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2014

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Five Surprisingly Lucrative New Year’s Resolutions For Teens

Teens’ wallets are dismally empty after the holiday gift-giving season is over. Yet it’s surprisingly easy for them to replenish what little money they had before they spent it on everyone else. The following resolutions can help teens create a fresh stash of cash.

1. Resolve to omit one little thing. Omitting one little thing every so often can add up to earning one big thing faster than they might think. Impulse purchases on seemingly inexpensive items such as quick snacks, fashion accessories and personal care items can limit long-term spending power. Resisting the urge to buy small items once or twice a week can add up to big bucks in no time.

2. Resolve to sell some stuff. Maybe your teen has received new gifts they love that replace older things they no longer use. That beautiful new sweater might take away the desire to wear one from previous years, so selling it is an option. Ask your teen to check out consignment and resale shops in the area. Some places even pay cash on the spot for gently used items. And of course, there’s always eBay for unloading just about any item for a price.

3. Resolve to reward yourself. For teens, this is a no-brainer. They’re hard-wired to spend money on themselves. If your teen uses a credit card, make sure they know how to take advantage of the rewards program. Rewards points provide more flexibility to spend on other things they want in the long run.

4. Resolve to take on odd jobs. Teens have lots of energy to burn. Why not burn it up earning money? They can canvas the neighborhood and offer to do chores for a fee. Snow shoveling. Dog walking. Car washing. Elderly neighbors in particular might gladly pay for “young legs” to haul stuff up from their basement, move furniture around or fetch things from the grocery store. The keys to success: Be polite, look responsible and just ask.

5. Resolve to save up for actual things. What a concept! Try the old envelope trick: teens can label several envelopes identifying items they want to buy — an awesome new set of headphones, that to-die-for pair of boots or whatever. Decide on a set amount to stash into each envelope each month, even if it’s a few bucks a time. Before long, those envelopes will be full. And the mere habit of setting money aside regularly to meet personal financial goals will pay off not only now, but throughout life.

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All I Want For Christmas Is A Bitcoin

By Erin Lowry, contributor

Bitcoin seems as real as monopoly money and sounds as silly as a loonie or a toonie, except it isn’t printed in funny colors and is worth way more than $2. In fact, it isn’t even tangible. Bitcoin is a virtual currency introduced in 2009. While it may sound like a fun stocking stuffer, Santa would need to be feeling awfully generous to leave a Bitcoin.

What is Bitcoin?

Bitcon is an unregulated, non-FDIC-insured currency. Although it is not backed by the U.S. or any government or banking system, it has been slowly gaining both in popularity and acceptance. Some merchants, such as restaurants and small businesses, will accept Bitcoin in lieu of paying with cash or a credit card.

At its peak in November 2013, one Bitcoin was worth upwards of $1,200. As of this writing, one Bitcoin is worth nearly $370.

How do you get Bitcoin?

First, you need a wallet. No, not the kind you’re thinking. You need a digital wallet either on mobile, desktop, laptop or the Web.

Next, you need to acquire your Bitcoins. This can happen one of two ways.

Mining: Bitcoin uses the Internet and users’ computers and servers to offer up the computing power needed to perform the algorithms that keep Bitcoin running.

Or in slightly more simple terms: your bank uses massive data servers to perform transactions all day. Bitcoin has you. You provide your computer to the cause and are rewarded in fractions of a Bitcoin.

Anyone can do it: You just need to sign up, download the software and let your computer do the rest. But your little laptop or desktop probably won’t have the power to earn you much as a miner, so Bitcoin pools help bring resources together to earn more.

Buying: Not interested in offering up your computer to earn some Bitcoins? Not a problem. You can buy them outright on an exchange, or accept them as tender for an item you want to sell. Just be careful if you want to buy via an exchange, as there are scammers and fraudsters out there looking to take your money.

Is Bitcoin a good investment?

As a fun, speculative portion of a portfolio, sure, it’s a perfectly fine investment. But remember, Bitcoin is incredibly volatile and susceptible to hacking and scams.

