As you know the economy is on a downturn, the stock market is anything but stable, and real estate prices are dipping. If you are not worried about money you are in the minority. With so much going on around you it is important to keep one thing in mind: now is the time to save. By saving now you can protect yourself against future problems. It may not be fun to save all your money, and you don’t have to stock away every last dollar. But you definitely need to build your emergency fund/savings to ensure that you could get by should something bad happen to you or your finances.

There is no denying that it can be difficult to save. In fact, some people don’t have any money leftover at the end of the month; or so they think. No matter your financial situation you should look for a way to save each month. This does not mean you have to save thousands. Anything is better than nothing, and once you get on a roll you will see just how beneficial this can be.

Where are you going to save your money? Many people have money to save but don’t know where to put it due to the bad economy. Obviously, investing in the stock market is not the best idea for everybody at this point. If you are building an emergency fund you want to keep your money as liquid as possible. For this reason, the best place to save is in a high yield online savings account. This allows you to not only save but to also earn interest.

No matter who you are or what position you are in now is the time to save. The more you save each month the better. Keep this in mind when setting and managing your budget.

What is the status of your emergency fund? There are a few common answers to this question. Some people have enough money in their emergency fund, some are working to save more, and others don’t know what this is. As you can imagine, the best position is to have plenty of money in your emergency fund. The worst position is to have no money saved.

How much money should you keep in an emergency fund? This all depends on your situation. Many experts say that you need to have at least six months worth of living expenses in this fund. Will this work for you? Some may want more, some may want less. Either way, you need to know what you are comfortable with and then do your best to reach this goal.

If you don’t have an emergency fund now is the time to start saving. You never know when something is going to come up that will call for a lot of money over a relatively short period of time. For instance, what would you do if you lost your job? While this is never good, if you have an emergency fund you at least have money to fall back on until you find a new job.

Where should you keep your emergency fund? You want to make sure that this money is liquid. The best place to keep an emergency fund is in a checking or savings account. To make the most of it look for an online savings account that allows you to earn a good return on your money.

So what is the status of your emergency fund? If you don’t know the answer to this question there is a good chance that you are running behind. Do yourself a favor and sure up your emergency fund as soon as possible. This is not a decision you will regret.

Gas prices are as low as they have been in months, and there is a good chance that they will continue to plummet. Just a few months ago a gallon gas was $4 in most parts of the country. Fortunately, the national average is now below $2. While this is all well in good, the question you really need to answer is: are you using low gas prices to your advantage?

Everybody knows that the economy is bad. And perhaps the only good thing coming from this situation is lower gas prices. If you were paying $400/month for gas a few months ago you are probably paying closer to $200/month now. What are you doing with the difference? Since the economy is in a downturn and there is a lot of uncertainty it is important to put this extra money to good use. For example, you could save it in an emergency fund or quite possibly put it towards debt. No matter what, make sure you know how much money you are saving on gas as well as how to best use this extra cash.

Of course, just because gas prices are lower does not mean that you necessarily have to drive more. Instead, stick with the schedule you were following when prices were high. This will allow you to save more money, and if prices begin to increase once again you will not be in for a big shock.

All in all, low gas prices are something to be excited about. Make sure you are using this to your advantage from a financial standpoint.

Is your mind always at work when it comes to your finances? If so, you may find it difficult to decide when to save and when to splurge on something you really want. Unfortunately, if you make the wrong decision you could end up spending money you don’t have and/or finding yourself with no savings.

First things first, if you don’t have any money saved you should hold off on splurging. Simply put, you need to have an emergency fund above all else. This is a safety net that can come to your rescue should you lose your job, run into an unexpected expense, etc.

But I do have money in the bank? In this case you will have more to consider. Do you have enough money saved to be comfortable splurging? Only you can answer this question. Once you take a detailed look at your finances and what you want to purchase you should be able to answer this question and decide whether or not to save or splurge.

What are you splurging on? Obviously, there are some purchases that are smarter than others. If you are splurging on something you both want and need you may not have to do too much “self convincing.” But on the other hand, if you are splurging on something you can do without you may find yourself wondering if you should wait.

Deciding when to save and when to splurge is far from an exact science. The best thing you can do is know your financial situation, and act as responsibly as possible. It may not be fun to save your money but if you want to eventually splurge you need to have a large enough safety net to protect against potential issues in the future.

photo credit: krisdecurtis
With Christmas rapidly approaching, many people might be getting worried about how they’ll let their finances stretch to buying the expected Christmas presents this year. Don’t blow the credit card balance on gifts; instead consider these tips on budget Christmas presents:

• Agreee amongst your family that either you won’t buy gifts for each other this year, or everyone will only buy one gift - draw names out of a hat so that everyone is randomly allocated the person they should buy a gift for. Make sure you agree on a price limit (and not too high, or it defeats the purpose).
• Speaking of price limits, if your family or close friends all still want to buy gifts, think about agreeing on a maximum amount they should spend - this is especially useful if income levels differ widely amongst the group, so those with lower incomes don’t feel they have to spend a lot to “keep up” with the others.
• Consider making home-made gifts - if you have a crafty talent, create personalized gifts, or even just do some baking. There are very few people who don’t appreciate some home-made cookies, especially if you wrap them nicely and make it look personal. Not only is it cheaper than buying ready-made cookies or cakes, it also shows that you put some time and effort into the gift.
• In large families, decide on an age limit for gifts - for example, only children under 16 will receive gifts this year. Many families consider that being together at Christmas time is much more important than receiving gifts, and the real joy of the season is really in watching the younger children enjoy it.

