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5 financial tips to keep you ahead of 90% of the population

You are never too young to start financial planning.  In order to stay ahead of what I call the “Traditional Spending Curve” (TSC) you need to start planning your future as early as possible – here are 5 steps you can take to stay ahead of the curve and be better off financially than 90% of the population

I think most people will agree that financial planning can be a great tool in helping you to build a nest egg for retirement.  The only problem is that most people don’t start their financial planning and budgeting until after they graduate from college and get a job.  For most people their financial planning consists of a 401k from their employer and maybe a personal IRA on top of that.

You might be saying well there is no point in planning your finances if you are still in school and don’t have any finances but that is where it is actually most important.  This is where you have the opportunity to get ahead of what I call the “Traditional Spending Curve” (TSC) which is basically the level of necessary spending you must engage in at any particular time in your life.  When you are young it is very low because your parents pay for everything but as you get older it goes up as you start to pay for your own meals, or cell phone bills  etc. It takes a substantial leap when you move out and have to pay rent, utilities etc.  Naturally the amount you save is inversely proportional to the amount you spend so ideally the more you can save when you are younger when your expenses are lower the better.

When I say stay ahead of the curve what I mean is that if you wait until you are out of college and out on your own and working to start saving then you may have missed the boat already because then your expenses are very high and it is harder to save money for a house.  And the biggest problem people run into is that houses often appreciate faster than they are able to save.  So they get stuck paying rent and never have enough saved to put down 20% on a house and are always stuck behind the curve.

So here is a list of things you can do to stay ahead of the curve:

1) Get a job while you are in high school and save every penny you can.  You may not be earning much but you’ll find if you have a few thousand in the bank when you get out of high school you’ll probably be ahead of over 90% of your fellow students (and most adults too!).

2) Drive the cheapest car you can stand.  Don’t make the mistake a lot of kids make when they take all the money they’ve saved and spend it all on a down payment on a car and then they have no more savings and a car payment!  If possible try getting by without a car by hitching rides from friends or family or taking the bus, or borrowing a family car from time to time.  The money you save can make a huge difference when you get to #5.

3) Get a college education – this one is obvious – in this day and age its really not an option anymore it’s a necessity.  According to the US Census Bureau a college graduate will average about $20,000 more per year than someone with just a high school diploma which can translate to about $1,000,000 of extra earnings over a persons lifetime. So get a college degree and more specifically get a degree that will teach you a skill to get a job.  Majoring in art might be very interesting to you but it probably won’t help you find a very good job.  Specific majors include: accounting, engineering, nursing, law etc.

#4 Live at home for a few years after graduation.  This may be the hardest one to follow but it is the MOST IMPORTANT.  In order to stay ahead of the traditional spending curve you need to save as much as possible when you don’t have many expenses.  Well, the problem is that you’re not really making a lot of money until you get out of college and get a decent job so it’s hard to save a lot of money.  Then when you move out you have a ton of expenses so it’s still hard to save a lot of money.  However, if for example you live at home for a few years after you graduate and get a job then you should be able to save half of your income or more.  So if you are a college graduate making about $45,000 a year living at home you should be able to save about $20,000 of that or more annually!  In a few short years if you budget wisely then you could have $50-$100,000 saved up and ready for you first and most important major investment.

#5 Buy a House- Hopefully by now you’ve saved your money you earned in high school and college working part time and saved about $20,000 a year for the last 3 years by living at home with your parents.  This is when you buy your starter home. Lets say you are single and making about $50,000 a year.  So to be safe you buy a condo or townhouse that is 3 times your gross income or $150,000 and you put down 20% which is $30,000.  You are still left over with about $10-20,000 and now you have an asset that will appreciate as you pay it off.

You will be one of very few 25 year olds that has his or her own property with 20% equity and over $10,000 in the bank.  As your house value grows so does your equity and your ability to upgrade as you save more and increase your earnings potential.

As you’ve seen all this was possible because you started planning for your future while you were in high school.  If you had waited until you were already out on your own and paying rent it would be much harder to achieve the savings necessary to buy a house.  Many people are well into their 30s and still struggling to save enough money to buy a house.

You might be saying this is all fine and dandy but its too late I’m already behind the spending curve – well you can still improve your finances with financial planning but this article is really geared toward high school students and their parents.  This should really be taught in every high school in America but since it isn’t it’s your responsibility to teach it to your children if and when you have them.

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Every one is looking forward to a great vacation trip. Need holiday financial tips?

2 or maybe three holidays a year to Europe and the Caribbean are now considered the standard with £74bn being spent on vacations and spending money in 2006, according to Axa. The issue starts when the vacation is over and the feared Visa card bills start landing on the mat! Only then do some people notice that they have spent beyond their means and the ‘holiday hangover’ starts to set in.

Holiday financial tips to forestall the holiday hangover :

? Set a limit – Think about how much you can realistically afford before you decide where you are going and, more importantly, where the money will be coming from. Stick to this budget!

? Start saving – Put some money aside each month leading in to the holiday – don’t forget that most package holiday corporations require the balance to be paid up to 12 weeks before departure. Attempt to put the same amount away and deposit the funds into a separate bank account to bypass the temptation to spend.
Take advantage of special offers and avoid the ‘holiday rush’ period.

? Employ offers – When booking holidays, take advantage of motivations for booking early or bag a bargain by booking a late package deal. Keep an eye open for free kid places and don’t forget to get quotes from several different sources to determine if you can barter the price down.
If possible, use your debit card for transactions ( but don’t forget these are also subject to extra charges ) – avoid money advances on credit cards at any price as the interest rates are typically extraordinarily high.

? Budget daily – Work out a daily budget of likely spend and try to adhere to it while you are away. Do not feel tempted to blow the budget and put the daily meals on a Visa card.

? Quality not quantity – try to resist over-stretching yourself too much even if everyone else appears to be splashing out on foreign vacations. Holiday Financial Tips on Insurance

However [*COMMA] all vacation insurance isn’t the same and costs differ widely, here are 5 top pointers that may help you get the top deal on travel insurance :
? Shop around – do not be pressured to take travel insurance out with your travel agent, it’s not compulsory. There are occasionally more interesting deals available on the high st from banks, outlets and even the Post Office

? Already covered? – you may already have travel insurance – many premium bank accounts have value-added benefits like travel cover as an element of the package. You’ll already have basic travel insurance as a part of your benefits but may be ignorant so ensure you do your homework!

? Don’t pay for what you don’t need – If you only go abroad within Europe, choose a policy that only covers Europe instead of a global policy, as this may frequently be cheaper . Also, don’t pay for winter sports cover unless you need it.

For more great money saving and ideas you may visit us at Feed-your-Wallet.com.

Ideas to save money when budgeting for back to school spending

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The PYF Challenge taps Liz Pulliam Weston, the internet’s most read financial columnist, to provide savings tips to the finalist and viewers alike. Here she us some background her financial advising experience.

http:www.financemoneybusiness.com Economists change their minds daily about the current financial situation, global structures are crumbling, in some countries, interest rates are at 17%, in others they are negative at -0.25%. Governments are cutting spending, unemployment is rising. What can you do? Barbara Goldsmith gives her latest tips on how to move forward financially and take more control of your life.