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| Tips
to becoming the cash conscious college student |
 There are probably few habits with more life-long impact than learning to live on a budget. It is not an easy skill to develop, but neither is it as impossible as people who have never tried it believe it to be. While it requires some initial effort to develop a budget that you can actually follow, the benefits are substantial. A solid budget can not only protect from future financial disaster, it can also help you move to a higher level of prosperity. Establishing boundaries for yourself now can allow you more freedom in the future.
Follow these steps to develop a budget that works for you.
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Track your expenses. Spend a month keeping a record of every penny you spend. It isn’t as hard as it sounds. Carry an envelope with you wherever you go to collect your receipts. Record everything down to the bottle of water you buy at the vending machine.
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Establish a list of categories. Sit down with your spending record and group all of your expenditures into categories: Housing, Utilities, Transportation, Food, Savings, Personal, Debt. Don’t forget to factor-in large once-a-year expenses such as car tags, insurance, etc. This will help you determine realistic figures for each of the categories.
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Set a goal for your budget. The 60% rule is a popular guideline. This rule assumes that the essentials (housing, utilities, transportation and food) should total no more than 60% of your income. Then, you would designate 10% for retirement, 10% for short-term savings, 10% for emergency savings and 10% for entertainment and fun.
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If your current spending totals don’t match your goal, look for ways to cut. Sometimes putting your budget down on paper makes you realize you are living beyond your means. Search for major lifestyle changes you could make. Could you sell your car and opt for a less expensive option? How much do you spend on groceries? Groceries for a single person should not exceed $150 per month. If you are well over that total, try to avoid eating out or purchasing processed and pre-packaged convenience foods.
Don’t overlook the small ways to trim expenses. For every degree you turn your heat down during the winter months, you will save 5% on your utility bill. Try cutting back to basic cable, canceling your gym membership and looking for a cheaper haircut. Wait until the price goes down before you buy the latest and greatest gadget.
If you have trouble sticking with discretionary spending limits, put the entertainment money in an envelope. If the money is not there, don’t spend it.
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Find a way to save. Even if you can’t save much, don’t cut savings from your budget completely. It will be easier to increase your savings in the future than to try to begin a savings habit where none existed. If you have access to a 401(k), take advantage of it. Cut whatever expenses it takes to contribute at least as much as your company will match. Otherwise, you are giving away money!
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Pay off debt as quickly as possible. The only thing more important than saving is paying off your high-interest credit card debt. Find a way to pay more than the minimum payment. Eliminating this debt should be a high priority.
Once you have established your budget, make a commitment to following it, no matter what. If you’ve made up your mind that breaking your budget is not an option, it will be easier to avoid temptation when it comes your way.
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Go Green
 You hear a lot these days about going green – but what does that really mean? Basically, it is about being a conscious consumer and making conscious choices to leave a lighter imprint on the world. Try these tips to make greener choices.
Buyers Beware
- Take the time to purchase wisely. When you buy “green” make sure you are getting what you are paying for. If it is labeled “natural” or “organic,” make sure the ingredient list backs up the claim.
- Less is more. Only buy and consume what you really need.
- Check the packaging. Look for products that use recycled and recyclable packaging.
Be Energy-Wise
- Look for ways to use less energy. For every degree you lower your home’s temperature during the winter months, you’ll reduce the cost of your heating bill an average of about five percent.
- Replace all those old light bulbs with more energy efficient Halogen or Compact Florescent bulbs.
- Turn lights and appliances off when you are not using them. When they are plugged in, appliances use energy even when they are not in use. Unplug everything whenever possible.
- Limit dry cleaning. Many dry cleaners use harmful chemicals in the dry cleaning process. Look for a cleaner that uses “wet cleaning” or liquid CO2 techniques. Many articles whose tags ask for the dry clean treatment can actually be hand washed, especially silk, wool and linen.
Going green begins with an attitude. It is a conscious decision to make choices that will be better for the earth. There are many ways to tread lightly on the earth while still enjoying a satisfying lifestyle. Often it takes little more than a heightened sense of awareness to what you buy and what you need. |
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| Keep Your Insurance Costs Down
Are you looking for ways to watch your spending without giving up something you enjoy? What better place to start than your car insurance? Nobody wants to pay more than they have to for the insurance they need. Here are some ways to keep your auto insurance premiums down.
- The make and model of your car matters. Insurance will be higher for the sports car than it will be for a family sedan. Auto insurers have a rating system for every car make and model which factors in the cost of the vehicle, safety ratings and theft data. Cars are given a rating from 1 to 27. The higher the number, the higher your premium. If you are thinking of purchasing a car, consider having your insurance company give you a quote on several different makes and models.
- Your credit score affects your insurance rate. There are a host of reasons to guard your credit score carefully. Here’s another: most insurance companies pull your credit report. They use your credit score to help determine your “insurance risk score.” Keep your credit score up to keep your cost of insurance down.
- Pay all at once and you may pay less. Most insurance companies add “fractional premium” fees if you opt to make your payments, twice a year, quarterly or monthly. If you can pay the entire amount once a year, you can usually save money and minimize your risk of having your insurance canceled due to a late payment.
- Bad driving will cost you. The industry standard is to raise your insurance premium by 40% of the company’s base rate for your first at-fault accident. While some insurers offer a first-time accident forgiveness policy, the requirements to qualify vary greatly. Ask your agent to find out your insurance company’s specific policy. Speeding tickets can also cause your premiums to rise.
- Don’t lend out your car. If a friend has an accident while driving your car, you’ll have to file a claim on your insurance. You’ll be responsible for your deductible, and your rates will likely go up. You could also be in a position to be sued by an injured party in the accident if your friend is uninsured and the damage exceeds the limit of your policy. To protect yourself, it’s best not to lend your car.
Source: "12 Secrets Your Car Insurers Won't Tell You" at MSNmoney.com. |
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