Finance

There are so many "How To" manuals, lists, books, and articles.  I have written many myself, but today I want to write a "How To Not" list about saving money.

How To NOT Save Money

• Take all of your spending money with you to the store
• Fail to prepare a spending plan BEFORE the money is actually spent
• Always pay retail price
• Buy it as soon as you see it – always give in to impulsive decision-making
• Always buy things brand new
• Buy expensive items that depreciate in value (cars, boats, Ty Beanie Babies, etc)
• Buy more items than one can possibly use "because they were cheap"
• Eat at restaurants for at least two meals every day
• Never ask for a better deal on insurance or have insurance policies at multiple companies

Any that you want to add?

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Introduction

This couple is THROUGH with debt!  They announced that they were breaking up with debt in October 2007.  They have agreed to share their Debt Freedom March with everyone in the hopes of inspiring others to do the same!

Here is this month's update.

Here is their updated Debt Freedom Date calculation …

 Month By Month Progress …

Sangl Says

Couple #2 have torched over $33,000 in debt in less than two years!  They are ON IT!  They have backed off on the debt pay-off plan for a little while because they are replenishing their emergency fund and their new baby fund!  Exciting times for Couple #2!

President Obama recently signed into law several new changes to credit card lending.

Here are some things that stand out to me:

• 80% of American households have a credit card – Half of those carry a balance
• "Some get in over their heads by not using their heads." – President Obama
• People under 21 won't be able to obtain a credit card without a job or a co-signer
• Customer must be over 60 days late before rates can be increased on existing balances
• Consumers must receive a 45 day notice and explanation before interest rates can be increased
• There are more than 700 million credit cards in circulation in the United States – more than two cards for every man, woman, and child

You can read about it HERE. (Thanks to Robin for the link)

Your thoughts?

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Have you ever heard about the "Rule of 72"?

It is utilized to quickly provide a rough calculation of how long it will take your investment to double.

You need to know three things to use the "Rule of 72":

1. The annual growth rate of the investment
2. The current amount of money invested
3. The amount of time (in years) the money will be invested

NOTE:  This rule does not include any additional contributions you make to your investment.

Here is how it works.  You divide 72 by the annual growth rate of the investment.  That tells you how many years it will take for the investment to double.  Then divide the number of years it takes to double into the amount of time the money will be invested.

Here is an example.  Let's say that you have $40,000 invested growing at an average of 8% a year and that it will be left alone for 36 years. We divide 72 by 8 and that tells us that the investment will double approximately every 9 years.  We divide the 36 year investment period by the time it takes the investment to double (9 years), and we find that the investment will double approximately 4 times.

So let's do the math and double the invest FOUR times.

Double Once:  $80,000 

Double Twice:  $160,000

Double Thrice:  $320,000

Double Four Times:  $640,000

Please note that this is an approximation.  The actual calculation is more difficult, but using the Investment Value Calculator HERE we find that the actual amount would be $705,793.

The point is to get a close approximation really fast. 

In a tight economic time, a lot of people are getting very creative about how they spend their time and money.  Let's face it, we all want to have fun – even more so when the money is tight and times are stressful!  Here are some ways that I have seen people having fun and it is costing them NOTHING (or next to it).

• Pick-up basketball games at the local park
• Library visits – just to peruse the books, magazines, and check out free movies
• Bake a new dish using stuff that is already in the pantry and freezer
• Take the train downtown to people watch – I LOVE doing this in Chicago!
• Pull up Hulu.com and catch up on some old shows (like T.J. Hooker!)
• Start a blog
• Dig up some trees out of a ditch and transplant them into your yard
• Take time to pet the dog and cat
• Volunteer at a local community center, food pantry, or animal shelter
• Clean up the yard
• Attack one room in the house and reorganize it

Those are a few ideas.  What are your favorite things to do that cost little or no money?

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