Top 9 Money Saving Mistakes to Avoid

Saving money is something that everyone wants to do, but there are some pitfalls to saving that can actually cost you. Many of these mistakes are the result of trying to save money fast, or ignoring that the best way to save sometimes involves spending to avoid a big expense later.

Here are nine money-saving mistakes to avoid:

Mistake #1: Buying too much at the dollar store

Dollar store purchases can turn out to be money wasters, not money savers. While the price may seem cheap, some items may be expired or even unsafe. Shoddy goods can damage your home, cause a fire, or simply break easily. Carefully check any dollar store purchases to ensure that the item is not expired and seems sturdy.

Mistake #2: Fast food

While eating fast food is certainly cheaper than most other dining out options, you pay for a fast food habit in the long run with an increased risk for obesity and illness related to a high fat diet. While most people will eventually face medical costs, medical expenses for those with obesity are significantly higher than for people of a healthy weight.

Mistake #3: The buy-one, get-one deal and other promotions

Businesses sponsor promotions for only one reason: to get you to buy their products. Keep that in mind when considering promotional offers. Promotions or discounts on items that you would not ordinarily buy or use will probably cost you money, not save money. Especially avoid promotions that require signing up for an ongoing charge or membership fee after a promotional period ends. Most people forget to cancel their memberships after the trial period ends.

Mistake #4: Buying in bulk

Many people try to save money by buying in bulk at a warehouse store like Costco or Sam’s Club. While buying in bulk can mean that the per unit cost is less, you really only save money if you are going to use all of the product. If you do not eat all 10 pounds of potatoes before they spoil, you likely spent more money per potato that you ate than if you had bought your potatoes at the grocery store. Worse, warehouse stores encourage impulse buys of unneeded items along with bulk purchases.

Mistake #5: Too much do-it-yourself

In some areas, an inexperienced person can make drastic mistakes that end up costing a lot of money to fix. For example, avoid doing your own estate planning or plumbing unless you have some understanding of the field. In other areas, businesses are so efficient that there is not much to be gained by doing it yourself. After purchasing your own oil and oil filter, you may end up spending just as much as if you had paid a quick oil change place to do the job, for example.

Mistake #6: Cutting small out-of-pocket expense, but forgetting big expenses

For most people, their biggest expenses are their regular bills. However, when it comes to cutting costs, regular bills are often the last place they look. For example, it would take a great deal of coupon cutting to equal scaling back the cable bill by $20 a month.

Mistake #7: Leasing cars

A car’s lease payment may be less than the monthly payment on purchasing it, but that doesn’t mean you are saving money. In general, leasing is the most expensive way to own a car because after making three years of payments, you have nothing to show for it. On the flip side, after finishing with your last car payment after buying a car, you still own the car, which you can either resell or continue to drive.

Mistake #8: Skimping on important car maintenance

If you own a car, skimping on your car’s regular maintenance will end up costing you in the long run. By all means, use the cheapest oil change you can find, but don’t skip your oil change all together. Don’t avoid buying new tires when it’s necessary either, as bald tires are dangerous and can cause you to lose control of your car.

Mistake #9: Buying secondhand

While buying used goods is often a good way to save money, a lower price is never a better option if you can’t properly assess the conditions of the item. Purchasing a used car that has been inspected by a professional is a good idea, but buying secondhand items off of craigslist that have no way of being verified for quality is a bad idea. When buying secondhand, go through a reputable dealer, or make sure there’s a way to verify the quality.

7 Spending Tips That Can Save You Thousands of Dollars

When many people try to find how to save money each month they often end up finding little ways to save here and there. Don’t get us wrong, saving small amounts of money is good, but the smartest thing to do is to look for the big savings first. If you focus on the biggest savings first, you should be able to save thousands of dollars per year and begin to really get ahead. After you’ve learned how to benefit from the biggest saving tips, you can then move on to the smaller ones and see if you can add more to your savings as you progress.

The biggest savings can be found by looking at saving money on your groceries, car, credit and home. Our list is by no means complete, but these are some big places to begin saving your money.

1. Avoid Impulsive Spending

Most families probably spend at least a couple thousand dollars a year on things that they don’t plan to buy. There are two easy ways to reduce these impulse buys and save thousands:

  • Stick to your grocery list

    Research from the University of Pennsylvania shows that people who can avoid impulse spending can save up to 23% on their grocery bills. So create a grocery list and stick to it if you really want to save some money. According to what Statistics Canada reports most Canadians spend on food, a family of four could potentially save over $2,600 by following this one tip.

  • Don’t shop with plastic

    According to a study by Dunn & Bradstreet, people who shop with credit cards pay 12% to 18% more than those who shop with cash. The study further revealed that people tend to spend almost twice as much on vending machines when they use a credit card rather than cash. McDonald’s has also found that their average customer spends $7 on food when they use a credit card compared to $4.50 when they only use cash (a 56% increase in spending).

    Shopping with $40 in your wallet is a lot different than shopping with a $10,000 credit limit on a piece of plastic. Try shopping with only cash or your debit card if you want to save some money. Following this one tip alone can save the average Canadian household well over $3,000 a year if they are used to putting everything on credit.

    2. Take a Lunch to Work and Save $1,800

    Most of us don’t realize how much we spend on simple things like lunch buying a lunch everyday rather than bringing one prepared at home. Many people save a lot of money by always making more dinner than they need and then taking some of the leftovers to work the next day for lunch. If this doesn’t appeal to you, you can make something else. What ever you do, it should be much cheaper than buying a lunch every day. If you buy lunch for $7 every working day of the year, you will end up spending over $1,800. You can decide how much of this you want to put back in your pocket, or you can look for another place to save.

3. Stockpile Groceries and then Skip a Grocery Shop

You can save almost 25% on the groceries you buy each year if you stock up when they are on sale and then skip one grocery shop every month. When you skip a grocery shop, you live off of what you stockpiled. If you can’t do this monthly, then try for once every couple of months. It will still save you a lot of money. You can stockpile all kinds of non-perishable food, and you can freeze bread and meat when you find them on sale.

