Are High Food Prices and Poor Choices Killing Your Budget?

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Do you know how much you spend on food & incidentals each month? Do you think you have a pretty accurate idea? Or would you be surprised? Whether money is tight or not, everyone can benefit from trimming their monthly food costs. The little choices add up.

Spending $5 here and $10 there doesn’t seem like a big deal but those charges can really add up fast if you’re not keeping track of how often your spending. Things like packing your own lunch instead of eating out, or taking coffee from home instead of hitting the drive thru on the way to work can make a big difference, especially over time.

Consider this: If your average cost for eating lunch out is $6.50 and you eat 5 times a week you’re spending $32.50 per week. Contrast that with the average cost of a brown bag lunch ingredients of $12.50 per week and the difference in monthly savings is about $86 per month, or an annual difference of $1,040.

If you pay $2.29 for a 12 oz. cup of coffee, and you get coffee out 5 times a week, you’ll pay $11.45 per week. Brew your own? You’ll pay about $0.34 per 12 oz. or $1.70 per week. Annual difference in savings? $507.

It’s not just your choices about whether to got out for food & drinks vs. food & drinks from home. There are a lot of mistakes people make in their choices at the grocery store!

Shopping while you’re hungry. Don’t do it. You’ll make way too many impulse buys and overspend on junk food. Eat or snack before you shop. Trust me it makes a big difference!

Whether you’re the planning type or not you need a game plan. Shopping without a budget or list or general idea of why you’re there is like wandering around the department store randomly grabbing stuff off the shelves. You will end up spending more on things that may or may not fit your needs.

Learn how to recognize a Bad Bargain. Shopping wholesale does not always mean you’re getting the most for your money. It often does, but you have to be aware and pay attention because not everything at Costco is going to be cheaper than buying at your local grocery. Also consider a common problem I’ve seen and heard about over and over. You buy in bulk and are so excited about “how much you got” for the price, until 2 weeks later and your fridge is full of partially eaten food that is now starting to spoil. If you aren’t going to be able to actually EAT all that food while it is still fresh and you will end up throwing away rotten food, you’ve essentially trashed your “good deal” and your cash.

It’s a learning process and you’ll make mistakes. But learning how to do the little things now will save you more money and put you in that position to buy the flatscreen or cruise you’ve been dreaming about. Read more about 5 Easy Ways to Get More Food for Less Money.

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to build wealth and gain financial freedom!


Pride Keeps You In Debt Forever, Why It Doesn’t Have To

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What’s the most predictable action people take when they come into cash? A spending spree. You land your first real job with a nice salary, benefits, the works. You get that raise you’ve been working for. You score a big commission. Over a celebration dinner your friends ask you, “What are you gonna get?”

Excited You Start to Spend, Digging a Deep Hole For Yourself.

You’re excited about your success and you want to reward yourself. You tell yourself you need something so that you’ll “look the part” and “fit in” at work. Or, you could be caught up in some good old competition with your friends and coworkers (or both). It’s natural. We all have our pride.It’s natural to want to make good impressions. There is no argument that looking professional and dressing appropriately will help you in your career, but do you really need the latest designer clothing? Do you have to have that 2012 car or truck?

Beware of letting your emotions control you. Racking up debt to impress is a common but foolish move. You don’t have to give up on making a good impression. You need to be smart. You can make good impressions without sacrificing your financial security.

Clothing

Set your budget and stick to it. Make a list of what you need to get before you start shopping. You don’t have to sacrifice quality. Shop sales and clearances, shop at outlet malls, look for overstock, or shop online. You have enough options. The trick is going to be making careful choices and sticking to your list & budget.

Some things are really not worth sacrificing quality. You need at least 2 good suits. On the other hand, there is no reason to think that underwear from Target can’t do the job.

Vehicles

You don’t need a flashy car. You really don’t. I know you want it, and that’s okay. Be smart and work up to it. A decent used car that runs well will serve your needs just fine. There is nothing wrong with having a nice car, just don’t get it until you can truly afford it. Don’t forget it’s not just that monthly payment, you’re looking at insurance, repairs, maintenance & upkeep too! Another thing to consider: what kind of gas does your dream car take? Regular or Premium? That Porsche you want may not be able to take the cheap stuff. Buying a nice car before you can afford it could end up crippling you financially. Move carefully.

