Rainy-Day Saver

Cut Down on Heating Bills With These Tips

Nicole — Thu, 09 Sep 2010 17:08:05 +0000

In the summer, homeowners and renters who pay their own utility (gas & electric) bills do their damnedest to keep down their electrical costs by running the air conditioning less often. While I’m guilty of keeping the air conditioning off as much as I can, instead of just sitting there, sweltering, I’ve taken other steps to help control the ambient temperature inside of our home.

Curtains & window coverings are key. I make sure our drapes aren’t just aesthetically-pleasing — they’re also thick and heavy. On the front windows, which tend to get most of the day’s sun, I use insulated drapes, specially-designed to keep out the heat during the summer, and the cold out during the winter. Behind those I have either roll-down shades or cellular blinds, which filter the sunlight so that it doesn’t heat up like a sauna in those rooms.

In the warmer months, keep the curtains closed and the shades down during daylight hours in order to keep the sun from heating up your home. This tactic keeps the indoor temperature down a few degrees in the summer. Of course, if the weather is extremely hot, just give in and put the air conditioner on! Open up the curtains in the evenings when the temperatures drop to let in the cooler air.

Keeping Out the Cold in Winter

Now that fall is around the corner, it’s time to start thinking about how to keep the colder air out and cut down on your heating bills. Our bills were sky-high in our old apartment until we started taking matters into our own hands.

Draw the drapes/shades at night; keep them open during the day. It’s the same sort of drill as in the summer, but reversed. On sunny days during the fall and winter, let all of that warm-ish sunshine in by pulling open the curtains and raising the shades. As long as your windows are properly sealed and weatherproofed, you’ll benefit from the natural warmth of the sun. At night, shut them tightly again to keep the cold, drafty air at bay.

Close unused vents/radiators. We have an unused bedroom and make sure the heating vents are shut — there’s no sense in heating a room that no one’s in. Same goes for radiators — make sure the valves are shut on radiators in areas you don’t use.

Try (safe) space heaters. Instead of heating the entire house, use an oil-filled electric heater to warm the room you’re in. It works especially well if you can close the doors to the room and in those homes that don’t have zoned heat. I like to use a heater in the bedroom on nights when it’s not quite cold enough to heat the entire house. Your electric bill will go up, but the drop in your gas bill will more than make up for it.

Seal up gaps in windows and doors. You can get adhesive weatherstripping at your local home store. It’s easy to install around doorways and windows, and you’ll keep out the drafty air for minimal cost. You can also use a caulking gun to fill in gaps around the window frame itself.

I know it’s kind of soon to think about the cold weather (especially after the hot-and-humid summer many of us had to deal with this year), but it’s worth it to save some money this fall and winter.

How to Build Up Credit When You Don’t Have Credit History

Nicole — Tue, 07 Sep 2010 15:00:18 +0000

While some people have too many of those plastic devils — better known as credit cards — at their disposal, there are others who don’t have any. And because of their lack of credit history, their credit scores aren’t as high as they’d like, which causes them to be denied major credit cards, auto loans or mortgages.

Sounds silly, right? You obviously have such great control of your finances that you don’t need to put anything on credit, ever. Yet you don’t qualify for loans because you have little or no credit history. Instead, you need to prove to lenders that you can be responsible with loans and credit cards, too. Try some of these tips to build your credit history and get your credit score heading upward.

The Basics

Open Checking and/or Savings Accounts. Don’t hide your money under the mattress or live paycheck to paycheck. Creditors will want to see that you can manage your cash before they’ll trust you with credit. This is also a good idea for minors who don’t have a speck of financial history and want something to build on.

Check Your Credit Report. The three major credit bureaus — Equifax, TransUnion and Experian — are each obligated to provide folks in the United States with one free credit report per year through AnnualCreditReport.com. Check the report to make sure all information pertains to you, because sometimes others’ credit adventures can get mixed into your history. This sometimes happens when there are seniors/juniors in your family, or if another person has the same name as yours. Worst-case scenario is that someone has stolen your identity; identity theft is a real issue. Dispute any items with the specific credit bureau to try to “clean up” your information.

Getting Credit

Start Small. Apply for a store credit card, which is considered a revolving account in that it has a credit limit and requires a minimum monthly payment each month. But be aware that if you get one of these store cards, the interest rate will likely be sky-high and the credit limit pretty puny. But it’s a foot in the door!

