money management

If you’re in debt, you may be able to break free just by making some smart moves with your budget. Slashing expenses that you don’t need, finding ways to lower fixed expenses such as auto insurance and utilities bills will free up more room in your budget.

And so will the plain, old task of taking a close look at your monthly income and expenses. It will take a little bit of time to get organized, but it will be well worth the effort. It’s hard to see where the money you make is going when you don’t have a clear budget. Not having a clear and airtight budget makes it even tougher to rein in and pay down the debt you’ve acquired.

How much are you spending on food each month? How often do you fill up the gas tank? How much are your utility and cable bills? Just tracking your expenses for a month will help you to slow down spending and free up more money for debt payments.

Revamping Your Budget

Start with your fixed expenses. Tally up your fixed expenses such as rent or mortgage payments, utility bills, cable bills and cell phone bills. Add in any other monthly bills as well. Are you paying a little extra for auto insurance coverage each month rather than each quarter? Include this in your fixed expenses for now but know you can save money if pay this bill every six months or even yearly.

Short of moving or getting a roommate, there is little you can do to lower your monthly mortgage or rent payment, but those utility bills and cable bills and phone bills should be scrutinized. Keeping the temperature in a home just a few degrees cooler in the winter and warmer in the summer can help with utility costs. So can turning off lights whenever you leave, and doing without air conditioning on low-humidity summer days. Letting the fresh air into your home or apartment can do wonders for your budget.

Cable bills can be expensive. Weigh the pros and cons of keeping your current cable package. Can you get by with a less expensive option? Could you get by without this option altogether for a few months to free up more money to pay for your debts?

Cell phone bills are another big monthly expense. Do you have the best plan for your calling, texting and data needs? If you talk on the phone infrequently, opting for a less expensive voice plan than unlimited may make sense. Take a look at your text and data usage too. Could you get by without unlimited data? Ask your mobile phone provider just how much data you used last month. If you are nowhere near the lower data limits on cheaper plans, why not switch?

Making changes to your fixed expenses, the bills you pay each month, is a fast way to have a little more green in your pocket for that debt you are keen on paying off.

Reining in Variable Expenses

Variable expenses may change from month to month, or they may be a big expense such as homeowner’s insurance that you pay once or twice year. Making sure you get all the deductions you qualify for with your homeowner’s insurance is one way to lower what can be a very expensive bill. A quick call to your insurer may save you money, so don’t hesitate to reach out. Be honest with your agent. There may be ways to lower your bill that you didn’t realize.

This strategy works with car insurance too. Your insurance company wants to keep you as a customer so they may help to lower your costs with just a quick phone call. Shopping around for a better deal from another insurance company may save you money too. Loyalty and having a good relationship is certainly nice if an accident should happen and you need to file a claim, but when the priority is paying down debt, you may want to double-check that you’re getting the absolute best deal.

Food and gas are common variable expenses that may shift from month to month. A few dinners out can make food costs soar, while a few more nights in can have the opposite effect on your wallet, so take a close look at your food spending and make adjustments accordingly. If your food costs are burdened by meals eating out with friends, plan lunch or happy hour dates instead. Even better, invite friends over to your home instead, and savor a night in for a change.

Gas is another variable expense. If you travel the same route to and from work and do little additional driving, your variable gas expenses may not be all that different month to month. If you look back at a couple of months worth of spending and see big swings in what you’re paying to fill up your gas tank and it’s just more than you want to be paying, it may be time to re-assess your driving habits. Running errands all in one day can save on gas, as can carpooling with friends. Walking more and leaving your car behind to stroll a couple blocks works well too.

Apply the Cash You Save to Debt

Once you recognize and act on the spots in your budget that are costing you more than you’d like, you can apply the savings to your debt. Continue this habit and you have a strategy and the cash for paying down your debt.

But there is a big caveat; all that fun and impulsiveness is curbed back for awhile until your debt is paid in full, and you can build up some savings too. It’s more fun to spend money on an impulse when you have plenty of green in your account to handle it.

Plus, no regrets.

With a reverse mortgage, a senior homeowner can withdraw a large chunk of the equity in their home for cash, spend it how they wish and wait to pay it back.

