systematic plan to replenish your emergency fund. Since emergencies tend to be large and will remove a big chunk of your savings quickly, you should be replenishing your emergency fund on a regular basis.

Think of your emergency fund contributions as being like paying a bill – you must pay it every month, and you must pay a certain minimum amount. By adding $100 or $200 to the fund each and every month, you’ll be in a position to restock the account even after a costly emergency hits. And then you’ll be ready for the next one!

What do you do to avoid overusing your emergency fund? Leave a comment!

One of the best ways to motivate yourself to achieve a difficult goal – like paying off your mortgage – is by visualizing what you will do once you accomplish it. Here are some possibilities that can make paying off your mortgage early even more desirable than simply eliminating a very large debt.

1. Celebrate!

Yes, celebrate. In this day and time of revolving debt – including revolving mortgages – relatively few people ever actually pay off their mortgages. Most either refinance every few years, either to get a lower rate or to take cash out, or they never stay in their house long enough to ever pay it off.

If you manage to pay yours off, you’ll have done something that is increasingly extraordinary and worthy of celebration. Take a second honeymoon or a trip someplace truly exotic, or some other activity that you’ve been putting off, to reward yourself for a job well done.

2. Begin paying off non-mortgage debt.

Once you are done celebrating, it’s time to use the extra cash flow from the now nonexistent mortgage payment to start making some real differences in your life.

With your house payment now consigned to the history books, this will be an excellent time to work on achieving complete debt freedom! You can redirect the extinct house payments into paying off any non-housing debts that you have.

With the mortgage gone – and all your other debts too – you will have a stronger cash flow than you have ever had in your life. And there’s a whole lot you can do with that.

3. Increase your giving.

When you are in debt it’s often difficult to give to either church or charities. But with your debts safely behind you, you will be in a better position to give more generously. At least some of the savings that will result from not having any debt, could be directed into increased giving.

If there has never been much room in your budget to do this in the past, this will be your second chance. Anytime we become more prosperous, we should see that as an opportunity to help those around us.

4. Load up your emergency fund.

While there may be a real desire to increase your investments out of your improved cash flow, building up your emergency fund is one of the best ways to give yourself a sense of financial peace. If you have been keeping your emergency fund at a level sufficient to support three months of living expenses, increasing it to a 12-month reserve will go far in eliminating any short-term financial concerns, such as the loss of a job.

The larger savings balance will be important in freeing your mind to make sound financial decisions in all areas of your life.

5. Increase contributions to your retirement plan.

One of the biggest advantages in paying off a mortgage early – especially if you do it early in life – is that it frees up money for greater contributions to your retirement plan. That will open up the possibility of either early retirement, or a more comfortable retirement at the normal age.

Let’s say that your mortgage payment is $1,000 per month (just principal and interest of course) and you pay it off at age 45. If you direct half the money into retirement savings and the other half is used for other purposes, that will enable you to increase your retirement contributions by $6,000 per year. If you do that for the next 20 years, that will represent an additional $120,000 in retirement savings – plus investment earnings on the extra savings.

6. Help a few people around you.

We’ve already discussed increasing charitable contributions as a use for the money saved from your missing mortgage payments. But think back on your life – in your younger days when you were just starting out, were there people of greater financial means who helped you in your times of need?

For most of us the answer to that question is an emphatic yes! Think of this time as your chance to give back. You may not be able to give to those people who helped you, but you can help those around you who are in a position similar to the one you were in early in life. If God provided “angels” to help you in your time of need, then maybe now is your time to be an angel to someone else.

7. Live a little.

If you’ve paid off your mortgage, you’ve overcome a major hurdle in life. Now is the time to live a little in your life, in a way you couldn’t earlier on when your finances were tighter. Take advantage of that opportunity!

Work a little less, spend more time with the people close to you, go on mission trips, do more of the things that you always wanted to, help where you can, and be purposeful about living a happier and more productive life. You’ve made the effort that got you to where you are, and now it’s time to kick back and enjoy it.

If you can concentrate on the benefits of paying off your mortgage – rather than treating it simply is an obligation that needs to be satisfied – it might actually get you to the goal faster.

What goals would motivate you to pay off your mortgage early? Leave a comment!

So many people who are in debt try – and repeatedly fail – to get out of it. They might beat themselves up for being “weak” or utterly incapable of mastering their finances. In truth, they’re neither weak nor incapable. They’re probably just going at it in the wrong way.

