One of the most popular posts on The Wisdom Journal is 26 Ways To Make Extra Money While Keeping Your Day Job. Many of the ideas in that article require cash seekers to start their own small business of sorts, from babysitting to plant maintenance to tutoring kids to “mining the miners.”. But there are at least three other ways to generate extra cash in your pocket.

The fours ways to make money are:

• Start a business
• Work more
• Passive income
• Spend less

1. Starting a business – okay, we’ve got that one out of the way.

Starting a business takes a special personality type. It takes someone with the motivation and ability to handle the details involved in putting an idea into motion and the wherewithal to follow through. The time, effort, money and nerves that it takes to run a business (that has no guarantee of success) means that very few people will take this route.

2. Alter your work situation

If you can manage to get some overtime at work, a major promotion or raise, or take on a second job, changing your work situation DOES have a guarantee of sorts: you show up, clock in, and work and you’ll get paid. Whether you take on a second job, get a raise because you went back to school to finish your degree, or because you seized an opportunity to move up in the company, make sure your lifestyle doesn’t absorb your extra earnings.

3. Go passive

No income source is completely passive. Everything requires some sort of effort from someone at some point (even an inheritance was earned in the past). Examples of “passive” income could be the interest earned on your investments, getting royalties for past work, or some sort of arbitrage. The key to making money through your investments is accumulation. The more you’re able to save, the more interest you’ll earn. Even if you can manage to get a 25% return, if you only have $500 in that investment, you won’t make much. Eventually it will make a difference, but it will take a while without major contributions on your part (maybe from that second job?).

4. Spend less

Sure, this is a way to increase the cash in your pocket. Before income taxes, Ben Franklin said “A penny saved is a penny earned” but today a penny saved is one and a half or two pennies earned. If you can avoid spending, you can stretch your dollars and put those “earnings” into your bank account.

One of the downsides of making extra money is, of course, taxes. In our progressive tax system, the tax loss resulting from entering a higher income bracket is not prohibitive, but it is discouraging. You work harder (and many times longer), but the returns on your efforts diminish as your income tax rate increases.

Don’t let it deter you though, especially if you set up a small business. Many times you can offset most of your income through business deductions and the legal avoidance of these progressive taxes but and still come out ahead.

Photo by re-ality

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

“Pay off debt” and “save more money” are consistently among the top five financial resolutions made every New Year’s Eve, but you don’t have to wait to begin improving your personal financial picture. Most resolutions are far too general in scope anyway so here are a few ways to specifically plan for a better financial future – starting any month.

July
Summertime is a great time to complete home improvement projects around the house. Or, consider refinancing your existing mortgage at a lower rate (I recently did). Add your monthly savings to a savings account or use them to build your emergency fund.

August
August is well known as “back to school” time, but let’s plan beyond that. If you’ve got older kids at home, consider giving them a school clothing budget – loaded on a prepaid debit card. Make them choose between that trendy T-shirt and those must-have – but very expensive shoes or jeans. Kids learn a lot about finance and economics when THEY have to make the choices.

September
Do you have a child going to college this year? Help them start their financial life with a prepaid MasterCard rather than a regular credit card. They’re easy to use, but unlike a typical card, your student can only spend what they have. It gives the financial independence of a credit card, but without the risk of debt.

October
Got too much credit card debt? Outline a plan to get it paid off. Whether it takes three months or three years, you’ll feel great when you rid yourself of that burden.

November
Save a trip to the mall by giving gifts that send a financially positive message. Give the kids in your family a high yield savings account. Open it early in November and by year-end, they should be able to see some interest accrue. It’s a gift that keeps on giving!

December
Daydreaming about your summer vacation from under a blanket of snow? Start your vacation fund this month by putting aside a lump sum every month so you can take that cruise to Alaska in July – but without debt. Need ideas on where to find the cash? Check out my 17 Sneaky Savings Strategies.

January
Go ahead.  Make that financial New Year’s Resolution. Take stock of your finances, from the cost of life insurance and car insurance to the yield on your savings account and which online broker you use.

February
Tax time is the perfect time to take a big picture look at your finances. A tax professional can turn tax time into a bigger, more important discussion about retirement, your investments, and savings. Be sure to visit your tax professional with written questions in hand.

March
If you find that you owe taxes this year, consider reducing your tax liability with a traditional IRA. IRAs can lower your tax liability and help you save for the future. Ask your tax professional.

