When my husband and I first married, we were poor and in debt. It was a difficult place to be, and, even as we made inroads and improved our finances, we still felt pinched. As a result, we decided that we couldn’t “afford” to set aside money for the future.
Finally, after a few years, we finally opened a Roth IRA and started setting aside some money. As I began writing about personal finance, I realized what a mistake we made. During those early years, we could have perhaps set aside $25 per month. But we thought the amount was too small. If we couldn’t “afford” to set aside at least $100 a month, we didn’t think it was worth it.
If I could go back in time, I would shake my younger self (and her younger husband), and tell them what I have since learned: The earlier you start saving, the better off you’ll be — no matter how little you set aside at first.
The Power of Compound Interest
One of the reasons that it makes sense for you to start saving as early as you can is due to the power of compound interest. This is a concept that puts your money to work for you. With compound interest, the money you earn through interest and other returns earns money. This means that more than just your original capital is working on your behalf.
As you earn interest, and that interest earns interest, your earnings are compounded — increased over time. The earlier you start saving, the longer compound interest has to work on your behalf. Just starting five years earlier can mean a difference of thousands of dollars over the course of your lifetime.
Even though we didn’t have a whole lot to set aside early on, we did have some money available. Even that small amount, compounded over time, could have made a bit of a difference. But we missed out on the extra money we could have been earning. In fact, that $25 a month, compounded monthly at 5% a year, for 35 years comes out to $28,520.65. But if we had started five years earlier, and that $25 had 40 years to grow instead? The result would have $38,309.46. That’s almost $10,000 more — just for starting five years earlier like we should have.
A Habit of Saving
Even more important than the amount that you set aside early on is the habit of saving you develop. I’m determined to teach my son this lesson. He knows that one of the first things he does with any money that he receives is to set aside some of it for savings, whether it’s money he’s earned, allowance money, or cash gifts for his birthday.
If he earns more money, he sets aside more money for savings. This habit is one that, hopefully, will follow him his whole life. A good habit of saving starts early. Even if it’s only $10 a week, the habit can stay with you. Start saving now, and then set a goal to increase the amount that you set aside. Figure out ways to boost your savings amount when you can. You’ll develop a good habit and, meanwhile, the power of compound interest is working on your behalf.
If you’re like the typical person, you go through the holiday season buying, buying, buying. Whether out of a sense of obligation or of the gift giving spirit, if you’re not prepared, the holiday season can set you back a pretty penny.
Even though the holidays come around every December, many people don’t prepare for the expense. Whether it be gifts or Christmas trees people spend. One reason could be that they take the first several months of the new year to dig out of the financial mess they created when buying without a plan for the previous holiday season.
This holiday season, vow to do it differently.
Use Credit Cards for Your Purchases
I know, using credit cards for your holiday purchases seems to go against the advice that financial experts give. Those experts say to always pay with cash so you can’t spend more than you have. While that is good advice from a financial standpoint, it’s shortsighted in another way.
One of the best reasons to use credit cards instead is something called Section 75. This is especially important if you’re buying the majority of your purchases online.
What is Section 75? If you use your credit card for purchases, the credit card company protects you in case anything goes wrong. If you order a cashmere sweater for your mother and it never reaches its destination, you’ll get the money back thanks to your credit card. If you purchase a glass vase and it arrives broken and the company won’t help you, your credit card company can step in.
In addition to this beneficial feature, you should also use your credit cards to maximize your rewards points. If you’re spending $1,000 to $3,000 on holiday purchases, for instance, and you strategically use your cards with the best rewards, you may be able to rack up serious points. Maybe you could even get a free flight to use later in the year.
How to Stay Within Budget When Using Your Credit Card
If you’re using a credit card, spending carelessly is a bit easier than when you’re paying with cash. There are a few ways to combat this tendency.
First, use a budgeting program that helps you keep track of your spending. If you have a smart phone, you’ll know at one touch how much money you have left because all you have to do is consult the budget system app. This is an easy way to keep tabs of your money while reaping all the benefits of using a credit card.
Most importantly, before you even begin shopping, make a list of everyone you want to buy presents for. Then, determine how much you want to spend for each person. This can help you curb impulse buys.
There may be no way to avoid the expense of holiday spending, but there are ways to protect yourself and your purchases as well as stay within budget. Happy shopping!
As part of the green revolution, more and more companies are looking for ways to reduce their carbon footprint, and rightfully so. The effects of the emissions of harmful chemicals being released into the atmosphere have become increasingly clear. Many corporations that opt to use renewable resources to fuel their facilities and services out of concern for their environmental impact. An added bonus to these efforts is a marked reduction in operating costs. Here are a few energy efficient devices that can be added to any energy conservation plan to enhance its effectiveness and lower overhead costs in the meantime.
