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How to Figure Out Your Family’s Grocery Budget (and Stick to It!)

One question I see time and again is “How much should I spend on groceries for my family of four ?” — or three, five, etc.

When you’re making a household budget, it’s easy to know how much you need to include for most of your living expenses, like utilities, student loans, and even fuel. But when it comes to your average grocery bill, how much should you expect?

As much as I wish there were a simple answer, a family’s grocery budget will be different for every household. There’s no right or wrong number, but finding yours is key to keeping your grocery spending in check.

Here’s a guide to help you figure out how much you should spend on food each month.

Calculator and receipt in shopping cart for grocery budget

Calculator and receipt in shopping cart for grocery budget

WHY YOU NEED A GROCERY BUDGET

It may sound like it should go without saying, but you need a food budget because it will force you to think about money when you’re grocery shopping. After all, your income is a certain amount, and that means you only have a certain amount of money you can spend on food for your family.

The other reason you need a frugal food budget is to make sure you don’t spend too much money for the food your family needs (and to save money by not buying food you don’t need). You become smarter about your spending and think twice before adding impulse purchases to your shopping cart.

HOW MUCH TO BUDGET FOR FOOD

It can be tough to figure out how much you *should* budget for food vs. what you’re currently spending on your meals. There is not a right or a wrong number, but you must find the right amount so you don’t overspend.

Here are some tricks you can try to help you figure out exactly how much to spend on food per month.

Budgeting Hack 1: Use the National Average

According to the U.S. Department of Agriculture, the average household spends about 6% of its income on groceries each month. However, the study also shows that the average American also spends 5% of his or her disposable income on dining out. That makes your food budget 11% of your overall income — a significant expense!

If you want to keep things simple and use the national average to calculate your monthly grocery budget, then plan on spending 6% for groceries and an additional 5% for dining out.

Here is an example: If your take-home pay is $3,000 a month, you will budget around $180 for groceries and $150 for dining out. Of course, if $180 won’t cover your needs, then you need to commit to a more thrifty plan: Scale back on eating out and use any additional money toward your grocery needs.

Budgeting Hack 2: Use Your Actual Spending

A more realistic way to figure out how much to budget for groceries is to look at your current grocery spending. An easy way to do this is by completing a spending form.

Here’s how it works. Review all your purchases over several pay periods. You should include food spending, fuel, dining out, entertainment — everything. Having all the numbers in front of you will help you calculate the average of how much you’re spending on groceries (and all your other budget categories!) every week.

If you think your expenses for food add up to too much money, you can try to reduce your spending. Just keep in mind that your family will have to adjust the way you eat.

Budgeting Hack 3: Use a Grocery Calculator

Sometimes, you want to get specific help when figuring out how much to budget for food. There is a simple to use, online grocery budget calculator; you can use it for free.

Fill out the information for all of your family members, then hit calculate. It will return an average you should plan on budgeting for your family.

I ran this report for my family, and the result said we should plan on $219.35 for an average grocery budget for our family of five. That is more than we spend. On average, I spend $125 – $150 per week on everything our family needs.

While using a budget calculator can be helpful, it might end up doing the same thing for you: Suggest an amount that is higher than what you know you spend — or is higher than what you can afford. Use this calculator as a guide, but not the only factor when determining your budget.

Budgeting Hack 4: Look at the U.S. Average

Another way to reach a grocery budget amount is to look at the plans created by the USDA. The most recent plans are on their website. They provide the weekly cost for a thrifty, low-cost, moderate-cost and liberal plan on a weekly and monthly basis. The amounts are broken down by gender and age. You will need to total the numbers listed for the people in your family.

For example, the average grocery budget for a family of four is about $871, per this report. The amounts will be lower, of course for a family of three or higher if you need to budget for a family of five.

Once again, these numbers should be a guide. Once you start grocery shopping for your family, you may find that you spend much less – or even more – than what the average family spends on groceries.

Don’t Forget Special Dietary Needs

If you have a family member who cannot eat gluten or who has other dietary restrictions, these can affect your budget. Make sure you keep these foods in mind when developing your budget as they can cost much more than average foods or require trips to a specialty grocery store.

TRICKS TO MAKING A MONTHLY FOOD BUDGET

There is no magic formula or grocery budget app that will pull the numbers together for you. The key is to make sure that you put forth the effort in the right manner to make it work for you. Keep the following in mind when figuring your monthly food budget:

1. Consider Your Current Spending

Before you can make any changes, you have to know where you are starting. That way, you can see what you currently spend on your groceries so you can start cutting back.

Need help figuring our your average grocery bill?

You can use the Spending Worksheet and go back to find your spending on food over the past 8 weeks. Look at every transaction in your bank statement and total it. Then, divide that amount by two. You know have an average your family spends on food every month.

The next step is going to be finding a way to not only spend that amount going forward but try to find ways to spend even less if you can.

2. Put It in Writing

The next things you need to when creating your budget for food is to put it in writing. Once written down, you are more willing to commit to the process. Make sure your spouse or partner is also on board so you can work together to ensure you don’t overspend.

3. Start Using Cash

If you really want to stick to a tight budget, you need to use cash. Each payday, get cash from your bank for the amount you’ll need at the grocery store. That is all you have to spend until the next payday. No cheating! That means you can’t whip out your debit card if you run out of money.

You’ll quickly learn better ways to be smart and strategic when figuring your budget and sticking to it. (Read more about how to start using a cash envelope budget ).

4. Commit to Using Your Budget

You can have the greatest intent to use a budget, but if you aren’t ready to do so, it will never work. It is just like dieting. You may know you want to shed pounds, but if you are not willing to put in the effort, the weight will never come off.

Once you know the amount you have to spend at the grocery store, you need to stick to it (this is another reason to use cash). You have to make the conscious decision that you want to budget and then do all you can to make it work.

Your spouse or partner needs to be on board, too. It will never work if one of you is committed to making your grocery budget work and the other is not. Have a long heart to heart talk and make sure you are on the same page.

Read more: How to talk to your spouse about money

GROCERY SHOPPING ON A BUDGET

If you’ve tried all these ideas and still need to save money on groceries, here are some simple tricks you can try.

Reduce Your Dining Out Budget

Stop eating as many restaurant meals. That’s an easy way to find money to add to your grocery shopping budget, especially if this means you’re cutting back on alcohol spending at restaurants.

Use Coupons

While they are not for everyone, coupons are the simplest way to save money on the items you need. Even if coupons aren’t available for the grocery items you need, you can find them for household products you use, like toilet paper and laundry detergent, thereby reducing your spending and increasing the money you can spend on the foods you want.