Apply for a Secured Card. This is a credit card that works differently than the traditional kind. In most cases, you can get “credit” by putting down a deposit with the lender, and you can only charge up to that amount. It’s best to apply for a secured credit card at a bank or a credit union in order to be sure you won’t get scammed.

Use Revolving Credit on a Regular Basis. There’s no need to put everything you purchase on the plastic — charging small purchases once in a while will keep your account active and show the lender that you’re responsible with your credit card. Be sure to pay them off in a timely manner, and your excellent repayment history will be reflected on your credit report.

Associate Yourself With Someone Else’s Credit. No, not through identity theft! Ask if a parent, sibling or other family member will add you as an account holder on one of their credit cards, or will co-sign on a loan that you wouldn’t otherwise qualify for. But be aware that any credit faux pas you make (missed or overdue payments) will reflect negatively on BOTH of your credit reports.

Try For an Installment Loan. These are for the bigger loans for school tuition, car financing and mortgages. Obviously, I’m not advocating for anyone to run out and buy a house or a car just to boost their credit. But if you’re in the market for a new car and need financing, see if you can qualify for the loan.

Prepare for a Natural Disaster

Nicole — Wed, 01 Sep 2010 16:29:49 +0000

This week, residents up and down the East Coast (including myself) are worrying about whether we’ll be impacted by Hurricane Earl, which right now is a Category 4 storm with 135 mph winds. Different meteorological models have the storm swerving all over the Atlantic Ocean, but all agree it will come close enough to the coast to kick up at least gale-force winds and drop some rain during the beginning of Labor Day weekend.

Ever since I was a kid, I’ve imagined the worst-case scenarios whenever a tropical storm or hurricane started to head our way:

What if a tree falls on the house?

Should I stay away from the windows in case they shatter?

What do we do when the basement floods?

How do I protect my stuff?!

It took some research, but there are things you can do to prepare for a natural disaster such as a hurricane, tornado or earthquake, depending on your region of the country.

Homeowners/Renters Insurance. You need to protect your home and its contents in the case of damage from flooding, earthquakes and bad storms. I have visions of one of the three 100-foot-tall oak trees in our yard falling on our home, but I’m comforted by the fact that our homeowners insurance will cover it. On many policies, earthquake or flood insurance riders are additional, so check with your insurer to find out exactly what your policy covers.

And if you rent, make sure you have renters insurance. It only covers your personal possessions, since the landlord should have his own insurance on the building. But imagine how much it would cost to replace all of your stuff. It’s worth the $100-$350 a year in insurance for peace of mind.

Emergency Kit. Make sure you have enough nonperishable food and water to survive a few days after a natural disaster. Canned foods, at least a gallon of clean water per person in the household, and a can opener are key. Other necessary supplies are flashlights and fresh batteries, a first aid kit, battery-powered radio or TV, personal hygiene items, matches and candles (use with care), cash, and any medications you might need. You could use a portable cooking device such as a charcoal grill if you want to prepare heated foods — just remember the charcoal, a pot/pan and utensils.

Not everyone will have an emergency preparedness kit set up at all times, but if you know there’s a major weather event coming your way, it’s important to gather these items as soon as you can. If you live in an earthquake- or tornado-prone area, I’d suggest creating a kit that’s accessible at any time — use a plastic bin to contain everything. And periodically check the expiration date on the food and bottled water. Remove and replace old/expired items every few months.

Weather-Appropriate Clothes. If you have to flee a hurricane or are stuck in a home without heat after a blizzard, be sure you have a few changes of clothes. In colder weather events, have blankets, sleeping bags, extra sweaters, jackets, longjohns, woolen socks and snow boots with you in case you don’t have heat for a few days.

Pet Safety. Don’t forget about your furry friends. Have cat or dog carriers on hand in case you need to evacuate your home. Prepare a few days worth of food and clean water for your pet, along with any other accessories such as a leash or a favorite toy.

Utility Deregulation Can Save You Money

Nicole — Fri, 27 Aug 2010 14:00:46 +0000

For years, utility companies had a monopoly in a number of areas: electricity and gas, finance, transportation and communication. But in the past decade, federal and state governments have chosen to deregulate certain utilities and encourage free market competition. Why wouldn’t you want the freedom to choose which company provides your electricity, especially if the rates are cheaper than the one company that had control of the market for decades?

