How protective is your emergency fund?

By Jennifer Langley

Everyone should have an emergency fund regardless of their age or financial status. Not only can one of these funds protect you in the event of an emergency, but they are also a great way to learn about the importance of saving money. Even if you are just getting ready to move out of your parents' house for the first time, you should already be considering how much money you can put into your emergency fund on a monthly basis.

How to build an emergency fund

Most people in the U.S. live paycheck to paycheck, and this can make it very difficult to put any money aside. Unfortunately, these are also the same people who will find themselves in the most financial trouble if even one thing goes wrong. Therefore, it is necessary to make some sacrifices in order to build an emergency fund.


Even if you can only afford to put aside $5 a week, it is better than nothing, and over the course of the year you will save $260. Hopefully you will not have to touch the fund for many years, but if you end up with an unexpected car repair or other issue, it will be much better to have even $260 set aside than no money at all.

Why do I need an emergency fund?

Life is unpredictable, and it is always a bad idea to use a credit card to deal with an emergency situation, especially if you have limited financial resources. Consider for a moment where you are going to get the monthly credit card payments from before you simply move forward with a credit card purchase.

If you do not have an extra $100 a month to make a credit card payment, then you are not in a good position to rely on a credit card. Instead, you should have your own emergency fund in place that will help you replace your transmission, pay for a medical bill or cover your expenses if you miss a couple of days of work due to getting the flu.

No matter how well we take care of ourselves and our possessions, things will inevitably break down and we will eventually become sick. Therefore, the only way to keep ourselves from becoming buried by debt is to dip into an emergency fund instead.

What if I really cannot afford an emergency fund?

There are very few people who actually spend every dollar that they have in a careful way. Consider what your current bills are, and whether or not you actually need to keep all of them the way that they are. For example, if you have premium cable channels, you could easily save $20 or more a month to put into an emergency fund by canceling them.

Keep in mind that there are cheaper entertainment alternatives such as Netflix Instant Streaming if you are a movie addict. Another thing that a lot of people spend money on is a daily cup of coffee. Instead of getting it from a restaurant, you should make your own. The money that you save will give you a nice start to your emergency fund.

What if my emergency fund does not cover my expenses?

There will be some instances when your emergency fund will not have enough in it to cover all of your expenses, but it is always better to cover as much of the cost as possible from your fund. That way, if you do need to get a loan or use a credit card, you will be able to pay it back more quickly and in smaller installments.

This article was written by Jennifer Langley. Jennifer is an avid finance writer who stresses the importance of protecting oneself before venturing out into any endeavor.

* All images US-PDGov

Are you throwing your net worth into the wind?

Mitt Romney wants you to ask yourself whether you are better off now than you were four years ago. Obviously, he is trying to get elected, but it is a good question. Not simply because president Obama has been the steward of a failing economy, but as a way to see if you are one of the millions that wastes large amounts of money each year. To find out, here are ten common ways that Americans throw their net worth to the wind.

10 Ways consumers piddle away their net worth

• Banks raked in $7 billion in ATM fees last year. Surely, you can find an in-network ATM. Another suggestion is to shop around for a bank or credit union that will waive or reimburse ATM fees in exchange for a direct deposit or other consideration from you.
• Collectively, Americans spend an average of $12 billion on traffic fines each year. Do you really need to give the government more money than they already collect from your paycheck?
• Do you feel lucky? $31 billion went to lottery sales in 2010.
• $29 billion went to candy makers. Look for more creative ways to say you are sorry and healthier ways to snack.
• $44 billion was spent on tobacco products. That amount does not include the health care costs associated with tobacco use.
• $50 billion was spent on booze. Again, this does not include the costs of a DUI or health issues from drinking excessively.
• $49 billion was wasted in credit card interest last year alone.
• Didn't get enough of the hose on a lottery ticket? Americans spent $125 billion at casinos last year. No wonder they comp so many rooms.
• A total of $146 billion went into the wind in the form of wasted energy. You can find plenty of suggestions on how to reverse that trend at energystar.gov.
• On average, Americans throw $165 billion in food into the trash each year. For many it is the habit of buying on impulse that leads to having food expire at home. Writing a list, never shopping hungry, and using coupons are all easy ways to lower the amount of food that you throw away each week.

Even if you do not stop your bad habits, maybe you can cut back on them. After all, we all have a vice, but curbing it could save you hundreds, if not thousands, each year. Get control of your habits, then ask yourself if you are better off than you were four years ago.

This guest post has been provided by Keystone Auto Loans, a company that helps people get approved for auto financing despite high risk credit situations such as bankruptcy and repossession. Go here to learn more.

Why traditional financial advice is a joke

Wake up folks and smell the home brew, because when you're looking for jobs in your pajamas, you aren't going to be able to afford Starbucks (complimentary ad, you're welcome). Traditional financial planning and saving methods are undeveloped, cater to mid-to-high income levels, and are unrealistic in an economy with an increasing amount of working poor, and working age people who have given up looking for work.

Financial advisors, or planners also often only deal with clients with net worth over a certain amount of money. Obviously many low-income people have the intelligence they need to manage their own finances, it's the advice and lack of money that is faulty. How can someone have a back up plan when they are trying to pay for rent and food, and only have a couple of dollars left over?

The reason old money management methods do not really work is because it is so easy for a simple, but devastating medical event, or a layoff in a right to work state to ruin years of financial planning in a heartbeat. Traditional plans are based on stable incomes in a solid economy; they are obsolete like a manual typewriter, and assume people have job stability. For example, according to the Wall Street Journal citing DOL data, 73 percent of American adults work 9 or fewer years with a single employer, and 52.8 percent stick around for less than four years.

If traditional financial plans were really effective, they would be able to handle worst-case scenarios, and help individuals achieve financial goals at the same time without relying on a trite formula that simply reallocates assets, and reorganizes budgets. For example, television financial evangelists with their loud piercing voices and savvy investment advice are like the financial advisors of 1928 still playing cards and commenting on the game rather than telling people to think in realistic terms. After all, 1928 was very profitable.

A new kind of thinking needs to evolve in financial advising, a kind that helps multiple income levels. Even the rich can end up at the food banks, and it is too easy to just advise people how to manage money, when really what many people need is a plan of how to make less money work smarter, and how to get the money in the first place. Financial advisors should also be life management consultants that understand the world is not the prosperous, linear, black and white, "father knows best" place it used to be.

