No Money? Don’t Buy!

A few years ago the TV show Saturday Night Live aired a skit called Don’t Buy Stuff. In the skit a couple was trying to grasp the concept of not buying something if they didn’t have the money for it.

It was funny but truthful. Funny because Steve Martin and Amy Poehler are good at what they do—and truthful because so many people don’t understand that they shouldn’t buy things that they don’t have money for.

Plan to Save and Plan to Spend

If we remove those items, including a house and a vehicle, for which most people typically need financing, then the advice in this video is true and can be followed.

Is it easy? Not necessarily. Often it means that we'll need to deny ourselves something we want. In the long run, though, we're all better off if we don't go into debt—especially for frivolous purchases.

In the short term and the long term, your first focus should always be on having enough money to pay for things that you need. That's why it's so important to establish a budget and review it on a regular basis. Take a good look at where your money is really going—and be honest. Don't try to rationalize unplanned (and often costly) purchases by saying, "Well, I had a rough day, so I deserved that [mani-pedi / extra large lattte / expensive dinner]."

Too many "rough days" (or whatever your choice of a rationalization is) can turn into "too much wasted money"—and that can derail your savings plan. So think about things you can do (work out, talk to a good friend) that don't cost money—but that can still help you feel better after a rough day.

"And where would you get this saved money?"

You are in charge of accumulating your own saved money—so remember to pay yourself first so you can build your savings.  You and your future are worth it!

What About You? 

Do you ever make purchases when you really should be saving?

Avoid a Holiday Shopping "Hangover"

You know that sick feeling you get when you spend too much money? It might happen after you take your purchases home and start to think about them, or it might not happen until you see your credit card statement.

That feeling can be summed up as the I can't believe I spent this much on holiday gifts and how will I ever pay for this! feeling.

Some of us call it a shopping hangover. Sure...the shopping was fun. Music was playing in the stores. You might have been shopping with your friends. Everything was on sale...so you didn't spend that much...or did you?

Plan Ahead

This year, plan ahead. You can still be generous...but you'll also stay within your budget. These steps can help you:

1. Determine how much you can spend this holiday season. Think about any gifts that you want to buy for your family and friends, any cards you might buy, and the extras such as wrapping paper.

2. Using that total, draft a detailed budget before you start shopping. The budget should include a line item for each expense that you used to make up your total budgeted amount.

3. Get creative to reduce costs. If you’re creative, perhaps you can make gifts (and even some decorations) rather than buying them.

4. Resist temptation. As good as it feels to be generous, fight the impulse to overspend, even if it looks like the best deal ever.

5. Be flexible. Despite all your best intentions, you may end up spending more than you planned on an item. Rather than wallowing in guilt, find places in your budget to cut to offset the splurge. Check out our previous post for tips.

6. Use cash instead of plastic whenever possible. With cash, you can’t spend what you don’t have.

What About You?

Do you make a budget for your holiday spending? Let us know.

Basic Money Mistakes to Avoid

Most people worry about money—but you don’t have to let your worries ruin your life…not now and not when you’re older (and have more money). You can help your financial situation (and lessen your worries) if you avoid some basic money mistakes.

Mistake: Not tracking your spending.
What You Should Do: Pay attention to where your money goes. Remember to track all the incidentals you pay cash for. When you have a credit card, your credit card statement will help you track your spending. If you use a debit card, write the date, amount spent, and the name of the store.
Benefit to You: Tracking your spending will help make it easier to stick to your budget. You’ll see where your money is going—and you can make changes right away if you see that you’re wasting money.

Mistake: Not setting up a budget (and sticking to it). This advice may seem elementary, but many smart people don’t take it seriously.
What You Should Do: Determine how much money you realistically need to pay bills and buy needed supplies for a week or month, and don’t go over it.
Benefit to You: You will be in charge of your money—and with that accomplishment comes a good feeling—not that frantic, sick-to-your-stomach feeling that you get when you realize you don’t have enough money.

Mistake: Not setting up and maintaining an emergency fund.
What You Should Do: Set aside some money for emergencies, and don’t touch it for any other reason. You can get in this habit now by setting aside small amounts of money. Do this and you can start building your emergency fund before you move into your own place.
Benefit to You: Ten or 20 dollars a month can add up, especially if it’s drawing interest.

Mistake: Not shopping around.
What You Should Do: Take the time to look for the best prices, and avoid buying on impulse. Stock up on essentials on sale, and always look for opportunities to negotiate a better deal.
Benefit to You: You’ll get the best deal that’s available, so you’ll spend less money. That’s money you can save. (How about putting the saved money in your emergency fund?)

Why Bother Now?

But, you’re young! Why should you think about any of this now? Well, we’ve said it before (and we’ll probably say it again): the sooner you learn good money skills, the better off you’ll be! Learn these skills now while you’re still living at home. That way, if you make a mistake (think: I spent too much on clothes and now I can’t afford books), your parents can help you fix it—and it likely won’t be as serious as when you’re on your own (think: I don’t have enough money to pay the rent on my apartment).

What about you?

How well are you handling your money? Do you have a budget—and do you stick to it?

Welcome to Credit Unions Rock (Where Your Money Matters)!

Being an adult is a mixed bag of more independence and additional responsibility. Adulthood isn’t always easy; you have to deal with things that used to be in your parents' domain...things like salaries, budgets, savings accounts, and credit card debt.

CreditUnionsRock.com® offers you solid information on these issues and helps you plan for a successful future. In addition to the CreditUnionsRock website, the Your Money Matters blog is designed to help you make sense of the decisions that you have to make.

Whether you have college, a career, a home or wedding bells in your future, our goal is to provide financial tips that make sense. We'll cover:

• Earning money
• Budgeting (or making a spending plan, as some people like to call it)
• Saving money
• Spending money...and being smart about it
• Borrowing money and paying it back
• Planning for the future

We'll toss in some tips about preventing identity theft and the importance of reviewing your credit report. It should go without mentioning that we'll write about credit unions, but we'll mention that any way! After all, credit unions are our favorites!

What about You?

If you have a question, comment, or a financial tip to share, please take some time and post your thoughts.