Did you know that when you buy a new car, the value of the car immediately depreciates when you get it home? By buying a car that is one year old, you will be paying close to what the car is actually worth. Most cars are worth half their value within a two year period. Buying a car with a high residual value may allow you to sell or trade it in for more. A quick google search can help you find your cars residual value. Be cautious and check how much the vehicle costs to insure, even different models have different insurance rates. Maintaining your vehicle for around $50 can save you about $800 a year in repairs. Check your vehicles manual and follow its recommended maintenance schedule. Learning how to change your own oil, antifreeze and filters will save you even more money. Washing your own car can save you as much as $30 a month. Lastly, if you have things in your trunk or backseat, take them out. Items in your trunk or backseat add to the cost of fuel it takes to run your vehicle.

Help share your stories on how you save money on transportation costs. You never realize how often you might just say “why didn’t I think of that?”

People who know exactly how much they spend each month on groceries are twenty times less likely to be deep in debt than those who don’t know how much they have spent.  When we include dining out, vending machines and fast food into the list of food related purchases, we realize how much we are spending.  Prepackaged and ready to eat meals also end up costing a lot of money.  Eating is a necessity but there are many ways to noticeably reduce your food budget.

First of all, stop going out to eat.  Eating out is much more expensive than a meal that could have been prepared at home.  Do not buy frozen meals.  When you buy frozen food, you are spending way too much for way too little.  Try preparing your meals from scratch when you have some free time for the rest of the week.  Don’t buy meats that are already cut.  You are paying the supermarket to cut up the meat for you.  You can save a dollar per pound of meat by cutting it yourself.  You should of course make sure to compare supermarkets. One supermarkets may price items $1.00 $2.00 more or less than another supermarket.  Buy the generic brand products which are usually processed at the same plants as the name brand products.  When you buy a name brand product, much of the cost goes to the expensive of the product.  This can save you over $500.00 dollars in a year!  Buy fruits and vegetables when they are in season because the price will be significantly less.  Eating vegetarian meals once a week can save a family of four about $15.00 a week.  Use Coupons wisely. A lot of people use coupons just because they have one.

Americans have a long, sordid history with borrowed money. In Collateral Damaged: The Marketing of Consumer Debt to America, Charles Geisst, a professor of finance at Manhattan College, takes us through the centuries to explain how we wound up at our most recent — and spectacular — credit bubble. TIME’s Barbara Kiviat spoke with him

Which makes our most recent downturn worse?
Yes, absolutely. We’re out of proportion with our amount of personal debt. A good number of people are in debt to the point where they may not ever be able to pay their way out.

Why didn’t lenders better capitalize on our speculative bent sooner?
Our banking system was never national. In fact, it wasn’t even retail in the 19th or early 20th century. The banks that were capable of doing the most lending to individuals didn’t actually do it. We had to wait until Bank of America, for instance, got into business and a lot of the companies like Household Finance that started making consumer loans for this thing to actually warm up.

So going forward, how do we strike the right balance between the “democratization of credit” and the overextension of debt?
We have to go back to the notion of credit basics. In other words, to buy a house, you can’t borrow more than, let’s say, 2½ times your gross salary. We know the financial institutions are retrenching themselves right now. The question is, Has the consuming public learned anything from this? That’s the more difficult issue.

How do you think the new regulations for credit-card companies will change things?
Well, they’re going to tighten up some of the shoddy practices the credit-card companies have pulled off in the past. They seem to be taking notice of the GAO’s periodic reports about the credit-card companies’ practices — you know, misleading statements, using different font types, billing practices, hidden fees. It’s going to address most of those issues. My problem with it is it still doesn’t address the matter of interest rates. There’s got to be a cap, as far as I’m concerned.

You actually assign a lot of blame for our recent troubles on a lack of interest-rate caps — that is, on the absence of strict usury laws. Why?
Almost every state had usury laws in the 1920s, and they were circumvented one by one. Prohibitions against excessive interest started to disappear [South Dakota, for instance, loosened its laws in 1980], and once they did, the credit-card companies recognized a wonderful opportunity. They could charge as much as the market would bear, claiming that they had to charge more for bad credit risks. You can argue that’s the democratization of credit, but it’s in the interest of credit-card companies to keep people under the yoke. We’ve just swapped loan sharks for legitimate loan sharks.

So maybe there are some people who just shouldn’t have access to credit?
I think everyone should have access to credit in a very strict proportion to their income — not a future projection of their income, which is what we’ve been doing. It’s been, “I’m now making $50,000, but in a few years I’ll be making $150,000, so no big deal, let’s go buy an expensive house now.” This whole business of giving more credit than a person can service is not only foolish, but if you tried to do that 200 or 300 years ago, it would have been considered immoral as well. We don’t think that way anymore, but essentially it is, because that person is going to be in debt forever.