Reverse mortgages are special types of home loans that are available to homeowners aged 62 and older. Unlike home equity loans, with a reverse mortgage you can wait to repay it until after you leave your home. Leaving your home could simply mean no longer using the house as your principal residence, selling or relocating to a new home, or moving to a senior living facility, or upon the homeowner’s death.

Many seniors may turn to reverse mortgages for an infusion of much-needed cash, strengthening their monthly budgets and giving them a greater sense of financial security from month to month. You may use the money from a reverse mortgage to bolster your Social Security benefits, which may not be enough each month.

You may turn to a reverse mortgage for help in dealing with the diagnosis of a long-term illness for yourself, or a loved one, which may require money beyond their current income or for help in dealing with the costly aftermath of a lengthy hospital stay and its subsequent recovery.

For example, you may need to pay for additional people to help you at home, in-home aides, someone to help with laundry, meals and housekeeping. And your health insurance may not cover the full extent of your on-going medical costs and expenses.

Other people may decide to take out reverse mortgage to simply pay for home repairs or home improvements. The money could be available in a lump sum in a single disbursement, through a line of credit or monthly cash advances or a combination of a line of credit and monthly payments.

With a reverse mortgage, you keep the title of your home and you are still responsible for paying property taxes, homeowner’s insurance and maintaining your home, so it’s not as if your homeowner costs vanish, as convenient as the cash may seem.

In general, with reverse mortgages, the older you are and the greater the equity that you have in your home, the more money you can receive. How much you can borrow with this type of mortgage depends on a homeowner’s age, the type of reverse mortgage you choose, the appraised value of your home, available interest rates and a financial assessment of your ability to continue to pay property taxes and homeowner’s insurance.

The amount you owe with a reverse mortgage comes due when the homeowner dies, sells the home, or no longer lives there as a principal residence. Most of this loan type have a “non-recourse” clause, which means you or your estate if you should you die while living there, would owe no more than the value of your home.

A reverse mortgage may be a good option for people who own their own home and  have few if any other savings to tap or for those simply looking to get some additional cash for expenses. But it is important to consider your individual situation carefully and to understand the pros and cons of a reverse mortgage.  Seniors with other assets may wish to tap those instead and leave their home and its full equity as an inheritance for their heirs.

Here is a look at the pros and cons of getting a reverse mortgage as a senior homeowner.

Advantages of reverse mortgages

Tapping home’s equity for cash. Converting some of the equity in your home to cash through a reverse mortgage is a key advantage and selling point for these types of home loans.  You’ve got equity in your home but you’re short of cash. A reverse mortgage is one way to convert that equity into cash. 

Tax-free money. Believe it or not, the money you receive through a reverse mortgage is tax-free, an advantage for people with limited incomes.  Rather than income earned, a reverse mortgage is considered a loan advance so the money you receive through a reverse mortgage isn’t subject to taxes.

No impact on federal benefits. Getting a reverse mortgage will not affect your eligibility for Social Security or Medicare so you can tap into the equity in your home and bolster your monthly budget and not impact those important federal programs.

Disadvantages of reverse mortgages

Fees. With a reverse mortgage, you will pay an origination fee as well as closing costs and continuing servicing fees. So there are plenty of costs to consider when tapping your home’s equity through a reverse mortgage.

Interest adds up. As you receive money through a reverse mortgage, interest gets added to the balance you owe so the amount you owe through a reverse mortgage increases over time. Some reverse mortgages have fixed rates and other come with variable rates.  With a variable rate reverse mortgage, an increase in interest rates will increase the interest you pay on your reverse mortgage, bumping up your overall balance.

Fewer assets. A reverse mortgage could use up much of the equity in your home, leaving fewer assets for you and your heirs.  So you and your descendants will have less outright value in your home after signing on for a reverse mortgage.

Shop smart for a reverse mortgage

If you think a reverse mortgage may be right for you and your family. It is important to shop around.  Consider offers between lenders carefully.  You’ll also want to learn more about the different types of reverse mortgages.

