One of the best things you can do for your finances long-term is to start a savings habit. For many of us, though, the idea of setting aside money in a life already cash-strapped seems daunting.

Saving is important, though. It should be a goal for you, especially considering that a rainy day fund can help stave off financial catastrophe. According to a recent Bankrate survey, 28% of Americans have no emergency savings at all. If you are in that group, it’s time to start a savings habit. Here are five tips that can help you on your way:

1. Start with Any Amount

Many people get discouraged because they think they need to set aside a certain amount of money each week, or it’s “not worth it.” The truth is that any amount that you can set aside is better than $0. If you can start with $1 per day ($7 per week), that’s what you do. It doesn’t seem like much, but the idea is to start a savings habit. You can move on from there. But the first step is to get into the mindset that you are going to save something — no matter what.

2. Review and Boost Your Savings

Once you have established that you will set aside money for savings, it’s time to review your amount and add to your savings. After you become comfortable with what you’re setting aside, add more. If you’ve been setting aside $10 per week, boost the amount to $15 per week after a couple of months. Down the road, you can boost your savings even further as you become more comfortable.

3. Look for Things to Cut from Your Budget

Experts estimate that you waste between 10% and 15% of your household income each month. This means that you are probably spending money on things you don’t actually need, or even want. Rather than wasting that money, consider putting it toward building your financial future. Look for wasteful spending to cut from your budget, reduce your spending, and then redirect that money into your savings habit.

4. Create a Rewards System

If you want to stay motivated, you can set up a rewards system for your savings habit. You do need to be careful about this because you don’t want your rewards to cost you money. Instead, think about things you can do that might be out of the ordinary, but that don’t cost. Maybe you can check out a new book or movie from the library after you save for a certain number of weeks. Perhaps you can reward yourself with a lazy weekend afternoon when you boost your weekly savings amount. Figure out what you would enjoy, and use it to reward yourself for your efforts.

5. Make it Automatic

Automatic savings can help you keep up without thinking about it. Arrange regular transfers from your checking account to your savings account. If you have the option, have money withheld from your paycheck each month and deposited into a savings account. It’s also possible to use a tool like Digit.co to use an algorithm to automatically figure out how much you could be saving and doing it for you. Look for ways to make it automatic so you don’t have to think about it, and you might be surprised at how fast your account grows.

One of the desires many people express is to make more money. Most of us like the idea of having a little extra spending cash to get us through hard times. If you’re looking for a side gig, though, it might not be all that easy to figure out exactly what is likely to work best for you in the long run.

If you are trying to figure out the best way for you to make extra money, here are some things that can help you take the next step.

Do You Need Money Immediately?

First, you need to consider whether or not you need money immediately. If you need cash fast, you aren’t going to have time to start a side business and wait a few months to start seeing the fruits of your labor.

You might need to get a part-time job if you need money quickly. This isn’t always the favored way to make extra money, but it might be more practical in your situation. Another consideration is taking advantage of blood plasma donation. If you have a blood bank in your area, you might be able to make between $25 and $50 per donation (up to two donations a week) to make fast cash.

The fast you need money, the more limited your options are. If you have a little more time to start earning more money, or if you are interested making more money to reach long-term lifestyle goals without a need to make ends right now, it can make sense to try to start your own business or do a little freelancing.

What is Your Expertise?

If you have a specific expertise, you might be able to make money based on what you know. I was able to start a freelance writing business because I like writing and I have a degree in journalism. I know people who take on side gigs related to software development, graphic design, coding, and social media consulting.

You can also turn your expertise into other types of businesses. You can tutor others, teach online classes, or consult. If you have knowledge other people want, you might be able to sell that to others.

Can You Make Something?

The ability to make something can net you more money in the long run. Woodworking, sewing, and any other type of crafting can provide you with regular income through what you sell. It can take time to get up and running, but many people find it a fulfilling way to make money on a hobby. I know someone who makes beautiful wood signs with vinyl cutout letters. She does quite well selling them.

Are You Able to Provide a Service?

Finally, even if you aren’t able to sell your expertise, or if you aren’t sure you can make items to sell, it’s possible to make money providing a service. You might be able to provide child care, walk dogs, or offer some other service. Carefully check the laws and regulations in your state and city to make sure that you are doing it properly, and that you have the right licenses before you proceed.

In the end, there is a good chance that you have a way to make extra money. You just need to figure out the way it’s likely to be more effective for you.

Now that summer is here and the kids are out of school, you are probably looking for ways to save money. The good news is that it is possible to save money this summer if you plan ahead and consider what’s available for a low cost — or even for free.

1. Free Activities for the Kids

Sending the kids to the water park or taking them on a big vacation can get pricey. Instead, look around and see what’s available for free. Many libraries and zoos offer free reading programs and animal information sessions. Also, don’t forget about nationwide initiatives like Free Museum Day once a month.

You don’t have to limit yourself to free activities for the kids when you’re saving money this summer, either. Look for concerts in the park, and gallery walks. These can be great for kids, as well as for the adults.

Even if you can’t find a lot of free activities for the kids, there is the possibility that there are low-cost activities. Look for summer band programs through your school that might cost a fraction of private lessons, as well as low-cost workshops offered by local organizations.

2. Plan Staycations and Camping

You don’t need to go on a big summer vacation to make good memories. My son and I usually go camping three or four times a summer, including going with extended family. It’s an inexpensive way to have fun and make amazing memories.

Plan staycations as well. Sometimes we take a day trip to a nearby historical site. We pack a picnic and visit a waterfall a few hours away. It doesn’t cost very much, and it’s a great way to enjoy each other’s company and do something fun and out of the ordinary. At the very least, you can do something unusual like bring the laptop outside and stream a movie in a tent on the lawn or have a picnic on the living room floor.

3. Avoid Using the Air Conditioner as Much as Possible

One of the biggest money leaks you’ll have during the summer is the air conditioner. You can save money on utilities by doing what you can to make your home energy efficient and then running the air as little as possible. I usually open the windows at night and run fans to circulate the air. Then, first thing in the morning, I shut the windows while it’s still cool. It keeps the house manageable until mid to late afternoon. After that, we usually spend time downstairs, where it’s naturally cool.

You can also avoid using the air conditioner in your efforts at saving money this summer by leaving the house. If you have an inexpensive public pool, you can spend the hottest portion of your day there, or you can go to the mall (as long as you don’t spend your money buying things).

There are a number of tips and tricks that can help you avoid turning on the air conditioner for most of the day. I even find that going to the cheap movie theater once a week to stay out of the house costs less than running the air conditioner.

Combine different strategies, and you might be surprised at how much money you can save this summer.

Until my husband asked for a divorce a little more than a year ago, I hadn’t thought much about the impact of divorce on taxes. Now that I’ve been through a tax season with a brand new filing status, I’ve learned a few things about how your divorce can change your taxes.

Spousal Support is Income, Child Support is Not

One of the first things to realize about taxes and divorce is that spousal support should be reported as taxable income. If you receive it, it counts as income. If you pay it, you can deduct it from your income. My divorce decree doesn’t include spousal support, so it’s not an issue for me.

Child support is a different story. My ex pays child support, and he pays it happily. Because our country expects parents to financially support their children, child support isn’t considered income to the recipient, and the paying party can’t deduct it. However, it’s important that the money received in child support go toward the benefit of the child. I don’t spend the money sent for my son on anything other than taking care of him. My ex and I agreed that I’ll put half of what he sends in my son’s 529 account and use the other half to help with paying for his clothing and extracurricular activities.

New Filing Status = New Tax Bracket

In many cases, a new filing status can mean a new tax bracket. In my case, because I have custody of my son, I file as head of household. This means I don’t have quite the benefit I had when married, but my brackets are more favorable than someone filing single. My ex saw a jump into the next tax bracket because the gap in our incomes was closing just when he asked for a divorce. He found himself in the 25% bracket, instead of the 15% bracket, where we were as joint filers.

You also need to be clear on who is able to claim your children as dependents. Only one of you can claim your children. It should be spelled out in your divorce decree. Because my son lives with me 100% of the time, it was easy for us to agree that I would claim him. However, things might be different depending on how your custody works out. Someone who pays more in child support while having the kids 50% of the time might get the deduction. Or, if you have multiple children, you can each claim some. Others deduct in alternating years. However you do it, it’s important to be on the same page so that there aren’t mix ups at tax time.

SE Tax Increase

While my tax bracket didn’t change, my tax bill is going to be much bigger going forward. Because my business used to be run with my ex, we could assign income in a way that reduced my own FICA taxes. I had a lower self-employed tax. Now that I’ve had to dissolve my old business and start a new one, all of the income is assigned to me. That means my self-employment tax bill has gone up by quite a lot. So, even though I’m in a lower tax bracket than my ex, I will pay more in taxes going forward.

Carefully think about taxes and divorce, and consider consulting an expert if you aren’t sure how to proceed.

Most of us groan each month when it’s time to pay insurance premiums. Insurance is one of those things that matters a lot to your finances because it can protect your assets. Paying your premiums can protect you against a situation later on that results in bigger losses. Most of us can’t pay to replace a whole house, or handle the kinds of hospital bills you wind up with when you have a major injury.

Just because you have to pay for insurance doesn’t mean that you get nothing from it. Here’s how to get the most out of your insurance policies:

1. Understand What’s Included in Coverage

Pay attention to your coverage. You might be surprised at some of the items included in your coverage. Health plans are required to cover the cost of a preventative visit each year. There’s no reason not to go to the doctor for an annual checkup if it doesn’t cost you anything. Many car insurance policies offer coverage for rental cars. No need to pay for the extra coverage when you already have the coverage you need. From home insurance policies that cover theft (even when someone steals out of your car) to the trip cancellation coverage you might have just from using a credit card, understanding your coverage can help you use what’s already available to you. You’re paying premiums, so you might as well take advantage of what you’re entitled to.

2. Look for Flexibility

Some insurance policies are flexible and come with various riders that can make the product better work for you. Find out whether or not there are some flexibility, including some life insurance policies that come with long-term care riders. This can help you tailor your coverage a little bit so that you cover a long-term care situation in addition to ensuring that your family is protected in the event of your death.

You might also have other flexibility in coverage for your car or home insurance policies. Find out what is available to you so that you can get a policy that fits your needs.

3. Check for Discounts

If you want to get more bang for your buck, look for discounts. Many insurance companies will give you a discount if you have more than one policy with them. Look for ways to get a multi-line discount. On top of that, if you are married, some life insurance and long-term care policies offer couple discounts. If you both get a policy, you can see an overall discount. This can make sense in many cases.

When I was growing up, my parents got a discount on my car insurance coverage because I had good grades. Today, I am with an insurance company that refunds my 25% of my premiums when I go three years without a claim. Find out if you qualify for special discounts, and do what you can to maintain those. When combined with other ways to make the most of your insurance policies, you can save money, protect your assets, and do so without breaking the bank.

No matter how much we try to avoid materialism, at some point you will probably end up buying something. Purchases are necessary since few of us can grow or make everything we need. You probably even buy things that you want, even if you do try to limit the amount of stuff cluttering up your house.

Being a smarter consumer can help you save money and reduce unnecessary purchases. As you try to figure out what makes the most sense for you, here are 3 tips that can help you make better buying choices:

1. Start with What You Value

Before you buy anything, know your values. Figure out what is important to you. Too often, we make poor spending decisions because we aren’t clear on values and priorities. It’s easy to make impulse purchases when you don’t have a framework for deciding whether or not something is worth buying.

Sit down and work out your long-term goals, and identify your values. Then, create priorities for your finances and your spending. You will be a smarter consumer when you change your spending habits to match with what really matters to you. Before you buy something, ask yourself if it meets a need or helps you reach your lifestyle and financial goals. If a purchase doesn’t move you forward, don’t make it.

2. Comparison Shop

Looking for the best deal isn’t just about saving money. The cheapest item isn’t always the best choice for you, or the item that will save you the most money in the long run. Pay attention to quality as you comparison shop. When you decide you need to make a purchase, take the time to compare your options, and figure out what will offer the best quality in the long run. The fewer times you can buy something (like tools or shoes), the better off you will be in the long run. Comparison shopping is a good way to get an idea of what is likely to offer you the best bang for your buck. You want to be a smarter consumer who gets the most value for your money, rather than someone who just gets things because they are cheap. (And what happens when the poor quality means you have to turn around and spend more later?)

3. Look for Deals

Don’t forget about the deals. After you have shopped around, and you know your purchase is in line with your values, it’s time to look for deals. You can use coupon and rebate sites to find promo codes and savings. From free shipping to 50% off (or more), it’s possible for you to get even more out of your purchases. You can also use rebates and loyalty programs to stack deals and reduce your overall costs. Before you buy something, check to see if there is a coupon, discount, or rebate associated with it. Checking doesn’t take very much time at all, and you can stretch your dollars even further when you take the time to see if you can get a discount.

As you look for ways to be a smarter consumer, you will save money and enjoy higher-quality items — and a higher quality of life.

Is Your Debt a Yo-Yo Diet?

by Miranda Marquit · 0 comments

We hear a lot about how yo-yo dieting can cause problems with weight gain. Each time you drastically diet in order to hit a weight loss goal, and then finish the diet, the weight comes back faster and in greater amounts.

In some ways, debt can be like a yo-yo diet. You might aggressively pay down the debt, but what happens when you finish paying it off?

Many people who have paid down debt quickly find themselves back in debt again later. Part of the biggest issue with staying out of debt once you pay off your obligations is the fact that you haven’t really tackled the root cause of the debt.

Yo-Yo Debt

When you’re caught in a cycle of yo-yo dieting, you aren’t actually changing your daily, regular habits. Instead, you end up viewing the weight as the problem, and you make unsustainable changes to your routine in order to reach a specific goal. Once you reach that goal, you revert to your old behaviors because you are unable to keep up with the drastic changes you made to lose 10, 20, or 30 pounds. Pretty soon, you find yourself regaining all that weight — and then some.

In some cases, debt can have the same problem. You might aggressively tackle your debt, paying off a few thousand dollars in a short period of time. It feels really good to reach that goal, but have you really changed your money habits? Some of the extreme strategies you employ to tackle your debt might not be sustainable in the long term. Old habits re-assert themselves, and your debt comes creeping back. In some cases, it can come back bigger than ever.

Smaller, Lasting Changes

As I fight with my weight yet again, I’m taking a different approach. Instead of aiming at a weight goal and doing what it takes to reach that goal in the shortest amount of time, I’m slowly changing my habits. I’m adding more exercise to my regimen. I’m slowly replacing some of my nutritional choices.

These smaller changes mean that my weight loss is proceeding at a slow rate. However, it also means that I am more likely to maintain better health over time. Because I’m changing my habits to tackle the causes of my yo-yo weight situation, things feel different this time. I feel like I’ll be able to stick with the changes I’m making because they aren’t huge. They are more sustainable over time.

You can take a similar approach with debt. Smaller changes can help you make the most of your money, and reduce your debt at a sustainable rate. You might not be able to claim dramatic results, but you are more likely to have better long-term financial habits. Small changes to the way you approach your money can add up over time, and they can also be more sustainable, allowing you to stick with them, rather than losing your resolve later.

In the end, getting off the yo-yo cycle requires making changes to your lifestyle. Once you change your lifestyle in a sustainable way, you are less likely to give up down the road.

One of the most important things you can do for your finances is to be smart about the way you manage your credit. Good credit can save you money in the long run, and provide you with opportunities to maximize your financial situation.

If you want to build and maintain good credit as part of your frugal lifestyle, here are some tips you can follow:

1. Make All Your Payments on Time

The best thing you can do is make all of your payments on time. Your payment history is the most important aspect of your credit score, and it’s something that can make or break you.

It’s not just loan payments you need to make on time if you want good credit. You also need to make other payments. While some payments, like your insurance premium and utilities, might not register on the positive side of a traditional credit score, they will start to impact you if you miss payments. Your missed payments can be reported or sent to collections, and then they will drag down your credit score.

2. Use Credit Sparingly and as Part of a Plan

In order to build a credit history, you need to use credit. However, you don’t want to end up in debt as a result of your credit use. This means you need to use credit sparingly and as part of a plan. If you don’t trust yourself with credit, you can improve your situation by simply using your credit card once or twice a month on small purchases and then paying it off.

I like to use my credit cards more often. They are part of my spending plan, and I use them for most regular purchases. I do pay off the purchases each month, so that helps keep me from seeing big interest charges, and it helps me build my credit history.

3. Don’t Borrow Too Much

Creating a solid credit history is a matter of balance. Yes, you need to use credit to get a credit score. Sometimes it makes sense to get a small loan, as for a car or a personal loan, in order to diversify your credit profile. However, you want to balance that out. If you have too much debt, it can backfire on you. Too much debt drags down your credit score, you need to make sure you pay it off as quickly as possible, and borrow as little as possible.

4. Keep Your History

It can be tempting to cut up your credit card, especially if you have had trouble in the past. If you cut up your card or put it on ice, you don’t have to cancel the account. Canceling the account can shorten your credit history and ding your score. Keep your history intact when possible, and avoid applying for a lot of new credit at once, since those inquiries can bring down your score and reduce the average age of your accounts.