4. Price Matching

Many Canadians don’t know that you can price match in Canada. This means that you shop at your favorite grocery store, but you check the grocery store flyers in advance and then take the flyers with you to prove to the cashier that a competitor is advertising a lower price. If your favorite grocery store matches competitor’s advertised prices, then you can get those same low prices without having to waste gas driving all over town. You can usually save at least ten percent on your groceries by shopping at a grocery store that price matches competitor’s flyers. This would save a family of four over $1,100 per year.

Bringing flyers with you when you shop to ‘price match’ may not appeal to everyone, but you can give it a try if you want to save some money. The only national store to advertise price matching is Wal-Mart. However, not all Wal-Marts carry groceries. The Real Canadian Superstore does not advertise price matching but they will do it—just check with a manager to be sure. Other grocery stores may also match competitor’s advertised prices, but you will need to speak with a store manager to find out.

5. Buy a Quality Used Vehicle Rather than a New One

In recent years, car manufacturers appear to be building better quality cars than they have before. Because the quality of cars has increased, it means that buying a used car is less risky than it used to be. Consumers still need to be cautious and use publications like Consumer Reports or Phil Edmonston’s Lemon-Aid books to find the highest quality used-cars, but since new cars lose so much value once you drive them off the lot, it now makes more sense then ever to seriously consider buying a quality used-car rather than a new one. Dave Ramsey, a personal finance radio host, drove this point home by telling his listeners that, “A new $28,000 car will lose about $17,000 of value in the first four years you own it. To get the same result, you could toss a $100 bill out the car window once a week.”

Buying a used car rather than a new one can literally save you tens of thousands of dollars in some cases. At the very least, you should be able to save thousands of dollars and still get a great vehicle that may even still be under warranty. You can find a quality used-car by visiting your local library and looking up used car ratings by Consumer Reports or Phil Edmonston’s Lemon-Aid. If this is new to you, your local librarian will probably be happy to show you where they keep these publications.

Once you buy your new vehicle, you can then save more money by keeping it for 15 years. Consumer Reports once conducted a study that showed that a quality vehicle should be able to last for 15 years without any major repairs. If you keep a reliable vehicle with good fuel economy this long, Consumer Reports suggested that will stretch your dollars the furthest. This will also give you plenty of time to save for a new vehicle and hopefully avoid paying interest on a car loan.

6. Appeal Your Property Tax Assessment Value

If your home has decreased in value, check your property assessment value that your property taxes are based on to make sure that your home’s assessment value isn’t higher than its market value. Property assessment values are usually assessed a good amount lower than market values of homes to ensure that they are fair. If you don’t think that your property tax assessment value is reasonable, apply for a reassessment. This can potentially save you a lot of money in taxes. You can also find out your neighbours’ property assessment values from your nearest property assessment office to see if your house is fairly assessed compared to your neighbours’ homes.

While home prices across Canada have held out very well compared with home prices in the United States, some Canadian communities are experiencing declining home prices. If this is happening in your community, you may be able to learn from our neighbours who live south of the border. In the U.S., the National Taxpayers Union estimates that property tax assessment values for 60% of homes are too high, and only 2% of homeowners are taking the time to appeal those higher assessment values. Apparently, most people who are appealing their property assessments are at least partially successful. So if you think that your property’s tax value is too high, try appealing it and save some money.

7. Pay Off Your Credit Cards

If you are carrying a credit card balance of $5,000 at 19% interest, you are paying almost $1,000 a year to your credit card company in interest. An easy way to save a thousand dollars a year would be to pay this debt off. If you are carrying more credit card debt than this, your savings could be huge. Most people don’t really think about how much interest they actually pay on their credit cards, and they rarely think about how many years they have been carrying their credit cards debts for. If you have owed around $5,000 on your credit cards for 5 years and have been paying 19% interest, you will have almost paid the same amount in interest as you owe on your credit cards. This isn’t a smart financial decision.

More Savings Tips That Can Save You Hundreds of Dollars

  • Give yourself an allowance and stick with it.
  • Don’t carry a lot of cash—or credit cards—in your wallet. Impulse spending is harder if you have to go to the bank machine to get money.
  • Whenever you want to make a large purchase, wait for a day or two. Any worthwhile purchase will still be there tomorrow. By sleeping on your decision, you will give yourself more time to think about it and potentially avoid an impulsive decision.
  • Save your change. At the end of each day, put your loose change into a jar.
  • Instead of buying a coffee every day, make your own. If you spend only $2 on a cup of coffee every working day, that adds up to $500 per year.
  • Use coupons. You can request them from most grocery manufacturers. If you do this you can save 10% on your yearly grocery bill.
  • Only buy things on sale if you have the money, and only if you were planning on buying the item anyway.
  • Try to buy things at the end of the season. Christmas decorations are always on sale after Christmas, and candy is cheap the morning after Halloween. This works for expensive things too. Cars of the previous model go on sale in September when the new models roll in.
  • Consider buying products that aren’t brand names at discount stores. The same manufacturers that make name brand products often make the cheaper brands as well. This is true for appliances, electronics, vehicles, clothing and groceries. Buying generic brand names rather than brand names on groceries can save you 25%. Generic brand names can save you money, but they may not be the same quality as brand names.
  • Shop on discount days. Some stores like Safeway offer a discount day one a month. Most retailers offer big discounts on Boxing Day each year. Discount days are the perfect time to plan to buy things, or to stock up on things you need if the price is right.
  • Shop at discount grocery stores, discount clothing stores, dollar stores and online stores to save lots of money. Shopping at discount grocery stores can save you 10% on your groceries and buying your produce at a produce store can save you 32%. Click here to learn more.
  • If you pay off your credit card in full every month and are disciplined in how you use it, you can use your card to collect points and save a lot of money by purchasing flights, gift cards, and other things with your reward points.

Best Car Insurance Companies of 2019

If you drive a vehicle, you need car insurance. Regardless of where you live, car insurance is a no-brainer investment that will save you thousands in the long run since it protects you from paying huge sums out-of-pocket in exchange for a relatively small monthly premium. Of course, not all car insurance is created equal, so we’ve compiled a list of the best car insurance companies that offer great coverage at a fair price.