Solar-Powered Gadget Charger
It’s extremely common for smartphone and tablet owners to leave their gadget chargers plugged into the wall as a constant place for them to stay. This creates convenience for the user by eliminating the need to crawl under desks and search for an outlet each time they need to charge something.
The downside of this setup is the “vampire power” that the cords pull when they’re plugged while they aren’t in use. Combat this entire scenario by equipping your office staff with solar-powered gadget chargers. They can leave these new chargers near a window to charge and end the vampire effect.
Even though boot-up times have decreased exponentially, it’s still a common practice to leave computers running overnight, partially because many users believe the machines require a substantial amount of energy to boot up. Modern innovation has changed all that, and it’s not necessary to leave any electric devices turned on overnight.
Today, computers do use a fair amount of power, but turning them off overnight will minimize that. The computer will also likely last longer, as the components will be exposed to less stress.
One of the biggest arguments made by people who leave their computer running constantly is the convenience of always having it ready to go. Work with this by encouraging your employees set their computer to a power save mode when they step away. This can be made extremely easy with the Ecobutton. It’s a USB device that allows you to quickly set your computer to the most economical and efficient power mode possible. This is similar to a shut down, but a quick press of any key wakes it right up again, and they will find themselves right where they left off.
Energy Star Rated Appliances
Sure they’re not exactly devices, but you might be surprised how much energy you can save by replacing that outdated refrigerator in your employee break room. Generally speaking refrigerators should be replaced within 10 years. Chances are the unit that’s hissing away next to the water cooler is in dire need of an upgrade.
Older models of microwaves and other appliances also use more energy than newer models. Not only do they pull more energy in the first place, but they tend to be less effective as well. Look into replacing these units and watch the savings pile up. An energy provider like the ones found at www.electric.com may also be able to shine some light on this.
The window socket is one alternative to the solar powered gadget charger. It will come in handy for employees who have run out of outlets, or whose workstations aren’t near an available outlet.
This is one of the most innovative ways of conserving energy to emerge recently. The Window Socket is a solar powered outlet that uses a suction cup to adhere to any window surface. Its mini-solar panel collects energy to power devices on the go or at home. Simply stick it to an exterior window and let it charge for six hours. Once charging is complete, you can bring it anywhere and charge devices on the go, or use it in areas of the office that are away from traditional outlets.
Energy Efficient Printer
A staple in any office, your company printers may be gobbling up more energy than you realize. As with kitchen appliances, printers usually need to be replaced periodically. Look for Energy Star rated models, and upgrade your printers to these new, energy efficient ones. Don’t hesitate to switch to 100 percent recycled paper either.
Give these energy efficient devices a try and see what it does for your energy bills over the course of the next year or so. Added to an existing energy-saving plan, these products will surely give you just the nudge you need toward operating at a more affordable cost level, and easing the burden on the environment in the process. Feel free to share any personal experiences you have as far as energy savings and reducing operating costs.
Congratulations! You’ve just finished paying for a wedding, which means you just spent the equivalent of a home down payment or a year of college on a single day. (Unless, of course, you followed this site’s sustainable wedding planning series.)
Now that the wedding’s all taken care of, your major expenses are over, right?
Not exactly. If you’re about to tie the knot, you better prepare now, or risk breaking your budget and causing uncomfortable financial arguments in your marriage’s first year.
Here are seven hidden costs of getting married:
1. The Name Change
Not every woman changes her name after marriage. But many still do, and many couples of all genders decide to hyphenate or combine their current last name.
Whether you’re becoming Mrs. Jones or both of you are becoming Mr. and Mrs. Wright-Jones, name changes are expensive. In addition to the cost of legally changing your name at the courthouse, you also need to change your drivers’ license, your passport, purchase new checks, etc.
2. Two Christmases
Really, this also counts for Thanksgiving, Hanukkah, or any other major holiday. You and your spouse are now obligated to visit twice the number of relatives at every holiday, which means you have to buy two sets of round-trip air tickets, pay for checked bags four separate times, buy twice as many Cinnabons, etc.
If you or your spouse’s parents are divorced, or if you have grandparents in yet a third location, the number of relatives you have to visit each year grows exponentially. There’s a reason why so much of Americans’ vacation dollars go towards what are termed “oblications.”
3. New Furniture
Yes, you probably got plenty of blenders and cocktail mixers at your wedding. You know what you didn’t get? A good bed, to replace the one you’ve been using in college. Or a matching dresser set. Or new curtains, or a dining room table, or all the other little things you’re going to need to furnish your new house.
(If you and your spouse plan to save money now by simply moving into one of your two apartments, or if you’ve already been cohabiting in a small apartment, congratulations: you’ve put off this expense for approximately three years. But it will come. Trust me.) Continue reading 7 Hidden Costs of Getting Married