Single purpose. Single-purpose reverse mortgages are available from some state and local government agencies and non-profit organizations.  These types of reverse mortgages may only be used for specific purposes such as home repairs and home improvements.

Proprietary. Proprietary reverse mortgages are private loans back by companies that develop them.  Homeowners with high value homes may qualify for more cash through a proprietary reverse mortgage.

Home Equity Conversion Mortgage (HECM). These federally insured reverse mortgages are backed by the U.S. Department of Housing and Urban Development. Before applying for this type of reverse mortgage, you must meet with a counselor from a government-approved housing counseling agency.

Choosing the best health plan for you and your family takes time and a little bit of work. But before getting lost in the details of each plan, sit down and take a close look at your family’s medical needs and expenses.

What medical services will you and your family need in the next year? Not sure? Take a look back at your health expenses in the previous year and use it as a guideline.

Did you visit the doctor often? Or just for standard check-ups? Does someone you love have asthma or another condition or disease that requires routine attention and care? Did you spend a lot on prescription drugs or hospital visits?

Tally up all of your medical expenses over the past year and look at the costs. Take the time to go through each month thoroughly. You want to have a firm grasp of your actual health care expenses before choosing a plan. Once you know just how much you spent on health care in the past year, it will give you a good estimate of what you are likely to spend on health care in the upcoming year.

And, if there is an additional health care cost on the horizon, a possible operation, or medical procedure that may be needed, factor that into your future medical costs as well.

Once you know your medical costs and expenses and what you spent your money on, it’s time to look at health plans.

Finding the Right Plan

Some health plans offer greater choice of medical providers and tend to cost more. These more traditional health plans are called indemnity plans.

Indemnity plans tend to have higher out-of-pocket expenses and higher deductibles. After paying an annual deductible, most indemnity plans cover a percentage of a patient’s medical costs, often 80 percent. Most indemnity plans come with a cap of how much you would pay as the patient in an upcoming year.

With other health plans, you have fewer health provider choices. And you’ll need to select physicians within a specific network of care providers but the costs also tend to be lower.

These types of plans are called managed care plans, and include preferred provider organizations, (PPOs) or health maintenance organizations (HMOs). With a managed care plan, your choice of doctors and hospitals are more limited but you also tend to have lower out-of-pocket costs and lower premiums.

Of course, if you can find a doctor that you like within an affordable network of physicians, it can be the best of both worlds.

Managed care plans are available in many employer health plans and through HealthCare.gov.

Think About Your Savings

Looking at your own personal savings is another important aspect of choosing a health plan.

Higher deductible plans mean you’ll pay more money out of your own pocket before the benefits and coverage of your health plan kicks in, but you’ll also pay a lower premium or payment amount each month.

Weigh the pros and cons of paying a little more each month out of your own pocket, with a lower deductible plan, but paying less if a serious medical condition or expense should occur. Would a higher deductible or lower deductible plan work best for your family?

An Uncertain Future

For people with health plans through the Health Insurance Marketplace, the future is not clear.

The new President-elect pledged to repeal Obamacare, but an all-out repeal will be difficult, without having 60 votes in the U.S. Senate. And Republicans have 51 seats, with a seat representing Louisiana to be decided in a run off election in December.

Sections of the Affordable Care Act that will be difficult to repeal or change are the reforms made to the Medicare program, the provision that allows young adults to be on their parents policies until the age of 26, and the provision that requires insurers to sell policies to everyone, including people with pre-existing health conditions.

Under the Affordable Care Act, those under the age of 26 may be added or stay on a parent’s health insurance policy even if the young person gets married, does not live with a parent, is not financially dependent on a parent, is attending college, or is eligible for an employer plan. And this may be a good option for families if other areas of the law are repealed.

There are portions of the Affordable Care Act that can be changed or eliminated through a process called reconciliation, and if Republicans vote along party lines in 2017 they have enough votes to make those changes.

These include ending the expansion of Medicaid coverage, eliminating the federal subsidies that make it more affordable to buy health care through the Marketplace and doing away with tax penalties for not buying health insurance. They also could eliminate a number of taxes that were created to pay for the Affordable Care Act under the Obama administration.

