If you expect to be able to save some of your current income for your future, a household budget is necessary. You need to know where the money is coming from and where it goes when it leaves your wallet or bank in order to manage it effectively.

To get started, you’ll need a pen, calculator and paper – and/or a spreadsheet program. Gather all of your pay stubs, income records, monthly bill statements, check register or online bank statements if you have them, and statements for retirement or other investment accounts.

Step One: Determine your income. If you are on salary this will be easy, as you earn the same amount each month. It can be more complicated if you are self-employed, work on commission or have variable income for other reasons. Do your best to get an accurate monthly average of income earned, and remember to include tips, bonuses, child support, alimony or any other type of income you receive regularly.

Step Two: Determine your monthly expenses. List everything you pay. If there are bills that fluctuate, like utilities or food expenses, for example, just find the average by totaling a year’s worth of that expense and dividing by 12 months.

Step Three: Take a deep breath and check your totals! Is your income less than your expenses? No wonder you haven’t been saving! Go through your monthly expenses list and mark items that can be eliminated from your expenses (coffee shops, gym memberships and/or unnecessary subscriptions, etc). While you’re at it, you can also mark expenses that could be reduced (food expenses can be reduced more than you think with use of coupons, buying items on sale, eating out less, etc). Once you’ve tipped the scales so your income total is greater than your expense total, you can determine how much money to save. Pick a weekly or monthly savings amount that also allows for a little cash buffer in case you have some unexpected need for more cash than you included in the budget.

Step Four: Post the budget on your refrigerator or another area that you will see it every day. Refer to it often to help stick to the budget and grow your savings. As items are paid off, you can increase the amount you are saving.

Looking for a new checking or savings account?  Unhappy with your bank and want to switch?  Just like credit card companies compete with one another with their rewards programs, banks compete with each other for new customers by offering sign-up bonuses.  Here are several institutions, banks, and online payment companies that are offering cash bonuses when you open a new account with them:

IngDirect Savings and/or Checking Accounts: 

If you are referred by a current ING account holder, you can get a $25 bonus for opening either a savings or a checking account through ING (with a minimum opening deposit of $250).  I have an ING account with both a savings and checking account and love them both.  It’s online banking at it’s best.  For the few bills I pay each month that don’t actually let me pay online, I just fill in a “check” through my ING account online, and they physically print and mail it for me (I don’t even pay for the stamps).  There are a number of other benefits with the ING bank accounts, including above average interest rates you earn on your money, and the ability to make direct deposits into other people’s bank accounts without paying any fees (like an e-check).  If you want to get a referral to receive your $25 sign up bonus, email ggreenblog@hotmail.com and let him know!

Bank of America Personal Checking Accounts

Open a Bank of America personal checking account before July 31st, 2008 and use offer code AOU260508 to receive a $75 sign up bonus.  You can apply online or at your nearest Bank of America location, but you will only qualify if you do not already have a Bank of America account.  Student checking accounts also will not apply.

Wachovia Checking Accounts

Have a Wachovia account?  Refer a friend and you both get a $25 bonus, in the form of a Wachovia prepaid Visa card, when the friend opens their checking account.  If you don’t have an account already, find someone who does to give you a referral certificate (printable right from the Wachovia website) and you can both earn $25 for the time it takes to print out the form and fill it in.  Can’t find anyone with a Wachovia account?  This person will find one so you can get the bonus (and so can the other guy!): maximizingmoney@gmail.com

Keybank Student Checking Accounts

Need a student account?  Students who sign up for the Keybank Free Student Checking Package (pretty much everything you need, including a checking account, debit and credit card) will receive a free 4GB iPod nano.  Offer expires August 28, 2008.

Midwest Bank

New customers opening a checking and relationship savings account with Midwest Bank get a $100 bonus when you set up the checking account to have a direct deposit.  Only one $100 bonus allowed per household.

 Sovereign Bank

Students who open a checking account with Sovereign Bank with a minimum of a $10 deposit and sign up for the Visa CheckCard are rewarded with a $24 iTunes gift card bonus.

Westbridge Bank and Trust

The Westbridge Bank and Trust wants to help you pay for your gas.  Open an interest checking account (current interest yield of 3.55%) and receive a free $50 BP gas card as a sign up bonus.  If you have some money to store in a CD, open an 18 month CD with a minimum of $5,000 (at 3.65%) and receive a $100 BP gas card bonus.

