Thanks to easier borrowing, Generation Z won’t know anything about layaway.  That’s when you make payments for an item before you take it home as opposed to after.

Today’s society waits for nothing, so instead they’re renting some of the most ridiculous things.  Personal finance expert and MSN columnist Liz Pulliam Weston, writes 5 things you should never rent and rims is one of them.  Also on the list are furniture, computers, televisions, and paychecks (a la payday loans).

Don’t Waste Your Money!

Rent-to-own’s are a waste of money, but they lure you by quoting a low dollar payment, like $62 a week.  Then, you think “I get paid $250 a week, I can afford get that and still have a lot of money left over.”  No, you can’t, especially if you want to keep making payments on the car that holds the rims or the house that garages the car.

 Do the Math

Before you consider renting something, do a little quick math.  Multiple the rental price by the rental term.  For example, you want to rent rims for $50 a week for a year.  That’s $5200.  Now calculate the amount you’d need to buy the rims.  Let’s say it’s $2600.  You can save up for six months and buy the rims.  To make it easier, there’s a calculator on the computer you’re using.  (Start –> Programs –> Accessories)

Gas prices keep going up.  Economists were predicting prices at the pump would reach $4 by the end of the summer.  Lots of places are already seeing prices above that and summer hasn’t even started!  Drivers of SUVs, trucks, and even people who drive cars that require premium gas are feeling the hardest hit.  Should you start thinking about trading for a vehicle with better gas mileage?  Maybe not.

These are some things you have to consider:

• Can you find a buyer for an SUV right now?
• Will you able to sell or trade your SUV for what it’s worth?

The answer to the first question is maybe, the answer to the second is probably not. 

Let’s say your SUV is worth $20,000.  You’re able to trade it for a car worth $15,000.  You have a $5,000 difference to make up for in gas savings.

Now, let’s say your SUV used $400/month in gas.  Your new car uses $200/month in gas.  It will take 26 months to start seeing savings.

A sell/trade is most economical when you can trade for as close to your car’s value as possible.  Otherwise, it could be years before you start realizing the gas savings.

If you’re thinking about getting a lower gas mileage car, make sure you crunch the numbers first.  In the meantime, look at these five ways to save on gas.

Some people spend every penny they earn, never putting any money aside for a rainy day.  Worse, they don’t put anything aside for their retirement.

There’s another side to that coin.  The person that saves everything.  Having some extra money in the bank is a good thing, but is it possible to save too much?

Are You Living Debt-Free?

Some level of debt is reasonable.  Most people can’t afford to buy a home upfront, so a mortgage is usually a given.  You probably also have student loans, an auto loan, and possible some credit card debt.  Don’t save so much that you neglect to pay off your debt.  Generally, you should pay off highest interest debt first which usually means credit card debt, then auto loan, followed by student loans, and mortgage.

What Are You Saving For?

Saving is good, but what’s the point of saving for the sake of saving?  When you’re putting money into your savings account each month, you should have a savings goal in mind.  Not only will that goal give you something to work toward, it will also let you know when it’s ok to stop saving.

Enjoy the Money You Make

What’s the point of going to work everyday if you never get to enjoy the fruits of your labor?  It’s okay to spend money on things you like, whether it’s going to see a movie, enjoying a new restaurant, or buying the latest electronic gadgets.  You just have to do it in moderation.

If you’re putting aside money each month for retirement, you’re making payments toward your debt, and you already have an emergency fund, doing a little frivilous spending is acceptable.

How often do you wish your financial sitaution was better?  Now, how often do you do something to make your finances better?

You (and only you) have control over your money.  If you don’t like the way your wallet looks these days, you (and only you) can do something about it.

Take the time you spend thinking about talking about being broke and figure out ways to get more money.  It’s not as hard as you think it is.  You can make more money or you can cut your expenses or, even better, you can do both.

Need some inspiration?  Reading this blog is a good start.  There are tons of websites out there that can help you manage your money better.  Some of my favorites are Bankrate, MSN Money, Smart Money, and Kiplinger.  You can easily Google some money management terms to get more ideas.

Visit your local library and check out some books on budgeting, finacial management, credit, and debt.

It’s your money, so if you want to change it, do it.

If you make a goal to get your graduate degree by age 27, you’ll take steps to reach that goal.  You might get a job with a company that has tuition reimbursement.  You might take a class to prepare you for the GMAT, LSAT, etc.  When you make decisions, you’ll keep your goal in mind.

The same is true of your money.  If you have a goal to save $10,000 in the next 3 years, you’ll be putting money in your paycheck each pay period.  You’ll save windfalls instead of splurging them.  You’ll do less frivilous spending and more saving.

On the other hand, if you don’t have any money goals, you don’t have anything guiding your spending.  You’re more likely to blow all your money.  Unless you plan to work your entire life, i.e. retire on nothing, this isn’t a good idea.