You talk about the need for a financial-products safety commission. What do you think of the proposal the Obama Administration has put out there?
In the outline form we’ve seen so far, it looks like a good idea. But as I say in the book, if the thing is created, it’s going to be barraged by new financial products from up above on Wall Street. They won’t know what hit them. So I think unless there is some sort of regulatory body that is going to play chess with Wall Street, a complimentary body that filters this stuff on the wholesale level before it becomes the consumer stuff, whoever is on that consumer-safety commission is going to get completely swamped.

A lot of your book is about the history of borrowing money. Any favorite episodes?
Well, it’s been a long road. During the Roman Empire, the first anti-usury law — and I think this says it all — was found in the Council of Nicea in the 4th century. It states that no clergyman could practice usury, so you can get a pretty good idea of what was going on then — lending to the flock. The odd part is, the Council of Nicea was also the council that confirmed the concept of the Trinity. Those are probably two of the most unlikely pieces of legislation you could find in the same piece of canon law.

Article from http://www.time.com

Consumers are simply overwhelmed by the financial straits in which many find themselves in and cannot make an informed decision. Many of you have had this experience. Panic begins to set in and you say, “Help I’m in debt. What can I do?” This is when you realize that you owe too much money to too many people and you might not be able to pay it all back. Assuming that you have found the strength to start solving your debt problems, what can be done? In fact, there are many avenues for resolving an uncomfortable financial situation. How you proceed depends on the details.

The Bar associations in almost every state provide some great information to get you started. For example, good attorneys and debt counselors will tell you that, if you are in a serious debt situation, creditors and collection agencies are only able to contact in the early stages. Eventually, the law will force them to stop calling you on the telephone. From that point they will probably be contacting you by mail to let you know they are escalating the situation to include possible legal action.

This means that they may try to recoup some of the losses through either a collection agency arrangement or through a court-mandated settlement. Why is this important information? Because many times, people in debt will make quick emotional decisions that do not solve the problem at hand and which do not protect their own interests. These consumers often feel harassed and hurried by creditors and collection agencies to the point that they just want to end the phone calls and letters altogether, regardless of the consequences to their financial health. In reality though, this may be a good time to take a few deep breaths, talk with family or financial advisers you trust, and start using the tools of the debt system to work for you.

One of these tools that many people have neglected for years is the credit report. If you are in a situation that may require debt consolidation or debt management and counseling, it is imperative you have a full understanding of your credit history. Just knowing the facts contained on your credit report can be a great comfort when creditors and merchants start asking what you intend to do about your debt obligations. Credit reports are issued by credit-reporting agencies that get their information from your creditors. The reports are made available to other creditors, employers and landlords and to you upon request.

According to the California Bar Association, a “credit report includes such information as whether you pay your bills on time, have had a foreclosure, owe money as the result of a lawsuit or were convicted of a crime. Each piece of information stays in the report for a certain number of years. For example, a bankruptcy usually will be listed for 10 years.”

Debt negotiation may be another option. If you shop carefully and work with a company that makes you feel comfortable, a counselor or professional manager may be able to handle your debt stress with a good plan.

Experience has taught many of us that late-fees and back payments can be stopped when you undertake a serious debt settlement plan with a reputable specialist. Then, and only then, can you move forward with your life and get out of debt completely.

Americans charged $51 billion worth of fast food last year

about 1/3 of the people filing for bankruptcy owe an entire year’s salary on their credit cards.

It took Montreal 30 years to pay off its Olympic debt of $2 billion, held in 1976!

At least one in 10 consumers has more than 10 credit cards in their wallets. That is equal to 304 tons of plastic or 61 Elephants!

The longer you leave a debt problem the worse it gets and by facing your debts immediately, you’ll be out of your debt problem a whole lot sooner. There is a solution for everyone.  Here are a number of basic tips to get you started

Pay your priority debts first

Priority debts include council tax, TV license, fines, rent, mortgage, utilities bills, hire-purchase agreements, taxes and child maintenance.

Unsecured loans and credit cards are not priorities, so if you must default on any debt repayments then choose these. The fact is that they’re at the bottom of the pile when it comes to repaying debts, which is why they’re often the most aggressive about chasing you.

Be strong

You don’t have to take harassment from creditors. You are well protected in law. If you’re harassed, let them know that it is a criminal offence to demand repayment in a way that causes you or your family fear, distress or humiliation under Section 2 of the Protection from Harassment Act 1997. You can also report them to the Office of Fair Trading under Section 40 of the Administration of Justice Act 1970. Put this in writing.

