Monthly Archives: January 2016
As the holiday season came upon us and the weather went from tolerable to unbearable, I found myself seeing more movies than I would have the rest of the year. I suppose it is a good time to see movies, as the potential Oscar winners are released, so the quality of films should be greater, but I found myself wondering, is it really worth going to the movies? Not only in money, but also time, which I feel as just as valuable. If you go to a first-run, primetime weekend show, it is $10 a person, so for a couple, $20 to get in. Add in another $25 for two alcoholic drinks (still $12 for a couple of soft drinks), then if you want popcorn or candy, another $10 or so. So for a two hour experience, was it worth $50-60? It probably was not. Of course you could do a matinee show, sneak in your own pop, or alcohol shooters to put in, and skip the popcorn, and maybe see a movie for $10 total, but what is the fun in that? I am not sure what the correct price point should be to see a movie, maybe $8 a person or so, which is not much of a difference, but the amount it costs of popcorn, candy, or pop, is just ridiculous.
There are so many bad movies that get released every week, alone in a year, so I do find myself going to less movies, not only because of the price, but also I find it more and more hard to sit through two hours of a bad movie, only to leave and say “eh, it was alright”. To me, that is not entertainment. Of course not all movies are bad; I do enjoy comedies, and I do make sure I see the potential award nominated movies, and of course I had to go on opening night to see the new “Star Wars” movie. I know movies are made to make money, so the endless amounts to sequels that come out, and the majority of the movies that are released are some form of a super hero, so unless people stop going, we can look forward to years and years of super hero sequels, reboots, and entirely new casts playing the same characters. For my money, I think I will wait for most to arrive to rent On Demand or showing on the streaming services.
Lenders see credit score as a major factor in getting approved for a home loan, auto loan, personal loan, and additional credit cards, so it is important to save a solid credit score. It does not have anything to do with income level; someone that makes $30k a year could have the same credit score of someone who makes a $100k a year, so although both may not get approved for the highest line of credit, having a good credit score allows the same financial opportunities. One way to start would be to pull a copy of your current credit report, as you can pull a free copy once a year from the three major credit card bureaus to make sure your credit history is up to date and, with the amount of fraud these days, accurate. Just because you may have made mistakes in the past, eventually with years of hard work with debt payoff and on-time payment, previous poor credit card judgment can be removed with debt payoff and steady on-time payments.
Being responsible with credit is very important to moving in the right credit direction. If you do not have self-discipline to stop using cards, then they should be cut up right away to prevent use. If you find yourself charging more than what you can pay off in a month then you need to stop using immediately, as statement balances carrying over with interest will only continue to set you back. Next, begin a strong push to pay off this debt. Pay off the card with the highest interest rate first. As you stop using the cards and pay down each month, it is important that each payment is made on time, as payments that are thirty days late is reported to credit bureaus, as well as being late could jump the APR to ridiculous levels.
Now that you have a plan of attack and begin a course of action, you might ask when you can start to see positive results. Although it may not seem like it right away, any reduction in debt each month is a positive. Patience is important, as credit scores will increase each month as debt is reduced and payments are made on time. Going from a ‘poor’ to an ‘excellent’ score will not happen right away, but with the right discipline, your credit mistakes will be a financial burden of the past.
Not everyone has the same financial goals. Some may want to build up a savings account, or save for a home or vehicle. Figuring out your monthly expenses, both necessary and spending money, while still being able to contribute the most to savings is not always easy, but a budget is needed to stay out of debt increase contributions to savings. If you find yourself overspending and not having enough left over each month, take a look at how much you are spending eating out, going out to bars, and any other expensive habits you may have, and reduce spending to stick to your budget. If you start smaller and gradually increase, it may not be as noticeable.
The only way to find out what you’re spending money on is to keep track. You would be surprised that spending a few dollars on a coffee, fast food, or eating out for lunch because you were lazy to pack, are a few things that quickly can add up over a month, let alone a year. Not to mention going out for dinner, spending a few nights a week at the bar. If you do not believe me, check bank and credit card statements each month to analyze spending. Take a look at the items that you could have gone without and add it up, it might make you cry.
Having a budget means you have to stick to it, so it is going to take some discipline. It does take patience and requires flexibility as there can be many unexpected charges that come up, or if anything should have with to your income level. A good way to start would be to try only using cash for spending throughout the entire month. Take out a pre-determined amount of money and only use that amount. Having using real money instead of a credit card with virtually endless limits could limit any potential shopping sprees, reduce impulse buys, and keep priorities in line to stick with your spending limits. Make sure the savings account is not ignored as well and stay focused on contributing, avoiding any dipping into it. The burden does not only have to fall on you, so make sure you make it a team effort with the budget and involve your significant other so that way you can rely on each other for support, pushing each other to be financially successful.
The holidays are over, the bills are starting to come in, and as you start to prepare for tax season, you may be looking at your bank account balance, 401(k) statements and wonder where did the year go and you are not as ahead as you wanted to be. Are you spending too much and not saving enough? The first step is to organize your finances. List out all of your monthly expenses, how much you are contributing to savings accounts, and work to have a little more left over each month. Maybe you have debt that you have been paying down, which should also be a priority to get rid of. In 2016, the way to improve your finances is to reduce spending, increase savings, and contribute more toward 401(k).
A good way to reduce spending is to look at your expenses and see where you can cut corners. Shop around for different phone carriers, cable providers, car & home insurance companies, or if mortgage rates are lower than you currently have, it may be time to refinance, all of which could save you hundreds of dollars each month. With the leftover money you need to increase your savings. If it seems difficult, gradually increase direct deposits, and any merit increases received, increase savings by that much so you will not notice a pay increase and tempted to spend it. The next step would be to be further ahead to long-term financial planning, increasing contributions towards 401(k). First rule would be to contribute as much as your employer matches or you are just throwing away free money. 401(k) might not be the first on your mind as maybe you are just getting by paycheck to paycheck, or more interested with paying bills, putting money in a savings account, and having money left for entertainment, but planning for your future should be a priority, especially going into your 30’s and beyond.
One thing we are not taught at a young age is personal finance, maybe we should, or maybe I did not listen, but it is never too late to start. Debt can be a scary thing, feeling that you may never get out of it, getting by without savings accounts increasing, but with discipline and patience, you can turn things around, but it has to start and end with you, so take notice in 2016 to improve your finances.