MSN Money selected their Top Money Stories of 2011. Initially, I began to dissect their list and intended to write about them all. But, I got stuck on the low interest rates for savings. This is a huge topic and decided it warranted an entire article. In fact, The Huffington Post suggests this environment, instead of helping the economy is actually keeping consumers from spending.

ANEMIC RETURNS ON SAVINGS

This one impacts anyone with money to invest in a savings account, CD, or short term bond. The historically low savings rates are slashing retirees lifestyles. All the folks looking to earn a return above 0.9% on their savings need to do some digging around.

LOW INTEREST RATES

As I updated our familys’ asset allocation this week, I was smacked in the face with the deplorable return. As we keep a hefty 20% of our portfolio in cash investments and 20% in bond type investments, I relentlessly searched for some sort of return on the fixed portion of our portfolio.

TIPS

I decided I would pursue investing in Treasury Inflation Protected Securities (TIPS). After all, at least they will keep up with inflation. Much to my dismay, Charles Schwab had none yielding a positive return. I certainly am not investing in a TIPS fund right now, because as soon as interest rates rise, the principal value of the fund will fall, netting a certain loss. In fact, the TIPS fund we currently have is priced at $117.00. Fortunately, we bought the shares when it was priced at $100.00. I decided to wait and put in a bid for the April auction and hopefully, buy individual TIPS at par. With individual TIPS, you always receive the principal payment back when the bond matures plus an adjustment to compensate for inflation.

SERIES I GOVERNMENT BONDS

Series I (for inflation) Governement Bonds are similar to TIPS. With I bonds you not only get a FIXED (does not change) rate of interest, but you get a BONUS; you receive an ADJUSTABLE rate of interest that changes along with the inflation rate. So the combined interest rate includes a fixed interest rate (currently zero) plus an inflation adjusted rate for a new combined interest rate which adjusts every six months. These bonds can be bought at your bank in small denominations up to $10,000.00 per year. They are among the best choice for inflation protection.

SHORT TERM BONDS

Next, I went on to Schwab and searched their fixed listings for bonds with terms of between 2 and 4 years. I found a great A rated bond paying close to 3% and maturing in  2013. When I went to purchase, I realized the minimum investment was $100,000.00. That was a bit steep for us! None of the other short term bonds paid more than 2%.

CERTIFICATES OF DEPOSIT

On to CDs to find out what type of interest rate I could snare for the next 2 to 3 years. At Bankrate.com the best interest rate I found was 1.29% for 2 years. For a 3 year CD, the top rate shot up to 1.53%. Although the Federal Reserve Bank alluded to keeping rates steady into 2013, there is something upsetting about settling for such a low rate.

Personally, I would rather keep our uninvested cash and fixed funds totally liquid in case rates rise in the next six months. Or maybe I’ll bite the bullet and buy a one year CD. I’ll keep you posted.

SAVE THIS ARTICLE

Although the returns on these investments are presently quite low, they will go up. Print this list out and save it. These are some good ideas for your short term funds. One thing I’ve learned from decades in the financial markets, rates go up and down. For those borrowers out there, there will come a time when you are crying for these low interest rates. For the savers and fixed investors, rates are bound to rise.

In sum, get the best rate you can but don’t tie your money up for too long as rates will eventually go up.

Where are you parking your short term cash?

image credit; Doug88888

& Holiday Links

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With drunk drivers on the loose, and the crazies out and about, here are some ideas for a really fun New Years Eve at home. Try these out with the family, a few friends, or a big group.

FOOD

Pot luck is the way to go. If your guests bring some grub, they are automatically invested in the event! Set a theme for even more fun. Try hors’doerves, sandwiches, dips, international, or any theme you can come up with. Finger foods are recommended. Also, pot luck cuts down on costs!

New Years Eve Times Square NYC

DRINKS

Create some fun drinks; it’s New Years after all! You can make alcohol punch, Sangria, mixed drinks, beer, wine, or whatever combination you prefer. To keep the costs in check, keep it to a few choices! For those teetotalers, soda, mock-tails, or punch keep the fun rolling.

ACTIVITIES

The older El Carino and I get, the less we like (most) parties. Unfortunately, many of our contemporaries aren’t as much fun as when we were younger. When you come to our house, you are not going to be relegated to sitting around and talking – boring. We have had every type of ”activity” party. Get active, plan some events and invite the crowd. Pick and choose what seems fun for you.

