My Personal Finance Story Part 6 of 6
6 Tips on How to Budget for Your Holiday
It is holiday time again, the time to relax and have fun. However, a holiday that comes with the luggage of financial stress or credit card debt is not a holiday. The best way to avoid post- holiday financial stress is preparing a budget. Below are 6 tips on how to budget for your holiday.
- Start Planning Early
Family holidays can be cheap if you plan ahead. This is because you will have more options in terms of destinations and activities. You will also be able to tell how much to spend on different costs such as travel expenses, food and gifts.
You can put some money in a high yield savings account. This higher the rates you make the better. This is because you will be able to meet the budget for your holiday easier.
- Make a List
Having a list will help you determine what you have. If you can only save $600 for your holiday, it is better to know how you will spend it before you start shopping. By doing this you will avoid damage control after the holiday.
Gifts are some of the items that make a holiday budget overflow. But it is good to understand that holiday expenses do not stop at gifts. The best way to avoid overspending on gifts is to include everything in the list. Include travel expenses, food, gift wrap and household decorations to avoid surprises.
- Check the list twice
After making a list, give it another look to determine if you can eliminate someone from gift list. Do your mailman and your hairdresser need a gift? These are some of the people you can remove from the list.
Buying gifts for family members is important, but if buying for everyone in the family is more expensive, you can buy a group gift, something they will all appreciate.
- Think off Peak
Most destinations offer remarkable discounts during their off-peak seasons. Visiting some places during winter may be very expensive, but the same lodges and chalets offer amazing deals for summer.
However, it is good to do some research on weather conditions during off peak seasons. This is because some places might come with the increased chance of bad weather during off peak.
- Use Cash rather than Credit
It is good to use cash rather credit during holidays. This will help you obey your budget. However, that does not mean you move around with big wads of money. Most banks nowadays provide travel cards that are welcoming when it comes to holiday spending. Your bank will load your travel card in the currency of the country you will be traveling. The card works just like a debit card for cash withdrawals at ATM’s and for purchases.
- Avoid Emotional Purchases
Let face it, when we are stressed we spend more. The only way to avoid emotional purchases is to take emotions out of the holiday purchases. Stick to the budget and ensure you are not caught up in the excitement of black Friday sales. Do you need another DVD or another TV, probably not.
How Students Can Stay Debt Free in College
Taking out loans in order to complete your college degree sets you up for years of repayment. Not only that but having student debt can also make it difficult to finance major purchases, such as a car, after graduation and may force you to take a more stressful job just for the higher salary. Thus, staying out of debt while in college will afford you greater freedom after graduation.
When applying for colleges, do your research on the cost of tuition, room and board and other required fees such as laboratory and supply fees. It is important to remember that the most expensive university is not necessarily the best university or the right one for you. In most cases, private colleges and universities are more costly than public or state colleges, and out of state public colleges usually cost more than in-state schools. Seek scholarships through Pell Grants, national foundations such as the National Association for the Advancement of Colored People, and foundations such as Veterans of Foreign Wars. If you have trouble finding aid on you own, stop by your college financial aid office to get a listing of scholarships to which you can apply. Work
Although having a job while in school puts constraints on your time, it teaches you the value of hard work and gives you experience that will look great on your resume upon graduation. Seek a part-time job in an area that appeals to you or that will give you an edge in your field. For example, if you are majoring in education consider working in a preschool, childcare center or as a nanny. Your college may also offer work-study opportunities to help pay for your tuition.
Ideally, before you go to college, you will already understand how to balance a checkbook, pay a bill, calculate simple and compound interest and prioritize needs versus wants. However, it is possible to enrolled in one of the top online PhD programs in the nation and still not know these basic financial skills. Luckily, it is never too late to learn them. Banks, religious institutions and college financial aid offices all usually offer financial literacy classes. By taking these courses you will learn how to manage your money so that you do not make bad decisions, such as taking on credit card debt.
When in college, prioritizing needs versus wants is integral in staying debt free, explains Dave Ramsey. If you buy everything you want when you want it, no matter how many scholarships you receive or hours you work, you will be in debt. While a laptop may be a necessity, the most powerful and expensive model is a “want.”
Avoid Credit Cards
Federal legislation disallows anyone under the age of 21 from holding a credit card without an independent, significant income or a cosigner on the line of credit, claims the University Parent Connection. However, foregoing the credit card altogether will help you stay debt free by forcing you to only spend as much as you already have. By paying with cash or debit rather than credit during college, you avoid credit debt and all the associated costs of credit, including finance fees, interest and late payment penalties.
Going out to the bars or a concert every weekend is a huge temptation for many students. However, weekends of partying and tropical vacations over spring break can put you into debt. Instead, spend your extracurricular time improving yourself and developing skills that will serve you in the future. Explore your campus and the surrounding town. Utilize the fitness facilities. Drop in on lectures from notable experts in topics outside of your area of study.