These were all provisions of a bill passed by Republicans in 2015 in the House and Senate and vetoed by President Obama.

When and if those changes take place is unclear. One bill proposed by Republicans in 2015, called for the end of the federal subsidies assisting people buying insurance through the Health Insurance Marketplace at the end of 2017. The deadline for enrolling in 2017 health plans in the Health Insurance Marketplace is Thursday, December 15.

Laws typically take a long time to change and implement, so it is possible there may be a year or more before changes to the Affordable Care Act take effect. But nothing is certain other than the new President’s plan to take apart Obamacare and replace it with something else.

Trump released an outline of his health care plans on Nov. 11. He has a very different plan for health care coverage in America, including a return to high-risk insurance pools and more Health Savings Accounts.

According to Greatagain.gov, “A Trump Administration will work with Congress to repeal the (Affordable Care Act) and replace it with a solution that includes Health Savings Accounts (HSAs) and return the historic role in regulating health insurance to the States. The Administration’s goal will be to create a patient-centered healthcare system that promotes choice, quality and affordability with health insurance and healthcare and take any needed action to alleviate the burdens imposed on American families and businesses by the law.”

The outline also calls for allowing people to purchase insurance across state lines and re-establish high risk insurance pools “for individuals who have significant medical expenses and who have not maintained continuous coverage.”

I only ask because my husband is, and really always has been one of our many obstacles to saving money. He is my little spendthrift. Not that I’m blaming anyone for our lack of savings, but it does make saving a bit more difficult. How can it not? Honestly, though, I think it comes down to a difference of opinion in the way life should be lived.

Somewhere Between Thrifty and Practical

By no means do I consider myself a frugal person. In fact, if we were rich, I would definitely want to be spoiled. Frugality is a state of mind that my brain can’t quite wrap itself around. It borderlines on penny-pinching, and I just can’t bring myself to do it. In other words, I don’t want to trip on pennies to get to retirement, but I’ll get fired up to fight for those dollars.

I don’t clip coupons, but I thrift shop or buy off the clearance racks. I buy whole and nutritious foods and cook at home. I trim the fat in our household bills, and I don’t think we’ll ever buy a new car again, but that doesn’t mean that I don’t want to experience life. It means that I also want to think ahead to an adventurous and relaxing future… and that takes A LOT of money.

It’s estimated that to enjoy retirement, you need like 2 million dollars in the bank. 2 million.

My Dad was a very generous man. When my eyes would bulge at the bill for a fancy dinner or when he surprised us with a big vacation, he would always smile, shrug and say “You can’t take it with you.”, and he was right. You can’t take it with you. You can save it, retire on it, vacation with it, or leave it to your loved ones, though. You know how they say you’re going to marry someone just like your Dad? “They” were right. I did.

A Heart of Gold with a Taste for It

Fortunately, and unfortunately, my husband is a millionaire in a middle-class man’s life. What I mean is that he works like a slave to make sure our needs are always met because he loves us to the moon and back. He even wants to lavish us in the things we want, whether we can afford them or not. He believes in true love, living in the moment, working hard, sharing experiences, good food (he considers this an experience all on it’s own), and shopping to your heart’s content. Sorry, ladies, he’s taken. 😉

He wants the best in life for all of us, bless his sweet heart, BUT so do I, and not just in the moment, but in a million moments we haven’t reached yet. What he refuses to accept is that I don’t need a new car, a big house, or fancy meals to make me happy.

I just want to secure our future, which will, in turn, allow a little “seed money” for our kids when we’re long gone. This is my dream… not jewelry or vacations.

