A lady budgeting

Make the Most of a Reduced Paycheck

Don't worry you will get through this!

Don't stress out!

Bubbles burst, the economy falters, companies downsize, and personal disasters happen which can result in a reduced paycheck. Perpetual salary growth or even maintenance is simply not guaranteed. However, by adopting the right tools and attitude, you can make the most of a reduced paycheck and not just survive, but thrive.

 

Determine whether your situation is temporary or permanent

If you fully expect to be back to your full salary soon, you may only have to adjust to lessened cash flow for a limited time. But before you tap into your reserves (and retirement savings, home equity, cash value life insurance, etc.) it would be wise to behave as if the salary reduction is long-term. Cut down on spending now. Securing your old income may take longer than you think.

If you do not expect to make as much money as you once did, you may be experiencing anxiety, which is normal. You may be panicking about the practical matters to contend with as well, such as how you will pay your bills. Adopting a systematic approach and devising a plan will help you manage the anxiety.

 

Recognize that your salary is not you

This is a deceptively obvious statement. Of course your salary is not you. But many people’s self esteem directly corresponds with how much money they make—the higher the income, the more important they feel. If your mood declines when your income drops, make every effort to dispel the attitude that financial wealth equals worth. It does not, nor does having an abundance of money guarantee happiness. Think back to when you were making more money then you do now. Were you genuinely happier, or did you just have the ability to buy more?

 

Seize the day

Hardship can hone skills and challenge entrenched ideas. Perhaps you worked in the high-tech field because the money was good, but that is not where your passion (or even perhaps talent) truly is. Consider this your opportunity to discover what you really want out of life. After all, if you are going to dedicate forty or more hours a week to your job, it should be something you love. Or at least like.

If you are currently unemployed or are working fewer hours, use this “extra” time wisely. Your options are as varied and abundant as your desires. Consider taking a class—one that will boost future earning potential or for pure pleasure. Write that book, paint the kitchen, start an exercise routine. Or just relax.

 

Analyze your expenses

When cash is copious, it is easy to spend arbitrarily. However, when the salary that sustained such a lifestyle is gone or drastically reduced, its time to take a good look at what you need to spend your money on, not what you can. Prioritize expenses now, and identify which bills take precedence. Mortgage versus car payment? Credit cards versus utilities? Analyze the ramifications of missing or not paying each. If you need help deciding, contact a financial counselor for help.

 

Develop a spending plan.

 

It will help you to discern between those expenses you can and cannot live without. If you find there is simply not enough money to support your necessities, much less your desires, at the very least you now know how much you will require from your next job. If expensive dinners are now a thing of the past, relish in the delights of a cheap pizza, or making cold cuts stretch with lots of lettuce. Enjoy and appreciate the things you may have begun to take for granted.

 

Remember: credit is not supplementary income

When money is tight, credit cards can take on an unusually seductive glow. However, a $40,000 line of credit is not a bonus in disguise, no matter how you much you wish it was. If you use credit to maintain the lifestyle you’ve grown accustomed to, it won’t be long before you “hit the wall”. Without an income to support repaying the balance in full every month, you’ll be paying in installments. Interest rates on unsecured credit is not cheap, and if you fall behind by 60 days, the rates will likely skyrocket. Late and over limit fees will add to an increasingly daunting balance. And soon you’ll be wishing you could return all the merchandise you bought and the meals you ate just so you don’t have to open another statement and look at those big, scary numbers. Credit cards are not designed to be emergency savings accounts.

 

Develop a plan

To thwart procrastination, write down what you want to achieve during this time. Be specific: include names of people you need to speak to and proposed accomplishment dates for each task. Update and refer to it regularly. Apathy’s enemy is a detailed and well-thought-out plan.

 

Go forward

Get professional assistance, talk to friends, and find others who are in like circumstances. It is too easy to think you are alone in this—support is key. Vent to those who can empathize; ask for help from those who can assist. Shock, shame, and anger are normal and feeling these emotions is expected. But by adopting a positive attitude and taking pragmatic steps, you can adapt to a reduced income, and achieve a financially stable future.

 

 

Blog Credit: https://www.balancepro.org/resources/articles/how-to-make-the-most-of-a-reduced-paycheck/


A couple purchasing a new car at a dealership

Tips to Save You Thousands on a New Car

Surviving the car dealership

Be Educated!

Whether you’re buying a new or used car, there are certain things to keep in mind when making a purchase. Unless you are a natural-born haggler, you might be a little uncomfortable or uneducated as to how to get the lowest price. A lower price means a lower monthly payment, and who doesn’t like saving money?

