Ask OKMM Q&A Forum


::October Edition::

man sitting with a laptop, typing in an Ask OKMM question

I'm not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month!

Ah, yes - the battle between wants and needs can be epic. Thankfully, winning the fight and salvaging your spending plan doesn’t have to be a nightmare. With the desire to improve and a few mental magic tricks, you’ll be well on your way to protecting to your budget.

To boost your willpower and tackle temptation, practice these steps until they become financial habits.



::Spending::


Q. In an effort to save money, I’m considering joining a warehouse club. Is a membership to a store like this worth it, or should I continue shopping at my regular grocery store?

Q. Should I buy furniture outright or "rent to own"?

Q. Between school, church and community activities, my family is constantly on the go. What are some fast, economical options for feeding my family without resorting to the drive thru?

Q. Is buying 100% gas vs. gas-ethanol mix worth it?

Q. How can I save when dining out in the Oklahoma City area?

Q. Everything seems to be getting more expensive lately. Is there any way to stay ahead of rising prices?

Q. Why is the cost of gas so high?

Q. Do you have any good tips for dealing with the high cost of fuel? With skyrocketing gas prices, my budget is really feeling the pinch.

Q. My husband thinks it's smarter to buy a new fridge on credit because it will last longer. I would rather buy an inexpensive second-hand fridge for now and upgrade later. What do you think?

Q. During the summer I thought I’d do some home repairs. Is it smarter to do it myself, which would be cheaper but could take longer, or hire someone to do the job, which could be more expensive but done in half the time?

Q. I know that when talking about ways to save money, one of the first things most people suggest is to cook at home and avoid eating out. But honestly, I’m not a big fan of cooking, so my family eats out a lot. Do you have any tips on ways we can still save money when dining out?

Q. I don’t make a lot of money compared to my friends. They constantly want to go out to eat or participate in expensive activities. I’m afraid that I’m digging myself into a financial hole. What should I do?

Q. My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy?

Q. Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it?

Q. What is the easiest method to track your spending, especially outside the home?


Holidays, Vacations and Other Life Events


Q. Halloween is one of my family’s favorite holidays! This year I promised my wife that we’d scale back and keep the cost to a minimum. Do you have any suggestions?

Q. Help! How do I avoid overspending this holiday season?

Q. As spring approaches, I'm trying to think of new family activities, but money is tight. I'm worried that cutting back may mean sacrificing our fun. Any ideas?

Q. Summer is always an expensive gift-giving time for me and my family. It seems like invitations to weddings, baby showers, graduations and birthday parties never end from May to August! Can you suggest some tips to help ease the pain of purchasing for others?

Q. Now that Christmas is over I should be relieved, but I know I spent too much money (cash and credit) on gifts and entertainment. I don’t want to go through this again next year! What can I do?

Q. My wife’s company rewards their employees with bonuses around Christmas time. In the past, we’ve used this money to pay for gifts or to take the family on a holiday vacation, but we’d like to use the money more wisely this year. Any advice?

Q. With the holidays fast approaching, I’m feeling stressed. Money is tight so I can’t buy presents for my friends and family like I normally would. I want to share some holiday cheer, but I’m out of ideas. Can you help?

Q. This summer I'm planning to propose to my girlfriend of four years. Unfortunately, I feel bad because we don't have a lot of money and I'm afraid she won't say yes if I choose a cheap ring. What should I do?


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::Saving / Investing::


Q. I’ve saved $33,000 in an emergency fund and have invested a substantial amount of money in stocks. Is it a good idea to invest a portion of my emergency savings into stocks, a 529 college savings plan and a Roth IRA so it can earn more money?

Q. I know that saving is important, but after taking care of daily expenses and doing my best to save for emergencies, thinking about stashing money for my child’s college education and my retirement is overwhelming. I’m not sure I can cover it all … which savings goal takes priority?

Q. Which is more important, saving or paying off credit card debt?

Q. Is it better to have all your money in one place?


Emergency Funds


Q. What’s the best way to start an emergency fund?


Retirement


Q. Can you explain more about financial planners - what they do, what their rates may be, and how to find a reputable planner (one that won't simply try to sell you more life insurance)?

Q. I have a CD that is getting close to maturity. How do I know if I should renew it or cash it in?

Q. Are there any rules of thumb for investing in stocks?

Q. What’s the difference between a traditional IRA and a Roth IRA? Which is a better investment option?

Q. Who do you think would accumulate more by age 65?

Q. I would like to be able to retire someday, but I just can’t seem to save money on a regular basis. How can I ever afford to retire if my monthly spending eats up almost all of my paycheck (or more)? Help!


Lifestyle


Q. How do I save money to prepare for having kids?

Q. My family and I would like to take a vacation at some point this summer. We have most of the money already saved, but we’re struggling to come up with the last few bucks. Do you have any tips on ways we can save a little extra money throughout the year to make vacation planning easier next summer?


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::Paying for College::


Q. Can you shed some light on Oklahoma's 529 College Savings Plan? How does it work? What about fees? What happens to the money if my child decides not to go to college?

Q. When it comes to paying for college, I imagine I’ll receive scholarships and grants, however, I doubt this will be enough to cover my tuition and fees. I’ve heard about crowdsourcing your tuition. Is this a viable alternative to student loans?

Q. I think we’re going to need student loans to help pay for college. I've done some research and it looks like federal loans are our daughter’s best option. We’re concerned about taking on too much debt and want her to borrow as little as possible. Should her father and I take out the loans, or is it better for her to incur that debt?

Q. My husband and I recently had a baby and we’d like to start a college savings fund, but we don’t know where to start. What are our options?

Q. My kids are 12 and 14, and I haven’t really made college savings a priority. How do I start saving money for college at this stage?


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::Budgeting::


Q. I’m not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month!

Q. I’ve heard that a member services representative at my local bank may be able to help me set up a budget. Is this a good idea?  If so, how do I take advantage of this service?

Q. For many people, getting paid once a month is extremely hard, no matter how much money you make. Where can I find resources to help me save and still have enough money to last through the month?

Q. How can I keep my budget on track in a tight economy?

Q. How can I manage my money better without following the typical budget?

Q. How do we go about setting a budget or sticking to what we already have?

Q. I’ve heard a lot lately about creating a spending plan, but do I really need one?

Q. What is the easiest method to track your spending, especially outside the home?

Q. It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have?


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::Credit::



Payday Loans


Q. I’ve taken out several payday loans and I’d really like to break the borrowing cycle, but I’m not sure how. Where should I start?


Credit Cards


Q. I’m a careful credit card user, and I’ve heard creditors have to follow new rules. What changes have been made to the credit card laws?

Q. Is it really a big deal if I sign up for a store credit card to take advantage of their 10% off special?

Q. I’m paying 22% interest on the credit card I got in college and would like a lower rate. What are my options?


Credit Reports / Scores


Q. I’m curious; can an employer get a copy of my credit report without my permission?

Q. How long does it take to increase my credit score if I’m trying to rebuild my credit?

Q. What are ways to improve a bad credit score?

Q. I was recently told that applying for a department store card wouldn't affect my credit score. That's different from what I've always been told, so who's right?

Q. How do I check my credit report?

Q. If I maxed-out my credit card, made a payment late, or went through a debt settlement, what effect would this have on my credit score?

Q. Since it’s so important to know your FICO score, is it safe to give your personal info to one of those credit companies via the Internet to get your score? Are they really free?

Q. Over the years, I have collected many different credit cards. Some of them are store cards (Lowe’s, Target, etc.) and some are Visa and MasterCard accounts. I only have a balance on one card right now. I would like to close some of these accounts, especially store accounts, but I’ve heard that closing accounts can hurt your credit score. But, I’ve also heard that mortgage companies use your total available credit to compute your ability to pay. So, what are the guidelines and pitfalls in closing credit card accounts?


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::Debt Management::


Q. Like many people, I have an auto loan. My goal is to pay it off early so I can pay less interest. I’m not sure what approach I should take, can you help?

Q. I have nearly $10,000 in credit card debt. I don’t want to file bankruptcy and I’m afraid a debt repayment program will be too expensive. What other options do I have?

Q. Is a strategic default a good idea, or should it only be considered as a last resort?

Q. What's the difference between good debt and bad debt?

Q. I've heard about the debt snowball method for eliminating my debt. I'd really like to give it a try; can you provide step-by-step instructions?

Q. On my way to work, I see several signs advertising the services of credit repair agencies. Is it best to use one of these agencies or can I repair my credit by myself?

Q. Which is more important, saving or paying off credit card debt?

Q. I’ve noticed that there are a lot of radio and television commercials advertising various credit and debt counseling services. Are all of these businesses legitimate? How do I tell?

Q. Often I find myself overwhelmed when it comes to dealing with my debt. The big picture is often frustrating and leaves me unsure of what to do. Can you give me some tips to help me keep it all in perspective?

Q. When paying toward debt, what should I attempt to pay off first? The smallest debt or the higher interest rate?


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::Consumer Issues::


Q. My recent diagnosis of type 2 diabetes has impacted my lifestyle, especially my finances. Doctor’s appointments, prescriptions, medical supplies, exercising and a modified diet are all essential parts of my treatment plan. Even with insurance, these expenses add up. I know if I don't focus on my health now, the long-term negative impact will be greater. Do you have any tips for managing these health-related expenses without compromising my budget?

