Are you setting your budget for 2009? If so, there is a good chance that you are focusing closely on your expenses. After all, if you can cut expenses you can save money. But guess what? You may be leaving some things out that are very important. For instance, are you including insurance premiums? This is one (which is sometimes more than one) expense that many forget to write into their budget. Did you make this mistake?

Even if you only pay your insurance premiums once or twice per year, instead of monthly, you still need to budget for them. For instance, many people pay their auto insurance every six months. In this case you need to take the total amount due and divide it by 12. This will show you how much money you need to save each month for this particular expense.

If your budget does not currently include insurance premiums you should go back and change this. You don’t want your budget to be thrown out of whack because you left these important and often times expensive expenses out of the equation. A budget is only accurate if it includes all of your income and expenses.

Unfortunately, it’s probably too late for those who had planned to retire in the next couple of years and have just discovered the retirement savings have been so dramatically reduced that they will now have to work a few years longer - but for the next generation of workers, there are a few things you can do to try to avoid such a scenario. Of course, nobody has a crystal ball to see the economy of the future but The Simple Dollar does have some realistic suggestions on tactics that will help lower the risk of the same thing happening:

• Contribute a bit more than is “theoretically” needed to your retirement plan. Adding an extra 1 or 2% won’t make a big difference to your current lifestyle but the compounding effect will definitely help in retirement.
• Change your investment strategies throughout your life. Investing more aggressively when you are younger is fine; as you approach retirement, change your mix to be more conservative - you no longer have the time to wait for the economic cycle to go back in your favor. Some retirement plans will do this automatically for you if you choose their “target retirement fund” options.
• Don’t put any of your money into an investment that you don’t understand or that seems to risky to you. And don’t be afraid to ask plenty of other people for help and advice.
• Assume that you will also do some part-time work in the early years of your retirement, so there will be some additional income to help you out at the start. This is becoming increasingly common as people are still active and healthy when they reach retirement age.

photo credit: pfala

If you are like most people you have a certain amount of money to get you through the month. When this is gone you have three options: do without until next month, dip into your savings, or use credit cards. As you can imagine, number one is the best option. You never want to use credit cards to get by, and of course, if you can stay away from your savings, unless you have a very good reason, it is a good idea.

The best way to make your money last the entire month is to have a budget. This way you know how much income to expect and how many expenses you will be faced with. This may change every so often, but a basic budget is a great place to start. With a budget in hand you will know what to expect, and whether or not you will have enough money to get by. If you don’t, you need to make changes.

Do whatever it takes to make your money last the entire month. This way you don’t have to rely on savings or credit cards to get by. When your income is more than your expenses you should not have any problems.

photo credit: epicharmus

Do you have a financial plan? Better yet, do you have a financial plan that you trust? Believe it or not, the proper financial plan can and probably will save you a lot of money month after month. Those who don’t have a plan find themselves in trouble at some point in time. You can easily avoid this by being prepared for everything at all times.

Your financial plan does not have to be a long, complex document full of figures. Instead, it can include a basic outline of your budget as well as any goals you have for your money. With the proper financial plan you can save money by cutting expenses. To go along with this, you will also find your savings accounts growing because of the way you are treating and spending (or not spending) your money.

When you have a financial plan you will feel as if your money situation is in good shape. And remember, you don’t need to be rich to have a plan. Even if you earn minimum wage you can still devise a plan that will help you follow your budget, make the right decisions, and reach all your goals.

photo credit: Jesse757

Is online shopping something that you think about night and day? If you enjoy buying online you probably know that you are saving a lot of money. And while this is a good thing you should also know that staying safe is important as well. After all, saving money does not do you any good if you are jeopardizing your personal and/or financial information.

Here are a couple of quick tips that will ensure your safety:

1. Don’t use a computer that you are not familiar with. If spyware is installed you could have your information stolen in no time at all. You should only shop online from a computer that you trust; such as the one in your home.

2. No matter how much savings you are being promised you don’t want to buy from a store that you don’t trust. Stick to online outlets that are well known, and take security seriously.

These two tips, although quite basic, will help to keep you safe while shopping online. It is great to save money by using the internet, but don’t give up your safety along the way; it is not worth the tradeoff.