A co-worker recently mentioned that she was switching utility supply providers from PSE&G, which was the only electric and gas provider for households across northern New Jersey for ages. These energy utilities have supply and delivery charges, at different rates, depending on how much electricity or gas units are used. By changing the supply provider, the per-unit charge will be reduced from ~.12 to ~.09. It doesn’t sound like a lot, but it will make a big difference in the winter, when the heat is on, and in the summers, when air conditioning use is in full force.

There are a number of alternative energy providers out there, and it may pay for you to check out their rates and compare them to your current utility provider. For us, if we switched our energy supplier, PSE&G would still provide the method of delivery through its power lines and natural gas piping; those costs will be included on your bill. But the delivery charges are generally lower than the supply charges.

Regulation History

The initial outlay for all of the communication, electric and gas lines crisscrossing America was a lot of money for the companies who decided to invest in these burgeoning markets. To protect the companies’ investments, the federal government regulated these industries, eliminating competition. While the intent was good, this led to the monopolization of these industries and a lack of choice for consumers, who were forced to accept whatever rates were charged.

This eventually led to companies having too much of a say within the government regulatory committees, and consumer interests fell by the wayside. Eventually, a deregulation movement started in the 1970s, affecting transportation and, to a lesser degree, energy companies. Over time, each state has made the decision whether to deregulate or leave the old regulation policies in place.

A number of states (including my state of New Jersey) have deregulated both natural gas and electric utilities; some just offer one or the other; and then there are the nearly two dozen that still heavily regulate the industries. Where does your state fall on these lists?

Both Natural Gas & Electric Deregulated

California (partial choice for gas)
Delaware (partial choice for gas)
Illinois
Maryland
Massachusetts
Michigan
Montana
Nevada
New Jersey
New Mexico
New York
Ohio
Pennsylvania
Rhode Island
Texas (partial choice for gas)
Virginia
Washington, D.C.

Only Electricity Deregulated

Arizona
Arkansas
Connecticut
Maine
New Hampshire
Oklahoma
Oregon

Only Natural Gas Deregulated

Florida
Georgia
Indiana
Iowa
Missouri (partial choice)
West Virginia
Wyoming (partial choice)

Neither Electric Nor Natural Gas Deregulated

Alabama
Alaska
Colorado
Hawaii
Idaho
Kansas
Kentucky
Louisiana
Minnesota
Mississippi
Nebraska
North Carolina
North Dakota
South Carolina
South Dakota
Tennessee
Utah
Vermont
Washington
Wisconsin

Looking into alternative energy suppliers is something I’d like to look into when I have a spare moment, because hey, I like to be warm in the winter/cool in the summer, but I don’t want to continue to pay out the nose for it like many of us do. Mr. Saver and I do our best to conserve energy, but we have to have the heat or the air conditioning on to SOME degree in order to be fairly comfortable.

Baby Costs: Saving Up for a Newborn

Nicole — Wed, 25 Aug 2010 19:43:02 +0000

A wrought-iron crib might be taking things a bit too far, no?

Sounds silly, doesn’t it, to ‘save up’ for a baby? But besides being a life-changing presence in your life, a child comes with tons of expenses. And if you’re planning to get pregnant, it’s very important to talk to your partner about how that little bundle of joy will affect your finances.

“Preparation”

Some would argue that a newborn doesn’t need a lot of things, but the parents definitely will. At the very least, you’ll need a car seat to bring the little one home from the hospital (and drive him/her to doctors’ appointments), a bassinet, a clean, sanitary place to change diapers, the diapers themselves, clothes, baby formula if you’re not breastfeeding, and bottles for the formula.

Then there are the other things that most parents will like to have — a crib, perhaps a dresser, a stroller or a baby carrier, Pack ‘n’ Play (which really is just a glorified crib, but much cooler), bouncer and rattles/teethers. And all the other accessories that come with raising a baby. The crib will need a mattress, sheets and blankets.

Anticipating Your Costs

If you really want to scare yourself — uh, I mean, be prepared for the costs of your newborn — BabyCenter has a neat little calculator to give you an estimate of your first-year expenses. I inputted the anticipated first-year and “startup” costs for my child (surprise, I’m pregnant!) and got an estimate of $11,602, with $4,800 of that daycare costs alone (and only for 6 months).