Research the Market Value

Just like any other purchase, you want to know what the vehicle is worth. There are many resources and websites available for consumers to check how much a car is realistically worth. Checking on this before going to the dealership will give you peace of mind knowing you’re getting a fair deal. You can assess the value of the car by going to sites like Kelley Blue Book or Edmunds. Both sites will help you find the average price per model in your area.

Don’t become too invested in the deal

You need to be ready to walk away from the deal if it’s not adding up. Make sure you keep a clear head and know when to say, “no thanks” and move on. Don’t get attached to a particular car, because in reality, there are thousands to choose from. Saying no and moving on may be a result of the dealer you are speaking to as well. Many are overly pushy and confusing, resulting in a bad customer experience. They may promise one thing, then turn around and take it back. Pay close attention to what they say and take notes if you have to. Auto Advisors are a great tool to use because they help people buy cars all the time. They know what to look out for and how to get the best deal.

Walk into the dealership knowing your out-of-door price

The out-of-door price is the price that you want to walk out with, which includes all fees, taxes, and other costs that you pay. Make sure this reflects the market value that you researched. Go into the dealership with a firm price and then talk the salesperson down. The salesperson wants to make a sale, so if you’re firm and don’t get too set on buying the car that same day, the salesperson will many times settle for your price.

Don’t get sucked into the extras

Here are some common add-ons that the dealership will try to get you to purchase to make it seem like you’re getting an added benefit.

  • Nitrogen in your tires – This is only useful for racing; otherwise, you likely will not notice a difference in your car’s performance or wear.
  • Theft Protection – These packages vary, but most new cars come with a built-in alarm system that will do the trick. There is no need for an advanced system.
  • Rear-seat Entertainment Systems – These are a complete waste of money. Ten years ago, it was a different story, but currently you can purchase a tablet for a fraction of what a rear-seat system would cost.

In conclusion, you need to be prepared and informed when purchasing a vehicle. Going to a dealership underprepared will most likely result in a poor deal that you walk away from unsatisfied. If haggling isn’t your thing, consider using an Auto Advisor. It’s their job to make sure you get the best price. They work with dealerships thousands of times a year, so dealers want to give them the best price possible in order to keep getting their business. You can learn more about our free auto advisors by clicking here.


Young woman relaxing on beach, ocean view, Vacation Outdoors Seascape Concept

Ways to Save on Your Next Vacation

Man relaxing on the beach

As the spring and summer months quickly approach, we are all looking forward to some much needed vacation time. There are typically two types of people when it comes to planning for a vacation. Read the following sceneries and honestly reflect on which one relates most to your approach.

Scenario 1:

You and your friends/family decide to take a sporadic vacation to Mexico during March. The timing works perfectly for everyone, so you buy your tickets at a high season price. As the date quickly approaches, you all have completely forgotten about planning or buying a hotel, so you scramble to find a bouge place to stay. You end up spending way more than you should have due to your lack of planning.

As your relaxing on the beach with friends and family, zero thought goes into what you purchase or where you swipe your card. By the end of the stay, you have racked up a $8,000 bill for your luxury 4-night stay. Was it worth it?

 

Scenario 2:

You and your friends/family decide to take a vacation together at some point during the year. Everyone sits down and searches for the cheapest times for tickets, hotels, etc. Once the perfect date is settled and hotels and flights are purchased at an offseason price, you decide to make a daily budget to follow.

On vacation, you closely monitor your spending and aren’t just whipping out your rewards credit card to exercise your wrist. On your budget, you’ve accounted for extra spending each day so even if some days are more expensive than others, you have the necessary funds for it. Once it’s time to leave, you have a $4000 bill on your rewards credit card, but have enough money in the bank to pay that off immediately due to your proper planning.

 

Some tips to prepare for your next vacation:

  1. Budget. BUDGET! The last thing you want to do after coming back from a relaxing stay at the Bellagio is worry about paying off a credit card that you don’t have the money for.
  2. Use a rewards credit card for purchases. There’s nothing wrong with putting everything on a credit card. As a matter of fact, it’s what you should be doing to avoid having your account compromised. Earn extra money, miles, or gifts by putting everything on your rewards credit card and then pay the balance off to avoid high interest charges.
  3. Book in advance and during offseason if possible. Scenario 1 and 2 stayed at the exact same place but paid completely different prices. Booking well in advance will relieve stress as well as get you the best price. It’s recommended to start planning your vacation a year in advance to give you plenty of time to budget and find tickets.

According to CheapAir.com 2018 Annual Airfare Study, they determined that you should book this far in advanced for the following seasons.

  • Winter: 62 days in advance
  • Spring: 90 days in advance
  • Summer: 47 days in advance
  • Fall: 69 days in advance
  1. Figure out local transportation. You can easily save money by checking if there are local trains, busses, Uber, Lyft, etc. Taking a taxi everywhere will cost you an arm and leg.