I separate my bank account into different sub-accounts so that I can easily track my money. For years, I have had a checking account and two savings accounts. One of my savings accounts was for long term savings (a car, a vacation, down payment on a house) and one was for earning extra interest until I found something I wanted to buy.
Occasionally, I would overspend the money that was in my checking and short term savings account and have to "borrow" money from my long term savings. Because I had set that money as untouchable, except for the purchase of my big ticket item, I charged myself a service fee to "borrow" that money.
For example, if I needed an extra $100 dollars to cover that giant shopping spree I went on last month (see my post on using my credit card), then I would transfer $100 from my long term savings into my checking account and pay the bill that was due. When I got my next paycheck, I transferred the $100 PLUS a $50 service charge back into my long term savings account.
Not only did this keep me from overspending routinely, it also allowed my savings account to grow more when I did have to cover a bill. Far better than putting my service charges in my bank or credit card company's pocket, right?
Thursday, July 26, 2007
Credit Cards -- Not the Wicked Witch
I routinely charge things on my credit card.
There... I admitted to it.
And while I know that I would spend less if I didn't buy on credit, I also see an upside to using my credit cards. If you have the willpower (or monthly income) to cover your credit card purchases, why shouldn't you take advantage of the convenience and the perks that come with swiping that pretty little plastic card?
Let me explain how I use my cards.
1) I have set up many of my bills to be automatically charged to my credit card. I no longer have to worry about due dates or late charges on those bills. I just pay my credit card bill once per month and I live a much simpler life!
2) I pay my balance in full EVERY single month. This is essential. Do not even attempt to use your cards like I do if you are unable to pay your bill each month. Many credit card users even go so far as to deduct the money from their checkbook when it is spent on their credit card. This way they can earn interest on their money and still have enough to pay the credit card bill comes due. It's a great way to keep your spending in check.
3) The original reason I started using my credit cards to pay for gas, groceries, etc. was that I wanted to earn the perks. As long as I pay off my bill each month, those perks are a wonderful treat for me. I've taken many, many mileage purchased flights thanks to my credit cards.
4) Regular use of credit cards, with on time payments, is good for your credit score. An excellent credit score will save you money on future car loans, mortgage rates, insurance rates, and more.
Please remember that credit cards do tempt people to spend more than they otherwise would. I know I am guilty of this. When shopping for new clothes or groceries, I do not tally the amounts in my head -- I know my credit card will cover the amount. I tend juggle after my purchases are made, often returning items to the store or "borrowing" from my savings accounts until I can earn some extra money. If you choose to use credit cards, please make sure that you have an idea how high your balance can get each month and still be paid off. If your budget is really tight, you might want to avoid credit cards for now.
As part of my financial fitness program, I am going to begin tracking my daily spending. You might want to try the same thing if your spending is out of control.
There... I admitted to it.
And while I know that I would spend less if I didn't buy on credit, I also see an upside to using my credit cards. If you have the willpower (or monthly income) to cover your credit card purchases, why shouldn't you take advantage of the convenience and the perks that come with swiping that pretty little plastic card?
Let me explain how I use my cards.
1) I have set up many of my bills to be automatically charged to my credit card. I no longer have to worry about due dates or late charges on those bills. I just pay my credit card bill once per month and I live a much simpler life!
2) I pay my balance in full EVERY single month. This is essential. Do not even attempt to use your cards like I do if you are unable to pay your bill each month. Many credit card users even go so far as to deduct the money from their checkbook when it is spent on their credit card. This way they can earn interest on their money and still have enough to pay the credit card bill comes due. It's a great way to keep your spending in check.
3) The original reason I started using my credit cards to pay for gas, groceries, etc. was that I wanted to earn the perks. As long as I pay off my bill each month, those perks are a wonderful treat for me. I've taken many, many mileage purchased flights thanks to my credit cards.
4) Regular use of credit cards, with on time payments, is good for your credit score. An excellent credit score will save you money on future car loans, mortgage rates, insurance rates, and more.
Please remember that credit cards do tempt people to spend more than they otherwise would. I know I am guilty of this. When shopping for new clothes or groceries, I do not tally the amounts in my head -- I know my credit card will cover the amount. I tend juggle after my purchases are made, often returning items to the store or "borrowing" from my savings accounts until I can earn some extra money. If you choose to use credit cards, please make sure that you have an idea how high your balance can get each month and still be paid off. If your budget is really tight, you might want to avoid credit cards for now.
As part of my financial fitness program, I am going to begin tracking my daily spending. You might want to try the same thing if your spending is out of control.