Having (and sticking to) a budget is one of the key ways to become debt free and manage your money well. Yet plenty of people who try to run their finances according to a budget fail, and that’s probably because they’re making common mistakes that mean failure is much more likely. Here are some key features of a successful budget to help you out when planning where your money will come from and where it will go:

• Make sure categories are appropriate for your personal situation, rather than just copying categories from somebody else’s suggested budget categories.
• Don’t forget to include expenditure that doesn’t happen monthly - for example, maintenance costs of your car which might only occur twice year.
• Ensure that you take account of cash that you spend as well, not just what gets put on the credit card or you write checks for. It’s easy to “not notice” the couple of dollars you spend on a coffee each day, but it adds up quickly throughout the month.
• Include “savings” as an expenditure category so you can “pay” into your savings account (or investment or emergency fund, for example) the same way as you would pay a bill.
• Don’t make the categories and information required for tracking your spending so detailed that you give up doing it because it’s too labor-intensive.

College students and anyone who has just turned 18 are targets for credit card companies looking for new customers, but if your 18-year-old is either still living at home or is financially dependent on you and away at college, then the decision on whether or not they should get a credit card fairly lies more with the parents. A recent post at About’s Financial Planning site had a good discussion about the pros and cons of giving a teenager a credit card, and the end result: usually, the best answer is yes, sign them up.

But of course, there must be rules to go with their new found credit freedom, if parents are the ones who have to foot the bill. For example, it should be used to pay for something that the parents have already agreed to pay for (gas for the car, for example) or only in case of emergency.

One of the biggest benefits of getting your 18-year-old a credit card is that they can begin to develop some credit history. Length of credit is an important factor in calculating credit scores so if they are able to use a credit card without creating debt from a young age, that stands them in good stead. But the key thing is that they should treat the card as a bill that must be paid off in full at the end of every month.

That all important credit rating can make a big difference to what loans you can get and how much interest you’ll pay, so these tips on ways you can ruin your credit can remind us of the best ways we can act to be sure we don’t damage our credit score, wherever possible:

• Don’t forget to pay a bill on time. Sure, if you can’t get to the post one day and your payment arrives a day late - one time only - it’s unlikely to have any effect on your credit score. But make it a habit to pay your bills on time or early.
• Don’t spend up to your credit limit. The ratio of your debt compared to your credit limits is a big factor in calculating your credit score. Experts recommend spending no more than 10% of your credit limit.
• Don’t cancel all your old credit cards. Keep one or two credit cards that you have a long history with as this will help your credit score.
• Don’t sign up to a dozen new cards a year. Ignore all the offers that land in your mail box. Stick with the cards you have and your credit score will like you a whole lot more.
• Don’t borrow money you don’t actually need just because somebody thinks it will help your credit score.

A new British book written by two women, Sheconomics, might bring some controversy for the two authors, Karen Pine and Simonne Gnessen. They’re claiming that women have inferior skills to men when it comes to dealing with finances and they’ve written this book to explain why this might be so and to suggest ways that women can change this.

According to Pine and Gnessen, the whole finance world is focused on men. The language used to talk money is a turn-off to many women, and the lack of emotion and feeling involved in financial decision making excludes women too. Many women even simply allow their partners to take control of their finances without giving it a second thought. But the facts are that many women will be single by the time they reach retirement age and should inform themselves now about how to manage their finances better.

One of the key points that the authors make is that emotion plays a part in finances, but it shouldn’t play too much of a role, and women need to recognize this. That starts even at the level of “retail therapy”, when women don’t mind spending money to cheer up their mental state, regardless of the financial impact. They suggest that women should take responsibility for their money and spending habits and learn more about investments and pensions.

And in their defence, they do recognise that there are millions of women out there who already do this very well! But they say that research shows there are a lot of women who don’t, and this book is for them.

photo credit: Material Boy

As a parent you are probably well aware that your child needs spending money from time to time. The question is: how much of an allowance does your child receive? This is up to you as a parent, and should be based on your beliefs, your child’s wants and needs, and of course, how much money you have. After all, if you don’t have enough money to give your child a large (or small) allowance you should stray away from this for the time being.

As noted above, it is your job to decide how much of an allowance to give your child as well as when they will receive this money. Some parents base this allotment on their child’s behavior or how many chores they do around the house. This is a great idea because it helps to teach your child that they need to do work in order to get paid.

But what if I don’t have a lot of money to give as an allowance? As you know, this is something you have to work into your budget. You should never feel obligated to give money that you don’t have. Instead, explain your situation to your child so they have a better understanding of what is going on.

How much of an allowance does your child receive? This can be a tough situation to deal with!