• Charades
• Taboo
• Pictionary
• Balderdash
• Wii games- Tennis, bowling, and boxing tournaments
• Newlywed game with any sorts of couples (don’t have to be married or opposite gender!)
• Dance parties
• Improv games
• Trivial Pursuit
• Musical Chairs (too much fun with adults )
• Cookie decorating

MUSIC

The music sets the mood. Make it eclectic, lively and fun.

BARB RECOMMENDS

This ones for you bloggers out there. eMoneyMakingOnline published a superb explanation of Google’s latest update in Writing for web-What has changed with the Panda Update? I don’t usually worry too much about trying to write for anyone other than the personal finance readers, yet I know lots of my readers are also bloggers and this one will keep your site going in the right direction.

Blog Tyrant gives 13 excellent tasks For When You Can’t be Bothered Writing. Ever heard the term “epic article”. I’m not completely sure what qualifies, but the information covered in this post promises to move your blog on to bigger and better opportunities.

Budgets are Sexy reminds readers that It’s My Birthday and I Can Shop if I Want to! I sometimes imply that spending money is bad. J. Money reminded me that money is a tool, and not an end in and of itself. If you don’t enjoy the fruits of your efforts and over focus on the future, you are missing out.

Rich Beautiful and Single and I Wonder Why was a guilty pleasure read over at Financial Samuai. Sam shared an encounter with a beautiful (on the outside) woman; not so much on the inside. And she wondered why no suitors were beating her door down. I don’t get these type of women.

Ask Liz Weston responded to a reader who asked, Will Stocks Ever Return 8% Again? Although neither Liz Weston nor I are fortune tellers, and history does not predict the future, take a glance at a long term chart of the US stock market. The long term trend has been upward ever since the birth of the US stock exchange. If you think American companies and International Companies as well will continue to grow and prosper, then stock market returns will rise.

Miranda Marquit, writing for Bargaineering writes about an important investing activity, portfolio rebalancing, in End of Year; Time to Rethink Your Investment Strategy. She offers up some excellent questions to ponder while you prepare your investments for the coming year.

Mike piper at Oblivious Investor writes an  article explaining muni bonds. If you’re in a high tax bracket, you do not want to miss this one.

Don’t be Perfect is awesome advice from Canadian Personal Finance. Although Alan was referring to investing, the applications are much broader. Perfectionism is a success killer. Focus on the important, don’t be afraid to make mistakes, take some calculated risks and success will follow.

Follow up from Bloggers Making $1000.00 per Month at Cash Flow Mantra will keep you motivated. My readers and myself are always interested in inspiring money making articles! I’m going to be watching closely as Cash Flow Mantra ramps up his money making plans!

Square Pennies offers up more tips for Entertaining for Less & Keeping the Fun.

BARB ACROSS THE BLOGOSPHERE

Please support these fine sites who published my work.

Charles Schwab Investment Research Tools at Findthebest.

What’s up with Europe? Should I Avoid Investing There? at Benzinga.com

Carnival of Personal Finance at Money Cactus

Carnival of Financial Camraderie at My University Money

 What are your best New Years Eve ideas?

image credit LeSimonPix

 You must subscribe to my WEALTH TIPS newsletter on the right. You get invaluable wealth building information and a FREE e-copy of my award winning 20 Minute Guide to Investing. Do not hesitate!

On Wednesdays I answer Reader Questions. If you have a money question, write in. You may be considered for a Wednesday column.

Here’s a thoughtful question from Buck Inspire from the article, Contribute to a Roth IRA Today

Buck Inspire: Thanks for the reminder to get more into my Roth!  I also fund my rollovers and Individul  401k.  Which do you think should be maxed out first?  Roth or 401k’s?

This is an excellent question, which to max out first, a 401K or a Roth IRA?

The easy answer, max out both the 401K and the Roth IRA!

What if I Can’t Max out Both My Roth IRA and 401K?

Obviously, if you had unlimited funds, you wouldn’t be reading this blog! In the real world we all need to make financial choices. Where to allocate retirement funds is a common question for investors.

The simple answer is, if your company matches your investment in a 401K, make sure to contribute enough to get the employer match.

After you receive the FREE employer money, then the decision whether to go with the Roth or 401K depends on your answers to these questions:

• What is your tax bracket now?
• Do you think you will be in a higher or lower tax bracket upon retirement?
• Do you like the investments offered in your workplace 401K?