So as you can see, daycare costs are what will really eat up your income, if you’re not going to have a stay-at-home parent. Especially here in New Jersey, our costs relative to income are sky-high — $800 a month for childcare may be a conservative estimate on my part, as I’m not ready to talk to daycare providers just yet.

Where to Find Savings

One word (well, three hyphenated words): hand-me-downs!

Think of all the baby items that are barely used because of how fast a child grows. There are barely-worn clothes, infant car seats that can’t be used anymore, baby swings, infant tubs and even cribs. Why spend full retail price on brand-new items if you can get slightly-used stuff at little to no cost, particularly if you have friends who have stuff they no longer need. Some ways to find these items:

1. Ask friends and family if they have clothes or furniture that they’re no longer using. And these things don’t have to specifically be baby-related. For example, I already have a glider chair from a neighbor who was giving it away because she’d changed her decor. I can sew new cushion covers on it to match the decor in the baby’s room.

2. Check Craigslist or Freecycle. There are so many posting on these sites for stuff that’s free or priced pretty low. Just be careful about meeting a stranger — if you decide to look at items or buy them, conduct the transaction in a public place to be safe.

3. Scour yard sales. Many people sell whatever they no longer need at cut-rate prices. You could score a box full of hardly-used infant clothes, a baby swing or toys.

4. Look at the Salvation Army or Goodwill stores. You may not find a ton of smaller items here, but you may luck out with furniture, toys and strollers.

5. Get crafty! If you’re any good with a sewing machine, you can make a ton of stuff, from a diaper bag to fitted crib sheets to clothes, and even curtains and decorations for the nursery room. Knitters can make baby blankets and sweaters. I plan to make curtains, a diaper bag and anything else I can get use out of (and it will help kill time since I’m now unable to help with our home renovations, such as painting).

I plan to use a combination of all five suggestions to keep our costs as reasonable as possible.

Is there anything I’ve missed? Share your tips!

Is Graduate School Worth the Cost?

Nicole — Mon, 23 Aug 2010 15:08:37 +0000

It used to be that a bachelor’s degree opened up a lot of doors for you. During high school, parents, teachers and guidance counselors all pushed us to go to college and get a degree — if not a four-year school, a two-year community college would do — and who knows, perhaps you’d continue on to get that four-year degree. That magical piece of paper that was supposed to open all the doors to a successful career and life.

But there was no talk about which degrees would lead to the better-paying jobs, or which degrees were fairly useless without going into a master’s degree program.

It seems that a bachelor’s degree is the ‘new normal’ for post-high school graduates. But does that mean you have to step up your game and go after a master’s degree? Credit hours for post-baccalaureate studies are more expensive, and the programs are fairly limited. The big master’s programs are in the areas of education, healthcare and business, as an advanced degree correlates to higher salaries because of the increase in skills. But what about master’s degrees in other areas?

When to Go for an Advanced Degree

– When it will increase your salary, such as if you’re an educator or employed by a company that will bump up your earnings when you bump up your education. Will your employer contribute to the cost of said master’s degree? Even better. Be sure to calculate how long it will take you to pay off the tuition, though. If your master’s program costs $30,000 and you’ll only see a $2,000 raise from it, it will take you 15 years to break even. And that’s not counting the interest you’re paying on school loans. Try for scholarships, grants or stipends (such as for being a teacher’s assistant) to cut down costs.

– If you want to change careers. You’ll need the education, and the master-level degree will be a nice addition to your resume.

When NOT to Further Your Schooling

– Unless you know for sure you want to become a doctor or a lawyer, if you’ve just finished your undergraduate degree, it’s highly recommended to get some real-world experience before deciding to jump right into a master’s program. Why? Because of the difficulty in getting a job after nearly 6 years of schooling. Sure, you’ll have the education, but experience counts for a lot in the job search. You’ll still be stuck in an entry-level position, if you can even get that, because many potential employers will see you as overqualified. Think about waiting a few years before moving on.

– If you can’t afford the debt. Don’t go into hock on the off-chance that you think you can get a better position with a higher salary. If you absolutely are sure that you want to go for a master’s degree, avoid this pitfall by doing your research first and choosing a program in an area that is projected to see growth in the near future. And, of course, be sure that it’s a field that you enjoy. Don’t go into a specific master’s program solely because you see dollar signs.

