Travel can be a thrilling adventure or a much needed relaxing getaway. But traveling can be so much more than that. Whether you’re taking a short vacation or an extended trip, you can turn your experience away from home into new career possibilities, improve your resume, and increase your value as an employee. Here are seven ways to improve your career with travel:

1. Teach.

You don’t have to have a degree in education to be a teacher. Teach whatever skills you excel in or anything you consider yourself an expert on. Offer to be a guest speaker at a high school, college, community center, or library. If you’re looking for more long-term travel, consider teaching your first language in another country.

2. Learn a language.

There’s no better way than to learn a language than by emerging yourself in it. Traveling to a foreign speaking country for an extended time is a great way to learn their language first hand. Whatever field you’re in, knowing another language makes you more marketable to future employers.

3.  Take a class.

Whether you have time for an entire semester or just one day, look into taking an appropriate class or seminar. Check out colleges and universities to see what courses they offer. Community colleges and libraries can offer computer classes or life skills classes like budgeting. Hospitals, YMCA, and health centers likely offer classes on CPR and nutrition.

4.  Network.

Facebook and Twitter are fantastic ways to meet people and keep in touch, but nothing compares to networking face to face. Search LinkedIn and professional websites in your industry for networking events. Professional groups may be hosting events or meetings in the area. Reach out to alumni in the area, friends and former colleagues for anyone who they can put you in contact with.

5. Volunteer.

Volunteering is not only a terrific way to help people, but it can also add to your resume and work experience. Any volunteering shows you are an active, well-rounded person. For additional career benefits, volunteer in your related field of interest. Check out Volunteermatch.org to find the perfect opportunity that you’re interested in.

6. Get more work experience.

If you want to travel but can’t sacrifice an income, work while you’re away. See if your current employer has opportunities in other locations. Look for seasonal or temporary work on job search websites like Monster and Careerbuilder. If you have little experience or want to join a new field, take an internship.

7. Plan your trip.

Even the skills you attain while planning an extended trip can improve your resume. Organization, paying attention to details, and working independently are just a few of the skills you can spin to employers. You’re doing thorough research while looking for deals, using people skills while calling to negotiate deals and book reservations, and using financial skills while creating and sticking to a travel budget.

Today Facebook IPO (FB) will be one of the biggest in history. The IPO was set at $38, at that price Facebook will raise $16 billion which makes it the biggest Tech IPO and third biggest IPO ever. Facebook will trade on NASDAQ under the symbole FB.

If you have not entered our contest there is still time to do so. We are giving away $500 to a lucky reader, entering is simple so don’t wait!

A Letter from Mark Zuckerberg @ Borowitz Report

Negotiating Retirement as a Couple @ Retire Happy

Do You Look for Value as an Investor? @ Planting Money Seeds

Are Banks Really In It For You?  @ My University Money

Top 5 Smartphone Apps to Save Money  @ Million Dollar Journey

The Green Ages: Life Before Credit Cards @ Canadian Finance Blog

How Young Adults Can Still Thrive Financially @ Boomer & Echo

How Should I Invest After I Retire? @ Wealth Pilgrim

How to Avoid Investment Scams @ Free From Broke

Carnival

Carnival of Personal Finance #361 – The Mothers Day Edition @ One Cent At A Time

Homemade skin care recipes are a dime a dozen. Affordable homemade skin care recipes are another beast altogether. For an affordable spa getaway that doesn’t require you to leave home, try these four cruelty-free mixtures on for size.

After-Shower Body Mist

In an empty spray mist bottle, mix one part witch hazel to one part water. Add in up to a half part olive oil and several dashes of your favorite essential oil or flavor extract. Seal the bottle and shake well before using. I like to spray this on right after the shower and rub it into the skin on my legs, arms and torso before drying off. I find I need way less lotion this way. If you and your spouse both want to use this mist and you don’t feel like making a double batch, consider a unisex scent like orange, ginger or grapefruit.