To get you started, the following comparison illustrates the contrast between ways of thinking about saving money. On the left are more mainstream ways of saving money; even these tips are the type of advice high-end financial planners try to avoid. On the right are money saving alternatives for low-income individuals or households. These represent a meager lifestyle that is attainable within a low-budget and is often far beyond what we many are accustomed to practicing in their daily lives, but might have to after retiring, losing a job, receiving a harsh medical diagnosis etc.   

 Mid-to-high income saving tips                Low-income money saving tips

  

1. Build emergency account	1. Sell everything
2. Bulk shop	2. Fishing, edible vegetation
3. Refinance mortgage	3. Move in with relatives, R.V or Van
4. Go to state school	4. Learn at library, or earn jail degree
5. Downsize vehicle	5. Tax free old vehicle, scooter, bicycle
6. Turn down pool heater	6. Shower at the gym
7. Bundle utilities	7. WiFi, Antenna, VoP phone
8. Downgrade theater membership	8. Freegan events -ex. Art gallery
9. Extend salon visits	9. Learn to cut & style hair
10. Sale shop only	10. Dollar stores, & church garage sales

 * Left image attribution US-PDGov

Tips for using debit and credit cards

Image attribution: Elph; GFDL, CC BY-SA 3.0

The security of credit card transactions is subject to stricter legal safety requirements and higher liability protection than debit cards. However, the security policies implemented by card networks and issuers differs leading to variance in the level and functionality of the fraud claims process among both credit and debit cards. Even though credit card transactions are thought to be safer than debit cards, other factors also influence and test this belief. These factors include the card's unique security features, safety practices of the card carrier and the technology used to process and monitor transactions.

Credit cards and debit cards operate differently, and this affects their security in some ways. Sally Herigstad, a certified public accounting reporting via CreditCard.com suggests credit cards offer more financial protection in terms of actual cash-flow because with credit cards a disputed charge is not immediately drawn from an account as is the case with debit cards. Additionally, the Bank of America states credit cards are more secure for shopping via the internet because consumer fraud protection is stricter than debit cards for these kind of purchases. 

The brand and issuer of both debit and credit cards also affects the quality of their security. For example, a Visa credit card issued by Bank of America has different security features and services than a MasterCard credit card issued by the Navy Federal Credit Union. Moreover, according to Visa, both its credit and debit cards are protected by perpetual fraud monitoring via its no liability policy. MasterCard also has its own trade marked security features such as a holographic magnetic strip called “Holomag” on the back of its card.

Demographic factors can also influence if credit cards are safer than debit cards and by how much. For example, according to CreditCard.com, women are more likely than men to be victims of identity theft. Thus, if a woman is carrying a credit card and a man carries a debit card, the probability is higher that a woman will be victimized regardless of what card is carried by the man. In other words, in this example, gender plays an increased role in security than the type of card.

The Federal Reserve Bank of San Francisco states the Credit Card Fraud Act protects both credit and debit cards. However, also per the San Francisco Federal Reserve Bank, debit cards are regulated by the Electronic Funds Transfer Act whereas credit cards are protected by the Fair Credit Billing Act and the Truth in Lending Law. Since these laws are not the same, and more laws exist for the regulation of credit cards, the security afforded to debit cards is less expansive than that protecting credit cards.

Guest post: Beyond couponing: Ways to save money outside of clipping coupons

 

US-PDGov

By: Debra Johnson

Couponing has exploded recently, largely due to shows like Extreme Couponing that make couponing big business, and a lot of people mistakenly believe that this is the best or only way to save money. However it’s unlikely that the average person has enough time in their day to clip coupons and check deals and buy items in that large of quantities to justify that type of extreme couponing. And while couponing itself is a great practice, it’s not the only way to save money in your everyday life. In fact, sometimes it’s the smallest changes that make the biggest difference. Here are some minor changes that you can implement to make a major difference:

1. Check out the local library. Every month people pay money for streaming and rental services like Netflix and Hulu to watch different TV shows and movies when they could be watching the same things courtesy of their local libraries. But it’s safe to say that a lot of people probably don’t even know where their local library is. However local libraries are stocked with DVDs of movies and TV shows and you’re able to check them out for free. Ditch the monthly subscription services and find your nearest library – that $10 a month that you save can add up nicely over the years. 
    
2. Join E-bates. If you do any sort of shopping online (and let’s be honest here, most people do) then you should consider joining E-bates. The website links up with retailers all over the web and gives you a percentage of the money you spend back to you. Not to mention, it’s free to join, so there’s really no reason not to sign up and start saving.  
   
   
3. Grocery shop mid-week. Instead of hitting up the grocery stores on the weekends, try shopping mid-week instead. Grocers tend to mark down items that need to sell quickly before their weekend shipments come in, and you can score vegetables, fruit, dairy products, and meat products, just to name a few, on clearance if you go before the weekend hits.
   
   
4. Pay with cash. Mindlessly swiping your debit card is one of the leading causes behind spending too much money because it’s so easy to do. Instead of pulling out your debit or credit card while you’re out, take a set amount of cash with you and stick to only spending that. You’ll be much more aware of where your money is going when you have a finite amount to spend. 
   
   
5. Comparison shop everything. Whether you’re scanning grocery flyers or shopping for the best vacation rates, comparison shopping can save you a ton of money. It may take you more time to do, but the time you’re spending is nothing compared to how much you’ll end up saving, and once you start doing it regularly it will become second nature.

One of the best ways to cut back on spending and save money is to become very aware of what you’re spending and to really evaluate if it’s something that you actually need or not. Don’t be afraid to turn down going out if it’s not truly in the budget, and find alternatives, like hosting a potluck dinner at your house or a game night, instead. The little changes can make a big difference in the amount of money you spend and save.

About the Author:

This guest post is contributed by Debra Johnson, blogger and editor of live out nanny. She welcomes your comments at her email Id: - jdebra84 @ gmail.com.

Cost effective ways to dine out with children

Image attribution: Paul Glazzard, CC BY-SA 2.0

There are plenty of ways to dine out with kids without breaking the bank. These frugal methods for dining out can make interesting, and sometimes educational outings as well as affordable or free food. Frugal ways to dine out with kids can also be part of a daily activity that brings family or friends together to share experiences, entertainment and food.

• Kids eat free restaurants

For those who still like to go to restaurants when dining out with kids, kids eat free restaurants might be just the thing. According to Frugal Living, there are many kids eat free restaurants for parents and adults to choose from when dining out with kids. Among these restaurants listed by Frugal Living are select franchises of Applebees, Buffalo Wild Wings, Cinzetti's and quite a few others.

