Holiday Savings Planning

It’s easy to overspend during the holidays. An American Express survey found its customers plan to spend approximately $1,500 this year on gifts alone.Sale doesn't always mean savings. That's why it is important to create your savings plan for the holiday season. Holidays -- once a time for family, food and gifts -- are now prime seasons of financial peril. When using credit cards to purchase items, it's easy to forget how much has been actually spent. Here we've written some guidelines to help make the holidays manageable. Visit our page here on Holiday Savings Planning for more information.

Some Suggestions to Follow:
• Decide on how much you can afford to spend
• Budget in hand, write down your shopping lists for the year
• Look at the list and see where you can cut back
• Don’t forget to include the extras when cratingyour budget
• Plan your gift buying shopping trips
• Use store’s convenient lay-a-way plan, if unable to pay for full item
• Make gifts at home: baked goods, picture collages, or arts and crafts

Additional Resources:

• Record your Holiday Gift List- Use this chart to track your purchases

• Holiday Expense Planner- this is an easy to use chart that will help you see and calculate your holiday expenses.

• Savings Planner- This calendar tool can help you stay on top of all the activities and deadlines this holiday season.  December Planner: Map out your holiday activities and events using this calendar planner. 

Christmas in July - Shift the Date

Holidays can be overwhelming.  Places to be, relatives to visit, meals to plan and host, events and parties galore.  It is all good, but sometimes can be too much.  Shear logistics of managing the schedules and events can be so difficult that it can take the joy out of the actual experience. 

Virginia Saves has an idea that can keep the joy of the season but spread more throughout the year as well!  Creative celebrations can bring new life to old routines and to keep the spirit of the season all year long.  One idea is to shift some of the celebrations normally reserved for November and December to times when you can have more intentional focus. 

Summertime can be a great time for breaking from routines and reconnecting with family.  Shared vacations can be a great way to bond with sisters, cousins, aunts and grandparents.  Consider adding some family fun to your get togethers by having Christmas celebrations out of season.  It can help you keep the season in your heart and remember all the reasons for the holiday.

Who says you can't enjoy a turkey feast with all the trimmings during the summer.  Perhaps even plan a Christmas party with family and friends.  Singing holiday music, like "Let it Snow" can create some festivities and add a lot of fun to the summertime heat!  Plan a gift exchange and pull out all the ornaments and baubles from your last celebration to bring new life and joy to your summertime fun!

Christmas in July - The Best Gifts

By making plans now for the holiday season, you have plenty of time to save for that very special gift for the ones you love most.  But what you may not have considered is that by planning now, you can make personal gifts that will not only tell your loved ones you care at Christmas, but all year long.

Our friends at Virginia Tech Extension Services put together some ideas of gifts that you can use to make this year the most special one ever.  Use this Holiday Gift List to stimulate your thinking to make or buy a very personal gift that will be remembered not only Christmas week, but may become a centerpiece kept all year long.

Christmas in July - Counting the Costs

Have you ever wanted something but weren't sure how much it would cost?  Maybe it was a remodeling project, some landscaping, or perhaps a car.  It is very surreal to make plans for something when you don't know the costs, but frequently that is how many approach the holidays each year.  Without a real figure to plan for, we set aside way too little in savings because the costs are so indefinate.

Virginia Saves with some help from our friends at the Virginia Tech Extension Services have put together a planning tool to help you identify and plan for the costs of the holidays.  This budget worksheet can help you plan for all  the costs of the holiday and build a budget that will ensure that you have more than sufficient funds to meet your needs when the time comes.

If you read our last blog post, you know how to go about creating the gift giving list, but that is just the start of the total holiday costs.  With this holiday planner, you can plan for the food, travel, gifts and all the other incidental costs of the holidays and be prepared for the best season of your life!

If you need some help pulling together the costs, take a look at your bank statement from last year to get an estimate for the costs of postage, cards, food, etc.  If you use on-line banking or a credit card, often you can review history and get estimates that way.  Don't forget that with a plan in hand, you can look for special discount and sales in the off-season that will allow you to cut the costs and still enjoy a full celebration during the season.

Planning also reduces impulse buying as you have plenty of time to plan for and make the right purchases.  Advertisers thrive on incentivising you to act on impulse, but impulse buying can be very costly and not very satifying in the end.  The joy of the purchase leaves soon after the act and you are often left with the fallout of the costs of your decision.  Impulse buying disconnects you from your goals and priorities and drives you to act on the immediate desire.

Finally, buy building your budget now, you can make adjustments to your savings plan so that if additional funds are required to make your holiday dreams come true, you have enough time to make the adjustment.  You may also find that you may have been saving more than what was needed and you can redirect that spending to other priorities in your life. 

