Save Money...Sell Your Poverty

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Offline Shamim Ansary

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Save Money...Sell Your Poverty
« on: May 15, 2011, 02:33:24 PM »
Saving Money: Why A Financial Crash Diet Could be Bad for your Wallet

Every now and again the media goes crazy when a new fad diet arrives onto the scene and regardless of whether it is the Atkins Diet, the Scarsdale Diet or the South Beach Diet, each one seems to represent a desperate attempt to very quickly lose weight and obtain the ideal body.

Unfortunately the effects of these diets are often very negative and fad dieters tend to lose enthusiasm as the initial weight loss caused by the extreme diet begins to level out and the cravings for decent food settle in.

Disappointed with the results, most fad dieters return to their old eating habits and often end up putting on more weight than when they started.

Now I am sure you are asking what all this has to do with personal finance? Well, in the same way that extreme dieting can hurt your health, extreme saving can have an equally negative impact on the health of your finances.
Extreme Saving

To me, extreme saving is the financial equivalent of a crash diet and extreme savers will do anything they can to cut out every non-essential cost from their monthly spending, even if it means living a miserly existence.

This means eating the cheapest of cheap foods, not socialising with their friends, wearing their clothes until they are threadbare and giving up on any other little luxuries or hobbies.

The main problem with extreme saving is that it is very difficult to sustain this way of life over a long period of time. Monotony and boredom can easily niggle away at the best intentions of any extreme saver and drive them back to their old spending habits, in the same way that a fad dieter will go back to eating their favourite treats with a vengeance.
Create a Healthy, Balanced Savings Diet

Rather than following fad diets, most health experts advocate that the best approach to weight loss is a healthy and balanced diet, combined with plenty of exercise, and those same principles apply to successful saving.

Let’s face it, eating beans on toast for dinner every day may be cheap, but it is going to make you miserable. So too will staying in all month whilst your friends are out partying and having a good time.

The best approach then is to create a healthy, balanced savings diet where you review your spending, identify areas of high expenditure and find ways to make savings, without necessarily having to cut back completely on everything. This might mean just going out with your friends twice a month, rather than every week or supplementing some expensive dinners with cheaper dinners in your weekly shopping.

By balancing your savings against your spending, you do not then deprive yourself completely, making it much easier to continue saving in the long-term.
Creating a Sustainable Savings Plan That Will Grow Your Wealth

Whilst the secret to weight loss is to consume less calories than you burn, the secret to wealth building is to spend less money than you earn. You can maximise the amount you save by following these three steps:

    Decide on your savings objectives – For example are you saving to get out of debt, to buy a new home, to go on holiday, to pay for a wedding or to pay for your children’s education?
    Understand your current situation – Create a budget to show how much money you earn, how much you have in savings, how much you owe, how much you spend and where you spend it.
    Identify savings – Review your spending and earnings to see where you can make cut backs and try to identify any opportunities to increase your income.

If your objective is to save £10,000 for a deposit on a new home, you can begin to break that down to identify a monthly savings target. So £10,000 divided by 36 months will give you a monthly savings target of £277.

By finding cheaper alternatives for essential spending and reducing your non-essential spending, you can ensure that you are able to pay £277 into your savings account each month. And because you are not completely cutting out all fun spending items and know that you will be able to meet your goal of buying a house in three years time, it makes saving much less painful.
Monitor Your Progress

One of the biggest problems that dieters have is staying on track, so many people weigh themselves on a regular basis to monitor their progress. If they have slipped, then they can increase the amount of exercise or decrease the size of their food portions to try and get back on track.

The same approach needs to be taken with your spending to ensure you are not over-spending and missing your monthly savings target. Ideally you should review your bank balance and spending at least twice a month, if not more, and if it looks like you have overspent in one area then you will see that you need to cut back in other areas.
Sustainable Vs Fad

So whether you are slimming or saving (or maybe both!), selecting a sustainable and balanced approach should help you become much more successful in meeting your goal.
"Many thanks to Allah who gave us life after having given us death and (our) final return (on the Day of Qiyaamah (Judgement)) is to Him"

Offline Shamim Ansary

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Re: Save Money...Sell Your Poverty
« Reply #1 on: May 15, 2011, 02:37:06 PM »
6 Tips for for Eating Healthy of a Budget

The greatest wealth is health – Virgil

The benefits of a healthy diet are undeniable. Unfortunately, following such a diet can be costly.