Q. I’ve been told that playing casino games and purchasing lottery tickets is a great way to earn extra cash, sometimes equivalent to a second income. Is this true? What’s your opinion?

Q. Can you explain how a health savings account could be better than health insurance?

Q. Hypothetically, I've won a $2 million Powerball jackpot. What’s the best way to collect payment? What happens if I die before I receive all of the winnings?

Q. My family is contemplating a change from two incomes to one. What are some things we should consider before taking the plunge?

Q. I’ve heard a lot about disaster-proofing your financial documents. What’s the easiest way to accomplish this task and why is it beneficial?


Relationships and Money


Q. I’m engaged to be married this fall. My fiancé and I were raised with different views regarding money. What can we do to make sure we’re on the same page financially before we tie the knot?

Q. One of my closest friends is constantly in a financial bind and comes to me for help. In the past, I’ve done what I can to help but I’m starting to feel taken advantage of. What can I do to stop this cycle of lending money while keeping my friendship intact?

Q. My son is being deployed overseas. I'm worried about maintaining his day-to-day bills while he's gone. At the same time, we both would like to make sure he upholds his debt obligations and that he keep his credit afloat. Do you have any suggestions?


Identity Theft


Q. What steps can I take to avoid identity theft?

Q. My wallet was stolen and I cancelled my credit cards. Is there something else I should do to make sure no one steals my identity?


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::Big-Ticket Items::



Homes


Q. Our mortgage is almost paid in full. My husband wants to move into a new home and get out of our starter home. What would be more practical in our current economy: economical home improvements on an old home or purchasing a newer home?

Q. I’ve been renting for several years and have decided I’d like to own my own home. I’m not sure I can afford a traditional site-built home; are mobile homes a good investment?

Q. When you’re selling your current home and buying a new one at the same time, should you contract with separate realtors?

Q. My wife and I live in an older house. Over the years we’ve been working on updating random odds and ends, but we haven’t done much to the kitchen for the fear of spending a fortune. Do you have any cost saving ideas we can use now while we save money to do what we really want?

Q. With today’s low interest rates, we’ve been thinking about refinancing our home mortgage. What should we consider before making our decision?

Q. I’m planning to sell my home this summer, but I’m worried about the state of the housing market. How can I make my house more appealing –without spending a fortune - so I can sell it quickly and make a healthy profit?


Vehicles


Q. When I bought my car, I paid for an extended warranty. Now, a third party company has contacted me claiming my policy might not offer enough coverage. Some resources say third-party warranties are a good deal while others say it's a scam. What do you think, is the added coverage a good investment?

Q. Is gap insurance worth the cost?

Q. I’ve been thinking about buying a new car. In the past, I’ve always purchased new, but this time I’m considering a pre-owned vehicle. I’ve seen the commercials for services like Carfax®, but I’m a little wary. Are reports like these reliable?

Q. I want to refinance my car. Is it best to refinance it with the same bank who gave me the loan or my main bank that I use for all my personal things?

Q. Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it?


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::Kids & Money::



Q. What are some fun ways to teach my middle school students the "good, bad, and ugly" of credit cards?

Q. My husband and I try to live below our means, make wise decisions with our finances, and explain money concepts to our kids. It really bothers me that my oldest child can't watch a cartoon without seeing at least one commercial that convinces her there’s an item she MUST have. Do you have any tips or resources to help us beat the pull of consumerism?

Q. My 8 year-old has been asking me to give her an allowance. I think it’s a great idea, but what’s the best way to teach her about money management and spending at such a young age?

Q. My teenage son landed his first summer job. While I’m extremely proud of him for earning a paycheck, he blew his entire first paycheck in just a couple of days. How do I teach him to manage his paycheck wisely?

Q. How much allowance should I pay my kids? Should it be tied to chores or not? What should I expect my kids to pay for out of their allowance money (birthday presents for friends, family, Christmas gifts, fun stuff for themselves, etc.)?

Q. My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy?

Q. My children are 6 and 8 and I really want them to learn about money before they get any older. What can I do?


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::Taxes::



Q. Is there anything I should know about being audited by the IRS? Together, my husband and I make a substantial amount of money. I’ve heard the more money you make, the higher the chance is of being audited.

Q. I heard that filing my taxes online is better than hiring a tax professional because it provides me with more opportunities for savings and maximizes my refund. Is this true?

Q. I’ve heard that it’s better to have a mortgage for the tax deduction than to pay off a mortgage early. My husband and I have worked very hard to pay off our mortgage in four years. We took out a 30 year note, but plan to pay off this note in April of this year. I’m concerned about the loss of the tax deduction in coming years. Is this going to hurt us in the long run?

Q. I look forward to receiving a tax refund each year, but my family and friends keep telling me that getting money back is a bad thing. I’m not convinced; how can a refund be a bad thing? Why shouldn’t I look forward to a refund each spring?


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Spending


In an effort to save money, I’m considering joining a warehouse club. Is a membership to a store like this worth it, or should I continue shopping at my regular grocery store? (posted Aug. 29, 2014)

Big-box retailers like Sam’s Club and Costco can be great places to score lower-cost deals on grocery items, household products and even bigger ticket items like tires, patio furniture and mattresses. The value of a club membership depends on you - the types of products you buy, how quickly you use them and the amount of storage space you have available.

Before buying a membership, visit your local store to see what it offers. Many retailers host special events that allow non-members a chance to explore the store before making a decision to join. If your store doesn’t offer a preview event, ask a friend or family member who’s already a club member if you can tag along during their next trip. Before your visit, make a list of your commonly purchased items and the prices you typically pay. Remember that big-box stores may not carry the same products you’re used to, so be prepared to review what’s available that’s comparable to items you regularly purchase. It’s a good idea to bring a calculator so you can compare the cost savings to the prices offered where you typically shop. Bigger doesn’t always mean cheaper; calculate the cost per unit to make sure it’s really a better deal. If the potential savings is greater than the cost of membership, joining may benefit your budget.

If you choose to purchase a membership, follow these tips for bulk-shopping success:


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Should I buy furniture outright or "rent to own"? (posted Sept. 30, 2011)

Rent-to-own companies offer products like appliances, furniture and electronics. You can either rent the product for a short period of time and return it, or agree to rent the product until you pay enough to own the item.

If you only need an item for a short period of time, rent-to-own might be a viable option. However, if you want to keep the item, buying from a rent-to-own company will usually cost two to five times as much as purchasing the item from a department or appliance store.

Regardless of where you buy a product, it’s important to comparison shop to find the best deal for your money. If the item you’re interested in is something you want but don’t need right away, consider putting the amount you’d have paid a rental company into a savings account. Once you’ve saved enough money, you can make your purchase outright – saving both interest payments and the possibility of making late payments and having the item repossessed.

After comparing your options, if you choose to go through a rent-to-own retailer make sure you ask the right questions.

  1. What is the total cost over the length of the contract?
  2. Who’s responsible if the item breaks or gets damaged?
  3. Will the item I get be new or used?
  4. What happens if my payment is late?
  5. What happens if I miss a payment?
  6. Are there penalties if I cancel the agreement?

Good luck to you and happy shopping!


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Between school, church and community activities, my family is constantly on the go. What are some fast, economical options for feeding my family without resorting to the drive thru? (posted Oct. 28, 2011)

This is a great question and one that I’m sure many can relate to. If you feel like your to-do list is never ending and you rely on fast food restaurants more than you’d like, one of the following tips may be just what you need.

For more sanity-saving kitchen ideas, check out these online resources:


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Is buying 100% gas vs. gas-ethanol mix worth it? (posted June 24, 2011)

This is a huge, and sometimes heated, debate among drivers and unfortunately the answer isn’t as simple as yes or no. We did a little digging and here are some things to consider when comparing your fuel options.

What’s the difference for my pocket book?

Is ethanol good for my car?

Can I use ethanol-blended gas in older vehicles?

Will ethanol blended gas plug fuel filters?

Can I use ethanol-blended gas in small engines like lawn mowers and weed eaters?

Will using an ethanol blend affect my gas mileage?

Is ethanol really better for the environment?

Ultimately, since there are no clean cut answers to the question, it most likely comes down to personal preference and how your particular vehicle performs. Consider doing an experiment to see which type of fuel works best with your vehicle. After your next fill-up monitor your car’s performance and fuel mileage, then when you fill up again, choose the other type of fuel, tracking the same performance factors. Compare the results and decide which fuel is best for your vehicle and driving patterns.


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How can I save when dining out in the Oklahoma City area? (posted April 25, 2011)

We’ve all heard it before. Cooking at home and brown bag lunches are friendlier on the pocket book, but let’s face it - sometimes you just want to eat out. The good news is we have some great tips so you don’t have to break the bank to dine out.






