Saving - It's a habit, not a hobby
Personal savings rate is a key measurement of the amount of resources American household have available to contribute to the national saving. A low personal saving rate limits how much the nation can invest and so ultimately limits future economic growth.
Bit of History
From 1960 until 1990, households socked away an average of about 9 percent of their after-tax income, government figures show. Americans got out of the habit in the 1990s as they saw their wealth build up in other ways, first through surging stock prices and then soaring home values.

The annual personal saving rate (effectively, income minus spending) averaged around 10% during the early 1980s, when the economy was in a severe double-dip recession. It then began to fall steadily, even as the economy weathered two more recessions, averaging about 7% around the time of the 1990-91 recession, then falling below 2% for the first time in 2001. It averaged about 0.6% from 2004-07. Americans also spent more than they earned in recent years which is another reason for pushing the personal saving rate below zero. Check out the link for a detailed clear picture.
Current Mindset
A change in money mindset has emerged again from this recession. That has resulted in a rise in the personal saving rate, which the government calculates as the difference between earnings and expenditures. Economists now expect the rate to rebound to 3% to 5%, or even higher, in 2009, among the sharpest reversals since World War II. Goldman Sachs last week predicted the 2009 saving rate could be as high as 6% to 10%. (Wallstreet Journal article - See “Hard-Hit Families Finally Start Saving, Aggravating Nation’s Economic Woes”.)
Many banks and financial institutions are sending out flyers and phamplets encouraging customers to save money. Actually they need deposits to increase their reserver which is different story. Money gurus recommend various methods and techniques which are hard to follow strategies. It doesn't always fit all types of people and lifestyle. We need a simple, realistic, and ideal plan to reach the saving goal, whether it is short to long term.
Whether you are looking to save money for your first Ipod or little bit more for your first car or bigger target to buy your first home. Just three simple steps to follow to create a good saving plan. Before that, you better set your mind set by realizing the truth. "Saving is a habit and not a hobby." It is hard to start saving and never easily comes off the cuff. Many of you do not like to hear it, but that's the fat.
How to Realize your goal?
Many of our habits are product of constant practice whether its from child hood or teens. If you don't have that saving habit built in you, it is going to be take time start one so you better show some patience. Making something habitual needs determination and constant practice.
I like to mention a quote by Frank Outlaw.
"Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; it becomes your destiny."
You need to first cultivate thoughts about Savings. Keep thinking about saving money in different ways whether from your paycheck or reducing electricity bill or credit card bill. You just keep thinking about saving something every day or month. Next, talk to your spouse and friends about money saving ideas and plans. Finally, take action by following your own idea or any of three ways mentioned below.
1. Don't spend your dimes and quarters. Start putting them in a piggy bank or digital money jar. Digital money jar will give your amount. Every month, take the change to nearby bank and deposit it in you savings account. You can Open a savings account either with Nationalized bank or local banks with just minimum deposit of $1. I would recommend Credit unions for small saving accounts.
2. On every ATM withdrawal, take $10 out and put it away in the secret wallet/purse compartment. Don't ever touch it whatever happens. At the end of the month, take it all out and deposit in your savings account.
3. This one is the easiest of all, called Blind savings - Set up automatic withdrawal to put away a small amount from your paycheck as Payroll deduction or Auto deduction from your checking account to your CD or Savings account. You will never see this money and it is blindly saved.
Once you start taking action and sticking with it rain or shine. Everything will fall into picture automatically, transforming yourself. Your savings habit gets built into you slowly. Once you get into the habit, it just comes as a second nature.
So do not procrastinate and think it is impossible. You already took your first step thinking about saving, you just need make an habit. Sart working towards your next step by talking, planning and taking action. Try it out and share your thoughts.
- Vijai's blog
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Guest Post: Where are the every day low Air fares?
This week, I am happy to bring an interesting blog post published by my friend and budget blogger Shreyas at GivingGrinch. He shed some light on how the Air fares are forecasted and how you can take advantage of certain parameters to find low air fares in the current market. He brings in his many years of Airline industry work experience added with facts and figures to make this post an interesting one. Enjoy reading...
