Money Saving Tips for Young Spenders

Money Saving Tips for Young Spenders

young shopper

Young spenders who first start earning an income often spend too much on luxuries or take on too much debt. However, if you are prepared, you can also establish a game plan that will lead you toward wealth. The following tips can assist you in this type of quest.

#1 – Save One-third of What You Make

Placing $1 out of each $3 you make into the bank may sound like a lot. However, it also creates stability in your financial life. When you have a good deal in savings, you can better weather the tough times, such as a layoff. While saving this chunk of money is a sacrifice, it is a sacrifice that allows you to get that much closer to your goal of financial security.

#2 – It is Okay to Spend Money on Career-related Investments

According to financial advisors, it is okay to spend money on educational expenses that concern your career. These costs may also include your work wardrobe or a how-to book that concerns your job.

#3 – What Are Your Dreams?

According to a news report, many times, young people fail to save money as they cannot articulate their long-term goals financially. For example, ask yourself if you want to eventually quit your day job and run your own business. or perhaps you have a more ambitious pursuit. What are your dreams? When you set money aside to realize lofty goals, you have the reasons needed to work and save money and fulfill specific objectives.

#4 – Pay Off Your Student Loans Early

Financial advisors also recommend that young people pay off their student loans early as the financing carries a 5 or 6 percent rate of interest – much higher than what a savings account can earn. By paying off a large amount of your student loan debit, you can immediately begin saving more money.

#5 – Don’t Wait to Save Money Until You Feel You Can Afford It

Financial experts advise to start saving for retirement now. Don’t wait until you feel you can afford to save money or open up an employer-sponsored 401(k). If you start saving now, you can set enough cash aside to accumulate $1 million by the time you retire.

Study Says Overdraft Fee’s are Costlier than Payday Loans

Study Says Overdraft Fee’s are Costlier than Payday Loans

Wells Fargo Overdraft

Payday loans have gotten a bad reputation over the last several years. The short-term, high-interest loan is constantly chastised by public officials, non-profit organizations, consumer advocacy groups and anti-poverty activists. They say these financial products hurt the poor and send middle-class households into a never ending spiral of debt.

But what about overdrafts that so many banking customers use when facing pecuniary difficulties? Well, they may become the new enemy of the aforementioned entities.

According to a new study by consumer watchdog Which?, using your overdraft can be costlier than taking out a payday loan. In fact, as the survey suggests, it can be up to four times more expensive than taking out two-week payday advance loans, which is also exorbitant for borrowers – the organization cited Wonga’s average APR of 1,509 percent as an example.

The consumer watchdog stated that its findings highlight the fact that regulators need to start cracking down on unauthorized overdraft charges that often cause significant harm to the most vulnerable of banking customers.

What exactly can be done? The consumer body advocates a cap on interest and fees.

“People with a shortfall in their finances can face much higher charges from some of the big high street banks than they would from payday loan companies,” said Alex Neill, director of policy and campaigns at Which?, in a statement.

“The regulator has shown it’s prepared to take tough action to stamp out unscrupulous practices in the payday loans market, and must now tackle punitive unarranged overdraft charges that cause significant harm to some of the most vulnerable customers.”

Soon after the results of this study were published, the finance industry responded.

RBS, for instance, issued a statement, averring that it encourages all of its customers to contact a branch if they feel they are going to enter into unarranged overdraft. Since the financial institution realizes this is an expensive type of borrowing, RBS helps them find an array of alternative solutions.

Meanwhile, the British Bankers’ Association (BBA) also sent out a statement, alluding to the fact that overdraft charges have “plummeted” since the global financial crisis. The BBA noted that consumers have saved nearly $1 billion over the last five years.

“Banks are helping customers compare account charges in a variety of ways, from making them easier to understand to providing useful online calculators and mobile apps,” the BBA said in a statement. They also itemize charges on bank statements and use text alerts to communicate important account information instantly. If a customer thinks they might go overdrawn, they should speak to their bank to arrange an overdraft to keep costs down.”

Now that the Financial Conduct Authority (FCA) has tackled the payday loan industry and reined in the unscrupulous lenders, the federal financial body may start to go after the banks and their expensive overdraft charges.

Financial Experts Teach Consumers How to Save for Travel

Financial Experts Teach Consumers How to Save for Travel

Dream Vacation

The following tips can assist you in adding to your travel fund and saving for a dream vacation.

Set Up a Special Savings Account

Experts recommend setting up a special savings account and having automatic deductions taken from each paycheck. They suggest choosing the highest amount of money you won’t miss – such as $20 or $50 from each paycheck.

Cut Back on Current Costs

Another way to save extra cash is to cut back on some of your regular expenses. For example, establishing a budget to see where your money is allocated is what you want to do first. Next, set up an account on an online budgeting site, such as Mint. This kind of site will divide your spending into various categories so you can see where your money is going. For instance, the $4.00 per day you are spending on vending machine food is money that could go to travel.

Save Your Loose Change

It also helps to pay with cash as it assists you in keeping closer track of your money. Doing so also allows you to save your loose change and empty it into a jar at the end of the day. You might be surprised by the amount you accumulate over several months’ time.

Sell Some Stuff

If you have some extra stuff you don’t need, use eBay or Craigslist as selling platforms to sell the items and add to your bank account. Use the money for your “dream vacation” fund.
Find a Side Gig

You can also earn extra travel money by advertising to clean or organize homes and apartments, run errands or provide tutoring.

A Popular Vacation Destination

According to research, one of the most popular places to spend a vacation today is the Caribbean. Therefore, using any of the above savings approaches will enable you to take a dream cruise or visit a tropical island, for instance, in a reasonably short amount of time. According to USA today, a cabin on a cruise ship without a view costs around $499 while a cabin with a balcony is about $999.