Everything seems to be getting more expensive lately. Is there any way to stay ahead of rising prices? (posted May 30, 2008)

Every trip to the grocery store or gas station these days seems to carry a fair amount of sticker shock. Inflation - a rise in general pricing, which means your dollar buys less and less over time - is at the heart of this problem. The past ten years have been a period of low inflation by historical standards, with prices rising only an average of 2.75% per year. The honeymoon may be over; prices are already about 4% higher than this time last year.

Last month, we talked about how to save money on gas. The high cost of gas causes the cost of other things to rise, as well, since the fuel required to transport goods to stores is more expensive. Maybe you’ve noticed the resulting increase in grocery prices, too.

With a little shopping savvy, you can find some relief at checkout the next time you go to the grocery store. Try these tips to ease the pain.

Make (and stick to) a list. Each week, decide what you want to eat for every meal, make a grocery list based on your meal plan, and stick to your list. You’ll end up wasting less food, and you’ll avoid impulse buying. This is by far the most significant way to lower your grocery bill.

Forget the brand. Store-brand groceries are often just as good as the big-name brands, and in some cases, they’re made by the same company! Usually, buying generic products will save you even more than buying name-brand items with coupons.

Flex your neck muscles. Grocers like to put the most expensive items right at eye level, hoping you won’t look up or down to find the better deals. A quick scan of the full aisle can reveal significant savings.

Consider alternatives. Be flexible in your meal planning so you can take advantage of sales. For example, if chicken is unexpectedly on sale, could you substitute it for beef in one (or more) of your meals this week? Also, throw a few less expensive meals in the mix each week, such as spaghetti or soup. You don’t have to eat like you’re in college again, but cheaper meals two or three times per week could slash your food budget and offer an easy alternative after a long workday.


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Why is the cost of gas so high? (posted April 25, 2008)

With prices at the pump soaring, everyone’s pocketbook is feeling the pinch. There are several factors that affect the price of gas. We’ll look at where your money goes when you fill up and provide some tips to help you avoid sticker shock when the pump finally clicks off.

So, why is gas so expensive? Luckily, you don’t need to retake high school economics to understand two simple principles that guide the cost of fuel: supply and demand. As Americans, we consume a lot of gas–178 million gallons daily, to be exact. The more we drive and fly, the more our country’s demand for gas increases, which raises prices.

Supply has an equal effect on price. Oil, the main ingredient of gas, is a limited resource. It must be found, extracted, refined, transported and sold ... that’s a lot of work! Throw in a hurricane or war and oil supplies can drop, raising prices.

So, what does your $3-4 per gallon pay for anyway? The biggest part, about 66%, is the cost of crude oil. Refining, distribution and marketing make up 19%. Uncle Sam takes 12% through taxes. Finally, your local gas station gets about 3%, allowing them to cover their expenses and turn a small profit.

Now that you know why it takes so much money to keep your gas tank full, here are some tips to help make sure your pockets aren’t on “E”.

Drive less. The best way to lower your gas bill is to drive less. When running errands, try to combine multiple trips into one. Going only a few blocks? Walk or ride your bike for a gas-free, emission-free and healthy trip! Want to split gas cost? Carpool with a friend or coworker.

Take it easy. Speeding may or may not get you an expensive ticket, but it does waste gas. Driving 70 instead of 60 is like spending an extra $.54 per gallon at today’s prices. You’re not Mario Andretti; accelerate slowly and coast to lights.

Shop around. Gas prices vary in every area, so make sure you aren’t overpaying. Check out GasBuddy.com to find low prices in your area. Remember, don’t waste your savings by driving too far to save a few cents per gallon! Going to gas stations across town can eat up your savings, so find the best price that’s close to home.

Take a wrench to it. To keep your car from becoming a gas hog, proper care is the key. Check your tire pressure often and make sure it's up to par with the manufacturer’s recommendation. Got a clogged air filter? It could be choking your engine; replace it with a new one. Refer to your owner’s manual to keep your car in tip-top shape.


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Do you have any good tips for dealing with the high cost of fuel? With skyrocketing gas prices, my budget is really feeling the pinch. (posted May 25, 2007)

First, we salute you for evaluating the impact on your budget! Spending plans only work if we adjust them when needed. The price at the pump is painful, isn’t it? Don't smack the messenger, but you may have to cut your spending in other areas (and limit your driving!) to accommodate the higher cost. Carpooling when you can will save money, but we recognize that it’s not always possible or efficient.

Since a gallon of gas is now priced higher than the average latte, we did a bit of research to help you get the most out of each tank-full. Here’s what we found:

Easy does it. Your daily drive isn’t the Daytona 500. Instead of flooring it from a traffic light, accelerate slowly to avoid wasting gas and straining your vehicle.

Slow down. We often feel late-late-late like the rabbit in Alice in Wonderland, but speeding is a very expensive way to drive (even if you don’t get a ticket!). Driving 65 mph instead of 75 mph can improve your car’s fuel economy by up to 10 percent! Slow down and save money.

Clean out your trunk. Remove golf clubs, boxes of books, and other heavy items from your vehicle. Driving around with an extra 100 pounds of junk in your car can significantly reduce its fuel economy.

Check your tires. Keep your tires properly inflated; this will help improve or sustain your gas mileage and protect your tires from wear and tear.


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My husband thinks it's smarter to buy a new fridge on credit because it will last longer. I would rather buy an inexpensive second-hand fridge for now and upgrade later. What do you think? (posted March 26, 2010)

As much as we might like them to, appliances don't last forever. Without a doubt, there comes a point in every household when you have to pitch the old fridge and get a new one.

When you have to replace your refrigerator, how do you know if it’s better to buy new or used? You consider the pros and cons, and each option offers positive and negative aspects.

Buy Used! Used refrigerators seem like a good choice because they have the lowest upfront cost. Since many homeowners replace appliances when updating a kitchen, there are quality used fridges out there. However, it can be very hard to tell if a used refrigerator is going to pay-off or give you unexpected headaches. Potentially, you could end up spending more on repairs in upcoming years than you did to buy the refrigerator.

If you do purchase a used refrigerator, avoid buying one that has a pre-existing problem. Don't be fooled by the need for “a simple repair”; if there’s a problem now, you can probably count on more problems later. Bottom line, buying a used refrigerator is a risky move, but if you get lucky, it could be the best decision from an economic perspective.

Buy New! This would likely be the most expensive option for you, and that’s certainly a consideration. Nothing is worth spending more than you can afford to pay. If you can handle the cost, however, there are advantages to spending a bit more for better quality. For example, although buying a new refrigerator will require the highest initial investment, ideally it’ll be years before you have to face major repairs. If for some reason there is a defect in the model, your warranty should cover the cost of those repairs and any necessary maintenance. Additionally, there’s a wide range of new refrigerators that are more energy efficient than ever before, which could yield significant savings in utility bills.

Another benefit of buying a new refrigerator is the flexibility to choose a style and model that best meets your family’s needs and fits your home décor. Most people own a fridge for a long time – up to 20 years or more – so it’s important for the functionality to fit your lifestyle.


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During the summer I thought I’d do some home repairs. Is it smarter to do it myself, which would be cheaper but could take longer, or hire someone to do the job, which could be more expensive but done in half the time?(posted June 29, 2012)

Many homeowners are capable of handling routine maintenance and small repair jobs, but when repairs or improvement projects are more complex, it’s important to look at the situation more critically before trying to do-it-yourself (DIY). Before you jump in with a hammer and drill, ask yourself these important questions.

Do you have the skills to do the job correctly? If you’re handy, own the necessary tools and understand all the steps the project requires, DIY may be the more budget-conscious approach. However, if the repairs require purchasing tools or learning new skills there’s a good chance it’ll be more cost-effective to hire a pro. Inviting someone in to fix mistakes isn’t good for your wallet or your ego, so be honest with yourself before taking on a project.

How long will the project take? If time isn’t an issue and the renovations won’t hamper your ability to comfortably use your home, trying DIY may be the way to go. But if repairs are more time-sensitive, like a project that takes your kitchen or only bathroom out of commission for days on end, it may be smarter (and less stressful!) to hire help.

Is the money saved worth the investment of your time? Even if a penny saved and a DIY project well-done are your greatest sources of satisfaction, it’s still worthwhile to talk to a few contractors and get service estimates. You may find that doing the work yourself actually won’t save you much money in the long run.

If you decide that working with a licensed contractor is the best choice, keep these tips in mind.

Taking the time to research different cost-saving options can yield great results, helping you save time and money and ultimately, make the best decision for you and your family.


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I know that when talking about ways to save money, one of the first things most people suggest is to cook at home and avoid eating out. But honestly, I’m not a big fan of cooking, so my family eats out a lot. Do you have any tips on ways we can still save money when dining out? (posted Oct. 29, 2010)

I think many people enjoy eating out, I know I do! Living within a budget doesn’t mean you have to spend every night cooking at home. Here are some tips to help you eat out more affordably.


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I don’t make a lot of money compared to my friends. They constantly want to go out to eat or participate in expensive activities. I’m afraid that I’m digging myself into a financial hole. What should I do? (posted Dec. 19, 2008)

Enjoying time with friends can be expensive and frustrating, especially if they spend more money on entertainment. Trying to live a luxurious lifestyle on a smaller income can lead to overspending and unhappiness (among other negative consequences). There is good news, though; you can find middle ground without sacrificing your friendship! Here are some tips to stay on course when you’re tempted to overspend with friends.

