Tips for Getting to the Next Paycheck Without Running out of Money

It’s not something we like to think about, let alone talk about, but let’s be honest. We all have times in our lives when it seems nearly impossible to get through a simple two-week pay period without borrowing, begging or over drafting our checking account. It’s not fun, but with a little discipline and a lot of determination, it is doable.

The first thing you should do is write down what you think all your expenses will be for the pay period – utility bills, loan payments, gas for your vehicle, groceries, etc. Add it all up and compare it to the amount you got paid. If your expenses are more than your income, it’s time to start being creative.

Food is usually an easy place to start. Figure out what you already have in your pantry, refrigerator and freezer. Spend about an hour or two planning meals for the next two weeks with what you already have on hand. Use the grocery store sale flyers to help you fill in the missing pieces and only buy what’s on sale. If you have to eat sandwiches for a few days, do it. Definitely do not eat out or even stop for a cup of coffee. Make it at home.

Figure out what bills you can put off a few days. While I certainly don’t advocate paying your bills late, I know that feeding your family and having enough gas in the tank to get to work sometimes takes precedence over your bills. My rule of thumb is to pay anything with an interest rate or a late fee on time, even if it’s just the minimum payment this one time. These are the items that will hurt your credit and your budget if you don’t pay them in a timely manner. My cell phone company, gas company and electric company do not charge monthly fees. Those are the ones I generally will put off if I have to, but I try not to make them wait more than a few days. I’ll pay them online on payday when necessary.

Condense your drive time as much as possible. With the price of gas so high, you need to rethink how much time you spend in the car. If possible, work from home a day or two. Carpool with a friend from work. Let your kids walk or ride their bikes to school. You might even see if you can go in early or stay late at work to avoid rush hour traffic. You burn more fuel when you sit in traffic.

Most importantly, remember that the adjustments you are making are for a small time frame. Even if you have to do this for a month, perhaps you can reward yourself with dinner or a movie the next time you get paid. You deserve it if you managed to avoid using your credit cards or dipping in to savings.

Being Seasonal Saves Money

It’s officially Spring, and that’s good news for those of us looking to save a few bucks. This is the time of year when living seasonal really pays off.

I went to pay my utility bills the other night and was pleasantly surprised. Combined, my gas, electric and water/trash bills were about $150. While I was happy to usher in Spring with the heavy down pour we had, I was even more excited when I remembered the ways we can all save some money for the next few months.

Start with utilities. If you have a sprinkler system, shut it off. If you have ceiling fans, turn them on. Throw open the windows and breathe in some fresh air. This is our rainy season, or as I like to call it, free water season. With as much rain as we had the other night, you shouldn’t need to water your grass for a while. Turn off the automatic timer on the sprinkler system and just turn it on manually when your grass look like it needs a drink.

Save your a/c for the summer. As warm as it has been this year, we may not even have a month left of crisp air before the heat wave starts. Turn off your a/c and open your windows. If it gets a little warm mid afternoon, turn up the speed on your ceiling fans. If it gets a little cool at bedtime, toss a light blanket on the bed. Your wallet will thank you.

Stock your kitchen with seasonal foods. I absolutely love when something other than oranges, apples and bananas come back in season. We have all of those in the house right now, but we also have fresh strawberries, blackberries, plums and pineapple. You can really save a lot on your grocery bill by cooking with/eating fresh herbs, fruits and vegetables that are in season, especially if they are grown locally. Don’t limit yourself to the grocery store. Shop your local farmers market, too. Or, plant your own garden. This is the perfect time to start.

Buy your summer wardrobe now. If someone in your house is going to need new clothes this summer, start shopping now. Retailers like Old Navy, Kohl’s and others are offering big markdowns on summer essentials like short sleeved tops, shorts and sandals. It seems a little earlier than in past years, which means by summer, your deals and your selection will be gone. Use the money you are saving on food and utilities to stock up on season clothing now.

Happy Spring and Happy savings!

 

Your Income Tax Refund is NOT Free Money

Are you one of those people who can’t wait for tax season to get here? Do you do your taxes early in anticipation of your big refund? Do you already know how you’ll spend it before you do your taxes?