We’ve analyzed reports from J.D. Power, Consumer Reports and A.M. Best to get a view of car insurance companies worth checking out.

Amica: Best Overall Car Insurance Company

Amica was the strongest company overall in our research and received the highest rating in the New England region in J.D. Power’s 2019 customer satisfaction report.

The insurer also received the highest Consumer Reports rating among auto insurance providers — as it has every year since at least 1999. Consumer Reports noted that an overwhelming number of customers reported “relatively few” problems during the claims process.


  • “Platinum Choice” coverage: Amica offers an additional tier of coverage called Platinum Choice, which costs more, but includes identity fraud monitoring, full glass coverage, prestige rental coverage, and rewards for good driving.
  • A high J.D. Power satisfaction rating: Amica Mutual ranked as the best car insurance company in the New England region in J.D. Power’s 2019 auto insurance study.
  • High financial stability ratings: Amica boasts an A+ (Superior) financial stability rating from A.M. Best, which is the highest rating available.
  • No repair facility restrictions: Unlike most every other insurer, Amica has zero restrictions on which body shop you use for repairs.
  • Best array of coverage options: Amica offers the most driver and vehicle coverages of all our top recommendations. Its list includes GAP insurance and interior vehicle coverage, which aren’t offered by State Farm, The Hartford, Geico, or USAA.


  • Few online resources: There are a few FAQs on the site, but Amica lacks in-depth online materials to help customers get a complete grasp on their coverage without having to talk to someone. Additionally, some policy changes require direct assistance from an Amica agent, which can be time-consuming.
  • Fewer driver discount opportunities: Amica is missing a few key driver discounts, including pre-pay, low-mileage and military discounts. Consequently, it scored only 46 out of 100 in our driver discount evaluation.

State Farm: Best Car Insurance Company for Customer Service and Interaction

State Farm is the largest car insurance company in the nation, per the Insurance Information Institute in 2018. Fortunately, it’s also one of the best — especially when it comes to the customer service experience. In 2019, State Farm received high praise from J.D. Power for its service interaction and claims handling. And of all the insured drivers we surveyed, it received the most positive remarks by far.

It is incredibly easy to get in touch with State Farm. You can call one of the company’s 18,000 agents, go online, or even send a picture of your damaged car with your smartphone using the State Farm mobile app. Compare that to Amica, which doesn’t allow you to connect with an agent via an app, or file a claim through an agent.

State Farm also gets high marks for a pain-free shopping experience that lets prospective customers call their local agent or chat with a representative online if they have any questions.


  • Great financial standing: State Farm has an A.M. Best outlook of stable, and a A++ overall rating — the highest given.
  • Superior claims handling: No other insurer makes it easier to file a claim — a fact corroborated by its high service rating, 18,000 agents nationwide and excellent mobile app. Most other auto insurers offer the basic trifecta of phone, app and email to contact agents, but State Farm’s is the easiest to use.
  • Best online quote tool: Out of all the competition, State Farm has the simplest online quote tool. In less than five minutes, its tool will guide you completely through the process, replete with thorough examples of coverage options.


  • Lacks a couple of important coverages: Unlike its competitors, State Farm doesn’t offer stacked uninsured motorist or new car replacement coverages. That could be a deal-breaker for someone who lives in a state with a very high rate of uninsured drivers.
  • Missing a few common driver discounts: Like Amica, State Farm lacks two extremely common discounts: pay-in-full and automatic-pay discounts. These two discounts don’t save a ton of money, but they are definitely nice options to have.

The Hartford: Best Car Insurance Company for Policy Options

The Hartford is only the nation’s 11th largest insurer, but it still packs a punch. In fact, it had the highest score in our 12-category feature evaluation (92 out of 100).

It also offers a wide range of policy options and benefits, including rates based on how much you actually drive your car and a new car replacement program for cars totaled shortly after purchase. The Hartford was also the only insurer to score a perfect 100 in our vehicle-discount evaluation.


  • Mechanical breakdown coverage: Mechanical breakdown insurance helps cover the cost of repairs that aren’t covered by your car’s warranty. The Hartford is the only one of our top picks that includes this coverage.
  • Excellent purchase experience: The Hartford is one of two national providers to receive a perfect “Overall Purchase Experience” score from J.D. Power.
  • Useful policy benefits: The company provides not only a solid set of coverages, but also a great selection of policy benefits. For instance, frequent travelers will appreciate The Hartford’s towing and roadside assistance programs.


  • Merely average claims satisfaction: The Hartford received a perfect score in our claims management evaluation, but according to J.D. Power, customers are less impressed- it received a middle-of-the-pack three-star rating for service interaction.
  • Fewest online educational resources: The Hartford offers the fewest online learning materials among this field of competitors.

Geico: Best Car Insurance Company for Tech-Savvy Customers

We’ve all seen the ads: The gecko with the charming accent, the cavemen, the “wee” piggy and that camel who loves Wednesdays. Catchy advertising aside, what makes Geico stand out from its competitors?

Like most car insurance companies, they advertises low rates (“15 minutes could save you 15 percent or more on your car insurance”). But what else? According to J.D. Power’s 2019 U.S. Insurance Shopping Study, “The last decade of seemingly non-stop direct-to-consumer advertising and heavy investment into digital self-service technologies have driven roughly one-fourth of auto insurance customers to adopt direct distribution models that bypass agents in favor of do-it-yourself tools.” Geico’s response to this seems to be its very popular mobile app.

Geico is the second-largest car insurance provider in the United States. While they’re considered second-tier by Consumer Reports (listed under parent company Berkshire Hathaway Insurance Group), their customers rate them high in the categories of ease of reaching an agent, promptness of response, agent courtesy, and timely payment Not bad in terms of customer service.


  • Good number of discounts: Geico offers vehicle equipment, driving history and multi-vehicle discounts. It also offers additional savings opportunities for active and retired military (including emergency deployment), and for federal employees (fun fact: Geico is an acronym for Government Employees Insurance Company).
  • Superior mobile app: Geico’s mobile app offers the full suite of services. You can quote, buy and manage your insurance, pay your bill, get roadside assistance and submit a claim from your phone. Basically anything you can do on their website, you can do in the app. In the App Store, Geico has more than 1.54 million reviews and a 4.8 out of 5 star rating. This is significantly more users — and far more rave reviews — than apps from their competitors.