Tell them about it. Are your friends aware that you can’t keep up without hindering your financial goals? Be honest about your limitations and explain that you’ll need to cut back on expenses. Ask if your group can limit costly outings to once a month or every other month.

Invite your friends outdoors. You don’t have to be a hermit to save money. Suggest a few low-cost options, like hiking, county fairs, picnics, ice skating or outdoor concerts.

Do your homework. Look for events and restaurants that will fit your budget, but also be new and interesting to your pals. Watch for coupons and discounts for additional savings.

Pick and choose. Instead of participating in every activity, choose to join in for the part that’s most meaningful for you. For example, if your friends are headed to dinner and a movie and you want to hang out but spend less, consider meeting them afterward for coffee or dessert. Healthy finances are a priority, so you may have to show up late or leave early sometimes to keep your budget on track.

Who knows, maybe your actions will motivate your friends to take a closer look at their own spending habits!


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My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy? (posted Oct. 26, 2007)

First of all, congratulations! There’s no doubt that babies bring great joy to their families, but many times they’re accompanied by empty wallets (and plenty of sleepless nights).

It’s estimated that new moms and dads spend $6,200 on their baby during the first year, buying everything from clothes to car seats to cribs to diapers. Fortunately, with a little planning - and a few helpful tips - you can ease the financial burden … but you’re on your own for those 3 a.m. wake-up calls!

Nix the new. Let’s be honest—baby stuff is so stinkin’ cute! Small clothes, tiny socks, itty bitty hats… it’s easy to get carried away when buying for a baby, and small items can add up fast. You may want to consider consignment shops, garage sales or online sites (eBay.com, CraigsList.com, Freecycle.org) for a variety of gently used and wallet-friendly items.

Forget fancy furniture. A crib that meets national safety standards is a must. But, do you really need the matching changing table, bookshelf, armoire and hutch? Sure, they’ll all look fabulous in baby’s room, but are they functional or necessary? Join a mom’s group or talk to friends about what you’ll actually need (and use) in a nursery.

Resist the urge to upgrade. Just because you’re having a baby doesn’t mean you immediately need the bigger home next to the elementary school and park (equipped with swings and monkey bars, of course). And, unless you drive a clown car, you probably have enough room to safely transport your precious cargo.

Discuss daycare. If both parents plan to work outside the home after the baby is born, investigate the perks of using an employer-sponsored flexible spending account to pay daycare expenses. Generally, you can pay for up to $5,000 in childcare expenses a year using these accounts, which set aside money from your paycheck pre-tax.

Considering making the transition from working professional to stay-at-home parent? Test the waters by banking your paycheck during pregnancy to see if you can pay your bills, meet your savings goals, and still have a little fun on one income. Even if you find that you’ll both need to keep working, you’ll build a nice nest egg to start a college fund for baby!

You don’t have to break the bank to bring up baby. For more baby budgeting tips, visit PracticalMoneySkills.com/baby.


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Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it? (Dec. 30, 2011)

That’s a good question and like most financial situations, there’s no cookie cutter answer. As a general rule, it’s best to remain as debt-free as possible. However, there are pros and cons to using both cash and credit.

If you use cash, you’ll own the car outright and won’t have a monthly payment. You’ll also avoid added expenses in the form of interest fees. However, it’s risky to completely wipe out your savings. In the event of an emergency, you’ll be in a bind and could find yourself having to rely on credit at a higher interest rate.

If you choose to finance, your emergency fund stays intact, but you’ll have the routine expense and hassle of a monthly payment. The car will ultimately cost more due to interest charges and if you’re unable to make your payments down the road, you risk defaulting on the loan and ruining your credit. On the other hand, if you shop for a good interest rate and handle the loan responsibly, timely payments will help boost your credit score.

Thankfully, there are several payment options worth considering. You could:

To learn more about purchasing a new vehicle, check out our online self-paced learning module Auto Loans 101 or crunch the numbers with this calculator to see if cash or credit is the better buying option for you.


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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.


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Holidays, Vacations and Other Life Events

Halloween is one of my family’s favorite holidays! This year I promised my wife that we’d scale back and keep the cost to a minimum. Do you have any suggestions? (posted Sept. 24, 2010)

Pumpkins, ghosts, and goblins, oh my! Halloween is the third most expensive holiday of the year. However, you don’t have to spend a fortune to enjoy this holiday. Consider these tips to help you stay within your budget.


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Help! How do I avoid overspending this holiday season? (posted Nov. 20, 2009)

Have you made your list and checked it twice? ‘Tis the season to shop ‘til we drop in preparation for our friends and family this holiday season. Is your wallet prepared? While it’s easy to go overboard and overspend, it’s important to realize the significance of making a shopping budget and sticking to it. Follow these tips to make sure the holidays don’t zap your cash.

Make a list. Put the names of all the people you’ll be shopping for on paper. Next to their name, write in the amount you’re willing to spend. Then, make a list of potential gifts that fit within that budget.

Leave the cards at home. Instead of paying with plastic, use cash; it’s harder to overspend when you can physically see how low your funds are getting. Turn to the envelope system to stay on budget for each person. Write their names on envelopes and place the amount of money you plan to spend on them in each envelope. Once the money is gone, you’re finished shopping for them. If you’re nervous about carrying around large amounts of cash, consider buying pre-paid Visa gift cards to help you stay on track.

Turn to technology. If you have a Web-based phone, like an iPhone, consider downloading the My Christmas Gift List application. This application allows you to track the gifts you purchased, what you need to buy and how much you have left to spend for each person. In addition, it generates a helpful shopping list to assist you in getting in and out of the mall faster.

Don’t make it even. One of the easiest ways to fall victim to overspending is thinking that gifts need to be made even, meaning everyone should have the same amount of presents to open. This isn’t always realistic.


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As spring approaches, I'm trying to think of new family activities, but money is tight. I'm worried that cutting back may mean sacrificing our fun. Any ideas? (posted Feb. 27, 2009

Indeed, money’s tight for many families right now. Here’s the good news – there really are inexpensive activities your family can enjoy. To stretch that entertainment dollar, consider these tips.

Do your research. Newspapers and local websites are a good source of information about free or low-cost events in your area. Check out Wimgo.com to learn about festivals, museums, film showings, sports events, and other budget-friendly activities in your community.

Hit the library. Check out library-sponsored book readings, clubs, film screenings and lectures. While you’re there, borrow a book or magazine instead of buying one.

Go team! Attend a local high school sporting event; they’re usually much cheaper than college or professional games, but generate a lot of the same excitement and fan frenzy. Admission rarely costs more than $5 and concession stand fare is typically less expensive (and sales often support school programs, a nice benefit).

Dig for discounts. Many theaters, museums, galleries, zoos and parks offer discounts or free admission on certain days of the week or month. Don’t forget to check online event calendars; tickets for special events or activities may be free with admission!

Head outdoors. Mother Nature is an excellent source of free or cheap entertainment. Go hiking, fishing or camping for some fun and fresh air. Plan a picnic or try bird-watching in your local park or wilderness preserve.


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Summer is always an expensive gift-giving time for me and my family. It seems like invitations to weddings, baby showers, graduations and birthday parties never end from May to August! Can you suggest some tips to help ease the pain of purchasing for others? (posted June 29, 2007)

Oh, the cost of being popular! Shelling out your hard-earned cash to celebrate special occasions with family and friends can sometimes overshadow the joy of the occasion itself, can’t it?

You don’t have to be a Scrooge; meaningful, inexpensive gift options can be yours with a little planning. Here are some tips to help you support your loved ones’ happiness and still have some money left over to fund your own!

Learn to say no. Of course you can’t turn down a wedding or party invitation from your brother or best friend, but a former co-worker whom you rarely speak to may merit a pass. Sending a celebratory note or card—rather than a gift—will usually suffice.

Take advantage of the off-season. Always be on the lookout for thoughtful birthday, graduation, wedding and baby gifts. Spread the cost throughout the year by purchasing these items on sale and stashing them away for a later day, so you don’t have to part with a BIG lump sum of cash during the gift-giving season.

Be creative. Some of the most special gifts are from the heart. Are you crafty? Make some scrapbook templates for your favorite graduate. Love kids? Offer the mom-to-be an afternoon of free babysitting. Have a green thumb? Help the birthday girl or boy plant flowers. Give a unique (and cheap!) present by sharing your natural talents.


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Now that Christmas is over I should be relieved, but I know I spent too much money (cash and credit) on gifts and entertainment. I don’t want to go through this again in 2008! What can I do? (posted Dec. 28, 2007)

The holiday season should be a time to relax and reconnect with people we care about, but we usually exhaust and overextend ourselves looking for the perfect gift (and fretting about paying for it!). According to the American Bankers Association, it takes shoppers an average of four months to pay off holiday bills. Why spend one-third of the New Year paying off last year’s goodies?

You can avoid overspending during the holiday season next year – and the inevitable regret that follows – by taking a few simple steps during 2008:

If you found yourself relying on credit cards to make it through the holiday season, don’t beat yourself up! Focus on paying off the debt and planning ahead for next year.