Stick to Your List

Never shop without a list and only purchase the items on your list. Put in writing or use a grocery list app and don’t be tempted to add extra items to the cart.

Make a Meal Plan

Create a meal plan before you grocery shop. That way, you have a plan for the week not only to know what you will eat but also to make sure the ingredients will be on hand when it’s time for meal prep (reducing those frequent drive-thru meals). Meal planning saves you time, money, and the stress of figuring out “Mom, what’s for dinner?” without resorting to frozen pizza.

Keep a Price Book

Start watching the sales cycles at your grocery store and you’ll learn when it is time to stock up on your pantry staples, so you always pay the lowest price. Keep track of the prices in a price book for every item your family needs. (Bonus: When you get good at identifying your store’s food cost cycles, you can plan a meal or two around the fresh foods on sale in any given week.)

Add a Meatless Meal

One item that can quickly increase your grocery bill is meat. Try having a meal without meat every week (like Meatless Mondays), and you’ll find that you spend less.

Vegetables are cheaper than meat and can be just as filling. Having vegetables for your main course at dinner is not only healthy but can also help with saving money. Try loaded sweet potatoes, pasta with veggie sauce, or cheese and vegetable pizza for a delicious meal.

If veggies are a hard sell for your family, try fruit salads or breakfast for dinner — pancakes and French toast are cheap and fast!

Buying fresh fruit and vegetables that are in-season can help you save even more on your monthly grocery bill. And frozen vegetables and fruit are often cheaper (and tastier) than “fresh” produce that’s not in-season.

There’s an App for That

There are many grocery savings apps that can help you keep tabs on food prices and create a smarter shopping list. What is great about an app is that you always have it with you on your phone, so no worry that you left a coupon at home or in your car.

Steer Clear of Mistakes at the Grocery Store

When you grocery shop, there are temptations around every corner (and I don’t just mean the ice cream and chocolate chip cookies). There are sales on the end caps, fancy signs and different tricks stores use to make you spend more money. Learn about the ways grocery stores get you to spend more money so you can avoid them.

Avoid Haste and Waste

One of the biggest ways people waste money when it comes to food is through waste. People often buy food that goes bad before they get around to eating it.

You might also waste money buying convenience foods. (That frozen meal might seem like a deal when you’re running low on time, but you’ll save more if you prepare big batches of homemade, healthy food and freeze some leftover portions for later.)

These are two ways you are killing your grocery budget. Study your habits and find ways to make changes so you aren’t wasting money on food.

  • Pro tip: One convenience food I occasionally give into is a rotisserie chicken. It’s ready to eat when I get home from the store, and you can use it in a few other meals during the week.

NOW GO SAVE MONEY ON YOUR GROCERIES!

Take the time to create a grocery budget that is both frugal and feasible for your family. Don’t try to make the dollar amount so low that it is unrealistic, or it will fail month after month. But if you pay attention while you’re shopping and keep an eye on how long the food lasts your family, you’ll soon discover that having a realistic grocery budget is the tastiest way to save money!

Source: pennypinchinmom.com

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What Is a Good APR?

Sifting through credit card offers can be daunting. There are so many numbers and lengthy explanations that it can be easy to miss the most important details.

Though it’s always a good idea to read over every contract you sign, when it comes to picking a new credit card, there is one detail consumers should try not to miss: the card’s annual percentage rate, or APR.

Taking the time to find out what an APR is and how it might affect the monthly payment is a wise step before comparing credit card offers.

What Is an Annual Percentage Rate?

Is it the same as an interest rate? Not quite. An APR is the total cost of the loan expressed in annual terms—a small, but important, distinction. A credit card’s APR might include the interest rate as well as fees for late payments, foreign transactions, or returned payments.

Federal Reserve, the US national average credit card APR was 15.09% in February 2020. It’s reasonable to assume that an APR at or below the national average is considered “good.” That said, qualifying for a “good” APR may hinge on a consumer’s credit score.

APR and interest rates also change alongside federal interest rates changes, so it’s important for consumers to not only rely on an average that may be out of date, but rather, look at the offer presented to them at the time.

It’s a good idea for consumers to attempt to seek out the lowest rate possible for their financial situation.

Low vs. High APR Cards

Some credit cards tend to have higher APRs than others. For example, rewards credit cards tend to have higher APRs, but provide value via perks, discounts, points, or other benefits.

On the other hand, many low-interest cards come with fewer perks, but again, can save someone money in the long run if they need to carry a balance.

Low-interest cards also tend to be reserved for those with higher than average credit scores, so they may be harder to qualify for with lower credit.

How to Avoid Paying APR

There is one way to avoid paying an APR altogether, at least with credit cards, and that is by paying off the balance each and every month. By paying off the balance a consumer will never have to pay interest or any APR-related fees.

However, it’s still a good idea to seek out a good APR offer just in case a large purchase means carrying a balance for some time.

Tips for Qualifying for a Better APR

The APR a person qualifies for typically depends on his or her individual credit score. This means, those with credit scores on the higher end of the scale might qualify for lower APRs. If a consumer has a lower credit score, that doesn’t mean they are totally out of luck, but might be offered the same card at a higher APR.

improve their credit score.

One step is to check their credit report regularly for accuracy. US federal law allows consumers to get one free credit report annually from each of the three credit reporting agencies.

Consumers can also improve their personal credit scores by making debt payments on time and trying to use only 30% of their available credit at any given time. Payment history accounts for 35% of the total credit score, and credit utilization—how much of a person’s total credit is being used at a given time—accounts for 30% of the total credit score.

Reparing a poor credit score can take some time, but it’s worth the work.

Personal Loans and Credit Card Debt

If you’re currently carrying credit card debt on multiple cards and feel as though you may be paying too much in interest and APR-related fees, it may be time to look into consolidating that debt with a personal loan.

Consolidating credit card debt essentially allows a person to pay off their existing debt with a personal loan. Only one monthly payment instead of several could mean less to worry about.

Consolidating debt may mean qualifying for more favorable terms, such as a lower APR, which could help you pay less over the life of the debt. When considering consolidating debt, it’s a good idea to look at the fine print on any loan application to find out what fees a lender might be charging.

SoFi personal loans come with no hidden fees, such as those pesky origination fees, making it clearer to understand just what you’re paying for with a loan.

Learn more about consolidating credit card debt with a SoFi personal loan.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

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How to Plan a Budget If Your Home Is a Fixer Upper

Buying a new house is always exciting, especially if it’s a fixer-upper that just needs a little TLC to become the home of your dreams. But are renovation costs dampering your spirit? Guest writer Kerrie Kelly from The Home Depot shares her budgeting tips for staying sane and stress-free during home renovations. 

