Borrowing, or more exactly failing to take responsibility to pay back loans, is sinking Americans further in debt.
March 27, 2007 (Press Release) --
Catherine wants an addition on her house, Chris wants money to invest every month and Kim wants to help pay part of her children's college tuition. These people all ask the same question: How can I find the money?
The worst answer is also the simplest - borrow it. The best answer is also the hardest - spend less and save more.
Borrowing, or more exactly failing to take responsibility to pay back loans, is sinking Americans further in debt.
The Commerce Department reported last month that the savings rate for 2006 was a negative 1 percent, the result of people increasing their borrowing. The debt hole for Americans more than doubled from 2005's negative 0.4 percent.
Creating spending and savings goals are the safest way to find the money you want for what's important in your life, most financial experts say.
These goals don't begin with just juggling income and expenses, but rather require a head examination.
"Our financial well-being has little to do with the amount of money we earn," writes Alvin Hall, financial educator and author of a new book, "Your Money or Your Life."
Hall preaches that emotions are the determinant in our financial successes and failures. His book takes consumers through each stage of their life and how money fits in.
In his book, he writes about steps to take to learn your money habits, including:
Keep a diary of your spending and the emotions that go with it. At the end of the day, review how you feel about the expenses and whether you could have gone without.
Analyze one credit card bill from the past year. Put a checkmark by the purchases that still bring you pleasure today. You'll get an idea of what you can stop buying.
Test your money self-discipline. Experiment by giving up buying one item you enjoy. This exercise also increases your self-confidence when you discover you can do without the item. That, in return, restores the feeling of control and the confidence of having money to save for your goals.
Now, about putting those savings to work. Start a savings account to make monthly deposits toward your goal, then calculate the cost of that goal and the time period you have to save, advise the experts at Lowry Hill, a money management firm.
An online savings calculator makes this easy.
For example, if you open the account with $250 and deposit $100 a month, in one year you will have $1,474.24 at 3 percent interest. For a higher return, explore online banks that pay out more. Many of them can be linked to your local bank to allow automatic monthly transfers.
Plug your savings goals into the online calculator at www.dinkytown.net/java/Savings.html. It will tell what you will save according to the monthly deposit and interest rate, and how much you would need to save to meet a goal.
Author: Dan Serra
Source: http://www.mercurynews.com/
The worst answer is also the simplest - borrow it. The best answer is also the hardest - spend less and save more.
Borrowing, or more exactly failing to take responsibility to pay back loans, is sinking Americans further in debt.
The Commerce Department reported last month that the savings rate for 2006 was a negative 1 percent, the result of people increasing their borrowing. The debt hole for Americans more than doubled from 2005's negative 0.4 percent.
Creating spending and savings goals are the safest way to find the money you want for what's important in your life, most financial experts say.
These goals don't begin with just juggling income and expenses, but rather require a head examination.
"Our financial well-being has little to do with the amount of money we earn," writes Alvin Hall, financial educator and author of a new book, "Your Money or Your Life."
Hall preaches that emotions are the determinant in our financial successes and failures. His book takes consumers through each stage of their life and how money fits in.
In his book, he writes about steps to take to learn your money habits, including:
Keep a diary of your spending and the emotions that go with it. At the end of the day, review how you feel about the expenses and whether you could have gone without.
Analyze one credit card bill from the past year. Put a checkmark by the purchases that still bring you pleasure today. You'll get an idea of what you can stop buying.
Test your money self-discipline. Experiment by giving up buying one item you enjoy. This exercise also increases your self-confidence when you discover you can do without the item. That, in return, restores the feeling of control and the confidence of having money to save for your goals.
Now, about putting those savings to work. Start a savings account to make monthly deposits toward your goal, then calculate the cost of that goal and the time period you have to save, advise the experts at Lowry Hill, a money management firm.
An online savings calculator makes this easy.
For example, if you open the account with $250 and deposit $100 a month, in one year you will have $1,474.24 at 3 percent interest. For a higher return, explore online banks that pay out more. Many of them can be linked to your local bank to allow automatic monthly transfers.
Plug your savings goals into the online calculator at www.dinkytown.net/java/Savings.html. It will tell what you will save according to the monthly deposit and interest rate, and how much you would need to save to meet a goal.
Author: Dan Serra
Source: http://www.mercurynews.com/
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