The “Best” Master’s Degrees

According to Forbes.com, the best master’s degrees in terms of salary and projected increase in available positions over the next decade:

1. Computer Science
2. Physician Assistant Studies
3. Civil Engineering
4. Mathematics
5. Physics

These aren’t your everyday advanced degrees. For me, I won’t get anything out of going for a master’s degree (except a big, fat debt). Don’t get me wrong — I love learning. I’ve always loved school, and I was an excellent student. But it’s just not financially wise for me to do so, since it really won’t further my career at this point.

Are you thinking about getting a master’s degree? Or are you against the idea? Why?

Car Warranties & Roadside Assistance: Yea or Nay?

Nicole — Thu, 19 Aug 2010 14:08:46 +0000

This week, I was the unhappy driver of a car that died in the middle of a busy four-lane avenue. After 20-plus miles on the highway, I’d gotten off my exit on the way to work and was motoring along a city street when suddenly the car didn’t want to “go” anymore. Even though my foot was on the gas, it sputtered and complained for 1/4 mile before finally crapping out at a red light.

The only lucky thing was that I was right across the street from the local mechanic that many of my co-workers use, and the auto guys were able to push my car into the driveway of the shop during a break in traffic. I was embarrassed, but it could have been worse: I could have gotten stranded in the middle of the major 5-lane interstate that makes up the bulk of my commute.

The verdict? A dearly-departed fuel pump, which is a difficult job and a fairly-expensive part. $600 later, it’s fixed, but I’m not happy about it — even though there was nothing I could do.

My car is “only” 6 1/2 years old, but it’s 3 years past the roadside assistance and 36-month warranty that were included when I purchased the car new. That meant that once they expired, I had to decide whether I still needed roadside assistance and/or warranty coverage.

Here are my thoughts on getting roadside assistance and extended warranties for your vehicle:

Roadside Assistance

YES. As a car gets older, the potential for breakdowns or damage to your car increases. The moving parts continue to wear down, to the point where eventually, something will break at an inopportune time — like your fuel pump. Or the battery dies, the alternator goes, or a tire blows out.

As soon as my 3 years of GM Roadside Assistance expired, I immediately signed up for AAA. I’ve only had to use them twice, but being stranded on the highway at 3 in the morning and knowing there was a tow truck on the way was comforting (it was after a late shift at work; I was on my way home). A year of AAA Plus membership (which covers tows up to 100 miles) costs me $92, but I know it covers towing, fuel delivery (in case you run out of gas), jump-starts, tire changes and lockouts. And since I can barely lift a gallon of milk, nevermind take lug nuts off a rim, I need to know I can get someone else to do it for me if I’m on the road. It also covers any vehicle I’m in that breaks down.

I use AAA because it’s the largest roadside auto club in the country, but there are other choices, such as Allstate Motor Club and the National Motor Club. And nowadays, you can even sign up for roadside assistance plans through your credit card provider, car insurer or organizations such as the AARP.

Extended Warranty

NO. An extended warranty for your vehicle is generally considered a poor choice, especially if you have a car with a quickly-depreciating book value. A 2008 Consumer Reports survey agrees, calling an extended warranty a “high-priced gamble.”

An extended warranty allegedly either extends your vehicle’s coverage after the manufacturer’s warranty expires or covers repairs that don’t fall under the manufacturer’s warranty. If you buy a reliable car, chances are that you’ll have minimal problems. You’ll be doing routine maintenance on it — brakes, tires, oil changes — which aren’t covered by any warranty out there. General wear-and-tear isn’t covered, either. Many of these extended warranties also have a lot of exceptions, so there’s no guarantee the repair will be covered. That’s a lot of stuff that’s not covered!

If your car is always breaking down, you could buy another used car in decent shape for the price of the extended warranty. And if you get into an accident, the repairs will be covered by your car insurance if you have comprehensive coverage on your policy.

Instead of paying $1,000 for the warranty, take that money and put it in an interest-bearing account earmarked for car repairs. That way, you’ll have the money there in case something major happens — like replacing the fuel pump, which is costing me 600 beans.

Social Media Revisited: Is It ENCOURAGING Your Productivity?

Nicole — Tue, 17 Aug 2010 14:00:01 +0000

Well, Mr. Saver and I broke down and got new cell phones, which only cost us $20 for both (with no activation fees). However, we did upgrade to the “lite” data plan, something we’ve never had before, for $10 for each phone line per month. I guess we got tired of seeing all of our friends posting on Facebook and Twitter or searching for the answer to some random trivia question none of us knew while we stood there helplessly.