By

QDT Editor
March 15, 2017

Kerrie Kelly is a California interior designer who has helped many young couples choose their “first-home-together” decor. Kerrie writes on her design experiences for The Home Depot, offering homeowners ways to save money without compromising design.


Source: quickanddirtytips.com

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6 Signs Your Personal Finance Software Makes Life Easier

6 Signs Your personal finance software makes life easier

6 Signs Your Personal Finance Software Makes Life Easier

Finding personal finance software is easy, because there are countless choices in mobile apps, online programs, and finance software you can run on your home computer. But they’re certainly not equal. Personal finance software should make your life simpler, not more complicated, and it should be customizable for your particular life, goals, and needs. You know you’ve found great software when your financial life becomes easier over time. Here are 6 signs your personal finance software makes life easier.

1. You Haven’t Paid a Late Fee in Months

Does your personal finance software let you know in advance of when bills are due? It should be easy to set up automated alerts that tell you a few days before monthly, quarterly, or yearly bills are due, so you can take care of them and avoid annoying and guilt-inducing late fees. Ideally your software should notify you by text, so you’ll be sure and get the message whatever you’re doing and wherever you are.

2. Spending Categories Correspond to Your Actual Life

When personal finance software requires you to shoehorn your actual spending patterns into pre-set spending categories, the result can be confusion and frustration. Look for software that lets you create an unlimited number of spending categories you can customize. Do you buy your employees breakfast once a month? You can make a spending category for it. Are you a coffee or microbrew aficionado? You can make a spending category for it. Your budget should conform to your life, not the other way around.

3. You See How Trimming Budget Fat Affects Financial Goals

Sometimes it just doesn’t feel worth it to hold back at the grocery store after a long day or when buying Christmas presents. But when your personal finance software shows you exactly how disciplined spending helps you achieve your financial goals, like a vacation or paying off a loan, it’s easy to avoid giving in to those little temptations you face every day. When you can see how your discipline pays off, you’re more likely to stick with your good habits.

Start now: Get budgeting software from Mint to help manage your finances and make everyday life simpler by clicking here.

4. You May Have Faced One or Two Painful Truths

Powerful personal finance software can tell you things like how much you spent on fast food last week, or how much you’ve paid in non-network ATM fees this month. Sometimes, getting control of your personal finances means facing some harsh truths, like how much those little extras add up to. Your software should also be able to tell you how much more quickly you can reach financial goals if you cut a certain dollar amount from various spending categories. It’s a great way to stay on track to your goals.

Meeting finance goals with personal finance software5. You Know Exactly How Close You Are to Meeting Financial Goals

Maybe you want to save for retirement, or build up a down payment on a home. Your personal finance software should show you exactly how close you are to your goal at any time. You should also be able to receive monthly emails that track your progress and see how your everyday spending decisions affect how much you’ll have left over at the end of the month. Don’t settle for software that doesn’t let you track your progress easily.

6. Your Personal Finance Software Goes With You Everywhere

Personal finance software that links your computer and your mobile devices empowers you to make smart spending choices anytime, anywhere. Thinking about buying an item you unexpectedly find on sale? You can check your account balances right on your phone and know instantly if you can afford it. You can also set up convenient alerts that can tell you right away such things as whether you’re approaching your credit limits on your credit cards.

Personal finance software has come a long way since the days you had to manually enter checkbook balances and draft amounts. Today’s software offers an astonishing array of features that not only help you achieve financial goals, but actually make your everyday life easier. And when it links your accounts to your computer and your mobile devices, like Mint does, you have all the budget tools you need, wherever you go.

Start now: Get budgeting software from Mint to help manage your finances and make everyday life simpler by clicking here.

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Mint Google Play Mint iOS App Store

Source: mint.intuit.com

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Your Guide to Budgeting for Summer Camp

Send your campers off for summer fun without blowing your budget. Here’s how.

Summer camp is a rite of passage. A place where traditions begin and memories are made. A unique venue with a structured opportunity for kids to grow and learn new skills. As enriching as it may seem, embarking on the process each year can be intense: How do I choose a camp? Should it have a philosophy? How do I know my child will have fun? But often the question at the top of the list is, “How do I budget for summer camp?”

Whether you’re scrambling for camp arrangements for this year or getting a jump-start on next summer, you’re in need of a working budget for summer camp. “As a parent who sent several kids to summer camp for many years, I know how expensive it can be,” says Leslie H. Tayne, author and founder of debt solutions law firm Tayne Law Group.

Read on for expert budgeting tips for summer camp and how to save money on summer camp so you can make the best decisions concerning your wallet and your child’s wish list:

1. Get a handle on camp tuition

According to the American Camp Association, sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition isn’t too far behind, ranging from $199 to more than $800 per week.

One of the best ways to budget for summer camp is to understand your needs for the summer as well as your child's interests.

One of the best ways to budget for summer camp and prepare for tuition costs is to understand your needs for the summer as well as your child’s interests. This will help you determine ‘how much’ and ‘what type’ of camp you want: Is day-camp coverage important all summer because of work? Does your child want to experience sleep-away camp for a portion of the time? Is a camp with a specific focus (say a sport or hobby) on the list?

Depending on your circumstances and child’s expectations, it’s not unusual to be looking at a combination of camps—and tuition costs—in one season. If you have multiple kids at different ages, with different interests, creating a budget for summer camp and understanding how much you’ll need to dish out in tuition becomes especially important.

Once your camp plan is in place, assess how much you’ll need to pay in tuition for the summer months with school out of session. The sooner you’ve arrived at this figure, the easier it will be to work the expense into your household budget, says Heather Schisler, money-saving expert and founder of deal site Passion for Savings. “It’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time,” Schisler says.

Sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition ranges from $199 to more than $800 per week.

– American Camp Association

2. Plan for expenses beyond tuition

One of the biggest budgeting tips for summer camp is planning for the many costs outside of tuition. Tayne points out that sleep-away camp usually comes with a longer supply list than day camp—such as specific clothing or gear and toiletries to cover the length of stay. If your child is heading to a sleep-away camp far from home, your budget for summer camp may also need to factor in the cost of transportation or the cost to ship luggage. Day camps can also have fees for extended hours or transportation if your child rides a camp bus each day.

Once you’ve selected a camp—day camp or sleep-away—check its website for camper packing lists and guidelines. Most camps offer checklists that you can print out, which can be good for tracking supplies and costs as you go. After you enroll, your camp may provide access to an online portal that can help you manage tuition and track additional expenses, like canteen money, which is cash your child can use for snacks and additional supplies while away.

