spending | Online Savings Blog

What Can You Do Without Spending Money?
04.08.08 | Consumerism | 0 Comments | by junger

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Since we're in full-on savings mode in preparation for our vacation to California, our weekend was kind of … well, quiet.

Not that that's a bad thing — Debbie was under the weather, but we didn't really have any plans. For us, not having plans is a bad thing.

When we don't have any plans, we tend to do the one thing we definitely do not need to be doing now — spending money. Whether it's going to the mall, going out to eat, or frivolously shopping, we spend money.

So with no major plans but no desire to spend money, what do you do?

Obviously, there's a lot that can be done. We cleaned the house, watched a movie, spent time with family, played some Wii, planned our trip, and more. Yes, it's not that exciting, but it doesn't have to be.

We managed to have an enjoyable weekend without doing any damage to our bank account.

Then next time you're sitting around with nothing to do, think about all the things you could be doing without spending money. Maybe it's going outside for a walk, spending time with your family, blogging, playing a game, taking a nap, cleaning your house …

The list goes on and on.
Why Paying Cash For Everything is a Misnomer
04.07.08 | Consumerism, Money | 1 Comment | by junger

One of the bigger "disagreements" in the personal finance blogosphere is whether or not it's better to pay for everything with cash, use a debit card, or rack up rewards on your credit card (if you pay your balance off each month).

My personal spending habits are to use my debit card for everything. If I purchase something with my debit card, I know that I can see the transaction online, which carries over to my Yodlee monthly spending reports. I rarely carry cash because I rarely go the ATM (or maybe it's the other way around).

Others say that you should only use cash — specifically, what you have in your wallet. Once you see it leaving, you realize you don't have it any more.

The discrepancy in advice doesn't necessarily mean that some folks are wrong and some folks are right — everyone is working toward the same goal: spend less than you earn.

When you spend less than you earn, you're only buying things with money you actually have. That's "cash" in hand, whether it comes on paper or from your debit card.

Your preference — using cash or debit — depends on your ability to manage your spending. You need to figure out what works best for you.

The only wrong answer is spending beyond your means.
What Are You Doing With Your Tax Rebate?
04.06.08 | Money | 1 Comment | by junger

We're not getting much of a tax rebate this year — which is a good thing, by the way — so the $132 will either go toward our upcoming vacation or housing fund.

MSNBC.com recently polled some of its readers, asking them what they plan to do with their tax rebates.

In a sign of either a slowing economy or a return to personal finance best practices (unfortunately, I think it's the former), nearly all of the published responses focused on paying bills or adding to savings funds.

A few of the responses:

I should just sign the check over to Exxon Mobil. It’s all going to cover higher gas prices anyway.
Jim Smith, Sebastian, Fla.

Spend? You must be kidding! No way! It is going in my savings account.
Alex deCastro, Klawock, Alaska

If I get a rebate, I will add it to my grandkids’ college funds. They will have to have a good education to exist, much less thrive.
Sue North, Howell, Mich.

I am putting it aside to use on my family's summer vacation.
Martha Davidson, Mechanicsville, Va.

I am paying down my credit cards. It is useless to do what the president says in regards to spending the money. He obviously does not know how money-strapped the working class is.
Chez Escudero, Virginia Beach, Va.

If you're getting a tax rebate this year, we want to know: what are you doing with it?
Paycheck to Paycheck On Purpose: It Works
02.23.08 | Money | 0 Comments | by junger

One of the most popular posts here covered why living on a paycheck to paycheck mentality works. (Despite the lack of comments, a number of readers flocked to it.)

Single Ma from Fabulous Financials has a post up over at Consumerism Commentary on how she lives paycheck to paycheck, but is saving money through automatic deductions and taking money off the top.

By the time I receive my “real” paycheck, it’s less than half of what I actually earned, which is ok with me. All of my financial priorities are accounted for, so I have fewer things to worry about. Automation also locks in the funds to make sure I achieve my financial goals (e.g. max out 401k, IRA, and tax deductible college savings).

Having all of your investments, savings and tax-favored spending accounts (FSA, etc.) filled before you get a chance to spend it on impulse purchases is the easiest way to save.

You don't always feel like you're saving because so little work is involved, but you're doing better than if you waited until the end of the month to scrounge up whatever is leftover to put away.

Unless your paycheck is way out of proportion with your spending (on the positive side), try living with a paycheck to paycheck mentality. It works.
The Secret to Stopping Impulse Buying
02.21.08 | Money | 1 Comment | by junger

Everyone has impulses. For a lot of us, those impulses tell us to buy things that we want but don't necessarily need.

Right now, I really want either a PlayStation 3 or an Xbox 360 — partially to play Rock Band but also to get a Blu-ray player (now that it has won the format war).

I even had to spend an hour in Best Buy — twice! — in the past two weeks while I was getting new speakers put into my car (the old ones blew). To top it off, I spent most of that time playing the in-store demo of — you guessed it — Rock Band.

But I didn't walk out of there with any extra purchases.

Every time I consider hopping onto Amazon.com and buying something or picking up a gadget at Best Buy, I think about what I'm saving for — and I stop. We're saving for a home, and any big impulse purchase I make before then is going to take away money from that goal.

To stop your impulse buying, always remind yourself what you are saving for. It may help you to carry something physical — say, a picture of a house or photo of your kids.

How much is your impulse purchase going to hurt your savings goal? Don't let it.
Why Living on a Paycheck to Paycheck Mentality Works
12.26.07 | Money | 1 Comment | by junger

Living paycheck to paycheck isn't a great way to manage your money, but there's something to be said about having a paycheck to paycheck mentality.

We have a nice retirement accounts, an emergency fund, and are even saving specifically for a house. But we still live with a paycheck to paycheck mentality — and I'm glad that we do.

If you have automated your finances — including monthly retirement contributions, debt payments and transfers to high-yield online savings accounts — then living with paycheck to paycheck mentality is okay.

Because our finances are automated, our money is constantly doing something. It's getting added to our Roth IRAs or it's going into our housing fund or getting direct deposited into our checking accounts.

But since many checking accounts (including ours at Bank of America) pay nothing in interest, there's no reason to keep more money in there than necessary. So we only keep a certain amount in our checking account — enough to get transferred via automatic payments or to our outside savings funds and for bills.

This forces us to live a paycheck to paycheck mentality, even though we're saving for now and saving for the future.

With a paycheck to paycheck mentality, you're waiting for that next paycheck, but not just to pay the bills. It's also to invest and to stick into a high-yield savings account.

It works. Give it a shot — find out where all your money goes (start a budget), automate it, and then watch your spending.

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