The key to successfully maintaining your budget over the next few weeks is simple: planning, planning, and more planning!
Thanksgiving week is upon us, so besides the turkey that means one thing, Black Friday! Black Friday is a day supposedly retailers mark down products to crazy low prices. The truth is you can find better deals throughout the year, but now it is getting close to Christmas. As we go out to spend money, we must remember to stick to our budget. Rushed decisions lead to overspending and later on, regret. Also, let's now forget Cyber Monday. Cyber Monday is the Monday after Thanksgiving where online retailers have their best deals; don't get caught in the hype. Yes, the deals are usually very good, but this is why it's dangerous. It is way too easy to overspend while shopping online, primarily because there is no long line to wait in, and in some cases it's one click! So before you turn that computer on know what sites you plan to visit, buy your item(s), and turn the computer off. You will thank me later.
The key to successfully maintaining your budget over the next few weeks is simple: planning, planning, and more planning!
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Let's talk about the Aerospace industry today.
This week, the sale of Sikorsky to Lockheed Martin was completed. Lockheed purchased the helicopter maker for 9 billion in cash from United Technologies Corporation (UTC). Sikorsky is the maker of the black hawk helicopter and was also recently awarded a contract to make new helicopters to fly the President in (Marine 1 is call sign when the President is inside). With the purchase of the primarily defense contractor, Lockheed once again reaffirms itself as the premier provider of supplies to the DoD and the world. There were initial concerns that the deal might not go through due to regulatory issues, but those were soon put to bed. It seems the only other corporation that was interested in Sikorsky was Textron. It would seem awkward for UTC to sell one of the original members, but in today’s world, you must make hard decisions to keep the stakeholders happy and profit margins high. So do you all think it was a good purchase for Lockheed? Let's me ask a question, how many of you are actively working towards building your retirement nest egg? According to many surveys, there are barely 20% of people age 20-30 who have any money in their savings. That's is extremely low. To repeat from earlier posts, time is our best friend. Put much as you can aside and it will pay off in the long run. Most professionals will suggest setting aside 10% of your income into a 401k or similar. If that is not possible, start where you can and as you receive raises, put that directly into retirement. If you were making it before the raise, its clear you don't "need" the extra money to put it to work for you. The message here is something is better than nothing.
This week will be a very short, BUT important topic, Health Savings Accounts. A health savings account also known simply as HSA, is money taken out of your check (pre-tax) for medicinal expenses. The benefit of the account is it's taken out pre-tax so that in itself lowers the amount of taxes you pay per check and also the money is there in case of emergency. These are usually in conjunction with insurance plans with a high deductible so the money that is stored away saves you a lot of out of pocket costs. The final benefit is if you feel that you have enough money to be comfortable you can invest some of the money into mutual funds and make extra (possibly) while the money is sitting idle. If the money is needed it can be easily taken out of the mutual fund and used as needed! Constantly adding money to this account will pay off handsomely in retirement when medical bills can add up and income is limited, so with that being said look into and invest into an HSA if your company offers it.
The weather is changing and it's beginning to become that time of year where people begin to think about Christmas gifts so let's talk about this... Do not, I repeat, DO NOT get in massive debt for one day. I have heard of people paying off debt until almost the next Christmas. That is insane. We all understand wanting to buy gifts and make our love ones happy, but at what cost? It is best to figure out what amount you plan to spend and start buying gifts based off that amount. If necessary parents should tell their children the truth of money is tight and they will be getting only one gift.
It is best for people to understand WHY we give gifts and the value does not matter long as it comes from the heart. Any kids should also be told the story of Jesus's birth, if they do not know the significance of the holiday they should not be getting these expensive gifts to begin with. Last week for part 1 of winter months so let's continue... When was the last time you had someone come out to check the insulation around your house or when was the last time you did it yourself? Chances are it has been awhile! If your house is not properly insulated all that heat that you are creating is just slowly going outside and wasting electricity, and I can tell you now your AC unit might be good but it cannot hear the entire world up so keep the heat in.
Preventive maintenance on items in your house saves you a lot of money in the long run. Simple PM items can be done by the homeowner such as cleaning vents, caulking window seals and etc. Not taking steps and having to call someone over for "emergency service" is when things quickly get expensive. So if you feel like your unit might not last the cold winter months get it checked out in the fall, because waiting until peak season will cost much more for the exact same service. Overall the message in this post is be pro-active not reactive! Are you ready for the winter months? Ok... We know the temperature is dropping, but please do not rush and buy the thickest fur jacket or turn the heat on full blast, relax people. I know this might sound like someone being "cheap" but it's ok to keep your house a little cool and lounge around with sweatpants or etc. Usually lounging clothes are comfortable and wearing them inside the house will definitely save you on your electricity bill because keeping the house at 75-77 when it's 30 degrees outside is death on your wallet! An additional tip would be if you own your home get your heater/furnace inspected. Nothing is worse than a broken heating unit during the middle of winter because it WILL be expensive. Take heed to these two simple ways to keep your heating bill under control for the upcoming winter months!
Emergency Fund is a subject I talk about often, but a recent experience is why. When you experience death or tragedy in your family there are last minute things that cannot be planned for, traveling (car,flight,train, rental car, etc) and hotels. If one of these happen to hit your family the last thing you want to be worried about is, "Can I afford to attend the funeral of my loved one?" Steps to prepare: 1. I would decide on the of preferred means of travel and price a ticket for everyone you would be responsible for. If you choose to fly I would recommend multiplying the average ticket price by 1.5-1.75 to account for the last minute ticket purchase. 2. Now let's decide on a hotel. Whatever is your usual amount you spend PER night on a hotel have a week of that amount saved. If you usually spend $100 per night you should have $700 in a fund for emergency travel. 3. Food, this can get very expensive while traveling due to the constant eating out so this is also an expense that must be accounted for. Over the course of a few weekend trips find out the average that you and your family spend per day and save a week worth of that amount. I know these steps can be very expensive when added together, but it's better to prepare than miss an important event because of lack of funding. If you do not meet your goal that is ok, having something is better than nothing. I had stepped away from personal finance for awhile to focus on more of what is going on in the world but it seems I missed something important that needs to be discussed, impulse buying and buying based off an overreaction... Let's Begin.
Impulse buying - we all do it, walk in a store and see something you just want so you purchase it, usually no big deal if the item is cheap ($10 or less) but there should be a limit on the amount of impulse items purchased. If you purchased 10 impulse items at $10, that's still $100 gone for items you didn't really want. I know personally I don't even use the impulse items purchased, so it's really wasted money that could have best been used elsewhere like making an additional principal payment on a reoccurring bill. Buying based off an overreaction - So we all know how inconvenient it is for something to stop working; we all have been there! But remaining calm and make a sound financial decision. If the AC unit in your house goes out do you go buy another house? No! So if the radiator or radio goes out on your car that does not mean go purchase a new car, make the $200-400 repair and continue on with life! That is ah extreme example but it shows how we spend money out of frustration with a simple problem that is best solved with a little logic. |
-Finance
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