One of the best budgeting tips for summer camp is making sure you understand how much everything will cost—that's tuition plus any extra camp costs.

3. Create a year-round savings strategy

By calculating the necessary expenses ahead of time for the camps you and your campers have chosen, you’ll be able to determine an overall budget for summer camp. A budgeting tip for summer camp is to save money monthly throughout the year. To determine a monthly savings goal, divide your total summer camp costs by the amount of months you have until camp starts. If camp is quickly approaching and you’re feeling the budget crunch, you may want to start saving for next year’s costs once it’s back-to-school time so you can spread out your costs over a longer period of time.

Once you start saving, you’ll need a place to put it, right? When it comes to budgeting tips for summer camp, consider placing your cash in a dedicated account, which will keep it separate from your regular expenses and help you avoid tapping it for other reasons. “Then you can have your bank set up an auto draft [for the summer camp money] so it automatically goes into your account each month and you will have the money you need when summer rolls around,” Schisler says. If you use a Discover Online Savings Account for this purpose, you’ll also earn interest that can be put toward camp expenses.

“It’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time.”

– Heather Schisler, money-saving expert and founder of Passion for Savings

4. Find ways to fund your summer camp account

To boost cash in your summer camp savings account, consider asking relatives and family friends to gift your children cash for camp in lieu of birthday and holiday gifts, says Tracie Fobes of budget blog Penny Pinchin’ Mom. “If your child has his or her heart set on sleep-away camp, they may be willing to forgo a gift or two,” Fobes says.

Another budgeting tip for summer camp is to put your cashback rewards toward your budget for summer camp. For example, if you open a checking account with Discover—called Cashback Debit—you’ll earn 1% cash back on up to $3,000 in debit card purchases each month.1 You can enroll to have that cashback bonus automatically deposited into your Discover Online Savings Account so it remains designated for camp costs (and can grow with interest).

Say hello to
cash back on debit
card purchases.

No monthly fees.
No balance requirements.
No, really.

See Details

Discover Bank, Member FDIC

Lastly, if you don’t have your tax refund earmarked for another financial goal, you could use the windfall to kick-start your summer camp savings fund. Depending on the refund amount and your total camp costs, it could reduce your monthly summer camp savings goal significantly.

5. Reduce camp-related costs

Despite having your budget for summer camp in full view and planning in advance, camp can still be expensive. Here are some ways to save money on summer camp by cutting down on camp costs:

  • Ask about scholarships and grants: “Some camps offer scholarships or discounts for children and families,” Fobes says. Research your camp to see if they have anything similar to help offset—or even pay for—the cost of tuition.
  • Use a Dependent Care Flexible Spending Account (DCFSA): A Dependent Care Flexible Spending Account is a pre-tax benefit account that can be used to pay for eligible dependent care services. You can use this type of account to “cover dependent care [costs], and camp may qualify,” Fobes says.
  • Negotiate price: “Many people don’t think about negotiating the cost of summer camp, but it is possible,” Tayne says, and more and more camps are open to it.
  • See if there’s an “honor system”: Some camps have what’s known as an honor system, where the camp offers a range of costs, or tiered pricing, and parents can pay what they can comfortably afford. Every child enjoys the same camp experience, regardless of which price point, and billing is kept private.
  • Take advantage of discounts: Attention early birds and web surfers: “There are sometimes discounts offered when you sign up early or register online,” Fobes says.
  • Volunteer: If your summer schedule allows, “offer to work at the camp,” Fobes says. If you lend your services—perhaps for the camp blog or cleaning the camp house before the season starts—your child may be able to attend camp for free or a reduced rate.

Focus on the experience—not the extras

Don’t let summer camp costs become a family budget-buster. Plan ahead and look for money-saving opportunities and work your budget for summer camp into your annual financial plan.

To save money on summer camp, remember that you only need to focus on camp necessities. “Don’t spend a lot of extra money on new clothing, bedding, trunks or suitcases,” Schisler says. “Remember, summer camp is all about the experience, not the things.”

1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.

Discover Bank, Member FDIC

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Source: discover.com

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How to Set Financial Goals: A Simple, Step-By-Step Guide

Saving money is all well and good in theory.

It’s pretty hard to argue against having more money in the bank.

But what are you saving for? If you don’t have solid financial goals, all those hoarded pennies might end up in limbo when they could be put to good use.

Figuring out where your money should go might seem daunting, but it’s actually a lot of fun.

You get to analyze your own priorities and decide exactly what to do with your hard-earned cash.

But to make the most of your money, follow a few best practices while setting your goals.

After all, even if something seems like exactly what you want right now, it might not be in future-you’s best interest. And you’re playing the long game… that’s why they’re called goals!

What to Do Before You Start Writing Your Financial Goals

To help keep you from financial goals like “buy the coolest toys and cars,” which could easily get you deeply into debt while you watch your credit score plummet, we’ve compiled this guide.

It’ll help you set goals and create smart priorities for your money. That way, however you decide to spend your truly discretionary income, you won’t leave the 10-years-from-now version of you in the lurch.

First Thing’s First: How Much Money Do You Have?

You can’t decide on your short- or long-term financial goals if you don’t know how much money you have or where it’s going.

And if you’re operating without a budget, it can be easy to run out of money well before you run out of expenses — even if you know exactly how much is in your paycheck.

So sit down and take a good, hard look at all of your financial info.

A ton of great digital apps can help you do this — here are our favorite budgeting apps — but it can be as simple as a spreadsheet or even a good, old-fashioned piece of paper. It just takes two steps:

  1. Figure out how much money you have. It might be in checking or savings accounts, including long-term accounts like IRAs. Or, it might be wrapped up in investments or physical assets, like your paid-off car.

  2. Assess any debts you have. Do you keep a revolving credit card balance? Do you pay a mortgage each month? Are your student loans still hanging around?

Take the full amount of money you owe and subtract it from the total amount you have, which you discovered in step one. The difference between the two is your net worth. That’s the total amount of money you have to your name.

If it seems like a lot, cool. Hang tight and don’t let it burn a hole in your pocket. We’re not done yet.

If it seems like… not a lot, well, you can fix that. Keep reading.

A woman creates a monthly budget while sitting on her bed. The sheets are white with a floral pattern on them. This story is about how to set up financial goals.
Aileen Perilla/The Penny Hoarder

Create a Budget

Once you’ve learned your net worth, you need to start thinking about a working budget.

This will essentially be a document with your total monthly income at the top and a list of all the expenses you need to pay for every month.