  • Doesn’t offer gap insurance: GAP (guaranteed asset protection) insurance, which pays off the rest of your auto loan if you wreck the car while you still owe more than it’s worth, may matter to you if you made a small down payment on your vehicle or if you lease it.
  • Predominantly digital experience: If you’re hoping to deal with a local insurance agent in person or over the phone, you may be out of luck. Most customers deal directly with Geico customer service agents through the website, and claims are typically handled online.

USAA: Best Car Insurance Company for Members of the Military

Throughout our research, we found that USAA’s stellar reputation holds true. If you’re a member of the U.S. armed forces or you’re related to one, there is no better option.

USAA is one of the three highest-rated automotive insurers in the country. The only downside is its limited availability: Only active service members, veterans, and their families are eligible. Given those restrictions, the quote process is a bit more intense compared with its competitors, but that’s a small price to pay for its exemplary service.


  • Flawless purchase experience: USAA received a “better than most” rating in J.D. Power’s 2019 report, giving it one of the top rankings nationally.
  • Solid financial stability: A.M. Best gives USAA the highest possible stability rating of “Superior.”


  • Membership restrictions: USAA is available only to members of the military and their immediate family.
  • Predominantly digital experience: If you want to work with a local insurance agent in person, you’re out of luck. USAA customer service agents and claims submissions are available through the USAA website and over the phone.
  • Missing three key vehicle coverages: USAA doesn’t offer gap insurance, interior vehicle coverage or new car replacement coverage.

Progressive: Best for Discounts

Progressive is the fourth-largest auto insurer in the U.S. and offers an impressive array of discounts and special coverages that could reduce your monthly bill quite a bit. For example, the Snapshot tool allows Progressive to base your rate on your driving habits. Progressive also earned an “A+ Superior” stability rating from A.M. Best, so the company is on solid financial footing to cover any claims.


  • Widely available discount options: Just about every policyholder will qualify for at least one discount, Progressive says, so it’s worth getting a quote. Just a few ways to save: Earn a good student discount, use the Name Your Price tool and prove you’re a homeowner (even if your home isn’t insured by Progressive).
  • Pet injury coverage: Progressive offers free pet injury coverage, which is included with collision coverage and pays for vet bills (up to a specified amount) that result from a car accident. It could be a major draw for pet owners.
  • Solid consumer experience: Although Progressive isn’t rated at the very top — J.D. Power gives it an average score across the board — Consumer Reports customers say this insurer is “very good” at providing access to agents, a simple process, prompt responses, paying for damage and communicating; plus, it’s “excellent” at making timely payments.


  • Room for improvement: Other insurers on this list rate much higher for policy price and overall customer experience. If you buy coverage and you’re unhappy with the service, your best bet is to shop around and change insurers once your contract is up.

Other Car Insurance Companies to Consider

Not all of our top picks for the best car insurance companies are available in all areas of the country, so here are some other good insurers worth checking out.

Erie Insurance

If you live in the South, Midwest, or Mid-Atlantic regions, Erie Insurance is worth your consideration. Erie has consistently received high marks from J.D. Power and Consumer Reports. In 2019, Erie Insurance ranked first in the Mid-Atlantic region in J.D Power’s annual study.
The reason it didn’t make it into our top five recommendations is due to limited availability — it only serves residents of Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and certain parts of the District of Columbia.

Outside of that, Erie is one of the best commercial auto insurers, offering policies that come standard with coverage for road service, lawyer fees, and loss of earnings. It also has comprehensive coverage options that include extras such as money toward rental cars after a crash — which is an add-on policy with most insurers.

Auto-Owners Insurance

Auto-Owners Insurance is available in 26 states located primarily in the South and Midwest. It uses an agent-only model that promotes customer relationships, so it’s a great choice if you prefer talking to a human being. The company also scored a nearly perfect score in J.D. Power’s 2019 satisfaction report, falling short only in the realm of its rental car experience.

Here are the states where Auto-Owners Insurance operates: Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, and Wisconsin.

Preparing for a Baby? Tackle These 15 Financial Tasks

Preparing for a baby isn’t just tiny clothes and heartwarming ultrasound photos; it involves a lot of financial preparation. This guide will lay out the most important financial tasks on your plate from pregnancy to baby’s first years, including:

  • Estimating your medical costs
  • Planning leave from your job
  • Budgeting for the new arrival

Some parenting preparations are best learned on the fly — how to effortlessly and painlessly change the messiest diapers, for instance. But the list of things to do before baby arrives and within his or her first several weeks is lengthy, so tackling certain tasks now is a smart idea.

Pre-delivery planning

1. Understand your health insurance and anticipate costs. Having a baby is expensive, even when you have health insurance. You should forecast your expected costs fairly early in the pregnancy. NerdWallet’s guide to making sense of your medical bills can help as you navigate prenatal care, labor and delivery, and the bills that will ultimately follow.

2. Plan for maternity/paternity leave. How much time you and your partner (if you have one) get off work and whether you’re paid during that period can significantly impact your household finances in the coming year. Understand your company’s policies and your state’s laws to get an accurate picture of how your maternity leave will affect your bottom line.

3. Draft your pre-baby budget. Once you know what you’ll be spending on out-of-pocket medical costs, understand how your income will be impacted in the coming months and have prepared a shopping list for your new addition, adjust your budget accordingly. Babies come with plenty of expenses, so set a limit on both necessary and optional buys (like that designer diaper bag or high-end stroller with the LCD control panel), and consider buying used to keep spending under control.

4. Plan your post-delivery budget. Recurring costs such as diapers, child care and extra food will change your household expenses for years to come. Plan for them now so you aren’t caught off guard.

5. Choose a pediatrician within your insurance network. Your baby’s first doctor appointment will come within her first week of life, so you’ll want to have a physician picked out. Talk to friends and family to get recommendations, call around to local clinics and ask to interview a pediatrician before you make your choice. In searching for the right doctor, don’t forget to double-check that he or she is within your insurance network. Ask the clinic, but verify by calling your insurance company so you’re not hit with unexpected out-of-network charges.