Moisturizing Balm

The easiest night balm in my book is to mix a high-quality vegetable shortening with a few shakes of soothing peppermint oil. I found the easiest way to do this is to melt the shortening first before adding the scented oil. Then I pour it into my container of choice and put it in the fridge to solidify. A little of this lasts a long while, and can be added to your nail care routine as a cuticle treatment, used to moisturize heels and elbows and even as a lip moisturizer before you go to bed.

The batch I’m currently using up cost me roughly twenty-five cents to make and has been going strong for a few years now. If you want to take it up a notch and still stay on budget, consider the organic coconut oil shortening by Spectrum. I get mine at Whole Foods, but it’s available online as well.

Sugar Scrub

Using a short, somewhat flat container for easy scooping, fill up to three quarters of the way full with raw sugar. Add enough olive or soy oil into the sugar to reach the top of the pile, followed by a dash or three of your chosen essential oil. Mix up with a wooden craft stick or spoon and store in the shower. Because this particular skin care recipe always gets used in a rather slippery zone, I recommend a plastic container to avoid shattering.

Scented Oil

If you prefer something closer to baby oil than an after-shower mist, try making your own scented oil to spread on your legs and other typically dry body areas prior to drying off. Basically, you take an empty squirt bottle and fill nearly to the top with olive oil. Then you add your special scent. Lavender’s fun, or you can coordinate all of your homemade skin care recipes to have the same scent if you want. Seal, shake and use. That’s really all there is to it.

In addition to being cruelty free, these particular skin care recipes can also be easily prepared with the spoils of your next organic food shopping session. Organic skin care can cost big bucks if you purchase the products already made. But making them yourself and you can easily pay less than you would for a bargain conventional brand.

With interest rates at historical lows, many investors are looking for innovative ways to increase the returns they are receiving on the fixed income portion of their portfolios. Here are a few ways an investor can increase returns, while understanding the risks of higher yielding securities:

Increasing the Duration of your Portfolio

Basically, increasing duration means purchasing longer term fixed income securities. If the investment is appropriate for your needs, extending term can be one way to obtain a higher return on your fixed income portfolio.

One must be careful with extending the maturities of your fixed income holdings. Fixed income by its very definition provides a fixed stream of income, plus a fixed repayment of your principle at maturity (assuming no default). However, the price of a bond does change from day to day, in conjunction with interest rates. For example, if the prevailing market interest rate is 6%, would you be willing to pay full price for a bond that is yielding 4%? Probably not! This is especially true for longer dated fixed income securities, investors want to be compensated for receiving below market interest rates. So if you are going to be selling this security before maturity, be aware that in times of rising interest rates, your bond’s value will be declining.

The opposite is also true; in times of decreasing interest rates, longer term securities will increase more rapidly in value than short-term securities. However, hoping for capital appreciation on fixed income securities today is very risky, as long-term interest rates are at historical lows. The declining overall bond rates have provided great returns for fixed income investors, ETFs and mutual funds over the past five years; however, this is unlikely to continue indefinitely.

The bottom line when it comes to extending the duration of your portfolio is to only purchase fixed income securities that match your requirements for funds. If you are five years away from retirement and needing access to your funds, holding a portfolio of largely thirty year bonds is probably inappropriate. If you are thirty years away from retirement, having a portion of your fixed income portfolio in long dated bonds is probably an appropriate way to increase your returns.

Increasing the Risk in your Fixed Income Portfolio

Investors can increase returns on their fixed income portfolios by increasing the credit risk in their portfolios. What this means is purchasing more risky securities, which offer higher returns. Don’t let this necessarily scare you at first glance, there are ways to increase returns without taking extraordinary risks. For example, provincial government bonds tends to pay anywhere from 0.10% to 1.00% higher than comparable Government of Canada bonds. Provincial bonds are one good way to increase your returns without taking extraordinary risks. High quality companies such as major Canadian banks, insurance companies and public utilities also offer higher returns than government bonds.

To the extreme, higher risk resource companies and technologies firms must provide very high returns on their debt. But many professional portfolio managers view the risk on these securities as substantial, and classify these investments more similarly to stocks.