And I do mean all of the expenses — even that $4.99 recurring monthly payment for your student-discounted Spotify account definitely counts.

Your expenses probably include rent, electricity, cable or internet, a cell phone plan, various insurance policies, groceries, gas and transportation. It also includes categories like charitable giving, entertainment and travel.

Pro Tip

Print out the last two or three months of statements from your credit and debit cards and categorize every expense. You can often find ways to save by discovering patterns in your spending habits.

It’ll depend on your individual case — for instance, I totally have “wine” as a budget line item.

See? It’s all about priorities.

Start by listing how much you actually spent in each category last month. Subtract your total expenses from your total income. The difference should be equal to the amount of money left sitting in your bank account at month’s end.

It’s also the money you can use toward your long-term financial goals.

Want the number to be bigger? Go back through your budget and figure out where you can afford to make cuts. Maybe you can ditch the cable bill and decide between Netflix or Hulu, or replace a takeout lunch with a packed one.

You don’t need to abandon the idea of having a life (and enjoying it), but there are ways to make budgetary adjustments that work for you.

Set the numbers you’re willing to spend in each category, and stick to them.

Congratulations. You’re in control of your money.

Now you can figure out exactly what you want to do with it.

Setting Financial Goals

Before you run off to the cool-expensive-stuff store, hold on a second.

Your financial goals should be (mostly) in this order:

  1. Build an emergency fund.

  2. Pay down debt.

  3. Plan for retirement.

  4. Set short-term and long-term financial goals.

We say “mostly” because it’s ultimately up to you to decide in which order you want to accomplish them.

Many experts suggest making sure you have an emergency fund in place before aggressively going after your debt.

But if you’re hemorrhaging money on sky-high interest charges, you might not have much expendable cash to put toward savings.

That means you’ll pay the interest for a lot longer — and pay a lot more of it — if you wait to pay it down until you have a solid emergency fund saved up.

1. Build an Emergency Fund

Finding money to sock away each month can be tough, but just starting with $10 or $25 of each paycheck can help.

You can make the process a lot easier by automating your savings. Or you can have money from each paycheck automatically sent to a separate account you won’t touch.

You also get to decide the size of your emergency fund, but a good rule of thumb is to accumulate three to six times the total of your monthly living expenses. Good thing your budget is already set up so you know exactly what that number is, right?

You might try to get away with a smaller emergency fund — even $1,000 is a better cushion than nothing. But if you lose your job, you still need to be able to eat and make rent.

2. Pay Down Debt

Now, let’s move on to repaying debt. Why’s it so important, anyway?

Because you’re wasting money on interest charges you could be applying toward your goals instead.

So even though becoming debt-free seems like a big sacrifice right now, you’re doing yourself a huge financial favor in the long run.

There’s lots of great information out there about how to pay off debt, but it’s really a pretty simple operation: You need to put every single penny you can spare toward your debts until they disappear.

One method is known as the debt avalanche method, which involves paying off debt with the highest interest rates first, thereby reducing the overall amount you’ll shell out for interest.

For example, if you have a $1,500 revolving balance on a credit card with a 20% APR, it gets priority over your $14,000, 5%-interest car loan — even though the second number is so much bigger.

Pro Tip

If you’re motivated by quick wins, the debt snowball method may be a good fit for you. It involves paying off one loan balance at a time, starting with the smallest balance first.

Make a list of your debts and (ideally) don’t spend any of your spare money on anything but paying them off until the number after every account reads “$0.” Trust me, the day when you become debt-free will be well worth the effort.

As a bonus, if your credit score could be better, repaying revolving debt will also help you repair it — just in case some of your goals (like buying a home) depend upon your credit report not sucking.

A retired woman floats in a circular floating device in a swimming pool.
Getty Images

3. Plan for Retirement

All right, you’re all set in case of an emergency and you’re living debt-free.

Congratulations! We’re almost done with the hard part, I promise.

But there’s one more very important long-term financial goal you most definitely want to keep in mind: retirement.

Did you know almost half of Americans have absolutely nothing saved so they can one day clock out for the very last time?

And the trouble isn’t brand-new: We’ve been bad enough at saving for retirement over the past few decades that millions of today’s seniors can’t afford to retire.

If you ever want to stop working, you need to save up the money you’ll use for your living expenses.

And you need to start now, while compound interest is still on your side. The younger you are, the more time you have to watch those pennies grow, but don’t fret if you got a late start — here’s how to save for retirement in your 20s, 30s, 40s and 50s.

If your job offers a 401(k) plan, take advantage of it — especially if your employer will match your contributions! Trust me, the sting of losing a percentage of your paycheck will hurt way less than having to work into your golden years.

Ideally, you’ll want to find other ways to save for retirement, too. Look into individual retirement arrangements (IRAs) and figure out how much you need to contribute to meet your retirement goals.

Future you will thank you. Heartily. From a hammock.

4. Set Short-Term and Long-Term Financial Goals (the Fun Part!)

Is everything in order? Amazing!

You’re in awesome financial shape — and you’ve made it to the fun part of this post.

Consider the funds you have left — and those you’ll continue to earn — after taking care of all the financial goals above. Now think: What do you want to do with your money?

What experiences or things can your money buy to significantly increase your quality of life and happiness?

You might plan to travel more, take time off work to spend with family or drive the hottest new Porsche.

Maybe you want to have a six-course meal at the finest restaurant in the world or work your way through an extensive list of exotic and expensive wines. (OK, I’ll stop projecting.)

No matter your goals, it’s helpful to categorize them by how long they’ll take to save for.

Make a list of the goals you want to achieve with your money and which category they fall into. Then you can figure out how to prioritize your savings for each objective.

For example, some of my goals have included:

By writing down my short- and long-term financial goals and approximately how long I expect it will take to achieve each, I can figure out what to research and how aggressively I need to plan for each goal.

It also offers me the opportunity to see what I prioritize — and to revise those priorities if I see fit.

Jamie Cattanach (@jamiecattanach) is a contributor to The Penny Hoarder.

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Source: thepennyhoarder.com

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The Secrets to Sticking to a Budget

I remember back in my 20s.  I thought I had a budget. Well, it was what I called a budget.  The reality is that it was a slip of paper with some numbers written down on it.  I honestly did not know how to budget, let alone how to stick to one.

It wasn’t until my husband and realized that we had to make a change that I figured out how to create a workable budget.  Not just a workable budget – but finding the trick to sticking to a budget.

budget

budget

You may be like me.  You know who you should pay each month.  There is a list somewhere that shows all the places you must pay (and honestly, is probably not every person).  There are numbers listed, but they are more of a guesstimate than an actual budget.  The truth is, you don’t know how to budget.