Simply resolving to get out of debt isn’t enough to make it happen. You have to make changes in your life that will enable you to do it.

One of the best ways to enable yourself to begin getting out of debt is to first focus on building your savings. To many, this can seem like the exact opposite of what’s needed. To get out of debt, you need to pay off your debt, right? Yes – but you may need to get something else in place first, like a well-stocked savings account. Here are some reasons why.

Getting Off Debt Dependence

One of the most basic reasons why it’s so difficult to get out of debt is the dependence that it creates. Let’s face it, credit is an easy way to do business – all you need to do is choose your product or service, swipe your card, and you’re on your way. You don’t even need to concern yourself with your ability to pay – it’s all done for you.

In order to get out of debt, you first have to learn to live without it – not so easy considering the above. And in order to do that, you need to replace it with something else.

Most of us need some way to balance out income and expenses. Though your income may be level from month to month, expenses have a way of ballooning in some months. That’s when credit cards become especially attractive. They can provide that short-term injection of cash that keeps you liquid during months when you are short.

To get out of debt, you need to eliminate your reliance on credit cards as a source of short-term cash. Savings are the best alternative to credit cards. It can do everything credit cards do to provide extra cash, but it will do it without leaving (or increasing) your debt overhang the following month.

Once you shift from credit to savings as your preferred source of cash, your financial situation can begin to improve. At first your credit card balances will stop growing. Then you’ll begin paying them down. Eventually, you’ll begin paying them down faster – because you can, and because you’ll find them to be increasingly irritating. Once you are comfortable living out of your savings and no longer need your credit cards, you’ll finally pay them off.

It’s a process, but it begins with shifting dependence from debt to savings.

Creating the Psychological Upper Hand

Another big problem with credit is that the people who have the largest amount of it often live in the classic hand-to-mouth fashion. Credit pays the bills, and your paycheck covers the loan and credit card payments. It’s a vicious circle that’s very difficult to get out of once you’re in it.

Much of this trap however is psychological. It’s driven by fear. The way to overcome that fear is by creating some breathing room in your budget. By building your savings, you’ll have that breathing room. And once you do, you’ll start to have options.

Instead of trying to pay down your credit lines, either to free them up for more spending or with the intention of making them go away, instead put some extra money into savings every month. As your savings grow you’ll start to feel better about yourself and about your ability to overcome your debt.

Having the Ability to Pay Off Debt in Big Chunks

If you try to pay off your debts gradually, it can be a long, slow process. Most of us can manage to keep the debt payoff intensity going for short spells, but if it turns into years, it can wear you down.

But if instead of concentrating on paying down your debt you put extra money into savings, you will eventually come to a point where you can pay your debts in big chunks. Let’s say you want to keep a minimum savings balance of $3,000; any amount beyond that is available to pay off debt – if that’s what you choose to do with it. Let’s say you keep saving all the way to $6,000. You can make a one time payment of $3,000 on your debts, and still have money in the bank.

The debt payoff will not only be substantial, but you’ll see improvement right before your eyes. You may even pay off an entire credit line. It will be progress that you’ll be able to see and benefit from.

If You Can Save Money on a Regular Basis, You Can Pay Off Debt

There are two changes that are happening in your financial situation when you begin to become a saver:

1. You learn to live beneath your means (the foundation of all financial progress)
2. You create the budgetary flexibility necessary to pay off your debts.

You get into debt by not having control of your finances, forcing you to borrow to cover what you need. But when you build savings, you take control of your finances. By then, you no longer need debt.

If you’ve had little luck getting out of debt by trying to pay it off directly, it may be time to change your strategy. Start focusing instead on building up your savings, and see if that doesn’t work better for you.

Have you tried to get out of debt with no success? Do you see how building your savings first might help? Leave a comment with your thoughts!

As a blog that seeks to educate, motivate, and inspire you to manage your money wisely, it’s only natural to discuss issues related to finance here. Money, however, is merely a tool to be used to accomplish your life goals.

And in order to accomplish your life goals, two other things you’ll need are energy and good health. In other words, without energy and good health, you won’t be able to enjoy your money.

So if you’d like to live a healthier life, here are eight ways to improve the health of your body, your mind, and your home as well. I learned them from the book, You: Staying Young: The Owner’s Manual for Extending Your Warranty by Michael Roizen and Mehmet Oz.

