|One Percent at a Time|
By Melissa Tosetti
One of the goals of Savvy Living is to: Save 20% and spend the rest with abandon.
|Interview with Rachel Cruz (Dave Ramsey's Daughter)|
By Melissa Tosetti
A few months ago I was in my hometown of Fresno to give a speech when I saw a billboard advertising that personal finance author and radio host, Dave Ramsey would be in town on October 4th for a show. Ramsey is famous for helping millions of individuals and families get out of debt. Always on the lookout for new information on personal finance, I decided to go.
Since I was going to be attending the event, I thought I’d contact Ramsey’s public relations department to see if I could get an interview. Unfortunately, he was already booked for the day, but his representative asked if I’d be interested in interviewing Rachel Cruz, his daughter and co-presenter.
Rachel’s focus is on teaching her generation about money (she is 24). We made arrangements to meet before the show. Appreciative of the fact that in just a few hours she’d be standing in front of several thousand people presenting her material, I kept my questions as brief as possible – although I thoroughly enjoyed talking with her and would have loved to chat longer. She is very charming and passionate about the topic of personal finance.
What do you feel is the number one reason why people put financial security so low on their list of priorities, even though they know it’s important?
I believe there are two reasons.
1. Denial – People let momentum build up until they crash and have no choice but to face it.
2. It’s not laziness, but a sense of not wanting to take responsibility. People want to live in the moment and choose immediate gratification.
When you speak, is there one particular message you try to get across to spur people to take action?
My passion, especially for my age group is the topic of debt. “The borrower is the slave of the lender.” Debt is a thief. It steals our income. It’s crucial for my generation to stay out of debt. We think that we can’t go to school without student loans, but it’s doable.
If someone has finally decided to start addressing their debt, what is the first thing you suggest they do?
I have several suggestions.
1. Get $1,000 in a savings account before doing anything.
2. Stop going into debt. Cut up your cards!
3. List your debts from smallest to largest – regardless of interest rate.
4. Focus paying off the smallest debt first (paying the minimums on all the other debts). Put as much money toward paying off that smallest debt as possible.
5. Once that debt has been paid off, take the money you were putting toward that card and pay it toward the next smallest debt - continue this process until all of your debts have been paid off.
6. Pay off your debt voraciously!
Do you have any personal “Money Rules” for handling your day-to-day finances that you find particularly beneficial?
My husband and I sit down and work on our budget monthly. Our budget gets adjusted as needed. We then use the envelope system putting cash away for Groceries, Dining, Clothes, Personal Spending, Gifts, etc.
I’m a natural spender so the envelope system allows me to take care of my obligations and still spend money on what I need and then want.
Are there any memorable and inspirational success stories from graduates of Financial Peace University that you’d like to share?
We’ve had so many success stories, but my favorite is the family that has three kids (6, 8 and 12) who have done what is necessary to get out of debt. Every Friday my dad has Debt Free Friday on his show and this family will call and scream “We’re Debt Free”.
I want to tell those kids, “Do you have any idea what your parents have done for you?”
For more information about Rachel Cruz, Dave Ramsey or their live events visit DaveRamsey.com.
|Strive for Financial Leftovers|
As you know, the Golden Rule of Finance is to spend less than you make. How do you do that? Strive to have left over money in your checking account at the end of each pay period. Even if it is only $5, that means you have successfully spent less than you make.
|Save for Future or Pay Down Debt?|
During speaking engagements, I often get asked if it's better to pay down debt or to put money away for retirement. My answer is always - do both.
It's understandable to want to put all of your financial efforts toward paying off debt. However, depending on your financial situation, that could mean putting off contributing to your retirement for several years.
In a recent article, David Bach, one of my favorite personal finance authors, wrote about how it's equally important to pay down debt and build wealth. He suggests paying 50% of the money you "pay yourself" into a retirement account and 50% of it toward paying off debt.
I strongly suggest reading his article How to Save For the Future While Paying Down Your Debt. It's filled with solid information to help you create a strong financial foundation.
|Permission to Spend|
By Melissa Tosetti
One of the major goals of Savvy Living is to save 20% of your income so you can spend the rest with abandon.
If you do not give yourself some freedom around spending, there is too much potential to get frustrated and stop saving altogether.
|No Better Deal|
By Melissa Tosetti
Why pay retail when there is NoBetterDeal?
NoBetterDeal.com is an online store where shoppers can purchase surplus inventory and retail returns at prices below what even wholesalers pay.
They carry just about any product you can imagine including Computers, Electronics, Tools, Sporting Goods, plus items for Kids, Babies and your Home. Their prices are particularly competitive when it comes to televisions.
I recently spoke to Tom McElroy, NoBetterDeal’s vice president of e-commerce, and asked just how good of a deal can you get? The answer: 30% - 70% off the price of retail.