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My wife’s company rewards their employees with bonuses around Christmas time. In the past, we’ve used this money to pay for gifts or to take the family on a holiday vacation, but we’d like to use the money more wisely this year. Any advice? (posted Nov. 30, 2007)

Financial freedom is one of the best gifts you can give yourself and your family! Only you know what your current needs and savings priorities are, so there’s no one-size-fits-all answer. However, we can recommend a few places to stash that extra cash that will keep you jolly all year!

Scrap debt. Put your bonus to work as a “debt warrior,” slashing credit card debt and loans with no mercy. Pick your favorite enemy: debt with the highest interest rate or the highest balance. Either way, you’ll be one step closer to winning the war against debt. For inspiration, check out the “debt snowball" approach described on the Getting Out of Debt page.

Start (or boost) your emergency account. Experts recommend holding three to six months of living expenses in an easy to access savings account. If that amount is intimidating, aim to save at least $1,000 to start. This will cover most minor emergencies, so you don’t have to fall back on credit cards or payday loans when the unexpected happens.

Finance your future. Who doesn’t dream of life after work? No matter how you envision retirement, it’s important to think about how you’ll fund it. Bank your bonuses in a retirement account, like a Roth IRA, and watch your money grow!

Jumpstart your child’s college fund. Higher education is truly the gift that keeps on giving—not to mention, no batteries are required! Contributions to Oklahoma’s 529 College Savings Plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by employers. Visit OK4Saving.org for more information.


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With the holidays fast approaching, I’m feeling stressed. Money is tight so I can’t buy presents for my friends and family like I normally would. I want to share some holiday cheer, but I’m out of ideas. Can you help? (posted Oct. 26, 2012)

Your question reminds me of a quote by Art Buchwald. He said “the best things in life aren’t things,” and he’s absolutely right! This holiday season, instead of stressing over what you can’t afford, focus on the gifts that money can’t buy.

Remember, when it comes to gift giving, it really is the thought that counts. Here’s to a joyful, stress-free holiday season.


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This summer I'm planning to propose to my girlfriend of four years. Unfortunately, I feel bad because we don't have a lot of money and I'm afraid she won't say yes if I choose a cheap ring. What should I do? (Feb. 26 2010)

First of all…congratulations! Secondly, there’s no need to feel bad because there are many options to purchase a ring for a reasonable price. You should never go into debt for an engagement ring. It just doesn't make sense; why start your life together with debt? To reduce the cost of an engagement ring, mull over these alternatives.

Do Your Research – If you’re willing to put in the time, you can find a great deal. Jewelers usually offer seasonal savings around holidays, so even if you only have a short time to search, go to a few stores and shop online to compare price and quality.

Consider an Heirloom – Using a family ring as an engagement ring can be very sentimental, not to mention it symbolizes a close family connection. It’s a great way to get a beautiful stone, and in some cases a beautiful ring, at no cost.

Buy it Used – Buying a used engagement ring can be a great solution for couples on a tight budget. People sell wedding jewelry for various reasons. If a divorce or break-up prompts the sell, you could possibly snag a great ring at a super low price.

Choose a different stone – Diamonds may be a girl’s best friend, but there's something to be said for going the nontraditional route. Rings set with colored gemstones are very trendy right now — and very affordable.

Go Faux – Consider delaying the purchase of an expensive ring until you can afford the one you truly want. There’s a wide selection of believable, quality faux diamond rings, such as a high-end cubic zirconia or moissanite stone.

Don’t overlook the metal – You can cut your total cost considerably by selecting cheaper metals for your engagement ring such as silver, gold or white gold. These metals are significantly less expensive when compared to platinum.

These are only a few tips you can use to save money on an engagement ring. Remember, the value of a ring doesn’t only depend on its price!


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Saving / Investing


I’ve saved $33,000 in an emergency fund and have invested a substantial amount of money in stocks. Is it a good idea to invest a portion of my emergency savings into stocks, a 529 college savings plan and a Roth IRA so it can earn more money?(posted September 26, 2014)

While it’s natural to want your savings to grow, financial experts advise against investing funds that you’ve earmarked for emergencies. Crises typically happen without warning, so the ideal emergency fund should be kept in a non-investment account, easily accessible and separate from other savings accounts (vacation, college, retirement). While it won’t earn the higher returns you hope for, a savings account at an insured bank or credit union is typically the least risky and most convenient location to stash your emergency fund.

If you’re determined to earn higher returns on your emergency fund, these financial tools are considered low-risk options and generally offer a slightly higher return than a standard saving account.

There’s a vast selection of financial tools and services available, so shop around to find the product(s) that will best meet your needs. Once your emergency reserve is fully-funded (three to six months’ worth of necessary living expenses), consider working with a reputable financial planner to determine the ideal investment plan to help you meet your financial goals. To learn more about working with a financial planner and find one that specializes in your area of need, visit PlannerSearch.org.


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I know that saving is important, but after taking care of daily expenses and doing my best to save for emergencies, thinking about stashing money for my child’s college education and my retirement is overwhelming. I’m not sure I can cover it all … which savings goal takes priority? (posted April 26, 2013)

This is a question many families are asking. Ideally, we should save for both, but in reality, families juggle multiple priorities. Paychecks can be stretched thin. Here are some things to remember when you’re mapping out your saving strategy.

If you must choose between saving for retirement and saving for a child’s college education, focus on your retirement. As a parent, it’s natural to want to focus your efforts on your child(ren), but it’s important to remember that while there are many financial aid opportunities to help fund higher education, the same can’t be said for funding your retirement. When a difficult choice has to be made, take care of your retirement needs first.

For more information about grants, scholarships and preparing for college, visit UCanGo2.org. To learn more about investing and how quickly your savings can grow, check out the Rule of 72. Visit the OKMM website, OklahomaMoneyMatters.org, for more helpful information about saving, financial planning and other important consumer topics.


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Which is more important, saving or paying off credit card debt? (posted July 27, 2007)

To answer this question, let’s turn to our good friend, mathematics (please don’t stop reading!). If you’re earning 2% interest on your savings and paying 18% interest on your credit card debt, you’ve got a 16% problem.

If the interest you’re paying on credit card debt is higher than what you’ll earn in a savings account, pay off your debt first. That said, don’t completely neglect your savings! While several factors affect how your money grows, one of the most important elements is time. Simply put, the earlier you start saving, the more you’ll earn through the magic of compound interest. Also, a cushion in your account will keep you from relying on credit cards or payday loans in a crisis.

Here’s the bottom line: it just doesn’t make sense to pay more interest than you can earn. Use the bulk of your extra money to pay off those pesky credit cards, but make sure you contribute something to savings each month, even if it’s only $50. Once the debt is paid, shift those monthly payments to savings. Since you’re already living without the extra money, you won’t miss it!


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Is it better to have all your money in one place? (posted Jan. 26, 2007)

Assuming you’re talking about savings - not disposable income - the old saying “don’t put all your eggs in one basket” holds true. It’s just too risky to invest all of your savings in one company or industry. The idea is to create a blend of assets that provides the most return for your money. Calculated diversity is the key.

Not sure where to start? Most experts recommend a simple investment mix that can be achieved with the following steps.

1. Start an emergency account to cover unexpected expenses that would otherwise find their way onto a credit card. Experts recommend saving 10% of your income each month until you have enough money to cover 3 to 6 months of expenses. If 10% seems impossible, start at a lower monthly percentage and work your way up. Since an emergency is never planned, put your money somewhere easily accessible, like an interest-bearing savings account or money market account.

2. Whether you’re 25 or 55, retirement should be on your mind. Take advantage of an employer’s 401(k) or other sponsored investment program, especially if they offer matching funds. At minimum, contribute enough to get the full company match - that’s free money!

3. In addition to maximizing your contributions to a matched savings program, make regular contributions to a traditional or Roth IRA. Learn more about these and other investment options and access calculators and other planning tools at CNN's Money site.

4. Got kids? Consider monthly contributions to the Oklahoma College Savings Plan (OCSP), our state’s 529 plan, for each child. Participation in the OCSP offers several savings perks, including an Oklahoma income tax deduction on contributions and tax-free growth and withdrawals. Visit Ok4Saving.org for more information.

In short, you must create a customized savings plan to fit your long-term goals. A certified financial planner can help you strike the right balance.






Emergency Funds

What’s the best way to start an emergency fund? (posted Dec. 29, 2006)

First, congratulations! You’ve recognized the value of taking a very important step to manage credit debt: funding an account to cover unexpected expenses that would otherwise find their way onto a credit card. Although creating an emergency fund takes discipline – and therefore, isn’t easy – the process is simple. Figure out how much you need to save and commit to set aside money each month to reach that goal. Experts recommend saving 10% of your income each month until you have enough money to cover three to six months of expenses. If you can’t save 10% right now, don't be discouraged; commit to save as much as you can and work your way up to 10%. (The key word is "commit." See the pattern here?) As with any savings plan, consistency is the secret to a healthy “rainy day” fund … save a predetermined amount each month and add any “windfall” money, like bonuses, tax refunds or birthday gifts so you can reach your goal faster.