It’s important to ensure proper diversification if you intend on pursuing a risk focused strategy. Having all your savings in one corporate name could be very risky if that company runs into trouble. One way to accomplish diversification is to purchase a corporate bond ETF or mutual fund. This allows you to hold numerous corporate bonds, reducing the risk of one individual company running into trouble.

Preferred Shares

For many years, individuals have overlooked preferred shares as a great way to increase returns in their fixed income portfolio. Preferred shares are issued primarily by highly credit worthy companies, like banks or public utilities. Recently, however, more risky firms have become involved in the preferred share market, such as resource companies. These offer substantial returns, but the risk on these securities is very close to that of owning the common equity of the firms. An investor has to be careful of how much risk they are taking on, especially if the intention of the investment is to diversify away from common equity positions.

Generally, preferred shares will offer a higher return than similarly risky corporate debt. This is because in the event of a default, the company must pay debt holders first before preferred shareholders receive any money. Preferred share investors are compensated for this risk through higher returns than what one would receive by investing in comparable debt securities. Preferred shareholders rank ahead of common shareholders, however, so these securities are generally less risky than owning common stock.

Another advantage of preferred shares is the tax treatment of preferred dividends. While interest from bonds is taxed generally at the highest rate (and this is why most fixed income investments should be held in an RRSP or TFSA), preferred share dividends receive a dividend tax credit, increasing your after-tax return. If you do not have room in your RRSP or TFSA but are looking to purchase a fixed income investment, preferred shares are something that should definitely be considered.

All of these methods are ways of increasing returns in your fixed income portfolio. However, one must understand the risks and ensure that the investments you are purchasing are appropriate for your situation. The fixed income market is less liquid and research is harder to find for individual investors compared to stocks, so getting sound advice if you are uncomfortable is important.

With temperatures warming up and summer well on the way, the topic of summer vacation is sure to be on everyone’s mind. Most people are excited to be planning a big extravagant trip. However, there are more options than just booking an expensive flight, staying in an overpriced hotel, and blowing all of your hard earned money. In fact, you don’t even need to leave your own city to have a great vacation. Here are six easy ways to skip the pricey vacation and still have fun locally:

Spend time in outdoors. Parks are good for a lot more than just the play equipment. Visit parks that have a basketball or tennis court, volleyball net, or baseball field for instant fun with a group. Bring a cooler, snacks, and sandwiches for an afternoon picnic. Find parks in your area that offer something unique like a scenic landscape, a beautiful garden, an area for fishing, or a dog park so you can bring your furry buddy.

No matter where you live, there is somewhere nearby where you can camp for the night. You’ll feel like you’re in a whole new place even if you’re just a few minutes away. Bring food to cook or already made food if you don’t have a grill. Camping is a low cost way to getaway. Can’t find something close by? Camp in your yard!

Visit your local library. Libraries have a greater purpose then just helping out with a difficult research paper. Now that it’svacation, read the fun books and magazines that you’ve been wanting to read all winter but haven’t had the chance. Check out books on crafts, cooking, and games for fun, at home activities. Besides books, you can also borrow movies for free.

Libraries often also offer entertainment outside of books and movies. Ask your librarian what events are going on. Often they may host different classes, musical performances, and art shows. If your local library isn’t too great, simply visit libraries nearby.

Visit relatives and friends. Whether they’re across the country or a few blocks away, use the free time to visit friends and family you haven’t seen in a while. Staying with friends and family feels like a vacation but eliminates the cost of a hotel room and lowers cost of food and entertainment. If it’s further away, let your hosts show you their favorite places in the area to spend time.

Visit local colleges. It may sound crazy to be hanging around a school as soon as classes are out, but it’s not what you think. There’s always something free or really inexpensive going on at colleges. Plays, musical performances, speakers, movies, sporting events, and festivals are just the start. Colleges can have free entries or cheap access to a campus art museum, other types of museums on campus, the library, or a fitness center. Restaurants and bars nearby often cater to college student’s small budget so they’ll offer deals and be affordable.

Take a day trip. If you really feel like there’s nothing left to explore or discover in your own area, take a day trip that’s within a few hours away. Leave early in the morning and come back at night so you don’t have to spend money on a hotel. Take a train or bus to cut costs on gas or invite friends to split the cost. Find deals for your destination from local newspapers.

Find out why there’s no place like home. Fun and happiness are a state of mind so you can truly have a great time without leaving your own home. Cook a fun dinner, spend time in your backyard, and enjoy the company of your friends and family. To mix it up, have a vacation themed day. While you’re saving up to visit your dream destination, bring it to your home. Are you dreaming of visiting Italy? Watch a movie that takes place in the scenic country, listen to lively ethnic music, cook yourself an authentic Italian meal, and indulge with some wine.

Even though it can be easy to fall into the debt trap when you use a credit card, the truth is that sometimes it’s best to use a credit card. It’s true that you can use a debit card in much the same way as a credit card, but there are some things a debit card is missing. Many banks tell you that you can have similar protections with a debit card branded with a major credit card company logo, but there are different requirements in effect to receive that protection.

Another consideration is that with a debit card, the money is taken from your account immediately, and you have to ask to put it back — possibly even fight to put it back. With a credit card, the money is not taken out of your account; it is borrowed, and in most cases the credit card issuer can be on your side getting the money back for you by canceling payment to the merchant. In practical terms, it’s easier to stop payment on a credit transaction than to put money back that has already been debited from your account.

As you consider which card to swipe, and how to organize your finances, here are 4 types of transactions that might be best completed with a credit card:

1. Travel Purchases

Whether you are buying gas or making reservations at a hotel, purchases made for travel are best made with a credit card. Not only can you earn rewards when you make these purchases with a credit card, but you also might receive other benefits. Many credit cards include travel insurance, rental car insurance, and other perks that can protect you.

Additionally, in some cases your card might be subject to a hold. It happens occasionally with gas purchases, as well as many hotel purchases. If a  hold is placed on your debit card, you don’t have funds available until the hold is removed. With a credit card, you have your credit limit, but a debit card is subject to what you actually have in your account. If you have room on your credit card for the hold, it makes more sense than to tie up your checking account funds.

2. Online Purchases

When you buy online, you can’t always be sure about what you will end up with, or the state of the goods when they arrive. Making online purchases with a credit card can provide you with warranty protection, as well as a course of action if the goods don’t show up in their promised condition. Many credit card issuers will pay back your purchase if you have a legitimate case. In some cases, it’s easier to dispute (and win) a purchase made with a credit card than with a debit card.

3. Recurring Charges

In a number of cases, it can make sense to put recurring charges on a credit card. In many cases, from cell phone bills to gym memberships to TV services, putting the charges on your credit card can help you when it comes time to cancel. In some cases, your credit card issuer can help you cancel, and ensure that a cancellation of payment goes through.

It can also help you with your cash flow management. Using your credit card for automatic payment of these recurring charges can ensure that your bills are paid on time, and that you have adequate cash flow in the bank account for your obligations. Of course, you should pay off the balance as soon as possible. But, if a paycheck is later, or if you worked fewer hours one pay period, having your recurring charges on a credit card can help.

4. Major Purchases

Again, the main advantage to making major purchases — especially electronics purchases — is the protection that comes with using a credit card. If you have to dispute the purchases, it’s almost always easier to stop the payment on the item with the help of a credit card issuer than to have the money put back into your checking account after it’s been immediately debited.

Anytime you are concerned about the quality of an item, and any time you are looking for protection for your purchases, you can usually find another layer with the help of your credit card. Because of the way they work, there are just some purchases better made with credit.

We all would like to know how to save more money and improve our balance sheet  and hopefully one day reach financial freedom. As always we would love to help you get there and today we have partnered up with Life Insurance Finder to help one lucky winner add $500 to their bank account and get closer to financial freedom! Entering is simple and you can get as many as 10 entries! All you have to do is share your best money saving tip in the comments, for more options see below.

To get things going I’ll start with my Top 5 Money Saving Tips!