So, start making some goals for your money.  If you already have goals, review them to make sure they’re still relevant.

Making a budget on paper is a good start, but for some people, it’s tough to put the paper budget into pratice.  You have to keep running totals of what you’ve spent in each of your budget categories and frequently compare it to what you’ve budgeted.  What good is a budget if the process is too cumbersome to keep up with?  Envelope budgeting might help you.

How Envelope Budgeting Works

Start by writing out your budget on paper.  Decide your spending categories (e.g. food, rent/mortgage, utilities, etc.) and how much you will spend in each category each pay period.

Then, make an envelope for each spending category.  On the outside of the envelope, write the name of the category.

Each pay period, divide your money for each spending category based on your budget and place the money inside the corresponding envelope.  When you’re ready to spend, take the money from the appropriate envelope.

Envelope Budgeting With Checking Accounts

Envelope budgeting works best with cash since the physical absence of money from an envelope will keep you from spending it.  However, the world of direct deposit and debit cards, managing your money this way can be difficult.  Here’s some suggestions.

• Don’t deposit your checks (or withdraw your direct deposits) so you can manage with cash.  Then, if you prefer to pay certain bills with check, deposit the money before paying the bill.
• Open multiple checking accounts.  If you have several spending categories, I don’t suggest opening a checking account for each one.  On the other hand, you might open a second checking account to separate bills and other necessary expenses from spending money.
• Use an envelope budgeting software to help categorize and manage your spending.

Tips to Make It Work

• Stick with it.  It might take a few months to get the system to work for you, so don’t give up too soon.
• Get the family involved.  Make sure to include your spouse and children.  Even if your kids are too young to spend, you can explain why you’re diving the money and spending from envelopes.
• Don’t throw away leftovers.  If you have money left in an envelope, put it toward savings.

If you used direct deposit on your 2007  income tax, you probably got your tax rebate last week.  Otherwise, you can expect to get your check in the mail by July.  (See Who Gets Their Rebate First? to find out when you can expect to get your rebate).  You probably have gotten anywhere from $300 to $1800.  What should you do with all that extra money?

The government wants you to use it to stimulate the economy, i.e. blow it on clothes, electronics, etc.  That may not be the smartest thing, especially if you have debt or no savings or both.

My suggestion: put at least 40% of it toward debt/bills, 30% of it in savings, donate 10%, and blow the last 20%.  That way, you take care of your financial needs and wants.  Of course, you can tweak the percentages if you need to, but you get the jist – put most of the money toward savings and debt.

Now, you know your financial situation better than I do, so if you need to put all the money toward your debt or all of it in savings (especially if you don’t have an emergency fund) do it.  Or, if your debt’s already paid off, you have an emergency fund and a healthy savings, you’re in a better position to  spend the money how you wish.

Prices on nearly everything keep rising but incomes aren’t increasing to match.  Unless you were previously underspending your income, you’re starting to feel the pinch in your wallet.

Now’s the time to make some important decisions about the money you’re spending.  You might have to say no to some things and cut out some of your expenses to make your paycheck stretch.  If you don’t do it now, you can easily find yourself living above your means, which can lead straight into a hole of debt.

Look at one of your past billing statements to see where you typically spend your money.  Are there places that you can cut back?  A few weeks ago, I showed you how I cut my monthly expenses by $100.  You may be able to cut yours by more.

Decide what you have to spend money on and what you can live without.  The things you can live without, live without them.  As the cost of living increases, you’ll be glad you made spending adjustments sooner rather than later.

Many kids are taught money management when their parents start giving them a regular, periodic allowance.  Then kids become adults, get their own jobs, and allowances disappear.  But maybe allowances should continue into adulthood.

Have you ever considered giving yourself an allowance?  Separating “bill” money from “spending” money can help keep you within your budget and force you to make wiser decisions about spending money.

Physically separating your spending money, either by withdrawing the cash or by putting it in another account, will allow you to spend without tapping into your bill money.

How much should you give yourself as an allowance?  Subtract your expenses and monthly savings from your income and that’s the amount you’re allowed to spend each month.

These days, it seems like gas prices are always hitting record highs.  Some places are seeing prices as high as $4 a gallon.  Increasing gas prices can definitely pinch your wallet, especially if you’re not adjusting your gas consumption or spending some other area of your budget.  Kiplinger has some tips to save money on gas.

• Shop around.  The gas station you pass on the way to work might not have the lowest price gas in your area.  A site like GasBuddy.com can help you find the cheapest gas near you.
• Buy early or late.  Avoid buying gas during rush hour when gas prices are typically at their highest.

Carpooling, public transportation, and working from home are also options for saving on gas.  If you drive an SUV or other vehicle with low gas mileage, you might consider trading for a more fuel-friendly set of wheels.  Remember, if you’re spending more money on gas, you’ll probably have to cut spending somewhere else in your budget to continue making the most of your money.