Busting Financial Myths - A Penny Saved Is A Penny Earned!

Today, many people find themselves trying to save on every penny because of the financial sacred cow that a penny saved means a penny earned. While this can be right in certain occasions, I find this notion fallacious because being cheap can cause people to lose more than the small amount of money saved. To find out why this is the case and seek better solutions, please read on!

When we spend time finding cheap stuff (by focusing only or primarily on price), we lose many hours of productivity which could have been better used to create value for the world. Though many people can live cheaply and save the pennies using such methods, they also forsake the big bucks and comfortable lifestyles awaiting them. This is because to be rich, they must think big. This involves the need to place more emphasis on value than price as value is the only tool that saves you money in the long run, not price.

In addition, the mindset of being frugal causes people to buy things they don't really need only because they are cheap. As a result, they spend more money and receive less value when other factors like satisfaction get considered. Here, they could have been much better off in the aspect of receiving value if they had placed more focus on non-quantifiable factors in their buying decisions.

Moreover, focusing on price can limit our ability to dream, envision, create and find solutions. This is because whenever we try to find cheap solutions, we think less about value which is in fact the quintessential element determining effectiveness. After all, a cheap price is sometimes a shortcut to being cheated.

Given the ramifications of such a fallacious belief, 2 classes of people will emerge. One of them would be the spenders who are wasters of productivity as they buy too much of low quality merchandise. Here, their excessive consumption of goods with little value usually do not bring satisfaction and it is sometimes almost certain that the same amount of money used to buy all these wholesale items can be exchanged for much great value.

The second class bred from this myth would be the savers who are too busy conserving productivity. This is also a waste of productivity because unused productivity will never be regained. Thus, instead of scrimping because you cannot afford something, ask yourself how you can afford what you want. This will help you turn inward and take responsibility when you know solutions do exist.

Furthermore, besides all the shortcomings this fallacy can bring, it also makes people prey to the 'Costco' mentality where they buy things they don't use in bulk. For example, 1 pound of nuts cost $3.50 but 5 pounds cost $10.

To save money, people buy the 5 pounds of nuts but it remains in freezer for months because there is too much to eat. At the end, these nuts are unconsumed and expire. Here, the lost opportunity cost incurred is rather large as the $6.50 could have been used elsewhere to provide more satisfaction.

Hence, in conclusion, after pointing the inherent flaws of this modern financial dogma, I believe readers have gained some wisdom by knowing that they ought to place greater emphasis on value instead of price. This is because value can save you money in the long run but price doesn't.

About The Author:

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Ways to Save Money at the Gas Pump

Everybody knows how expensive the gasoline can be at today unstable market prices. But not only can you save money by choosing the right gas station and maybe not driving a car at all, but you can also lessen the burden on you wallet by following a few steps. These steps are no brain busters but common sense ways to save you some money.

A good working car

First and foremost you need to make sure that your car is all it can be. This means that the car should be in excellent or at least good working condition. If your car is an older model, you should make sure that it gets a good tune-up at least once a year. A nicely tuned car will most likely give you a lot more mileage on the gallon than a car that is in need for service.

Air in tires

Another good way that can help save on your gas bill are properly inflated tires. You need to make sure that you have the right pressure on the gauge when you go and fill up your tires at the gas station. The right amount of air pressure can make the difference of using more or less gas. Properly inflated tires will cause you to use less gas than tires that have not enough air in them.

Speeding

Every speeder will need more gas than a person that drives the speed limit. If you have a speed limit of 70 miles per hour and you are only going 62 you will lower your gas usage by approximately 15 percent. Now this can be quite a bit over a course of a long drive. It is only a difference of 8 miles per hour, but the difference in your savings can be great.

AC

If you can avoid it than don't use the air conditioner especially when you drive in the city. The temperature should be set to no lower than 75 degrees. Higher is even better. Driving down a highway with the AC on is not as bad as in the city, but driving with open windows on a highway will also make you use more gas.

Getting gas

Make sure you know where you can get the cheapest gas. There are certain internet pages that will show you the lowest prices in your area. If you travel and you need gas, don't go to the gas station that's right off the highway to fill up. Take the extra two or three minutes to drive to a gas station that's closer to town. If you need to fill up before a bigger trip try to get your gasoline from a wholesale club like Sam's Club. The prices at these places are significantly lower than at a regular gas station.

These are just a few examples that can help you keep your gasoline bill down. With a good tuned car and the necessary know-how everybody can save at the pump.