But for us frugal folk who seek a healthy lifestyle there is hope.  With a few tips we can effectively stock our pantries with high quality, healthy foods without breaking the bank.

Before we get started, however, let’s take a look at what eating healthy consists of:

    Keep your intake of heavily processed and junk foods to a minimum.
    Be aware of the amount of calories you intake.  Not saying you need to count every calorie, but ultimately it’s calories in versus calories out that determines weight gain/loss.
    Drink plenty of water.
    Limit foods high in refined sugars and saturated fats (avoid trans fats at all costs).
    Eat a balanced diet meaning get a good variety of all the food groups, especially vegetables and fruits.

Ok, so you’ve got a general idea of how to eat healthy.  Now, let’s get right to it and learn how to eat healthy on a budget.

1. Plan your meals

Plan out your dinners and lunches at least a week in advance and write out a grocery list.  Don’t forget to include healthy snacks to the list as well.  Preparing your own meals is a great way to save money and since you control what goes in the food it makes it easier to eat healthy.

2. Frozen vs. fresh

Frozen fruits and vegetables are usually a lot cheaper than any produce you’ll find in the fresh section of your supermarket.  And contrary to popular belief, frozen fruits and veggies are just as healthy as their fresh counterparts.  Furthermore, since their shelf life is a lot longer you typically won’t be throwing away as much either.

3. Pass the salt

A diet high in sodium can lead to a host of health problems later in life. Limit the amount of salt you intake by purchasing low-sodium and no-salt-added food items, which generally don’t cost anymore than regular items.  And pass on the salt completely when preparing your own dishes.

4. Make extra

If you find it hard to find time to cook then try making double when you do cook and freeze half for a quick meal at a later date.  You may even save some money if you can quickly reheat a meal as opposed to running to the nearest fast-food restaurant.

5. Growing your own

Drastically cut your produce prices by growing your own.  Start a garden or plant your favorite produce items in pots on your patio for an inexpensive way to eat healthy all season long.  You can even take it a step further and plant your favorite herbs in small pots in your kitchen window.

6. Look low for inexpensive items

I mean this literally. Many grocery stores purposely put the more expensive items at eye-level.  So, look a little lower for the cheaper or generic brands and save a little money.  Most stores also post the cost per unit on the shelf so look closely at this and see what the best deals are.

A few quick tips:

    Buy in bulk
    Use cheaper varieties of meats when preparing stews
    Look out for the day-old bakery cart and clearance bins
    When you must eat out, eat half and take the rest home for a quick meal later
    Don’t buy pre-cut veggies, instead cut them yourself

These are just a few ways to get the most bang for your buck so to speak.  But, here’s another way you will be saving money by eating healthy – future healthcare costs! Taking care of yourself now through proper diet and exercise may prevent cardiovascular and heart disease, diabetes and cancer which are four of America’s biggest killers.
"Many thanks to Allah who gave us life after having given us death and (our) final return (on the Day of Qiyaamah (Judgement)) is to Him"

Offline Shamim Ansary

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Re: Save Money...Sell Your Poverty
« Reply #2 on: May 15, 2011, 02:46:46 PM »
Have You Tracked Your Spending

It’s an important question to answer. Tracking your spending may seem simple, but it can make a big difference in your personal finance. The sad truth is that many people don’t realize they are having financial problems until it’s too late. The simple habit of tracking your spending can help you avoid such a situation.

Make no mistake: even if you earn much, not tracking your spending could easily lead you into financial trouble. One example is Michael Jackson. He was a great artist and left a great music legacy. We can all learn from his passion and dedication.  But, just as with me and other people, there are also things from his life that we should learn not to do. One of them is in personal finance. Here is what The New York Times wrote about it:

    “It’s all a mess,” said one executive involved in Mr. Jackson’s financial affairs who spoke on the condition of anonymity out of respect for the entertainer’s family. “No one really knows what is going on, but these are early days.”

It’s estimated that he had between $400 million to $500 million in debts.

But why did it happen? How could someone who earned so much have such a big debt? The New York Times article explained why:

    “He never kept track of what he was spending. He would indiscriminately charter jets. He would buy paintings for $1.5 million. You couldn’t do that every other week and expect your books to balance.”