Have you ever considered why you chose the bank that you bank at? Was it because your parent’s bank there, it’s close to your house, or that it was the first place you stopped at? Most of us end up banking at large mega-banks with billions of dollars in assets, even though these types of banks offer some of the worst deals out there when it comes to savings and investments.

These major mega-banks are not terribly concerned that average Americans with average incomes become their customers, rather they put their emphasis on scoring big accounts because those are much more profitable to hold. Many of them don’t put much of an effort in the products they create or the marketing that they do for the average customer.

Many of these banks have very lousy products for the average consumer, especially when it comes to savings accounts. Wells Fargo is offering a meager 0.1% on their standard goal savings. Bank of America is offering a 0.2% interest rate on their regular savings and Wachovia is offering 0.15% on their “Premium” savings.

Most of these banks have very lousy checking accounts as well. You might get a free checking account with the first set of checks for free, but that’s about it. No ATM refunds to speak of, no free checks later on, and if you want to just about anything out of the normal, you’re going to end up paying a fee to make it happen.

There are so many better options when it comes to your checking and savings accounts, especially when you shop for them online. There are a number of banks, such as HSBC Direct, ING Direct, Emigrant Direct, IGO Banking and E-Loan that are offering high-yield savings accounts to their internet customers offering rates anywhere between 2.75% and 3.75% APY, that’s 20-30 times more than Wells Fargo will give you with their basic savings!

When it comes to checking accounts, you probably won’t earn a dime in interest from any major bank, but when you go online you can easily get from 3% to 4% APY on the money that’s sitting in your checking account. Some of the accounts available will even refund any ATM fees that you incur!

Major mega-banks have been giving their regular customers a raw deal for far too long, if you still keep your money at one of these banks offering you an abysmal savings rate, it’s time to move your money.

Image from savingsaccountforchildren.net

You don’t have to be a financial adviser to understand that the sooner you start putting money into a FDIC insured, interest-earning account, the more money you’ll have when you’re older. If you start saving for college when you’re an infant, compounding interest will work more in your favor than if you started as a high school freshman. Even if the child decides not to attend college, having a savings account that has been growing since they were babies will certainly give them a nice chunk of change when they enter the “real world” of working adults, and perhaps help them secure their first home or vehicle.

There are many options for saving money that offer interest. If you’re interested in starting a regular savings account for your child, take the time to find one that offers the highest interest rate possible. Chances are you won’t need any extra functionality (like a debit card or unlimited withdrawal transactions), so you can focus on finding high interest savings accounts to really maximize the savings potential of the money you deposit over time.

If you’re looking to start a college savings account, you probably want to consider a 529 plan. Each state has their own version of a 529 education savings plan – but their benefits are similar regardless of which state you live in. You can open 529 plans with a small deposit, and contribute regularly (up to a state mandated maximum amount per year). Friends and family can make gift contributions to a 529 account. When your child is old enough to attend college, the money saved in a 529 does not hurt their chances of receiving financial aid as much as other savings accounts might.

Another option for saving for your child’s future is to save money in certificates of deposit. Many people mistakenly believe you need to have thousands of dollars before a certificate of deposit will earn any interest worthwhile, but if you’re starting to put money aside for your child’s future, you have many years to invest. Choose long term certificates of deposit at the highest interest rates you can find, and keep re-investing the profits into a new certificate of deposit each time it matures to benefit the most from CDs. You can also learn to ladder your CD investments to further maximize potential interest earnings.

When many banks begin competing in the online savings world, they offer an inordinately high interest rate for a good 6 months or so and then drop back to something less competitive once they gain a significant amount of customers. More fickle customers that are chasing the highest interest rates simply move onto the next bank offering a great deal, but a few online savings banks consistently offer interest rates well above the rest, and one of those is KeyDirect. For over a year, KeyDirect has been offering an interest rate of 2.00% APY or above on their money market savings account, even after two rate-cuts from the Federal Reserve.

The account has a minimum opening balance of just $50.00 which puts it within the realm of almost all savers. You’ll earn an interest rate of 2.00% APY on any balance up to $250,000.00. There are no monthly service charges to speak of and you’ll receive free checks to take money out of the account with.

You can apply online through their website or over the phone. If you fill out the online application, a customer service representative will call you by phone to verify your identity by asking you questions about your credit report. It’s a pretty straight-forward process compared to some other online savings banks. When opening an account, a hard-credit pull will not be confirmed so that your credit score will not be negatively affected.