Predicting the Future

I don’t know about you, but my fortune telling skill is limited. Although I believe that tax rates will be higher in the future, I’m not sure if my personal tax rate will be higher. After all, in retirement, my salary income will be gone and I’ll be

How Rich Will I Be?

living on pension, social security, and our invested assets! Again, my soothsaying tells me that this income will be lower than our current income.

How to Choose?

I can’t give Buck a definitive answer without looking at lots of personal information. I can give Buck some analytical ideas to help him decide.

If you really need a tax break now because your income and tax brackets are high, and you think that they will be lower in the future, then the 401K may be the one to max out first. As long as you are happy with the investment choices available in the 401K.

For the newbies out there, a 401K investment removes your contributions from federal taxation now (because you contribute pre tax dollars). The monies continue to grow tax free. But, when you take the funds out at retirement, you pay tax on them plus tax on any earnings as well.

With a Roth, you pay tax on all of your income, and then contribute “after tax” funds to the Roth. These funds grow tax free just like with the 401K. Upon retirement, or at anytime after age 59 1/2 you can withdraw these funds without paying tax on them! It’s a sweet deal.

If your tax bracket is not in the stratosphere now, the Roth IRA has some important advantages.

You choose your preferred investments.

All withdrawals are tax free.

There is never a requirement to withdraw the funds from a Roth IRA.

As with any investing decision, certain assumptions are made. In reality, those assumptions may turn out to be correct or incorrect. So, make the best decision now, with the information you have.

Have any of you dealt with this decision? Did you choose to max out your 401K or Roth IRA?

Caveat; As with all investment decisions, this is not a recommendation to buy or sell any investment product. Before making any investment decisions, please consult your own investment advisor.

Couple Money writes How to Begin Investing for Retirement with $1,000.

Invest it Wisely tells How to Plan the Ultimate Retirement.

Passive Family Income asks How Your Retirement Investments are Coming Along?

Personal Finance By the Book queries, Should a College Student Save for Retirement?

Redeeming Riches wants to make sure you are dealing with these 5 Retirement Risks.

image credit; Photo Knight

INSURE THIS CAR?

How to Cut Your Car Insurance Costs

Everyone is aware that if you own a car, you need insurance. Since insurance is one of those “what if” costs that you need, but don’t want to use, cutting insurance expenditures is a win win proposition.

As a personal finance expert, I look for ways to cut costs which will not impact my lifestyle. Here are some insurance basics that will lower your premiums.

If you drive an older car, (confession, El Carino’s new car is 8 years old, and the one I drive is 13 1/2) there may be coverage you can avoid. Even Liz Weston, from MSN Money suggests you may want to Dump the Insurance on Your Clunker.

What are Collision and Comprehensive Coverage?

Collision coverage pays to repair your own car in the event of an accident.

According to Edmunds, “Comprehensive coverage takes care of your car in the case of theft, fire, falling objects, explosions or other unexpected problems.”

What if your car is totalled?

The insurance company considers your car totalled when the repair costs are greater than a predetermined percentage of the car’s value. For example if the repairs on your damaged car are 80% of the car’s value, and the “totalled threshold” is 70%, then even though your car could be repaired, it is considered totalled by the insurance company.

For example;

Car’s value: $10,000.00

Repair costs: $8,000.00

Totalled threshold: Any repair above $7,000.00

Even though the car can be repaired, the insurance company considers it totalled.

Edmunds goes on to say, “ If you’re driving a rattletrap, on the other hand, and the sum of your premium and your deductible are close to the value of your vehicle — or if they exceed it — you might want to consider doing without this coverage.”

RAISE YOUR DEDUCTIBLE

One of the best ways to lower your premium is to raise your deductible. If you have a good sized emergency fund and are a safe driver, consider boosting your deductible to $500.00 or $1,000.00. This approach usually takes a big bite out of your premium.

SHOP AND BUNDLE

• Spend a few minutes on line every few years to compare rates.
• Before buying a new car, find out the cost to insure!
• Consider buying homowners and auto from the same firm to lower premiums even more.
• Always ask what discounts are available. You may be able to do something quick and easy to lower your insurance costs.

What are your cost cutting insurance strategies?

image credit; Bogdan Suditu

How to Live Well if You Work in a Low Paying Field

Sign up on right to get free WEALTH TIP’s Newsletter, and FREE bonus eBook; 20 Minute Guide to Investing!

In Part 1,  I responded to a reader who wondered Why I Freelance for pay well below my normal hourly rate of pay. I talked about a variety of satisfactions I get from educating others about personal finance and wealthy living.