Get Your Spendthrift to Be Thrifty-er

Thrifty is just not in their nature. It’s not about changing who they are, but working together to meet a goal that you set together. This will require many conversations about money to share what’s important to each of you. There will be many compromises, but I promise it will be worth it in the long-run. Here are some ideas on how you can work together to save money for your future, whether that’s an emergency or rainy day fund, college savings, or for your retirement:

• Compromise on the big things. If he/she wants to spend money on a big vacation, find a nice bed and breakfast in a town that’s within a day’s drive instead, and downgrade it to a weekend trip instead of a week-long trip. If it’s for the whole family, do the same, but with outdoor activities in mind.
• Thinking of a new car? Cater to his/her practical side with discussion on how less debt, low miles, and regular maintenance might be better for your financial outlook.
• Entice your spouse to stay home for dinner with a good home-cooked meal. There are thousands of recipes online that will cure that itch for going out, which is usually initiated by boredom or lack of food in the fridge.
• Bigger isn’t always better. A bigger house usually means more space to clean, more repairs, lawn maintenance, more space to heat and cool, and a lot more debt. Whether you’re renting or buying, talk about your family’s true needs in regards to housing before you jump in with both feet.
• Take your spouse shopping with you and show them how easy it is to find something they like on a sale rack or in the thrift shop. It’s always better to show and share than it is to tell.
• Cut the credit cards. Okay, maybe you don’t need to cut them just yet, but discuss some rules or boundaries that you both should stick to when, or if, you use them. And, make sure you know when one of you is charging something, so you can prepare to pay it off.
• Come up with a small saving plan that you both commit to on the spot. Talk about the pros and cons, then how you can be consistent and the amount per month works well with your finances. Then, agree to reassess your savings goals again in 6 months.

Talking about money doesn’t have to be difficult. I guarantee that your husband or wife is not opposed to saving money, although it may feel that way at times. Perhaps he/she just want to enjoy life and be in the here and now, and in most cases, that’s a good thing. Brainstorm and figure out how you can do both. Marriage requires a lot of things, especially compromise, so it’s important to talk about money concerns. That’s the only way you can both get in the same book, and on the same page.

Mistakes. Nobody wants to make them, but we do, and by the time we realize it was a mistake, it’s probably too late to do anything about it. And, financial mistakes are some of the worst, because they don’t just affect you. It involves your family, your current income, and your future savings.

I’m a 40-something woman with a family, and I consider myself to be somewhat intelligent in most things. By most things, I mean just about everything but politics, and finances. I didn’t know what I didn’t know about finances, saving money, and investing until very recently. And, I still don’t know a LOT about any of it, but I’ve put my best foot forward to learn as I go, so that’s what I’m doing. What else can I do?

Financial Mistakes are Embarrassing

I’m going to share what I consider to be mine and my husband’s biggest financial mistakes. There are many more than just these 5, but these were the most damaging to our life, and to our future  together. We very much regret the way we mishandled our money and are trying to get on track to set things straight, and get ahead. Every cell in my body knows that we’ll accomplish this lofty goal, but my patience will definitely be tested

I hope that by sharing our financial mistakes, we cause you to pause. Whether it’s to guide you away from certain things or makes you rethink a plan, then it’s worth my embarrassment. And, make no mistake, I am embarrassed. When your mother tells you to think things through, you really should take heed.

Purchasing the Wrong Home, then Remodeling

This was one big financial mistake, but we sure learned a lot. Hindsight is 20/20, right? Many years ago, we bought a beautiful home. Acreage, a huge garden, spacious and private. We had the money, but not much else. We were excited and in our 30s, which is pretty normal for first-time buyers…maybe even a little late.

The problem with this purchase was two-fold – we didn’t have a stable income and we wanted to “improve” the house. We went way over budget on the remodel and two years later, had to sell the house. We didn’t even break even, as the housing market crashed and we went in the hole due to the remodeling costs.

RETROSPECT: We should have waited, or at least shopped around more and purchased a smaller home that was more suited to our needs at the time.

Using Emergency Fund for Non-emergencies

We have become used to living a certain way, so because our income can have it’s ups and downs, financial stability can change quickly. When it was good, it was really good and we stocked some money away, but when it wasn’t, we went back to our savings to live on it. Now, some would say that’s what an emergency fund is for….to lean on. Unfortunately, we didn’t lean on it, we relied on it and emptied it.

In other words, we still went out to dinner, bought the kids new clothes, and traveled, even though we, technically, couldn’t afford to do any of those things. We didn’t trim the fat when it was required. There was nothing frugal about our thinking back then, and that prevented us from saving more for our future together. Although we regret our inability to curb our bad habits, we know better today, and we’re working on building better financial habits.