1. Exercise your body.

We all know that physical exercise is an important part of staying healthy. But for some reason, most people keep making resolutions to lose weight (when they should be making resolutions to exercise).

To try to stick to your resolution, find unconventional ways to fit exercise into your schedule. For instance, if your workplace has a gym, try going during your lunch hour. Or take a walk with your coworkers during your break times.

2. Get enough rest.

Aim for seven to eight hours of sleep every night. If you have difficulty falling asleep, avoid consuming caffeine for at least three hours before bed. Then try this routine about fifteen minutes before bedtime:

• Finish up all your tasks, whether it’s washing the dishes, completing a report for work, or reading a book.
• Make a list of what you need to do tomorrow, so you can avoid worrying about forgetting it when you fall asleep.
• Do your before-bed hygiene routine, including flossing and brushing your teeth.
• Spend a few minutes doing some deep breathing exercises to calm down.

3. Deep breathing.

Carve out time every day to breath deeply. As mentioned above, before bed is a good time. But you can do this whenever you’re trying to manage stress.

To do this, take a deep breath in slowly — it should take about five seconds to inhale. As you inhale, use your diaphragm to pull air into your chest, and push out your stomach so that your belly button moves away from you. Then exhale slowly for five seconds, pulling your belly button into your body to get all the air out.

4. Limit or get rid of unhealthy foods.

I don’t want to discourage you from enjoying food. But if you don’t want to completely get rid of unhealthy foods, limit foods that contain any of the following as the first five ingredients on the label:

• Palm or coconut oil. These are two of the few highly saturated vegetable fats.
• Corn or soybean oil. These contain excessive levels of omega-6 fatty acids relative to omega-3 fatty acids, which may increase the probability of a number of diseases and depression.
• Simple sugars ending in -ose, such as sucrose, glucose, maltose, and fructose.
• Any non-whole grains, like bleached or enriched flour.

5. Try a calorie-restricted diet for awhile.

The goal here is to alter your body’s settings to eat healthier foods in more sensible amounts. To do this, eat about three-fourths the amount of food you normally eat each day, using healthier options than what you’re used to eating.

You can do this by eyeballing the amount, or literally filling up your plate as usual, then taking away one-quarter of the meal and saving it for tomorrow.

After you do this a few times a week for a month or two, it’s likely that you’ll have trained your body to need less food than you’ve been used to eating. That’s because many of us actually indulge in toxic eating.

In other words, we eat because we’re bored, angry, sad, lonely, or depressed — anything other than actually being hungry. We also eat because we’re nutritionally starved, even though our bodies are consuming lots of calories. But it’s all about disrupting old habits by replacing them with better alternatives.

6. Automate your eating.

Find three or so healthy meals (breakfasts, lunches, dinners, or snacks) that you like and eat one of them every day. When you can automate your eating behavior with good choices, you’ll have mastered one of the crucial steps to fueling your body with ingredients that’ll keep you healthy and strong.

7. Take a break day away from media.

Try this once a month. Turn off the TV. Don’t read the newspaper. Don’t surf the web. Use the computer only as needed for work or important tasks.

Take the time you saved to read a good book to engage your mind. Get some exercise, or plan an outing to spend quality time with your family. At the end of the year, you may be surprised by how much you’ve accomplished that you can feel great about.

8. Detox your home.

• When reheating food, don’t microwave plastic — you’ll get small amounts of it into your food. Instead, cover food with ceramic, glass, or a paper towel.
• Leave your shoes at the door. Aside from making your floor and carpets dirty, you can track in toxins such as lawn-care pesticides, which can get trapped in your carpet.
• Use nontoxic products that are based in alcohol, peroxide, and bicarbonate to clean your home. Simple baking soda is great for cleaning sinks and tubs. Vinegar in a pump spray bottle works well for cleaning windows and mirrors.
• Ditch the moth balls. They contain naphthalene or p-dichlorobenzene, which are fancy words for compounds that are way too strong for killing insects. Use cedar chips instead.
• Use deodorant instead of antiperspirant. Sweating is normal, but blocking the pores is not.

By making these changes in your life, you’ll feel a lot better, and be in a great position to enjoy the money that you’re working so hard for.

What are some other tips you can think of to start living healthier now? Leave a comment!