In Part 3; How You Turned Your Passion Into Cash, others share success stories and welcome your input as well.

This question got me thinking about the millions of folks out there who are passionate about doing work that does not pay well. These fields include acting, music, the arts, social work, community service, non profit work, lower pay administrative work, service jobs, restaurant work, retail sales, and many other jobs. In fact, there are probably more lower paying jobs than those that pay well.

Pay level satisfaction is impacted by your own perceptions. Many newly employed college grads, are thrilled to have a job at any pay grade!

I am certainly not imposing my personal values on whether your job is ”well or poorly” paid. I’m offering suggestions to live wealthy, regardless of income.

You may be in a lower paying job, either by choice or by default. Here are some ideas about how to live well and build some wealth in spite of your pay grade.

Adjust your expectations; Forget how anyone else lives. I’ve been fortunate to travel the world. In most countries even the wealthy live in what we in North America would consider small apartments. No matter the size of your family, you do not need a large home. Scale back, live in a smaller home or apartment than you thought was comfortable. Add a roommate or two. You may be surprised at how little you really need. Want some privacy? Go to the library or for a walk.

Take public transportation; Although El Carino and I both have (old) cars, I take the train or walk whenever possible. Jennifer from Little House in the Valley rides miles on her bike.

Use your tax dollars; You pay for parks, libraries, free community art and theatre programs with your tax dollars. Get that money back by using those resources for your entertainment and enjoyment. There are tons of “free” events in most major cities, especially around the holidays.

Eat well and cheaply; Stick to a simple diet. Consider some vegetarian dishes spiced up to make flavorful and delicious. I love a meal of beans and rice. Make a big batch and freeze some for later. Buy in season fruits and vegetables. Go light on meat and prepackaged processed foods. You’ll be thinner and healthier as well.

Spend mindfully; Make it difficult to overspend, don’t spend your leisure time at the mall near temptation. Think before you spend and plan your shopping trips.

Save something, no matter the amount; Get in the habit of saving. Have a small amount transferred from each paycheck into a savings account.

Get out of debt; However you do it, you cannot live on less with debt! For debt help, read these recommendations from top personal finance bloggers; Consumerism Commentary, NoDebtMBA, Debt Sucks Blog, Debt Free by Thirty, Fat Guy; Skinny Wallet, and Money Help for Christians.

Enjoy what you have!

Make sure to read Part 1: Why I Freelance; How to Live Well When your Passion Doesn’t Pay Well.

And Part 3; How You Turned Your Passion Into Cash; be sure to chime in with your story.

image credit: Cuba Gallery

Holiday Shopping Tips

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VIDEO SERIES; PART 4

Welcome to Part 4 of my YouTube video series, Learn Money from Barbara Friedberg Personal Finance.com. This tour of the grocery and the mall shows you how to get what you want at a price you can afford. Come with me to get the secrets to shopping smart. Make sure to check out parts 1, 2, and 3.

Part 1, Talks about how I went from a scared girl to a confident and successful adult. The video showcased a first attempt video project with Hints for Holiday Shopping. The tips work well for any season. And the article championed getting started now!

Part 2; New College Grads; Get Smart About Money is dedicated to those just starting out, lays out money ideas for the 20-somethings and smart money reminders for the more established.

Part 3; Learn the importance of personal branding in Use a Commercial to Promote Your Brand.  View this quick introduction to Barbara Friedberg Personal Finance.

Save Money on Your Holiday Shopping

I’ve been trained from birth in the ways of looking great for less. My dad was the master at buying a gently used luxury model car for a song. And my mom knew every trick about how to make that dollar go on and on. We shopped everywhere from the outlets, to the discount stores, to the mall, looking for high quality goods at reasonable prices. In this recently released video, I’m going to take you on a shopping trip, from the grocery to the mall and show you how it’s done.

These tips are all about making good decisions, practicing them until they become habits.

Like any good habit, smart small, watch your spending, and shop smart.

ACTION STEPS

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it for all of your personal finance thoughts, activities, and plans.

Take a moment and review your spending over the last few weeks. If you have no idea what you’ve spent, then keep track of all spending for a week.

Consider how you might reduce some of your expenses (use the ideas from this videotape) and give it a try. Better yet, write down one strategy you will employ to reduce spending for the next week.