RETROSPECT: Obviously, if I could go back in time, I would have lowered our cost of living by way of rent and monthly bills in any way I could, ditched the fancy coffees, cooked more at home, and bargain shopped a lot more, among other things.

Living on Inheritance Money Instead of Investing

I am going to go out on a limb here and say that this was, bar none, the biggest money mistake we ever made. This could have been a financial turning point for us, but it wasn’t due, in part, to selfishness and guilt.

Have you ever felt like no matter how hard you worked, you could not afford to give your family what they needed or wanted? It feels awful. This is where we were mentally when a substantial (to us) inheritance came our way. Financially, we were hurting and not even making ends meet.

We talked about what to do with the money. Debt settlements were discussed, vacations, savings, business needs, housing, everything. We argued. We made lists. I so badly wanted to pay off debts, and he so badly wanted to spoil our children and do things to make us happy. We tried to do both, while catching up on just about everything, but within the year, the money was gone. We had squandered it away.

RETROSPECT: Of course, we should have been practical and caught up for the month, paid off ALL DEBTS, given ourselves enough for an emergency fund (and used it correctly), and then invested the rest long-term.

Using Credit Cards to Fund our Business & Life

We’re, regrettably, still paying for this mistake. We did what most people still do – used our credit cards to keep paying for things we couldn’t afford. That got us into a world of debt trouble. Double trouble, because we each had our own credit cards. We also had to keep our business afloat…with a credit card and a few lines of credit.

We were in deep, and although we’ve managed to pay off almost all of my debt over the years, the ones used for the business are still knocking at our door. Honestly, I’m not thrilled that we lost control of our spending with credit cards, which also hurt our credit scores, but I don’t regret using it to save our business… because it’s now thriving.

RETROSPECT: Credit cards carry a lot of risk and responsibility. This was a hard lesson and we haven’t hand any credit cards since. They can help AND hinder, and sometimes it’s hard to tell the difference. We should have left the personal credit cards out of the situation altogether and got a business loan instead. It would have been more economical in the long run.

Upgrading to New Cars Instead of Buying Used

Should we file this mistake under obsession? It’s so strange because we didn’t have a choice but to buy used cars starting out, but after our first new car, we just couldn’t stop. We kept upgrading before they were paid off, one loan after another. We lost so much in depreciation, it’s hard to talk about. On top of that, we were paying out in interest too. It was a lose-lose situation. Granted, we had a nice reliable car, but at what cost?

Yes, they were bright and shiny, and smelled heavenly. But lesson learned! We finally paid off our last new car recently, and man, were we pleased with ourselves! Yes, it’s a tad worn, but it runs like a champ and we love it. We will never buy a new car again. It’s just not worth it.

RETROSPECT: We probably could have saved tens of thousands of dollars over the years. We bought a LOT of new cars – easily 7 in 12 years! In the future, we will do our research and buy used. Pinky swear.

Is it really okay to make money mistakes?

Yes and no. Making mistakes is part of life, but if you’re making big ones like these, ones that can be prevented, then you’re doing you and your family a great disservice. And some of these mistakes can dramatically shape your future – whether it’s for the worse or not really depends on the size of the mistake and how well you rally.

Believe me, I know you can’t see every obstacle coming, but you can be smart, think ahead, and plan. Then, think again.

Saving money is already hard. Life is expensive and it’s tough to put anything aside for the unforeseeable future. Not only does it take discipline, but you also have to find that little bit of money that you wanted to save in the first place…and maybe you just can’t find it. Well, I have good news and bad news.

There are plenty of small ways to save, as we discussed in “Can’t Save Money or Won’t?”. And, the good news is that one of the ways to save mentioned in that post is absolutely free – it’s called Digit. The bad news is that you may not have heard of it until now, which means you’re not using it, which also means you’re not saving more money with it… yet.

But, you’re here now, thanks to this glorious thing we call the internet!

