Subscribe to our free, online newsletter.
This is the first in an occasional series in personal finance. Each article will address ab different aspect of personal finances and provide some tips for you. However, always consult your own financial adviser or tax professional for your specific situation.
It’s amazing to watch street performers show off their skills whether it’s playing music or performing magic. I’ve always been impressed with one juggler in particular. He dazzles the crowd by juggling knives and bowling pins while balancing on a tall unicycle. I think bowling balls are also involved at some point.
In many ways, this is the situation in which many families find themselves. Juggling finances and time for work, youth activities, school plays, and just general things to do around the house. And try to throw in a vacation, as well. It is a delicate balance on an daily or weekly basis.
As a result, the average American family has hardly any time to look at their finances to try to get ahead. And of those who do spend some time, the advice can be hard to implement. Brew coffee at home instead of buying. Brown bag your lunch. Drop cable. And so on.
What’s the problem? That advice is hard to follow because people like going to buy coffee. And getting lunch with co-workers and watching their TV shows.
What to do instead – I’m certain that when the juggler first learned to juggle, he wasn’t very good. Over time, instead of just cutting back on the number of things he throws in the air, he became more skillful and efficient. Becoming more efficient also applies to finances.
One way people keep themselves from getting ahead is spending money unknowingly. How many people use their income tax refund to pay down credit card debt? In my experience, it’s quite a few. But consider the math:
Average tax refund – $2700 per the IRS
Available credit card rate – 16%
Equals $432 or $36/mo just in interest!
Instead of getting it as a refund, change your withholding so that you get extra money each paycheck and save that amount in the bank. Even if you spend the money out of that account, you save the credit card interest. It’s not a lot, but it is quite a few coffees you didn’t have to give up to get that savings.
That is just one example of many areas in handling finances where people unknowingly throw money away.
If you do want to cut back on your budget, consider ways that don’t impact your lifestyle. When was the last time you shopped homeowner and auto insurance premiums? Or had an energy audit and received energy efficient light bulbs for free? Or changed you’re electricity supplier to lower your utility bills? Or used flex or health savings accounts to pay medical bills on a tax free basis?
Will any one of these make you rich? Of course not, but you can save and still watch your favorite shows while getting coffee on the way to work each day!
When you become more efficient, you find the money that makes juggling your life and family activities a lot easier.
Financial Coach Jack Wang is a WestfordCAT sponsor whose show, “Personal Finance Playbook,” airs monthly. His firm, Longhorn Financial, LLC, is based in Chelmsford.