Planning ahead will destress your holiday and make this season the best ever.  Tell us what you did to enhance your holiday!  We want to hear from you!

Christmas in July - Making a List

As the savvy saver, we know you have become, you have already begun making plans for your future by setting aside savings to cover the costs.  In preparing for Christmas you may already have begun participating in a Christmas Club or have some savings set aside for the holidays.  By preparing ahead, you take the financial and emotional stress out of the holidays and add to the celebration of the season.  The most effective way to stretch your dollars is to disconnect financial decisions from emotional stress and impulses. 

With this in mind Virginia Saves in partnership with Virginia Tech Extension Service has prepared a Christmas list to help you plan ahead even during the summer so that you can find that perfect gift for those special ones in your heart.  The best part is that you can do this without the use of debt to haunt you into the New Year.  The concept is simple and we have attached a form to assist.   Holiday Gift List

Step one:  Identify the people on your holiday shopping list.  Remember not only immediate family but also remember those other gifts that crop up during the season, like the office party, your women's club, neighbors, the baby sitter, the mailman...all the people who have impacted your year.  To help you - begin making a list of those people you purchased for last year and then modify your list from there.

Step two:  Identify the dollar amount you would like to spend for that person's gifts.  You can use an amount from last year and make adjustments or get creative this year... since you have time to plan ahead, you can perhaps make something more personal saving money and adding personality to your gift at the same time.  See our article on Creative Gift Giving this Christmas.

Step three:  Total up the amounts for the individual gifts and now you have an amount for your Christmas Gift Giving Budget.  See our article on Budgeting for Christmas.

Step four: Now that you have people, amounts and even perhaps ideas for gifts in mind, you can start tucking away items over the next few months to destress the shopping portion as well.

Vacation Planning

Vacation Planning can save you lots of money on the total cost of your vacation, but can also be a great family activity with each member getting involved in the choosing of the destination, planning the activities and the costs.  With everyone involved, saving for vacation becomes an adventure in itself. 

Planning for your vacation includes not only considering the costs before you go, but also allocation of time for travel and activities as well as creating a list of all the things you will want to take with you.  By planning ahead you can save yourself not only money but stress as well! 

Start with the budget:  Knowing the financial boundaries before you begin planning will help simplify the decisions and lessen disappointments when lofty vacation dreams don't fit within your financial reality.  The budget is the amount of money you have saved or will have saved prior to the vacation.  Saving each month toward the costs will allow you to grow a larger reserve from which to plan activities.  If you are planning a vacation to cost $1,200 then by saving $100 each month, your reserve is completely built before leaving.

Plan your destination:  Getting the entire family involved in determining what you would like to do on vacation.  Knowing the amount of money you can spend on the vacation, have a family meeting to discuss possibilities.  The dream vacation you thought the kids would love may take on a new flavor with the kids involved in the planning.  Establish rules for contributions so that no one is excluded and all ideas are considered.  Good rules allow for unrealistic ideas to fall off the radar pretty quickly.

Make a list:  You will want to get the family involved in making a list of all the potential costs for the vacation.  The more detailed the list the fewer surprise costs.  Consider the cost of preparing the car for the long trip, the cost of gas to get there or the cost of alternate travel.  How will you get around once you are there?  Where will you eat?  How much will you spend on souvenirs?  What is the cost of activities once you arrive?  Use this worksheet to get started.  As you develop the list, you will find new ideas cropping up from the team about what they would like to do - great time to discuss the costs and logistics of all the ideas.  This way you are training your children to plan in advance for the costs of other items as well.

Begin Preparing:  After the list is made there will likely be many things that need to be done to make the vacation successful, from adding to the vacation fund by giving up some of the costs of other daily things or packing, preparing the home for leaving, preparing travel meals and activities. 

Consider Food Costs: Having snacks and drinks for the car can save a ton on stopping along the way.  Also discuss boundaries in advance for eating out.  You can save a great deal by drinking water instead of ordering beverages and skipping the dessert in favor of something tasty later.  If you will be staying at a location that has a fridge with a microwave or stove, you may be able to purchase some groceries to make meals and save on costs of eating out.

Here are some more resources to get you started:

Plan Your Summer Vacation Now.   Extension Service offers some great suggestions for getting started planning your summer vacation great strategies for breaking down the costs of the summer vacation and worksheets included.


Budgeting: Summer Travel.  Practical Money Skills for Life offers some great tips for saving on your travel costs this summer.  Arm yourself with a good vacation plan that accomodates all the costs.