Do you know what the most powerful tool for overcoming procrastination and increasing your productivity is? According to Brian Tracy, author of the bestselling productivity book “Eat That Frog,” it’s your ability to plan.

Yep. In fact, making plans, setting goals, and taking action on them largely determines the course of your life. Or, as time management guru Alec Mackenzie puts it: “Taking action without thinking things through is a prime source of problems.”

Here are proven ways to get more things done, which I learned from Brian Tracy’s book, “Eat That Frog.”

Increase your ROE

No, I’m not talking about Return On Equity here. Rather, one of your top goals at work should be to get the highest possible return on your investment of energy – physical, mental, and emotional. And the best way to ensure this is by creating and sticking to a plan.

Remember, it was Nobel Prize-winning Prime Minster Winston Churchill who said, “He who fails to plan is planning to fail.”

Every minute you spend planning will save as much as 10 minutes in execution. Plus, it only takes about 10 minutes to plan your day. Yet this small investment of your time will save you up to two hours in wasted time and effort throughout the day.

How to Make a Plan

So how do you do it? It’s really simple. All you need to do is get a piece of paper and a pen. Then write down everything you have to do before you start working.

Make your list for the next workday the night before. If there are tasks that you haven’t completed during the previous day, move them onto your list for the coming day. Then add everything new that you have to do for the next day on top of that.

The payoff you get for making your list the night before is that your mind will work on the list while you sleep. Then when you wake up the next day, you’ll find that you have useful ideas that’ll help you do your job faster and better.

Four Lists for Four Purposes

Although having one list is better than none, you should create four different lists for four different reasons.

1. The first list you should create is a master list, in which you write down every single thing you want to do sometime in the future. This is where you capture every idea or new task that comes up. Don’t hold yourself back, and don’t worry about priority and sequence at this point. You can sort this out later.
2. The second list you should have is a monthly list that you create at the end of the month for the month ahead. This will contain items that you transfer from your master list.
3. The third list is a weekly list where you plan your entire week in advance. Move items from your monthly list onto this list.
4. Lastly, transfer items from your weekly list to your daily list. As its name suggests, these are the specific tasks that you’re going to complete the next day.

Working Your List

Now that you have your daily list, as you work throughout the day, cross off each item as you complete it. Doing this will give you a visual picture of accomplishment as well as a feeling of success.

Seeing yourself working through your list will motivate you. Steady, visible progress will help you push past procrastination and move forward to accomplish even more.

Planning a Project

Things which matter most must never be at the mercy of things which matter least. – Johann Wolfgang von Goethe, German writer, artist, and politician.

Whenever you have a project to complete, start by making a list of every step you’ll need to take in order to move the project from beginning to end. Then organize the steps by both priority and sequence.

Once you’ve done that, start working on one step at a time. You’ll be amazed at how much you get done by working this way.

As you work from your lists, you’ll feel as though you’re in greater control of your life. Start planning each day in advance, and your work will go much faster and smoother than before.

How do you push past your procrastination? What are your thoughts on these tactics? Leave a comment!

Healthcare costs are rising across the board, but one area that seems to be outpacing the rest is prescription medications. It isn’t just that prices are rising, it’s also that there are more medications for more illnesses, being prescribed more frequently.

How do you save money on prescription medications while still taking the very best care of your health?

1. Buy generic whenever possible.

Generic prescriptions are almost always less expensive than brand names. Most times, prescribing doctors will indicate that pharmacists provide generic where available, but that’s not always the case. Make it a practice that any time you’re given a prescription by a doctor, that you specifically ask him or her for generic alternatives.

Not only can the savings on the price of the generic drug be cheaper, but many health insurance companies require a smaller co-payment on generics than they do on brand names. If you’re on any kind of ongoing drug therapies, using generics instead of brand names can save you several hundred dollars per year. And as the years pass, the savings can really add up.

2. Get free samples from your doctor.

Doctors often get free samples of various prescription drugs from the manufacturers of those medications as an inducement for the doctor to prescribe them. Some doctors will give these to their patients voluntarily, but it never hurts to ask.

Anytime you get a prescription order from a doctor, ask if you can be started out with free samples. If you can get enough to cover the first month, you’ll save at least that much. If you can ask for free samples anytime you need a prescription, you’ll save that much more.