April
Take a look at your current deductions to see where you can reduce that tax bill next year.

May
Each spring, “Home For Sale” signs emerge like daffodils. If you’re in the home buying or selling market,  do your homework and shop for mortgage rates with the same passion you’re shopping for a home.

June
June is the perfect month for a mid-year financial tune up. What interest are you earning in your savings account? Do you need to sock more away for retirement? How’s that debt reduction plan coming along?

Each year we all make resolutions and think we’re “starting fresh.” A clean slate IS a thing of beauty, but the truth is that we can wipe our slate clean anytime during the year and there’s no time like the present.

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

Earthquakes, floods, and forest fires know no season. Spring tornado season is just around the corner and soon thereafter, we enter hurricane season. If you were thrown a curveball and had go through a hurricane, tornado, earthquake, flash flood or forest fire – would you be financially prepared to weather the storm?

Natural disasters serve as reminders that we all need to be prepared, no matter the source of the disaster. What to do?

1. Take a home inventory.

Go room by room and record a visual inventory of your possessions on a video camera or still camera. Describe the item in your own voice, recording its cost and when you bought it as well as any serial numbers or model numbers. Photograph your landscaping, patio, outdoor furniture, fencing, and sprinkler system and include automobiles, boats, or RVs. Review your inventory every two to three years to keep it up-to-date and augment the video or photographs with a written record. List each item and its value as well as any identifying numbers where appropriate. Put your inventory records in a safe place such as a safe-deposit box.

2. Keep copies of all financial records in a very safe place.

Scan your financial documents (mortgages, life insurance policies, other insurance policies, copies of your drivers license, passport, credit cards, everything) and burn them onto a CD in pdf format, then keep this CD in a safe deposit box. An alternative strategy is to use something like Mozy Online Backup which offers up to 2 GB of free storage or unlimited storage for only $4.95/month. All you have to do then is remember to scan and save to your hard drive.

3. Update your homeowners insurance.

It may seem obvious to you and me, but believe it or not, most people are either not insured at all or severely under-insured on their homeowners insurance. According to the Federal Emergency Management Agency, only 25 percent of the 10 million American homes that lie within high flood-risk zones carry flood insurance, despite the fact that homes are four times more likely to be damaged by flood than by fire.

4. Be sure you have the right kind of insurance coverage.

Your first line of defense is your homeowners insurance so make sure you’ve examined your insurance coverage before disaster strikes. What you don’t know CAN hurt you in the long run. For example, there’s a big difference between replacement and reimbursement cost. If your 3-year-old flat screen television is destroyed in a flood, does your coverage pay to replace it or only pay you based on it’s current, depreciated value (much less)? Some policies only cover the structure so make certain you cover the contents of your home, as well as the structure. If you’re a renter, buy renter’s insurance because the landlord’s insurance won’t cover damage to your possessions.

5. Beef up your emergency fund.

If you find yourself going through a disaster, having a three to six month emergency fund will be a lifesaver. Don’t delay in starting your fund as soon as possible. Use my Sneaky Savings Strategies to help you pump cash into your fund and don’t be afraid to get creative in your own savings ideas.

We all hope we never have to weather such a storm, but by taking a few smart precautions, a punch in the face by Mother Nature won’t knock you out.

Note: This article was included in the Carnival of Personal Finance – Blogthority.com Relaunch Edition! Make More Money Blogging edition! Thanks Mike!

Photo by smiteme

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

What can you do to accomplish more of what you really want to do within the time frame you want to do it?

1. Change the words in the title from “this weekend” to “TODAY.”
   Getting started at some imaginary point in the future isn’t going to help. Whatever it is you know you need to do – do it now.

   Procrastination is opportunity’s assassin.  — Victor Kiam

2. Get rid of your calendar.
   If you’ve never used a calendar, despite buying a new one each year, don’t think that buying another one will somehow magically transform your habit of procrastination into a habit of getting things done. Work from a prioritized “To Do List” instead (I use a moleskine).

   Only Robinson Crusoe had everything done by Friday. — Author Unknown

3. Pick the lowest hanging fruit first.
   You don’t always have to start at the beginning. If that first step seems the hardest, start with another part of the project instead. Give yourself a mental boost by getting something done, then move to the more difficult stages.

   Procrastination is like a credit card: it’s a lot of fun until you get the bill. — Christopher Parker

4. Set your workspace up YOUR way.
   If your set-up is simply not convenient, it will definitely hold you back. Don’t think you have to set up anything the way someone else does either. Experiment with what works for you and then tweak it to fit your style. Try using a time multiplier.