An emergency is never planned, so put the money where you can reach it quickly, such as an interest-bearing savings account or money market account. Building an emergency fund may seem like a daunting task, but it will allow you the freedom to forego credit should something go awry. Now that’s peace of mind!


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Retirement

Can you explain more about financial planners - what they do, what their rates may be, and how to find a reputable planner (one that won't simply try to sell you more life insurance)? (posted Feb. 23, 2007)

Simply put, financial planners help you manage your resources and achieve your financial goals, like retirement, education and debt management. Professional planners (and price tags!) aren’t one-size-fits-all; services and costs depend on your situation and special needs.

There’s more to choosing a financial planner than opening the yellow pages and saying “eenie, meenie, minie, moe!” You’re trusting someone with information that’s deeply personal - your finances - so you’ll want to be prepared. First, research your own situation and determine your priorities. Planning to retire in 10-15 years? You’ll want a planner to make sure you’re on target to reach your savings goal, and that your money will last. Got little ones you want to send to college? A planner can help you set up a mix of investments that’ll grow as fast as your kids do. Just starting your career? A planner can offer objective advice to help you set long-term savings goals and build a solid foundation for a lifetime of financial success. The Financial Planning Association’s website, FPAnet.org, offers more information about rates, certification and the specific needs financial planners can help you address.

Now that you know your primary financial focus, it’s time to start shopping for a planner! Ask friends and coworkers for referrals. For more options, visit PlannerSearch.org to find local certified financial planners who specialize in your area of need. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

Like our bodies and our vehicles, our financial lives need a check-up every now and then. Financial planners can give you guidance, but remember this – ultimately, you are the decision maker. Don’t feel pressured into anything you’re not fully comfortable with, and never hesitate to ask for more information or more time to make a thoughtful choice. It’s your money, and it’s your life. Make the most of both!


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I have a CD that is getting close to maturity. How do I know if I should renew it or cash it in? (posted July 31, 2009)

I applaud you for being proactive! It's important to keep track of when CDs are maturing, so you can explore other options and decide whether you want to reinvest in another CD or cash it in and move your money to another investment vehicle.

For those who many not know, a CD (Certificate of Deposit) is a promissory note issued by a bank. It bears a set maturity date, earns a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

Back to your question. Whether the market environment is up or down when a CD matures, it's always a good idea to review all options before making a choice.

Renew?
Most banks will continually renew CDs for you at maturity if you don’t give them alternate instructions. Often, they’ll offer to “renew” and put your money into a new CD with the same term as the previous one. However, the interest rate may be different if CD rates have changed since your initial purchase. Make sure you know the bank’s policy and current rates, and that you give proper instructions if you don’t want the money rolled into a new CD automatically.

Shop around?
Before you choose to renew a CD at your current bank, see what else is out there. Rates are competitive, and the bank knows that you have a variety of choices. Check your newspaper, mail, and other promotional information published by local institutions to compare CD rates and, if the grass is greener, move your money to another institution.

Cash it in?
Are you happy with the return, or are you looking for more income from your investments? CDs offer steady interest earnings and low risk, but they don’t usually offer high returns in comparison with many other types of investments. So, depending on your risk tolerance and savings goals, you might consider cashing a mature CD and investing the money elsewhere.

Here’s the thing - only you can know which option is best for you! Investment decisions must be made in the context of your full financial picture. How do CD’s factor in your family’s overall financial equation? What’s your tolerance for investment risk? What are the tax implications of each choice? How soon will you need to access your money

If you don’t know the answers to these questions, consider meeting with a certified financial planner. A financial planner can help you make the most informed decisions possible based on your specific financial circumstances and goals. To find a local certified financial planner, ask friends for referrals and/or visit PlannerSearch.org.


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Are there any rules of thumb for investing in stocks? (posted Oct. 31, 2008)

Investing of any kind can be confusing and feel overwhelming, even in a strong, stable financial market. Here are a few tips to keep in mind when investing in stocks.

Read up. Before investing, educate yourself about the stock market and companies you’d like to invest in. Do some research online and stay informed about current events.

Go for the long-haul. Stocks are a long-term investment, so don’t panic when the market’s down. If you’re investing for future growth, you’ll have plenty of time to rebound from the lows and ride the highs.

Know your risk level. As with any investment, owning stock involves risk. Before investing, decide how much risk you can handle; a risk tolerance quiz like the one at MSN Money can help you figure it out. Typically, the closer you are to retirement, the more conservative you’ll want to be. Conversely, the younger you are, the more risk you can take on because you’ll have more time to recover from a down market.

Diversify. You’ve heard the saying, “never put all your eggs in one basket.” The same is true with investing. It’s important to diversify your portfolio, which means investing in a variety of industries and products at various risk levels.

Time it right. The key to making a profit is to buy low and sell high. A professional advisor can help you determine when it’s time to cash in or cut your losses.

Remember, it’s your money, so make the most of it! For more information about investing, visit CNN Money’s website or consider taking a local investing course or joining an investment club.


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What’s the difference between a traditional IRA and a Roth IRA? Which is a better investment option?

An IRA, or Individual Retirement Account, is a plan that allows you to contribute a portion of your earned income each year. Currently, the maximum regular contribution per year is $5,000 for an individual and $10,000 for a married couple filing jointly. These limits apply to total annual IRA contributions; in other words, an individual can't contribute $5,000 to a Roth IRA and $5,000 to a traditional IRA in the same year.

While these accounts are similar, the fundamental differences involve the “T” word … taxation. Contributions to a traditional IRA are taken from pre-tax income, and may be tax deductible in the year they're contributed. Funds in a traditional IRA grow tax-deferred; the money is taxed as ordinary income when you take it out at retirement (if you follow the rules). Eligibility to contribute to a traditional IRA depends on your age, and you’ll pay a penalty for withdrawals prior to age 59 1/2, though there are some exceptions to this rule. You have to begin taking funds from a traditional IRA by April of the year after you reach age 70 1/2, even if you don't need to access the money yet. If you need the tax break now or think you'll be in a lower tax bracket at retirement, a traditional IRA may be the right choice for you.

Contributions to a Roth IRA are taken from post-tax dollars - in other words, you've already paid taxes on the earnings - so unlike a traditional IRA, qualified withdrawals from a Roth IRA are tax free (if you follow the rules). You don't have to begin taking funds from a Roth IRA until you're ready, and there’s no age limit to contributions; eligibility depends on income level. If you expect to be in a higher tax bracket when you reach retirement age, a Roth IRA may be a sound investment.

There's a wealth of free information about IRAs available online. You can start by visiting CNN's Money website, the Motley Fool website or AARP Money Tips site.

Only you can decide what’s right for your budget now and at retirement. A financial advisor can help you explore the implications of these and other options, so you can make informed decisions. No matter which route you take, you’re taking charge of your financial future, and that's something to celebrate!


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Who do you think would accumulate more by age 65?

Contributor A: a person who started saving $1,000 a year at age 21, saved for eight years and then completely stopped.

Contributor B: a person who saved $1,000 a year starting at age 29, and continued saving that amount until age 65.
(posted Dec. 21, 2007)

That’s a great question! Generally, the earlier you begin saving and the more money you contribute, the more your money will grow. Using a savings calculator found at MSN Money, we were able to answer your question. Let’s get to it!

Based on the numbers given and assuming an 8 percent interest rate compounded monthly, Contributor B would end up with more money in the bank by age 65 ($200,541) compared to Contributor A ($189,735). However, Contributor A made a much lower total investment ($8,000) when compared to Contributor B ($36,000).

Our advice? Start saving early—and often—and continue to contribute to your retirement plan as long as you can to maximize your retirement savings. To get the most out of your retirement nest egg, consult a licensed financial planner to develop strategies that make sense for you based on your goals.


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I would like to be able to retire someday, but I just can’t seem to save money on a regular basis. How can I ever afford to retire if my monthly spending eats up almost all of my paycheck (or more)? Help! (posted March 28, 2008)

First of all, you’re not alone in this dilemma. In 2006, the average savings rate in the U.S. was -1%, meaning millions of people were not only failing to add to their savings, but dipping into existing savings to cover expenses! Kudos to you for thinking in advance about retirement and wanting to make small changes today that will largely impact your future. Here are some tips to help you stash cash for a happy retirement.

First, take a look at your lifestyle. Are you living close to (or above) your means? It’s time to have an honest conversation with yourself; is your spending now sacrificing your security later? There’s nothing wrong with wanting a bigger house or clothes that would make Nicole Kidman jealous, but learning to live within your means is the most important financial lesson for anyone at any income level. Ask yourself this question - can I live with a little less now to have a better life later? Of course you can!

Once you’ve decided security in retirement is a higher priority than keeping up with the Joneses, trim the fat in your cash flow. We all have priorities in life, and our spending reflects them. To make sure your spending supports your priorities, turn to the B-word… budget! Some people view budgets as restrictive, but they’re actually tools to help you get what you want.

Be sure your monthly budget includes regular savings. Aim to save 10% of each paycheck, but don’t stress out if that’s unobtainable right now. Put in what you can and increase the amount at every opportunity. The key is making regular savings a habit. Want to know a savings secret? Set up automatic deposit or automatic transfer to your savings account. You can’t spend what you don’t see!