• Promotional dinner seminars

Sometimes promotional seminars also offer free dinner. This can be  a useful way to introduce children to the adult world of finance while also getting them a free dinner. For example, the Better Business Bureau of Louisville, Kentucky mentions many investment planners and estate planners offer free lunches or dinners to potential clients. If kids are actually interested in the topic of the seminar, or if they warm up to the idea of the seminar, the meal can be that much better.



• Church dinners

Churches also offer free dinners alongside specific church events per the Salisbury Post. These events might require kids and adults to attend a church service, parish meeting or community sponsored event, but can also be a frugal source of dinner. For those parents looking to introduce their children to life among church goers, a free church dinner might be just the thing. What's more these types of dinners are not necessarily limited to one faith only.

• Hunting pot luck

Another frugal way to dine out with kids is at hunting events such as hunting pot lucks. At these events, newly acquired game and wildlife becomes the main dish after a day of venturing outside amongst ducks, deer, turkey, rabbit or even fish. If hunting is your thing, hunting pot lucks are a way to teach kids about the activity while spending quality time with them and following up with a hearty meal.

• Food holidays and birthdays

If a kid can't get a free meal or discount on his birthday, a national food holiday might be just the thing. Food holidays are promotional holidays that promote a specific type of food at discounts or free. For example, on March 1, 2011, the International House of Pancakes (IHOP) offered free pancakes for National Pancake day.  If pancakes aren't the right type of food, there are plenty other food holidays that might contribute to a frugal outing with the kids.

How to create a successful budget

 Image attribution: Stuart Miles. Standard royalty free license

A successful budget grows wealth and manages debt within an organized framework that easily manipulates and apportions money for maximum financial benefit. The traits of a budget are what help make it successful by providing the basis with which the budget can operate and assist with appropriately managing the budgeter’s life.

Capitalize

No budget can work without money to budget so a budget must be capitalized to be successful. Examples of sources for capitalizing a budget include income, capital gains, and interest earned from assets. Once a budget has been capitalized, the financial parameters within which the budget can operate are established.

Prioritize

Another trait of a successful budget is they are often prioritized. In other words, some expenditures and allocation of money may be more important than others. To determine which budget allotments should take priority, consider the affect on basic needs, cost of debt, reduction of debt, and amount of savings. For instance, a good budget accounts for basic short-term needs such as food while simultaneously preparing for longer term financial horizons.

Systematize

Systematization of a budget is a similar trait to prioritization except its focus is more on the functionality of the budget. For example, a successful budget might distribute money across a number of categorized goals such as retirement planning, emergency savings, high interest debt and so on.

Optimize

Optimization of money is a key trait of a successful budget because it allows that money to go as far as it can go. For example, if debt can be paid off within six months, and the money used to pay that debt is then re-allocated to savings for another six months will there be more savings over a course of one year than if an equal amount of debt payments and savings contributions had been made?

Accessorize 

A successful budget may also be accessorized, not necessarily by expensive financial software, but rather with useful budgeting techniques. Simple mathematical analysis of a budget is one such accessory. To illustrate, mathematical analysis is a useful if not essential accessory because it allows the budgeter to determine if one use of money has a more advantageous affect on net worth than another.

Since finances and people’s lives are diverse, a budget can vary from simple to complex based on the financial needs of the individual or household. For example, an overly complicated budget may be simplified to better meet the objectives and requirements of a straightforward financial plan. Moreover, successful traits of budgets reflect tailored financial allocations that meet specific needs, and goals using comfortable and suitable methods.

A look at financial freedom

Everyone knows how to gain financial freedom the hard way, but what isn’t quite so evident, is how to gain financial freedom quickly, easily and with no risk i.e. effortlessly. However, societal structure is not designed for this, but rather to the contrary. Perhaps if all humans were wealthy no one would work. Even so, how does one gain financial freedom in 30 words or less? i.e. with a straight answer that doesn’t wander off into the world of rhetoric, or semantics.

Image attribution: Africa; standard royalty free license

Since 30 words have already passed, the answer to that question should now be evident. That is to say, the answer to this question is, if financial freedom doesn’t already exist, chances are it can’t be found in 30 seconds or less. That’s a reality hurdle that can make attaining financial freedom that much more possible. Having said that, before explaining how to gain financial freedom, it is important to first define what financial freedom is as it is a loaded term that differs based on perception of what it is.

For one person financial freedom may be living a life of luxury without having to work, but for another it may simply mean being free of the concept of money altogether. The path toward financial freedom is different for both types of financial freedom. Being free of the idea of money altogether is actually harder to do because it is such a prevalent aspect of so many economic systems.

When effort is thought of as overcoming personal, cultural or economic friction, that effort is at least somewhat determined by the level of that friction. For example, one who does what comes naturally i.e. out of  un-manipulated personal choice while earning money doing so, can be thought to be making less effort than one who does something that earns money against his or her will. In such case, the former of the two makes less effort to gain financial freedom because the path to that financial freedom is more effortless. Thus, the first step toward gaining financial freedom effortlessly is to do what comes naturally.

For the person who seeks to avoid training his or her mind to acquire financial freedom, a more literal, and even more effortless notion of financial freedom is alluded to. The lottery winner almost fits this criterion, but is accompanied by the one key caveat of low probability. Thus, how to achieve financial freedom with high probability in addition to minimal effort is the question. The answer to this question is to find the financial opportunity that has high probability of success, is accessible, and requires little or no effort to implement.

Naturally, the next question in how to gain financial freedom might be, if financial opportunity is required, how does one find financial opportunity. Now the notion of financial freedom is gone, and instead replaced by the more accurate question of how to gain financial opportunity that pays. The easy answer is of course to look, but this would be followed up with the question, where does one look? The answer to this question varies, but can be quickly answered by saying, look where money is most easily acquired, but think in a way that is not designed for the macro-economic mass.

How to pay bills

 Image attribution: Stuart Miles; Standard royalty free license

Prioritizing expenses can reduce the cost of debt while also maintaining essential services needed for day to day household functioning. Knowing how to prioritize expenses can also help ensure adequate retirement planning and avoid having important services cut off.

In order to prioritize expenses, it is important to first have a budget that assigns portions of money to the expenses before they are paid. This budget can help maintain consistency in financial planning and facilitates the prioritizing of expenses.

• Utilities and insurance

Without utilities and insurance, living becomes difficult and potentially dangerous. Without the basics of day to day life, performing income generating tasks, and maintaining focus on other priorities is challenged. For this reason, it makes sense to first pay those expenses that allow one to function in such a way that other debt payments are more likely to be made or facilitated.