   There’s nothing to match curling up with a good book when there’s a repair job to be done around the house.. – Joe Ryan

5. Give yourself a reality check.
   Get real with what you actually CAN accomplish. Procrastinators often have an unrealistic sense of time. They may have the feeling that a project will take forever or that they have “plenty of time.” Neither of which may be true! The more realistic you become, the less likely you’ll be to procrastinate.

   Tomorrow is often the busiest day of the week. – Spanish Proverb

6. Use what you have available right now.
   Use the minutes available to you. My wife has started making everyone clean up during a television commercial. You’d be amazed at what you can accomplish in just 2 minutes! Five minutes can seem like a lifetime after that drill but five minutes is enough time to get something done. One or two phone calls or more can be returned in that time. An email can be answered. A report can be printed. A memo can be written. A decision can be made.

   A year from now you may wish you had started today. – Karen Lamb

7. Give yourself a pat on the back.
   After you meet small deadlines, reward yourself with a small treat – a walk outside for some fresh air while listening to your iPod or a cup of coffee (you decide). When the entire project is completed, think on a little grander scale – maybe a night out on the town or a weekend away.

   Nothing is so fatiguing as the eternal hanging on of an uncompleted task. – William James

8. Find an extra hour each day.
   If it seems like there really is no time, carve out an hour or so from your existing schedule. You really CAN find an additional hour each day, trust me. If you really want to take up biking or walking or blogging, try getting up an hour earlier each day (or on weekends). If you want to do it, you’ll find the time … and that’s the key … desire.

   We shall never have more time. We have, and always had, all the time there is. – Arnold Bennett

9. Get started.
   That’s the hardest part – getting started. But it’s like pushing a car. A lot of energy has to be expended in the beginning, but once you’re going, keeping the car moving is a lot easier. Just make sure you don’t have the emergency brake set!

   How soon “not now” becomes “never.” – Martin Luther

Photo by florianbanzer

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

I’ve watched several shows on mountain climbing over the past few weeks and out of curiosity, searched for “how much does it cost to climb Mt Everest?” The result shocked me – the average trip costs $65,000 and takes two to three months. Yes you can do it for less, but in the world of high stakes mountain climbing into “the death zone,” do you really want the cheapest guide service?

Another statistic shocked me as well: 80 percent of all accidents that occur when climbing Mt Everest happen on the way down.

That means that despite overcoming incredible odds, numbing cold, a lack of oxygen, possible snow blindness, and incredible fatigue, not to mention the risk of falling from a 1,000ft cliff of solid ice, almost all accidents and deaths occur AFTER a climber reaches the summit. They happen after the goal has been reached, after the triumph, after the cheers and slaps on the back, after the celebratory satellite phone call, after the once-in-a-lifetime photo op. After spending months in preparation and tens of thousands of dollars.

Tragic.

It occurred to me that when it comes to goals, particularly financial goals, we expend so much energy in achieving them, that we forget about the way down. Too often, all our thought processes lay in hitting the goal, not in the plans for “happily ever after.” We pay off all our debt only to charge those credit cards right back up less than a year later. We create our emergency fund, use it for an emergency and then fail to replenish it. We set up an online savings account and fail to fund it. We put a few dollars away for the kid’s college only to never revisit it again. We buy tax software early in the year and wind up filing for an extension.

We’re great at setting and even achieving goals, but we’re pitiful at the “what’s next?” portion. I think we become overly confident in our ability to achieve and then slip, having our own accident on the way back down the mountain.

So the next time you set a goal, don’t just set a time limit for achieving it, set up a plan for what to do next.

• How will you live once you’re debt free?
• How will you replenish your emergency fund should you be forced to use it?
• How will you fund your children’s college education regularly?

Decide ahead of time, how you’ll handle the challenges of coming down from your own personal Mt Everest. Be careful, but more importantly, be intentional.

Photo by apurdam (Andrew)

JD from Get Rich Slowly included this article in the Carnival of Personal Finance #243: Valentine’s Day Edition. Thanks JD!

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

You Need A Budget — yes you do, and to help spread the word about budgeting the YNAB way, I’m giving away one copy of their software to a randomly selected reader of The Wisdom Journal on February 1st, 2010. All you have to do to be entered in the drawing is leave a comment! Only one entry per person but you get two entries if you give me a topic you’d like to see discussed in the future.