Air Fares: A Short-Term Forecast
According to the Bureau of Transportation and Statis
tics (BTS) domestic U.S. air fares had the largest percent decline since 2002. With summer in our rear view mirror, the prospects of a slow economic recovery and a decrease in airline capacity many experts believe prices have stabilized. There are still great deals out there; you just have to know where to look. The following suggestions may improve your odds.
Destination Selection
* Trips to business markets, especially those dominated by one carrier (a fortress hub) generally cost more. A fortress hub is a large airport dominated by one carrier. Americ
an at Dallas-Ft. Worth, Continental at Houston Intercontinental and Delta at Cincinnati are examples. In these markets the dominant carrier provides non-stop service to points throughout the nation. This level of service allows the carrier to maintain pricing power.
* Pick a destination that is served my multiple carriers (ideally both major and low cost carriers).
* Carriers like Air Tran, Southwest, Frontier, JetBlue, Virgin America, Spirit and Allegiant have taken market share from major carriers by introducing lower fares. This doesn’t mean they always offer the lowest fare. To maintain market share, major carriers will price match. Austin, Las Vegas and Ft. Lauderdale are three examples of markets with a healthy mix of major and LCC competition.
* Select a destination with multiple airports. Below are the average itinerary fares for Houston, New York City, Los Angeles, San Francisco and the Washington D.C. area. As you can see, the fares vary greatly by airport. If you are flexible research fares to an alternative airport. Tip: add ground transportation costs (taxi, car rental, public transportation) to your airfare to compare the total cost of each option.

The Lowest Average Fares in America
Of the top 100 airports (by originating passengers) the most affordable destinations are Long Beach, Oakland, Burbank, Dallas (Love Field) and Las Vegas. Conversely, the most expensive airports are Huntsville, Cincinnati, Grand Rapids, Savannah and Des Moines. Below are the top 30 from both ends of the spectrum. It should not shock you that many of the expensive markets have fortress hubs or limited competition.

A Final Tip: The Best Time to Travel in 2009
The period between Thanksgiving and Christmas is a low period for air travel. During this time both business and leisure travel drop significantly. In an attempt to generate bookings airlines open their inventory to their lowest fares. But don’t buy your ticket too soon...we’re still in a recession after all! There is likelihood even lower/sale fares will emerge between 60 and 21 days to departure – especially in competitive markets. Of course, the only thing less rational than air fares are trying to predict them...buyer beware and happy trails!
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Chew Sugarless Gum & Save money
Healthy mouth, Healthy body, that's an old expression.
Healthy mouth, Healthy body and Wealthy pocket , it's the new mantra.
A Healthy body starts with good dental hygiene. That's what drives us all to brush our teeth first thing in the morning. With that comes, fewer trips to dentist and more importantly to physicians which translates to less money spent on dental and medical expenses. Believe it or not, chewing sugarless gums comes for help to make it even easier in keeping your teeth strong and protect from cavities.
When we were kids, we were told to avoid sugar-ladened chewing gum for health concerns. Now, it is hard to see a kid without gum in their mouth. At the same time, chewing gum manufacturers came a long way attracting health consicious consumers by providing products which ensures good oral
health. In this post, we will see how sugarless gum helps to save money and keep us healthy.
What are Sugarless Chewing Gums?
Chewing gum is no longer is meant to provide a sweet treat or freshen breath. It has taken different avatar in oral health. You've seen the claims on sugarless gum wrappers. Packages of Orbit say the chewing gum helps strengthen the teeth. And a package of Trident gum containing xylitol says it helps prevent cavities. The question in our minds, Are these claims solid?
According to Martin Schlatter, Wrigley's marketing chief, it seems so. A three-year clinical study showed 8% fewer cavities, and a two-year study found a 38% drop, because chewing the gum strengthens teeth and creates saliva that reduces plaque acids.
