Category: Saving Tips
Need some money? Don’t ask your friends or family. Find out why.
For many people, there comes a time when it becomes absolutely essential to borrow money to pay important expenses or make bills. If you are late with a lot of bills, you could end up facing huge costs for late fees, utility shut-offs and other penalties. You could damage your credit and you could end up facing eviction or the repossession of your car.
Unfortunately, many people go through these kind of financial problems at some point in their lives and they need to find somewhere to turn for help.
If you are facing any kind of financial problem, from unexpected home or car repairs to being unable to pay bills, you may be tempted to turn to your friends or family members in order to get the money that you need for your bills. The reality, however, is that this is almost always a terrible idea.
Borrowing money from friends and family should be an absolute last resort only after you have exhausted other possible loan options that may be available to you. There are myriad reasons why you should never even borrow money from friends or from family members unless or until you have exhausted all possible other resources and are in a truly emergency situation.
Some of the many reasons why you don’t want to borrow from family and friends include the following:
You could put your family or friends in an uncomfortable position
Many people in the United States today are living paycheck to paycheck and your friend or family member that you ask for money may not actually have any cash to spare to give you, even in a temporary basis.
When you ask them for money, you’ve thus put them in a very uncomfortable position. They might have to admit to you that they are also facing financial struggles, which could be something that they don’t really want to say to you.
If they are a close friend or a close family member, they may also feel too badly to say no to your request especially if they know that you really need the money.
The result could be that your friend or family member lends you money that he or she doesn’t really have to give and thus you could drag someone you love into a bad money situation.
You could ruin the relationship and be uncomfortable whenever you spend time together
Owing someone money can make you feel very beholden to that person, even if they don’t say anything and are gracious about giving you the loan. You could feel uncomfortable and no longer like the equal of the person that you borrowed money from. This can undermine your relationship and make it less fun for you to be around a person who is important in your life.
The person who you borrowed money from could also become resentful of the fact that you took the loan, especially if they see you spending cash on something else or if they feel that you are taking too long or not trying hard enough to pay them back. You do not want to take a chance on alienating the people in your life who you care about because of a financial transaction.
You could end up being unable to pay the loan back
People generally do not borrow money with the intention of defaulting on the loan and not paying it back (especially when they borrow from a family member or a friend).
Unfortunately, sometimes life gets in the way of your best intentions. Even though you have every intention of paying back the person that you borrow from, you could end up simply being unable to do so.
This is likely to make you feel a tremendous amount of guilt and it is likely to make your friend or loved one feel resentful and possibly feel financial pressure as a result of the bad loan.
These are just a few of the many reasons why you do not want to take a chance of borrowing from a family member or from a friend. Instead, consider all other possible sources of loans available to you.
Even people who have bad credit may be able to obtain a car title loan from a trusted provider like TitleMax.com or a loan through a bank or other lender. Apply for loans and exhaust all options available before you ever even consider asking someone you love or care about for money.
Here are some ways to trim your cellphone costs and save hundreds per year.
You’ve heard the iPhone users of their referral mammoth monthly fee – but it’s not just those with the most stylish smartphones paying a fee.
“The average consumer spends over $ 300 per year,” said Schwark Satyavolu, which helps consumers save on costs. Knocking that many of your tab is not difficult, experts say: You can do this by changing your plan, your operator or how to use your phone.
Change your plan
Setting your current plan is the easiest way to save. You even have to extend or terminate your contract.
“Eight of 10 people do not use what they pay for,” said Satyavolu BillShrink’s. Ask your carrier for a summary of the use that goes back 12 months to see if you could get a better plan.
Go to the Data
Although many people voice plans of the family and less to enjoy the family messaging and data plans – which can save you a lot. AT & T, for example, offers unlimited text for a family of $ 30 per month, against $ 20 per person.
Ask for discounts membership
If you work for a large company, government agency, or university, you probably qualify for a discount – up to about 25% – on your personal phone. Get details of HR.
Unless you have a teenager prone to disasters, the insurance covers your phone for loss or damage is usually a waste. You pay $ 4 to $ 6 per month, and ranges from free to $ 50 $ 125. You can get a new phone for less, should you need it.
Say you’re leaving
“Carriers do not want to lose customers, so if you tell them that you have found a better plan, you may get a break,” said Sascha Segan, an analyst at PCMag.com cell phone.
Change your door
You may be able to do better by switching to another carrier, but wait until your contract is in place to avoid a cancellation fee.
Out of competition
The four major carriers – AT, Verizon, Sprint, and T-Mobile – have about 220 shots combined.
Looking beyond the “Big Four”
Regional carriers such as U.S. Cellular, MetroPCS, and Cricket Wireless offers savings of $ 20 per month plus the four major plans. You will not get a signal at the national level, if you travel to a place where there is no coverage, you will have to pay roaming charges. “But you can save a lot of money if you’re a homebody,” says Segan.
It is easy to see why prepaid phone plans are rapidly gaining in popularity: They offer calls, texts and web access from $ 40 per month – no contract or cancellation fees. If you use less than 300 minutes per month, they can be an economical choice. LetsTalk.com helps you compare plans. In addition, AARP members can get a phone without a contract for 250 minutes, and a consumer service cell, from $ 19 per month.
Change your behavior
How will you use your phone may have much to do with how much you will pay. These behavioral changes can easily save a lot of money.
Track Your Minutes
For those who do not have unlimited calling plans, the cost to go on the monthly allocation of minutes on average $ 36 per line. If you tend to approach the danger zone, check your weekly use – online or by code from your service provider – and limit your calls accordingly. Also, the habit of using your phone or work phone during business hours, when minutes moving in general will be charged to your monthly maximum.
Get the 411 for Free
I do not know the number you need to achieve? Composition 411 will cost at least $ 1.49 a pop. Use Google’s free option instead: Just call 800-GOOG-411.
Dialing internationally on Wi-Fi
If you often make international calls and have a phone capable app-chip, download the Skype application. Because it operates over Wi-Fi, Skype lets you call landlines abroad at discounted rates. (Some Verizon phones, the Skype application is running on the mobile cellular vs. Wi-Fi, but not yet billed to your normal minutes.) Also, you can call other Skype users. Anyway, you say goodbye to a large portion of your bill.
Two frugal experts reveal how to shave 15 percent off your monthly utility bills.
Imagine spending just $20 a year — or less — for yearly telephone service. Or, perhaps you’d be interested in shaving 15 percent off your monthly utility bills. Two frugal experts say you can do it.
Everyone looks for simple ways to save, especially in today’s tumultuous economy. Bankrate asked two frugal bloggers to share their thoughts on some nearly effortless ways to hang on to your hard-earned green.
If you take their advice to heart, you’ll likely save at least $100 a month around the house.
Rethink Your Phone Service
Fed up with expensive telephone bills? Jonni McCoy, author of the Miserly Moms website, recommends switching to an alternative phone service like magicJack or Skype.
Such services allow you to make local and long-distance calls for a fraction of the price of traditional phone service. For instance, magicJack customers can get phone service for as little as $19.95 a year, while Skype calls are free to other Skype users.
“These are good alternatives to (traditional) phone service, and they include long distance, so no extra card is needed,” McCoy says.
Customers nervous about dropping their traditional phone carrier have other options for saving money.
For example, consider canceling long-distance service from your phone carrier and using calling cards instead, says Susan Palmquist, creator of money blog The Budget Smart Girl’s Guide to the Universe.
Need a second phone line? In this case, a service like magicJack works well, because it’s “much cheaper than adding a second line to your existing phone account,” Palmquist says.
When it comes to your monthly cell phone bill, save money by cutting down on your minutes and switching to a more basic plan. Palmquist recommends switching to a pay-as-you-go cell phone.
Cut Down on Electricity
Each month, utility bills silently drain a little more cash from your wallet, preventing you from building a sizable emergency fund or retirement nest egg.
There are several ways to trim these bills. Three quick and painless ways to save include: switching to compact fluorescent light bulbs (which are more energy-efficient than standard light bulbs) lowering the temperature on your hot water heater (130 degrees Fahrenheit is enough to kill germs) and drying your clothing on a clothesline or rack whenever possible.
McCoy and Palmquist also recommend signing up for any incentive or rebate programs offered by the local utility company.
With these programs, you typically agree to allow the power company to briefly shut off certain appliances when energy demand is particularly high. In return, you get a credit on your monthly bill.
For example, customers who participate in Florida Power & Light’s On Call Savings Program allow FPL to install a small device on their water heater and air conditioner compressor. This allows the utility company to periodically borrow electricity for 15 minutes or so.