The major down-side of this bank is the limitations it puts on ACH electronic transfers. KeyDirect will limit you to $2,000 in transfers per day and a total of $20,000 per month in transfers. If you have a large amount of money in other accounts you want to transfer in, it might take several days with of transfers to move all of your money over to KeyDirect. The bank does not block external ACH transfers from your outside checking or savings account.

Because of some state laws, KeyDirect only operates in 37 dates and Washington, DC. If you live in AK, CO, ID, IN, KY, ME, MI, NY, OH, OR, UT, VT, or WA, you won’t be able to open an account with them. The bank is FDIC insured and has been for the last 51 years, so chances are it’ll be around for a while.

A lot of people who listen to audio books believe Audible is the only real place to go, but there are actually a lot of different ways to find and download mp3 audio books online. There are services which allow you to download public domain books for free to listen to of varying qualities and a number of other subscription sites which can, in a lot of cases, save you money over Audible’s $15.00 per month subscription service.

One of these services is music-clubs.com. They offer both fiction and non-fiction audio books. Some of the types of books available include business, careers, self-help, children’s, young adult, and spirituality. Whatever you’re looking for, chances are music-club.com has what you’re looking for. Their collection is fairly large in size, it’s not the biggest out there, but chances are you’ll be able to find something worth listening to.

Music-Club really shines when it comes to fiction books. Regardless of which audio books authors you’re looking for, you’ll find it. If you’re looking for the latest fantasy novel or a science fiction adventure, Music-Club is the place.  One of the recently released definitely worth checking out is ‘Anathem’ by Neal Stephensen. It’s a science fiction mystery about a world where scientists and intelligent people are herded and locked into sanctuaries so they don’t create something that will destroy humanity.

Music-Club offers two subscription plans, a gold membership, and a platinum membership. The gold membership has a special where you can get 50% off for the first three months, and pay a mere $14.95 per month after that. With the gold subscription, you get one book of any size. Unlike audible, there aren’t books that are “two credits” which make the book take two months of one’s subscription. There is also a platinum level membership for $22.95 per month that comes with 2 free audio books up-front, 2 downloads per month, and after that you can purchase additional audio books for just $11.47 for each download. Both of the plans offered are very competitive with Audible’s services, and depending on which books you buy, you can save a substantial amount of money.

This service might not be the best fit for everyone, but it’s very competitive with Audible’s, iTunes’ and other stores pricing levels, so check it out.

Unfortunately, with a difficult economy, some people need a little extra cash from time to time. Unexpected expenses can make it impossible to make it to your next paycheck without a little assistance.

If you have poor credit, your only option may be to consider a cash advance. Advances in technology can make it easy to get a faxless payday loan. These loans are easy to apply for.

Before you take out a payday loan, make sure you consider two important things.

First: You need to understand how much payday loans cost. Payday lenders, like other lenders in the U.S., must disclose the “Annual Percentage Rate” (or “APR”) of each loan. The APR is a way for you to compare two different loans to each other. The loan with a higher APR is more expensive. Payday lenders typically charge between $10 to $30 for each $100 borrowed. When disclosed as an annual percentage rate, this can range from around 390 percent to 780 percent.

The APR is calculated by a formula that takes into account the amount the lender is charging you, the amount you are borrowing, and the length of the loan. It breaks down all the costs of the loan, including the interest rate, and that rate is known as the annual percentage rate. On a 30-year fixed-rate loan, the APR is the actual annual cost of the loan if you make 360 payments. Since payday loans are typically short term loans, the APRs can be quite high.

Don’t use the APR of a payday loan to compare with an APR of a mortgage (a long-term loan). Use APRs to compare different payday loans of equal lengths. Use it to decide Which lender is going to give you the best loan rate. Here are two examples to show how to use the APR to decide which payday loan is a better deal.

Example One: If you are going to borrow $200, the lender is charging you a fee of $30, and the loan is due to be repaid in two weeks, the APR is 782%.

Example Two: If another lender is going to charge you a fee of $20 for the same $200, two week loan, the APR will be 521%.
Obviously, the second lender is a better deal. Use a payday loan calculator to figure out which loan is cheapest.

Next, before you take out a payday loan, you need to understand what a “rollover” is. Most payday loan borrowers renew or rollover their loan at least once. When a borrower files for an extension on their loan, it effectively rolls it over to a future repayment date which is the next paycheck. Additional fees are paid for each rollover which can create a seemingly endless cycle of debt. Many States allow unlimited rollovers.

Before you take out a payday loan, make sure you will have enough money to repay the principal in its entirety on the first due date. Do not get sucked into an endless cycle of rollovers, as you will end up in a worse situation than you are currently in.

