Tighten Your Belt Now, Feel Better Later
All day we are inundated with doom and gloom regarding the way the U.S. economy is screaming down into a feirce downward spiral. Gas prices are on fire, homes are in free fall, banks are imploding and the deficit is plummeting faster than a brink in a pond. Obama and McCain are giving half hearted answers with plans that are a little vague and more for ratings then anything. We are in 2 “conflicts*” in the Middle East while jobs are hard to come by and the nation just keeps getting fatter.
Granted, the media does not help this widespread panic, but there is still plenty of room for worrying.
Instead of setting ourselves on fire and jumping from a high story window, Milk Your Money has a plan to not only help, but get you ahead of the game after this financial hurricane passes.
Our belt tightening idea is really what this whole site is about. Scrap those services and material things that are weighing down your cash flow and start milking your money.
-Eliminate debt. Do this first before anything else. Make every dollar get to work in getting back to the surface. You should not focus on saving a dime until you are not paying egregious interest on credit cards and cars. Mortgage interest is a different story but we will get to that.
Those that understand interest, make it. Those that don’t, pay it. – Vincent Apostolico
-Automate it! Set aside money to go into a money market every paycheck and then completely forget that its there. Its like when your spouse changes the alarm clock a few minutes ahead and you don’t realize it…suddenly you start arriving to places on time. We have a hard time wrapping our head around the fact that saving regularly, especially with compound interest, can REALLY add up over time.
-Monitor your cash flow. See what is coming and going. Everyday. In fact you really should be staring at your bank account for at least 20 minutes every day in my opinion. Keep a finger on that pulse and you will be able to head off surprises before they occur.
-Start a Roth IRA. You have your emergency funds fleshed out and still want to put something away that will be effective. Start a Roth! Its already been taxed so every little bit that goes in there is all yours, no penalties. Limited at $5,000 (49 years old and below) and $6,000 (50 years old and above).
-Taxes. Don’t be afraid to ask someone for help if it means that you will get more money back. Seek professional help if you think it will be worth it. It might also be a good idea to adjust your withholding so that you get more per pay check and your refund approaches zero. Any money the government gives you back is money that is not in your account gaining interest. The government doesn’t give you interest for the money its holding for you do they? Let me know if they do and I will jump on it. (Treasury bills don’t count!)
Now that you have structured your money to work for you, imagine what things would be like if you kept them like this? You would be used to not eating out so much, you would have securities that rise normally, your shares that you might have acquired are now worth more because you bought them at rock bottom prices. You are now much further ahead then what you would have been if you had plodded along at your current rate.
* By no means am I devaluing the service of our men and women in our military, simply saying that its very expensive financially as well.
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Haha, I LOVE the quote. I am going ot have to remember that and use it later!
Excellent point on adjusting my withholding, that is something that I had not considered. I would far rather have that money earning interest for me than get it back as a lump sum whenever the government gets around to it…
I believe that will make me some money, thank you!