Tell your friends you’re cutting back

Telling your friends about debts can be very hard, but it needn’t be. Most people have debts, and most have more than they let on. But if admitting debts is a step too far, you can still at least say that you need to cut right back on your entertainment budget. You can use any excuse: redundancy concerns, an unexpected bill, saving for a deposit on a house (or another house) or that you want to be able to save money to take advantage of low share prices.

Contact your creditors immediately

Always call your creditors before things go wrong, and before they contact you. If you promise to call them, call them on time, even if you have to tell them that you can’t afford to pay what you thought

Always attend court hearings

Remember that the law is there to protect you as well as your creditors. If you can’t afford to pay more than $1 per month then no judge will make you do so. You must be able to live, and you must be able to have some money for a little fun, too. Even judges recognize this!

Be totally truthful at all times

Always say what you really can afford. Don’t exaggerate or understate. It is in your interests to tell the truth to your creditors and to the court.

Millions of solutions to debt

There are an unbelievably high number of solutions to dealing with debt, but all most people think of is to consolidate, which is often a poor choice for them. If you’re unable to reduce your debts each month, you should seek help on the millions of ways to tackle your debts, and get a plan that is tailored specifically for you.

Stop using your credit and debit cards immediately. Also stop taking other loans, either from banks or finance companies or friends or family. Stop getting into more debt.

SAVE! The most important step you can take, in the beginning, is to start a small savings account if you haven’t already. Begin depositing into it regularly, at least $100 per paycheck if you can. If you can’t find $100 then see the next step for how. Make it an automatic deposit, the first bill you pay each payday, because it is the most important! A savings account will help you smooth out your finances — when an emergency comes up, like your car breaking down or someone having to go to the hospital, you won’t be thrown back into debt. You will have some cash to pay for that emergency, and you can use your regular paycheck for regular expenses.

Discretionary spending. If you can’t find $100-200 to save per paycheck, then you need to cut some things from your spending. This is where tracking your spending comes in handy, but even if you don’t, you know some of the extras you spend on — cigarettes, coffee, snacks, candy, desserts, eating out, magazines, shopping for clothes or gadgets or toys or shoes, books, going out … these are just a few of the examples. I’m not saying you need to cut everything out, but if you can cut a few of them, or maybe just one at a time, that can add up. Then, take the money you didn’t spend on those discretionary items, and put that amount into savings each payday. Increase this over time.

Start a debt snowball. If you haven’t heard about debt snowballs, they’re simple. List out your debts and arrange them in order from smallest balance at the top to largest at the bottom. Then focus on the debt at the top, putting as much as you can into it, even if it’s just $40-50 extra (more would be better). When that amount is paid off, celebrate! Then take the total amount you were paying (say $70 minimum payment plus the $50 extra for a total of $120) and add that to the minimum payment of the next largest debt. Continue this process, with your extra amount snowballing as you go along, until you pay off all your debts. This could take several years, but it’s a very rewarding process, and very necessary.

Make a budget. I know, it’s a dreaded word for most of us. But it’s not that hard, and if you set it up right, it’s fairly simple. I recommend using a simple spreadsheet. List all your regular expenses (rent, car, utilities, internet, etc.) and their amounts, and then your variable expenses (groceries, gas, eating out, etc.), and then your irregular expenses (things like car maintenance or medical that might not come up every month, but break them into estimated monthly expenses — if you spend $600 a year on car maintenance, budget a $50 monthly expense). Now match that up against your income. The expenses should be less.

Automate your bills. Try to get your bills to be paid through automatic deduction. For those that can’t, use your banks online check system to make regular automatic payments. This way, all of your regular expenses in your budget are taken care of. Make sure that your savings is done the same way – automatic deduction.

Save for your irregular expenses. Some call it a freedom account but the key to ensuring that you have smooth finances and that you stick to your budget is to take into account all your irregular expenses, such as insurance, car maintenance or repairs, gifts (think Christmas!), medical and other such things. List them out, estimate your annual spending, and begin saving for them each month. Again, if you spend $600 on car repairs, budget $50 a month for that expense, and put that amount in savings. You could set up different accounts for each expense in an online bank or put it all in one account and use Money or Quicken or a spreadsheet to keep track of each. Then, and here’s the key, when these expenses come up, use that money for those expenses! That way, you can use your regular budget for the stuff it’s meant for, not for these “unexpected” expenses.