• Low balance accounts

A debt prioritization technique advocated for in the ‘Military Spouse Finance Guide’ is snowballing debt. This method starts by paying the largest amount to the smallest debt, then rolls over the funds used to pay that expense into the next largest debt. The theoretical affect of snowballing is with each consecutive debt that is paid off, a larger amount of money becomes available to pay off larger debts.  

• Revolving credit

Revolving credit has a greater affect on credit rating than installment debt such as auto loans according to the Fair Isaac Corporation, paying down revolving credit such as credit cards has the greatest impact on credit score in terms of debt payment. Due to this, and the idea that credit cards often tend to have higher interest rates than auto loans and other types of installment loans, prioritizing credit expenses first can be a good idea.

• High interest debt

Naturally, high interest debt should also be paid. Even if it is just minimum payments, keeping this type of debt in check and on slow balance decline is useful in reducing overall debt and improving credit score. If this type of debt only constitutes a small fraction of total income and a large amount of total expenses, paying it off slowly helps maintain a credit history.

• Retirement expense

Saving for retirement may be put off and neglected for more immediate financial concerns. To an extent this makes sense, but eliminating retirement expenses from a budget altogether can be a bad idea. The earlier one starts contributing to a retirement fund, the less money is needed to include this expense among financial priorities so it makes sense to start early even if it means paying debt off more slowly.

Another key factor in properly prioritizing debt is managing new expenses. If the U.S. Bureau of Economic Statistics is a valid indicator, the U.S. national saving rate ranged between approximately one and seven percent between 2004-2010. This means a high rate of expenditure is prevalent throughout the country and that prioritization of debt can be helpful.

In light of national savings levels, new expenditures might best be avoided in order to lower debt to income, and credit to credit limit ratios. Since many people have higher debt and credit ratios, the task of prioritizing debt is made more difficult. However, if no new expenses are taken on, and expenses are less than 99 percent of total income, the prioritization of expenses can be beneficial when budgeted for accordingly.

When to pay cash and when to use a credit card

Consumers might be better off if credit cards had the equivalent of a surgeon general's warning on it; "Warning: Use of Credit Cards may be dangerous to your financial health potentially leading to financial peonage, and bankruptcy". Instead of the warning being by the surgeon general it might be by the federal reserve chairman. The idea here is credit cards are to be used with caution.

There are several reasons why a credit card can be useful however. Since modern economies are very dependent on credit as a source of exchange, it is somewhat undeniable that credit is a financial reality. Credit cards can also protect spenders through credit dispute mechanisms and credit history statements. This financial reality can necessitate the use of credit cards in addition to the following:

• Using credit cards effectively helps build credit ratings
• Bridge financial gaps between paychecks
• Make possible a beneficial opportunity that might not have been available otherwise.

Cash is useful too, and although it is quickly becoming less and less necessary to use cash, it still can be helpful to use cash instead of credit. Moreover, although credit cards are widely accepted and cash is not always necessary, there are specific benefits associated with using cash. Some of those benefits are listed below.

• It doesn't have to be paid back unless it's from a loan.
• Cash spending can keep one on top of a budget by only spending what one has
• It's harder to trace purchases if you like privacy.
• Cash looks good, it's creative, feels nice and is less uniform than plastic. It has aesthetic appeal.

So when should one use cash and when credit? how to distinguish? The concept of a monthly time line can be useful here. By planning a monthly budget one can decide which money will be used for building and maintaining credit and which money might be used to keep one on budget.

Of course not everyone needs to use cash because more advanced budgeters have self-control. In this instance, one may not use cash at all and may even dive into the realm of micro-budgeting. An example of Micro-Budgeting is when one finds a credit card that matches his/her greatest expense to a credit card that provides rewards and incentives for those expenses i.e. airline miles, cash back, discounts, gas rebates etc. This will inevitably lower the cost for that expense making the credit card advantageous if the expense is a necessity and within budget.

The decision of how to fine tune one's use of cash and credit card is up to the individual. Each individual has different spending habits, needs, expectations etc. regarding the use of cash and credit. By considering the above concepts in mind, one may be better navigate the pros and cons of spending with cash and credit cards.

Why Tankless Water Heaters can Save Money

Do you turn on the water and have to wait for it to warm up? Tankless water heaters bypass this problem by heating the water where it is being used. Tankless water heaters don't have to pipe hot water as far as is with tank heated water nor do they need to store and maintain water at a constant temperature, both of which can save money on energy costs and improve water efficiency.

Small tankless water heater

Source: Public domain

Although there are certain advantages and disadvantages to this type of heating system they can be useful, efficient and cost effective in the right usage applications. For example, when one is not using the shower which is typically most of the day, one's hot water tank periodically turns on to keep the water at a minimum temperature setting. This uses energy when nobody is home and/or using water. A tankless water heater only operates 'on demand' and therefore uses energy when it is needed and not when it is not needed.

Types of Tankless water heaters

There are several types of tankless water heaters including propane, natural gas and electric tankless water heaters. These heaters require more energy at the time of water use but may use less overall energy and water. The heaters come in different sizes and energy requirements based on the application. (plumbingstore.com)For example, if one just wants on demand water heating for faucets there are tankless water heaters specifically for use in faucets. A shower and/or laundry machine would require a different size of tankless water heater because it uses more water. This link explains this concept in more detail.

Cost effectiveness

Tankless water heaters are cost effective because they have an expected life expectancy of approximately 33% -50% more than a conventional water heater. Also, the time one spends waiting for water to warm up one is using water needlessly. Over time this can use 100's of gallons of unneeded water and cost; a tankless water heater can help reduce this excess water consumption. Also, tankless water heaters are believed to be 20% more energy efficient than conventional water heaters leading to even more potential savings.

Brands, installation and type

Another way to save money with a tankless water heater is by shopping around. Different brands, installation methods and types will cost different amounts. Alsoi, if one purchases a tankless water heater for the water consumption usage used most in the home that is likely where the most energy savings will be derived from. For example, toilets don't need hot water, but showers typically do. Furthermore, brushing teeth and washing hands can be done with cold water. This being the case, a tankless shower heater is probably the best option of the three uses of water in terms of application.

Tankless water heaters may also be tax deductible or have some tax benefits depending on the country in which one lives. Plumbing supply store, home improvement stores and online are good places to start shopping around for a tankless water heater. Company brands include Bosch, Powerstar, and Niagra Industries Inc. Do it yourself installations are obviously the most cost effective water heaters to install, however this may be difficult depending on one's water distribution system and/or existing plumbing. The smaller the heater the easier it may be to install. What's more if installed in conjunction with a home warranty or with the purchase of the heater the cost may be reduced significantly.