Digit is not an app or software program. I need to make sure you understand this because most everything else is, so it’s in our nature to assume it’s like everything else, but it isn’t. It’s based in texting (SMS), so although different, it’s extra-easy. You don’t need to download anything, and once you sign up for a Digit account and connect it to your bank account, you’re all set.

Being set up like this allows for simplicity. You don’t have to login and check account balances or tell it what to do. Digit already knows what to do and is going to keep you updated every step of the way. You have to trust this little (but very smart) system. For example, if you want to withdraw some money, then just text “withdraw”.  It will ask you how much, confirm it, and let you know what day to expect your deposit (usually one day later). Done.

If you want to pause Digit, text “pause”. It’s that simple. 

How does Digit save me money?

Digit analyzes your spending habits and finds money to save. I know it sounds strange, but it works! Digit uses an algorithm to decide how much money to take and when to take it from your bank account and put it in your Digit account. It will differ from one person’s account to another, but it’s saved in small increments every few days, so you’ll hardly notice it’s gone. If you find that it’s taking too little money, or too much, just text “save less” or “save more” to adjust it.

The best news? It’s all automated. After set up, there’s nothing to do but save money!
(Is it just me or are banks really missin’ the boat on this one? Auto-deposit isn’t enough.)

And, it updates you daily, weekly, or as often as you like, to let you know what’s going on and how much they were able to save for you. You can also access your account online, but it’s really not necessary, unless you want to view your savings history or have a question.

Security
I’m sure you’re immediately concerned about security, like I was, so you’ll be happy to know they provide bank-level security and your money is FDIC-insured. Oh, and no, they won’t overdraw your account – they actually guarantee it. If they ever do, they’ll pay the penalty for you. I guess they feel very strongly about that algorithm. 😉 

Rewards
Digit just announced Digit Plus, which allows rewards for those who keep their money in their Digit account rather than withdrawing it. By leaving it in there, you can earn $.05 for every $100 in your account, every three months. This is a very small incentive, but as we’ve discussed, every penny counts. I probably won’t leave my money in there because I know I can do better.

Here’s what I plan to do instead.

How I Use Digit to Fund Acorns

Since I want to save money so that I can invest money, which, in turn, will make me more money, I need a plan to get started. The problem is that I’ve really just started to save money, so I don’t have the minimums required for the larger investment companies, but, fortunately, I don’t need one for Acorns.

You lost me, Mrs. MoneyJar. What the hell is Acorns?

In simplest terms, Acorns is an app that connects to your bank accounts and rounds up your debit card transactions and invests the difference in a pre-packaged portfolio (for a small fee).

I opened up an Acorns account right before I found Digit, realizing that I really wanted to put at least $100 per month into Acorns (on top of the round-ups). This wasn’t possible because I was struggling to save enough to do that…until Digit.

I have only been using Digit for 7 weeks, so almost two months. That isn’t very long, but in that short time, I’ve magically saved $150! That’s just shy of what I want monthly for Acorns, but I can probably save a little more this month, so I know I’ll hit my monthly target. What’s crazy is how easy it was to save money with Digit – I hardly noticed it was gone from my checking account, and what this tells me is that I do have the money in there to save, but I couldn’t find it because I was probably mindlessly spending it on less important things.

I’m predicting that I’ll meet my $100 savings goal via Digit by the end of this month! So, each time I get my text from Digit announcing that I’ve reached my milestone of $100, I’ll withdraw it and put it in Acorns, because I’m a beginner investor and it gives me the opportunity to help my money grow a little bit.

In the meantime, get Digit-al and save more money, because this is gonna be big. 

If you say you can’t save any money at all, I’m going to immediately call bullshit. You only think you can’t save any money. I have been living paycheck to paycheck most of my life and I thought I couldn’t save any money either, but you know what? I can. I just have to get off my lazy ass, commit to myself, and actually do it. As it turns out, there are a few simple ways to get started.

