This is a guest post brought to you by ForexTraders.

In these trying economic times, it can be quite an accomplishment to meet your monthly budget requirements and then have money left over for savings. We all must learn how to save on a regular basis to provide for our future financial security, but we also must take the time to lean about investing, a rather daunting topic since none of us ever were really taught much about the discipline during our collective time within structured education.  The subject must be approached at some point in our lives and in just the right manner or our precious savings can disappear in the blink of an eye.  The market can be very cruel when it teaches its lessons to the uninformed and impatient pupil.

The fact remains that you are reading this article, and that is a good start.  Hopefully, the following anagram will help guide your effort and keep you on the right track.  Investing is all about “PPPPP”, the five “P’s”:

• Preparation:  As you start your journey, you need to immerse yourself in the subject matter.  Buy a book on investing, read articles on the Internet, and visit your local library to study up on the topic.  Your first objective is to familiarize yourself with the terms and principles of the craft so that you will fully comprehend your lessons to follow.

• Professional:  After knowledge, experience is key, but unless you want to lose money gaining it on your own, the only “shortcut” available is to find a competent professional in your locale to teach you the basics and guide you along your path.  Accept your “amateur” status.  Enroll in a class.  Seek out an investing club, but find an expert.  He will teach you about fundamental and technical analysis, how to develop a trading plan, risk management principles, how to choose a broker, and a whole lot more.  Gain from his wisdom.

• Practice:  At this stage, you are ready to determine what kind of investor that you are.  You may like to study companies and invest for the long-term, or you may prefer a more active trading regimen where you move in and out of the market attempting to profit from short-term opportunities.  Your personality will dictate which one.  The former type uses “paper-trading” to simulate real investing.  For currency trading, forex broker reviews will point you to those that offer free demo accounts for practice.  For high-risk arenas like forex trading, specialized training is a must, coupled with hours invested on these demo systems to perfect your trading plan and to gain the confidence and consistency necessary to survive real market conditions.  In whatever medium you choose, practice is vital to gain experience.

• Prevention:  Investing is really about managing risk.  All investment vehicles offer a potential reward, but only if you are willing to accept the risk for a potential loss.  Low risk items start with savings accounts and U.S. Treasury Bills.  Medium risk extends to stocks and bonds, and high risk is accorded to things like real estate, commodities, futures, options, and currency trading.  For each vehicle, there are tried and true risk management principles that will minimize your potential for losses.  You must learn these principles and employ them.  Losses will happen.  They are a fact of life, but your objective is to limit these losses, and to “let your winners run”, a favorite investment saying.

• Production:  Producing consistent positive results is your goal, so take everything you have learned and as Nike commercials have said, “Just do it!”

I’ve created specific strategies that will help me reach my main financial goal this year: boost my savings. Since this is a 3 part series for this one goal, here were the first two parts:

1. Part 1
2. Part 2

Today, I’m focusing on another strategy that will help me meet that goal and find an extra $200 a month to deposit into my savings accounts. That strategy is a Cash Only system for certain expenses. My daily habits are now under control with the help of a finite gift card, but the more seldom luxuries, like eating out, need to be monitored more closely. Though I’ve been better about eating at home and making sure I eat something before leaving the house (this was always a problem – drinking sugary coffee, thinking I’m not hungry, then a few hours later crashing and burning only to find the closest fast food restaurant I could drive thru!).

Using a cash envelope system, I’ll deposit my budgeted amount into it at the beginning of the month then when it runs out, ce la vie eating out. Not only will it be better for me financially, I’m guessing it will also be better for my health. I’m also getting into the habit of drinking only water with a slice of lemon instead of ordering a drink, thanks to Sam, which saves a few bucks every time.

Two additional strategies that will help me meet my financial goal this year, and I’ll quickly sum them up in this part, are keeping track of additional income that comes in and making sure it ends up in savings and making sure I hold myself accountable. Being that my income is slightly erratic, some months are better than others. Instead of seeing that money disappear into the black hole of my checking account, moving it into my savings accounts will immediately save that extra cash ahead of time.

I’ve also just figured out how to measure my progress using a Financial Planning widget. I also came up with a plan to track my savings progress even though I’m tracking 3 accounts with a fourth one waiting in the wings – how I love excel sheets!

My other two goals this year aren’t as difficult for me to obtain, basically ride my bike more (which I’m tracking my progress already), and guest post more often. Watch for my quarterly summaries!