Tankless water heaters can also be used with other heaters. For example, in a hot climate a solar heater may be the main type of heater used and the tankless heater may be a back up for colder days. How one uses a tankless water heater, and the cost of the heater and its installation are probably going to be the factors that most influence the energy savings and benefits of the system. These heaters are used more in European countries like Britain but are gaining exposure in North America as the demand for energy conservation increases. By shopping around, assessing water consumption uses and comparing prices and installation one can benefit from a tankless water heater and help create an energy efficient home and environment.

Sources:

1. http://en.wikipedia.org/wiki/Water_heater
2. http://www.topix.net/forum/home/building/T4OC4S149FIPABO9A
3. http://ezinearticles.com/?Does-A-Tankless-Water-Heater-Save-Money?&id=255328
4. http://www.articlecity.com/articles/home_improvement/article_1991.shtml
5. http://www.tanklesswaterheater.com/products.htm
6. http://tinyurl.com/57hkn2

How to budget by prioritizing expenses

Prioritizing expenses can reduce the cost of debt while also maintaining essential services needed for day to day household functioning. Knowing how to prioritize expenses can also help ensure adequate retirement planning and avoid having important services cut off.

In order to prioritize expenses, it is important to first have a budget that assigns portions of money to the expenses before they are paid. This budget can help maintain consistency in financial planning and facilitates the prioritizing of expenses.

• Utilities and insurance

Without utilities and insurance, living becomes difficult and potentially dangerous. Without the basics of day to day life, performing income generating tasks, and maintaining focus on other priorities is challenged. For this reason, it makes sense to first pay those expenses that allow one to function in such a way that other debt payments are more likely to be made or facilitated.

• Low balance accounts

A debt prioritization technique advocated for in the ‘Military Spouse Finance Guide’ is snowballing debt. This method starts by paying the largest amount to the smallest debt, then rolls over the funds used to pay that expense into the next largest debt. The theoretical affect of snowballing is with each consecutive debt that is paid off, a larger amount of money becomes available to pay off larger debts.

• Revolving credit

Revolving credit has a greater affect on credit rating than installment debt such as auto loans according to the Fair Isaac Corporation, paying down revolving credit such as credit cards has the greatest impact on credit score in terms of debt payment. Due to this, and the idea that credit cards often tend to have higher interest rates than auto loans and other types of installment loans, prioritizing credit expenses first can be a good idea.

• High interest debt

Naturally, high interest debt should also be paid. Even if it is just minimum payments, keeping this type of debt in check and on slow balance decline is useful in reducing overall debt and improving credit score. If this type of debt only constitutes a small fraction of total income and a large amount of total expenses, paying it off slowly helps maintain a credit history.

• Retirement expense

Saving for retirement may be put off and neglected for more immediate financial concerns. To an extent this makes sense, but eliminating retirement expenses from a budget altogether can be a bad idea. The earlier one starts contributing to a retirement fund, the less money is needed to include this expense among financial priorities so it makes sense to start early even if it means paying debt off more slowly.

Another key factor in properly prioritizing debt is managing new expenses. If the U.S. Bureau of Economic Statistics is a valid indicator, the U.S. national saving rate ranged between approximately one and seven percent between 2004-2010. This means a high rate of expenditure is prevalent throughout the country and that prioritization of debt can be helpful.

In light of national savings levels, new expenditures might best be avoided in order to lower debt to income, and credit to credit limit ratios. Since many people have higher debt and credit ratios, the task of prioritizing debt is made more difficult. However, if no new expenses are taken on, and expenses are less than 99 percent of total income, the prioritization of expenses can be beneficial when budgeted for accordingly.

How to Surive Shopping at the Mall

Don't go to the mall! The "mall mauling" is that stressful, heavily populated, and slow time of year in which hundreds and thousands of Christmas shoppers converge upon the malls to achieve the cherished goal of buying presents for loved ones. This mauling doesn't have to be a terrible experience and there are ways around it. A few of those ways involve just a little time and thought to how one should go about doing the Christmas shopping.

• Shop early to beat the crowd

Early means both early in the day and early in the season. Shopping for Christmas just after store opening after morning rush and as close to early December as possible is likely to be less stressful. The closer to Christmas day the time becomes the more pressure and crowds there are at the mall. After work hours between 5:00-9:00 PM can particularly taxing especially on top of rush hour traffic.

• Give cash instead of gifts

One may have to put the cash in big boxes to make the Christmas tree look like it's stocked with presents, but one doesn't have to go to the mall to get boxes, those can be obtained at Alcohol stores who are often glad to have the public take their box trashing responsibilities off their hands. If one isn't intent on giving sentimental or thoughtful gifts, cash is the clear and easy answer to avoid the mall altogether.

• Shop at local stores and/or chain outlets

A Christmas shopper doesn't always have to go to the mall to get the shopping done. This can be achieved by shopping at the nearest strip mall to one's neighborhood. Not only can this save gas and time, these types of stores are generally not as busy as the hallways of malls in which a multitude of shoppers transiting between, and searching for their shop can be found wandering in a shopping frenzy.

• Skip the expensive mall gifts 

Gifts are more expensive at malls because convenience costs. That doesn't necessarily translate into quality either. Homemade, or off the beaten path gifts can have appeal and sometimes even more value. Consider alternate gifts that cost less by first asking the recipients what they would like first, or what they think of some of the items other shops may have.

• Ask someone else to shop

With a little coaxing and some rewards asking someone else to do the shopping can be another way to avoid the mall and the maul mauling. If they don't want to do it, for about $20.00 a trusted neighborhood teenager may be willing to help out provided they know what to look for.

• Mailorder items instead

Many companies such as L.L.Bean, Lands End and Eddie Bauer send out catalogs from which gifts can be chosen. If they are ordered far enough in advance these gifts not only arrive without a trip to the mall but in a box. That means all that needs to be done is wrapping the box. This method can also be expedited and have a variety of shipping order options to meet one's deadlines and preferences.

All in all, the mall mauling is avoidable. With a few well chosen tactics and shopping strategies, shopping can be easy and painless. The above methods can both reduce the stress of shopping and possibly save a little on gas and travel expenses or that extra fancy gift that tempts one when browsing the windows of the mall's many shops. The mall mauling is no myth, it is a reality, but like many realities, there are also many solutions to the mall mauling.