6. Start or check your emergency fund. If you don’t already have a “rainy day fund,” now’s the time to anticipate some emergencies. Kids are accident prone, and with the cost of raising a child there’s no telling if you’ll have the disposable income to pay for any unexpected expenses. Having at least three to six months’ worth of living expenses covered is a great place to start.

While in the hospital

The main focus while you’re in the hospital is having a healthy baby. But there are a few loose ends that will need to be taken care of.

7. Order a birth certificate and Social Security card. Hospital staffers should provide you with the necessary paperwork to get your new child’s Social Security number and birth certificate. If they don’t or if you are having a home birth, contact your state’s office of vital records for the birth certificate and your local Social Security office to get a Social Security card.

Within baby’s first 30 days

8. Add your child to your health insurance. In most cases, you have 30 days from your child’s birth date to add him to an existing health insurance policy. In some employer-based plans, you have 60 days. Regardless, do it sooner rather than later, as you don’t want to be caught with a sick baby and no coverage.

9. Consider a life insurance policy on your child. No one expects the tragedy of losing a child, so many parents don’t plan for it. The rates are generally low because a child’s life insurance policy is used to cover funeral costs and little else. When it comes to covering children, a “term” policy that lasts until they are self-sufficient is the most popular choice.

10. Begin planning for child care. Finding the right day care or nanny can take weeks. Get started long before your maternity leave is over. You’ll need time to visit day care centers or interview nannies, as well as complete an application and approval process if required.

Beyond the first month

You’ll be in this parenting role for years to come, so planning for the future is crucial. Estate planning is a big part of providing for your children, but it isn’t the only important forward-focused task to check off your list.

11. Adjust your beneficiaries. Assuming you already have life insurance for yourself or the main breadwinner in your household — and if you don’t, you should — you may want to add your child as a beneficiary. The same goes for your 401(k) and IRAs. However, keep in mind that you’ll need to make adjustments elsewhere to ensure when and how your child will have access to the money. A will and/or trust can accomplish this.

12. Disability insurance. You’re far more likely to need disability insurance than life insurance. Make sure you have the right amount of coverage — enough to meet your expenses if you’re out of work for several months. Remember, your monthly living expenses have gone up since the new addition.

13. Write or adjust your will. Tragic things happen and you want to ensure your child is taken care of in the event that one or both parents die. Designate a guardian so the courts don’t have to. Your will is only one part of estate planning, but it’s a good place to begin.

14. Keep funding your retirement. When a child arrives, it’s easy to forget your personal goals and long-term plans in light of this huge responsibility. Stay on top of your retirement plans so your child doesn’t have to support you in old age.

15. Save for his or her education. College is costly, but you can make it more manageable by starting to save early.

Adding a new member to your family comes with a lengthy list of responsibilities, so don’t try to do them all at once. Prioritize and tackle the most important items on your financial to-do list first. Because medical bills and insurance claims will be some of the first financial obligations you’ll encounter while expecting, start there. Move on to budgeting for pregnancy and the first several months of your baby’s life.

With 18 or more years until your little one leaves home, time would seem to be on your side. But — as the saying goes — blink and he’s grown. Now is the time to start taking the steps that will set your family up for financial success.

5 Budgeting Mistakes You Can’t Afford to Make

These blunders could instantly render your budget useless, so you’ll want to avoid them at all costs.

Budgeting 101: How to Start Budgeting for the First Time

Budgeters are twice as likely to report no financial worries, compared with spenders.

If you’ve read any personal finance advice, you know there’s one simple rule that comes up time and again: You need a budget. A budget is a roadmap for where your money will go so you can make your hard-earned income work for you. Budgets assign your money a job and establish spending limits for specific expenditures so you can use your money responsibly.

Creating a personalized budget is essential to developing the right spending habits, setting aside money for the long term, and ensuring the money in your bank account goes where it needs to. But how do you make a budget?

Getting started with your first budget may seem complicated, but this Budgeting 101 article will walk you through every step in the process. You’ll learn how to budget, how to avoid common budgeting mistakes, and how to ensure your budget is one you can actually stick to.

Jump in, get started, and design a budget you can live on in no time.

A man and a woman looking at financial papers with a calculator


1. Determine why you want a budget

According to surveys, only around a third of all households live by a strict budget. By deciding to budget, you’re joining a select minority — and your decision will pay off. Budgeters are almost twice as likely to report no financial worries compared with spenders, and they’re less likely to live paycheck to paycheck or struggle with finances.

While budgeting is always a great decision, it’s good to define goals before you start the process, since the reasons you’re budgeting may impact choices you make during the process. Common reasons to create a budget include:

  • Finding a way to save more money
  • Reducing overspending on problem areas
  • Ending fights about money for couples
  • Making sure your spending reflects your goals and values
  • Breaking the paycheck-to-paycheck cycle
  • Avoiding spending money you don’t have
  • Getting out of debt
  • Staying on track toward long-term financial goals

While it may seem silly to think about your motivations, psychology plays a big role in how we handle money. In fact, University of Maryland research into budgeting showed the process of creating a budget makes it more likely goals will be achieved because the process of hashing out the numbers creates an emotional investment, enhances motivation, and discourages cheating.

2. Do a deep dive into current spending habits

Before you can create a realistic budget, you need to know what your current spending habits are. If your budget isn’t realistic, it’s nothing more than a wishlist.

You won’t know if your budget is realistic until you’ve got an idea of where your money is currently going. Most experts recommend tracking your spending for about 30 days to get a clear picture of spending. There are a few ways to track spending:

  • Enter your expenses into a spreadsheet or notebook: Whenever you make a purchase, write it down or enter it into a spreadsheet. This is the most hands-on approach but can be time-consuming and you might forget expenditures if not entered immediately. It helps to keep your receipts.
  • Use an app: Apps such as Mint, Dollarbird, and PocketGuard make it easy to track spending by linking your credit cards and bank accounts. Link all accounts and ensure each purchase is labeled correctly to get an accurate assessment.
  • Use your statements: Credit card and bank statements can help track spending, although this approach is less likely to produce detailed results because you may not remember what a particular transaction was for. Still, if you want to get started with your budget right away, going back over a month or two of old statements will give you a big picture to use as a jumping-off point.