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People are constantly looking to save money without reducing their quality of life. The trick to saving money is to make frugality a habit; so you don’t even have to think about it. Here are 4 money saving tips you maybe overlooked that could save you substantial amounts of money over time:

1. Maintain Your “Things”: Everything has a limited lifespan, however, most items will have a longer useful lifespan if they are maintained properly. Maintaining your car is a prime example – keeping the oil changed, tires properly inflated, and brakes replaced regularly will help extend your car’s lifespan. Maintaining household appliances and clothing are other areas that you can extend the use and save money over having to replace them more frequently.

2. Shop Around: When you do have to buy something, take the extra time to bargain hunt. With the invention of such websites as pricegrabber.com and bizrate.com you can take a look at what many different retailers are selling the item you need for. Don’t forget to check the Consumer Reports guide (also online, consumerreports.org) before making a large purchase, as they offer unbiased reviews and advice for many products.

3. Discount Clothing: There are many ways to reduce the amount of money you spend on clothes that it seems a little ridiculous to spend $70 on a pair of jeans when you can get a similar pair for $20. Try shopping at outlet stores, or Cosco for reduced prices on clothing. If you’re up for it, you can buy used clothing on eBay, at yard sales or consignment shops, or the Goodwill Store (as a bonus, you’ll know the profits Goodwill earns from the sale of items in their retail shops goes towards charity). Many times you can find clothing in perfectly good condition for a fraction of what it would cost new – and sometimes there are items with the tags still on them!

4. Grocery Shopping: Unfortunately, we can’t completely eliminate paying for food but there are many tricks to paying less for our food. First, shop with a list and use cash. This way, you can only get what you have cash on hand to buy and you won’t be tempted to throw a few extra items into the cart. You might be surprised at how much extra you spend on each shopping trip with those little “extra” items that make their way into the cart! Clip and use coupons on items you ALREADY buy, but don’t clip or use a coupon just because you have one. That defeats the purpose and doesn’t help you save money.

For many living paycheck to paycheck, it often feels like there is never anything left over to tuck into a savings account. Saving money may not be a priority and therefore will always end up feeling more and more like a struggle. There are a number of ways to start saving, whether it be to set specific savings goals or to budget your money with savings in mind.

One particularly simple way to save cash is to automate the process. By establishing and an automated withdrawal and deposit of funds from one account to the other, you are more likely to stick to your savings plan. One reason is because the automated process doesn’t allow you to get your hands on the cash that you are likely to spend. Many people find saving money to be a nearly-impossible task. Because of the onslaught of bills and expenses each month, they have a hard time making saving cash a priority.  They feel that whatever money is “left over” will go into the savings account and are surprised each and every time when there is no money left over.

By establishing an automatic plan to save, you essentially set your mind to accepting the withdrawals each time. You no longer have a reason to worry about what’s left to save and as time goes on and you see the account grow, you will likely become a more motivated, more confident saver.

How Automation Makes It Easy

Setting up an automated savings plan is pretty simple. In fact, there is more than one way to do automatically deposit a set amount of money into your account on a regular basis. The first way you can automate your savings deposit is through your employer. If you have signed up for direct deposit of your paychecks, you can complete a form that allows you to direct deposit the bulk of your money into one account and assign another amount to your savings account. This way, each time your direct deposit goes into the bank, you will add a little more to your savings account on a regular basis without any extra steps.

For those who do not have access to direct deposits, you can visit your local bank branch and request that your checking and savings accounts link together so you can establish an automated transfer from one account to the other. Again, with automated money transfers, you never have to touch the cash or remember to make a deposit.

Set It and Forget It

Once you start depositing money into your savings account, forget about that money. Of course, you should always keep your eye on your banking statement for errors but as for the money, forget you ever had it. Don’t fool yourself into thinking that you could “borrow” from your savings account unless it is for a true emergency. The likelihood of you paying yourself back early on is not realistic. Over time, as you begin to see the account growing, you may be less likely to use the money impulsively. But in the beginning, you have to learn to practice self-control and leave the money alone.

Keep the Accounts Updated

If you get a raise or other increase in income, don’t forget to make adjustments to your automated savings accordingly. Should you pay increase, it makes sense to have your savings deposit increase as well. Don’t forget to update your bank accounts and automated deposits of your paycheck. In the event you get a cash bonus or other unexpected windfall, plan to put it into the savings account and let it sit for awhile, otherwise it will probably burn a hole into your pocket.