Food/Dining

Again, set a budget and stick to it. Set amounts for groceries and eating out. This is one of the easiest ways to overspend.

Helpful Tips:

  • Don’t buy food on credit. If you don’t have the cash to join your friends, politely turn them down or invite them to your place to eat in (assuming you’re a good cook).
  • Don’t go shopping when you’re hungry.
  • Plan a selection of meals for the week. This is more flexible than a menu plan and you will have a variety of meal options on hand that you can choose from on a daily basis.
  • Make a shopping list and stick to it! It takes practice, but walking away from those impulse buys gets easier with time. If it’s something you really want, make a note to fit it into your shopping list for next week.

Impulse spending can easily get out of control, and if we’re not keeping careful track of what we’re spending we can easily lose track of how much is going into our food bill every month. It’s okay to splurge on yourself once in awhile, as long as you realize and plan for the impact it will have on your budget.

Housing

Again, don’t buy before you can afford it. What good is it to own a fancy condo or house and be unable to purchase furniture, keep up with property taxes, or do repairs? Having an address in a trendy neighborhood might make you feel good, but the stress of knowing you are drowning in debt far outweighs the boost in pride you get from that fancy address.

Renting an apartment is a perfectly acceptable alternative. Absolutely nothing wrong with it. Downtown or suburbs? What best meets your needs? What can you reasonably afford? Consider the pros and cons and choose something that works for you.

Furniture

Stay away from 0% financing furniture deals. While it may be tempting to get all your furniture on credit, just don’t do it. Work your way up. Shop craigslist, clearance outlets, IKEA, or CB2. Be patient and get creative. You can have a nice looking home without sacrificing your wallet!

Entertainment

Don’t expect that you won’t need an entertainment budget. Set aside part of your budget to enjoy yourself. Cable expenses should be in this category (or skip cable and get a Netflix subscription). If you want to go to a few games or concerts, set aside money for those. Let yourself have fun. Be smart and keep tabs on your fun money. Look for things to do in your area that are free or low cost. And most importantly, learn to say No when you really can’t afford something.

Vacations

Your coworker is going to Cancun and wants to know where you’re going. Realize this isn’t a competition. This is not about spending what your peers are spending. It’s your vacation and your financial future. You can have an equally or better time doing a weekend getaway in your area. Remember, the purpose of a vacation is to get away, relax, have some fun. You can do that anywhere just as well as you can in Cancun. And hey, there’s nothing wrong with an expensive vacation if you have the money set aside for that purpose. Save up for it and do it. Then you will be able to enjoy yourself even more because you know you did it debt free.

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to build wealth and gain financial freedom!


Teaching Kids About Money in Tough Economic Times

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My heart goes out to families that are struggling financially. Other than a death or an illness, a financial crisis is one of the most difficult events a family could experience together; however, it can be turned into an opportunity for your family to grow closer together, learn new financial skills and experience new adventures together.

In my experience working with families in my Insurance and Financial services practice for the past 24 years, it’s best to handle a crises proactively by sharing “age appropriate” information with your children about your financial situation. However, be sure to share a positive plan on how you’re going to come through this experience stronger as a family.

Here are the steps I suggest:

  1. Teach your child (children) that this financial problem is only temporary and that by being proactive your family will overcome this current difficulty.
  2. Reassure your children by telling them how much you love them and that the financial problem is not their fault. Children internalize the financial struggles of their parents, so it’s very important you do not make them feel guilty for asking for money or things and it’s especially important you don’t make them feel responsible for your family’s financial struggles.
  3. Develop a plan of action on how you are going to overcome your current situation and then share with your children the steps you are going to take to get back to living a prosperous life. Get them involved. This is an opportunity for you and your children to learn or relearn financial skills. See my recent blog article on teaching kids about Goals and Money for more information.
  4. Now comes the fun part. When a family is under financial stress their lifestyle is going to change. This is an opportunity for you to rediscover that “the best things in life are free.” Instead of going out to a restaurant or pizza place, teach your kids how to make a pizza. Instead of buckling under the pressure to buy your child a new video game, make a play city out of boxes and other things you find around the house. Instead of telling your children you’re not going on family vacation this year, take them to one of the parks in your area and spend time in nature. Do you have teenagers? Invite their friends out on a hiking adventure. It may be a little tough getting teens on board, but once they have a few positive experiences you will find most teens want what we all want, love and attention. The cost: free.
  5. Know the signs of depression and anxiety. A financial crisis can be very stressful and you have to be aware of the signs of anxiety and depression in your children, your spouse and yourself. Seek professional help in dealing with the emotional impact of a family financial crises. The United States Department of Health and Human Services has a good resource at this website address: http://www.samhsa.gov/economy/.