I’ve also joined The Saved Quarter challenge. Though my goal isn’t to save a quarter of my income, I’m setting attainable savings goals that I intend to meet.

Do you have specific strategies to help obtain your 2011 goals?

This past year, I’ve made some good headway towards my 2010 goals, mainly with paying down debt and increasing my credit score. Yet I’ve found that one of my primary goals, increase my savings, got lost throughout the year. The biggest reason this goal failed was that I didn’t set specific enough mini-goals with strategies to accomplish them. I’ll be breaking down my goals in parts with a wrap-up article scheduled as a guest post at another site later in January (I’ll share that link then).

Breaking down goals into bite-sized chunks seems to work well, at least for me. So for my first 2011 goal, increase my savings, I’ll structure it to make it more manageable and make myself accountable.

• Boost my savings accounts (there are a total of 3 of them)

1. Label my savings accounts accordingly: Big-Purchases, Wealth Building, Emergency Fund
2. Automate my savings amounts so it’s less likely I’ll spend the money. The amounts are as follows: $400/month into the big-purchase fund, $270/month into the wealth building fund, and $80/month into my emergency fund. This increases my monthly savings by $200. It also assumes that I’ll be saving a little over 13% of my income providing my income remains stable (that seems to be my biggest hurdle).
3. Create quarterly goals for each account – I need this goal mainly because my income is erratic: By March 31st I should have increased my big-purchase fund by $1,200, wealth building fund by $810, and emergency fund by $240.

To make this plan work, I’ll be posting the next 4 parts of this year’s goals throughout the next couple of weeks. The biggest factor for increasing my savings account is to find out where in my monthly budget I can scrounge up that extra $200. I know it’s there; at least that’s what my Quickbooks reports are saying. I recently renamed my three major accounts, thanks to my husband’s input, and may need to switch the monthly savings amounts around a bit. But the total amount saved each month will hopefully remain the same. Stay tuned for the specific strategies that are going to help me meet this primary goal.

What goals are you looking to accomplish this year? Do you have a strategy to accomplish them?

This guest post was written by Henry Truc from Go Banking Rates, a website that brings you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide. Follow them on Twitter at @GoBankingRates.

For most homeowners, paying down their mortgage loan is akin to fighting off the plague, but the dream of one day owning their home in full keeps them going. Unless you’re flush with cash, buying a house usually means taking on a sizable amount of mortgage debt, and with that, forking over a fortune in interest payments.

Conventional wisdom suggests that owning your home outright is the smarter financial strategy. You don’t owe lenders anything, you save money on interest payments and you’re one major step closer to financial independence.

That said, there are some disadvantages to owning 100 percent of your home equity that should be considered.

Disadvantages of Owning Your Home in Full

Though it’s debatable whether or not there is such a thing as good debt, paying off your mortgage in full does reduce certain opportunities for better use of your money. Home loan debt isn’t necessarily a bad thing and here are a few reasons why:

• Tax Deductions: One of the most popular reasons for maintaining mortgage debt is the tax advantages that you enjoy on interest payments. It doesn’t necessarily make sense on its own because owing money just to save money on interest defeats any economic purpose. It does, however, effectively reduce the cost of that debt.
• Greater Financial Flexibility: Instead of having no cash in the bank and a mortgage paid in full, it may be a good idea to tap into that equity just to ensure that you have some access to cash if an emergency arises. If you pour every dollar into paying down your mortgage and don’t have anything left over for home repairs or one-off incidents, you could be positioning yourself in a tough spot to handle any costs of unforeseen events.
• Cheaper Debt: If you can get a good mortgage rate, chances are it’s multiple times less than your credit card, personal loan or auto loan interest rate. Consolidating your debts with a HELOC or home loan refinance can provide you some debt relief and help you save money on interest payments. Plus, mortgage interest payments are tax deductible, unlike credit cards or other personal loans.
• Property Value: Since your property value isn’t affected by your mortgage balance, you can put your equity to better use than just having it sit around idly by, waiting for you to sell your house. You may want to consider taking out a loan against your home for value-added investments like remodeling your home or adding another bedroom that will increase its market value.
• Return On Investments: By the same token, you can probably do better with your home equity than having it sit around earning a zero percent return. Depending on your risk tolerance and the potential return on investment, you may be able to outpace a low fixed mortgage rate. Granted, no investment is guaranteed and you’d be hard pressed to find a CD rate that trumps your mortgage rate. So for practical purposes, putting your home equity at risk to pursue any investment may not be a shrewd idea.