Michelle Johnson has been a freelance writer for a few years and enjoys providing informative articles. You can also check out her latest website on Dual-Basket-Deep-Fryer models which can be found at http://www.dual-basket-deep-fryer.info.

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Providing Payment Flexibility To Your Customers By Utilizing Credit Card Merchant Accounts

Many years ago businesses used to receive payments via cash only, but now the use of credit and debit cards is increasing in a great deal. In order to compete with other businesses, you have to provide flexibility of payment method to your customers, or else they are likely to shift their attention to other places which provide the convenience of paying with plastic. Even though you may feel that using plastic is rather a complicated process and needs you to acquire new skills in managing this form of payment, you have to follow the trend if you want to stay long in business.

It can't be denied that nowadays the use of plastic is considered as the second most utilized method of payment, and on the internet plastic is the ultimate mode of payment. If you have an online business but reluctant to provide the convenience of paying using plastic, there is a huge possibility that your business won't last long. It is true that it is not easy to handle credit card merchant accounts because merchant accounts need you to understand their complicated concept. In addition, you may be confused to choose the right merchant service provider because it is quite difficult to obtain enough information from customer reviews. A lot of information are provided by the merchant provider, thus the information may be biased if not much, a little.

In order to attract a large number of potential customers, it is important to get the correct services from either a bank or a merchant service provider. This is due to the fact that nowadays you can find businesses working in various methods to attract customers and this scenario influences the kind of merchant accounts the businesses may own. You should discuss with a reliable merchant service provider to guide you in getting the right type of credit card merchant accounts for your business. By doing this, you are avoiding your business from a lot of future problems especially when your merchant account is not appropriately classified. Having a proper account will also save your money and you are protected from the possibility of frauds.

Having proper credit card merchant accounts will benefit you in several ways. First, if you run a business that doesn't require you to deal directly with a customer, most often payments by customers are made through the CNP or Card Not Present accounts. You receive your payments by contacting your merchant service provider using phone, letters, fax machines and email.

If you open an online business you may want to apply for the right credit card merchant accounts. If you have mobile business, you also need to use the right credit card services because a lot of purchases made by your customers can't be processed in real time. Being a mobile merchant, you may use a lot of imprints to capture a customer's proof of payment via credit or debit card, and after the verification procedure is complete you can start processing the sale. You also need to open proper credit card merchant accounts if you run a seasonal business. This is because you are not able to create or terminate your accounts as you please since your business is seasonal in nature.

To check out more on this, especially regarding retail merchant accounts, just click here.

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How To Save Money During The Holidays

The holidays are all about spending too much money. So they seem to be at least. In reality, the holidays should be about family, spending time with the people you love, relaxing, and all other sorts of fun things. Traditions and fun times are meant to come out of the holidays, not headaches and stress. If you spend more of your holiday fretting about how you are going to fund it, then you need to make a change. You could go out and buy a T5 ballast to monitor your Christmas light energy, but electronic ballasts will cost you as much money as you save from it this year. There are easy and simple ways to save money during the holiday season. Spend more time focusing on your family or your friends, or even yourself for that matter and less time worrying about your pocketbook. Using these tips, make your holidays a time to remember, not to dread.

Gifts are the most obvious money spender during the holidays. Most of the time, it is justified too because in the spirit of giving, people want to give the best gift they can. However, saving money does not necessarily mean skimping on quality. There are a ton of sales and things around gift sopping time, so take advantage of them! It is silly to not grab the biggest sale you can. Black Friday and thanksgiving weekend shopping is really worth all the hype it receives. Sure you may fight a few crowds or traffic, but it is usually worth it if you are going to be spending tons of money otherwise. Buying online is another great way to save money on gifts. Stores usually run more sales online than they do in stores.

Decorations are another huge money pit during the holidays. Of course, they are a part of the season, most often a big tradition. It is understandable to want them and to want to make your home look festive and nice. However, buying new decorations every year is not necessary. Use trimmings from evergreens and things to decorate mantle pieces. Using live ones will make your house smell better too! Making your own decorations from old ones or things from craft stores can not only save money but turn out better decorations. Who knows your house and taste better than you? Once you get a classy set of decorations you like, stick with them for a few years. Holiday decorations do not tend to go out of style very fast.

Lastly, holiday activities are a big place where money is spent. This is something that is well worth it because these things only come around once a year. However, it is wise to set a budget for yourself for these types of things. Plan out what you can afford to spend ahead of time so that you can have fun without overindulging. Money is like everything else, the general idea is that moderation is best. Spending in moderation, obviously, is best.