Fewer than half of all Americans responding to Consumer Financial Literacy surveys indicate they have even a “somewhat good idea,” what they’re spending on food, housing, entertainment, and other essential expenditures — so figuring out where your money is going must be part of the budget process.

3. Use a calendar to catch irregular expenses

While tracking spending shows you where money goes on a day-to-day basis, your budget should also factor in funds for irregular expenses, such as holidays and birthdays.

Americans who borrowed to cover holiday costs took on over $1,000 in new debt during the 2017 season, according to a Magnify Money survey. Half of those who borrowed would still be repaying holiday debt at least three months later. By budgeting throughout the year, you’ll never get into holiday debt again. Some irregular expenses in your budget might include:

  • Christmas, Hanukkah, or other gift-giving holidays
  • Birthdays
  • Annual car inspections and registrations
  • Annual vacations
  • Property taxes
  • Professional dues
  • Annual insurance premiums
  • Annual medical exams, including veterinary exams

Your calendar and past credit card statements will help you make a list of all expenses that crop up throughout the year.

4. Add up all of your income

Budgeting is about making the best use of income, so you need to know how much money you have coming in. Factor in income from all sources including:

  • Wage income
  • Money from side gigs
  • Alimony and/or child support
  • Business income
  • Income from investments

If your income is variable, one of the best budgeting approaches is to pay yourself a salary. This means you’ll decide on a monthly “salary” to base your budget around and when extra money comes in, save it in case of a bad month later. The monthly income you choose as your salary could be based off what you earn on average, or what you’d typically earn in a bad month if you want to build a bigger cushion and reduce the risk of overspending.

Those with irregular incomes could also live off last month’s income, updating their budget each month based on what they earned the month prior — but this is a more labor-intensive approach.

5. Identify your personalized financial goals

Most people who make a budget do so because they want to accomplish more with their money. This usually involves achieving long-range financial goals such as:

  • Saving for retirement
  • Building an emergency fund
  • Buying a house
  • Purchasing a new vehicle in cash
  • Paying off debt
  • Saving for college
  • Saving for a vacation or other big purchases

When you set goals, you can align your budget around achieving them by deciding how much you need to set aside to accomplish each goal. Goal setting has been shown repeatedly by studies to increase motivation and achievement. To be effective, your goals should:

  • Be specific: Instead of “save for a house,” your goal should be “save $100,000 for a down payment.”
  • Include deadlines: When do you want to buy that house or purchase a new car or retire or send your kids to college? Set a target date by which you’ll need to achieve your goal.

Setting goals is the single most crucial part of making a budget. If you don’t use your budget to make sure you’re working toward goals, all you’re doing is shifting spending and you’ll still have nothing to show for your money in the end.

6. Decide how much to save

Once you’ve got your financial goals, decide how much you need to save for each goal. If you want $100,000 for a house down payment in five years, save $1,666 monthly. If you want to build a $1,000 emergency fund by next year, save $83.33 a month. If you want to pay off $5,000 in debt at 10% interest by the end of the year, make $440 in monthly payments.

It can be hard to know how much to save for big goals, like college, a house, or retirement. Check out these guides for help:

  • How much to save for retirement
  • How much house can you afford
  • How much to save for college

The more specific you can be about how much to dedicate to each goal, the more likely you’ll achieve it. But if you don’t want to go through this whole exercise, take a shortcut and make a plan to save at least 20% of your income. You can devote 15% to retirement savings and the rest toward other goals.

7. Schedule a household meeting

If you’re single, you don’t have to worry about getting anyone else on board. But if you have a life partner, budgeting is a team project.

Money is a leading cause of relationship stress, with 35% of couples in a SunTrust Bank survey citing money as the cause. If you aren’t on the same page, your attempts to budget may be thwarted when your spouse hits the mall or splurges on Super Bowl tickets — and this is bound to cause strife.

It’s important to have a state-of-the-union meeting even if you maintain separate finances so your partner will understand why your spending habits may change and how he or she can support your efforts.

8. Decide what kind of budget you want to make

Now that you’ve done the preliminary work, it’s time to actually make a budget. Of course, there’s not just one type of budget, so you’ll need to choose which makes sense for you. Primary options include:

  • A zero-based budget: This is the approach popularized by Dave Ramsey and it involves making income minus outflow = $0. With a zero-sum budget, every dollar you have is assigned a job, with some of those dollars going into savings and the rest assigned to different spending categories. This type of budget can be restrictive, so it’s not right for everyone — but it helps with avoiding overspending, and meeting goals including debt repayment.
  • A 50-30-20 budget: With this approach, which Sen. Elizabeth Warren (D-Mass.) helped create, 50% of income is allocated toward needs, such as rent, food, and minimum payments on debt. Thirty percent is earmarked for wants, such as trips or entertainment. Finally, 20% goes toward savings. If you choose this approach, you’ll have a lot more flexibility — but may still up spending irresponsibly in some areas. Automating savings is key to making this budget work so you don’t ever shortchange yourself.

Everyone’s budget will be different, but here’s a rough example of a budget, assuming you bring home $4,000 in income each month.

Expense Monthly Budget
Retirement savings $600
Emergency fund $80
Travel fund $100
House downpayment fund $450
Christmas fund $30
Rent $1000
Utilities $300
Car payment $250
Gas and vehicle maintenance $300
Insurance premiums $200
Cell phone $50
Groceries $400
Clothing $50
Entertainment $150
Wiggle room $40
Total $4000

9. Choose a tool to make your budget

The next step is to decide on the logistics of creating your budget. The sample budget above was made in a simple Excel spreadsheet and this approach can be a great one because you don’t need to download any special apps or learn any new programs.