There is hope! By applying solid financial principles and strategies, a little time and patience, you will overcome your current financial struggles. You will be stronger as an individual and as a family. You can use this time to teach your children one of the most important lessons of their life, that money is not everything.

As someone who had a young family at the age of 17, I know a little about what you’re going through. I followed the advice above and it worked for me. I think it will work for you, too.

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to build wealth and gain financial freedom!


Money – Goals – Children

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Recently I was asked by a national publication to talk about Money, Goals and Children. As a father of 4 great children, I know something about kids, money and goal setting. I used real money when teaching my own children about goals and financial responsibility. Here are a few excerpts I submitted to the editor.

How do you make goals real for kids?

I used money to teach my children from an early age about goals. I would pay my children for jobs they would do around the house. Many parents demand their children do chores for free and I suppose that’s okay. However, since you are going to provide your children with money for clothes, toys, and activities anyway, why not teach them how to handle money while providing them the lifelong skill of knowing how to set and accomplish goals at the same time?

How do you help kids keep focused on their goals?

I always tried to match my child’s age with the focus required for the task at hand. A four year-old child only has an attention span long enough to pick up toys, so I would develop tasks for them that would match their attention span. To keep them focused, I would use something that already motivated them. For example, one summer my two sons and their friends wanted to build a clubhouse in the woods behind our house. I agreed to help them with the cost to build it but they had to come up with $50 of their own money for supplies. Within three days they earned the money required, so that weekend we went to the lumber yard to buy the supplies and build the clubhouse. By the way, our whole neighborhood had sparkling clean cars that week because of the kid’s motivation to earn that $50.

What are the elements of a “good” goal?

  1. A good goal should be written in pencil. It’s “ok” to change your mind. We all change our minds from time to time and we should teach our children there is a difference between revising a goal or quitting when faced with a challenge.
  2. Goals need to be written down for clarity and also so you can remember what it is you are trying to accomplish.
  3. Once written, the goals need to be placed around the house so you can see them often.
  4. Your child should be able to imagine herself attaining the goal.
  5. Most importantly, accomplished goals should be celebrated! Reinforce success.

Keys to teaching about goals and money

  • Lead by example. Set goals with your children and then work together to accomplish them. Some of our best memories as a family were formed when we were working together to earn enough money to buy something or go someplace.
  • Pay them fast. Don’t make a child wait for money. Their attention span is short. A young child doesn’t understand waiting for payday. Even a teenager will quickly become discouraged if you make them wait beyond the weekend for their pay.
  • Make the job and compensation age appropriate. I wouldn’t offer to pay a ten year-old boy $50 to change the oil in my car. Likewise, I wouldn’t offer to pay my teenager $2 for cutting the grass. Children should be compensated fairly based on their age and the type of job they are doing.
  • Look for opportunities for your child to exercise his or her new goal setting skills. Most shopping disagreements with my children vanished once they had money to spend on the things they wanted. One time my daughter wanted a special pair of tennis shoes that were very expensive. I told her I had $65 for her “back to school” tennis shoes and that if she wanted the $95 pair, she would have to make up the difference. We both left the store that day getting what we wanted.
  • Most of all, make it fun and easy for them to accomplish their goals. You will accomplish more by sharing with them the joy of setting and accomplishing goals than you would by showing them how hard they have to work. Life isn’t always hard. When they learn how to set goals and accomplish them, they will seek harder challenges on their own. Have fun!

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to build wealth and gain financial freedom!