Some level of debt is necessary for just about everyone. Few can buy a home without credit. One of the largest expenses that people will pay over their lifetimes will be interest charges. There are some options that people can use to make sure that they can pay the least amount possible in interest.
Refinance a Home
One of the biggest interest expenses the typical family will payout is the interest owed on a home mortgage. There were many people who got a mortgage when rates were around 6 or 7 percent. With current rates just over 4 percent, refinancing is a move that can save many thousands of dollars over the life of the loan.
Pay More than the Minimum on Loans
While this might leave less money in a person’s wallet in the short term, the long term benefits will allow them to pay much less in interest over the life of a loan. Less paid out in interest will help people keep more money in their pockets over time.
Pay a Mortgage through the Bank Holding the Note
Some banks allow those who pay their monthly mortgage payment through a checking or savings account that is set up at the same bank to save a little bit on the payment.
Some banks have offered their debtors a quarter or half a point off of their interest rates for paying their monthly bills in this manner. Of course, not all banks will do so. Mortgage holders will need to check with their specific lender.
Transfer a Balance
Just about every American gets those credit card offer in the mail that will give interest-free payments for a set period that is usually for two years or less. Consolidating outstanding credit card debt onto a new card that does not charge interest is a great way to save some money on interest payments.
It can also cut the number of payments due each month. Unfortunately, there will probably be a balance transfer fee added to the principal for the benefit.
Use Balance Transfers to Actually Make Money
Transferring a balance is not just a way to save on interest. Those banks that offer interest-free payments will sometimes send some checks to pay off other bills. It is at times possible to use those checks to cash out and put the money into an interest-bearing account.
Users can then pay off the debt by just cashing out the CD or annuity. While interest rates are not the best, this is a way to make a little bit in interest on the bank’s dime.
There are many ways to save money on interest for those who do good research and have discipline. For those who find themselves unable to make their monthly payments, it is possible to find a bankruptcy lawyer to work out another solution.
Pocket Money: Five Steps to Become Financially Independent
Becoming financially independent takes a plan and a certain amount of discipline to meet the goals you want to accomplish. Here are five steps that can set you on the right path to becoming financially independent.
Spend Less Than You Earn
One of the biggest reasons many people can’t become financially independent is because they can’t get a handle on their spending. You need to make a monthly budget and stick to it at all times Budget for necessities such as housing costs, food, and transportation costs first.
Discretionary spending should be the last line in your budget and it may vary from month to month, so don’t get complacent in what you can spend.
Save Early and Often
The only real way to become financially independent is to build up a good nest egg. To do that, you have to budget in an amount to save every month, both for emergency savings and retirement.
If you have a 401(k) or another retirement plan at work, enroll in it and at minimum, save the amount you need to secure and compare matching contributions. Your emergency fund should be your next priority, and if you can afford to save more after that, put more money toward retirement.
It’s hard to achieve financial independence when you owe people money. Some types of debt have a good purpose, such as a mortgage or student loans. But most other types of debt, such as credit card debt, simply serve to siphon of money every month in the form of finance charges you could save instead. Lowering your debt, or even becoming debt-free will get you much closer to your goal of financial independence.
Rent Rather Than Buy
Though owning a home can help you build equity and increase your assets, it also puts a financial ball and chain around your neck. Mortgage costs, taxes, insurance, and maintenance cost all take money that you might otherwise be able to save.
Owning a home also can make it difficult to move for a better job. Renting an apartment allows you to stay more financially independent and mobile while you’re single. Renters Guide suggests you look in your area for Bridgeland apartments for rent or find a condo that is being rented out at a smaller price.
Protect What You Have
You can’t truly achieve financial independence if your savings and assets are constantly at risk. Having insurance ensures everything you have worked so hard to build will be protected.
You need life and health insurance, homeowners or renters insurance, auto insurance, and business insurance if you own a business. Make sure you have enough in savings to cover any unexpected damage as well.
Achieving financial independence isn’t easy, but it’s not impossible, either. Following these steps will help you get there.