In fact, Mt. Gox, previously one of the largest Bitcoin exchanges in the world, filed bankruptcy earlier this year after losing 850,000 Bitcoins. The company’s official claim was that the Bitcoins were stolen, even though 200,000 have since been recovered.

Bitcoin transactions are also irreversible and can only be returned by the person who received the funds.

Finally, there can be tax consequences to trading in bitcoin. The IRS says that bitcoin and other virtual convertible currency is a capital asset. As such, selling or trading bitcoin for “real” cash or goods can result in taxable gain.

So, if your teen wants to dabble in a unique form of finance, Bitcoin may be a great gift as long as you proceed with caution. But it might also be the only gift under the tree — in the form of a gift certificate, of course.

 

Erin-Lowry_150hErin Lowry is the founder of BrokeMillennial.com, where she uses sarcasm and humor to explain basic financial concepts to her fellow millennials. Erin lives in New York City and works for MagnifyMoney.

 

 

 

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2015 Financial Planning With Your Teen

By Wendi Williams, contributor

Growing up I was taught to save for a rainy day, balance my checkbook and to check the weekly paper for coupons. Simple investments for my future were foreign and scary. It wasn’t until I was in my 30s that I took a very active role in my money, how it was spent, and where it was invested.

Most of our kids are not educated in financial matters and it essential we change this. The new year is around the corner and 2015 is the perfect time to get started.

As parents, we expect our teens to be teens and we want to save them from irresponsible teenage mistakes. We discipline them for not getting good grades, encourage (sometimes force) them to go to college, yet we do not effectively teach basic fundamentals of finance.

Parents today need to emphasize the importance of credit scores and savings. Ask your children if they hope to purchase an automobile, boat or a house at some point during their lifetime. All of these purchases will involve either their credit score or savings, and typically both.

Failing to explain the perils of poor credit can have lasting effects. If you’re like me, the thought of co-signing for a credit card for your teen caused you to take a really big gulp trying to get that lump out of your throat. It is scary, but wouldn’t you rather have your children make financial mistakes under your supervision?

The key to your sanity is setting a low credit limit. Discuss the credit agreement with them, what the APR means, and what late/missing payments will do to their score and how it affects them moving forward in their lives. It wasn’t until I was out of college, living paycheck to paycheck before I understood the true concept of saving.

Start with a goal, such as living off of 80 percent of your income and saving 20 percent. Every time they get a birthday card in the mail with money in it, have them put 20 percent in a savings account.

Sit down with your kids and make a budget. If you need help, most banks have online budgeting tools (which you will have access to because you opened up a savings account for them)!

Once they are on point with their budget, incentivize their savings. Depending on their age and stage in life, have them save for a vacation with their friends or to buy a car. Institute a matching program like a company would with a 401K.

What more could you ask for than teaching your children to be fiscally responsible while also saving you money! You know, the money they have saved for their first car, college textbooks, spring break, etc.

Ultimately, getting teens to sit down and listen to you is going to be the biggest obstacle of all. As parents, we are charged to prepare our children for life and finances are a big part of it. Let’s start 2015 with investing in our children.

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3 Reasons Financial Resolutions Fail (And How To Succeed)

By Erin Lowry, contributor

Ah, the new year. January 1 marks a day that most of us, including teens, make sweeping declarations about how our financial lives will improve this year — yet many of those resolutions don’t last a month. If becoming more financially savvy is on your teen’s 2015 checklist, advise them to avoid these three pitfalls.

1. Lack of a budget

It doesn’t matter if your teen is trying to pay down debt, save up for college or learn how to handle money from his or her first real job — it’s imperative to have a budget.

Teens may not have many expenses, but take the time to sit down together and discuss the importance of a budget. After all, college and the potential for debt isn’t that far off.

Have each member of the family set a budget for 2015 and challenge each other to stick to it. Take that extra step to show your teen the family budget, instead of feeling the urge to shield them from finances.

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2. No communication or support system 

Money is often scary because it is spoken about in hushed, stressed voices. Instead of passing down a legacy of money-related stress, turn finance into an empowering topic.

Use 2015 as a year to speak openly with your teen about the family finances. This doesn’t mean you need to reveal your net worth, but explain the basic family budget and how you are preparing for the future by saving or handling existing debt.