Stewart Wrighter recently started purchasing lighting supplies such as T5 ballast online because of the convenience. He had Electronic Ballasts installed in his office which is more energy-efficient.

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How To Save Money During The Holidays

The holidays are a very costly time for some families. It is unfortunate that should be the case, because it hinders the spirit of giving. With all the gifts, decorations, and festivities it is easy to allow spending to get out of control. If you do not keep yourself in check you might just find yourself in a bankruptcy office wondering where all your money went. Your bankruptcy attorney probably would not be very sympathetic towards your condition. Instead of having money on your mind all this holiday season, find ways to ease the stress. No parent likes to tell their children they cannot afford the gifts they want, or see their sad faces on Christmas morning when Santa did not deliver what was on their Christmas list. Luckily, there are ways to save money during the season to free up some cash for gifts for your loved ones.

One of the easiest ways to save money is to stop purchasing items directly from stores. Blind spending is dumb spending. Online shopping and using coupons is great for families who are on a tight budget. Taking the extra twenty minutes out of your morning to look through the paper and cut coupons is worth the money you could save. Even just reading catalogs and comparing prices will help. It sounds so simple, but so many people just buy something the moment they find it instead of taking the time to shop around for the lowest price so do not be lazy check out all your options. Shopping online allows you to use different sites that compete with one another for low prices. Department stores are only really good for holiday shopping on black Friday.

Another easy way to save money during the holidays is to reuse and make your own holiday decorations. Buying lights and things really add up. Use the resources you have to decorate your home. A branch from evergreen trees and Christmas trees is just as nice, or even nicer, than garland and it is completely free. Also, look for cheap stores for holiday decor. Places like home goods and things mock designer looks but do it for very inexpensive. The thing about holiday decorations is that they do not need to be the quality, because they are only used for a few months out of the year.

Lastly, the holidays comes with spending also with little things. Hot chocolate sales for the boy scouts, charity events, candy sales... All of these things take a few dollars here and a few dollars there, but ultimately add up to a lot of money. Set yourself up a budget for these things, and when you reach it do not feel guilty. Yes, giving to charity is nice but you also have to support your family. As long as you help a little, you are doing a good deed. You cannot save the world by throwing away all your spare change. You will find much more money in your pocket if you think about this sensibly.

Stewart Wrighter recently spent time researching bankruptcy with the help of a bankruptcy Dallas specialist. His sister hired a Frisco bankruptcy attorney to help her sort out her business finances.

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Saving Money As A Student

Being a college student can be hard when it comes to money. There is so much you want to do, but spending money does not seem to make a lot of sense. It is a very difficult time in which you want to be irresponsible, but also are being forces to grow up and face the realities of life. If you live like an irresponsible teenage for your whole life you will wind up in a bankruptcy attorney office when you are older. You would probably prefer to be the bankruptcy lawyer than to have to get help from him. This is an age-old battle that people usually do not discuss. It is especially hard if your parents have paid for things for the majority of your teen life, cutting the cord will be a huge step. Everyone has to grow up eventually but here is some advice for making the financial part a little less painful.

It is understandable that working in college can get hard. Luckily, there are a lot of odd jobs college students can do to make money. Being a teacher's assistant is one thing that will really help. You get paid and it looks good on a resume, and your professors will appreciate it. It never hurts to have good connections. Doing laundry for college sports teams also is a great way to make money. You can do homework while waiting for the laundry, and it can be done at any random time you need it to be done.

Keep an eye out on the student board in the lounge or the dining hall. A lot of people ask for tutors or advocate jobs on these. So many people just pass them by without giving them a second look, when it could hold a huge opportunity. Tutoring is one of the best ways to make money as a student. If you are good at a subject, share it with someone who needs it. Tutoring is a great way to make money. Advocate yourself even on bulletin boards. If you excel in a certain area post letters about a willing math or English tutor, you will be surprised with the money you can make.

You can also save money by limiting your social life spending money. Yes going out and partying is fun, but partying is no cheap. Limit yourself to one night out a week or so, and try to get your friends to do other things. Movie nights and handing out does not have to sounds as lame as it really is. How can a stressed college student refuse a night to relax and hang out with friends?

Also try to watch the amount of money you spend on food. Get a dining plan and try to live by it. Going out to restaurants and grabbing late night snacks from the store down the street will really burn a hole in your pocket. Drop your soda habit for water. A water bottle you can fill up is much cheaper than buying drinks all the time.

Stewart Wrighter recently spent time researching bankruptcy with the help of a DallasTexas bankruptcy attorney. He was very impressed with the quality of workmanship performed by the Plano bankruptcy lawyer at the same practice where he worked.

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Bonds - The Safer Investment Option

Investing in bonds is one of the safest options for every financial investor, even for complete beginners. While there are many types of investment options out there - stocks, mutual funds, real estate, insurance policies, foreign exchange, etc. - bonds are less risky in nature, thus making them a must in a diversified investment portfolio.

When deciding to set aside an amount of money for investment, it is recommended that you create an investment portfolio that is diversified. This spreads the financial risks involved into different investment instruments and therefore creates a healthier financial investment plan. Of course, the options included in the portfolio should depend on one's goals and objectives. Speak to a financial advisor to get ideas on which instruments to include.

One of the options that you should look into is bonds. By definition, a bond is a debt security issued to raise money for capital. The maturity of a bond is usually set for more than one year. Upon the sale of the bond, the issuer is obliged to pay the holder the principal plus interests before or during the maturity date. This financial instrument provides the investor a source of income in the form of interest paid twice a year. The structure of the instrument makes the holder easily predict the amount of income generated.

Corporations and governments require large amounts of money to fund endeavors. In order for these entities to raise enough money, they sell bonds to investors. As soon as the endeavors start to make money, both sides result into a win-win situation. The corporation or government entity earns profit, while the investor earns interest. However, there is also a small risk involved in this type of investment. When the company that issued the bond goes bankrupt, they may not be able to pay the interest, part of the principal or the entire principal. This risk can be dealt with by making a sound decision before deciding to invest.

To invest in bonds, first choose which type to invest into by doing some good research on the Internet, reading finance magazines and books, and getting recommendations from financial advisers. After making a sound decision, determine the amount you are willing to invest and purchase the bond through a broker or directly from the company issuing it. The minimum amount of investment is usually $5,000. Consider investing through mutual funds if the minimum investment amount is too high for your budget.

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Get Free Donations Online For People Who Need Money Help

As everybody knows, people nowadays are tight on cash especially because of the state that the economy is currently in. Even though everyone would like to have an easy way to get some extra money, they can't seem to find a way. There are always things on the internet saying "make money online" or "make easy money everyday on the internet" but many of those slogans advertise a company that is actually trying to make you spend more money so that they can get richer. Don't ever fall for those types of online sayings, they are everywhere but are totally useless and a scam. The only possible way for a person who needs money help is to start a website and somehow pray for it to be successful because nowadays there's too much competition online.

Okay, so the really only way to get money for free is by donations. Many people that need money help would love to receive donations but the only problem with that is getting the word out. With the way that technology and especially the internet is like in modern times, getting the word out can be simple. Just find a donation website and then make a request for money. Only those people who are in serious need of money help should try out those services. It is unethical for a person who can pay his/her own bills to request even more money. If there are enough donators and enough donation services circulating around the world then everyone who is in need of money help can always have somewhere to look. It can be gratifying for the donator to know that they are doing a good service to the community. People with kind hearts have a huge impact on society. The gratitude that the donators get from the people accepting the donations only make it more worthwhile.

Online donations are simple thanks to services like PayPal. It is also easy to be an anonymous donator if desired. It is preferable that people who look for donations online make a truthful and compelling story on how they got to the situation that they are in now. Talking about the dreams that can be accomplished by donations also help the size of the donations that one can receive. Sending pictures to the person donating money also has a gratifying impact for the donator. During these difficult times, the internet is the best and most convenient place to go to for people who want to donate to the needy or for people who need donations.

Brian Tse is the operator of http://www.needmoneytohelp.com, a site dedicated to providing a donation service for people who are in deep water and need money. The site also warmly welcomes anyone who wants to benefit humankind by giving a little something to others.

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How the FDIC Affects Your Wallet

You might be surprised to learn that the FDIC is not funded by tax payer revenue, so it receives no Congressional appropriations. Rather, it’s funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $45 billion, the FDIC insures more than $5 trillion of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.

Banks and thrift institutions have to comply with a host of regulations and safe operating guidelines designed to protect depositors and their money. In many ways, the FDIC could be considered a consumer protection agency as it supervises and regularly examines insured banks to make certain they are operating in safe and sound ways, thus protecting customers and their deposits.

On October 3, 2008, FDIC deposit insurance temporarily increased to $250,000 per depositor through December 31, 2009, but there is legislation currently proposed in Washington to keep the $250,000 coverage permanent. Many experts believe this will pass with little resistance, but only time will tell.

Your money in savings, checking and other deposit accounts, when combined, is generally insured to $250,000 per depositor in each bank or thrift the FDIC insures. Deposits held in different categories of ownership – such as single or joint accounts – may be separately insured. Also, the FDIC generally provides separate coverage for retirement accounts, such as individual retirement accounts (IRAs) and Keoghs, insured up to $250,000. The FDIC’s Electronic Deposit Insurance Estimator can help you determine if you have adequate deposit insurance for your accounts. We’ll cover ownership categories in more detail in our next installment.

The FDIC, Your Bank, and You

We’re launching our blog with a short series of posts dedicated to how we work with the Federal Deposit Insurance Corporation, or FDIC, to protect your hard-earned cash. (With bank failures and economic doom-and-gloom all over the news we thought it a good place to start.) But before we get into specifics, we need to provide a brief history of the FDIC and its role as a consumer protector.

The FDIC was created as an independent agency of the federal government in 1933 in response to the bank failures of the 1920’s and early 1930’s. The FDIC is headquartered in Washington, D.C., but conducts its business in Utah from a field office in Salt Lake City. This field office works closely with the Utah State Department of Financial Institutions to oversee the safety and soundness of many of the state’s banks, including Western Community Bank. Since the start of the insurance program on January 1, 1934, no depositor has lost a single cent of FDIC-insured funds from a bank failure.

The FDIC insures deposits only. It does not insure securities, mutual funds or similar types of investments that banks and thrift institutions may offer. (See Insured and Uninsured Investments on the FDIC website to determine what is and is not protected by FDIC insurance.)

Upcoming installments will cover “How the FDIC Affects Your Wallet,” “How to Make the Most of FDIC Insurance Coverage” and “How the FDIC Affect’s Your Bank’s Service.” We hope these posts will help you gain a better understanding of how you can better protect your hard-earned cash, and how your bank is working to protect you.

Make the Most of FDIC Insurance

Our last post made reference to the FDIC’s Electronic Deposit Insurance Estimator, or EDIE, to help you determine if you have adequate deposit insurance for your accounts. Today we’ll delve further into ways you can make the most of available FDIC deposit insurance coverage.

Perhaps one of the best features of FDIC deposit insurance is that’s free. You qualify for it simply by opening a qualified deposit account at an FDIC insured bank. How much insurance you can receive is a different matter. The amount of coverage is based on factors such as the amount of money you have in an insured bank, the type of account, and the kind of ownership category the account falls into.

You can never receive more money than you have in your deposit account. Traditionally, the FDIC has insured deposits up to $100,000 per depositor, but on October 3, 2008, FDIC deposit insurance temporarily increased to $250,000 per depositor through December 31, 2009. So this means if you and your family have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage – your deposits are fully insured. A depositor can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements

You may qualify for more coverage if you own deposit accounts in different ownership categories. The best source of information regarding ownership categories is the FDIC. So to help you determine how you can establish your accounts in the proper ownership categories and to help you maximize your coverage, we suggest you take some time to review the information on the FDIC’s insurance coverage info page.

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The Princess and the Penny

Do you remember the story of the Princess and the Pea where a pea is placed below a ridiculous stack of mattresses to help a desperate prince determine if a traveler claiming to be a princess really is a princess? The prince thought if the woman could feel a pea through all those mattresses that she had to be a princess, because “only a princess could have skin so delicate” as to feel that small irritating pea under all of those mattresses. Sure enough, the woman proved to be a princess. She did not sleep all night because she could feel the tiny irritant under all the mattresses. Imagine what she would think today sleeping on one mattress with a penny-or a stash of money-stuffed under it.

Admittedly, this story is recalled in order to make a point: As bad as the economy is, or may get, the mattress is not the smartest way to save. If you don’t want to loose sleep over the safety of your money, or sleep with an annoying lump in your bed, do some homework and find a safe and secure bank where you can open a simple savings account. You will have greater peace of mind knowing your money is FDIC insured and that your bank is working hard to deserve your trust.

Remember that the bank failures you’re hearing about in the news are typically large banks, and that there are thousands of smaller institutions, like community banks, that continue to operate in safe and sound ways. What’s more, your local community bank is most likely owned, managed, and operated by people in your community who understand your needs, the local economy, and the issues that affect your neighborhood.

Resist the temptation to open a “restless-nights-sleep account” and open a simple savings account at a trusted local community bank instead. You’ll sleep better.

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Benefits of “Going Local”

“The past few years have seen increased emphasis on “going local,” or supporting local communities by consuming products that are produced and sold by independent organizations rather than big-box, franchised retailers,” according to American Fork City Councilman, Dale Gunther in an article published in the February 2009 Utah County Business Journal. “The trend has really taken off…because it helps local communities thrive by reinvesting local dollars at home.”

“While it’s natural to think of products such as produce and art as part of the “going local” movement,” Gunther continues, “one product that is often overlooked is the community bank. Yes, the community bank is indeed a local product that supports local communities.”

So what are some benefits to banking with a local community bank? Here are a few cited by Mr. Gunther:

• “Community banks are locally owned and geographically centralized. This means the money deposited by citizens in your town is generally loaned back to citizens in your town” – not citizens or businesses in other states or even counties.
• “Local management also means faster decision making and less red tape.”
• “At community banks, there are fewer layers to get to the top, which means you have easier access to executives.”
• The employees of community banks are almost always from the community. They “know the community and have been working at the bank long enough to know how to best meet the needs of the community. They know the market and have a vested interest in seeing the local economy succeed.”
• Smaller banks are better to work with you when you have problems with your account. “[They] work with you to avoid fees in the first place and, when incurred, they don’t sting as much as those of their bigger brethren.”

When you consider “going local,” do as Mr. Gunther suggests and “realize that as much as spending locally lifts communities, saving and borrowing locally does, too,”

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“How much should I have in savings?”

It’s not often that I read the magazines in the break room–partly because I could care less what’s going on with Brangelina or because I have no interest in making cupcakes look like butterflies. But I confess to opening the April 1, 2009 issue of Family Circle Magazine a few days ago and stumbling upon an article by Kate Ashford titled “Financial Planner.” The article was shorter (much shorter) than I expected, but there were some good bits of advice.

“Confused by the economy?” Ms. Ashford begins, then answers four (only four, mind you) finance-related questions. I’m not going to repeat them all–you can click the link to the article above if you want to read the entire piece. The third question and response is worth sharing here because I hear this question with some regularity when I’m in the bank, and when people I meet find out I work at a bank:

“Q. How much should I have in savings?

A} At least six months of living expenses. The general rule of thumb has always been that dual-income families should have three to six months of living expenses accessible in a savings account…But fewer than 40% of adults have enough in savings to tide them over for even three months, according to Bankrate.com. And now that the economy is so uncertain, experts are leaning toward six months. “If someone loses his job, it’s anybody’s guess how long it will take to become employed again,” says Donald E. Whalen, a certified financial planner in Alpharetta, Georgia. But don’t get overwhelmed by the thought of having to save so much money-”living expenses” doesn’t mean cash for leisure activities. It’s the money needed to cover bare essentials, like mortgage, food, and health insurance.”

To beef up your emergency fund:

A) Set up a weekly automatic debit from your checking account into a high-interest savings account, and increase the amount when you can.

B) Raise the deductibles on your home and auto insurance, or shop around for a better deal, and then stow the difference in a savings account.

C) When you finish paying off a credit card, keep making payments-to your emergency fund.

D) Try bundling expenses (like getting phone, Internet and cable from one company) then stash the savings.”

These are great ideas, and the emphasis is clear: Look for places to cut expenses and then save the money rather than spend it. For more ideas on how to save money, check out some of our past posts.

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Half-empty or Half-full?

The US Department of Labor released a report today stating that the national unemployment rate rose to 8.5% in March 2009 — the highest level since 1983. At the risk of sounding a little heartless: So what? What does this often quoted statistic mean to me and you? It’s 8.5% of what? How does Utah, or Utah County, or Orem, Lindon, Pleasant Grove, or American Fork fit into this statistic? These are all good questions that deserve some attention. So here goes…

The unemployment rate is a measure of the percentage of the work force that is unemployed at any given date–which means that 91.5% of the work force is still employed according to the March 2009 numbers.

How does this affect us locally? For simplicity’s sake, let’s take a look at February’s statistics, because we have them for the nation and state. In February 2009, the US unemployment rate (or sometimes called jobless rate) was 8.1%, which means that the 91.9% of the workforce who wanted to be employed had a job. The rate for the same period in Utah was 5.1% (or 94.9% employed). This puts Utah at number six on the list behind Wyoming (3.9%), Nebraska, North Dakota, South Dakota, and Iowa (4.9%) out of the 50 states and Washington D.C. In the Provo-Orem and Salt Lake City Metropolitan Statistical Areas, the rate was 5.2%. This places our local rate at 27 on a list of 372 other Metropolitan Statistical Areas.

We all know we’re in turbulent economic times, but in our neck of the woods we’re not being impacted as heavily as other areas of the country, and we’re not getting through it unscathed, either. Have we seen the worst of it? Probably not. Is the glass half-empty? No. There is still plenty to be thankful for, because it surely could be a lot worse for many more people.

Chances are high that you know someone who has been laid-off or needs a job. Do them a favor by keeping your ears and eyes open for opportunities, and let them know about what you see or hear. History tells us that communities that work together are usually better insulated against downturns as each member helps his or her fellow citizens. The situation will get better. At a recent event I attended, Steve Forbes, the Chairman and CEO of Forbes, Inc., and Editor-in-Chief of Forbes Magazine, said, “The world can only end once–and this is not it.”

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Tax Fun Facts

Is it really fair to place the words “tax” and “fun” next to each other? We’ll let you decide, but with April 15^th bearing down on us, here are some interesting–if not fun–tax facts to divert your thoughts for a few minutes and hopefully lift your spirits.

• The first property tax in the United States was in 1798.
• The first US income tax started during in the Civil War to help raise money back in 1862.
• The first federal tax office in the US was the Office of the Commissioner of Internal Revenue in 1862.
• The 16th Amendment, ratified in 1913, established the first permanent US income tax. Four states rejected the amendment: Connecticut, Florida, Rhode Island, and Utah, and two never considered/discussed it: Pennsylvania, Virginia.
• The Gettysburg address, one of the greatest speeches in U.S. history, has 269 words. The Declaration of Independence contains 1,337 words. The Holy Bible consists of 773,000 words. Yet there are over 7,000,000 (not a typo that is 7 million) words in the U.S. Tax Code (laws and regulations).
• There were 402 tax forms in 1990, by 2002 that number jumped to a staggering 526.
• The number of pages in the tax code and regulations went from 26,300 in 1984 to an astonishing 54,846 in 2003. There are 500 pages in a ream (standard package) of paper–that’s nearly 110 reams of paper! A ream is about two inces thick, so if you stacked all 54,846 pages on top of each other, you would have a stack of paper 220 inches high, or about 18 feet tall!!
• The IRS sends out over 8 billion pages in forms and instructions every single year, that’s nearly 300,000 trees. (Thankfully, they now use recycled paper).
• The easiest form, the 1040EZ, has 33 pages of instructions–ridiculous.

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Minimizing the Stress of a Layoff – Part 1 of 3

Layoffs are commonplace in a sagging economy, and chances are good that you know someone who has recently been laid-off from his or her job. And it often doesn’t matter how good you are at your job or how hard you work. But a layoff doesn’t have to be the end of the world, nor should it be. The key to minimizing the stress and negative fallout is to know how to react if you are laid-off and to prepare now for the possibility of a layoff in the future.

If you’ve been following this blog, you know we recently posted information about Utah County’s unemployment rate. Fortunately, the Provo/Orem Metro Area ranks 27th out of 372 other Metropolitan Areas in the U.S. according to February 2009 numbers–so it could be lots worse. Nevertheless, while 91.5% of the workers in the Provo and Orem areas are still employed, there are an increasing number of good, honest, hard-working people who want to work, but who do not have a job.

If you’ve been laid-off, have hope. You will survive to work another day if you’re determined to work. You may even find a way to embrace the layoff for what it may be–the opportunity to make a career change that you’ve been considering for a while.

We don’t know about you, but we’re tired of hearing about hope and seeing nothing done. It’s time for solutions. We’ll be posting information we think may be useful for anyone currently employed, anticipating a layoff, or who may have already been a casualty of downsizing.

Please leave us comments with ideas or helpful information you have that may help someone facing the stress of a layoff.

Minimizing the Stress of a Layoff – Part 3 of 3

Here are some additional ideas that may be useful to help reduce the stress of a layoff, or to prepare for the possibility of one in the future:

Be Wise with Your Emergency Fund – This assumes you have an emergency fund. If you don’t have one, start one. Cut back on discretionary purchases and put as much of your paycheck into your emergency savings fund as you can. If a layoff has already affected you, cut back or eliminate unnecessary expenditures and be wise with your use of the fund. Our “How much should I have in savings?” post can help you determine the right amount to put away. And the information in our “Automate Your Savings” post can help you save effortlessly. Hopefully, if you do get laid off, you’ll also have a severance package that will help you pay the bills. However, the more you can sock away, the more peace of mind you’ll have if the axe falls.

Communicate with Creditors and Billers – One of the major stresses after a layoff is making ends meet. The more willing you are to communicate openly and honestly with creditors and billers, the greater your chances are that they will work with you to help you meet your obligations. It’s not a guarantee, but you may be surprised by what they are willing to do to help you.

Remember to Look on the Bright Side — At worst, getting laid off is a temporary trial (and you will get through it, I promise). At best, your layoff may be the kick in the pants you need to find a more fulfilling job. It’s surprising how often I hear people speak of being thankful for their layoffs (some of them volunteered or even begged to be let go). Their severance packages gave them the time and opportunity to pursue the careers of their dreams. If you’ve been unhappy in your current career path, this layoff may be your chance to explore your options.

Know What Resources are Available — There are many resources available to help if you have already been let go. The Utah Department of Workforce Services has offices in American Fork, Provo, and Spanish Fork with professionals who can help. The Church of Jesus Christ of Latter-day Saints has Employment Resource Centers available to anyone, regardless of religious affiliation.

Tell Everyone You Know That You’re Looking for a Job – Now is not the time to be the strong, silent type. Ask for leads from family, friends, and neighbors. Sometimes it really is who you know, not what you know that leads to a meaningful job opportunity.

If you have ideas or helpful information that may help someone facing the stress of a layoff please leave us a comment.

“You want to do what?!?”

A recent discussion with my wife about our long-term retirement hopes was very revealing. The discussion went something like this:

Wife: “When you retire I think it would be fun to go to culinary school together and consider opening a restaurant. We have so much fun in the kitchen talking and cooking.”

Me: “Yeah. That would be fun. It would be a lot of work, but it would be fun. But what I would really like to do when I retire is be Donald Duck.”

Wife: “You want to do what?!?”

Me: “I want to be Donald Duck at Disneyland or Disney World. I think it would be fun seeing all those happy kids everyday. Don’t you?”

Wife: “I guess, weirdo. But wouldn’t it be easier and more fun being with me doing something we both enjoy?”

At that point I knew she had issued a checkmate, and I had best think about my plans more as our plans to stay out of trouble. It was also apparent that both ideas carried financial implications we have never discussed. Culinary school and funding a business are not cheap, nor is relocating to Anaheim or Orlando.

Consequently, a study from Fidelity Investments indicates this type of discussion is not entirely unusual. It finds we are not doing a very good job talking about our long-term financial goals with our significant others.

The study reports that only 45% of couples regularly discuss finances. And when it comes to retirement plans, 60% of couples don’t agree when they’ll retire, and 42% are like me and my wife–they don’t agree on what kind of life they’ll lead after they retire.

Does your significant other know your financial goals? Do you know his or hers?

What Really Matters?

When the stresses of life and work bog us down it’s easy to forget the things that really matter or are of the most value to us. Here are three things that I have been reminded of recently that may be of some value to you, too:

Relationships One of my peers recently reminded me that while we’re working hard to handle the pressures of the economy on the bank and the daily duties we face, that we can’t forget we have families and relationships to strengthen. As one blogger effectively said it: “The regular companionship and camaraderie of people you care about and share interests with is continually life-affirming. [Relationships] don’t revolve around the things you have or the activities you can afford – they revolve around people and shared experiences.”

Gratitude I find that the more I’m focused on the things I do have, rather than focusing on that which I do not, that I am more cheerful and giving. I become more positive in my thoughts and speech. I become more content to work harder to reach my goals. I have more purpose in my daily actions and interactions. Cicero said “Gratitude is not only the greatest of virtues, but the parent of all the others.”

Service Helen Keller said, “Happiness cannot come from without. It must come from within. It is not what we see and touch or that which others do for us which makes us happy; it is that which we think and feel and do, first for the other fellow and then for ourselves.” It is in the act of helping others that many receive a great deal of personal joy and satisfaction – something that cannot be replaced by any sort of material item.

What really matters to you? What do you value most?