If you want a tool that will allow you to automatically see if you’re on budget, there are plenty of apps you can use. Popular budgeting apps include:

  • Mint: Mint is free and offers the option to create a budget. When your bank and credit cards are linked, Mint will track how well you keep to budget limits. You can choose categories of spending, set limits, specify how frequently each expense will occur, and specify whether to start each month with leftover amounts from the prior month.
  • You Need a Budget: YNAB costs $6.99 per month but is billed annually at $83.99. You can try YNAB for free before committing to see if it works for you. You can set spending limits for each different kind of spending, connect your bank accounts to track progress and get detailed reports.
  • PocketGuard: PocketGuard builds a budget for you, based on income and goals you set. The app tracks where your money is going and alerts you to how much it’s safe to spend. The app is free unless you upgrade to PocketGuard Plus, which is $3.99 per month or $34.99 per year.

Here’s an example of Mint’s budgeting program to see how this software works. But don’t get caught up in choosing the right software. If you’re overwhelmed and not sure where to start, your Excel spreadsheet will do fine.

Mint's Budgeting Feature


10. Put pen to paper — or fingers to keyboard

So, now that you’ve decided which approach to take and know what you’re spending, it’s time to input your numbers.

To start the process, define what categories you’ll use. You can be as specific and detailed as you want. You could have a category for groceries and a separate one for eating out or a general “food” line in your budget. You could group all entertainment spending in one category or, if you love to shop for books, could have a separate line item in your budget.

Once you’ve got your categories broken out, set your desired spending limit for each one. Base these numbers off what you found when tracking spending. If you were spending $800 a month on groceries, you may decide to cut back — but do so realistically. Don’t budget only $200 because you’ll set yourself up to fail.

You should also build in a little wiggle room because unexpected expenses will happen. This should be a line item in your budget with a set amount of extra money each month available in case you go over in another spending category or have a surprise bill show up. For most people, around $50 to $100 is a good number.

When you’ve put the numbers on paper — including your desired amount of savings to meet your goal — make sure your spending matches income or aligns with the 50-30-20 buckets.  If you find that you’re spending more than you have available, either cut spending down or increase income through a side hustle. Keep adjusting the numbers until they work.

11. Avoid these common budgeting mistakes

Budgeting is an imperfect process, so don’t be discouraged if you don’t get everything right the first time. To maximize your chances of success, it’s helpful to learn from the experience of others. You can read about common budgeting mistakes to avoid these big errors in your budget:

  • Unrealistic expectations: If you make a budget you can’t possibly stick to, you’ll set yourself up for frustration.
  • Budgeting based on gross income: Take-home pay minus taxes and deductions for health insurance premiums, is lower than your annual salary. When you set up your budget, you’re finding jobs for dollars you actually bring home each month. Look at bank deposits to see how much your actual inflow is and budget based off that amount.
  • Failing to consider big changes: Often, people who find that income isn’t high enough to meet expenses start looking for discretionary expenses to cut. You may cancel cable TV and give up eating out. While little cuts can be helpful, sometimes it’s big, fixed expenses that cause problems. Selling your car with the $400 a month payment, getting a roommate to cut the rent in half, or moving to a cheaper house will do way more to free up money than cutting a few coupons or downscaling your cellphone plan.

There’s lots more advice about budgeting mistakes you can learn from, and you’ll likely make your own unique mistakes — but over time, the process will get easier.

12. Determine how you’ll hold yourself accountable

Making a budget is only the first step. You have to figure out how to live by your budget. Some people are disciplined enough to just do it, but there are also techniques that can help you stay with your plan. Some of the best approaches include:

  • Automation: Put your bills on autopay — including extra payments to debt — and automate transfers to retirement and savings accounts. When money moves where it needs to go before you get a chance to see it, you’re less likely to spend it.
  • The envelope system: The envelope system involves physically putting cash in an envelope for each spending category and labeling it. Spend only money from the proper envelope on all purchases in each category. When the money is gone, you’re done spending for the month.
  • Tracking spending: You’ll need to continue to keep track of spending to see if you’re sticking within your limits. Apps help. When you link accounts with budgeting software, you can see right away where money is going and the app should generate reports showing whether you stuck to your budget.

If you have a partner, you can hold each other accountable by working together to make sure you’re sticking to the spending limits you’ve set.

13. Set up a monthly budget review

Finally, it’s important to check in with your budget and make adjustments as needed. See how you did each month, where you overspent, and if you had extra left over. Then, adjust your budget according to what you’ve learned.

Your life will change over time so changes will always need to be made. Once you’ve got a good baseline budget, however, making tweaks is easy.

Now you know how to budget to save money and cut spending

Whew! You’ve gone through all the essential steps of the budgeting process now. If you’re feeling overwhelmed, don’t be. Budgeting is really easy once you’ve gotten the hang of it — and now you know every step you need to take to budget so you can make your hard-earned money work for you. Start budgeting today and you’ll see how much happier you are when you live on a budget, save money for your future, and spend guilt-free.

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The Craziest Ways People Save Money

We all know love makes people do crazy things, but the lengths people will go to in order to save a few pennies here and there might be even crazier. Considering the average American household is $132,000 in debt, learning a few money-saving tips couldn’t hurt. The nation’s savviest penny pinchers aren’t afraid to go to extremes to cut corners. Although some tips might require swallowing your pride, many also help reduce environmental waste. The following money-saving tips might seem strange, but they actually work.

1. Keep a pitcher close to the sink

woman's hand pours water from a pitcher into a glass

All tap water can be put to use somewhere. |

Instead of wasting water while you’re waiting for your tap to turn hot, collect the cold water in a pitcher. You can use it later to drink, cook, or water your plants.

2. Pee in a bottle

Sprouts watered from a watering can

Turn waste into food for plants. |

The expression, “If it’s yellow, let it mellow,” isn’t without merit. Not flushing when you pee can save gallons of water each day. But if you really want to save money and help the environment, try peeing in a jar or bottle and using the waste on fertilizer — a two-for-one special.

3. Say ciao to your Charmin

baby pulling toilet paper

Do you really need all that toilet paper? |

Speaking of bodily functions, why waste money on toilet paper when you probably have spare newspaper, junk mail, and bills lying around? Discomfort aside, toilet paper really is a waste of money if you think about it.

4. Unplug everything

Plugs on wood

Stop allowing plugged-in appliances to add up on your energy bill. |

While it doesn’t waste as much money as leaving on every light in the house, keeping your appliances plugged in can add up. According to the Department of Energy, these devices comprise up to 10% of your electricity bill. In order to make life easier, try using power strips, so you can switch off multiple devices at once.