& Barb Recommend’s Links

Check out my latest articles at Benzinga.com, Findthebest.com, and The Dollar Stretcher

Sign up on right to get free WEALTH TIP’s Newsletter, and FREE bonus eBook; 20 Minute Guide to Investing! And be sure to pick up my RSS feed or email subscription and follow me on twitter so you get the word immediately.

Prequel

My family made a huge move this summer from a moderate cost of living area to one of the higher cost of living areas. The advantages of this move are enormous; we live a short distance from one of the most exciting cities in the country. The nature, culture, arts, shopping, and access to just about anything is fantastic. Our weather is outstanding. The job opportunities are good. The public trasportation is better than in our old locale. And, finally the scenery is breathtaking.

All is Not Perfect-The Pros and Cons

According to Salary.com cost of living wizard the cost of living in our new home town is a whopping 40% higher than in our old borough. Wow, I knew it was more expensive here, but I didn’t realize it was this much higher! I’ve personally noticed that groceries, gas, restaurants, and housing are significantly more costly in this dream city.

We made the move with our eyes open. El Carino’s new salary is higher than his prior pay. Our daughter is grown, so we didn’t need to worry about the school district when buying our home. The housing crisis made buying our condo about $150,000.00 cheaper than if we had relocated three years ago! We made the move well aware of the costs and have amassed enough net worth to relocate without jepardizing our financial present or future. And, for us the lifestyle changes warranted the move to this premium locale.

Flashback

Compare this move with an antonymous decision when our daughter was a toddler. At that time we lived in beautiful and costly San Diego California. We decided that El Carino would look for work in an area where I could afford to take some time off from the rat race to be a full time mom. In a cheaper location we could maintain a nice lifestyle in an area with good schools. Thus, we gave up the paradise of ideal weather, beach, and excitement to move to the midwest. During those years, we saved and invested a lot, lived in good neighborhoods with well regarded school districts, and grew our net worth.

That decision to leave San Diego for the midwest many years ago enabled us to afford our current move without sacrificing our retirement.

Is Moving to a Lower Cost of Living Area Right for You?

Life is all about compromises. You cannot be successful in life, marriage, or just about anything without compromise.

We decided at the outset that we were willing to settle in a moderate midwestern city in order to facilitate the family lifestyle we wanted. After leaving San Diego in the early 1990′s we bought a 3 bedroom, 2 bath home for well under $175,000.00 in an extremely desirable midwestern neighborhood surrounded by much more luxurious homes. I stayed at home and enjoyed being a mom and head household manager for a few years. We put the maximum into both a workplace 401(K) and Roth IRA’s. And during those years, in the middle parts of the country, our family-focused life set a solid foundation for our future.

For those living on the coasts and in the high cost areas of the country I recommend living in a more affordable locale. The financial savings are enormous and the lifestyle, while not as glamorous has it’s advantages. We didn’t get stuck in a traffic jam for many years. Of course, like all decisions, money is not the only decision making factor. There is family proximity, job outlook, and personal preferences. But, don’t rule out a move, there are some beautiful places off the beaten path. Even Money Magazine’s Best Places to Live article recommends some unique locations.

BARB RECOMMENDS

• 5 Things I Hate About Chrismas at You Have More Than You Think
• Why Programmable Thermostats Don’t Save You Money at LenPenzo.com
• Being too Frugal Almost Got Me Arrested by Money Reasons
• Quick and Easy Dividend Calculators by Sustainable Personal Finance
• How I Got 4 Movie Tickets for $9 by 20s Finances
• Where to Look for Your Next Job by My University Money
• Want to Invest in Stocks? Consider This First by Novel Investor
• What’s the Best Investment Advice? Invest in Yourself by The Frugal Toad
• Most Portion Sizes are Ridiculous by Frugal Confessions
• When an ETF is Not Acutallly an ETF at My Journey to Millions

Have you considered relocating to save money?

image credit; James Hetherington

Sign up on right to get free WEALTH TIP’s Newsletter, and FREE bonus eBook; 20 Minute Guide to Investing! And be sure to pick up my RSS feed or email subscription and follow me on twitter so you get the word immediately.

READER PERSONAL FINANCE QUESTION:

“Hi, Barbara. I hope you don’t mind me reaching out to you. When I left my job, I
left $130,000 in a retirement account. I met with a financial advisor who
suggested an annuity, but I am not sure that is the best bet. I know you can’t
officially offer financial advice as an advisor, but what do you think of a
variable annuity from Allianz?

