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Savings Mistakes You Can Learn From

It is cheaper to learn from other people’s mistakes than to learn from trial-and-error. That’s why it is important to find out the experiences of people who have “been there, done that” especially with regards to financial management. Some wish they can go back to their 20’s to undo the mistakes of the past. Meanwhile, there are others who regret the financial decisions they made earlier.

The experiences of different individuals in debt and personal finance will definitely vary greatly. For example, some people wish they haven’t spent that much while others might regret saving too much and not spending enough on themselves while they were younger. This article won’t provide concrete steps. Rather, we aim to help you see the alternatives:

Saving 10 Percent of Your Income – instead of spending all your salary as soon as you receive it, save 7 to 10 percent. Many people regret their free spending ways. For instances, by saving a little bit of money every month, you may be able to buy a nice house outright for your retirement in 30 years.

Waiting Too Long – when it comes to money, not doing anything is a decision to do something. By postponing the decision to start an IRA in your early 20’s, for example, you will have less investment for retirement and you may also need debt help. The same is true in other things, if you can afford to buy a house today, it might be a good idea to buy because inflation might drive it up over the short or long term.

Making Transfers Inconvenient
– some people do get the idea. Many couples today actually have a separate “emergency” account that receives automatic savings. But that money is a temptation and you may need debt help because of this. By making it hard to transfer money to your checking account, you are likely to spend less as well. Also, make that “emergency” money almost impossible to reach for impulse buys.

These are just some of the actions you can take starting today. There are many financial decisions you that need to be made every single day. Plan and choose your next move carefully and get debt help as soon as you need it.

Turning Frugal: Save Money by Spending Wisely

You can feel it in the air. Everyone is turning frugal. After decades of engaging in shameless consumerist attitude, people are suddenly becoming wiser with their money. The catastrophe that forced them into the situation might not be welcome, but the shift in consumer attitude will do a lot of good to society as a whole for the long-term.

There are still bills to pay and debts to get rid of though. In the meantime, it is important to save as much money as you can. It is inevitable that you still need to spend on certain things. Here, we compiled some blog posts that can help you spend less on your needs and wants:

April @ Get Rich Slowly uploaded an article titled “The Art of Improvising: Alternatives to Buying New”. Despite what the headline implies, this posts digs deeper into saving. Other than telling you to stop buying new stuff, the author also provided practical tips on how and where you can save. For example, she tells you to repair whenever possible, delaying spending, trading, or renting. Borrowing is also a good idea in some instances.

DeputyHeadmistress @ Frugal Hacks wrote an interesting post “When It Pays to Buy New”. Now, she is not specifically encouraging you spend money on new things; the point of the article is that it sometimes pays to buy something new. This is especially true if the product you’re interested in meets two factors: it frequently needs to be replaced and the company you’re buying from offers money-back replacement guarantee. If it doesn’t meet the latter condition, you should think twice.

The third blog we will feature for this week focuses on buying cheap books. Fiscal Geek has a post titled “24 Ways to Help You Buy Cheap Used Books”. It provides various links to websites that sells books at bargain prices. Even non-booklovers will find the post useful because it gives them an idea about how much, or how little, they should pay when buying stuff.

GMAC LLC Changes Its Name to Ally Bank

Wanting to leave its own problems behind, auto and mortgage-financing firm GMAC LLC has dropped its own name and re-launched itself as Ally Bank. The company has been suffering from billions of dollars in losses since the mortgage crisis hit. Currently, it has an $11.5 billion in capital shortfall.

The bank’s chief marketing officer, Sanjay Gupta, has revealed that the company wanted to new name that will eliminate the baggage that most banks have to deal with after they received billions in bailout money. Last December, GMAC received $6 billion in bailout money including $5 billion from the Trouble Asset Relief Program.

Plugging the Capital Shortfall

“Ally” was selected as the new name because of its implications that the bank is a friend and a trusted partner for consumer’s banking needs. Gupta said that, it contains the “attributes we are trying to convey”. GMAC LLC expects that this move will help them gain more customers. The new image is expected to attract retail depositors which are a crucial funding source with today’s credit squeeze.

The improved bank deposits will help fill the gaping $11.5 billion capital hole as was revealed in the stress test results. Nineteen banks took the so-called stress test and ten banks, including GMAC, were told to raise their capital. Despite all strategies on the contrary though, many experts still believe that the company will need another bailout in order to survive.

Attracting Retail Deposits

Long before GMAC LLC decided to rename itself as Ally Bank, it was already offering above-industry average industry yields for consumers. A lot of lenders have tried this strategy since the financial crisis hit in 2007. Ally Bank will offer a 2.8 percent rate on a one-year certificate of deposit even if the industry average is around 2.29 percent.

This strategy appeared to work. The bank’s deposit showed a significant increase during the first quarter. It experienced 16.5 percent improvement to $22.5 billion which is broken down as $11 billion in retail deposits, $9.5 billion in brokered deposits, and $2 billion in other types of deposits. In addition, Ally Bank expects more federal funding because of its status as the preferred lender for vehicles made by the now-bankrupt Chrysler LLC.

5 Savings Tips From Sites We Like

With today’s economic crisis, it is important for everyone to cut cost where they can, whether in business or in their personal life. Saving money for yourself and for your family is actually simpler than you think. For this week’s roundup, we compiled a list of blogs that might help you save money on everyday expenses.

Jaimie Paynter @ Bargaineering introduced the idea of using allowance as a budgeting tool in the post “Do You Need An Adult Allowance?” Essentially, it takes the idea of “budgeting” one step further because everyone is familiar with the idea of allowance since childhood. Someone in authority controlled our spending. As an adult though, using allowance don’t need to be controlling. Rather, it can actually free from your financial burden when used property.

David @ My Two Dollars wrote a post titled “If You Don’t Need It, It’s Not a Bargain At All“. From this headline alone, readers will have a pretty good idea about what this post is about. It talks about how customers are usually encouraged to spend simply because “deals” are being offered in the market especially during hyped-up occasions.

J.D. @ Get Rich Slowly recently uploaded a blog post “How I Cut My Television Bill in Half“. Here, he provides some alternatives to cable television. Deluxe cable packages can cost a significant amount. But if customers know about other options that deliver the same kind of service, they can reduce their bills dramatically. J.D. gives viewers some choices such as buying shows from iTunes store and watching shows for free in Hulu.

Trent @ The Simple Dollar wrote an interesting post “Buying Fresh, Buying Cheap“. The blog post outlines the different ways a consumer can save money from buying fresh fruits and fresh meat. Usually, most people instantly assume that fresh is more expensive compared to canned goods. Trent reveals tht this isn’t necessarily the case when you know how to look for bargains.

The My Dollar Plan Blog consulted with newly-retired IRS officials about tax deductions from gas mileage in the post “Tax Savings: How to Deduct Tax Mileage on Your Personal Car“. With the kind of economy today, it is important to cut costs where you can, tax mileage included. This blog post shows how a car-owner can save money from using his car for business purposes.

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