How financial planning calculators can help you budget

Financial planning calculators can help you budget because they accurately assist in the process of evaluating and reorganizing finances when used correctly. The benefits of financial calculators include being able to compare and balance numbers such as amortization schedules, net interest margin, debt to income ratio and other personal financial variables that are helpful when budgeting. No matter how simple or complex your financial situation, financial calculators can help you with it.

Financial calculators can help you budget when the following steps are implemented. These steps from start to finish illustrate a process by which budgeting with financial calculators takes place. The last two steps are the more difficult of the five because they are more involved and may require acclimation. Even though the process of using a financial calculator in a budget may seem like a chore, once you learn how to do it the first time it becomes easier and faster thereafter.

• Be aware of the different types of financial calculators
• Know what financial calculators do
• Locate financial calculators for use
• How to use the financial calculator
• Incorporate financial calculations into budget

What financial calculators do

Financial calculators address a wide range of financial matters relevant to financial planning such as debt management and maintaining personal cash flow. There are a number of financial calculators that can be used for varying financial functions; these functions include financial planning, and budgeting for and within financial planning.

The different types of financial calculators include hand held calculators, calculator software applications and online calculator applications. There are several functions these calculators may possess, some of which may be incorporated into one calculator and in other cases individual calculators. Examples of financial calculators are listed below:

• Texas Instruments BA II Plus financial calculator
• Hewlett Packard (HP) 17BII+ Financial Calculator
• Bloomberg financial calculators
• Financial calculators at financial calculators.com
• BankRate online financial calculators

How to use financial calculators

1. Define your financial objective: Knowing specifically what you want your budget to do can help you decide which financial calculator(s) are the best choice. Since everyone's unique financial situation involves different assets, income, and expenses the right financial calculators to use can differ. Some example objectives are listed below:

• Finding out how much to lower debt and/or increase credit
• Assessing the option to retain or refinance a mortgage
• Determining the difference in net returns between investments
• Knowing how to properly valuate an asset
• Forecasting future values of savings plans

2. Choose the right financial calculators: After defining a financial objective it should become more clear which financial calculator(s) are most appropriate. Sometimes all that is needed is a simple calculator with basic functions such as multiplication, division, addition and subtraction. For example, an amortization calculator would be helpful in assessing mortgage refinance options.

3. Implement and analyze calculations: The results of financial calculations give you a picture of what happens to your finances when certain actions are taken. When the results match your financial goals then the financial calculator has helped you achieve that objective. For example, when determining the difference between two investments the future value function on a financial calculator indicates saving less money per month for investment B leads to the same net value as investment A. If your goal is to do more with less, the financial calculator has assisted with your financial intention.

Incorporating financial calculations into budgets

Each budget requires different calculations that are defined by financial goals. Sometimes the only financial calculations needed may be adding up expenses and subtracting them from income to make sure the former is less than the latter. Other times multiple sets of calculations may be utilized to arrive at numerous financial assessments. For example, when retirement planning several functions are considered including age, savings, annual savings contributions, annuity income requirements, inflationary considerations etc. This type of budgeting involves present financial decisions for the future.

Another example of a budget that makes use of financial calculators is in examining the financial benefit of a fuel efficient vehicle or energy efficient appliance purchase. Moreover, how many years does it take for the purchase to generate budget cost savings and does that future gain offset the present cost in terms of alternative financial decisions such as an investment, and operating cost of existing equipment. In this case the financial calculations involved would include financial planning with budget forecasting under two or more sets of present budgets.

The number of budgeting possibilities for which financial calculators are used is dependent upon the complexity of the budget. To further illustrate, budget efficiency may make use of interest and cost related calculators whereas budget assessment may make use of ratio or percentage calculations.

In other words, budgeting can have stages such as 1) organization, 2) assessment and 3) re-organization that each involve different monetary calculations such as personal cash flow balancing, asset management, and multi-cost and variable calculations. For example, mortgage calculations that simultaneously incorporate interest, payment, and time or investment budget calculations that weigh risk against margin requirements and premiums.

How to Identify Needs vs Wants In Your Budget

Identifying needs vs wants in your budget helps determine if budget items are essential or non-essential. Doing this allows the possibility of improving a budget for lower costs and greater savings. When distinguishing between needs and wants, determining if you can survive without significant to change to your life can be helpful.

On the other hand, adjustments to budgets based on identification of needs and wants can also affect quality of life and standard of living which are within the realm of needs, hence identification of needs can be a little more involved than basic survival.

Becoming adept at convincing oneself that wants are actually needs can cause budgets to suffer. You may need transportation but what kind of transportation do you need? You may require food to live, but does that mean eating at a restaurant is a need? Are potato chips an essential vegetable? What kind of entertainment is essential to meet a need for joy and how important a need is joy?

Needs are generally more important than wants, however, needs can be classified in different ways. Maslow's hierarchy of needs include things like 'Self-Actualization' as the highest order of needs. Most people can live fairly comfortable lives without self-actualization, therefore, the type of needs and the method by which needs are identified can affect how a budget is defined in terms of needs and wants.

Classification and identification of needs vs wants

Identifying needs vs wants in your budget involves a standard or criteria by which needs are distinguished from wants. For example, a new vehicle may be a want if a vehicle is already owned, but the type of vehicle one already owns may also be a want in the sense that not all car types are required to fulfill a need assuming a vehicle is needed.

A system in which budget items are identified by needs priority can help identify which needs are more important than others and which needs are actually wants in disguise. The following dualities can be used to distinguish needs by type.

1. Needs identification by type

• Physical needs vs Psychological needs
• Essential needs vs Non-essential needs
• Empowering needs vs Non-empowering needs

To identify needs vs wants in your budget also involves determining which needs are also wants. For example, some wants may be misidentified as psychological needs; psychological needs such as sense of self-worth may be influenced by certain wants that affect standard of living or status.

If self-worth can be affected by something that is free, that item can be considered the need in relation to the want. To illustrate further, self-esteem may be a need that is not determined by objects of value at all; in such case a healthy attitude about the self may be all that is needed instead of a Rolex.