How to save for the vacation. MSNBC offers 9 great travel tips for creative ways to save for vacation.

Travel Budgeting- Do you know how much you're going to spend on your travels? The Travel Budget Tool will help you plan your your vacation costs   Little things add up so this tool can help you create a realistic budget for your total cost of vacation.

10 money-saving tips for a vacation  Get creative and think about some great alternatives to those costly vacations.

Money 101, the basics

April is Financial Literacy Month and a free resource is available! Money 101, the basics is a free web-based financial education designed to educate, empower and increase financial knowledge.

The eight modules cover the following subjects:

·         Employment

·         Income

·         Taxes assets

·         Credit cards

·         Debt

·         Expenses

·         Goals

The information in this course is presented as real world practical application. The in-depth assessment report includes a budget, other important financial statements and personalized items, suggestions and strategies that are relevant and specific to the financial situation.

This is a great FREE resource. Sign up today to get started!

http://www.money101thebasics.com/

Overcoming Barriers to Saving

Did you read the new article from America Saves? Virginia Saves' own Lori Irwin was featured as a guest writer! Lori discussed the barriers to saving and gave four great resources to overcome these common problems. Check out the article and see these small changes can improve your financial situation!

All enrolled Virginia Saves receive this monthly email publication. Enroll today for this and other powerful saver tools.



A Budget is not for Babies!

Most people do not have budget.

Budgets have really gotten a bad rap! The feelings that the word ‘budget’ evokes are usually negative and constraining. Budgets are usually associated with restricting the activities that are enjoyable. It does not have to be that way! Think instead, ‘spending plan’!

Income – expenses = Spending plan!

The calculations required is grade school math, therefore, everyone is qualified to make a spending plan.

The National Syndicated Radio Host Dave Ramsey recommends a zero based budget which means the income minus the expenses equals zero. He says to “spend every dollar on paper before the month begins.”

Budgets, AKA Spending Plans, can be written on paper, saved on a computer document or created in a computer software program. A great free online budgeting tool is available at http://www.mint.com/

It is important that all monthly expenses are covered by the income coming into the home. This will avoid the need to use credit card debt for basic living expenses. Credit should not be used to purchase items which you cannot afford!

If the expenses exceed the income, a deficit is present. The expenses must be reduced or income increased to balance the budget. If the income exceeds the expenses, this surplus allows additional savings or preparing for upcoming predictable expenses.

Predictable expenses are maintenance, holidays, bills or miscellaneous things that may not come due every month. A few examples would include Christmas, tires for the car, personal property taxes, and car insurance premiums. These expenses are not surprises but they can take the wallet by surprise!

Be prepared for these ‘budget busters’ by saving some money the expenses each month. Some things are not UNEXPECTED expenses is a Savvy Saver article that details a great method to be prepared for these kind of expenses.

Virginia Saves motto is ‘Start small, think big.’ Start small by creating a budget for you family this month! Think big. You may have to be creative to make all expenses to fit into that first budget.

Budgeting is the first step toward financial freedom! Will you take that step?

Retirement - Reinvent Yourself

The fifth video in the series of Financial Planning for Your Future gives new ideas about retirement. Here is a great perspective that may give hope to those close, and not so close, to retirement age.


Week three: Retirement- Reinvent yourself

Rethinking Home Ownership

The fourth week in the series Financial Planning for Your Future address the American Dream, home ownership. Recently, that dream has turned into a nightmare for some families. Think through the cost completely before deciding to purchase a house. Watch this short video about renting vs. owning a home.


Week four: Rethinking Home Ownership





Home owners must budget for repairs, maintenance, and taxes. A revolving savings account may be a great idea to save for these irregular expenses.

More is 'Caught' Than 'Taught'

Virginia Saves equips Savers with the resources needed to pay off past debts, pay for current needs and wants, and invest for the future. As adults, we actually have to reprogram how we deal with stress and create a new plan. The spending plan is a powerful tool to help reach goals!!

Part of this vision is to supply ideas to parents. The next generation is watching and learning how to handle money. More is ‘caught’ than ‘taught’. If children develop healthy spending and saving habits as young people, they can avoid some of the money troubles their parents have experienced.  Take advantage of teachable moments that will instill good money habits with our children.

How can children learn the value of money?

·    Be realistic. Tell children that they cannot have everything they want. Wants will always outnumber available dollars!

·    Give commission. ‘If you do not work, you do not get paid!’ Teach children the value of work and that work produces money.

·    Have a family spending plan. Living on a budget needs to be modeled to children. This may involve telling the adults in the family that wants will not fit into this month’s spending plan.

·    Require calm money discussions. Talk with respect and without emotional outbursts or manipulation when talking about money in the home.

·    Set family financial goals. ‘When debt free, we will save to go to Disney!’ Get everyone on board to think of strategies to reach the goal.

·    Have fun while cutting back. Have a camp- out in the back yard and make S’mores. This spring break, have a ‘stay-cation’ and visit the sights close to home. Do not forget to pack a picnic lunch!!

Her are a few great resources for parents with young children:

Kids Count- many links to great parent resources

Children and Family- articles from Crown Financial Ministries to help train children (and parents) Children and Finances Part 1
Children and Finances Part 2

Handipoints- training good behavior in children through fun activities

Money Lessons for Children- Great resources for parents and teachers for financial skills

Thrive by 5- great activities and lessons you can use in your home to train pre-schoolers in financial basics

Money Mammals- website to help encourage both savings and giving for children. 

Parents are a child’s first teacher. They will learn more about how to handle money from you than from a high-school Personal Finance Class. Talk to children about smart money choices and help them develop good money habits!

Enroll at www.virginiasaves.org/enroll to receive a monthly newsletter full of saving ideas.

LIKE Virginia Saves on Facebook!

What is a Fiduciary?

This second week in the Financial Planning for Your Future Series gives a new term that may be unfamiliar, Fiduciary. A fiduciary is someone who acts in your best interest, not their own. Watch this short video to learn what to look for in a financial planner.


Week Two: Putting Your Interests First.





Financial Planning my sound like what someone needs if they have 'lots' of money. In actuality, a financial planner can make even small amounts of money grow.


Participate in employer 401K or 403b plans, especially if the employer provides a match. The match is like free money!


Paying off debts is a great way to find money for savings. Remember, basic living expenses and emergency savings come before any investing!

Take Control of Your Financial Future

Over the next six weeks, videos will be shared in a Financial Planning for Your Future Series on the Savvy Saver. These are short vidoes that will focus on a new area of your financial future each week.


Week one: Taking Control of your Financial Future.






Below you will find more find information about taking control.

Some things are not UNEXPECTED expenses
New Year Financial Resolution

Some things are not UNEXPECTED expenses

Christmas comes every December. Kids go back to school in September. The car needs new tires. These items are not unexpected. However, the family budget is often surprised by these predictable expenses.

These irregular items can really wreck efforts of money management. Planning for predictable expenses need to be incorporated in a good spending and savings plan.

Saving a portion of the tax refund can be one way to prepare for irregular expenses. The money saved will reduce financial stress. Imagine how it would feel to have money saved for Christmas, and no holiday bills arriving in January!

A Club Account at a local credit union or bank is a great way to save for upcoming events.  Christmas clubs and vacation clubs allow money to be saved for a specific period of time, called the term of the club.  The term can range from a few weeks to a year or more.  This is a great place to save money before an upcoming expense instead of using debt. Funds can be deposited manually or transferred from a checking account automatically.

Another great idea is the revolving savings account. This is money set aside every month in a savings account specifically for these expenses that do not come every month. The money in this account may be for several items.  Below is an example of a revolving savings account.

Expenses                             Total amount needed                    Monthly amount to save

Christmas                            $300                                                       $300/12 months = $25

Car repairs                          $240                                                       $240/12 months= $20

Car insurance                     $600                                                       $600/6 months = $100

Total savings deposited in account          $145 per month

This $145 deposited in the savings account every month will allow for withdraws for the whole amount of the expense (Christmas, Car repair, ect.) when the money is needed.

It is not a good idea to charge these expenses on a credit card without a plan to pay them off. Caution must be used when using debt to provide basic living expenses. A credit card is convenient, almost too convenient.  If a credit card it used to pay for items that reoccur without quick repayment, debt will build quickly. 

A better option may be the debit card which drafts money from the checking account for each purchase. Debit cards only allow money actually in the account to be spent.  This forces spending choices. ‘Will we purchase groceries for 4 days or eat out tonight?’

A debit card can have a major credit card logo and may offer the same buyer protection. It is important to ‘opt out’ of options that allow overspending the money in the account. Overdraft protection is often expensive because of the fees charged. Use the convenience of the debit card but do not purchase items that are not budgeted in the spending plan.

Planning for predictable expenses is a smart plan. Think about the expenses that are budget busters for your finances and use one of the savings option discussed to plan for the expenses.

Savings helps you expect and plan for predictable expenses!

Dreaming about the Tax Refund. . .

According to the Bankrate.com, this year 30 percent of Americans intend to pay down debt with their tax refund, 28 percent say they will save or invest it, and 26 percent plan to use the refund for necessities such as food or utility bills.