Put windfalls, like birthday money or the upcoming tax rebate, to work for you in a savings or investment account. You’ll be so glad you did. Shiny cars lose value, electronics become obsolete and clothes go out of style, but an investment in a 401 (k) or IRA will be worth much more in the long run.

Transform yourself into a bargain shopper. Saving just $10 per week on something you normally buy (e.g. groceries, fancy coffee) nets over $500 per year! Call your car insurance company to see if you qualify for discounts or a lower rate. If you’ve been a responsible credit card user, ask to have your interest rate lowered. Search eBay, consignment stores or thrift shops to find steals on household items and clothing. Make saving a game and enlist the help of your whole family.

In the end, the biggest factor in your saving success is you! It takes work to make saving a priority, but a sound financial future is well worth the effort.


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Lifestyle

How do I save money to prepare for having kids? (posted Sept. 26, 2008)

Raising a family can be one of the most gratifying (and expensive!) experiences in your life. However, kids don’t have to turn your finances upside down. With a little planning and goal setting, you can maintain financial security as your family grows.

Prepare for purchases. Sit down and think about how a baby will affect your everyday living expenses. Do you have room in your budget to accommodate child-related expenses or are you already living close to (or above) your means? Sketch out a new budget that includes expenses like diapers and daycare, and compare it to your current monthly budget. Do your current income and expenses leave room for baby-related items? Are there areas in your budget you could trim now to comfortably support a family life later?

Set specific saving goals. Having a clearly defined goal helps you stay on course to reach your target and motivates you to save. Aim to save at least 10 percent of each paycheck to build a financial cushion. Some families may want to stash away a specific amount—let’s say $2,000—before having children. Break down this larger goal into smaller monthly achievements. For example, if you hope to conceive in one year, you’ll need to put back around $160 each month (or about $40 per week) to reach your pre-baby savings goal.

Keep that thrifty attitude. Throughout your pregnancy and after the baby arrives, continue to look for additional ways to cut costs. Consider borrowing maternity clothes from a friend, and shop garage sales and consignment stores for baby clothes and nursery items.

There’s no magic formula. As it so often does, successful financial planning lies in adjusting your spending to reflect your priorities. Learn more about budgeting for baby at PracticalMoneySkills.com/baby.


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My family and I would like to take a vacation at some point this summer. We have most of the money already saved, but we’re struggling to come up with the last few bucks. Do you have any tips on ways we can save a little extra money throughout the year to make vacation planning easier next summer? (posted May 28, 2010)

Taking a vacation today has become incredibly expensive. Any spare bucks you can save between now and then will help out a lot. Here’s some ways to help you set aside that little bit extra.



There are plenty of ways to save money and cut costs when the pay-off involves a fun family getaway. Just don’t wait to get started.  Make plans to start saving for that wonderful vacation next summer before this summer is over.


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Paying for College


Can you shed some light on Oklahoma's 529 College Savings Plan? How does it work? What about fees? What happens to the money if my child decides not to go to college? (posted May 29, 2014)

You're not alone when it comes to wanting to save for college, but not fully understanding your options. In a recent study, Oklahomans were asked their opinion about saving for college and investing in Oklahoma's 529 College Savings Plan (OCSP). Of those polled, 86 percent said it's very important for their child or grandchild to go to college, but only 43 percent are saving to help them get there. This discrepancy may be due in part to confusion about savings options and a tendency to either under- or overestimate the cost of higher education.

To help you craft a more informed savings strategy, let's explore some of the finer details of Oklahoma's 529 Plan.

To learn more about Oklahoma's 529 College Savings Plan, including investment option performance, how a 529 Plan compares to other investment options and how contributions can affect financial aid, visit www.ok4saving.org.


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When it comes to paying for college, I imagine I’ll receive scholarships and grants, however, I doubt this will be enough to cover my tuition and fees. I’ve heard about crowdsourcing your tuition. Is this a viable alternative to student loans? (posted March 29, 2013)

Crowdsourcing (in this case, crowdfunding) is growing in popularity as today’s students seek innovative ways to find money to help them pay for higher education. Through sites like SmarterBucks.com, StudentDonate.com, and GoFundMe.com, students are harnessing the power of the Internet to bring friends, family and even strangers together for a common goal – to help them pay tuition or pay off student loans through fundraising campaigns.

On sites like these, students create online profiles they hope will entice people to believe in their educational endeavors enough to contribute money to the cause. How much money is collected depends on how persuasive the profile is and how much the student markets it through social media platforms, emails or simply word-of-mouth.

While crowdsourcing is definitely an option, don’t forget these tried and true methods for finding and receiving financial aid.

If you do need student loans to bridge a financial aid gap, remember to borrow only what you need to pay for school. To learn more about your financial aid options and how to make smart borrowing choices from the start, visit ReadySetRepay.org.


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I think we’re going to need student loans to help pay for college. I've done some research and it looks like federal loans are our daughter’s best option. We’re concerned about taking on too much debt and want her to borrow as little as possible. Should her father and I take out the loans, or is it better for her to incur that debt? (posted Nov. 27, 2013)

It’s wonderful that you’ve researched your daughter’s financial aid options. At Oklahoma Money Matters, we tend to agree with what you’ve concluded. When it comes to choosing between federal and private or “alternative” loan options, we encourage students to maximize their federal student loan options before exploring private loans. That’s because federal student loans tend to have fixed interest rates and more flexible repayment options, like deferments, forbearances, and multiple repayment schedules designed to fit a variety of financial situations.

If she hasn’t already, we encourage your daughter to complete the Free Application for Federal Student Aid (FAFSA). Completing the FAFSA should be your family’s first step in the financial aid process. She must complete the FAFSA to qualify for federal loans, grants and scholarships, as well as some private grant and scholarship programs. Grant and scholarship funds are considered gift aid – aka free money! Encourage your daughter to study hard, make good grades, participate in extracurricular activities and apply for as many grants and scholarships as possible. The more free money she receives, the fewer dollars she’ll need to borrow to pay educational expenses.

Now let’s tackle who should carry the debt. Each and every family handles college funding differently. While we can’t say which solution is ultimately best for your family, we can offer some points for you to consider when making this decision.

Whichever route you choose, we encourage you to have an honest conversation with your daughter. Outline expectations and responsibilities on both sides, explaining what you are and aren’t willing to do to help her financially. Having this discussion upfront helps open lines of communication, setting the stage for ongoing discussions and potentially avoiding future conflict. Also, it’s a proactive and supportive step you can take to teach your child to responsibly handle her college debt – and that’s a lesson that will serve her well for the rest of her life.

To learn more about financial aid and federal student loan options, visit ReadySetRepay.org.


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My husband and I recently had a baby and we’d like to start a college savings fund, but we don’t know where to start. What are our options? (posted Sept. 28, 2012)

It’s great that you recognize the importance of saving for your little one’s educational future. Getting a head start is an effective saving strategy because the longer your savings can grow, the easier it is to reduce or eliminate the amount of money your child may need to borrow later to pay for higher education.

Luckily, your family has choices when it comes to selecting a savings vehicle. It’s important to shop around to find the option that will best meet your needs. To get started, check out these options:

Oklahoma’s 529 College Savings Plan. Contributions to this savings plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by your employer. Other perks associated with this type of plan include no income requirement to participate, a choice of investment options, and the option to transfer saved funds to another eligible beneficiary if your child decides not to attend a postsecondary institution. The money saved in a 529 Plan can be used at schools nationwide to pay qualified expenses (tuition, fees, books, and anything else that the school or the IRS deems necessary to attend that institution.) To learn more or enroll, visit Ok4Saving.org.

Coverdell Education Savings Account (ESA). An ESA is a trust or custodial account created to help families pay for elementary, secondary and college education expenses. While contributions aren’t deductible, they do grow tax free until distributed. If used for qualified educational expenses such as tuition, fees, or required books and equipment, then distributed funds are tax-free. With an ESA there are some limitations to consider; the amount you can contribute is determined by your income level, and the funds must be used by the time your child turns 30, or the earnings become taxable and a penalty is applied. Explore SavingForCollege.com to learn more about ESA options.

Gerber Life College Plan. The Gerber Life College Plan offers a different approach, acting as both an insurance policy and a college saving plan. Families who contribute to this savings plan agree to make fixed monthly payments for a set length of time and in return receive a guaranteed cash payout once the account has reached maturity. Another aspect that’s different from both the 529 Plan and the Coverdell ESA is that the funds saved through this method can be used for anything, not just your child’s education. It’s important to note that because this plan is a life insurance policy, the application does ask for health related information, and there may be some exclusions and limitations. Visit GerberLife.com to learn more.

You may also want to check out From Cradle to College, a great publication from UCanGo2 that’s filled with parent-friendly tips and information that proves it’s never too early to prepare your child for a successful future.


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My kids are 12 and 14, and I haven’t really made college savings a priority. How do I start saving money for college at this stage? (posted Sept. 28, 2007)

This is the million dollar question for a lot of parents! Ideally, college savings would begin at birth; however, we recognize that’s not a reality for everyone. If you’re part of the group that’s getting a late start, don’t panic—but don’t keep waiting, either. Start saving now! Here’s a plan of action to help you build a college savings nest egg.