Needs and wants identification by affect

The affect items of value have on standard of living and quality of life can also be used to identify needs vs wants in a budget. For example, the type of food we eat may affect both standard of living and quality of life, however, only the most basic of foods are essential needs making everything else either a higher order need or a want. To determine if a budget includes unnecessary needs or wants, hypothetically eliminate those things from your budget to see if the affects meet the following criteria:

• Your acquisition of needs will not be impacted
• The items are redundant
• Quality of life will not be negatively influenced
• Reasonable goals and aspirations are unhampered

To further illustrate the above criteria consider point 1. Mr. Bacchus enjoys a special type of lettuce grown in Costa Rica but this lettuce costs $2.50 extra per head. This lettuce is merely a preference and not a need. Furthermore, the removal of this item from Mr. Bacchus' budget meets the above criteria because 1) the acquisition of needs are not adversely affected, 2) the item is not essential and is replaceable, 3) the affect the lettuce has on Mr. Bacchus' quality of life is negligible i.e. it is a want not a need. And 4) Mr. Bacchus' goal of eating only the best lettuce is unhampered because more cost effective lettuce of high quality is obtainable elsewhere.

Summary

How to identify needs vs wants in your budget is a partially subjective matter determined by one's existing life. That is to say, changes to a budget for person A may not have the same affect on life for person B due to the needs currently met in person B's life. The means by which needs are distinguished from wants can also affect identification of such.

In other words, two different models of needs vs wants identification may classify needs and wants differently and may even determine some wants to be needs when in fact items only meet needs and are not the needs themselves. In any case, needs and wants are separate things that can adversely affect a budget, hence the need to distinguish them.

Source: http://www.deptorg.knox.edu (Maslow's hierarchy of needs)

Tips for financial planning in your 20s

Anyone in their 20's who are thinking seriously about financial planning may be ahead of the curve in one sense, but it's probably just as realistic to realize there's lots of time to worry about financial planning later. However, ridiculous financial planning might seem in the 20s though, it can do wonders later in life.

Perhaps it's a good idea to think of it like tickets to the Super Bowl or a really good concert, both of which require just a little advance planning. Financial planning in the 20's is different from that in other periods of life. Risk, fun and experience are often more typical pursuits of '20 somethings', and responsibility, fiscal discipline and end of life savings are not always a high priority.

Investing, and debt management are two of the major part of financial planning in the 20's. What's more investing in the things one loves is a good way to invest in the 20's, after all what 20-29 year old doesn't like spending money, and some 20-29 year olds might simply dismiss the word 'retirement' as a meaningless concept that applies to old people only.

To spend 'right' in the 20's requires just a fraction of the amount of time spent studying for a test or time spent with friends or playing sports etc. By doing this and thinking about what to buy well, one is generally helping oneself prepare a better future. This article will illustrate a few ways to 'buy right' i.e. invest in things that are fun and fiscally prudent at the same time, in addition to providing investing and debt management tips.

Investments for the 20'S

• Automobile: Automobiles can be more than just an exciting way to get around town, they can also be wise investments if chosen well. Certain vehicles including some used cars such as the Subaru Outback, Honda Accord, Mini Cooper and Toyota Prius all retain their value well according to research from CNN Money. Vehicles that retain retail value over time can also be dependable, and long lasting in addition to bringing back a decent resale price. Also, such vehicles may be used to help finance other things such as tuition loans, and asset backed mortgages.

• Education: A well chosen education can lead to a promising career that earns many thousands a year. Even though the upfront cost of education can be expensive, it is still an investment and can pay off in the future. The more the education chosen is in demand, the greater the potential return on the investment.

• Time: Time is a commodity in the 20's just like any other decade of one's life. Investing one's time in the simple act of thinking about investing is an investment. Not only can this build an awareness of money but time spent in employment yields cash. Cash, as everyone knows, can do a lot of things.

• Home: Home's that are located in working class neighborhoods and that need a little work can be affordable to a working 20 something. With as little as 2% down-payment and a steady job, a home in the 50K-100K range diverts rent money that would probably be paid anyway into a home that may appreciates in value and save capital. Most people have to live somewhere, so why not make a home out of it.

• Individual Retirement Account (IRA): Open one of these and throw away the key, just getting one is an accomplishment in the 20's. If this can be achieved, don't worry too much about meeting the maximum annual contribution, a few year later one might thank oneself and start contribution more to an already set up account.

If the above investments can be accomplished by age 29, one may be on track to bigger, more retirement related investments. It really isn't necessary to save for retirement in the 20's, but it is a good idea to invest in something. The following tips may help one focus on things like where to come up with down-payment money for a car or house, how to find good jewelry and a good education.

Investment and debt management tips for 20-29 year olds

• Save 5-10%: Just do it. 10% of one's beer money, music money, movie money, clothes money etc. can translate to 20% down the road and it doesn't hurt that much. This 5-10% can be used to fund an IRA, a down-payment on a good car, or any other kind of investment.

• Avoid Credit Card Debt: It may not seem a lot at first, but credit card debt can pile up before long. Pretty soon afterward, debt can get out of control.

• Transfer Credit From Community College: Since community colleges are cheaper, it can dramatically lower the cost of a University education to transfer credits from a community college.

• Live at Home: Living at home may not be ideal, but just a year or two of living at home while working can lead to potentially large savings especially if the parents don't charge full or any rent.

• Talk with Jewelry Appraiser(s): Chatting with Jewelry appraisers who love gems, and precious metals can be interesting and informative. They can inform one of the best jewelry and where to get it. Theoretically, any jewelry is an investment, but some jewelry can be a better deal and hold value better.

• Surf the Internet: The Internet has lots of car listings and automobile advise. Searching for a list of cars that retain value will help one buy a 'set of wheels' that last a long time and keep their value. Not only could such a car cost less in maintenance, it could pay back a little when it's time to trade in or sell.

• Ask Parents: It's not always fun asking parents for advice, but they do know things sometimes. If one grew up in a house, a parent may be able to help with understanding the mortgage process and what is required. Mortgage loan officers at mortgage banks can also provide details of what is required.

Financial planning in the 20's involves investing, debt management and a little fiscal responsibility, but the responsibility doesn't have to be painful and it may be a benefit down the road. Sometimes in the 20's or 30's life might have a few unpleasant surprises, the dream job may not pull through, one's plans may not turn out as expected. By investing and thinking about investing, one is preparing the mind for the future of life.

Money management tips

Money management is the way daily financial events are handled in step with financial goals. The reason money management is important is because if it is done properly, there are potential benefits or at least less monetary problems that may crop up.

Money management is an essential ingredient to growing wealth, controlling costs, keeping cash flow under control and maintaining proper credit, debt to income ratios and so forth. A few key areas of money management are savings plans and budgets, personal money management, money management programs and money management software.