Often, people fail at goals because there is no support system and a complete lack of honest, open communication. Don’t let you or your teen’s money aspirations fall flat because you’re too scared to talk about it together.

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3. Giving up after the first failure

One thing is certain to happen in 2015. Someone in your family will fail. Perhaps an unexpected emergency arises that forces you or your teen to put more money on a credit card than expected. Or maybe a family trip goes over the amount budgeted. The trick is to address with your teen what went wrong and recalibrate goals. Don’t set an example of giving up because of one small financial failure.

Use 2015 as a year to challenge yourself as a parent. Put more money into savings, cut little expenses, and figure out how to create a passive income stream or master basic investing skills. Be sure to share all the details with your family.

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Erin-Lowry_150hErin Lowry is the founder of BrokeMillennial.com, where she uses sarcasm and humor to explain basic financial concepts to her fellow millennials. Erin lives in New York City and works for MagnifyMoney.

 

 

 

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Teaching Teens To Plan For The New Year: The Rewards Of Realistic Resolutions

By Jennifer Powell-Lunder, contributor

The new year is a time for reflection and renewal. For many, it represents an opportunity to regroup and reset goals. As teens grow older, their understanding of its symbolism expands.

Now is the time to teach teens the true meaning of setting and keeping goals; an important skill for those who may be mindful of the moment without weighing out the consequences of their actions.

Because this generation of teens is being raised in a “get it now culture,” the benefits of setting and keeping resolutions are even more important and apparent.

Working with teens to preset goals and make plans for the future helps teach the importance of planning. In addition, teens can experience the rewards that come with achieving a goal set as a resolution.

So how to help teens develop productive resolutions they can stick to? Here are a few hints:

Help teens categorize their resolution commitments. Take some time to sit down with your teen and talk about setting goals in specific areas. Categories could include academics, finances, recreation (sports or other activities), social life, health, etc.

Be sure goals are clear, concise and attainable. Some goals sound great on paper, but in reality are not really achievable. Emphasize goals that can be achieved even though they may take time. If for example, your teen wants to buy a big-ticket item, help to devise a realistic savings plan.

Focus on the immediate and long-term future. Ask your teen about long-range plans. Where do they want to be in five years? Help develop goals that can encourage success but attend to important details. A focus on personal finances, for example, will be essential for living a successful and independent life.

Report on your own rewarding resolutions. Your teen may not realize the immense effort you put into make things happen. Explain the process, for example, of how you had to save and plan for a new car, or a kitchen re-do. This offers an important story of success.

Share your own recent resolutions with your teen. This will enhance communication and encourage continuous connection with your teen. Offer updates on your progress and ask about theirs. The tone you set says you are in this together.

The new year offers an opportunity to reaffirm resolutions and make new goals. When parents help teens plan out plausible promises for the new year, they teach their teens about commitment and follow-through.

 

JPL New Headshot_1Jennifer Powell-Lunder is a clinical psychologist specializing in work with children, adolescents, young adults and their families. She is co-author of the book Teenage as a Second Language, the creator of www.itsatweenslife.com and co-creator of www.TalkingTeenage.com. Jennifer is widely published and regularly featured in both national and international media as a Parenting Expert. She is an adjunct professor of psychology at Pace University and maintains a private   practice in Westchester County, N.Y.

 

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Teaching Teens: What A New Year Means For Money

By Brian Page, personal finance adviser

For many adults, New Year’s is a time to look backward at regrets and set a resolution to change. For teens, it can be a time to begin to look forward and set goals as they transition into their adult lives. Here are five tips to help teens start their year heading down the right financial path.

1. Prepare for a postsecondary education.

Completing additional education following high school can make you more employable and increase your earning power. Consider the right type of program to meet your employment and lifestyle goals.

The Department of Education student aid site is full of resources to find an affordable path to a postsecondary education and offers a checklist that can serve as a preparation guide for high school students.

If you’re convinced college is for you, explore Khan Academy College Admissions. It is full of brief videos and interviews providing practical tips for future college students.