First, figure out how much money your child will need; it’s hard to hit a savings goal if you don’t know what it is. Check out OKcollegestart.org for information about the average cost to attend one of Oklahoma’s many public colleges or universities. While there, encourage your child to create an online account, which allows students to bookmark favorite colleges and build a personal portfolio of grades and applications.

Now that you have a savings goal, there are several ways to build a college fund; shop around to find the plan that’s right for you (check out SavingForCollege.com to get the ball rolling). Two common methods are described below.

As a supplement to your savings, encourage your child to apply for as many grants and scholarships as possible. Check out local organizations that sponsor scholarships such as your church and community groups (YMCA, 4-H Club, Kiwanis, Jaycees, Chamber of Commerce, Girl Scouts, Boy Scouts). Remember, scholarships are awarded based on a variety of criteria, including need, merit, residency, family history, skills, hobbies, and athletics. Check out the scholarship search function at OKcollegestart.org to learn more.

Also, don’t forget about the best deal in town - Oklahoma’s Promise, formerly known as OHLAP. If you meet certain income requirements and your child meets certain academic requirements and stays out of trouble, Oklahoma’s Promise will pay tuition at an Oklahoma public two-year college or four-year university. Students must apply in the 8th, 9th or 10th grade, so don’t miss the boat! Get the details at OkPromise.org.


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Budgeting


I'm not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month! (posted October 31, 2014)

Ah, yes - the battle between wants and needs can be epic. Thankfully, winning the fight and salvaging your spending plan doesn’t have to be a nightmare. With the desire to improve and a few mental magic tricks, you’ll be well on your way to protecting to your budget.

To boost your willpower and tackle temptation, practice these steps until they become financial habits.


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I’ve decided to face my fears and create a personal budget. I’ve heard that a member services representative at my local bank may be able to help. I’m a one-on-one learner and figure this could be a great option for me. Is this a good idea? If so, how do I take advantage of this service? (posted July 27, 2012)

Everyone needs a personal budget, so congratulations on taking this positive step toward managing your finances.

A budget, also known as a spending plan, can help you track and manage your income, savings, debt, and living expenses. Before seeking professional guidance, you’ll need to gather some documentation to make the budgeting process easier.

Once you’ve gathered the necessary information, call your financial institution and ask to speak with

a customer service representative. Explain the services you’re looking for to see if they can help.

If your bank doesn’t offer the assistance you need, another source of one-on-one help is Consumer Credit Counseling Service of Central Oklahoma. CCCS has 12 locations throughout the state and offers free personalized budgeting sessions. To learn more or to schedule an appointment, call 800.916.4522 (toll free) or visit CCCSOK.org.

While free services are an option, don’t completely rule out hiring a certified financial planner (CFP). A financial planner may be better prepared to address specific, complex financial situations like saving for educational expenses, preparing for marriage or divorce, or handling an unexpected financial windfall. Visit the Financial Planning Association’s website, FPAnet.org, to learn about the specific needs financial planners can help you address. To find a local CFP, visit PlannerSearch.org. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

No matter which service provider you choose, a reputable planner or counselor should take the time to talk to you and answer any questions you have, including asking about your financial goals and priorities, and offering objective advice to help you set long-term saving goals and build a solid foundation for a lifetime of financial success.

Don’t forget, we can help, too! Explore our self-paced Budgeting learning module to get a head start on creating the spending plan that’s right for you.


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For many people, getting paid once a month is extremely hard, no matter how much money you make. Where can I find resources to help me save and still have enough money to last through the month? (posted April 27, 2012)

That’s a great question. Finding yourself with more month than money is a struggle many of us can identify with. It takes discipline to budget your money to last four to five weeks, but it is possible!

Consider this alternative to more traditional budgeting methods. You’ll need three bank accounts – one for savings, two for checking. First, decide how much of each paycheck you want to put toward savings and have that automatically sent to your savings account. Next, put the rest of your paycheck into checking account 1. This is the account you’ll use to pay all your monthly fixed expenses, like rent, car payment and utilities.

Divide the money that’s left over after paying your monthly fixed expenses by four and set up a weekly automatic transfer of that amount into checking account 2. Use account 2 for all variable living expenses, like groceries, entertainment, clothes and eating out. The key to making this budget work is to refrain from transferring more money over or using credit cards.

To take this approach to the next level, consider moving to a cash-based system. It’s a proven fact; most of us spend more when using debit or credit cards than we do when paying with cash. After you’ve determined what your weekly allowance for variable expenses will be, grab some envelopes and write the name of each variable expense category in your budget on a separate envelope. Then, place the weekly amount of cash you plan to spend on that category inside. The beauty of this method is that once the cash in each envelope is gone, there's no more spending until the next week! This tactic forces you to spend only the amount you've allotted for each category.

Remember, there are a multitude of budgeting methods and tools available. If this one doesn’t meet your needs, don’t give up! Instead, try a different one until you find the right fit for you and your lifestyle.

Additional resources to help you maximize your finances:


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How can I keep my budget on track in a tight economy? (posted March 25, 2011)

Thankfully there are a lot of little money-saving steps you can take that can add up in a big way. Of course you can start cooking at home or brewing your own gourmet coffee instead of hitting the drive-thru. Examine your auto or home insurance to make sure you’re getting the best deal. Update your W-4 so only the necessary deductions are taken from your monthly paycheck. Or, you can be more careful about turning off lights when you leave a room. Beyond these simple tips, let’s examine some additional ways to save a dime or two.

You don’t have to make huge sacrifices to stay on budget. Just take a creative look at your spending and find simple ways to cut back just a little and get a better deal.


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How can I manage my money better without following the typical budget? (posted Jan. 28, 2011)

A well-developed budget helps many people manage their money, but some find it difficult to maintain their monthly spending plan. If that’s you, there’s good news! It’s possible to save and manage your money without following the typical spreadsheet budget. Here’s how.


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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.


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I’ve heard a lot lately about creating a spending plan, but do I really need one? (posted Nov. 27, 2006)

You bet you do. Spending your money without a plan is like traveling cross-country with no map. Without charting your course in advance, you may reach your final destination, but the journey could be filled with unnecessary twists and turns, dead-ends and road blocks.

Thinking of a budget as a road map to financial happiness - instead of a restrictive, binding “spending diet” - helps us see the big picture. One of the main reasons budgets fail is a negative attitude. Stop your stinkin’ thinkin’ and view your spending plan as a way to reach your financial dreams and goals! Budgets aren’t one-size-fits-all; the structure depends on your spending priorities and saving goals. This means you have control of your money, not the other way around … and that’s the very definition of financial freedom.

Tracking your day-to-day spending is an important part of budgeting. Check out tips to help you stay on top of your spending under the "Spending" section and use those tips to build a workable budget that reflects your true needs and priorities, leaving room to reduce debt and save for the future. Let’s get started!

It’s your life, it’s your money and the budget is your tool. Make it work for you!


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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.


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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.

Shop at discount stores. Stores such as Ross, T.J. Maxx, and Marshalls (among other popular discount chains) are good places to buy brand name items for a lot less. People don’t have to know you didn’t spend a fortune on a gift.

Plan ahead. Typically, wedding invitations are sent out at least a month in advance. This allows a little bit of wiggle room to plan for the upcoming gift purchase. Baby showers are normally set later in the pregnancy, so start your baby gift fund once you receive news from the mother-to-be. In addition, put those lovely once-a-year birthday celebrations on your calendar and set a reminder one month in advance so you have time to save some extra cash. Preparing yourself for these little expenses (that really add up!) is a solid start.

Build a buffer. When balancing your checking account, don’t let yourself reach $0. Instead, designate another amount – $50 or $100 – as your break-even point. This creates a buffer for emergencies and helps keep you from going into the abyss. So, when that surprise birthday party comes up the weekend before payday or that crazy couple you love (but don’t quite understand) runs away to Vegas to get married, you won’t have to turn the cushions over on your couch or vacuum out your car for spare change!

Be creative. Give something homemade or offer your help with special projects. Help the mother-to-be create the baby’s scrapbook templates. Try helping the lovebirds by serving cake or handling the guest book at the wedding. Your time and assistance are worth much more than a lavish gift.


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Payday Loans

I’ve taken out several payday loans and I’d really like to break the borrowing cycle, but I’m not sure how. Where should I start? (posted July. 26, 2013)

Whether you turned to short-term, high fee payday loans to deal with an emergency or to simply take care of day-to-day expenses, you’re not alone. The Consumer Financial Protection Bureau (CFPB) reports that the average payday lending consumer takes out 11 payday loans in a 12-month period, sometimes paying more than $781 in fees.

Even though payday loans are touted as a temporary solution, meant to be repaid within one pay cycle, that’s often not the case. The majority of payday loan borrowers continue to roll old debt into new loans, creating a vicious borrowing cycle that’s difficult to end.

While digging your way out of payday loan debt won’t be easy, the effort will be worth it. Here are some steps to consider when creating your repayment plan.