5. Follow a Financial Plan

The key is to follow a financial plan. Creating a plan for your money can help you rein in your spending and prepare for the future. Build an emergency fund so you don’t have to use debt to get you out of a pinch. Plan ahead so you have the resources you need and make a plan for spending your money wisely. You’ll maintain good credit, and a better financial situation.

Good credit is one of the most important things you can develop in your financial life. Your good credit can open doors for financial opportunities — and not just for loans.

In the last couple of years, I’ve seen firsthand how beneficial good credit can be.

Save Money When You Borrow

The most obvious benefit of good credit is the savings you receive on your interest charges when you borrow. Years ago, when my then-husband and I bought a home, we saved thousands of dollars during the time we had our mortgage because our good credit scores qualified us for the lowest rates.

I also saved money the last time I bought a car. That loan will be paid off this year, and I’ve kept the loan this whole time because the low 1.9% interest rate is easily beat by putting what I would have put toward paying off the car early into investments. I’ve seen returns of much better than 1.9% annualized since borrowing for my car.

Even my credit cards and personal line of credit come with lower interest rates, thanks to my credit. I rarely pay interest on these accounts, but on the rare occasions that I do carry a balance, it costs me much less than it would if I didn’t have good credit and had to pay a higher interest rate.

Other Financial Benefits of Good Credit

I currently receive a discount on my monthly car insurance premium because I have good credit. That’s a nice perk to enjoy, and I get it even though I’m not borrowing from the insurance company.

My recent cross-country moves have also been made easier because of my good credit. When we moved to Pennsylvania, the luxury apartment complex we wanted to live in required a credit check. Likewise, I wasn’t able to move into my current rental home in Idaho until after I passed a credit check. Without good credit, you might not be able to move into the rental you prefer because you are rejected in favor of someone else. My utility company also required a credit check before hooking me up.

There is also an element of peace of mind due to my good credit. I have been able to have liquidity. This came in handy when I moved across the country, and it is comforting now that I have medical bills due to a recent injury and an unexpectedly high tax bill due to my recent divorce.

Knowing that I have options (even if those options require a little borrowing) provides me with peace of mind. While I don’t expect to max out all of my available credit, it’s nice to know that there’s a backup plan if I need it.

Even if you don’t plan to borrow for anything, your credit matters. It’s how financial services companies make judgments about you. Bad credit can cost you more than you might expect, and good credit can open doors and save you money — even if you aren’t working with a lender.

One of the best ways to improve your chances at financial freedom down the road is to invest. However, many people have a hard time getting started. If something is holding you back from investing, it’s a good time to examine the situation, and see if you can get through your roadblocks so that you have a healthier financial future.

Not Enough Money

The biggest excuse I often hear about investing is that you don’t have enough money. It’s a common myth that you need to have a lot of money to invest.

In reality, you can get started with as little as a few bucks. Many online brokerages don’t have minimum account requirements. You can start with a small amount of money, and commit to invest a small amount over time. A small, regular investment is better than making no investment at all.

There are even programs and apps that allow you to invest your pocket change. Start simply, with an index fund or index ETF, and you can take advantage of dollar cost averaging to build your portfolio. You don’t need a lot of money to start investing, so don’t let that hold you back.

Not Enough Knowledge

We tend to think of investing as complicated. And it can be. However, it doesn’t have to be. If you are getting into advanced day trading strategies, or using products like options, things can get a little bit complex. Some investing ideas require a lot of specialized knowledge to do well.

The good news is that most of us don’t need deep knowledge to be successful in the long term. Most of us can do just fine with a basic knowledge of how stock markets work, and how to use index funds or index ETFs to get started.

Some of the simpler products don’t require a lot of knowledge. Understanding the stock market, when you look at it in terms of a whole, isn’t that complicated. If you take a few minutes to learn about indexing, you can understand investing enough to make a good long-term decision and get started.

Over time, as you are more confident and as you have the time to learn more, you can branch out with your strategy. For most people starting out, though, an all-market index fund is easy enough to grasp, and you can get started quite quickly.

Worried About Doom and Gloom

Are prognostications of doom and gloom holding you back from investing? Don’t let them rule your life or your financial future. For the most part, investing holds up over the long haul. A trend line might look scary in the short-term, but stepping back and watching market performance over time changes the picture. A broad approach can help you overcome worries about a drop, since you will understand that most markets recover and thrive over time.

Take a look at what’s holding you back from investing, and then see if you can gain the information you need to overcome your fears and move forward. Your future self will be happier and wealthier.