Don’t Die Poor

Being off the circuit for a while and not keeping up with all the other bloggers but paying attention to my own finances as well as my business, I have come to find that a lot of what financial bloggers write about is difficult if not impossible for many people top achieve. We all like to think that we can just cut up our credit cards and make the debt go away, but hte truth is, we are ina hole and we have to dig ourselves out of it. The fastest way to cure the debt problem is to have the best tools and to believe in yourself.

That being said, many of us may still need a credit card to help stay afloat. Others might rely on credit to get from paycheck to paycheck. So, now that we know we need the credit card, which one do we get?

The Credit Card Menu is an amazing tool which helps you answer that very question. They take the time to upload all of the necessary info in a very easy to use format. They even go so far as to break down which cards are better suited for you based on your personal situation. Whether you are in bad debt or looking for rewards, they can help you find the card thats right for you.

With all the great personal finance web sites, blogs, and articles out there, you would think that more people would have a greater understanding of what their financial pictures look like and even more you would think more people understood what their net worth was. Knowing this fairly basic financial formula can open the door to knowing much more about your fiscal status than any other. Over the next few weeks I will be publishing a series of posts dedicated to outlining and solving the Net Worth Formula. For a complete view of this topic please see “Your Net Worth” page.

There are some amazing blogs like, My Money Blog and Debit Versus Credit, and sites like that focus a lot of time on net worth both of which I read regularly for their brilliant points on personal finance and life. One site in particular, Million Dollar Journey, actually compares other sites that list their Net Worth. They do an excellent job of explaining how they calculate their own net worth and even publish it for your perusal. AOL Money published a similar article on Net Worth which you can find directly or through their new site Walletpop.com

I will give you the basic overview here; over the next few weeks this series will be published right here. For immediate updates, subscribe above!

So, How do you go about calculating your net worth? The Net Worth Formula is laid out as follows:

NET WORTH = ASSETS - LIABILITIES. This seems pretty basic and it is when you break it down. For now lets call the assets things you have and liabilities are debts you owe. I will go into each of these terms later in this series. Net Worth is the balance between the two variables which shows you exactly where you stand financially.

Lets look at a simple example. In this example, you own a house worth $250,000 and your house carries a mortgage of $100,000. Your Net Worth is $150,000.

Assets - Liabilities = Net Worth

250,000 - 100,000 = $150,000

You can clearly see that once you begin to accumulate too many liabilities or debts, you directly effect your Net Worth in a negative way and as you eliminate debts, your net worth improves. Building your net worth is the first of many steps to building financial security and and success. You may be asking, why is this so important? You should use this figure as a benchmark and as a snapshot so you can make accurate comparisons and have a strong understanding of your personal wealth. Knowing this formula will encourage you to build your assets and eliminate liabilities.

In the next part of this series, we will discuss Assets, What to include in the formula, and ways to improve your Net Worth.

from wikiHow - The How to Manual That You Can Edit

Decreasing your energy consumption at home will also minimize pollution (from burning fossil fuels) on a global scale and save you money on the household level. Best of all, most energy-saving methods are easy to implement and, when implemented, go a very long way.

Steps

1. Fix the drafts. In an average house, up to 20 percent of heat is lost through drafts. To test an area, simply hold the palm of your hand up against a door or window. If you feel cold air coming through, warm air is escaping. This is simple to fix and can save you hundreds on your yearly heating bill.
   • Fit draft excluders around all exterior doors and interior if need.
   • Fill in any cracks or crevices on window frames, skirting boards or floors with a filler or sealant.
   • Close curtains or shutters after dark fall to trap in the warm air and prevent drafts.
2. Turn down the thermostat. Turning your thermostat down by just 1 degree can reduce your energy consumption by over 5 percent. You won’t even notice the difference in room temperature. On the same note, don’t heat rooms when you are not using them.
3. Decrease the hot water temperature. Your hot water thermostat needn’t be higher than 60 degrees centigrade (140 degrees Fahrenheit). Any higher and you will only be mixing it with cold water to cool it back down for use. Give your boiler regular check ups, especially if you have had it for a few years.
4. Turn off appliances and lighting. Turn off any appliances you are not using, especially by switching off lights when you leave the room. Don’t leave fridge or freezer doors open for longer than necessary, and don’t forget your freezer needs to be defrosted regularly for it to run efficiently. Don’t use the “standby” function on you TV, stereo and DVD player. Unplug these appliances, as well as your microwave, when you are not going to be using them for over half a day. Appliances left on standby mode can draw an average of 5-10 percent of household energy use! And if you need light during the day, open the curtains. let the sun shine in and use it as light.
5. Wash economically.
   • Only use the washing machine when you have collected a full load. If you must wash a partial load, use the economy or half load setting. Also, modern washers work just as effectively at 40 degrees as they do at 60, but the difference in temperature will make a difference in terms of energy used.
   • Tumble dryers use up a huge amount of energy. If possible, hang your clothes on a line instead. This is better for your clothes as well.
   • Washing economically doesn’t just apply to your clothes. Taking a shower instead of a bath uses around 50 percent less energy.
6. Insulate. Up to a third of your home heating escapes through the roof. Prevent this by insulating. Not only is it simple to do, but it’s also the most cost efficient energy saving measure you can make. If you don’t already have it, invest in cavity wall insulation. This will prevent another third of your heat escaping.
7. Reuse water which comes out of the tap that would drain otherwise. When you turn up the hot water on a tap, put a container under the tap until the water is warm enough. Then use the water in the container to water plants or use for other purposes. This saves a surprising amount of water.Look for grants available to help make your home energy efficient. Saving energy is such a vital issue that grants are now becoming more readily available to help you make the necessary home improvements. In many parts of the world, energy suppliers, the government and your local council all offer help in paying for energy saving measures. Check out their websites or telephone a local official for further information.
8. Use energy efficient appliances. From light bulbs to kitchen goods to home entertainment equipment - there are a plethora of energy efficient appliances now on the market. Amazingly, they can use 50 percent less than other models, and up to a quarter less for light bulbs. Have a look at the energy saving trusts website to see their product recommendations.
9. Switch to eco-friendly energy. Many energy suppliers are now offering power from renewable sources rather than polluting fossil fuels. Do you research to find out which company in your area is offering green energy. It won’t take long to fill out the paperwork but the consequences will last lifetimes.