If you just can’t wait until February to start using YNAB and you’re convinced (as I am) that it is the BEST budgeting software available, use coupon code WISDOM when you check out and you’ll receive a 10 percent discount.

Why am I so excited about YNAB? Perhaps it’s their 4 Rules of Budgeting that permeates their system:

1. Stop living paycheck to paycheck. You’ll be blown away by how their system eliminates paycheck-to-paycheck from your life. I’ve never seen anything quite like it.

2. Giver every dollar a job. This is what’s referred to as “zero based budgeting” and it turns the traditional budgeting method on it’s head — completely upside down. Zero based budgeting traditionally is time-consuming and exhaustive but NOT with YNAB.

3. Prepare for the rain. You know the day is coming when you’re going to need a lot of cash to cover an emergency, a semi-annual insurance premium, or new tires for the car, so YNAB helps you prepare for those events.

4. Roll with the punches. Even with the most sophisticated and thorough planning, you can overspend in a category, so YNAB spreads that overage across the next month’s budget where it can be absorbed more readily. YNAB designed their system with a buffer to help you cover accidental overspending.

YNAB isn’t fancied up for intense investing purposes, it isn’t designed to handle your overseas accounts in the Cayman Islands, or your multiple IRA’s. YNAB is designed to be the budgeting software that helps you follow the first basic tenant of sound personal finance: create and live by a budget. But YNAB took it a step further and created a planning system within their software that helps you stop living paycheck-to-paycheck. And since “living within a budget” is a fantasy in most households, I’m hoping that my enthusiastic endorsement of YNAB will help regular readers and others get out of the paycheck-to-paycheck cycle and begin living a better life.

Can you just imagine NOT living paycheck-to-paycheck?

Check out YNAB today and be sure to leave a comment if you’d like to be included in the drawing for a free copy of their software!

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

It’s that time of year again — “resolution season,” and other than losing weight or exercising more, few areas of our lives are subjected to New Year’s resolutions more than personal finance.

So, if you’re going to make New Year’s personal finance resolution, here are 5 to choose from:

1. Get an insurance checkup.

The potential for major financial consequences of a catastrophic health issue, damage to your home or car, loss of life, or loss of your ability to generate an income means that insurance simply must be a priority in our modern life as a way to hedge against risk of loss. Remember that most bankruptcies are caused by uninsured health problems.

Make it one of your 2010 resolutions to take a little time this year and make sure you’ve got your insurance bases covered by talking with your own agent or checking with NetQuote for auto, health, life, renters, or any other insurance. NetQuote will gather quotes from several different insurers for you, allowing you to control the process a lot more than normal.

2. Begin an investing program for retirement.

Even though more and more people are investing for their biggest financial challenge – a  financially secure retirement – many aren’t saving enough or aren’t saving at all. One survey found that about 60 percent of people age 45 or older have less than $100,000 in retirement savings. If you run the numbers for what retirement will cost and what you’re likely to get from Social Security, it’s nowhere near enough. If you have the means, contribute the maximum to your 401(k) or IRA. If you don’t, try using one or more of my 17 sneaky savings strategies to save cash for investing or seek out other ways to make extra money.

3. Begin tax planning in January of THIS year for next year.

Every December, it seems that every financial publisher posts an article on “trimming your tax bill.” While these are generally filled with great advice, you shouldn’t wait until December to start using tax strategies. Throughout the year, select appropriate investments for your taxable and tax-advantaged accounts. For example: In tax-advantaged retirement accounts such as Roth IRA’s, make investments that have the potential to generate a lot of taxable income. In taxable accounts, focus on long term capital gains and/or qualified dividend income. And if your situation is at all complicated, get customized advice from a tax professional – not a blog … even this one.

4. Create and live by a budget.

This is crucially important. A lot of people manage their money by the seat of their pants, but successful personal finance requires careful and deliberate planning. Create a budget and use it to make decisions about your own spending and saving. Write down your financial goals – calculate amounts and time horizons for your kid’s college and your own retirement – so you can make the best investment choices. Plan your financial future to help you devise strategies for getting there.

5. Remove emotions from your finances.

It’s difficult, I know, especially when we consider how securely money is tied to our emotions. Emotions really are your enemy. They can cause you to buy at a market peak and sell at a market low, which is exactly the opposite of what you should do. If you can’t make financial decisions objectively, consider working with an objective adviser who can help you avoid rash moves.