Rescuing my credit card
When I was fresh out of college, I got my first credit card. I had taken a trip to Europe and signed up for a mileage earning credit card from the airline I used on that trip. It was a great investment for several years, but I have been frustrated by the fact that my oldest credit card (and thus a big chunk of my Credit Score) had an annual fee (what was I thinking?!) and was earning miles on an airline that I found it difficult to redeem miles on.
I had resigned myself to the fact that I was stuck with that decision for a long time, until I started researching cash rebate cards that I could use for my business expenses. I learned that my credit card company would allow me to convert my existing credit card into any of their other types of cards.
I called the customer service number and made sure that my credit history would follow me and that the annual fee would stop. They assured me that both of those things would happen.
So... I converted. I rescued my expensive credit card (goodbye annual fee!!) and will now be earning a reward that I can really us (CASH!). If you find yourself in the same position of holding a card that doesn't really meet your needs anymore, contact your credit card's customer service department and ask them about your options. If I had known about this option, I would have converted my card years ago!
I had resigned myself to the fact that I was stuck with that decision for a long time, until I started researching cash rebate cards that I could use for my business expenses. I learned that my credit card company would allow me to convert my existing credit card into any of their other types of cards.
I called the customer service number and made sure that my credit history would follow me and that the annual fee would stop. They assured me that both of those things would happen.
So... I converted. I rescued my expensive credit card (goodbye annual fee!!) and will now be earning a reward that I can really us (CASH!). If you find yourself in the same position of holding a card that doesn't really meet your needs anymore, contact your credit card's customer service department and ask them about your options. If I had known about this option, I would have converted my card years ago!
Networking Makes Cents
Last night I met with direct sales representatives from seven other companies. We introduced ourselves, our companies, and our businesses. We are going to share ideas with each other, as well as referrals if someone is looking for that particular business.
This kind of format has many applications for working women outside of the direct sales industry, as networking contacts can be a valuable source of information sharing and relationship building.
Helene Cruz, assistant director of M.B.A. programs and services at Pace University said that her most recommended career strategy for women starting their careers is to build a network early in their career. You never know when a contact might be helpful, so begin by building relationships with the people around you at work, at lunch, at play, etc. She suggests joining a professional organization, alumni meeting, or attending a networking reception. See her complete interview at CareerJournal.com.
When looking for a networking group, keep your eyes out for one with members who have goals that aligned with your own. This doesn't mean that you all need to be in the same industry, but that you should be working towards similar goals. Contacts made in a networking group may become more than just professional contacts.
Helene Cruz recommends that you begin networking by making small talk with the person next to you at breakfast, lunch, or dinner. Start with a personal connection and gradually move to business information as you get to know one another a little bit.
Your challenge, should you choose to accept it, is to make one new contact this week and begin to nurture your own network.
This kind of format has many applications for working women outside of the direct sales industry, as networking contacts can be a valuable source of information sharing and relationship building.
Helene Cruz, assistant director of M.B.A. programs and services at Pace University said that her most recommended career strategy for women starting their careers is to build a network early in their career. You never know when a contact might be helpful, so begin by building relationships with the people around you at work, at lunch, at play, etc. She suggests joining a professional organization, alumni meeting, or attending a networking reception. See her complete interview at CareerJournal.com.
When looking for a networking group, keep your eyes out for one with members who have goals that aligned with your own. This doesn't mean that you all need to be in the same industry, but that you should be working towards similar goals. Contacts made in a networking group may become more than just professional contacts.
Helene Cruz recommends that you begin networking by making small talk with the person next to you at breakfast, lunch, or dinner. Start with a personal connection and gradually move to business information as you get to know one another a little bit.
Your challenge, should you choose to accept it, is to make one new contact this week and begin to nurture your own network.
Tuesday, July 24, 2007
Best Gift Ever?
For my 22nd birthday I received a book that, at the time, was not exactly what I had been hoping for. In retrospect, it was the one of the best gifts I have been given. My parents, wise people, gave me Personal Finance For Dummies, 5th edition
at this critical time of my life. I read the book and was fascinated with everything included in there. I recommend this book as an overall introduction to finance for everyone from young adults to recent graduates to recently divorced. I will go into specific topics covered by the book in a later post, but wanted to share with you how thankful I am for the foundation it gave me on personal finance.
at this critical time of my life. I read the book and was fascinated with everything included in there. I recommend this book as an overall introduction to finance for everyone from young adults to recent graduates to recently divorced. I will go into specific topics covered by the book in a later post, but wanted to share with you how thankful I am for the foundation it gave me on personal finance.
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