5. Dumpster dive

Composting the Kitchen Waste

Old food isn’t always garbage. |

According to NPR, retailers waste a whopping 10 percent of the edible food in America each year. The main reason? Picky customers. Most stores throw out food at the end of the day, so you can either take the scavenger route and dumpster dive or ask your local store manager if you can take a look at closing time. That overly ripe banana nobody wanted to buy could be your breakfast.

6. Sit out the party

Woman sits alone at dinner table

Don’t overspend on parties you didn’t even want to attend. |

Saying no to birthday parties (or weddings, depending on your age) can be difficult. But the costs for social occasions that you feel lukewarm about can add up. Unless you think saying no will truly damage your relationship with the host, try sitting out a few parties of third cousins or co-workers you barely know.

7. Take a vacation at Christmas to save on gifts

Couple on beach looking at sunset

Avoid the gift-giving frenzy by heading out of town. |

The holidays can lead to excessive expenditures, especially if you spend them with extended family and feel pressure to buy everyone a present. Try taking a trip instead of avoiding the gift grab. You’ll save money and headaches over family arguments, and you’ll get a nice vacation out of it.

8. Freeze all your dry goods

wooden varieties of pasta made in Italy

Freezing dry goods can extend their freshness. |

You’ve probably heard freezing coffee keeps it fresh, but did you know just two weeks in the freezer could help your flour stay good for an additional two years? Same goes for sugar, grains, and baking mixes. Although all of these goods will expire eventually, chances are you’ll use them before they go bad.

9. Make your own cleaning supplies

House cleaning product

DIY cleaners save on money and toxins. |

Vinegar and baking soda can achieve almost anything your cheap cleaning products can. Before you run to the store, try making your own cleaners at home. Best of all, they’re less toxic and less expensive than organic brands.

10. Potty train your cat

Black cat sitting on the human toilet

Involve your kitty in saving money. |

The average cost of litter for a cat owner is $165 dollars a year. That’s over $1,500 dollars over a cat’s lifespan. One way to save money on your feline is to potty train him or her with a Litter Kwitter system. The method isn’t meant for all cats, but vets say it’s legitimate.

11. Get permanent makeup

woman getting laser tattoo procedure

Stop spending so much on makeup that just goes down the drain. |

According to, the average woman spends over $15,000 dollars on makeup in her lifetime. That’s more than enough to buy a used car. One solution is to go for a more natural look. Or you could save a couple thousand dollars and get permanent makeup surgery. On average, procedures cost between $400 and $800.

12. Wash clothes in the shower

young girl with curly hair sitting in white bathtub

Your bath water can do double duty. |

Instead of just hand washing your delicates, try handwashing everything. It’s a good workout and, if you do it with your bath water, you’ll wind up saving money. In terms of water use, a 10-minute shower uses approximately the same amount of water as the average-sized washing machine.

13. Paint your roof

Person paints trim of house white

Your roof color directly impacts your energy bill. |

If you can’t install solar panels to make your energy use more efficient, try painting your roof white. Because the color will reflect more sunlight, you’ll reduce your energy bill anywhere between 10% to 40% in the hot months.

14. Use the fridge and freezer for non-food items

hand is opening a freezer door

Cold extends the life of many everyday products. |

Once again your freezer comes to the rescue. Clothing, lipsticks, candles, and batteries are all items that last longer when stored in the cold. Be wary of what makeup items you store in the cold, though. Although it can extend the shelf life of items, such as nail polish, the cold also can compromise the integrity of some of your favorite beauty products.

15. Join a memorial society

A coffin about to be lowered at a funeral service

A little planning will help funeral costs be more manageable. |

This might sound grim, but if you join a local affiliate of the Funeral Consumers Alliance or a similar group, you could save thousands of dollars on your funeral. The alliance negotiates contracts with several funeral homes to bring you a lower price. Affiliates can be found in most states.

16. Head to Mexico for dental work

Dentist repairs tooth of his female patient

After that sugary margarita you might find yourself at a dentist in Mexico. |

Not all trips to Mexico are to hang out on the beach with a margarita. According to The Washington Post, thousands of Americans head to Mexico each year to get dental work. Getting your procedure south of the border will cost you about a quarter of the price you would have paid in America. Many of these dentists have been trained in America, so you’re still getting a quality operation. It’s something to keep in mind if your health care is at risk.

17. Put your spending on ice

100 Dollars frozen and cracked

Freeze your credit cards — literally. |

You don’t need your bank to freeze your credit cards to curb your spending. Just pop them in the freezer yourself. Kerri Moriarty, head of company development at Cinch Financials, suggests submerging your card in water and keeping it frozen as a contract with yourself not to use the card. No defrosting allowed.

10 Tips for Saving Money

While you may not have control over the economy, you do have control over the actions that you take.

  1. Keep track of your spending. If you know where your money is going it will be easier to make changes if you need to.
  2. Separate wants from needs. Do you really need that 42-inch flat screen television? When money is tight it should not be spent unless absolutely necessary.
  3. Avoid using credit to pay your bills. While it may make things easier now, using credit only increases your monthly payments in the future.
  4. Save regularly. Have some of your paycheck directly deposited into your savings account or set up an automatic transfer each month from your checking to your savings account.
  5. Check your insurance policies. Review the coverage for all your plans. You may have too much and be wasting money or too little and not be adequately covered.
  6. Be careful about spending a significant amount of money on periodic purchases, like gifts and vacation. While you may feel good while you are spending the money, you may wish you had the money later.
  7. Cut or downgrade your services. Can you get a cheaper cable package or have no cable at all? If you have a cell phone consider cutting your land line.
  8. Try lowering your energy bill. Turn off appliances and lights when they are not needed. Purchase energy-efficient light-bulbs. When you can, use a fan instead of air conditioning or put on a sweater instead of turning on the heat.
  9. Consider signing up for online bill payment. Not only will you save on stamps, but you can make sure your payments are received on time.
  10. Cut down on take-out ordering. Even if the meal is not expensive, doing it frequently can really add up. A $10 pizza once a week will cost you over $500 a year!