I would like to convert it all to a Roth IRA but know we can’t take the tax hit in one year. I would appreciate any insight you can give. Thanks!”

MY RESPONSE:

WHY DO FINANCIAL ADVISORS LOVE ANNUITIES?

VIDEO SERIES; Part 2

News Flash; I’m nominated for a Plutus Award in the Best New Ebook Category for my ebook 20 Minute Guide to Personal Finance (download for free on the right)!! Please vote for me here!

Welcome to Part 2 of my video series. In Part 1, I talked about how I went from a scared girl to a confident and successful adult. The video I showcased was a first attempt project with hints for Holiday shopping. The tips work well for any season. And the article championed getting started now!

Todays video, dedicated to those just starting out, lays out money ideas for the 20-somethings and smart money reminders for the more established.

“Never spend your money before you have earned it.” Thomas Jefferson

Follow Jefferson’s advice, add in a bit of saving, and you are on the right path. Watch the video, consider the tips, pass them along to your friends, and help them become money smart!

Money doesn’t have to be complicated. Develop consistent habits, don’t spend what you don’t have, be patient, and your money will grow. And don’t forget to create additional income streams to grow your wealth.

• This is part 2 of a series showcasing my YouTube Videos. Learn personal finance and life skills from these instructional videos. Make sure to check out Part 1; Achieve Your Perfect Life With Goal Setting.

Check out these websites dedicated to those just starting out:

• The College Investor
• Financial Success for Young Adults
• Young and Thrifty
• Thousandaire

What money advice do you wish you knew when you were starting out?

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed or email subscription and follow me on twitter so you get the word immediately.

Guest author, Helen Fabe, successful real estate professional and life long volunteer

El Carino, Zoey, Simon, and I have been living with my folks now for almost one month as we wait for our short sale condo purchase to finalize in our new

Spend Smart

far away land. Although disruptive in some ways, there are also quite a few benefits; In addition to mom’s good cooking, she is also contributing her second article to this blog.

As one of my biggest fans, mom is also a long time student of personal finance. Read these three real life stories and learn from her observations about how to make smart money decisions.

Mr. Money is No Object

Mr. Money is No Object is a member of a moderate means couple with two working seniors. For their anniversary, he spends $100.00 on their celebration dinner. I was a bit surprised at that type of extravagance and wondered, “Wouldn’t a $50.00 celebration dinner be just as festive?” After
all, he’s also saving for an expensive watch. I continued to ponder, “Does he have a rainy day fund?” In Mr. Money is No Object’s case, I believe he might have received equivalent satisfaction from a $50.00 dinner as from double the amount.

(Barb’s comment; this also raises the question of his values, if expensive dining is extremely important to him, maybe the value of a $100.00 dinner out, outweighed the $50.00 savings of a more moderate dinner!)

Mr. Want versus Need

My next friend is selling his home and is sprucing up the patio. Although he wanted huge pots to dramatically improve the curb appeal, he was concerned with the $100.00+ price tag. After careful consideration, he realized his goal could be reached with several smaller pots grouped together. Just as beautiful for a fraction of the cost.

In my opinion, that was an example of a sensible spending decision. Although he “needed” to spruce up the curb appeal of his home, he avoided the extravagant pots for a more conservative alternative.

Mrs. I Feel Guilty Whenever I Spend

My neighbor is comfortably retired with no significant financial concerns. Throughout her life she has been and still is quite frugal. For a special occasion she wants an expensive piece of jewelry and agonizes endlessly about the purchase. She repeatedly asks herself, “Do I really need it?” Well, of course she doesn’t need it, but there is no logical reason not to treat herself to the jewelry. Unfortunately, even after making the plunge and purchasing the beautiful bracelet, she continues to be racked with guilt and worries that she spent too much.

The end result, she can’t even enjoy the lovely jewelry. In fact, if you can afford a purchase, and want it, then it’s a waste to feel quilty about the spending.

THE TAKEAWAYS

• Consider your values when spending. Do you really enjoy and value the cash you are spending?
• Make a conscious spending choice. Is the expense worth the amount of time it took to earn the money?
• Be mindful about whether  your spending is a want or a need. Then make the choice to buy the item, look for a less expensive alternative, or avoid the purchase altogether.
• For those “tightwads” out there, if you decide to splurge, and can afford it, make sure not to ruin the decision with second guessing and guilt.
• Remember to enjoy your smart spending decisions.

Do you have any money tips?

image credit; Doug88888