Don’t be ashamed because you aren’t alone.

Thousands of people, just like you, don’t know how to create a budget. Even more, have a budget, but they don’t stick to it.  In fact, for many people, the budget they have right now doesn’t work for them.  They just don’t know how to write and make sure they are always sticking to a budget.

If you are just learning about budgeting, you will want to check out our page — How to Budget. There, you will learn everything you want to know about budgets and budgeting.

TRICKS TO MAKING A BUDGET THAT WORKS

There are some tricks to putting together a real-life workable budget.  These include:

Now, before you get too far into this post, I want to make sure you’ve got the tools you’ll need to make your budget.  Make sure you sign up here to gain access to our resources library, where you will locate the forms you will need to create your budget and financial plan.

Are you ready?  Great!  Let’s dig into these ways to make a budget work.

Every penny needs to have a job

It may sound simple, but honestly, it is one of the main reasons that budgets fail.  You don’t account for every cent you make, so you aren’t sure what to do with it.  Do you save it or spend it?  Do you use it towards debt?  If you don’t tell it what you want it to do, then it will just find a place to land for you – and often, that will not be what you want.

Instead, review your budget and account for every penny you make.  Give every single penny a job to do.  Tell it where you want it to go — and never give it an opportunity to try to be in control.

Review your budget before the first of every month

If you wait until you start to pay your bills each month, your money has already taken over.  It’s too late.  That is why it is essential that you sit down every month and review your budget.  The cost of groceries may have gone up.  You might have found a way to reduce your utilities.

Make all the adjustments to your budget before payday comes.  That way, when the money comes in, you jump right in and put it to work for you.  There will not be any surprises popping up.

Never charge too much on credit cards

The truth is that most people are in debt because they are spending money that they do not have.  They usually do this through credit cards.

I’m not saying you can’t use credit cards.  Not even close.  You just must use them the right way.

That means never charging any more than the cash you have on hand at that time.  There is no guarantee that payday will arrive.  Can you pay your credit card bill if your paycheck doesn’t come?  What would you do if your employer suddenly closed shop and you had to wait for bankruptcy proceedings to get that final check?  You’d be in a world of hurt because you could not pay off your card at that time.

The right way to use a credit card is to have the funds needed to pay it off available in your checking or savings account.  If you have $800 set back, that means you can’t charge $900 during the month.

Watch your charges to that you know you can always pay the balance in full every single month — without having to rely upon a paycheck to do so.

Prepare for the unexpected

Let’s face it; life is good great throwing us curve balls.  Medical or family emergencies, job loss, housing issues — any of these can pop up without warning.  That means you must be ready.

When that happens, you don’t want to have to throw the budget out the window because you can’t cover the expense.  You absolutely must have an emergency fund ready to cover those costs.

There is no way around it.

Even if you don’t make much, you can still build an emergency fund.  You just should look at it a bit differently and put systems in place to make it happen.  Remember, even $5 a paycheck saved is better than $0 saved.

Work on your budget together

If you are in a relationship, it is critical you work on your budget together. It doesn’t matter if you split up the bills and each takes responsibility for specific items.  You both still must see where every penny is spent and together determine how you will spend your money.

Creating a budget that works for both of you encourages open communication and honesty.  You both make money, so you both have a say in what to do with it.  It doesn’t matter who makes more here.  What matters is the way you handle your money together.

Failure to have a workable budget is a frequent reason for money fights between couples.  One spent money that was needed for rent or decided to go on a shopping spree. Sitting down and discussing your finances together, as a couple, is one of the most critical parts of your relationship.  You are grown-ups and need to be responsible for your money together – as a team.

HOW TO STICK TO A BUDGET 

You’ve worked hard to make a budget.  Now, you need to know the tricks for sticking to it!After all, what is the point of having a budget if you won’t make sure it works?  Here are some of the tricks we use to ensure we stick to our budget month after month.

1. Track your spending

We always track our spending.  We know we won’t overspend on fuel or the mortgage. That just doesn’t happen. However, when it comes to groceries, dining out and food, we track every penny.  Doing so allows us to see how much we have spent and what is left to spend until the next payday.

Read more:  How to create and use a cash budget

2. Accurately record your income

It is important that the amount of income on your budget is accurate.  You can’t guess here.  Make sure you consider every penny coming into your home so that you can put it to work (see above).

Read more:  How to track your income

3. Don’t forget annual fees

Some expenses are paid once a year.  These might include insurance or property taxes. The issue comes up when these were not built into your budget.  You should save a bit each month to cover any of your bills that are paid in a frequency other than monthly. That way, when the bill comes due, you aren’t struggling with finding a way to pay for them.

4. Plan ahead

This is another trick to sticking to a budget. You don’t know when the air conditioner will break down.  But, what you can do is to plan for it.  The way you do this is by creating an emergency fund.

Always set money back every month so that you can cover those unexpected expenses that may pop up from time to time.

5. Make sure your numbers are real

As much as you would love to spend only $300 a month on groceries, that is probably not a reality.  That means you can’t put the number you want to see on your budget.  You must use the numbers that really work.

Be honest and prepare a budget using amounts you currently spend. If your budget will not balance because of overspending, you can figure out where you need to cut back.  But, at least you’ve got real numbers that accurately reflect how you spend.

Read more:  How to create a spending plan (see where your money goes)

With a few simple changes in how you create a budget, you’ll figure out the way to make it work.  Sticking to a budget is the key to having a strong financial plan.

Source: pennypinchinmom.com

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Investing With the Business Cycle

A “business cycle” refers to the periodic expansion and contraction of a nation’s economy. Also known as an “economic cycle,” it tracks the different stages of growth and decline in a country’s gross domestic product, or economic activity.

business cycles . Each business cycle is dated from peak to peak or trough to trough of economic activity.

During the expansion phase of the business cycle, GDP increases and the economy grows. This phase tends to be significantly longer than the contraction phase. Since 1945, the average expansion has been 65 months, while the average contraction has lasted 11 months, according to a congressional research report. Features of expansion periods include:

•  GDP growth rate of 2-3%
•  Inflation around 2%
•  Unemployment between 3.5-4.5%
•  Bullish stock market
•  Increased demand for goods and services
•  Interest rates move higher
•  Job creation
•  Stock prices usually increase
•  Increased wages
•  Increased real estate values

As economic growth slows down, an economic contraction begins as the nation enters a recession. GDP growth dips below 2% in this phase.