Keep in mind that these options should only be considered if you own a majority of your home equity or own your property outright. Mortgage debt is still debt. Whether you owe a balance on your first mortgage, are refinancing to consolidate other debt with higher interest rates or using it to fund a home improvement project, you’re still taking out debt on your home. Before agreeing to any home loan, use a mortgage calculator to ensure that you can afford the monthly payments first.

Advantages of Home Equity

Owning your home, whether outright or just a majority of the equity, has undeniable advantages. The more equity you own in your home, the more stable your financial situation may be. The peace of mind and stability of not having to worry about meeting mortgage payments is hard to put a price on.

You shouldn’t consider taking on more mortgage debt against a home you have little or no equity in. In addition, if you are fortunate enough to be in a financial situation where you can own your home outright, be debt free and have a surplus of savings to invest wisely, you may not need to access your home equity at all. The key, as always, is to find the right balance that fits your financial strategy and maximizes the efficiency of your money.

Do you think it’s better to own your home outright or to owe a small mortgage balance?

• Selling the American Dream
• Who are the real “Joneses”?
• Rent vs. Buy; The Guilt, the Guilt

The Yakezie.com

A few weeks ago, I practically missed my carnival date and didn’t have a chance to catch up on all of the Yakezie member’s posts. So, today I’m making up for the ones I missed. For some lazy Sunday afternoon reading, here  is a copious supply of reading material:

• Financial Samurai with What the Tax Cut Extension Means to You. Thanks to Sam, I’m able to decipher and digest all this tax lingo smoothly.
• Budgeting in the Fun Stuff with Fit in a Fun Friday – Zip Lining. This activity is something I’d definitely want to do. I’ve heard it’s popular in Central and South America, but didn’t know there were places in the U.S. where I could zip across a forest.
• Consumerism Commentary with When Doing the Right Thing Hurts Your Credit. Flexo makes a good point that if you paid off your cards in full, like a responsible credit card holder should, it may hurt your credit score if the company reports your balance as the amount you spent, not the total amount that they’ve extended to you.
• Frugal Zeitgeist with Holiday Organizing Tricks. Basically, don’t be lazy and get others to help pitch in!
• Free from Broke with PerkStreet Free Online Checking. A comprehensive review of this online bank.
• KNS Financial with NJ City Collects Over $1 Million in 3 Months from Red Light Cameras. Let me just say that the Phoenix area did something similar to this a few years ago and now every time I drive there, I’m constantly “flashed”. I just hate those cameras! Of course, part of the trickery is that the speed limit changes every few feet from 75 to 55 to 60 and I’m never sure what the speed limit is!
• Buy Like Buffett with Why Index Investing Will Not Work for the Next Decade. Predicting a slower period of growth on the horizon, Mark makes a few good points about the drawbacks of Index Funds.
• Early Retirement Extreme with How to get Wealthy on Minimum Wage. The definition of “wealthy” differs from “rich” in this article making it possible for just about everyone if you’re determined.
• Canadian Finance Blog with 4 Reasons Your Resolutions Fail and How to Overcome Them. This is such a timely topic with the New Year right around the corner. Find out why most of us struggle to meet our resolutions.
• Bucksome Boomer with Time to Make FSA Elections. I honestly haven’t taken advantage of my employer’s FSA, but perhaps I should.
• Punch Debt in the Face with Lovin’ 2010. Ninja has made excellent progress this year on his savings and debt goals. I’ll be using this as inspiration for my 2011 financial goals.
• Not Made of Money with Last Minute Gift Ideas – A Few Simple Tips. Good ideas for those of us scrambling to wrap up our shopping!
• My Journey to Millions with Why Did I Create a 529? Why Did I Choose New York’s Program? I don’t have kids yet, but for those that do and want to start saving for their college, this article is informational.
• Invest it Wisely with Importance of Financial Literacy Education. I couldn’t agree more, now I just have to find time to check out this book.
• Sweating the Big Stuff with Should We Use Gift Cards on Everyday Items? My answer is YES.
• Saving Money Today with What To Do When You Hate Your Job. I’d say, well then QUIT. But maybe I’m just over-reacting.
• Len Penzo with his weekly Black Coffee roundup. Always an amusing read.

Whew! I still didn’t get around to mentioning every Yakezie member’s blog, so I’m guessing I’ll have to follow up with a Part 3 sooner or later.