Social media has definitely burrowed its way into our collective lives and seems to have some staying power.

According to Wikipedia’s entry on social media,

Social networking now accounts for 11 percent of all time spent online in the US. A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009. Twitter processed more than one billion tweets in December 2009 and averages almost 40 million tweets per day.Over 25% of U.S. internet page views occurred at one of the top social networking sites in December 2009, up from 13.8% a year before.

I find these statistics amazing, but not unrealistic. So how does all this online social interaction affect our productivity at work and home? If people are tethered to their smartphones and computers, does social media negatively affect their work ethic?

As I mentioned in a post back in December, Is Social Media Killing Your Productivity & Earning Potential?, social media can be a major time-waster. Instead of working and being productive, they’re telling the world what they’re having for lunch or complaining about how cold it is in the office (something we’ve all been guilty of at one time or another).

Some people actually become more productive through social media. How about those folks who find new clients or a new job through Twitter or Linked In? The networking potential of these sites is staggering.

Then there’s the other way around — when companies use social media tactics to reach out to customers and clients and increase brand-awareness.

Either way, integrating social media into your business plan is a good idea, as long as it doesn’t become a time suck that takes away from your money-making adventures.

You also don’t have to use social media 24/7 to get the most out of it, especially now that there are programs that allow you to schedule tweets and posts. But it’s still important to interact in real time with your followers and fans, in order to better connect with them. Just make sure you schedule this ‘social’ time into your work schedule to ensure you don’t get off track.

What’s interesting is that there are some studies that claim that workers who take a ‘brain break’ and participate in social media usage during office hours actually INCREASE their productive by 9% or more. Of course, this contradicts all the studies that claim businesses lose a ton of money due to workers being UNDERPRODUCTIVE due to overuse of social media.

Perhaps you just have to know whether social media usage will benefit you. Do you think you’re more productive when using Twitter, Facebook and LinkedIn, or less?

Don’t Lose Your Shirt: Back-to-School Savings Tips

Nicole — Fri, 13 Aug 2010 13:00:18 +0000

Remember when you were a kid, the entire summer seemed to stretch forever? Well, at least until you started seeing and hearing commercials for back-to-school sales. If you were like me, you couldn’t wait to get new supplies like Jansport backpacks, Trapper Keepers, notebooks, Lisa Frank folders, pens and pencils (okay, I’m dating myself here — I did eventually move on to binders).

To be honest, I never owned a Jansport backpack, although I’ll fess up to having a Trapper Keeper or two and lots of unicorn-plastered Lisa Frank folders. Instead, I went to Woolworth’s with my $20 bill and got a backpack for about $15, and it lasted me a few years. The big secret? I still own both of my high school backpacks, and Mr. Saver uses one in the summer to carry his stuff when we trek “down the shore.”

Instead of spending a ton of money on back-to-school supplies and clothing, plan ahead and shop smart.

Check the Circulars

Since early July, I’ve been seeing tons of back-to-school sales advertised in my Sunday newspaper (yes, those still exist, my friends). There are some incredible deals in there – one local drugstore has a coupon this week for 10 one-subject notebooks for 1 cent! All you have to do is clip the coupon and show up. Staples also has similar deals for pencils.

Most stores offer coupons of some sort — the kind you have to physically clip out and bring with you — but the discounts are worth it in the end.

Shop During “Sales Tax Holidays”

At certain times of the year, such as Christmas and before school starts, major cities, such as Miami, offer sales tax-free shopping days. Take advantage of these periods and get your clothes and supplies, minus the sales tax. This is especially advantageous for those who have a number of children who need back-to-school stuff.

Get Clothes on the Cheap

Bargain-basement prices can be had if you wait a few weeks after school starts before shopping for clothes. By mid-September, the fall styles are already hitting the discount rack, so bide your time and then attack the clearance sales with gusto!

Alternately, you can choose to shop at discount retailers. Many years my clothes came from Kmart, and while not extremely fashionable, they were new. Right now, I’ve found that Kohl’s almost always sends coupons in the mail ranging from 15% to 30% off your entire purchase (no restrictions) if you’re a Kohl’s credit card holder. Just make sure you pay off the balance in full to avoid finance charges.

Or check out thrift shops and consignment stores. You never know what you’ll find in there — and it won’t cost you full retail price, either.