In 5 Steps to Get Out of Financial Purgatory, I briefly mentioned how vital saving money is, but now we’re going to talk about the “how” part of saving. First, let me beat you to your excuses: I can’t afford to save. I don’t want to sacrifice having fun. I need every penny I can get my hands on. Get over yourself. I was delusional for years too, and am just now waking up. Yeah, at 40-something. I didn’t learn how to handle money in school, and my parents didn’t know enough about money themselves to teach us anything about using it, saving it, or building a massive empire out of it (it’s not like they were wealthy). They were broke and in debt, too.

So, I’m middle-aged, with financial regrets, and little to no savings, and it’s (finally) time to do something about it. I’m not helpless or stupid. I’m just out of excuses, realizing I don’t want to work until I die. I have lots that I want to do! Obviously, this epiphany occurring 20 years ago would have been more convenient, but there’s only one direction to go from here – forward.

Donald Trump has nothing on me. Just because I don’t make billions of dollars doesn’t mean I can’t save. Who says I have to start big? I can start anywhere, as long as I start somewhere, and I have some ideas I’ve recently implemented that you can start today.

Look Down to Save Up

Sometimes looking under your car seats, at the bottom of your purse or depths of your wallet are the best places to find your savings. We want to pay close attention to the little leftovers from recent purchases. Let me expand on that a little bit.

Skimming:  I don’t like to budget, so instead, I take a little off the top and stash it away each time I get paid and do what I want with the rest. In essence, I’m paying myself first. I’m making myself a priority, and it feels pretty damn good. So, if you get paid at the same time every week or month, set up an automatic transfer to your savings account. If you don’t, do it manually when your check comes in, or just pull out the cash and stash it somewhere safe (not in your sock drawer).

• I’m not putting my savings in a high-yield savings account for a reason. I believe they’re a waste of time, as rates are little more than worthless right now. Instead, I prefer to save  a small emergency fund, then invest a small amount and make some returns that way. I’ll show you how to “start small” in investing in some future posts, because even people like us (without significant net worth) can participate in investments.

Right now, I can swing saving about 5-8% of our income, but I strongly suggest choosing the largest percentage you think you can get away with, but if it starts at only 1%, that’s okay too. Start there and bump it up a percentage (or more) next month and the month after that. Consistency is what we’re after – good saving habits.

Money Jars:  Hi, I’m Mrs. MoneyJar… as in Money jar. I have two money jars in my office and my children each have one, plus their own checking and savings accounts. I have one 5-gallon “jar” for loose change and one very large (gallon) mason jar for tightly rolled $1 bills and $5 dollar bills. I put money in them at the end of every single day. If you’re not ready to drop your fives in there, then just start with the $1 jar and the change jar. You’ll be amazed how it builds up in a month!

Going Digital:  If having a money jar nearby is too tempting, then get digital with Digit (yes, it’s a referral link – because I use it, love it, and it works). Digit actually analyzes your checking account, and then decides when and how much to pull from your account based on your income and spending habits. They guarantee to never overdraw your account and you can control as much or as little savings as you like – you can even hit “pause” for a few days. And it’s kind of fun getting their text updates on what they saved you for the week!

It makes saving money so easy because it’s automated, secure, and free! And the weekly texts are fun and motivating. I don’t have to do anything, or even think about it, and I hardly notice when money is pulled out of my account. And, if I want to withdraw, I just send a text and get my money the next day. Seriously, you can’t go wrong with this if you have a phone with texting capabilities. It’s perfect. I talk more about Digit and it’s features here.

Small Savings = Big Future (eventually)

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki

These are three of the best ways I have found to get started saving in small ways without negatively affecting my day-to-day life. Doing these things (by the way, I’m doing all 3 right now) is helping me start a small savings. My current goal is to have an emergency fund of $2500 (to start) and $500 or more to invest. Your starting goal may be different than mine and that’s perfectly fine, but I urge you to start small, because it’s critical for your goal to be within easy reach so that you can succeed, then you can create a bigger goal.

Once I make my first goal, I’ll make it grow with small, simple investments (while still continuing to save). I’m learning that there are many ways to accomplish this, depending on the type of investment, amount of money invested, level of risk, and reinvestment. The idea is exciting, though, isn’t it? We’re going to grow money!

My parents always told me that money doesn’t grow on trees, but if we plant some seeds and make good decisions, maybe it can….