Tips

• Be attentive. You lead a unique lifestyle, which means there will be many unique ways you can save energy. For example, if you’re a fanatic tea drinker, only boil as much water as you need in a kettle.
• When you get mail that comes in a plastic bag, remove the mail by cutting the bag open and reusing the bag to hold things.
• A dripping hot water tap wastes energy and in one week loses enough hot water to fill half a bath, so fix leaking taps and make sure they’re fully turned off.
• Following these steps will not only save you hundreds in bills, but also help restore an equilibrium to your life and to the planet. Almost all of the energy supplied to our homes comes from burning fossil fuels. This releases huge amounts of carbon dioxide into the atmosphere, which contributes to the greenhouse effect.
• Take away 15 seconds when you microwave when possible.

Related wikiHows

• How to Lower Electricity Bills in the Summer
• How to Save Water
• How to Use Solar Energy to Heat a Pool
• How to Heat Water Using Solar Energy
• How to Save Money on Gas
• How to Reduce Your Greenhouse Gas Emissions
• How to Save the Environment at Home

Sources and Citations

• Save Power At Home. Learn more ways that you can save power at home and pocket the difference.
• VideoJug A video demonstrating how to save energy in your home. Shared with permission.
• “Pulling the plug on standby power” - The Economist, March 2006
• “Tips for saving energy around the home” - A page with tips for saving energy around the home
• Includes tips on saving energy.

Article provided by wikiHow, a collaborative writing project to build the world’s largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Save Energy in Your Home. All content on wikiHow can be shared under a Creative Commons license.

It’s not how much you earn, it’s how much you save that dictates how wealthy you will become. I believe this to be both true and realistic. The fact is you can never accumulate wealth if you spend more than you earn. There are so many financial theories that rely on this simple notion. Here are three:

• Make your Money work for you.
• Invest in High Yield Savings
• Pay down debts

Now we see that saving money is better than spending money, but we know that already!! The question becomes, what are you spending your money on?? Most people have no idea how much they throw away each and every day. Well, its time to uncover the mystery as to where all your money has gone.

I have guided many through the perils of over spending and the first step is to track the spending or in my case “Monitor Your Savings”. The old fashion method is pretty straight forward. Keep a pad with you at all times and write down each and every penny you spend. After 30 days go back to day one and review all your spending habits and simply cut out the expenses that you are spending too much money on.

Most people would rather use some digital form of recording and many already use Quicken or Microsoft Money. Both great tools. Here is a list of some of the better websites that allow you to track your spending habits.

• Geezeo - Cool Budgeting site with nice graphs and applications. Geared more for budgeting. Software links to your accounts and bill pay.
• Mint - I think this is a strong site but many feel it is lacking in applications.
• Mvelopes - This seems to have the most well rounded software and applications.
• Shoeboxed - This is the Netflix of the field. You mail in your receipts in a prepaid envelope and they upload that data onto a secure site you can access and manipulate. They do the dirty work.
  
• Wesabe - Great interaction between site and users. Groups, Forums, and a Blog offering advice to members.
• Yodlee - The money Center is probably the best service out there.

These are just the ones that I have found and I am sure there are countless ways to count your money but the point here is that you have to have some structured method of monitoring how you spend your money and how you save it.

Related Articles:

Spend Less Than you Earn - The Wrong Way to Think

Every Dollar Counts

Plant Your Money Tree

We have all read about the Snowball effect which I first read about in Dave Ramsey’s Total Money Makeover. In short the Snowball process to paying down debt makes you attack your debt in a systematic manner in which you apply payments to the highest debts first and once that is paid off you apply that payment to the next largest (or highest interest debts). This process continues until all debts are paid down.

For a great tutorial on how the Snowball works, visit: Or read Wikepedia’s definition.

So, now that we are paying down debt in an organized fashion and we have all of our bills under control, lets make this really pop by changing a few variables and causing an avalanche of savings!!

The trick here is to continue applying what you learned about Snowballing and Snowflaking and find ways to strategically add more funds to your payment plan. By doing so, you will increase the rate at which your debts get paid down. Take the tips you have picked up along the way from every financial blog you have ever read and pick one… Cut out luxuries, Dont eat out, Sell stuff on Ebay, Lower your bills, etc, etc….. (the list of opportunities goes on and on). Take those monies saved in each payment cycle and add it to your snowball. The amount may not be the same in every billing cycle but you can start a great avalanche once you get the snowball moving!!!

Related Articles:

Kick Start Your Debt Snowball

The Debt Snowball Method Can Help Pay Off Debts Faster

There’ No Such Thing As Free Debt

Caffeine Jitters

The Basic Steps Revisited