Know what’s in the box

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Know what’s in the box

How does that famous Forest Gump quote go….oh ya, “Life’s like a box of chocolates, you never know what you’re going to get.” And while I certainly agree with that life is unpredictable sentiment; buying chocolates doesn’t have to be unpredictable, right? Think about how ridiculous that is for a minute. You work hard for your money. If you want to take a chance play Monopoly or buy a scratch ticket. If you want chocolate visit my friend Christie at Godiva and she’ll hook you up (by that I mean she’ll actually help you pick out what you want). Be responsible with those Benjamin’s and devise a game plan. Create a budget.

Have you ever stopped and wondered aloud, where did it all go; what did I spend my money on? Assuming you don’t have amnesia, or a lack of short term memory like Drew Barrymore’s character Lucy in 50 First Dates, I suspect it just comes down to you being a little too loose with your greenback. You need to budget yourself. One way I found helpful (and depressing) was chronicling my spending for just one week. I simply wrote down everything I spent no matter what it was from my disposal income on for that particular week. I was startled to learn that my Starbucks coffees, lunches, People Magazine, one night out with my friends, and buying a new shirt on sale ($15) totaled a jaw dropping $95! Even if I left the shirt out I was still sitting at $80 bucks! I began to ask myself if I really needed to spend that much money each week and if I really needed all of the things that I spend money on.

I then decided to make a conscious decision to save, instead of spending, for one year. I stopped getting my $4 coffee’s in the morning; I brought my lunch to work, and got together with friends at home instead of at a club in Boston. What I found is that I saved nearly $3,000! It adds up quickly my friends. Now that’s not to say you can’t spoil yourself from time to time. We all need our fix somewhere. I mean, we still need to live today while planning for tomorrow. You need to find a healthy balance that suits you. Can you afford to put $5 per week away, $20, or $100? Don’t be discouraged by the denomination. Remember, “The power of discipline the rewards of time.” You should always pay yourself first. You too will be amazed at your bank statement in just a short period of time.

A couple of examples of just how much money you can save will help to illustrate. Take that $4.00 fancy Starbucks coffee you were buying on the way to work every morning. Let’s assume you work 48 weeks of the year and every morning, 240 days, you buy a fancy Starbucks coffee. Just this coffee alone is going to cost you $960 a year and that does not include the extra coffees you buy when you are on vacation, on the weekend or just need another hit during the day. We also think you cannot go cold turkey and you should treat yourself once and awhile. If you only buy yourself one of those special coffees once a week, you would still save $768 and you would be still looking forward to your special treat every week!

One last point about saving on the Starbucks coffee, by cutting down on the specialty coffee, you probably are reducing calories at the same time which will help with the waste line!

Going cold turkey on everything is pretty difficult, however if you apply the approach we suggested to some of the other expenses that steal your money, you will be still rewarded, and save a great deal of money as well. We have talked about the miscellaneous expenses that can really add up to a lot of money pretty quickly, however there are other areas that can be explored as well in terms of saving money.

Let’s assume you are paying interest on credit cards to the tune of 18% on the unpaid balance. Did you realize that if you took out a small loan, your interest would be below 10% and you would reduce your interest cost significantly?  This is another way to save money and put more in your pocket. Consolidate your debt into one low interest loan and them repay the loan with the savings and you will be amazed at how quickly the loan is repaid. This is another way to put money in your pocket and not someone else’s.

Whenever you look for that loan, or mortgage or whatever type of loan including car loans etc, always use a broker to help you find the best terms and conditions available. Ask for a loan at your local bank and then using the broker compare your banks loan proposal with what the broker can do for you. Competitive lending is certainly strong and healthy in this country and consumers might as well take advantage of it and save themselves some money. Let both your broker and your banks lending officer know that you are shopping for the best possible rate and they just might be willing to sweeten the deal to get your business, especially if you have a good to great credit rating.

So let the Forest Gump’s of the world continue to play Russian roulette with their box of chocolates; wondering what they will get. Your strategy of taking action and controlling what you pay for loans etc allows for a more predictable and profitable outcome. There will be a lot more money left in your pocket. So sit back and enjoy each predictable chocolate morsel. It sure tastes good knowing exactly what you’re going to get and still have money to spend on other things that may be more important to you.