Creating a savings plan and budget

Savings plans are for money that shouldn't be used for anything other than saving. It is essentially a financial faux pas if not bad financial form to use money allocated for savings for anything other than transfer to a potentially better savings product. Savings plans could be a corporate pension, an Individual Retirement Account, a brokerage account, money market account, life insurance policy etc.

In other words, there are many places to save. Choosing the right savings instrument depends on personal factors such as time-line, risk tolerance, rate of return, tax benefits and accessibility. Savings plans may also include weekly, monthly, biannual or annual contributions depending on the individual savings plan.

Budgets compliment savings plans in the sense that a good budget keeps costs under control and when adhered to, can allow one enough extra money each month to be able to save. This is often easier said than done as people often experience unexpected bills such as car repairs, medical co-pays, or higher than anticipated travel expenses. For this reason budgets should also include emergencies and unanticipated expenses. For example, 7% of one's monthly income is a reasonable amount to contribute to an emergency expense fund every month. What isn't used can be carried over to the next month.

Personal money management

Personal money management is the application of money management principles to one's individual or household finances. This may involve balancing check books, filing taxes, record keeping, paying bills, juggling accounts, overseeing investments and expenses and so one.

There are several ways personal money management can be achieved such as a customized money management system, pre-designed money management program or computer software money management. An important note to consider is personal money management plans should serve individual goals and be practical. Some discipline is required to effectively implement all the steps in a money plan, examples of such steps being the items listed above.

Money management programs

Money management programs are plentiful and can be found high and low. Some of these programs may be better than others but one may often see a common thread of reasoning behind them all i.e. save, budget, lower costs, and invest. These are the only four words one really needs to know to manage money but putting words into action isn't always easy.

One example of a money management program attribute is the Three Account System. The three account system facilitates a money manager's intent to save, budget and invest by channeling funds. Since Income-Expenses=Profit, one must have more income than expenses to save money. For this reason establishing the three account system in the beginning is the hardest part.

The three account system uses one account for paying bills, another account for buffering and balancing cash flow and a third account for saving and growing money. Ideally all three accounts will be increased in size every month for a net growth however, if the expense account never grows that's not necessarily bad because that is its designated purpose.

While the above system helps in the allocation of funds and cash flow, it still requires additional money management techniques such as record keeping, budget balancing, debt management, asset management etc. In other words, a money management program ideally includes all the steps, tools, and information necessary to successfully manage money.

Money management software

Money management software can be a very helpful tool for managing money if one has the discipline to use the software as one's financial information hub and portal. That is to say, for the software to be most effective, every transaction and piece of financial information should be entered into the software on a weekly if not daily basis.

Such financial information can include expenses, investments, allowances etc. in addition to accurate entry of total assets and liabilities, creditor account information, banking information, tax deduction information such as interested expenses, capital gains and so on.

The financial software processes the information and can then create up to date spreadsheets, financial scenarios, interest rate calculators, retirement forecasts and so forth. In other words, money management software helps organize financial information through a software program. However, for that software to be effective, the software must become a primary money management tool.

Money management is fiscal discipline translated into monetary action whether such monetary action be utilization of financial software, a money management plan or an individualized money management system. The goal of money management is to keep finances under control, organized and increasing in worth to the money manager. Bad money management might include bank overcharges, bounced checks, decreasing net worth, and poorly archived financial records such as previous years tax filings.

Good money management can be considered to be generally the opposite. Additionally, what makes good money management effective are fiscal discipline, savings and budget plans, and successful implementation of money management programs and/or software. Money management is more than just making sure what goes out is less than what comes in, but it is also what happens in the time between money coming in and it going out.

How to Survive, Even Thrive, in Difficult Economic Times

Surviving in difficult economic times implies a number of economic conditions and scenarios requiring financial innovation. Whether the objectives are to recover lost income or investment worth, discover more lucrative financial opportunities, or obtain new ways to create money, navigating fiscal turbulence can be done. In terms of financial planning, a number of strategies can be used to deal with periods of troubled economics.

Maximize investments

To maximize investments, a branched investment strategy may be utilized. In such a strategy a set of goals to maximize opportunity while simultaneously increasing net worth and lowering risk can be employed. During periods of declining equity growth, high inflation and bear market conditions, a traditional strategy of financial instruments with moderate yields and low risk hedge against adverse market deterioration. Alternatively, combining inflation re-optimization techniques with income and high yield bond investments may yield a net investment gain higher than a strictly conventional investment methodology.

Regain realized losses

Regaining realized losses requires capital investment to be re-earned either by reacquisition of income, capitalization of low and/or negative income months, or reinvestment into more lucrative financial opportunities. In the case of unrealized property devaluation, a hold strategy that allows time for a market turnaround may lead to a recapturing of property value. Since obtaining mortgage and home equity credit becomes more difficult in tight credit conditions, renting for a realized annuity of mortgage value recapture may bridge the financial gap of lowered property investment value by increasing monthly savings.

Discover new ways to make money

Discovering new ways to make money engages the bottom line agenda of personal financial goals. Depending on one's capital positioning, online private lending, engaging individual skills and know how into a workable income, and actively exploring new business ventures hold opportunity for entrepreneurial minds. Retaining licensed use of innovative technology applications, or discovering a wellspring of clients in need of a service are just two possibilities business ventures may capitalize upon.

In cases where one is without work or resources to invest of any kind, individuals must rely on and seek out other financial opportunities and/or methods. Such options may be a necessity that includes non-profit, charity and/or government assistance. If an individual has minimal asset value, qualification for financing of retraining, subsidized housing, daily living supplementation and/or temporary financial assistance until employment is found may be attainable.

Design and implement a budget

It often goes without saying a budget is important to surviving in difficult financial times. When money is tight, financial adjustments need to be made in order to pay bills, save, or simply survive. Budgets take income and may re-allocate that income to expenditures, savings, investments, retirement etc.

Sometimes budgets only consist of expenditures in which case other financial planning steps may be necessary. Budgets can be created and implemented on paper, on a spreadsheet, with financial software or any way that effectively works and carries out the objective of the budget i.e. organizing money for optimal credit, savings, spending etc.

Surviving an economic down time may be easier with the knowledge that it can be cyclical and occasionally secular in nature. In the former case, bearish financial conditions and sour economic times are relatively short lived. In the latter case, economic turbulence may last longer requiring a longer-term financial strategy.

Either way, large developed economies in particular, pay close attention to the management of national finances which can ameliorate troubled times. By making use of available resources, skills, techniques and options, surviving a difficult financial time may not be a walk in the park, but might not be quite as bad as it could be either.