Budget Beauty Habit

If you color or highlight your hair, you can stretch visits between hair appointments by sticking to a color that is closer to your own. You will still have that shiny salon-styled look but your wallet will be thanking you for going every few months instead of every 6 weeks.

What is your TOUGH DECISION?

One of my clients recently emailed a dilemma she is facing. I know that many of you might be going through this as well and thought it was worth sharing.

She has been a successful freelancer but is seeing a big dip in income. While she has been looking for more work, this is a tough job market (as I'm sure many of you know). We have worked together over the years to really trim her budget so she feels good in that arena. In addition, she has been saving $250 into her IRA each month, and $100/month into her emergency savings. She just found out her rent is going up and is considering dipping into her savings to find a lower rent home. Is this a smart decision?

Answer:

This is not an easy question and there may not be a right or wrong answer. I would start with making sure she is doing everything she can to spend smarter and networking for income on sites such as Urban Interns or Mediabistro. We can all do better and it's worth the few minute check-up.

After that I would lower her rent, even if it means dipping into savings to do so. By reducing what she has control over, she is minimizing her pressure for the longer term and overall. I would strongly recommend to still save - this is KEY! Therefore, it's worth it to dip into savings to move and reduce expenses.

Bargains at the Phone and Cable Company?

I highly doubt that Verizon, Time Warner or Comcast has a summer sale. However, there are ways to get better bargain rates from your phone or cable company. A few steps to squeeze more money from them:

- Start by just asking. If you get someone on the phone who is completely uncooperative, just hang up, dial again and speak with someone new. You can also ask for their supervisor. Don’t waste your energy trying to argue with someone who won’t help. You can also ask for the rep who deals with new sign-ups. Even though you aren’t new, tell them you are considering switching companies. They don’t want to lose you!

- Ask for a better rate than what you have or ask if they have any promotions going on. More times than not, they will be able to offer a better rate.

- Bundle your services and get a discount. The phone companies are offering cable and the cable companies are offering phone services. Use one company for both services and get paid for it!

Putting the Fun Back in Money

This article was posted on SmartyPig, a great resource for saving money and earning higher interest.

Ever notice how it seems like everyone else is going on an amazing vacation? Or just bought that new car? However, when you sit down at the end of the month and are trying to find those extra dollars for the vacation, you just can’t seem to stretch that dollar enough. Especially when you aren’t even sure your job is stable. One of the keys is putting the fun back in your money. How? Follow these easy steps.

Associate the Fun with the Not-So-Fun.

If you are like most of us, figuring out your mutual fund allocations is as much fun as going to the dentist. But what if you crossed learning about mutual funds with your favorite hobby such as yoga or watching NASCAR? It could be as easy as that. Start associating the two. Every time you plan to take a yoga class or watch a race on TV, you have to look up a mutual fund you own on Morningstar, or read a few pages of Money Magazine or even ask a smart friend about their mutual funds in their 401k BEFOREHAND. Put it in the schedule and then you have permission to om away!

Running to Ratios.

You are so wild about running, you would run every night after work or sign up for a 5k every weekend if you didn’t have other obligations. But what if you could start learning key financial terms such as expense ratio, exchange traded funds and asset allocation, while you are making your mileage every week? Take advantage of that time running by downloading some interesting and FUNNY podcasts from NPR or iTunes onto your iPod. Most are free. My favorites are: Planet Money and Marketplace.

Live a SEINFELD Episode.

One of my favorite SEINFELD episodes is the one where Jerry and the gang decided to live in an opposite world. All their actions were supposed to be opposite what they usually did. Why not tackle this idea with your money? If you are at a birthday party for one of your son’s friends and you usually talk about the baseball game, you can say instead “How do you evaluate how much life insurance you need?” Or if you pay for everything with credit cards, try just using cash for one week. If you gravitate to the op-ed page in the paper while sipping your morning joe, why not read the business section first that day. See what happens. Before you know it, you are quoting Geithner’s latest speech and you understand the effect unemployment rates have on your bank’s interest rate.

Reward Yourself.

This is one of my favorites. There is nothing like the big sweet piece of chocolate cake after dinner to get us to finish our veggies. The traditional ways of taking control of money aren’t really working any more. Create a reward for yourself when you reach a certain dollar savings goal. For every $1,000 you save, go out for dinner at your favorite restaurant. Yes, you are spending money, but you also have $1,000 saved in a hard-to-reach account you probably wouldn’t have saved.

Find a Buddy.

There is no question that you are going to stick to your spending plan better when there is someone to hold you accountable. It’s your choice if you pick the friend who will kick your butt or the friend in a similar situation. Regardless, you are more apt to see results when you have to answer to someone else. While you are at it, maybe this is the time to pick new friends? Go through your FACEBOOK page and look for friends with good money habits. You never know what kind of good habits will rub off on you.

Reward Yourself

I am finding that more and more the traditional way of taking control of our money does not always work. It sounds cheap and dirty but maybe this is what we need to resort to for seeing results in your bank account.

For every $1,000 dollars you save, treat yourself at the spa. Or buy that new $100 purse you had your eye on. Yes, you are spending $100, but you also have $1,000 saved in a hard-to-reach account you probably wouldn’t have saved.


Rest more. When we are going going going non-stop, we spend our money more unconsciously. Take ½ hour each day to plan your purchases, make decisions about your bills and overall be less stressed about the big financial issues in your life (i.e. new job, paying bills, your 401k).

Find a buddy. There is no question that you are going to stick to your spending plan better when there is someone to hold you accountable. It’s your choice if you pick the friend who will kick your butt or the friend in a similar situation as you. Regardless, you are more apt to see results when you are NOT doing it by yourself.

Weigh in everyday. Instead of going on the scale every day, open an envelope every day, check a savings balance, look up a mutual fund. Don’t get obsessed with it but by facing your finances everyday, you are also getting in the habit of bringing money into your life on a regular basis. Part of the reason we need a motivator is that we have been ignoring our money for too long.

High CD Rate and Money Market Account

I am also on the lookout for high interest rate for money market accounts or CDs. This morning I came across two rates that were worth mentioning.

1) HSBC DIRECT. They have a 12-month CD that is paying 2%. While it might not seem that high, that is the highest rate I have seen in a long time to lock in for a relatively short time period.

2) SmartyPig. Take the name with a grain of salt. It is FDIC Insured and paying 2.75% for a money market. There doesn't seem to be any other catches for now. Let me know if you have an account there and your thoughts.