1.) Cut cable. We haven’t had cable for over 3 years! I really don’t see why people still want cable. Most networks allow you to watch shows online at your convenience, with only 1 to 2 commercials. There are also other alternatives such as Netflix and Hulu. Savings: About $500/year.

2.) Search for discount codes online. Anytime I make an online purchase I make sure I search for a discount/promo code. I can’t tell you how many times I have found codes to save 10%-50% on my purchases. Just type “discount code for _____” and 80% of time you will will find something. Or just search sites like RetailMeNot for discounts. Savings: About $200/year.

3.) Use cash back credit card. We have been using a cash back credit card for the past 4 years and almost every year we get back about $500-$600. Sure there are some dangers with using credit cards, but if you are disciplined enough maximizing credit card rewards can add  a few hundred a year to your bank account. Savings: About $500/year.

4.) Use eBay. eBay has been a great money saver for me. It took me sometime to get used to it and it saved me a few hundred dollars last year. My most recent purchase was a case for my iPad. I paid $35 for a case that retailed $60 in the mall. Savings: About $200/year.

5.) Get rid of landline. I haven’t had a landline since 2007. Although there maybe a few reasons to keep your landline, most of us can do without it. Savings: $400/year.

Just these 5 simple things save us around $1800/year…good enough for a week vacation!

Now your turn!

Entering is simple and you can get as many as 10 entries! You don’t have to do them all, but the more you do the better your chances. Ok here we go:

1)  Tell us your best money saving tips for 2012 (1 entry).

2)  Follow @moneyhighway and @lifeinsurancef and TWEET about our Best Money Saving Tips giveaway! Just copy and send the following (2 entry).

“I just entered to win $500 with @lifeinsurancef and @moneyhighway, enter here: http://ow.ly/aORVe“

3.)  Like Financial Highway on Facebook and share this contest. (2 entries).

4.)  BLOG about this Giveaway!  Post your best money saving tips for 2012 on your site  – either in text, or in pictures  and then make sure to mention you’re trying to win “the $500 Financial Highway giveaway, sponsored by Life Insurance Finder – the easiest place to compare life insurance quotes. (5 entries)

Simple! Contest is open to anyone. You’ll need a Paypal account to receive the money. You will have 3 weeks till Thursday May 31st to enter and the winner will be announced on June 1st, we’ll pick a lucky winner via Random.org.

Good luck!

Water is one of those things we tend to take for granted. We turn on a tap and it’s just there but, if like most of us, you’re tired of rising utility costs, try these four small steps that can add up to big savings on your water bill.

You probably already know the basics of water conservation, but let’s review:

Take a shower instead of filling the bathtub. It takes 35 gallons of water to fill a bathtub. A five minute shower using a low-flow showerhead saves 22.5 gallons. It may not be possible for many of us to shower in five minutes, given that we also wash our hair and/or shave in the shower, but this gives you an idea of the amount of water that can be saved.

Replace the nozzles on kitchen and bathroom taps with aerators. Don’t worry; an aerator won’t reduce the water pressure.

Repair or replace leaky faucets. One leaky faucet, dripping one drop per second, wastes 10,000 litres of water a year.

Make sure you have a full load before running the dishwasher and don’t rinse the dishes first. Simply scrape them and let the dishwasher do the rest.

Likewise, wait until you have a full load of clothes before running the washing machine. Rather than running water until it is hot or cold, heat water on the stove or in the microwave and keep a pitcher of water in the fridge to drink or add a couple of ice cubes to your glass of water.

Don’t leave the bathroom tap running while you brush your teeth.

Use a covered rain barrel under a downspout to collect rainwater that you can then use to water the garden.

Now for some tips that maybe aren’t so common:

Put a plastic bucket in the shower to collect warm up and shower water rather than letting it all go down the drain. You can then use this “grey water” to flush the toilet a couple of times.

Forget about hosing down your driveway. A stiff push broom is all you need. If you prefer, you can wait until there has been a good rain and then go out with your broom. Consider it part of your exercise program.

I like to keep a glass of water on the bedside table at night. Any water that’s left over in the morning goes into the pets’ water dish or waters a houseplant.