Take advantage of student discounts on books, airline travel home and at area restaurants and stores. Your college may offer its own coupon book to help save you money on necessities. In addition, make sure you enjoy all the free activities for students on campus such as theater and band concerts.
With the price of a college education soaring, staying debt free in college is a challenge. However, graduating without debt is not impossible if you have your priorities in order, avoid temptations and put in the time needed to research different colleges and learn about personal finance. The skills you develop to stay debt free in college will build a solid foundation for your financial future.
About the author: ‘Brittany Lyons’ aspires to be a psychology professor, but decided to take some time off from grad school to help people learn to navigate the academic lifestyle. She currently lives in Spokane, Washington, where she spends her time reading science fiction and walking her dog.
15 Investment Failure Reasons
- Lack of knowledge – lack of investment knowledge easily lead a person to the bad practice of following the public and taking advises from wrong personnel or investing through believing reports from stock analysts and tipsters. Finally he will face total investment failure.
- No Goal – A clear vision or goal should be the backbone of activities like investing. Setting perfect goal helps to have proper planning that lead to right investments. absence of the same, lead one to irresponsible and cause huge money lose.
- No Risk awareness – It is not advisable for a person to invest directly to stocks if his risk taking capacity is less. If such people investing to stocks, fear or panic lead them to take wrong decisions like selling at wrong price.
- Lack of patience and discipline – Patience and discipline is the two most required qualities of any investor. Lack of any, lead to investment failure. You can refer point 3 above, totally related with this.
- Identification of investments – Have a look at point 2. As an investor, identification of right instruments have ultimate importance. It depends on various factors like risk profile, goal, financial status of an investor. For an example, if you invest on equities to meet a short term goal within 1 year, your investment give you huge failure.
- No having a right adviser – Approaching a qualified and experienced financial planner is a right move by beginner investor till getting required knowledge and thus confidence for invest self. A good adviser can help investors to not commit big mistake that may possible if someone doing the investment as self. With little knowledge, entering to the stock investments lead people to huge failures.
- Overconfidence – Remember, even legend investors lost money by mistakes. No one is perfect by making money by not committing any mistakes. whoever thinking of not make any mistakes, have more chance to lose money than any ordinary investor. Overconfidence is dangerous for an investor.
- Being a trader – Short term trading is a kind of gambling than investing. Luck is ultimate with trading activities. Casinos are the better place to visit than doing trading activities with stock markets.
- Improper balance of portfolio – Portfolio balance should be done time to time by considering age, financial positions, risk factors etc. Getting advice from right financial planners will do better for such. Lack of proper mix can lead to huge lose of money or less profit than what planned. For example, if a person near to the retirement age holding a portfolio that have major chunk of equity investments, putting himself to hell.
- Less diversified portfolio – Any portfolio with total focus to a particular sector or company may face huge failure. This can happen when the sector growth stopping or the company face internals problems. For example, if a portfolio focused to only large cap stocks or focused to the stocks of the companies from a particular sector have chance of failure compare with a portfolio diversified with large, small, mid cap stocks or invested across multiple sectors.
- Over diversification – similar to point 10, over diversification presenting an uncontrollable portfolio to a person. With an over diversified portfolio, there are possibilities of missing great investments. For an example, A port folio have more number of excellent company stocks but very small number of each,really missing the chance of getting huge profit compare with a portfolio that have less excellent companies with considerable number of stocks.
- Concentrating to return – Such behavior is the most dangerous to lose money by investing on any product by aiming its possible return by short term and not considering the risks. Such behavior and related heavy lose happened when the internet stocks start booming. People invested their each and every penny to such such stocks by not considering the risks associated with them. Finally, they lost everything by the crash of such stocks.
- Being aggressive – Aggressive people never think about the bad side of any action. Being more aggressive always put a person in trouble by taking wrong decisions. An example, buying a stock by seeing its booming nature and not considering the right price. I have mentioned the same in Point 12.
- Lack of monitoring – Yes, stock investments are for long term and may no need to monitor time to time. But, there should be another asset classes in the portfolio to leverage the profit and that may required monitoring in time. For an example, mutual funds required monitoring time to time to identify the performance of the fund as well as the fund manager. Or such investment lead to money lose.
- Finally, no time for research – An investor who investing on a product by not having all the required knowledge, simply putting his money to something to lose heavily. Ignorance always cost a person in two ways. First, without having knowledge, a person may not bet able to identify the real potential of the instrument and which lead him to not having right percentage of the same. Second, he may not able to identify the risk associated with the instrument and that may lead him to huge lose in the future.
Here’s some thoughts on the real estate market: