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The Generation Y Money Book has just been added to the Jump$tart Coalition for Personal Finance Literacy database (board members include the American Bankers Assn. Education Foundation, the American Savings Education Council, the Federal Reserve Board, Junior Achievement, the National Education Assn. and the Savings Bond Marketing Office of the US Treasury among others).
Commercials are hard for everyone to resist. After all, they're designed by professionals whose job is to convince us we can't live without the advertised product or service.
These advertising pros also have the benefit of market research (trying out ideas or approaches on small groups of people before you see the final ad) to see what key words and images will cause us to salivate and be compelled to buy. Add to that the repetition of ads and the day-to-day exposure of seeing our peers who've purchased advertised products and it's hard for anyone to resist TV temptation.
Two ways to beat the advertising pros Your fingers might outwit the advertising professionals by using the mute button during commercials. Although watching a commercial in silence will still have some impact, you greatly reduce the advertising power of the ad. Another alternative is just to stop watching commercials by immediately switching to another program (but not another commercial).
Do you want to spend 10 years of your life watching TV? If you watch an average of three hours of TV a day, seven days a week, you're "spending" over 1,000 hours a year in front of the tube. Instead of watching TV, you could have had a 20-hour- per-week job and paycheck. Over a lifetime of 80 years, that's 10 years of your life spent watching TV.
Am I making up this math? Calculate the numbers yourself. Three hours of TV a day equals 1/8 of a 24-hour day. If you live 80 years, 1/8 of that timespan is 10 years. Reduce TV watching from even three hours to two hours a day and that's over three years of additional free time for you during your lifetime.
No matter how much you enjoy TV, is it worth 10 years of your life? If commercials take up about 15 to 20 minutes of each TV hour, you could be spending three solid years of your life watching commercials.12. Notebook riches
Having goals in mind helps you with both day-to-day and long-term, larger expenditures. It gives you a way to see whether spending decisions make sense for what's really important to you.
The "right" way for you to spend your money The right spending decisions are different for everyone. What someone else thinks is a good use of money may not be what you think.
So, you need to create your own plan for spending. With a plan, you can avoid impulsive spending, which is where you spend without thinking about your most important goals.To get a handle on day-to-day spending, take these five steps:
First, make a list of your short- and long-term life goals. As baseball star Yogi Berra once said, "If you don't know where you're going, you won't know when you get there." Also, writing down your goals makes them more real to you.
Second, track your spending and match it with what you have to spend. Before the start of each month, make a list of the money you expect to receive and what you expect to spend. After the month ends, compare the actual results with what you expected. See where you need to make changes for the next month. If you don't have enough money to spend on everything you want (or need), where do you cut back? Some expenses are required such as car insurance. Other expenditures such as eating out are optional and can be cut back. By using the expense notebook in Money-Smart Way #12 and looking at expenses as either required or optional, you'll begin to see your spending habits.
Third, spend (or save) your money first on your most important goals. Take a sheet of paper and divide it into three columns that you label "#1," "#2" and "#3." Now rank your expenditures in categories of importance from #1 through #3. For example, #1 priorities are your most important goals (e.g., paying car insurance, saving for a computer, a car or for college). #2 priorities are not as critical (e.g., buying extra clothes) and #3 priorities are the least important ones (e.g., buying soft drinks). Try to meet your #1 priorities to the greatest extent possible before spending on #2 and #3 priorities.
Fourth, become a smart spender (more on this in Money-Smart Way #14 and later in Part Three: Money-Smart Ways to Shop).
Fifth, review your goals every year. At the end of each year, see how well you did in meeting your goals and make a new list for the next year.14. Ten ways to become an everyday money-smart spender
When you spend, you expend (use up). You may be using up more than money. You're using up the work (time and energy) required to earn the money. Spending is more than the act of handing over dollar bills, a check or a credit card. It's also handing over a part of you. With this in mind, here are 10 great ways to become an everyday money-smart spender. All of these small items can add up big.
Even small steps can add up to hundreds of thousands of dollars over your lifetime through the power of compound growth (Money-Smart Way #66).15. The art of asking questions
If you don't understand an answer, don't blame yourself. Chances are good the explanation wasn't clear enough. Don't be afraid or embarrassed to ask again saying, "I didn't quite understand. Could you please explain it again another way?"
Then, once you feel it's clear to you, you may want to say, "Let me say it back to you in my words to make sure I got it right."
Be sure to take notes when you ask questions by writing down the item you're calling about, the name of the person you're speaking to, their position, the phone number you called, the date and time you called, your questions and the answers given. Have a notebook or folder where you keep these notes organized.
Then, later on, if you have a problem, you'll be in a better position to back up your understanding of what was said to you.
If it's really important, confirm what a company representative or salesperson says to you by mailing, faxing a letter or sending an e-mail. Think about including a sentence such as "If anything I've written is incorrect, please advise me immediately by phone and in writing." Keep a copy of whatever you write. You may also ask them to write, e-mail or fax you back to confirm what you wrote is correct.
Then if what you see, talked about or purchased isn't what you thought it should be, you'll be better able to document your claims in writing.16. Cash register smarts
Watch the scanner
Mistakes can happen when scanners are used to record purchases. Sometimes an item is scanned twice or a clerk accidentally punches in the incorrect quantity for an item on the register. Other times, the wrong price is programmed into the checkout register.
As your purchases are being scanned in, keep an eye on the amount actually being charged.
Double-check your receipt right away
Before you leave a store, always look at your receipt. Be aware or you may pay (sometimes twice).