If you’re planning a long trip or even thinking of backpacking around Europe or Australia for a while, it doesn’t have to use up every penny of your savings. Saving some cash on your trip is relatively easily done if you follow a few of these tips:

• Get cheap flights by being totally flexible about timing, flying into cheaper airports (usually further away from the city, but check the transport costs and it might work out a whole heap cheaper), and subscribing by email to airline newsletters which often offer cheap deals if you book quickly.
• Do your research thoroughly on hotel or hostel costs, and try last minute websites to get an extra cheap deal.
• Shop around to get the best value insurance, and check with your credit card company which sometimes offers travel insurance if you buy stuff like your flight with your credit card.
• Don’t buy new equipment if you don’t absolutely need it - if you’re going camping, for example, look on eBay for tents that other travelers no longer need, but might not have used much.
• Use public transport as much as you can, or do thorough research on the price of a hire car.
• Eat from supermarkets if you don’t have the budget to eat out at restaurants every day of your trip. Your waistline will probably thank you too!

People are giving us advice on saving money everywhere we turn these days - but I know I can use it so I try to listen. Some recent tips on slashing costs on big ticket expenses caught my eye and some of them sound practical and doable:

• Raise your deductible on your household insurance to reduce your premium, and ask your insurer for a discount if you have multiple policies with them.
• Make sure your automobile insurance premium is lowered for every safety feature your car has (air bags or anti-theft devices, for example) - if in doubt, ask.
• Grocery shop more carefully, and to a menu, so you don’t waste food - experts estimate that we throw away a quarter of what we buy - that’s expensive!
• Delete premium channels from your cable TV package and cancel unnecessary (and often expensive) extra options on your cell phone.
• Buy children’s clothes from sales racks or second-hand, especially considering they’re going to grow out of it soon.
• Check all the different ways you can reduce your energy use so that your utility bills can fall - like sealing up leaks and lowering the temperature on your hot water system.
• Use coupons to get cheaper entertainment options (two meals for one, or cheaper movie tickets) and consider staying in with a DVD and a pizza just as good as going out to the cinema.

Are you finding it difficult to save money? In this case you need to change the way that you approach saving. There is more than one way to save, and it is up to you to decide what will work best for your financial situation.

Below are four ways to change (and better) the way you save:

1. Save first, put money elsewhere second. This is a great way to ensure that you are saving money each month. Even if things are tight you should always put money away to save before tackling other expenses and miscellaneous items. This will force you to cut out expenses that are not as important.

2. Automate the saving process. You can do this by having a certain percentage of money taken out of each paycheck. This is a way of “paying yourself first” that has been proven effective over the years. If you don’t see the money you can’t spend the money.

3. Open an online savings account that offers an above average return on your money. Many online banks offer interest rates of three percent or better. This is much better than any rate you would find at a local bank.

4. Utilize all of your options. There are many investment vehicles including savings accounts, CDs, the stock market, etc. Where you put your money is up to you. You will find that some options are less risky than others, and some offer more chance for a big return.

The four tips above should allow you to save more money on a regular basis. If what you are doing right now isn’t working, consider using one or all of these tips to get on track.

photo credit: wilhei55

photo credit: fabbio
If you want to have friends around to celebrate some special occasion but feel that you just can’t afford to throw a party right now, then maybe you just need to re-think what this party is going to look like. There are definitely ways you can still enjoy a fun party but not spend so much, and especially in economic times like these, no guest is going to complain. (more…)

German supermarket chain Aldi looks like they are trying to take over the world, and it’s true that they’re not your ordinary supermarket chain. Ginger from Girls Just Wanna Have Funds tried out Aldi recently after hearing from so many people that they’re cheaper than regular supermarkets and figured that her bill for two weeks of groceries would be $75 at Aldi as compared to something like $350 at Safeway or Trader Joes.

Aldi does a few things differently to be able to offer much cheaper prices, some of which I like and some I don’t. For a start, they don’t waste money on making the shop look attractive or with extensive shelving - the products are pretty much offered in the pallets they arrived in, arranged on the floor and with little effort (or expense) needed for re-stocking. I like this - why spend my precious money making the supermarket look great when I’d rather get my groceries cheaper.

Their other strategy is to have a much smaller range of products. You often can’t choose the size of the product you want, or there is only one choice for a particular item. When I lived in Germany, the home of Aldi, I sometimes shopped there but too often realized I couldn’t actually purchase what I was looking for. Perhaps Aldi’s not the place to shop with a list, but if you’re happy to go in and buy whatever they’ve got available and create a menu out of that, then you’re likely to save a lot of money.