Don’t Pay Full Price for Books

In college? Nothing hurts your budget more than the high price of textbooks in the college bookstore. If you have time before classes begin, search out cheaper alternatives such as Half.com, Amazon and Barnes & Noble. Sometimes you can even score a great deal on a new or used textbook on eBay. Just make sure it’s the right edition requested by your professor.

Or try to buy your books from fellow students who are done using them. It’s bound to be cheaper than buying them used from the bookstore. I know it always was for me back in the day.

Take Control of Your Finances — Today!

Nicole — Wed, 11 Aug 2010 12:00:09 +0000

Yes, you can take control of your finances. No matter how out of control your debt has spiraled, or how high your interest rates are, or how much you still owe on your school loans. It IS possible. But you have to take the first step and actually do something about it.

The personal finance community on the big ol’ Interwebs is a great place to find other people in your shoes. Or discover inspirational stories about people who took second (or third) jobs in order to pay off their debt as quickly as possible.

To me, there’s no such thing as good debt — you either owe money, or you don’t. While some debt may be beneficial to a point — if you’re trying to build your credit history or you’re financing a car (new or used) to get you to and from your job — in the end, it’s still debt. And paying it off can be the most infinitely satisfying thing in the world. I know in the past I’ve had a few instances where I’ve racked up a few thousand in consumer debt on my credit cards due to unforeseen circumstances, and I know the satisfaction that comes with zeroing out the balance.

That being said, the longer you put off getting a handle on your debt, the worse it will be — but it’s never too late. Feeling lost about how to get the ball rolling? Whether your debt is in the hundreds or the hundreds of thousands, there are certain steps you need to follow in order to start your trip down the road to financial freedom.

Tally Up Your Debt

It’s best to get the scary stuff over with first, right? Instead of thinking, “Oh, I only owe $5,000 on my Chase credit card and $20,000 on my deferred school loans,” add it all up to get that great, big number. If seeing a total debt load of $80,000 (or whatever your total is) doesn’t motivate you to eliminate debt, almost nothing else will. Then use that number every time you think about how much debt you’re in.

For my husband and I, we have no consumer debt. But we do have a car financed at 0% for another four years and 29 years left on our 30-year mortgage at 5%. Knowing those big numbers are still out there keeps me motivated to make extra payments when possible and stay away from accruing any consumer debt.

Figure Out Where the Money Goes & Act Accordingly

How did you get into that much debt to begin with? Car, school and mortgage loans are pretty self-explanatory, but what about all the discretionary spending you do on a day-to-day basis? If you don’t have a checkbook where you record your transactions, keep a personal spending log for a month, writing down everything you spend money on. Either whip up a spreadsheet of your own or use finance-tracking sites such as Mint.com to get a breakdown of where the money has been going. If you’re spending $20 a day on food, $5 on Starbucks coffee and $10 on lottery tickets, you know what to do — cut down on these purchases, if not eliminate them completely.

Set Up a Budget

This is an alien concept to some people, but it’s the best way to track your spending and stay within your financial limits moving forward. Total up your net income and then outline your monthly expenses, such as rent/mortgage payments, utility costs, credit card payments and grocery spending. Subtract that from your net income. What’s left is the money you probably spend like water throughout the month. Instead of leaving it there, ripe for the pickings, set up an automatic withdrawal to suck it into a savings account, or allocate it for additional debt repayment.

Most importantly, do not add to your debt! If you don’t have the cash on hand for that purchase, don’t make it. Instead, put a line in your budget and save up for that item. It’s much more satisfying to pay in cash, trust me.

Begin an Emergency Fund & Start Snowballing

I put these two together because I’m a strong believer in the need for an emergency fund, even if it means you’ll be putting less money toward your debt for a short while. If you already have an emergency fund with a few thousand dollars in it, count yourself as prepared and move on to the debt snowball. But if not, divert some of the money earmarked for paying off your debt to the EF until you’ve got a good amount in there.

For your debt snowball, you can do it one of two ways: pay off the balances in order from smallest to largest, or pay off the debt with the highest interest rate. While you might get more satisfaction from paying off smaller debts first, I like to go with the highest interest rate version. As you watch that total debt number begin spiraling downward, you’ll see how satisfying it is to get your finances under control.

Being completely debt-free may not be completely attainable — especially when it comes to mortgages — but you can lessen the burden and get a better grip on your finances.