5 Ways to Help You Out From Money Tight Situation
Despite slight improvements over the last couple of years, the country’s economy is still in rough shape. This makes things difficult for everyone, but it’s particularly hard on households that are in debt.
When money is tight, the finances that are barely chipping away at your debt pile is more wisely spent on food and electricity. That doesn’t mean it’s hopeless, though. Here are five tips to help you get back up on your feet.
In order to get the most out of your hard-earned money, it’s essential to cut costs wherever you can. Start by eliminating the things you don’t really need, like high-speed Internet, cable or satellite service or costly phone plans.
Go back to dial-up, watch TV over an antenna and get a pay-as-you-go phone. Similarly, start finding ways to save on groceries. Browse discount bins, buy things in bulk, shop sales and switch to off-brands.
When you’re having trouble paying off debts, it’s not wise to ignore them. Soaring interest rates on late payments can come back to haunt you. If things have become too tight as a result of these payments, you may wish to consider seeking debt consolidation.
These services can help you reduce your payments to a more tolerable level, helping you work your way out of debt while still making a living.
Many hard-working Americans are being forced to make due with what little income they have. Unfortunately, this often means that all of the bills can’t always be on time. While you may incur a small fee for late payment, it’s maybe your only option when there are more pressing needs.
Decide which bills have top priority. Pay the latest ones first if you have the money, and then move on to the least expensive bills. Many companies will also gladly accept partial payments.
With some ingenuity and a little adventurous spirit, you can always find ways to make more money. If you’re good at handicrafts, consider making and selling them online or at farmer’s markets and festivals.
Reselling profitable items from thrift stores, dumpsters and garage sales is also becoming popular. Some people even write web content online for extra money.
Cut Up the Cards
When finances are sparse, it’s important to avoid the urge to buy things on credit. The idea of buying now and paying later is alluring, but it is also what gets many people into debt in the first place. Cut up the credit cards and order personal checks instead. Then you’re not as likely to spend money you don’t have.
6 Monetary Actions You Should Try
As you get older, you will realize that most financial planning advice is too compound or too banal. Half of this advice is too hard for you to even understand and the other half you have heard before.
Assuming you are already giving to your 401(k), flossing after every meal and paying your credit cards off, here are 6 unusual, and achievable, smart money moves you should try.
1. Work Out Your Largest Savings Goal
Many people currently working are liable to live for 3 decades after becoming qualified for Social Security, but only a few know the meaning of this financially. Some people are not aware of what they will need to live comfortably after retirement. To live well once you retire, you should save about twelve times your yearly income before retiring.
2. Ramp up Your Investments
If you do not have a Roth individual retirement account, you should open one immediately. Invest in areas with good returns. You can also invest some cash in a fund, like the one specializing in minor-company stocks in rising markets.
It should not be your entire portfolio, but it has to be in there. Remember, emerging markets provide the best overall profits of any investment currently.
3. Try Homemade Month
Bid farewell to the burritos, soy chai lattes and pasta primavera. Pick any month, and try not to eat out by any means, for dinner, lunch or breakfast. It is not easy but certainly, these meals add up. For example, getting a sandwich for lunch at work costs you $10.
You would spend $2 to buy ingredients and 5 minutes of your time to make the same sandwich at home. If you had an audit of your household spending, you would be shocked to realize that about 70% of the expenses goes to restaurants.
4. Stop the Bleeding
If you are like most families, you spend up to about $300 a month on internet, satellite or cable TV and cellphones. Look into these expenses and see what can be reduced. Try dumping pay television altogether and instead watch movies and TV using online services like Netflix, Hulu Plus or Amazon for as low as $10 a month.
5. Hold a 2-Week Auction
Turn your home into Sotheby’s for 2 weeks. Go on Craigslist.com and eBay.com and auction off all things that you do not need.
The extra cellphone(s) in your kitchen drawer, that designer vase you never used and that second, unused lawnmower. Auction them all. Set a target for yourself, double it and see how close you get. Involve your entire family in this.
6. Imagine You Are Dead
Only a small number of people think about dying but from a financial planning perspective, everyone needs to. Chances are you have not prepared in case this happens. This does not apply just to the elderly.