Companies that have taken out loans may struggle to repay them, so they have to lay off workers and slow down production. As workers lose jobs, they have to cut down on spending. This creates a cycle of economic decline. Features of contraction periods include:

•  GDP growth falls below 2%
•  Decreased demand for goods and services
•  Interest rates move lower, making it easier to borrow money
•  Loss of jobs, increased unemployment
•  Reduced wages because people need jobs so they’re willing to work for less, and companies can’t pay as much
•  Stock prices usually decline
•  Real estate values plateau or decline

Stage 1: Recession

One definition of a recession is two consecutive quarters with a decline in real GDP. A recession could actually be defined more broadly as a period where there is significant decline in economic activity throughout the entire economy.

During this stage, GDP, profits, sales, and economic activity decline. Credit is tight for both consumers and businesses due to the policies set during the last business cycle. This leads to shifts in monetary policy that lead to a recovery phase. It’s a vicious cycle of falling production, falling incomes, falling employment, and falling GDP.

The intensity of a recession is measured by looking at the three D’s:

•  Depth: The measure of peak to trough decline in sales, income, employment, and output. The trough is the lowest point the GDP reaches during a cycle. Before World War II, recessions used to be much deeper than they are now.
•  Diffusion: How far the recession spreads across industries, regions, and activities.
•  Duration: The amount of time between the peak and the trough.

A more severe recession is called a depression. Depressions have deeper troughs and last longer than recessions. The only depression that has happened thus far was the Great Depression, which lasted 3.5 years, beginning in 1929.

Stage 2: Early Cycle

Following a recession, there tends to be a sharp recovery as growth begins to accelerate. The stock market tends to rise the most during this stage, which generally lasts about one year. Interest rates are low, so businesses and consumers can borrow more money for growth and investment. GDP begins to increase.

Just as a recession is a vicious cycle, a recovery is a virtuous cycle of rising income, rising employment, rising GDP, and rising production. And similar to the three D’s, a recovery period, which includes Stages 2-4, is measured using three P’s: how pronounced, pervasive, and persistent the expansion is.

Stage 3: Mid-Cycle

This is generally the longest phase of the business cycle, with moderate growth throughout. On average the mid-cycle phase lasts three years. Monetary policies shift toward a neutral state: Interest rates are higher, credit is strong, and companies are profitable.

Stage 4: Late Cycle

At this stage, economic activity reaches its highest point, and while growth continues, its pace decelerates. Monetary policies become tight due to rising inflation and low unemployment, making it harder for people to borrow money. The GDP rate begins to plateau or slow.

Companies may be engaging in reckless expansions, and investors are overconfident, which increases the price of assets beyond their actual value. Late cycles last a year and a half on average.

What Industries Do Well During Each Stage?

Historically certain industries have prospered during each stage of the business cycle.

When money is tight and people are concerned about the economy, they cut back on certain types of purchases, such as vacations and fancy clothes. Also, when people anticipate a coming recession, they tend to sell stocks and move into safer assets, causing the market to decline.

Basically, industries do better or worse depending on supply and demand, and the demand for certain products shifts throughout the business cycle. In general, the following industries perform well during each stage of the business cycle:

Recession

•  Healthcare
•  Consumer staples
•  Utilities
•  Bonds

Early Cycle

•  Information technology
•  Financial sector
•  Industrial sector
•  Consumer sector
•  Stocks and bonds
•  Real Estate
•  Household durables

Mid-Cycle

•  Information technology
•  Stocks
•  Energy and materials
•  Media

Late Cycle

•  Commodities such as oil and gas
•  Bonds can be a safe haven
•  Index funds

Who Should Invest With the Business Cycle?

Business cycle investing is an intermediate-term strategy, since it isn’t as short-term as day trading but not as long-term as buy and hold strategies. Each stage of the business cycle can last for a few months to a few years.

the best strategy for beginner investors.

However, more experienced investors might choose to shift at least a portion of their portfolio along with the business cycle. Business cycle investing can also be a good option for younger investors because they will have more opportunities to take advantage of the ups and downs of future cycles.

Understanding the business cycle can also help people make decisions such as when to buy a home or search for a job. It’s usually best to purchase a home, start a business, or look for a job in the early to mid-stages of the cycle.

The Takeaway

No business cycle is identical but history shows there can be a rough pattern to which industries do better as the economy expands and contracts. Investors can take cues from which stage of the business cycle the economy is in in order to allocate money to different sectors.

One great way to invest and keep track of the market is using an online investing app like SoFi Invest®. The investing platform features both active and automated investing.

For help getting started, SoFi has a team of professional financial advisors available to answer questions and offer guidance.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOIN20172

Source: sofi.com

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How to Clean and Polish Your Wood

We like wood with history—just not too much! If you have furniture or floors that are damaged, don’t despair. There are some simple, extremely low-cost tricks you can use to bring back the beauty and integrity of your wood furniture and floors.

By

Bruce and Jeanne Lubin
September 3, 2020

6 Items You Can Use to Cover Wood Scratches

Whip up your own wood cleaner

It’s simple: Just combine the juice from one lemon with 2 cups vegetable or olive oil. Use it just like you would use a store-bought cleaner, and fill your room with the fresh scent! Use this on your furniture or floor.

A very light coat will nourish the wood and help protect the finish, but be sure to rub it in well so it doesn’t leave a residue.

Steal a secret from your shoes.

Does your wooden coffee table, dresser, or dining room furniture have visible scratches? No sweat! Use a similarly hued shoe polish to fill in the offending marks.

Deep clean and shine

Your wooden kitchen cabinets may look clean, but over time, they can develop a sticky film. To eliminate it, mix 1 part vegetable or coconut oil with 2 parts baking soda, and rub on the cabinets. Remove the paste with a damp cloth, and then dry with a clean rag. You’ll be surprised at how much brighter they look!

See also: How to Bring Your Outdoor Furniture Back to Life

Polish furniture and floors

Get gorgeous wood floors

Those tannins in black tea also work wonders to shine and richen the color of hardwood flooring. Simply rub on some brewed tea (keeping moisture to a minimum) and let air-dry.

Save flat beer to shine furniture

Stale beer is a great cleanser for wooden furniture. The next time you have flat beer left over, don’t dump it out. Instead, use it to dampen a soft, clean cloth, then wipe it onto your wood furniture. Finish with a dry cloth for an amazing shine.

Give old wood new life

We love the antique look of old wooden furniture. But sometimes “old” just looks, well, old rather than “antique.” Get wood gleaming again and smooth away any imperfections and scratches with an easy trick that is amazingly effective. You only need two items that you probably already have in your kitchen: oil and vinegar. (Yep, like the salad dressing!) Mix 1/4 cup white or apple cider vinegar with 3/4 cup olive or vegetable oil. Dip a soft cloth in the solution and rub on for a brand-new look.

