College expenses are rising at an annual rate of 5 – 7%, making it increasingly difficult for the average American family to afford many of these high-priced institutions. College savings plans are a great way to begin saving for your child’s college expenses, and setting up a plan can be done in as little as 90 seconds.

College savings funds such as 529 Plans and Coverdell Education Savings Accounts (CESA) provide a tax-free advantage on earnings generated by the funds, and are among the best choices for families looking to invest for college expenses. Additional college savings programs can be explored at websites such as www.collegesavings.org.

Allocating funds on a monthly basis is the best way to build a college savings plan. And with automatic fund transfers available for most investment plans, there is little to do once the fund is set up but to sit back and watch it grow. Calculate the amount of available monthly funds that can currently be used towards a college savings plan. As you pay off outstanding debts, or experience other positive changes in your monthly income, plan on using the money you previously saved towards these debts each month to increase the amount being placed into the college savings plan.

Once you have your decided on your monthly allocation, the type of fund you wish to set up, and the financial institution you want to manage your fund, actually creating the account can be quite simple. It involves filling out a detailed application, paying the enrollment fee (if applicable), and transferring your first investment contribution.

Giving your children the gift of an unlimited future is not strictly for the very wealthy. With a little determination, discipline, and planning, you can easily set up an effective college savings plan to ensure your child gets their turn to wear that cap and gown on graduation day.

This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

Now that the holiday season is over, we can forget about all the mayhem and expenses that accompany our yearly festivities, right? Not so fast. Planning ahead and thinking about next year is a great way to minimize the crunch holiday gift giving puts on your bank account and credit cards. By opening a special “Christmas Club” savings account this January you can spread the holiday expenses over the course of the year, making them much easier to manage.

We’ve all been there. Holiday shopping for friends and family ends with considerable credit card expenses and the associated interest rates that accompany them. We don’t want to skimp on gifts for our loved ones, so we place ourselves in a financial bind to make sure the Christmas tree is overflowing with brightly wrapped packages. But you can eliminate the use of credit cards and the huge blow to your checking or savings account if you put aside a certain amount each month of the year for use towards holiday gifts.

Special purpose savings accounts are available through many reputable online banking institutions, such as ING Direct. Automated fund transfers can be set up to automatically transfer a specified amount of your paycheck into these accounts. Place your planned holiday purchases into a budget. Divide the lump sum by 12 to determine the monthly savings amount needed to reach your goal. For instance, if you plan on spending $1,800 on next December’s gifts, your monthly allocation will be $150, a much easier sum to swallow a little at a time.

Responsible financial management doesn’t mean that you have cut gift giving out of your yearly budget. With a dash of planning and a pinch of foresight, you can build a recipe for a great holiday season.

Impulse buying is defined as “an unplanned or spontaneous purchase”. Retailers in particular try to take advantage of our weakness for impulse purchases. Take a look to your left and right the next time you are in line at the grocery store. Candy, chocolate, gum, magazines, and soft drinks will most likely be staring back, tempting you to spend an extra dollar or two to satisfy a craving that wasn’t there a minute before.

Credit cards make it all too easy to make these unplanned or spontaneous purchases. You don’t have any cash on you, but you simply must have that 2-pound milk chocolate super bar, fancy new electronic gadget, or even a new car or truck. So what do you do? You pull out a credit card and tell yourself “No problem, I’ll pay this off later.” Not only are you setting yourself up to pay much more than the sticker price on the item due to credit card interest, but additional impulse purchases will only compound the problem and leave you deeper and deeper in debt each time.

But there are a few strategies you can use to reduce the amount of impulse purchases placed on your credit cards. Here’s how:

1. Make a List: Before heading off to the store, develop a clear list of everything you need to get. While at the store, stick to your list.
2. Stay Focused: Try to avoid distractions while shopping for items on your list or standing in line at the checkout counter. Research has shown that distraction is the leading cause of impulse buying.
3. Think About It: Prior to actually buying the impulse item. Hold it in your hand and think about it for 10 seconds. If you cannot come up with 3 reasons why you need it within that timeframe, put it back – you don’t need it. 

And so, with another holiday season upon us, the mad dash to buy gifts for everyone on your list has begun. Holiday shopping can be a stressful experience for even the most seasoned shopper. Crowded malls and parking lots, rude and disrespectful shoppers and salespeople, and unmanageable traffic all conspire to leave us stressed and angry.

There are a few simple tips, however, that can help relieve a good portion of the pain associated with holiday shopping. Follow these guidelines and enjoy a stress free holiday this year:

1. Get Organized: Men in particular could use some help with this one. Instead of rushing to the mall on December 23^rd with no clear idea as to what you want to get for your family and friends, make a list of each person and possible gifts well in advance. Then, plan out your shopping route. Breaking the shopping process up into multiple trips throughout November and December can keep stress to a minimum. Group stores that are near to each other together, so that one shopping excursion hits several spots.
2. Skip “Black Friday” for “Cyber Sunday”: For many products on your shopping list, there is no need to even start up the car in this day and age. Online shopping is gaining in popularity. In 2008, almost 30% of holiday gifts were purchased online according to the American Research Group. Online shopping offers the ability to easily sort and compare thousands of products to select the appropriate gift, and getting the best price can be easily verified. Although you may have to factor in shipping costs for most products, the savings on both transportation costs and your sanity can outweigh these expenses.
3. Start Early: The earlier you can begin your holiday shopping, the better chance you have of avoiding the mall mayhem. See a great deal in August on an item you know your husband or wife would love? Grab it now and store it away. It may not be there come December. Post-holiday clearance sales are also a good way to get ready for the next holiday season, with many products at a lower price than they will see for the rest of the year.
4. Relax: Take a few deep breaths and leave work or home stress behind before heading off to the mall. Leave plenty of time to deal with traffic and parking problems. And, if possible, leave the kids at home or with a relative for one less distraction while shopping. Becoming angry or irritated will only make the shopping experience worse. Get in the holiday spirit, and think of all the happy faces and smiles you will see once the shopping is over!

Excellent video coverage on a taboo topic — how the credit card companies prey on credit card holders to get more fees, interest, and debt.

What do you think?

Pulling out that small piece of plastic to charge anything from rent to new shoes or a dinner out with friends is a tempting option for many, even those with current debt problems. It’s all too easy to say “I can pay this off later” to satisfy an immediate need. But it is just this mentality that got many of us into trouble in the first place.

The first step in learning to keep your credit cards at arm’s length is to simply leave them at home. Physically take them out of your purse or wallet and put them in a safe location. This will force you to use cash or checks for any expenses, and makes it less likely for you to make non-essential or “impulse” purchases.

The next step is a bit more drastic. Cut up your credit cards. This will make it impossible to use them for everyday purchases. In addition to not having the option of actually using the cards, this process has a psychological affect as well. You are committing to not accruing any additional credit card debt, and the chopped up chunks of plastic mean you aren’t kidding around.

A final step in keeping credit cards at bay is to put a freeze on your credit reports. For around $10 each, most major credit bureaus will “lock” your credit rating. This will make it impossible for creditors to issue you any additional lines of credit because they will not be able to look at your credit report, instantly disqualifying you.

Drastic measures? Yes. But difficult times call for difficult choices. Make a conscious effort today to stop using your credit cards and you will be one step closer to a financially secure tomorrow.