How to Stop Overpaying for the Basics

John J Bowman Jr Accountant - Paying for the Basics

Households across America are struggling to make ends meet. High housing costs plague many cities. In others, stagnant wages offer little prospect for relief. Many people try to work multiple jobs and reach for just a few more billable hours, but even the hardest workers only have so much time and energy. This leaves people feeling pinched every month, concerned that paying basic expenses will tips them over the edge and into debt.

 

Ben Franklin is famous for the adage, “A penny saved is a penny earned.” With budgets so tight, this adage is truer than ever. The best place to start saving is on the recurring expenses that you resign yourself to paying every month.

 

Rethink Cable

Do you really need cable? If you have an Internet connection, you can save a bundle by cutting the cord and opting for streaming services like Netflix, Roku, and Hulu. Speaking of electronics, are you overpaying for your cell phone? Unlimited service is available for as low as $35/month via certain retailers; if you are paying more than that, shop around for other options.

 

Be Sustainable

Energy bills can leave you broke, especially if you live hot or cold climates. Every degree you lower the thermostat in winter and raise it in summer can save you up to 3 percent on your bill. If no one’s home all day, why pay to keep the place at 75 degrees? A programmable thermostat can help you adjust temperatures according to your schedule. When you head to work, are buses and trains an option? Many Millennials find they can do without cars and the payments, insurance, and gas that keep many Americans broke.

 

Eat In

Dining out can serve up an unnecessary burden on your budget. Avoid high costs and calories by learning some quick recipes to prepare at home. Brown bagging your lunch saves you money and calories. Cook a big dish over the weekend and take the leftover to work. For groceries, forget convenience and shop where you get the best value. Warehouse clubs can save you money if you avoid the temptation to buy more than you use. Be especially careful with perishables. Also, get a coffee maker to make your brew at home. If you like gourmet coffee, you’ll need to invest in gourmet maker, but you’ll make up for the expense over time. If you are stopping by the pharmacy, make sure to get the generic equivalents for both prescription and over the counter medications.

 

Find Low-Cost Entertainment

Unless you’re a monk, you probably need some entertainment now and then. Big movie theatre chains offer discount plans and second-run movie houses provide big savings. There are also great deals for kids.

 

These strategies can save you hundreds every month. That can be enough to fund an emergency savings account or retirement plan. Establishing a cost-effective lifestyle takes planning and discipline, but it’s better than being broke.

Are You Making These Common Finance Mistakes?

John J Bowman Jr Accountant - Personal Finance Mistakes

It happens every month without fail. When payday rolls around on the third Friday of the month, your bank account looks healthy – filled with money to spare, even. With a few easy taps on your banking app, you’ve sent off your rent, covered your electric bill, and paid off a little of your credit card debt. You decide it will be alright if you splurge a little on dinner, a movie, a maybe even a quick weekend trip to the local shopping center. A week or so later, you absentmindedly swipe open your banking app – and stare in disbelief. Your bank balance is practically anemic. Where did all of your money go?

 

Spending Impulsively

Your morning Starbucks latte could be costing you. Crunch the numbers: a venti latte costs roughly $4 a pop. If you multiply that times the five days in a work week, you find yourself with a coffee bill of $20 a week, or a full $80 a month. In other words, the money you spend on coffee alone could have covered your entire grocery bill for a month. Small expenses add up – so avoid making impulse purchases. If you think you might be splurging just a little too often, check! At the end of the month, compile all of your card charges and assess how much you spent on necessary items or services (i.e., rent, food, gas) versus how much you spent on unnecessary treats or luxuries. You might just find yourself reconsidering your coffee budget afterwards.

 

Paying Too Many Subscriptions

Do you really need Netflix, Hulu, Amazon Video, and HBO Go? Probably not. Signing onto a service may seem simple and cheap when you’re in the free trial period, but those monthly fees accumulate quickly. Do an inventory of the subscriptions you have and decide which ones you can afford to cut ties with.

 

Living on Credit

Having a credit card doesn’t give you access to free money! Credit card companies make their enormous profits off of people who make minimum payments and allow interest to accrue. Just think – by leaving the expense of a single small item on your balance, you could end up paying out twice the original price in interest and fees. Believing in the “free money” myth could cost you money; living on credit could leave you bankrupt.

 

Overspending on Housing

You may want the in-building gym or slickly designed kitchen – but can you afford it? According to a report from Harvard’s Joint Center for Housing Studies, over one-third of all American households spend 30% or more of their take-home pay on housing expenses. Most financial advisors set the expense ceiling for rent at 30% of a person’s take-home pay; however, even this might be too high for someone struggling to pay off hefty student loans or provide for a family. Don’t let a nice apartment or charming home lure you deeper into debt. If you do, you might find yourself needing to sacrifice your personal life and stay home far more than you ever wanted to.

 

“Keeping Up” With Others

If all of  your friends leapt into crippling debt, would you follow? The answer might not be as easy as you think. Sometimes, it can be difficult to say no to a weekend trip or fancy dinner – even if you know that the expense would eat into your budget for the month. Make a habit of thinking your budget first, and fun second – or risk losing out on a significant chunk of potential savings.

 

What is Cryptocurrency?

Most people have heard of Bitcoin, but have no idea what it is or how it works. Bitcoin is a form of virtual or digital currency known as cryptocurrency, which uses cryptography or code to keep transactions secure. Cryptocurrency introduced a new type of currency on a software structure.

What Is The Origin Of Cryptocurrency?

Satoshi Nakamoto was the originator of bitcoin, and release the original version of the Bitcoin software in 2009. The open source worked on the software for two years, when Nakamoto presumably moved on to other projects. There’s a lot of speculation about who Nakamoto actually is, but it may remain a mystery.

How Does It Work?

Cryptocurrency is real money in a digital a form of payment similar to secure, online e-commerce payment processors to pay for goods or services. A lot of companies involved with cryptocurrency issue tokens that are their form of currency that is similar to tokens in an arcade. Actual money is exchanged for the tokens. The new form of currency is so popular that there are more than 1,400 cryptocurrencies that are used for online trade. According to statistics, all cryptocurrencies currently in use have a value of approximately $708 billion. Bitcoin, the leader in cryptocurrency, has a value of $283 billion.

What Is The Blockchain?

The blockchain is the database that’s compatible with cryptocurrency. The way the blockchain differs from a traditional database is that the data can be stored on thousands of computers in locations around the world. Since the data is on so many systems, the cost is much lower than with a traditional database. Due to the encryption, if part of the data is compromised, the entire database isn’t exposed.

What’s the Attraction Of Cryptocurrency?

1. Many people are using cryptocurrency because they see it as the currency that everyone will be using in future generations. They’re buying the currencies now because they speculate that it will be more valuable in the future.

2. Inflation is another reason that people are using cryptocurrency. When banks manage the supply of money, it tends to decrease in value during periods of inflation.

3. Some cryptocurrency supporters like the idea of the blockchain, the system that cryptocurrencies use. The theory is that the blockchain is more secure than more traditional systems used for processing monetary transactions.

4. Some cryptocurrency users prefer the idea of conducting financial transactions without government interference.

5. Some financial speculators aren’t interested in using cryptocurrency because they’ll be more widely accepted for financial transactions in the future. The belief is that the currencies will soar in value, so they’re buying them know before the prices drastically increase.