3. Buy in larger quantities.

Typically when doctors prescribe medications they’ll do so in 30-day increments. There are certain medications which by law cannot be prescribed for longer periods, but most medications don’t come under that restriction.

You can often save significant money by buying prescriptions in quantities of 90 days supply or greater. The reason is that you are buying in bulk. The more of anything that you buy, the less expensive it typically is on a per unit basis. Sure, you’ll be spending more money up front for the larger supply, but the savings on a per month basis can be significant.

You should try to get larger supplies anytime the option is available, and the prices are clearly lower.

4. Try mail order sources.

Many insurance companies offer a mail order prescription alternative, and some will even try to promote this method of ordering medications. Mail order providers offer less expensive prescriptions because they operate out of central facilities dispersing large quantities of medications. Most prescriptions are purchased at large chain retail pharmacies that have hundreds or thousands of outlets that add to the cost of prescriptions. Mail order providers don’t have a large distribution chain, and can pass the savings on to their customers.

Even if your health insurance provider doesn’t promote using a mail-order source, ask if the option is available. Insurance companies will typically work with a very small number of mail order pharmacies, and may only work with one. But the savings that you can get are significant, in addition to the fact that the health insurance company may offer an even lower co-pay if you purchase through the mail order option.

5. Improve your condition!

There are certain diseases and ailments that are completely beyond human control. But most have to do with lifestyle, and that’s something that you have control over. If you can improve the state of your health, you may be able to reduce or even eliminate your dependence on prescription medications. That will save you more money than any other effort you can make.

Hypertension, diabetes, many forms of heart disease, and many degenerative diseases are either caused or accelerated by poor lifestyle habits. You can decrease your chance of contracting any of these ailments simply by giving up cigarette smoking, cutting back on alcohol consumption, eating less, exercising more, controlling your weight and avoiding dangerous activities.

The payoff can be permanently lower healthcare expenses, including the many high cost prescription drug therapies.

If you’re on long-term prescription therapies, what are you doing to control the cost? Leave a comment!

In several places the Bible directs us to give our money. This can be in the form of a tithe to your church, as well as direct giving to various charities and individuals in need. One complication of giving however is that there are so many potential needs surrounding us that we can easily get confused as to which we should support with our giving. And this can lead to feeling guilty in the process.

Have you ever felt this way? There are so many causes, one more worthy than the next. In addition, we all have limited resources so we’re never in a position to simply give to everyone. How do you sort out who you should give to and how much?

Giving to One Cause

One way to handle this dilemma is simply to give to a single cause. That can be your church, a specific outreach ministry, or a charity that’s important to you.

Giving is giving, no matter who we give to. You can give to the single cause that you feel most passionately about, feeling certain that just as God has you giving to a cause of your choice, you will have others doing the very same thing for other causes. In that way everything balances out, even though you yourself are focused on a single, specific cause.

Giving Mostly to One Cause and a Little to Others

If you have a single cause that you feel strongly about, but heartstrings continue to pull at you, then you can choose to make the majority of your giving to a single cause, while parceling out much smaller amounts to various others.

In this way you’ll be supporting the cause you feel most passionately about, but still contributing to various other causes at least in some small way.

Giving a Little Each to Many Causes

Some people don’t feel a heavy leading to give to any single cause. In that case you can choose to give a little to many different causes. Even though it seems like you’re only giving a little – the proverbial drop in the bucket – the total of all of your giving is having an impact even if it doesn’t seem obvious.

It’s sometimes thought that for you to give, you have to do it in some meaningful way. That thinking only makes sense if you are the only one giving to a certain cause. Since that’s virtually never true, you can give what little you have and know that it will make a difference when pulling together the contributions of others.

Giving Time and Effort

We often think of giving only terms of money. But you can also give of your time your efforts, and the gifts will be no less significant. This opens up a lot more options, especially if financially you have only limited capacity to give.

You can choose to make monetary contributions to your church, but volunteer your time and effort to help various other charities or even to help people in need in some direct way. Time and effort is often more important than money, especially when people are going through some sort of crisis. And every charitable organization, whether it’s a church or other institution, is always in need of volunteers.

Giving of your time and efforts, in addition to money, will open your giving options much wider than if you give only money alone.

Sometimes God Puts a Cause on Our Hearts

While it’s probably perfectly okay to give using the shotgun approach – throwing money out here and there in the hopes that will get to where it needs to be – if you take your giving to God in prayer to ask Him to reveal where your money, time, and efforts will do the most good He may reveal it to you.

