On monday this week I was in a car accident, two actually. First I hit a spot of ice on a turn which sent my car over a curb. Once I had stopped another car came from behind and rear-ended me. Everyone is okay and everything is being taken care of. My point here, is that I have a $500 deductible on my collision insurance, which means I will be paying out some green for the front damage. Because of my savings I can take this hit and move on with my life.

I’ve been thinking about how different this situation would have been when I was in college (when I had no money and very little savings). Chances are I would have cut back on important things (like food) or even had to go to family for help. I did get burned a couple times in college with car issues and it was much more painful to deal with it when I had no safety net.

Yes, it is unfortunate that things like this happen, but they are a fact of life and it helps to be prepared. You never know what may be around the next turn. It’s not necessarily something you should fear, but knowing that you are prepared to handle anything is very freeing. Keep saving and if you haven’t been, now is the perfect time to start!

After my recent crash I’m finally back on my feet. This time I am taking going to be using some software alternatives that are free in order to save some money. This information might come in handy for people who don’t know what alternatives exist out there. After trying some of these out that I had never used before, I must admit I am impressed. Open Source software has come a long way to meet up and in some cases excel past competition.

AVG Antivirus

I have always been hesitant about anti-virus software since the old days of Norton when it engulfed 50% of my processing power, bringing my productivity to its knees. (Note: I believe this is still a feature of Symantec Norton Anti-Virus.) I also have never really enjoyed paying a bunch of money for something that will only last a year, until the next time the company decides I am out of date and need to “protect myself”. AVG is the perfect solution to both of these issues and is a painless download to boot. While idling the processes it has running amount to less than 10MB of memory and 0% of my CPU.

OpenOffice

I’ve been using OO for about 6 months and have been pleased with its features and stability. What I’m most pleased with is the price tag and its open-source slap in the face against the certain other office applications available.  The download includes a word processor, a spreadsheet application, a presentation tool, and more.

Inkscape

This was a big joy to find as my new upcoming project pretty much requires me to have a vector imaging program. Most of the costly alternatives are exactly that, very costly. I’ve been playing around with it for a little while and am very happy to find a free program where I can accomplish what I need.

These are just of the few software alternatives I use. If you have other software you need but can’t afford, you might want to check and see if a free alternative exists that will work, before dropping all of that money.

Over the weekend I checked out a feature of my ING Direct Savings account. ING makes it incredibly easy to create a new account and have it become part of your online profile. Basically you can have multiple savings accounts under a single login. Each account can have a unique name, or in my case a goal. I decided it was time to set up something specifically for my 2009 goal of learning to ride and owning a motorcycle.

If you already have an ING account, creating sub-accounts is easy. Just login and on your homepage look for the link under your account that says “Open another account“.  You will be directed to an account type selection page. For my purposes I just needed another Orange Savings. After another page you will be directed to a page that looks like this:

Here is where you can specify the name of the account to match your goal. Best of all, the funding can be easily linked to your other ING savings accounts or even your original checking account linked to an outside bank. Once you complete the steps you will be directed back to your ING accounts page and the new account will be shown in the list:

After that if you want this to be a dedicated savings for that goal, I recommend setting up an automatic savings plan to passively and easily save.

If you would like to start an ING savings account with a free $25 starting bonus email me or leave a comment and I will send you a referral link asap.

Typically when people talk about the reasons to plan where money goes, they only focus a particular end goal. What many seem to miss is the benefits that you gain and use along the way.

If you have a truly balanced plan for your money, you can expect to enjoy:

• Complete benefits of compound interest
• Peace of mind about retirement funds
• Being prepared financially in case of emergencies
• Sharing knowledge with peers
• An improved sense of self-worth
• One less thing to worry about on the “to-do” list

Financial planning may not make you cool, but I believe it can certainly help confidence and self-esteem. There is great value in knowing that everything is lined up and your money is out there working for you, even when you are not.

The most difficult thing about saving money is taking the effort to manage and secure your money actively. You keep meaning to transfer the funds from your checking account to that high-interest savings account online, but that means you have to log in to each site, figure how much to transfer and initiate it. Putting money into long-term or retirement savings is even more difficult because you know that the money will be tied up from that point on. I have set my accounts to do all of this comfortably and most importantly: passively. I basically took the decision point (me), out of the equation.

Here’s how my system works:

• Paycheck automatically goes into checking account.
• ING Direct automatically withdraws a set savings amount from my checking on the 1st and 15th of each month. (estimated pay times)
• My Roth IRA withdraws from my ING account on the same schedule.

The added trick is making the ING withdrawal high enough to save money as well as cover the IRA transfer amount. In this way, everything cascades at once and I budget around what is left. By taking myself out of the equation I have assured continuous short-term and long-term savings. This also curbs any urges I may have to give in to impulsive spending.

Along the same lines, I have my mortgage set to automatically pull from my checking account on the first of the month. This way I am positive not to miss a payment, and I avoid the chance of late fees. My only responsibility at this point is to keep working and make sure the paychecks continue. Making use of automated savings options is not only smart, but makes investing continuous and painless.