Begin A Budget

What does the Fed's decision mean for you?

For the first time in 9 months, the Federal Open Market Committee (FOMC, or Federal Reserve) decided not to lower the Fed funds rate. The Fed funds rate remains steady at 2%. Is that good or bad? What does it mean for consumers? Staying on top of the major financial news like this can help you when maintaining a healthy budget.

Do you have credit cards? Chances are you have a card with an interest rate that is tied to prime rate. Prime is three percentage points greater than the Fed funds rate (2.0% + 3.00% = 6%). When the Fed is lowering, you can secure better interest rates on your credit cards.

What's the buzz about mortgages? The Fed funds rate also affects short-term interest rates such as those on adjustable-rate mortgages (ARM) and home equity lines of credit. However, the Fed's decision has less of an effect on long-term rates, like a standard 30-year fixed home loan. Long-term rates are more determined by the people that buy and sell in the bond market every day. If you prefer the security of a fixed-rate, they are still, historically speaking, very low.

Other effects? The Fed's rate also helps determine the rate for your savings account. If they raise, you benefit. If they lower, you earn less interest.

The Fed's overall goal is to keep the economy growing while fending off excessive inflation. So, while the recent drops in the Fed funds rate helped to stimulate the economy during the credit crunch, the lack of change today indicated that the Fed is focused on slow, steady growth while watching inflation.

If you think you're paying too much interest on your credit cards or mortgage and not earning enough on your savings, register for Begin a Budget today. You have nothing to lose and only money to gain!

How to save for a family vacation

Get the whole family involved and saving for vacation becomes as simple as 1, 2, 3...

1. Make a plan and stick to it! Figure out how much you have to spend on vacation and put the plan in place. As you make progress to save, let the whole family know. If you get your kids involved, they'll be more apt to help you cut corners.
2. A little less fun now means more fun later! Instead of taking the whole family to the movies, rent a couple flicks for a fraction of the cost. Make it a free evening by planning a game night at home. Also, make every effort to eat at home - dining out adds up quickly.
3. Take advantage of deals or rewards - ask around, people are always excited to share travel tips. Sign up for free services that alert you of lower airfares or hotels. Check out Priceline.com to set your own price - that will certainly help you stick to your budget! Also, check with your debit and credit card companies to find out if you've racked up miles or points to put towards your vacation.

It's inevitable that your whole family wants to go on vacation, especially as summer approaches. Planning is key - last minute trips can cost double what they should. With gas prices soaring, the old adage that "every penny counts" couldn't be more true. If you get your whole family involved, reaching the goal of a family vacation together becomes more rewarding than you can even imagine. Happy travels from Begin a Budget!

Begin a Budget -- It just makes cents.....

You know you should budget your money, but you just can't force yourself to do it.

Budgets and financial planning aren't exactly exciting, but is living paycheck to paycheck enjoyable? Begin a Budget is your solution to stop the paycheck to paycheck battle.

We understand that this may require a little soul searching. To end the financial anxiety, you will have to answer questions about your lifestyle and maybe eliminate a few of the "extras" that you like to treat yourself to. While it may be painful to look at the amount of money you are wasting, it allows you to have something you have never had before...SAVINGS!

Here are a few tips that will help you with your budget:

• Write everything you spend down
  
  • Keep a little sheet of paper with you and write down what you spend throughout the day
• Use a website to insert what you wrote down each day
  • There are websites that will help you track your spending.  It will take 5 minutes each night, but it will be the best time you spend each day
• Review your goal weekly budget goal
  
  • We recommend Sunday evenings.Take 20 minutes and see if you are on pace for your goal. 
• Schedule 1 hour to review your monthly budget goals
  • You must schedule the time. If you don't schedule the time you won't follow through. Look at where you wasted money and what you can do to change it next month.

The choice is yours. You can continue on the path that has left you desperate for that next paycheck or take a measly 3 hours a month and budget your money to financial freedom. The choice is easy and the timing couldn't be more right. Begin your budget today!