But not all chewing gum have this magic packed inside, health advantage is totally depend on the type of gum chewed. Two types of sugar substitues are used in sugarless gums depending on the manufacturers. They are xylitol and sorbitol. They are also called sugar alcohols, referring to their chemical make-up but they don't actually contain alcohol. By adding natural sweeteners like xylitol, manufacturers added the benefit of fighting against bacteria.
How Sugarless Gum works?
Let's take
Xylitol. It is a natural sweetener found in fruits such as strawberries, plums and pears. Xylitol looks and tastes like sugar. For this reason, it's used to sweeten food and candies like chewing gum, gumdrops, mints, medicated syrups and tablets, toothpaste and mouthwashes. It' is also found in dietetic and diabetic foods. Several dental associations endorse sugar-free products that are at least 50% sweetened with xylitol.
Xylitol is an anti-microbial which acts against the bacteria itself, preventing tooth decay according to scientific research. When bacteria in your mouth combine with sugars, they produce acid. This acid damages teeth, causing cavities. Bacteria in your mouth can't break down xylitol, so no acid is produced. Also, the sweetness of xylitol encourages salivation. Saliva washes out the mouth and helps prevent cavities.
Eating large amounts of products that contain xylitol may have a laxative effect. For example, having more than 10 to 20 pieces of candy or gum per day may cause this effect. This is the only known drawback to xylitol.
It is important to note that studies suggest that sugarless gums made of another sugar substitute called sorbitol do not seem to have the same preventive effect. Sorbitol can increase saliva flow which secondarily strengthens teeth, explains another analyst. But there are no studies that directly show that sorbitol-based chewing gums can strengthen the teeth.
How does Chewing Sugarless Gum save money?
In a PR Newswire post regarding a Majestic Drug survey, we learn some interesting statistics that may not shock you, but will inform you.
One in six Americans experienced a dental emergency in the past year.
Seventy-two percent of Americans have fillings, caps, or crowns, and 23 percent of dental emergencies relate to these restorations.
The survey revealed that out of a thousand people, respondents with an annual income under $35K had a higher instance of dental emergency than those with an income exceeding $100K.
Prevention is always better than cure. Brushing one's teeth and scheduling
regular visits to the dentist are primary in preventing dental and gum disease, but chewing sugarless gum will strengthen teeth and assist in preventing cavities. That, in turn, adds to a person's savings.
For example, an Orbit gum 12 pack with 15 strips in each pack cost = $15. It is 9 cents a strip. If you chew 5 pieces for an average 25 days, it cost just $11 a month and $132. It is far better than spending $150 - $250 for fillings, pulling teeth and more for pain relivers as well. Think about it!
What should I do?
As reported by npr.org, Milgrom, dentist at the University of Washington and his colleagues have studied how much xylitol is needed to actually knock out bacteria and prevent cavities. And he has two pieces of advice.
First: Read the ingredient list on the gum package. If xylitol is the first ingredient, then there's probably enough of it to be effective. (below list Sorbitol is the first ingredient and not really sugarless gum)
And second: Chew a lot of it. "You have to chew at least two pieces, three times a day to have an effect," says Milgrom.
This may sound like an inordinate amount of chewing, but in Finland kids have really gotten used to it. The Finns have been chewing xylitol gum for years as part of a public health initiative to reduce cavities. And Finnish researchers have documented a preventive effect in numerous studies going back to the early 1970s at the University of Turku.
Throughout Scandinavia, xylitol products are widely available, from lozenges and toothpastes to chocolate and candy gummy bears, says Ramos-Gomez, a pediatric dentist at U.C.LA.
Sugarless chewing gums are not only good for you but also good for your pocket. And of course, dental professionals have one more recommendation. Watch your diet. Make certain your toothpaste includes a fluoride ingredient.
Source: Last month(Sep) was dental month and npr(http://www.npr.org/templates/story/story.php?storyId=106347234 ) aired an interesting story on chewing sugarless gum triggering me write this blog after good amount of research. Thanks to NPR.ORG.