When the pets’ water bowl needs freshening, I pour any leftover water onto a houseplant before cleaning the bowl. Your plants won’t mind a bit of kibble or some pet hair.

In the summertime, after cooking vegetables like corn on the cob, which generally takes a big pot of water, I let the water cool right down and then use it to help water the front garden, a hanging basket or even the lawn.

The Government of Canada has more tips and ideas to help you save money on your water bill. Large or small, anything you can do to conserve water will also conserve money when it comes time to pay the bills.

When Canada introduced the TFSA into the mix of registered and non-registered investment accounts, it made an already difficult decision even harder. How do I allocate my investments between my TFSA, RRSP and non-registered accounts? We’ve prepared a number of examples below to help investors understand the tax treatment of different investment types and the optimal account mix for their portfolio.

Growth Stocks

Growth stocks are stocks that are primarily held for capital gain purposes (stocks where you hope the future value increases, not stocks that you hold for dividends). These stocks should be held in either the TFSA or a non-registered account. This is because capital gains are taxed more favourably in Canada than regular income, at 50% of the effective rate on regular income. Generating capital gains in an RRSP actually results in more taxes being paid. Here is an example of a stock held for a year in each account, assuming a tax rate of 30% (remember that capital gains are taxed at ½ your effective rate):

As you can see, the TFSA slightly outperforms the non-registered account as no tax is paid on the capital gain in the TFSA. The RRSP does not significantly outperform the non-registered account due to the favourable tax treatment of capital gains.

There is an important note, however. What is interesting is that most Canadians do not reinvest the tax savings generated by RRSP contributions. Most Canadians spend them. In fact, in some cases Canadians are earning negative effective after tax returns on their RRSPs due to the eventual tax loss in their RRSP because if this. When this is done, a taxpayer is effectively borrowing tax savings today and forcing themselves to repay it when they retire, and are much less likely to be able to afford it. An important consideration for sure!

It is also important to note that any capital losses in a non-registered account can be applied back three years against capital gains, or applied to any future capital gains indefinitely. This is not true with the TFSA or RRSP, where losses have no tax benefit.

Dividend Stocks

Dividend stocks have favourable tax treatment in comparison to regular income as well, but not quite as favourable as capital gains. Let’s assume: we invest in a stock with a 10% dividend, no capital gains, a 30% general income tax rate, and a 20% tax rate on dividends. Here again we see the advantage of the TFSA, followed by the RRSP which is even more preferable than the non-registered account in the case of dividends because dividends are taxed at a higher rate than capital gains.

The Impact of Compounding

Now the results for RRSPs don’t look as favourable as some would have expected in the previous two examples, but that is not the total story. Remember, in our examples, we only looked at one year returns. RRSP’s are not for short term investing, but rather retirement savings, and the intention is that investments are held for long periods of time. When dealing with compounding investments, an RRSP has an advantage as the initial investment is higher and therefore benefits from additional compounding over time. Further, there is no tax being taken out of the account in each period, allowing further growth. Here is another example of a dividend stock, but this time, we hold the stock for ten years:

*Note: in this example, I provided the total tax amount for the non-registered account… however, this would have been paid out in each of the years this investment was held, not at the end (I have accounted for the compounding correctly). I have also assumed the $9 “tax credit on the reinvested tax credit” is realised in year one, which is imperfect, but does not impact the results of this simple illustration.

Notice that now the TFSA has a substantial advantage over the non-registered account. This is because each year the non-registered account must pay tax on the dividends, and that cash cannot be used to further investment. However, with the TFSA, no tax is paid and that additional cash can be reinvested. Also, in this example, the RRSP outpaces the non-registered account, due to the benefit of the compounding of the saved taxes. Never the less, the TFSA remains the most favourable option.

Bonds, Term Deposits and GICs

Bonds are one asset class where RRSP’s have the edge over non-registered accounts in all scenarios, and especially when holding bonds over long periods of time. The TFSA will still hold an edge, but since interest is taxed the same as regular income, there is no tax advantage to holding bonds in a non-registered account.

