If you’re interested in saving money or getting out of debt, then you’ve probably heard this advice a hundred times: “Skip your daily Starbucks coffee and you’ll save a heap of money per year”. It’s sound advice, but a recent discussion at The Simple Dollar questions whether we should be focusing on small steps like these or big steps like - as in their example - selling the jet ski we only use once a year - and probably saving more money than we would by foregoing the daily coffee at Starbucks.

But the summary of the discussion is this: the best way to personal financial stability is to take a combination of small steps and big steps. If you take a lot of small steps, like brown-bagging your lunch instead of buying out, skipping that coffee, and hiring DVDs instead of going out to the cinema, then they will add up to be the equivalent of some of the big steps. If, at the same time, you also take some big financial steps, like downsizing your home or surviving with one car instead of two, then you’ll be accumulating a whole lot more savings there.

In combination, not only will you learn to live more frugally, but you’ll be feeling more secure because you are likely to get out or remain out of debt, and to be able to save towards a your retirement, too.

If you’re one of the many people looking for work at the moment, it won’t be a surprise to hear that this is a particularly tough time to be doing so. At CNN Money they have listed a few key tips for particular groups of job hunters, and perhaps one of these will be the tip you need that snags you a good job.

• For the older unemployed: the statistics are scary, with 9% of people over 50 losing their job in the past year - but check out AARP’s website which collates all the benefits you could be eligible for, and look at Retirement.com to see a list of companies that are more likely to hire older workers.
• For the younger unemployed: teenagers without any work experience are obviously finding it especially hard to find work in the current economic climate. Take advantage of your flexibility by being able to work nights or weekends without family responsibilities getting in the way; and don’t ignore internships as a great way of getting your foot in the door.
• For everyone: take this chance to gain more skills and thus make you even more employable. This is the time when many kinds of skills courses are out there recruiting trainees and students because they know this is the time they’re most needed.

photo credit: lumaxart

When you have a child, the big decision is how soon, or if at all, to return to the workforce. Of course, there are plenty of personal factors involved here, but one major influence is often the financial situation. But make sure you take into account all the costs before deciding whether or not returning to work makes sense from a financial viewpoint:

• Calculate child care costs: This can quickly reach into the thousands of dollars. Unless you’re really career-focused, you want to make sure you’re earning significantly more than you’re paying to put your child into child care. And in this case, more children make it more expensive.
• Calculate extra costs of being at work: For example, the quick coffee that you buy on your lunch break (even if you are frugal enough to bring your lunch from home); and the extras you need to be able to be at work, for example, work-style clothing. On top of that, factor in the costs of transport or commuting both to the child care center and to your place of employment.

Once you’ve gathered this information accurately, compare that to the income you will receive by returning to work - this makes at least one aspect of the decision a little more grounded in reality, because it’s not an easy decision for many parents to make.

Everywhere you look, financial planners and economic advisers are telling us to save money for our retirement and our future. But the younger you are, the harder that is to really imagine - why should we put money away now that we can’t access for another thirty or forty years? What if I’m dead before then? What if something happens to that money and I lose it all anyway?

With these thoughts in mind, it’s useful to look into the psychology of saving for retirement. Obviously, our real “self” changes a lot from when we start working, perhaps as a teenager, and as we go through middle age, have a family, and then start looking forward to retirement - and even our attitude to money and savings will be forever changing.

Perhaps the best advice is to try to get outside of your own mind when you are looking into retirement planning and financial issues. Pat Regnier from Money Magazine put it really well:

Imagine that a court put you in charge of the finances of an elderly uncle you don’t know well. You’d set aside your own tastes and try to make prudent decisions for him. Do the same for you.

If you haven’t jumped on the electronic filing bandwagon yet - that is, filing your taxes online in a paper-free way - then there are many good reasons to do so:

• You get your return faster - it can be as quick as two weeks, whereas the minimum time for a paper-based return is six weeks.
• You avoid mailing problems like your return getting lost in the mail, your tax check getting stolen, or any other kinds of delays. And you skip the line at the post office.
• You can do the filing at any time of day (or night).
• You avoid many mathematical errors because the e-filing software will pick up discrepancies; similarly, you don’t have to rely on data entry operators at the tax office to input your data correctly.
• You save paper and printing costs, and help the environment as well as yourself.
• You’re less likely to miss deductible items if you follow question by question formats in tax filing software.

While some people still are unsure about the security of sending this kind of personal information online, in reality, it’s probably safer than having pieces of paper everywhere with the same information on. Try e-filing for this year at least and see if you like it better.