There are two things involved in preparing for this.
First, get life insurance, plus disability insurance, in case you have dependents. Most people have some sort of coverage through work but this is normally desperately inadequate.
Second, you should make a will and if you already have it, ensure it is updated. Dying without a will can be disastrous for the family you leave behind. Luckily, such disasters can be so cheaply and easily prevented.
How Not To Save Money During Recession
With the current economic climate in the shape that it is, deciding to live a more frugal life can certainly make a lot of sense. Price comparison, grocery coupons and drinking less, it’s not exactly rocket science. Unfortunately, however, many people new to the idea of living a more frugal existence make a bit of a mess of it.
Surprisingly, in an effort to save money, it’s actually pretty easy to end up spending more. Then there’s that small matter of quality of life to consider. Therefore before heading to the second-hand clothes store, make sure that you know how to avoid making any of the following surprisingly common frugal living mistakes.
Most frugal living blogs will include at least one post about the joys of stockpiling. The idea is pretty simple when you see something that you regularly purchase on sale, you purchase a few months supply of it. Sounds pretty simple but most end up losing money by purchasing food that they will never eat. If it’s perishable, it shouldn’t be stockpiled. If you’ve never tried it before, it shouldn’t be stockpiled.
Overuse of Coupons
It’s important to remember that when supermarkets and manufacturers come up with coupon ideas, they are not attempting to help you. They are trying to get you to purchase things that you otherwise would not. This needs to be kept in mind when deciding which coupons to use.
Occasionally, you will get coupons for items that you regularly purchase, such coupons are a fantastic way to save money. Coupons that require you to simply try out an alternative brand are also worth using. But coupons that are for products that you neither want nor need are worthless.
They exist solely to increase your grocery costs, not lower them. While this might sound obvious, purchasing what you don’t need just because you have a coupon is one of the most common mistakes made by those new to frugal living.
A very common way for the man of the house to do his part when it comes to becoming a more frugal family is to offer to do a little bit of DIY. After all, there’s very little point in skipping that meal out if all the cash saved goes straight into the pocket of the local plumber.
Unfortunately, however, the average man thinks he knows a hell of a lot more about plumbing than he actually does. And when he attempts to apply said imaginary knowledge to his home, water damage is a significantly more common result than financial savings. Therefore before you try to save money with DIY, make sure that you actually know what you are doing.
Short Term Savings, Long Term Costs
When attempting to save money by being frugal, it’s very important to take a long term view. When you are purchasing something that you intend on using for a number of years, such as a car or a kitchen appliance, the cheapest option is rarely the best choice.
Focusing exclusively on price and forgetting about quality is a serious mistake to make when purchasing such items. While doing so will, of course, save money on the purchase price, you are likely to lose twice that in future repair costs. Therefore when it comes to purchasing items for long term use, take the long term view and focus on quality.
Saving a Dollar, Losing an Hour
If you want to truly save money by adopting the frugal lifestyle, you need to be prepared to occasionally get your hands dirty. After all, a large part of being frugal is being willing to forgo convenience so that you can save a bit of money. It’s important however to always ask yourself just what you are giving up. Occasionally, the trade is simply not worth it.
- Are you willing to drive an hour out of your way to use a dollar off coupon?
- Are you willing to spend an hour baking to save on the price of a loaf of bread?
- Are you really willing to cut your own hair?
Going Too Far
Finally, there is the matter of joylessness, a common emotion felt by those who simply go too far into frugal land. Are you going on holiday this year? No, house to paint. Are you going for a drink tonight? No, coupons to cut. There are many ways that you can save money and still live your life.
Unfortunately, those ways will always be outnumbered by the many ways that you can save money while turning your life into a grey, penny counting, existence full of boredom and sub-par products. Therefore while being frugal is certainly beneficial, don’t forget to live your life.
Richard Braine is the author of the above guest post and suggests readers sell gold only to trusted companies. Look for companies that pay the highest price per gram for your gold, with safe and secure procedures.