Use the envelope system for your variable expenses such as food and gas. This is optional, but it’s a good tip. I’ve been using it myself, and it works like a charm. Let’s say you set aside three amounts in your budget each payday — one for gas, one for groceries, one for eating out. Withdraw those amounts on payday, and put them in three separate envelopes. That way, you can easily track how much you have left for each of these expenses, and when you run out of money, you know it immediately. You don’t overspend in these categories. If you regularly run out too fast, you may need to rethink your budget.

Start thinking and planning your goals. When do you want to retire? How often do you want to travel? When do you want to buy that dream house? Do you want to save for your kids’ college education? Think about what you want in life, and start planning to save for them, especially once you’ve done all the above.

The origin of the word budget is the Latin bulga which is a little pouch or knapsack, which may have come from a Gaulish source that’s related to the Irish bolg, “bag”.

The word turned up in English in the fifteenth century, having traveled via the French bougette, a diminutive form of bouge, “leather bag”.

Its first meaning in English was “pouch, wallet, bag”, and followed its French original in usually implying something made of leather.
So the great traveler Thomas Coryate could write in 1611, “A certain peddler, having a budget of small wares”, and Aphra Behn had the character Hellena say in her play The Rover in 1677: “And was it your Man Friend, that had more Darts in his Eyes than Cupid carries in a whole Budget of Arrows?”.

At the end of the sixteenth century, the word could refer to the contents of one’s budget as well as to the container itself. People used this in the figurative sense of a bundle of news, or of a long letter full of news, and the word formed part of the name of several defunct British newspapers, such as the Pall Mall Budget. This was the sense that Washington Irving used in The Legend of Sleepy Hollow in 1820: “From his half itinerant life, also, he was a kind of traveling gazette, carrying the whole budget of local gossip from house to house; so that his appearance was always greeted with satisfaction” and which Thomas Jefferson meant in a letter he wrote in 1785: “I receive by Mr. Short a budget of London papers. They teem with every horror of which human nature is capable”.

The connection with finance did not appear until 1733, as the result of a scurrilous pamphlet entitled The Budget Opened, an attack directed at Sir Robert Walpole: “And how is this to be done? Why by an Alteration only of the present Method of collecting the publick Revenues … The Budget is opened; and our State Emperick hath dispensed his packets by his Zany Couriers through all Parts of the Kingdom” (the anonymous writer is using zany in the sense of the comical assistant of a fairground quack medicine salesman or mountebank, a decidedly unflattering comparison). The allusion was that the government minister responsible for financial affairs opened his budget, or wallet, to reveal his proposals. It probably also echoed the idiom to open one’s budget, “to speak one’s mind”, which was current then and continued to be so down into Victorian times (it turns up in Trollope, for example).
If he survived a few years, the pamphlet writer must have been chagrined to see his intended victims expropriate his satirical term and turn it into political jargon. By the 1760s, it was clearly well established, and has been the standard term ever since. But it was only in the 1880s that it began to be used as a verb in the sense of planning one’s expenditure, and the attributive meaning of “inexpensive; suitable for someone of limited means” is first recorded only in 1958.

There are two other closely-related words in English. One is bulge, which at first had the same meaning of a bag, but soon came to refer to an irregular swelling, lump, or protuberance, not a surprising change if you think of the often irregular shapes of old leather containers. The other is bilge, the lowest part of a ship’s hull. Because foul odors collected there, the word was used figuratively to mean nonsense or rubbish, a bit of British public-school slang current in the early years of this century, especially in the phrase “he talks the most utter bilge”.

So if an honorable member in the House of Commons should lose his cool and refer to the Chancellor’s budget speech as bilge he’s committing an etymological tautology as well as showing how out of touch he is.

Impulse spending is a common problem that many people have. The first step in fixing this problem is to monitor your urges for about two weeks. Keeping a small notebook in your pocket and using it to tally every time an urge comes along to buy something can be very useful. Even if you decide not to purchase the item, it would be a good idea to keep track of the urges. The reason being is that these urges are commonly in our subconscious. If we record every time we have an urge to buy something, it will be our first step toward awareness which will allow us to take more control over our spending. After a month, we should revisit the list of items we were going to buy impulsively and see how many of those items we actually still want. If we have the money after that time period and still want the item, it is ok to purchase it now rather than on first impulse. It is a good idea to avoid shopping areas and malls because we will most likely make a purchase in this sort of an atmosphere. If shopping is a must, it would be a good idea to carry a list of what you need and stick to the list. It’s never a bad idea to go somewhere that impulse buying would not be as likely such as the park or the beach. Last but not least, when the urge hits, take a deep breath, become aware of the urge and take a drink of water. A quick break can actually help us overcome our urges.

U.S. personal savings rate has dropped nearly 8.5% in the early 1980’s to less than zero today

The American people owe approximately $6.7 Trillion Dollars in household debt