Most importantly, note the FAFSA student aid deadlines include a checklist of what needs to be done and when to make college an affordable reality.

2. Protect your digital reputation.

Make yourself more appealing for college admissions by developing and protecting your digital reputation. Google yourself. Chances are, college admissions may Google you before accepting you. If needed, take the time to clean up your reputation…a.k.a. any social media blunders. Onguardonline.gov is a great resource to help keep you safe online.

3. Establish a budget and strategies to stick to it.

Start the habit of setting and sticking to a budget. Begin by tracking what you’re spending using mobile technology tools or keeping your receipts in envelopes. After a month or two you should have a complete picture of your spending habits.

Reflect and establish a savings goal using tips from the National Foundation for Credit Counseling to build a budget you can stick with. Consider establishing incentives to reach savings goals as a reward for thoughtful financial decisions.

4. Save for emergencies and future opportunities right away by opening a savings and checking account at a bank or credit union and contributing regularly.

Take the time to comparison shop minimum balance requirements and services that accompany checking and savings accounts. Consider prioritizing accounts with low to no fees and establishing text alerts for low balances.

Pay yourself first with direct deposit into savings and checking, and consider depositing your savings into a separate bank or credit union so it’s harder to transfer the money into checking. Deposits into checking should be significant enough that you should only have to dip into savings when you reach your savings goal, or for emergencies.

5. Think twice about buying your first car.

The responsibility for car expenses is ongoing. The costs of the car, insurance, gas and maintenance are best exhibited by the True Cost to Own Calculator. Consider the full cost of a car and the loss of future freedom if you’re obligated to pay for your own car expenses by spending time at work instead of with your friends and family.

Managing money is an adult responsibility we believe teens should learn before experiencing real world consequences. H&R Block Budget Challenge is a free money management simulation that uses evidence-based learning strategies to educate teens about real-life budgeting. It is the ideal playground for students to learn how to manage money — an engaging, learn-by-doing simulation.

Our hope is that students who have the opportunity to road test real world money decisions using our simulation can learn from mistakes with a caring teacher by their side to help, absent costly financial consequences.

 

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10 Steps To Help Your Teenager Create A Budget For 2015

By Vicki Davis, contributor

Sometimes teens think budget is a bad word. (I prefer the term “spending plan” but call it what you will.) Start off by asking your teenager to make a list of the things they’d like to buy or do next year and the cost. Tell them that you’re going to sit down to see how you can make it happen.

Step 1: Create a wish list

Ask your teenager to create a list of things they would want to do with their money next year. Remind them to write big events like spring break, prom or other items on the list. Have them estimate their costs for each of the items. It can also help to have them list a minimum and maximum amount for each, so you’ll have room to work.

Step 2: Create a need list

If your teenager already has a checkbook, then print out a monthly calendar and have them go through and write how much they spent on various items each month. If this is their first year with a budget, look through your own expenses from last year and pull out the things that you paid for that they will be paying for this year.

Step 3: Set expectations

Be very clear on which expenses will be theirs next year. Make a plan for how much you will give them to go toward these expenses. I think it is important to be fair. If you’ve been paying for their gas or cell phone, then you may want to consider putting that amount in their account each month.

Step 4: Set your dates

Additionally, I suggest requiring certain conditions before you make your monthly deposit. You are trying to reinforce the habits that will help your teenager succeed. These habits include balancing their bank account, paying bills on time and updating their spending plan.

Step 5: Look at income and percentages before you plan spending

Everyone has income. If your student is at college, you may be giving them a certain amount of money each week. Budgeting to spend 100 percent of the income on living expenses is a recipe for disaster for your student and for you.

For example, my husband and I encourage our teenagers to follow the giving/saving/setting aside principle we use. Our goal is to give 10 percent of our income to charity, save 10 percent of our income, and we set aside 20 percent of our income into a “freedom account.” The freedom account is for incidentals like annual car insurance. We keep a separate account, but your teenager could put this in a savings account and transfer it when those bills come due. The goal is to have at least enough in the freedom account to cover your highest insurance deductible.

