Strategy | Geared for Success

Spending vs. Saving: the Delicate Balance

Saving has never been an easy task for most American families, and in light of the recent financial hardships, it’s even more difficult. However, our economy desperately needs us to spend, to keep the cycle of business flowing. If we don’t purchase goods and services, businesses won’t be able to continue to pay employees, and the economy will just get worse.

This doesn’t mean that we should disregard caution and spend ourselves into debt. On the contrary, buying on credit if you are already struggling to pay your existing bills could be the tipping point for your personal budget. The best solution is to find the delicate balance between saving and spending where the economy is still be stimulated, but your personal reserves can also continue to grow.

If you have not yet cut up your credit cards, this is an excellent time to do so. Keep only one credit card intact for when you need to rent a car or book a hotel room, but leave it at home. This will keep you from being tempted with impulse shopping. You do not want to actually cancel the other credit card accounts, in order to preserve your credit rating, but you should definitely shred them.

The credit cards that you do want to cancel are those for specific stores. These types of credit card accounts nearly always charge the maximum percentage rate, regardless of your credit history. The one exception to the rule would be those store cards that offer 90 days or 12 months financing, ”same as cash.” If you participate in one of these promotions, always make sure you have paid the balance off in full before the deadline to avoid the accrued interest.

Filed Under: business, finance, strategy Tagged With: Credit card, Credit history, Credit rating

Work for Yourself or Someone Else?

When it comes to making money, there are two options: create the income with your own hard work and ingenuity or get hired by someone else who pays you for the work. There are definitely advantages and disadvantages to both. Here are some reasons to consider both.

Working for Someone Else

Having a job working for a company offers some security. You know how much you’re going to get paid and when. With that you can plan a budget and save up for things like retirement. You also get a lot of benefits including health and dental insurance, retirement accounts, and paid time off. If you work hard, there’s the potential for advancement and yearly raises. Some companies have other benefits including parties, prizes, bonuses, company swag, and family activities.

There are downsides as well. Your earning potential is limited and at any time, the company may decide to downsize, which will suddenly put you out of a job and forced to look for a new one. Also, promotions may come with more work but not an increase in pay.

Working for Yourself

There’s a lot of stress that comes from working for yourself, but there are a lot of benefits as well. For one, if you’re good at what you do and enjoy then work won’t feel like such a drag. You’re in control of your own life. You can take time off when you want without having to answer to anyone. You also have the ability to increase your hourly wage just by working harder and faster. You work as long as you need to instead of staying 8 hours to “look good.”

Filed Under: business, strategy Tagged With: Company, Paid time off, Wage

Creating a Savings Plan

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When it comes to buying big items, such as a house, cars, and furniture, too many people are purchasing on credit. The next time you’re about to put something on a credit card or with the assistance of financing or loans, first work out how much it will cost once you’ve paid the item off. If you understand how much you’re really paying for an item, you may realize that it’s not worth buying on credit.

Instead, consider creating a savings plan for things like a new car. To do so, the first thing you’ll want to do is create a budget. Enter in items that are the same every month, such as rent or mortgage, car insurance, and cell phone bill, and then set a realistic amount for other items such as groceries and entertainment. You may find that you need to decrease how much you spend on these items in order to spend less than you make.

If it’s not easy for you to track how much you’re spending, consider getting the budgeted amounts in cash. Separate it out into envelopes with each one labeled; once the money is gone, you can’t spend any more on that item that month. With the money that’s left over in your budget, that will go into savings. You should decide on what you’re saving for. The first thing you should save for is a nest egg: a lump sum that you can use for emergencies. Once that amount is saved, the next thing could be a newer car, a vacation or a down payment on a house. It’ll feel so good paying in cash!

Filed Under: business, finance, strategy Tagged With: Credit card, Saving, Vehicle insurance

Working for a Company of One

Image by Casey Serin via Flickr

With the economy the way it is, many people are losing their jobs and the jobs that are available often aren’t paying what they used to — if you’re one chosen out of possibly hundreds of applicants. So what can you do while you’re searching?

The best thing you can do while you’re on the hunt for your next job is to find contract work with companies. First, identify what skills you have that would lend well to contract work. This could be writing, editing, transcribing, data entry, construction work, handy man, etc.

If it’s something that you could do online, such as writing or data entry, then the best place to look for jobs is online as well. Places like Craig’s List are great ways of finding these jobs. Many of the jobs are done online, but because of restrictions, it’s best if you look at listings in big cities. They’ll say whether they’re available for those who are telecommuting.

For jobs that are location-based, such as handyman repairs or at-home daycare, you’ll want to advertise your services. This could be something as simple as posting fliers on telephone poles and listing ads on Craig’s List. Also make sure to use your network to get the word out. Tell all of your friends that you’re looking for work and what kind of jobs you’re qualified to perform. If they have work or hear of anyone needing that type of work, they’ll let you know.

Although it may start out as temporary, you may find that you like working for yourself better than working for someone else!

Filed Under: business, strategy Tagged With: Craigslist, Telecommuting