This is an important lesson for all of us. No matter how much you earn, if you don’t track your spending then your personal finance would be out of control. Tracking your spending is essential because it gives you awareness of your financial situation. It helps you see whether or not you spend less than you earn which is arguably the most important rule to follow in personal finance.

So, if you haven’t tracked your spending, today is the best day to start. You can use a spreadsheet or a personal finance application like Mint and Quicken. It does take some effort, but the financial awareness and control it brings far outweigh the effort. Furthermore, getting your financial life in order is a good way to also get other aspects of your life in order. Why? Because not only having good financial habits frees you from financial worries, but also it can develop positive attitudes like discipline and responsibility. These attitudes will affect other areas of your life beyond personal finance.
"Many thanks to Allah who gave us life after having given us death and (our) final return (on the Day of Qiyaamah (Judgement)) is to Him"

Offline Shamim Ansary

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Re: Save Money...Sell Your Poverty
« Reply #3 on: May 15, 2011, 02:50:17 PM »
5 Surprise Expenses You Probably Have not Accounted For

The frustrating thing about money is that it is inconsiderate. Money doesn’t care whether you’re struggling financially, so you can be hit with surprise expenses whether you have the money to pay for them or not.

When it comes to personal growth, your personal finances is not the most inspiring of subjects, but planning for the future is an integral part of developing your maturity and ability to cope with life.

The truth is, most of us have less in savings than we ought to in order to cope with life’s surprises.

What follows are five examples of potential financial surprise that could make things difficult for your bank balance, if you were to find yourself unprepared.

1. Car repair bills / Car accidents

Every single time I have been forced to spend money on a car, whether it was simply new tyres after a puncture or a new oil sump for my rusty first car, the expense always seemed to come at a time when my pockets felt a little light. Every time I would end up putting the cost on a credit card, borrowing money or putting off repairs until I could afford them.

Of course, there were potential problems with all of these solutions, not least putting off repairs – which is a dangerous thing to do.

2. Losing your job

Losing your job through redundancy or by getting fired is not generally something you can foresee, and both circumstances could put a tremendous strain on your finances.

With the current state of the world economy, many firms are being forced to look at cost-cutting measures like compulsory redundancies.

3. Mortgage payment increases

We tend to have a general idea of our monthly outgoings as a fixed sum, but there are factors beyond our control which could see an expense like mortgage payments increasing.

Changes in interest rates could mean bigger monthly payments and less disposable income available to you. Would you have a savings account you could dip into should this happen?

4. Death of a loved one

Perhaps the worst surprise that life can throw at us is the death of a loved one.

A death in the family is obviously an emotionally distressing time, and you will likely have to deal with feelings and processes you have never experienced before, like planning a funeral. Unfortunately these things incur costs that you can’t really account for.

5. Long-term illness

Our health tends to be completely unpredictable too. If you found yourself unable to work because of an extended period of illness then you could be hit financially, depending on your employer’s policy on sickness leave.

Being prepared

These are just five examples, and as most of us know there is any number of other nasty surprises waiting to hit your wallet.

Received wisdom indicates that you should ideally have six months’ of your current salary put aside in case you lose your job.

For most of us, this is a huge amount of money to have to start building up. It cannot be achieved by simply trying to keep some money aside every month from your disposable income. Instead you might think about opening a savings account with a high interest rate to earn money back on the cash you invest, hopefully helping you amass this kind of emergency fund much quicker.

Although it may go against the grain when it comes to personal growth, personal finance may be an area in which it pays to be a pessimist. At least, by planning for the worst you can hope for the best.

Source of all articles:
"Many thanks to Allah who gave us life after having given us death and (our) final return (on the Day of Qiyaamah (Judgement)) is to Him"

Offline goodboy

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Re: Save Money...Sell Your Poverty
« Reply #4 on: May 15, 2011, 05:36:45 PM »
Great posts..............Mr. Ansary.

 I really liked these two topics:

6 Tips for for Eating Healthy of a Budget & 5 Surprise Expenses You Probably Have not Accounted For.

Thank you.
Md. Abul Hossain Shajib.
Department of BBA, Sec:B.
25th Batch.
Daffodil International University.
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