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Savings made simple and easy...
Savings is hard and never comes off the cuff. Not many of you like to hear that but Sorry that's the truth. You should first and foremost realize that fact. I always like to expose the truth/fact first so one can understand before diving deep in it. When I was kid(6th grade), my mom showed the value of real money. She taught me about how to save every paise(Indian currency equivalent of penny). I started my first savings bank account when
I was doing my 7th grade and started putting every rupee(Indian currency equivalent to dollar) I earned. That's the foundation for my savings and spending habit. If you don't have that Saving habit built into you, its going to be hard to start with but it was never tough act. Anything is possible under Sun and above earth if you ask me. It's just needs your determination and to make it habitual by constant practice.
A quote by Frank Outlaw goes very well at this point.
"Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; it becomes your destiny."
You need to first cultivate the thought about Savings. Then talk about it to your spouse or friends anytime you talk about money or expenses. Then act on it by following any or all of 3 methods.
Prerequisite: Open a savings account either with Internet banks or local banks with just minimum deposit of $1. Credit unions are best for small saving accounts.
1. Start putting your change(pennies or dimes) which you gather every day or week in a piggy bank or a simple container. Every month, take the change to near by bank and deposit it to your bank account.
2. On every ATM withdrawal, take $10 out of it and put it away in the secret compartment in your wallet. Don't ever touch that whatever comes. At the end of the month, take it all out and deposit in your savings account.
3. I call this one it Blind savings - Put away a small amount from your paycheck automatically as a Payroll deduction or auto deduction from your checking account to your CD or Savings account.
Once you start taking actions. Everything falls into picture automatically transforming yourself and the savings habit gets built slowly into you. Once you got the habit, it comes off the cuff without even thinking about like your second nature.
Don't think its not possible. You already took your first step thinking about it on the path towards making savings a habit. So start working your next step by talking and taking action.
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What is Financial Freedom?

Photo from yinvsyong.com
What does it exactly mean to be Financially Free?
I know many of you have the answer just right under your collar. That is, Financial freedom means "Earn more so I don't have to count each dollar I spend and not worry about paying my expense every month" Or "Make more money to spend like there is NO tomorrow".
Is that the answer you got or something close to it?
If you think you got the right answer, please I am sorry to say that you are wrong. It's not just you got the answer wrong, it's just general outlook is not syn with reality. When you search google. You get the first result from Wikipedia as "Financial freedom describes a well-planned lifestyle where one no longer is required to work for income to cover their expenses. ..."
It's not just you you got it wrong. It's the people who started it all out and echo everyday so it is easy for them to mold to their own view point.
Like many of you I also thought thats the answer few years ago. We all think if we have more money that will solve all the problems. No, its not going to solve it. It's going create more problems and even bigger worries.
Financial freedom is not about having or earning more and spend whenever for whatever you want. According to me, "It' is all about being content with what you have(earn) now and manage to work within the boundary instead of stretching it long to get in debt". Its being self sufficient with the money you have and manage to spend wisely for all the expenses and grow it efficiently for the future. That's what I call Financial Freedom.
Let me take a simple example. For a scenario, we assume an average middle class American earns on average of $40,000 - $50,000 a year. If he makes an habit to work with this income limitation and make proper planning to take care of all the expenses and also manage to grow some money(10%) for the future that's what I call financially free. If you don't have debt you can't pay off and you have ability to manage and grow your hard earned money, that's simply financial free in its own version.
Our schools or college system, never teaches us lot about Money management unless you opt for finance course. Yet it will be more theoretical, money lessons can only be learned in a hard way by practical means. But you don't have to learn only from your experiences and mistakes, you can also learn from others mistakes. Thats a wise way.
So don't make the mistakes others are making by going beyond your boundary unless you have the guts to pull back otherwise you will be in deep deep debt by inviting trouble. Watch out folks, don't just take the advise of you finance guru's or planners. Give it a thought and you will dwell on something on your own.





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