If you get a tax refund every year, there is something you should know. Your refund is not free money. Well, it’s free to the government, but it’s actually costing you money. Everything penny you get in your refund check is money the government has been borrowing from you all year long without paying interest. Would you put your money in a Prize Savings Account if we didn’t pay you a dividend on your money? Of course not. Don’t the let the IRS do that either. Instead of taking the big refund, take bigger pay checks.

I am not a CPA, and legally, I cannot give you tax advice. I can, however, tell you what I would do, and you can take that information to a tax advisor to see if it works for you. The first thing I would do is adjust my W2 form at work. This is the form you use to tell your employer how many dependents you have. Your employer uses that information to calculate how much tax should come out of each paycheck. If you are getting a huge refund every year, you may need to claim more dependents. The more dependents you have, the less money they take out of your pay, and the more money you come home with on pay day.

Now, I know there are some people who use their refund as a savings account. My sister tells me every year that she would never save money if it wasn’t for her tax refund. Perhaps you feel the same way. If so, think about taking that extra money in your pay check and having it deposited automatically in a special savings account that penalizes you for withdrawing the money, like a Certificate of Deposit. These accounts generally pay a higher rate than a regular savings account, but they require you to keep the money in the account for a specific time period. If you withdraw it early, you lose money.

Another option is to have that money deposited automatically to a Christmas Club account. Many people use this account to save all year long for their holiday shopping, but you can use it to save for anything. In November, the credit union gives you all the money in a lump sum. It’s almost like getting a huge tax refund, only you’re earning interest on your money. Even with low savings rates, you’ll still make more than you would by letting the government use that money.

Remember, this is your money that you earn by working hard. Talk to a tax advisor about how you can put more of it in your pocket.

 

Take Advantage of Gas Rewards, but be Smart About it

The rising price of gas does not excite me. Gas rewards do. I got a pleasant surprise at the pump this morning. When I scanned my reward card and swiped my debit card, I learned that I had a fuel discount of $1 per gallon. If I opted to use that today, I would be spending only $2.59 per gallon and would save $16 on my gas bill. That’s huge.

What I liked even better was the choice I had to use it today or save if for another time. I chose to save it, because we are heading out of town in my husband’s truck this weekend. By using the fuel discount then, we will save even more, because he has a bigger tank than I do.

How did I get these rewards? I scan my reward card whenever I shop at Tom Thumb. I shop there for two primary reasons – prescriptions and sale items. I rarely buy anything full price there, but my rewards have added up quickly.

Right now, Tom Thumb is offering triple gas rewards. Instead of giving a $.10 cent per gallon fuel discount for each $100 spent, they are giving three fuel discounts, or $.30 cents per gallon. Prescriptions are included, and so are gift cards. That makes $100 pretty easy to reach while buying things you would normally buy anyway. Honestly, I’m even tempted to buy a Tom Thumb gift card at this point. I’ll use it there, anyway, on sale items and prescriptions, and that will give me even more fuel discounts. Even better, I can pay for gas however I want to.

Kroger has a similar fuel reward program. The benefits are not as good as Tom Thumb’s right now, but it’s still a fuel discount. If you shop at Kroger anyway, you will still save money on gas eventually. If you want an immediate fuel discount, you can save $.25 cents a gallon by paying for your gas with a special Kroger Visa credit card.

That’s a nice incentive to use their credit card, but be very careful. If you don’t pay your bill in full every month, you will be charged interest on the credit card, which will cost you a whole lot more than that fuel discount they gave you. This is why I don’t like reward programs tied to credit cards. It’s too easy for people to get caught up in the reward part and forget about how much they are really spending to get those rewards. The lowest interest rate on that card is 13.99% APR. The highest is $23.99%APR. If you keep buying gas with the card, but don’t pay the bill in full each month, you won’t be watching your rewards add up. You’ll be watching your debt pile up.

Take advantage of fuel rewards, but be smart about it. The last thing you need is a mountain of debt when you’re only trying to save money on gas.