This is also true for any term deposits or GIC’s that one may own. These are also best held in a TFSA account. It is not recommended to hold investments you may need access to in the short term in an RRSP due to the difficulty and cost of making withdrawals.

Summary

As we’ve seen above, there are a number of considerations when allocating your investments to your various accounts. To benefit from optimal tax efficiency, for an investor with a balanced portfolio, all fixed income assets should be held first in a TFSA until your contribution limits are met, and then in an RRSP. Equity investments can also be held in an RRSP if they are being held over the long term, but any short term holdings (especially as one nears retirement) may be more appropriately invested in a TFSA or non-registered account.

If you have maxed out your RRSP contribution limits and TFSA limits, ensure that interest bearing investments are in the RRSP and TFSA accounts and any dividend or capital gain investments are in the TFSA or non-registered account.

At the end of the day, the TFSA is always the most tax efficient account. Max it out first. Then analyse your investment classes based on the examples above to determine the best allocation for the strategy and types of investment you are planning to hold!

Related: Young & Thrifty TFSA vs RRSP.

One of the things we hear about all the time is how penny pinching can add up. The thought is that if you forgo some of the smaller purchases, and find ways to save on the smallest things, you can see big savings over your lifetime, a la David Bach’s Latte Factor.

But will pinching every penny really lead to untold riches? Will clipping coupons to save 50 cents on several purchases eventually lead to wealth? Can being a savvy saver put you on the path to financial freedom? Unfortunately, penny pinching alone probably isn’t the way to wealth, or a lifestyle that you enjoy.

Penny Pinching can Help You Identify Money Leaks

While merely pinching pennies is unlikely to transform your financial situation, the scrutiny that it engenders could help you change your spending behaviors, and shift some of the focus to saving your money. If you examine every dollar you spend, it will be practically impossible to avoid noticing some of the ways you are using your money. You might find some money leaks that need to be plugged up.

Make a concerted effort to know where your money is going, and shave off as much as you can. Pay attention to your money, and where it is going. You might be surprised to discover how much of your money is leaking off into the ether.

Penny Pinching Can Help You Set Financial Priorities

This doesn’t mean that you have to stop spending on everything that you deem unnecessary. In fact, a couple months of penny pinching can help you figure out your own financial priorities. Where do you feel deprived when you are pinching pennies? What things don’t you miss? If you miss having a morning donut, perhaps you can add the donut back in two or three times a week. However, if you find that you like brown-bagging it instead of always paying for greasy fast food for lunch, that’s a change you can keep.

Decide what is most important in your financial plan. Do you want to contribute the maximum to a savings account or a retirement account? Is it important that you save up for a vacation next year? Your penny pinching can help you see where your true desires lay, and can help you chart a course that allows you spend the money on things that are most important, and live the life you want.

What are You Doing with the Money?

One thing you have to be careful of when you are pinching pennies is to make sure that you are truly putting the money you save to good use. Pay attention to the coupons you use. It’s not really penny pinching, and you aren’t really saving, if you use a dollar off coupon to justify buying a five dollar item you had no intention of purchasing until you saw the coupon.

Also, be aware of how you could use the money to augment your efforts regarding preparing for the future. Add the money you save from penny pinching to your retirement account. An extra eight dollars a week, at a 5% annual rate of return, over the course of 40 years, adds up to an extra $52,765.34. Of course, you aren’t going to retire on that money. But if you combine it with your other efforts to boost retirement savings, or boost your emergency fund, it could add a little more cushioning.

Could You Save More with the Bigger Stuff?

Some people focus so much on pinching their pennies with the smallest purchases that they neglect the big stuff. Could you save money each month by refinancing your mortgage, or by shopping around for the lowest insurance rate? Finding a way to save big could offset the costs of life’s small pleasures, and render some of your penny pinching unnecessary. Indeed, cutting out all the small things that you love from your life can lead to dreariness, and dissatisfaction with your situation.

Don’t forget, too, that you can also make more money. Indeed, you are more likely to build more wealth when you earn more money and put it to good use than you could ever make pinching your pennies.