Many of the products they receive were originally returned by consumers experiencing buyer’s remorse or who found a cheaper product somewhere else. All items go through an inspection process and are priced according to condition.
A particularly good time to shop is mid-January when retailers receive returned products after the holidays. In fact, six to eight weeks after each season’s sales are good times to buy.
New items are uploaded every 30 minutes making the site addicting. Anywhere between 500 and 1,000 new products arrive every day!
There is a positive environmental aspect to NoBetterDeal’s business model as well. In addition to giving second life to the products they sell, they also liquidate broken products (that they can’t sell) to vendors who repair and then retail the items themselves. They prevent thousands of products from going into landfill.
Tom’s Insider Tips
You need to understand the lingo. There are six different categories for each of their products: New, Like New, New Box-Damaged, Open Box, Refurbished and As Is. Knowing the difference will help you to identity the best deals for you.
They offer a 30 day return policy and will refund your money, plus pay for return shipping. Products that have been refurbished have a 60 day return policy. They’re confident in their generous return policy as less than 2% of items sold are returned.
|10 Back to School Shopping Bargains - For Adults|
By Melissa Tosetti
Just about everyone can benefit from back to school sales - especially, this year as retailers are offering deeper discounts in an effort to woo consumers. So, what is out there ripe for the picking?
1. Purchase a year's worth of office supplies for half of what you would pay any other time of year.
2. Check out the juniors department and pick up trendy clothes and accessories to add a little spice to your wardrobe staples.
3. Now is the perfect time to stock up on athletic socks and underwear.
4.Dig past the purple and pink backpacks and you can find sophisticated bags that are worthy of taking to the office.
5. Now is also a great time to pick up a perfect lunch container. It will inspire you to take your lunch to work – saving you even more!
In an effort to reach out to college students, just about anything that can fit in a dorm room is on sale:
6. Pick up bedding and towels at good prices.
7. Not surprisingly, futons and desks are also on sale.
8. Mini fridges and microwaves won't get much cheaper than they are right now.
9. Storage containers and closet organizers can be found at bargain prices.
10. If you have been waiting for the right time to buy a new computer or laptop, now is that time.
Just because it is advertised as a back to school sale doesn't mean you have to be enrolled in class to take advantage of the savings!
|Savvy Savings - Going for the Gold|
By Melissa Tosetti
For most of us, watching the 2012 Games ignites a belief that anything is possible. Athletes at this level demonstrate that, through work and focus, there is no limit to success. That same kind of focus can be applied to your personal finances.
For athletes, it takes a strategy to get them from neighborhood gym to Games arena. And it’s no different when it comes to your money: Following these financial-related strategies can also get you from that anemic savings account to true wealth.
All six strategies are listed in my article Savvy Savings – Going for the Gold which is posted on Manilla.com.
|Spend Money on the Things You Want|
I had the pleasure of giving a speech to the California Asian American Government Employees Association.
As I started to talk about Savvy Habit #6 – Spend money on the things you want - one of the attendees raised her hand. She gestured toward my PowerPoint slide and suggested that I change the wording to read “Spend money on the things you need” not the things you want. She further pressed her point saying that if we all spent money on the things we want, we would spend too much – especially when it comes to kids because they want everything.
I told her that I appreciated her comment, but that the wording on the slide is intentional. The key is to know exactly what it is that you really want and not to spend on things that just catch your attention.
We don’t work at our jobs simply to pay the bills. Money should be enjoyed. Those who live The Savvy Life have created a strong financial foundation. They pay themselves first by putting money into a retirement and emergency savings account. On payday they take care of all their bills as well as fill their cars with gas and buy their groceries. Once those crucial items have been taken care of, they know exactly how much they have to spend on what they truly want.
Being savvy is a streamlined lifestyle. It’s about saving in the areas that are not as important to you so you can focus your spending on the things that are important to you. Know what you really want and stay savvy so you can acquire it.
* CAAGE presentation at the San Francisco Main Library.
|Is Saving a Struggle?|
By Melissa Tosetti
Are you still struggling trying to regularly save money without having to tap into it?
This often happens when we set the goal to save money. We decide to start saving 15% of our income right away. We are usually good for a week, maybe a month, but then find ourselves having to dip into that 15% that was put away. A savings account that you tap into on a regular basis is not a savings account. It’s a holding account!
Instead of striving to be an overachiever, make small goals. As suggested by Robert Kiyosaki, the author of Rich Dad Poor Dad, start by being an underachiever.
Begin with a small goal that you know you will be able to attain. For example, if you really want to start saving an extra $50 per paycheck:
Remember, only save what you know you can save. If you are pulling money from your savings account on a regular basis, you're not saving. If you find that you are dipping into your account, cut back the amount you are saving by a few dollars and when you are ready, you can increase the amount again.