Your best bet may be to do what I’ve done – use How A Second Grader Beats Wall Street and invest regularly in index funds, matching the market rather than trying to beat it.

Photo by mtsofan

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

Yeah, I know. It’s just gotten started … 2010 that is. Back in the 70’s when I was just a kid, I thought that by 2010, we would have a colony on the moon, be flying around in hovercraft, be easily curing cancer and would have eliminated world hunger and disease. We still have some obstacles to overcome in hitting those goals, but on a personal level, it’s never to early to begin designing 2010 to be the best year of our lives.

What do you think 2010 holds for you?

When you look back on this year in about 361 days, what do you want the highlights to be?

• Will this be the year you finally got your emergency fund in place?
• Will this be the year your budget became something real to you and your family and you put it to work for you?
• Will this be the year you quit chasing returns and begin investing with index funds, matching the market rather than trying to beat it?
• Will this be the year you finally begin spending less than you earn and begin making progress on a savings account?
• Will this be the year you decide to finish your degree?
• Will this be the year you actually lose that weight or start exercising?
• Will this be the year you make that ONE decision you know you need to make?

Or will you look back, like so many other years, and think, “Yeah, I really gotta work on that someday.”

That’s the essence of a “resolution” – finally deciding that someday is TODAY, that you’ve had enough of coulda-shoulda-woulda and you get motivated and get moving.

Movement, ANY movement toward your goals and resolutions is progress. And progress has a motivation all it’s own.

Close your eyes and imagine for a moment celebrating New Year’s Eve by marking that really special goal as DONE. Imagine the peace and joy of paying off that credit card, fitting into those jeans, running that marathon, finding that job, funding that Roth IRA, or having a Christmas without financial headaches and worry. For me, THAT’S really motivating!

So get started and make some sort of progress, creating your own highlights for 2010.

Photo by trudesign

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

Create a personal finance dashboard

We can create a financial dashboard similar to our car’s dashboard, but unlike our car’s dashboard, what you put on it is entirely up to you. A great tool to use in creating your dashboard  is Quicken (Try the new Quicken 2010 Desktop Products). My personal finance dashboard has things like:

1. My retirement accounts. I monitor how much I have on deposit, each account’s rate of growth, each account’s expense ratios, and the amount I’m consistently adding to my retirement funds.

2. My debt payoff rate. Regardless of which debt payoff strategy you’re using, monitoring your debt reduction is exhilarating. And if you’ve paid off a significant amount, it really gives you a buzz! Back when I had a credit card balance, I kept a sharp eye on my interest charges and I always made sure my payment was credited correctly. Keep your credit cards as well as any other consumer debt on your dashboard and make certain your payments are correctly entered on your account.

3. My cash account balances. I keep track of how much is in my savings account. Since I make regular deposits, I don’t glance at it too often. I also look at my checking account balance on a daily basis, updating the entries with the appropriate categories so when tax time rolls around, I’m ready.

4. My emergency fund. I haven’t had to tap into my emergency fund it a while, but I still keep an eye on its growth.

5. My life insurance needs. I try to evaluate my needs for life insurance on an annual basis. If your family is still growing, you’ll need to add beneficiaries, and if your income is growing, you may need more life insurance than you realize.

6. My health insurance needs. A medical issue can be devastating financially, even if you have an employer provided health insurance plan. It just makes sense for me to have a secondary policy to help cover deductibles and the 20 percent that I have to pay (I’ve had four straight years with over $10,000 in medical out-of-pocket costs).

7. My auto insurance needs. It’s very important to evaluate your car insurance needs, too. Why? You may be able to get a better rate, better coverage, or be able to drop your non-liability coverage if your car is paid off or isn’t worth the extra cost.

8. My homeowner’s insurance needs. If your home has increased or decreased in value, it might be time to re-evaluate your homeowners insurance. If your home has increased in value, you’re at risk in the event of a loss and if it’s decreased, you may be overpaying.

9. My income streams. I’ll be the first to admit that these are the weakest points on my personal finance dashboard, but I do monitor them regularly. If you decide to learn ways to make extra money, make sure you include these income streams on your dashboard.

10. My personal tax liabilities. I like to insure that I’m on track with my tax liabilities too. I check on how much I might owe and how far I am away from being eligible for certain deductions (i.e. the medical deduction currently has a floor of 7.5 percent of your adjusted gross income).