You can choose to add 8 to 10 drops of an essential oil (we like lemon, orange, or tangerine) for a sweet scent.

Prevent polish buildup

Excess polish can leave a dull finish on wooden furniture. To remove it, mix together 2 tablespoons white vinegar and 2 tablespoons water. Apply to the surface and wipe right off. Cornstarch will also do the trick: Sprinkle a little on the furniture and polish with a soft cloth. 

Just for fun: Is the 5-Second Rule True?



About the Author

Bruce and Jeanne Lubin

Bruce Lubin and Jeanne Bossolina-Lubin are the proud parents of three boys and more than a dozen books. After saving thousands per year using everyday tips and simple lifehacks, they started their own business in the hopes of sharing their knowledge with others. They have been known to go into their friends’ refrigerators to turn their eggs upside down so that they last longer.

Source: quickanddirtytips.com

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9 Ways to Support Small Businesses Without Breaking the Bank

We all have our favorite small businesses, including our go-to date night restaurant and favorite thrift store. These places serve more than great food and looks — they build jobs in the community, put children through school, and are the realization of your neighbor’s dream. 

These stores are built on hard work and love, and supply some of the best quality products you can find. Small businesses are a great sign of a thriving economy, but they’re also the first to suffer from economic downturns, like 2020’s COVID-19 recession. This is why it’s more important than ever to find ways to support your community’s businesses.

There are many reasons why small business success is vital. Not just for the economy but for our communities. That’s why Small Business Saturday (November 28) is one of our favorite times of the year, and why we collected these ways you can support small businesses without breaking the bank (or leaving the house!).

Shop Small Businesses

Shopping small is the easiest way to support community businesses and clear your holiday list. Shopping locally doesn’t have to drain your wallet, either.

Small businesses generate 44% of U.S. economic activity.

1. Skip the Hallmark Card and Support a Local Artist

Cards are a classic gift for any and all celebrations. They’re small, affordable, and easy to personalize. This year skip the grocery store and see what artists you can support while still getting beautiful and unique gifts for your family and friends. 

Most cities will have galleries, boutiques, and even tourist shops that display locally printed and designed cards to choose from. If you don’t have a shop near you, you can browse thousands of creators on Etsy to find the perfect design for each of your loved ones. 

2. Send Gift Cards

Gift cards are perfect for acquaintances, long-distance giving, and little acts of kindness every now and then. Instead of collecting Amazon and Starbucks cards, see what your local spots have to offer. 

Most restaurants and stores offer a gift card option, and you don’t have to waste the plastic! Send your gift via email to anyone, anywhere. So go ahead and thank your first mentor for their glowing reference with a gift card to their favorite coffee shop. 

3. Shop Throughout the Year

It’s true that handmade products can get pricey, but you’re ultimately paying for quality. If you’re already pinching pennies for the holiday season, start thinking about next year. Buying gifts for loved ones as you find them throughout the year is the best way to collect beautiful gifts without using credit. Plus, small businesses can use the boost year-round. 

Show Support From Home

Mockup showing someone fill in an instagram story template with favorite shops.

Download button for instagram story template.

Most of us have a budget that prevents us from buying a new wardrobe every month and eating out every weekday, so it just isn’t feasible to buy from all of our favorite local artisans all of the time. That doesn’t mean you don’t love them, you’ll just have to get creative to show your support from home. 

4. Share Your Favorite Products

When you do buy something new, take a photo! Sharing your favorite finds online and tagging the store is a great way to promote their products and quality to your friends and family. Even if you’re not buying, sharing a wishlist or their newest product could earn them another sale or new followers. 

I think people forget that their voice has influence, whether they are a huge celebrity or a humble stay at home mom. It’s amazing just what one post can do for small business.” — Autumn Grant, The Kind Poppy

5. Write a Review

You should let the world know when you find a shop you love. From Google and Yelp to a company Facebook page, leave a review to let others know they’re in good hands. Positive reviews are some of the best tools businesses have to convert sales. 

These types [local] of businesses live and die by word of mouth. Their reviews are everything to them. Now that everyone can look up the average rating of a business or service, it’s vital for businesses to collect positive, honest reviews.” — Dan Bailey, WikiLawn Lawn Care

If you do leave reviews, detailed thoughts and photos perform the best. These give the consumer plenty of information and help your review seem authentic. Plus, reviews can help platforms like Etsy and Google know the business is valued. 

6. Refer a Friend

Tell your friends when you find a new shop or service and share the love. Your friends trust you and likely have a lot of shared interests, so this word of mouth is a great way for businesses to earn customers. 

A referral is the single best compliment to a business owner. Trust me.” — Brian Robben, Robben Media

If you have friends and family from out of town you may also want to keep your favorite businesses in mind for when they visit. Keep a list of local restaurants, cafes, services, and shops that they can’t get anywhere else and take your friends on a local tour. 

Keep in Touch

Businesses have more ways than ever to keep you in the know, so make sure you’re subscribed to keep in touch! Newsletters and social media are a good way to keep your local faves and their promotional offers top of mind. 

Mockup showing someone filling in their wishlist on instagram.

Download button for holiday wishlist instagram template.

7. Sign-up For Newsletters

Most businesses send regular emails to notify you and other customers of their store details and deals. Newsletters are great ways to find coupons, sales, and new items you’ll adore. Just subscribing isn’t enough, though. Make sure you actually read their news and whitelist the email so you never miss a thing. 

8. Follow and Interact With Their Social Channels

Social media is another easy way to stay in the know; it can also organically promote a business. When you follow a business, platforms learn more about who else may be interested in their offers. Stay active and like and comment on their posts, too, to increase their visibility and trust with other shoppers. 

9. Swing By the Shop

Ultimately, the best way to support a business is to stop by and visit. You never know when something will catch your eye, and it’s a great way to share your find with friends. You may also get the chance to talk with the owner and learn more about the business while sharing your support. 

Drop a note to them of encouragement. Tell them why you love them and what they mean to you and the community…We’ve been absolutely floored when people have taken time out of their day to write us a note, telling us how much they like us/our product.” — Meaghan Tomas, Pinch Spice Market

No matter the product or service, small business owners will appreciate hearing that you love their shop and can benefit from your support. Tag a friend, buy a gift card, or write a review to help your favorite stores without busting your budget
Infographic of tips on how to support small businesses.

Sources: Small Business Administration | G1ve 

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