Agree on these percentages up front as you discuss how they are going to plan their money. Use a spreadsheet to help with this.

Step 6: Look at infrequent bills

Other “traps” to remember are quarterly, semiannual or annual bills. These traps also could include an annual vacation. If your student wants to take a trip or go to a camp this year, figure out the cost and divide it by how much time they have to save for it until it happens. (So $1,000 for spring break with five months to go would be $200 a month in their freedom account.)

Step 7: Enter recurring bills

Look at monthly bills and plan for when they will be paid. Remember that each month you’ll have to look at cash flow, but for now you’re looking at the year.

Step 8: Consider a “wants” and needs list

If your student wants a car, help them determine what they need. Work to help your student save their money and look at options for purchasing a vehicle that will not be as expensive. Help them set a goal of how much the down payment should be.

Step 9:  Look at the spreadsheet and discuss

Now, after you’ve gone through all this time, something is not going to balance. None of us ever has enough for what we want to do. (It seems.) Now is time for your student to make decisions. Balancing is not only essential, it is mandatory.

I recommend that you let your student take the budget and come back to you with a proposal and decisions about what they will do. I think parents should set the bare minimum requirements: spend less than you make, save for what you want, create a spending plan and have a routine of handling financial matters. But how they spend their money should be something you give them some freedom to do.

Step 10: Be flexible but hold accountable

Help your teenager build routines into their lives to help them succeed. Paying bills twice a month and balancing one’s bank account once a week will do that. Writing out expenses and making intentional decisions is vital.

Our teenagers can live a great life and make good decisions, but we have to help them make choices. But some choices cannot be given: they must balance and they can’t spend more than they make. Wow! What will become if we can teach these 10 simple steps.

 

vicki_davis_150hVicki Davis blogs at the Cool Cat Teacher blog and hosts the biweekly show Every Classroom Matters. She is a full time teacher in Camilla, Georgia and has three teenagers.

 

 

 

 

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New Years Resolutions: Effectively Managing Family Finances For A Prosperous Year

By Jennifer Powell-Lunder, contributor

The new year brings with it a sense of renewal, revelation and, of course, a commitment to resolutions. As a parent of a teenager, you are charged with planning for the future, ensuring that you can provide family security through productivity that in turn yields prosperity.

Part of the job of parenting sometimes entails shielding your family from the stress of financial pressures. As tweens turn into teens however, they become much more attuned to the world both inside and outside their doorsteps. Your teen may wish for the world, but may also be acutely more aware of how expensive it is to secure a well-educated future.

With a little commitment, creativity, and perhaps a dash of charisma, you can formulate successful financial plans to ensure a fabulous 2015. Teens, in turn, learn how resolve and commitment can reap important rewards.

What follows are a few financial resolutions to start the year off right:

Resolve to run your family finances as if you are operating a small business. This translates into both short-term (daily, weekly) and longer-term (monthly, yearly) strategizing and budgeting.

Writing it down makes it real. Saying you are going to do something and actually planning it out are two different things. When you commit your financial plans and strategies to writing, you create tangible terms to follow.

You are best-served overestimating costs and underestimating cash. Deficits can do you in while overages create opportunities.

Set aside an emergency-spending fund. When you plan for the unexpected you ensure that untoward events do not end up in a financial crisis.

Carefully consider capital expenditures. From car loans to college tuition, it is important to preplan for major longer-term expenses. Investigate savings plans (e.g., 529 plans for education costs) and loan terms. A few percentage points can equal thousands of dollars either spent or saved down the road.

 Commit to keep the specifics of financial stress confidential. Because teens are usually sensitive to stress at home, they may be aware of concerns related to family finances. Talk in general terms with your teen in a calm and reassuring manner. Send the message that you have the situation under control. Specific financial information can be stressful and overwhelming. Your teen may not need to know that your taxes have increased or that you are considering refinancing your home.

 Ask for input regarding resolutions. You empower your teens when you consider their contributions. Encourage them to come up with creative ways to stretch the family dollars or save for the future.

By formulating New Year’s resolutions that focus on effectively managing family finances, you can help to ensure prosperity is in the family’s future.