How should the tax refund be spent this year? The BEST idea is have a plan, then stick to it.

Virginia Saves recommends splitting the tax refund into three parts:  

ü  30% Emergency savings- Prepares for the next emergency.

ü  30% Pay down debt- Improves financial outlook.

ü  40% Discretionary spending- Allows spending on needs or wants.

An Emergency fund is the first step to financial security. Even a modest savings of $300 will prevent relying on using debt for an unexpected expense. Emergency savings breaks the cycle of crisis living and living payday to payday. Saving 30% of the tax refund in a savings account prepares for the next unexpected emergency.

Reducing Debt will reduce the minimum monthly payment due on credit cards and other debts. The reduced monthly payment leaves more money in the budget for other needs. Paying down debt with 30% of the tax refund improves the financial outlook for the year.

The remaining portion of the refund is allotted for discretionary spending. Purchase needs before wants and look for sales to stretch the dollars. Spending 40% of the tax refund on desired items is the reward for money smart choices.

Taxes can be prepared for free for families with incomes below $49,000. South Hampton Roads EITC Coalition is offering free income tax preparation. This includes roving site service and a site may be close to you. The South Hampton Roads Earned Income Tax Credit coalition has the free tax preparation sites listed at http://www.shreitc.com/en/free-income-tax-preparation-sites. AARP are also offering free tax preparation for low income families and seniors at many local libraries.  http://tidewatertaxaide.org

Many families qualify for the Earned Income Credit (EIC) and only have to file to receive a refund. Even if no taxes were paid, you may still be eligible to receive a tax refund with the EIC. Click here for more information.

Spend your tax refund wisely. You will be glad you did!

Five Stress Busters for the Hoilday Season

Holidays can be stressful with family, friends, and co-workers. Planning ahead can help reduce stress, and give you peace of mind for the season. Here are some other tips to help make the holidays more manageable this season.

1. Plan, plan, plan. Don't wait until the last second. Be realistic about the holidays. Understand that you can't do everything, so choose the things that you can accomplish and enjoy.

2. Create a budget, stick to it, and limit the number of guests attending your holiday parties. Ask each person to RSVP ahead of time, a day or two before the party, so that you are aware of the number of guests that are attending.

3. Simplify. You don't need to have 20 pies sitting on the table or 10 different appetizers. Remember that the main course is the star of your show. Set your menu in advance and remember to say NO.  If family members or friends want additional items on the table consider hosting a potluck.

With each guest responsible for a side-dish and their own beverage, you can enjoy the weather and company without sacrificing your pocketbook. Track your progress towards a savings goal by becoming a Virginia Saver, you can utilize the My Savings Tracker for free to record deposits and monitor your progress.

4. Set a schedule. There's a lot to do, and the best way to get it all done—and keep your cool—is to make a plan. Instead of keeping a to-do list in your head, write all your tasks down and then create a schedule so you can finish everything. Be tolerant of disappointment and changes in plans and remain flexible.

5. Remember: take a meditative moment at least once a day to breathe deeply, clear your mind of all the clutter. Also get good sleep. Six to eight hours of sleep is recommended to help rejuvenate your body, maintain proper immune function and aid indigestion.

Seven Ways to Save

We all want to save money, it’s the “how” that causes some confusion. If you’re not currently saving or living paycheck-to-paycheck, you need to start by changing your behaviors. Begin by tracking your spending and making a plan to save. Saving money is simple once you realize where it’s going.

Here are seven ways that you can save $100 or more in 2010:
Reduce your cell phone plan or switch to a prepaid plan. Many of us overestimate our cell phone usage. Drop minutes or features you’re not using to add to your savings.
Walk rather than drive to destinations less than a mile. You’ll not only burn calories, but also save the wear-and-tear on your vehicle.

Shop around for auto and homeowners' insurance: Before renewing your existing policies each year, check out the rates of competing companies (see the website of your state insurance department). Their annual premiums may well be several hundred dollars lower.
Utilize a cash-only spending plan. Unlike using your credit or debit card, you can’t spend what you don’t have on you, and it makes resisting temptation easier.

Take full-advantage of discounts! Ask your HR department at work to see what discounts or group deals like are offered.

Make your own entertainment by hosting a game night with family and friends. One board game costs less than $20 and produces hours of entertainment.

Ask your local electric or gas utility for a free or low-cost home energy audit. The audit may reveal inexpensive ways to reduce home heating and cooling costs by hundreds of dollars a year.
Make sure to bank your savings! Track your progress towards a savings goal by becoming an Virginia Saver, where you can utilize the America Saves My Savings Tracker for free to record deposits and monitor your progress.