As many people have personally experienced, those people who are closest to retirement are one of the groups who have been hardest hit by the economic downturn. That means there are adult children who are particularly worried about the state of their parents’ finances, and are looking for ways to be able to help them out - even though they’re not in great financial shape themselves.

A recent discussion at CNN Money looked at helping out a 50-year-old parent who doesn’t have any retirement savings, but the problem is even greater for adult children with parents approaching their 60s.

Some of the problems involve actually convincing your parent that they need to be serious about saving for retirement - for the double reason of their own financial security and making sure that they don’t later become dependent on your finances. Parents don’t usually like to learn from their children, no matter how old they are, so the advice is to introduce the idea of retirement savings as tactfully as possible and with an information focus - educate them (carefully) about 401(k)s and how they could be saving more. Encouraging a parent to set up automatic deductions from their wages to put into savings is also a useful step. But above all, remember they are your parents and probably the hardest of all to advise.

If your mortgage interest rate has been reduced recently, you might be enjoying paying less each month. But what are you doing with the extra money? Since most of us were surviving before while making a higher mortgage repayment each month, we could continue to survive on the same income - and we should find a good way to invest the extra money we’re saving.

One obvious thing is to continue paying the mortgage back at the same repayment level - or depending on your loan set-up, paying the extra amount into an off-set or savings account to use to make a lump sum payment on the mortgage at some stage. This will help you save interest and years off your loan.

Alternatively, if you have credit card or other personal debts, use the extra money you are saving to pay off these debts more quickly. If you are in a better position and are debt free, then the money you are saving by having lower repayments on your mortgage could also be directed into your retirement savings accounts. It’s up to you to decide where the money is most needed, but the most sensible thing is to choose one of these options rather than just spending it as an unexpected windfall.

The small decisions on how exactly you set up your mortgage seem to be changing, according to a CNN Money report. Should you pay up-front points to reduce your rate? Should you make more than the minimum down payment? And should you lock in your mortgage interest rate?

These questions used to have fairly standard answers, but these days things look a little different. This is what some of the experts are now saying:

• Up-front points: Now, it’s often worthwhile to do this with lower interest rates in the offing. In particular, if you are fairly sure you will keep this loan for some years - which is more common at times like this, because refinancing is less likely - then do the math and paying a point up-front will often pay for itself within a couple of years and then the money you save is all a bonus.
• Minimum down payments: Some home buyers have been burnt by making large down payments and then seeing their home equity (and their cash down payment) shrivel up. That means if you’re buying in a market that is still in decline (or could be), don’t make more than the minimum down payment to start with.
• Locking the mortgage rate: Surprisingly, many say that locking in now, even though rates are falling, is actually quite smart. Rates go up much more quickly than they go down and you’re likely to get caught out over the life of your loan.

If you’re trying to cut your grocery bills then you might benefit from reading this list of “cash trap” items - stuff that we are commonly buying these days, but we can definitely do away with. Apparently grocery bills make up about 30% of the average American’s monthly budget so saving money at the checkout is going to help with your financial situation. Check whether you really need to buy these things:

• Bottled water - in many places, the water from your tap is just as healthy (and sometimes healthier!) - and it is cheaper to use a filter to change the taste than buy it all bottled.
• Tomato pasta sauces - instead, buy a tin of tomatoes and throw in your own herbs and spices, and it will come out at less than half the price.
• Spice mixes - avoid “barbecue spices” or “Spanish spices” or whatever kind of mixes you see - check what the main ingredients are and they’re likely to be spices already sitting on your own kitchen shelf, and you can mix your own.
• Energy bars - in most cases these aren’t much healthier than chocolate bars, and they’re incredibly expensive. Take a piece of fruit instead.
• Bagged salad - yes, it’s quick and easy, but how long does it really take to wash a few lettuce leaves? Don’t pay someone else to do that unless you’ve got money to burn.

If your aim is to save money and stick to a budget, you might be surprised at how useful a credit card or a debit card can be. If you really can’t trust yourself with a credit card - that is, you run the risk of spending money you don’t yet have and not being able to pay the full bill at the end of the month - then definitely stick to a debit card. But the following principle applies in both cases.

The thing is, if you are paying for pretty much every item you buy on your debit or credit card, then at the end of the month you’ll get a handy statement from the bank that itemizes (at least) every store where you spent money, and how much. This is an excellent way to keep track of your money and see where you could cut down some of your spending.

Others agree that spending money with debit or credit cards helps you track your spending, in comparison to spending cash - there are often a lot of holes in the “where my money went” budget at the end of the month if you tend to use cash. So consider this when you’re contemplating cutting up all your cards - they might actually be helping you in some ways.