Personal finance for the financially clueless

Personal finance for the financially clueless Personal finance for the financially clueless It’s Tax Day today which means there’s a good chance that pretty soon you might have a couple of bucks coming your way in tax refunds. Then again, maybe not.Not everyone is raised to be financially savvy, but that doesn’t mean you’re forever doomed to make poor financial decisions (it’s okay to groan at my bad pun).If you’ve vowed to be smarter about both your spending and saving, have a look at some of these tips from personal finance experts who will inspire you to unleash your own inner Suze Orman: Make savings a game:  â€œWhen planning dates with a spouse or significant other, challenge them to plan a fun date night on a shoe-string budget” advises Neil St. Clair, investment and financial expert and President COO of Karma Network. Realize that shoe-string also means different things to different people. St. Clair and his wife challenge one another to plan Saturday nights out in NYC for under $100. He said that they looked at how much they typically spent, and then put the difference aside in a saving account. They do this several times a year, and he says others will be surprised at how quickly it can compound. Great advice, but if you’re more of a small-town person, you might be able to spend even less and save more. Join a credit union: “One of the easiest ways to save money is to consider joining a credit union” offers Terry O’Rourke, President/CEO at United Federal Credit Union. O’Rourke says “A lot of times, we can offer incentives and competitive rates that big banks can’t touch.” Also, credit unions are not-for-profit, so “you will also see reduced fees and charges relative to the traditional banks.” Since credit unions charge fees to cover expenses only, you might see a big difference on fees and when applying for a loan or mortgage. O’Rourke: “Even if you’re not just starting out, we know that the average person spends more than $300 in fees every year. The easiest way to save is to eliminate these useless costs.” Also, try to find a credit union with great interest rates. “Too many people discount fees and interest as secondary concerns,” O’Rourke said. “In reality you can easily save yourself hundreds every month by making sure you’re being smart abou t how you’re spending (or not spending) money.” Set micro savings goals:  This one speaks loudly to me, since I love the idea of being able to save in small increments. St. Clair said, “If you’re a coffee addict like me, that $6/day habit adds up to big bucks every 30 daysâ€"more than $100/month in some cases.” He doesn’t want to deprive you of your caffeine though “Substitute a smaller size or lower cost option. Set a savings goal of $1/cup. That could be a $20/month saving or more than $200/year!” Use tech to amplify savings: St. Clair says “Sites like Acorn or Mint can help you organize your finances and even invest your spare change. Tech can be used to get a good, clear understanding of your holistic financial picture, and can often be used to provide recommendations on how best to reduce your costs. It will also keep you honest â€" a computer doesn’t lie to itself if you missed your goal.” If you’ve been putting off keeping track of what you spend or save, now’s your moment. Treat your personal finances like a business: St. Clair advises running an analysis of your bank and credit card statements and categorizing just like a business would. “Set a goal of reducing expenses across any discretionary categories (e.g. restaurant dining) by an achievable figure month-over-month â€" say 5%. Then take that 5% and put it aside in a rainy day savings account.” This won’t hurt too much and might be the start of your rainy-day/emergency fund. Cut the cord on cable or satellite TV services: Your average cable or satellite bill can top $100/month. But really how many of those channels are you watching? Go with a service like Roku or Sling and you can save a significant amount of money month over month. If you’re looking for some basic spending better rules to live by, Graham Summers, MBA is President and Chief Market Strategist of Phoenix Capital Research shared these: Your rent/mortgage payment should be 33% of your paycheck or less. Find a place that fits that metric. Otherwise, you’re living beyond your means. Discretionary spending/buying fun items should be less than 10% of your paycheck. Anything more and you’re spending too much. You should be maxing out your 401(k). Put as much into it as possible. At the very least, you should be socking away as much as your employer is willing to match. You should be saving at LEAST 10% of your salary per year. Only eat out at a restaurant/bar three times per week. Do not let yourself break this rule.