Since personal finance is personal, what you keep an eye on may be (and should be) entirely different. You might even want to include an odometer reading of how far you’ve come in paying off debt or a pressure reading of your stress level.

It’s important to remember that it’s just a dashboard, and just like in your car, keep an eye on where you’re going. Never stare at your dashboard! Stare at where you want to be, glancing at your dashboard to make sure you’re going to arrive at your destination on schedule.

Photo by The Wisdom Journal! – that’s my car.

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

Frank over at Bad Money Advice recently took the Baltimore Sun to task about how money really gets wasted, and I agree with him. We’ve all heard about the various money drains: the latte drain, the gym drain, and the failing to use the library drain among others. But in the real world, these expenses are minimal at best. On a monthly basis, a few lattes, a $35 gym expense, and two or three books from Amazon would add up to less than $80. Nothing to sneeze at but there are some much more serious drains that really add up to a whole lot more money. Getting these under control would have a much bigger impact than giving up a latte or two.

And before you think I’m on top of things … I’ve made ALL these mistakes.

Too Much House Drain

Let’s be honest. How much house do you really need? “We like to entertain” is the fru-fru excuse you hear on HGTV, but gimme a break. How much real “entertaining” do you do? What, do you need a stage or something? Buying too much house is probably the top money drain of our modern society. I frequently look around at my home and marvel at the wasted space, the unused space.

Buying just $50,000 more house than you really need winds up costing you much more than just $50,000. There’s interest, taxes, maintenance, repairs, furniture, frequent “updating,” and cleaning, not to mention the wasted resources. Chances are you’ll only use three rooms 90 percent of the time you’re at home!

Too Much Car Drain

Buying too much car used to be the obvious fault of young professionals, but with the advent of home equity loans and some slick marketing, now buying too much car is as common as credit cards. Companies are constantly looking to twist and segment a market so they can exploit any unrecognized hunger. Lexus found that market by creating a luxury car that originally was the price of a lower end Cadillac or Lincoln, but much nicer than a Ford of Chevrolet. Add is a little marketing and BAM! a Lexus in the driveway at Christmas (with a big red bow of course) became the status symbol of choice.

Buying too much car hurts your budget over and over. Why? Because a car is a liability – it never produces income and constantly loses value. Solution: buy a good quality vehicle that gets you where you need to go and let your savings account balance be your personal status symbol.

Too Much Private School Drain

This is a touchy subject for me. I do have my children in private school but I’m constantly wondering if it truly is worth it. Our school isn’t that expensive when compared to many others. I recently looked at one school in the Dallas area that was $15,000 per year per student! I’m not paying quite that much, but the amount is enough that it makes me wonder if I’m getting my money’s worth. I wonder if I should put them in the local public school … it IS the top rated school in the entire state.

This is obviously a VERY personal decision but if you’re in a tight budgetary situation, this large expense could be one that breaks you free from money worries, allows you to build your emergency fund, and keeps you on budget.

Too Much Vacation Drain

If there’s a place where I have a weakness, it’s in taking vacations and travel, BUT I have started paying for them in cash rather than charging up the credit cards. I’ve also been able to use hotel points, airline miles, and other perks and benefits offered by various companies I do business with so my travel expenses are minimized.

One great thing about the Internet is that it allows anyone to research ways to save money and then take advantage of those finds. Don’t be afraid to research the best deal, then try to get a local travel agent to beat it!

Too Much Miscellaneous Drain

In reality, there is no such thing as miscellaneous. Everything has a category. Are you buying too much ____ (you fill in the blank). What is your weakness? Planning too big of a wedding? Buying too much new electronic equipment when it comes out? Dining out every meal? Buying too much in season tickets? Buying too much in an RV, boat, 4-wheeler, SeaDoo, or hunting club? Buying too much country club membership?

These are the REAL top money drains. Sure, the little things can add up, but rarely do 3 lattes per week compare to a $7,500 exotic vacation every two years. A $35/month gym membership that you only occasionally use doesn’t compare to spending $50,000 too much on a home, and a couple of books from Amazon each month will never compare to buying a new car every two or three years.

“Mind the pennies and the dollars will take care of themselves” is wrong

We have to mind the dollars AND the pennies! If you find yourself in a financial tight spot, look at where you can make the biggest impact first, then move down the list to the lattes and gym memberships. If you’re just getting started, think about how much of these items you really need and make the wise decision to give top priority to your retirement, your emergency fund, and your savings account.

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.