Each of us have talents, interests, abilities and passions that could very well make our giving more significant if targeted to a specific cause. Only God can reveal that to us, but in order for that to happen we have to ask.

How do you determine how your giving will work? Leave a comment!

With the stock market moving once again into record territory, maybe it’s time to wonder if this represents a solid continuation of the bull market that’s been in place since 2009, or if it means that a reversal is in store. Though it isn’t fashionable to say that stocks are affected by price levels, it is nonetheless impossible to ignore that we are moving into uncharted territory. And that means an extra layer of risk.

Will the market continue to rise, or is the recent surge signaling the beginning of the next market downturn? As an investor, this is a time to begin looking to broaden your investment base. One of the best ways to do that is to invest in income, and there are various ways to do this.

Short-term vs. Long-term Income Securities

Since income type investments are a diversification to the risk involved in stocks, you may want to begin shifting some of your investment capital into them now. But all income investments are not equal, and a critical distinction must be made between short-term and long-term income securities.

One of the considerations that we have that’s almost unique to our time is the fact that we have record low interest rates. That complicates investing for income in general.

In this rate environment, rates probably have nowhere to go but up. And since bond prices move in inverse proportion to interest rates, rising interest rates will convert into declining security prices. If you invest in long-term interest bearing securities, the value of your holdings will drop should rates rise.

This makes a strong case for investing in short-term income securities, particularly those with maturities of one year or less.

What are the choices?

Corporate Bonds

Corporate bonds are usually long-term in nature, say 10 years or more. While they pay above average interest rates, the risk associated with long-term bonds in general is probably unacceptably high at this time. A shift in interest rates, from flat to increasing, will mean a declining principal value of your investment. Sure, long-term bonds will pay the full face amount if held to maturity, but if you decide to sell your securities in advance of maturity in order to purchase higher yielding securities, you’ll take a loss on the sale.

For this reason corporate bonds are probably best avoided entirely because of the risk of principal loss.

Treasury Securities

Treasury securities are interest-bearing securities issued by the United States government. They run the gamut as income securities go, maturing in as little as 90 days to as long as 30 years.

Should interest rates begin to rise – which could be the very trigger causing the stock market to turn down – the safest treasuries would be those of the shortest term.

Not only will short-term securities (those maturing in one year or less) offer the best protection of principal, but because they will mature in a matter of months, your capital will be freed up to take advantage of higher interest rates as they become available.

And unlike corporate bonds, treasuries are backed by the full faith, credit and taxing power of US government, so the risk of default is virtually zero.

Certificates of Deposit (CDs)

CDs are similar to treasuries in most respects, except that they are insured by the US government (by the FDIC, up to $250,000 per depositor) rather than issued directly by it.

CDs are actually investment contracts with the bank to pay a certain interest rate over a specific period of time. Once again, in order to avoid risk of principal, and to keep yourself in a position to take advantage of higher interest rates in the future, you‘ll want to stay with the shorter-term securities – those with maturities of one year or less.

Dividend Stocks

Another way to invest for income, but while still staying in the stock market, is to invest in dividend stocks. Dividend stocks typically pay dividends that offer a yield that’s higher than what is being paid by the general stock market, and are often comparable to or even higher than competing rates on treasuries and CDs.

Dividend stocks do have risk of principal, and that can be negatively affected by rising interest rates or by a general decline in the stock market. However, they offer you an opportunity to participate in a market rise while paying you a steady income in the process.

Income-based Mutual Funds

If you like the idea of investing in dividend stocks, but don’t like having to build and manage your own portfolio, you can simplify the process by investing in income-based mutual funds.

These funds can go by different names, including income funds, growth and income funds, equity income funds, and other titles. Not only do they make the process of investment for income simpler, but they also offer diversification that will prevent you from taking a big loss in the event one of the securities within the portfolio collapses.

With the stock market in record territory, and interest rates at all-time record lows, now may be the perfect time to begin looking to diversify your holdings outside the stock market. Income investments are one of the best places to go. Don’t be scared off by the low interest rates – the reason for investing in income securities is to preserve your asset values so that you’ll have capital to invest in higher-yielding securities later, and also to scoop up bargains when the stock market goes on sale.

Are you investing for income? Leave a comment and explain how and why!