 

Jennifer Powell Lunder_New Headshot_Dec 2014Jennifer Powell-Lunder is a clinical psychologist specializing in work with children, adolescents, young adults and their families. She is co-author of the book Teenage as a Second Language, the creator of www.itsatweenslife.com and co-creator of www.TalkingTeenage.com. Jennifer is widely published and regularly featured in both national and international media as a Parenting Expert. She is an adjunct professor of psychology at Pace University and maintains a private practice in Westchester County, N.Y.

 

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9 Tasks To Wrap Up Your Family Finances In 2014

By Crystal Rapinchuk, contributor

As the holidays are approaching, this is a great time to wrap up some of your family finances for 2014, especially if you have teenagers at home who need some financial guidance. Here are nine tips to help guide you through the process:

Ensure your checkbooks are balanced properly. Whether it’s your checkbook or your teen’s checkbook, having a properly balanced account is vital to keeping track of your accounts to ensure that you don’t overspend what you don’t have.

Open up a savings account if you don’t already have one. Once anyone in your family is old enough to start earning money (or receiving money as gifts) they should have their own savings account.

Check your credit reports. Once a year you should run a credit check to ensure that there is no fraudulent activity going on or any unnecessary accounts open that can be closed. If you have a teenager who is earning income and doesn’t have a credit card, this is a great time to not only teach them about how to use a credit card wisely, but also to help them build good credit.

Pay off any credit card debt. Ensure that your accounts are paid off each month and that no accidental lapse of payments have happened before the end of the year. Emphasizing the importance of doing so will set a good example for your teen.

Review financial budgets. With the holidays coming up and the new year looming ahead, it’s important to make sure that your budgets and expenditures are current. Prepare for the new year and factor in vehicular expenses, insurance, college expenses, etc.

Donate to charity. Now is the time to wrap up those end-of-the-year donations in preparation for tax deductions in 2015. Bring your teen into the process by asking what causes they might want to include in the family’s contributions.

Deposit money into retirement savings accounts. Before the end of December, plan on depositing something into retirement savings, no matter how old you are. If you don’t have a retirement savings set up, now is the time to do so. Discussing your plans with your teen can provide a teachable moment on the concept of long-term financial planning.

Gather all receipts and tax-deductible expenses for 2014. Get a jump-start on next year’s tax return and begin collecting proof of all of your family’s tax-deductible expenses from 2014.

Estimate any upcoming tax expenses for the family and put a plan in place now to save for them. This will give you several months to begin saving for any taxes that you will owe.

 

Crystal Rapinchuk 150hCrystal Rapinchuk, owner of (Surviving a Teacher’s Salary), is the wife of a principal and mom of three. She has a strong passion for education and strives to promote educational values and frugal ideas to others through her blog. When she’s not busy blogging she can be found conquering her world through gardening, traveling and creating new adventures outdoors with her family.

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5 Ways Teens Can Save More Money In 2015

At times, it seems like money just flies out of teens’ hands. How can they capture those elusive dollar bills before they fly away for good? It begins by getting in the habit of saving, and the new year is a great time to start. Here is some savings advice to share with teens.

 

1. Identify a saving goal. Having a concrete dollar figure in mind will make it real. Identify the cost of must-have items, as well as splurge-if-you-had-enough-dough items. Total it all up and then divide into weekly or monthly amounts to set aside.

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2. Keep your wallet lean. Don’t leave the house with big a wad of cash. Limit yourself to carrying $10 or $20 less so you have to think before you spend.

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3. Save receipts. Just seeing a mountainous pile of receipts from every purchase, large and small, shows the impact of spending. Ditto for debit card receipts. Don’t wait for bank statements to come – view them online or tally expenditures weekly so you know your bank balance.

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4. Be piggy. Saving loose change in a piggybank actually works. At the end of every day, drop all your coins in before they get lost in your pocket, purse or washing machine. When the bank is full, it’ll be like finding free money.

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5. Be a cheap date. Save on entertainment costs by double dating, sharing car rides with friends or cooking together instead of dining out. Divvying up costs helps all enjoy an evening that might be unaffordable otherwise.

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