In this edition of Dollars & Sense, more on managing the household budget. First things first - how to get more money into that budget.
Nearly all the money managers we talk with say it's important to pay yourself first and the best way to start is with a company 401K where you work.
"So you're setting aside that money pre-tax and again many employers have match programs where they'll match a certain percentage of what you're paying so the returns are much better than what you'd get anywhere else...so really, leveraging your employer's retirement plan is really the way you pay yourself first and save for retirement," said David Hudson, Central Pacific Bank financial adviser.
Next trick, and there's really no trick to it, cut down those payments that involve interest fees.
"The first thing is if you're going to try and free up some expenses so you can save more is pay down your highest interest debt first. So that's usually credit cards," Hudson said.
Hudson suggests using a debit card instead of a credit card whenever possible.
We're all beginning to think of tax season now...
"The other thing is, if you are getting a tax refund each year, you should look at your withholdings. Because in getting that tax refund, you're actually giving the government an interest-free loan and that's reducing what you're bringing in on a monthly basis," Hudson said.
Now that you have decided to save - where do you put your money? One place is a savings account.
"They typically pay a little bit lower interest, but if you've got money that you're setting aside for a longer term, you can look at certificate of deposits. They do pay typically higher interest than your savings account," Hudson said.
Whatever path you choose to save, it's a good idea to consult with somebody.
"Just like an exercise program, or just like a weight loss program, we find people are more successful if they're working with others and encouraging each other. So it's really staying focused and having a partner that's got similar goals as you do," Hudson said.