Palmquist — who lives in Minneapolis and gets her power from Xcel Energy — does this and gets a 15 percent discount on her bills.
Are you drowning in monthly water bills? Palmquist and McCoy recommend money-saving options such as washing all clothing in cold water.
“I use cold water to wash clothes, and recently read that using the delicate cycle also saves water, too,” Palmquist says.
In some cases, saving cash actually goes hand in hand with superior performance, Palmquist says.
“We installed a low-flow shower head in the main bathroom and find it not only saves water, but the flow is better than the old one,” she says.
Of course, another “no-brainer” way to save is simply to use appliances less frequently. Wait until you have a full load before running the washing machine, dryer or dishwasher.
Don’t overlook water-saving tips for outside the home. Palmquist plans to invest in a rain barrel for outside watering next year. Meanwhile, McCoy recommends making changes to landscaping “so there is less lawn to water.”
Bundle or Drop Cable and Internet
McCoy suggests saving money by bundling cable and Internet services. Palmquist agrees, and recently switched to an “economy package” for her TV service.
However, Palmquist says it’s important to look before you leap into bundling.
“Sometimes it’s more expensive and they can lock you into a two-year contract, so check out everything first,” she says.
If you’re really gung-ho about saving, simply drop cable altogether. Perhaps you can watch your favorite TV shows for free on an Internet site.
Or, maybe it’s time to simply give up those expensive TV habits and think about the priorities that really matter to you.
“My main advice is to think about wants and needs,” Palmquist says. “Many of us think something’s a necessity when really it’s just a want.”
A $10 purchase can help you save more than $40 a month — and get you started on paring down what you owe.
If you find yourself falling deeper into credit card trouble, it’s time to take a hard look at what’s coming in, what’s going out and see where you can free up some cash quickly to start hacking away at your debt.
Some trims may seem small, but if you package several of them together, you can soon get started on a respectable payment plan. Here are some ideas for places to turn first.
1. Cell Phones
“For $9.88, you can buy a TracFone (prepaid cell phone) with pretty decent coverage and pay by the minute,” says Mike Sullivan, director of education at Take Charge America in Phoenix. “And if you’re careful, you can end up saving $40 to $50 a month off a typical $80 cell phone bill.” He also recommends canceling your land line unless you have medical issues that may require emergency calls.
2. Cable / Satellite
Most people can save money just by getting rid of the extra pay packages they have — such as premium movie channels and extra services. “If you’re really in trouble, cancel the whole package,” Sullivan says. Check out the library for free movies, DVDs and CDs to bridge the entertainment gap.
3. Homeowners Insurance and Car Insurance
By increasing the deductible of your policy from $500 to $1,000, you can see big decreases on your premium, says Michael Barry, vice president of media relations for Insurance Information Institute in New York. “People pay about $880 a year, so if I can knock $88 off, it’s a start.” Regarding auto insurance, take a look at your collision insurance if you have an older car. If you have even a fender-bender, sometimes the cost to repair the car would be more than it’s worth, so perhaps you could cancel the collision insurance altogether.
First, look up the value of the car at Kelley Blue Book, Edmunds.com or the National Automobile Dealers Association, then check the collision line on your auto insurance bill and see what it’s worth to you to keep that insurance. Also, if you don’t drive that car much, look for a discount. “If you drive from 7,000 to 7,500 miles a year, you can often qualify for low-mileage discounts,” Barry says.
Americans are increasingly finding alternatives here. In fact, consumers spent 11 percent less last year in this category, according to the Bureau of Labor Statistics’ 2009 Consumer Expenditures Survey released in October. If you have more than one car, this may be the time to look at downsizing to just one car and getting around with better planning, carpooling, bike riding, public transportation or car sharing. Car-sharing companies such as Zipcar operate in a growing number of cities and on many university campuses. You can rent a car by the hour when you have to have one without the expense of insuring and maintaining your own car.
“People often overlook programmable thermostats,” says Edward Tonini, director of education of Alliance Credit Counseling in Charlotte, N.C. “You can spend $20 to get a programmable thermostat and if you set it right, it can save you $100 over the course of a year easily.”
Households spent an average of just more than $300 a month on food eaten at home and about $215 per month on food outside the home in 2009, the BLS survey reported. “Maybe eating out isn’t necessary for you,” Tonini says. “Packing lunches and eating at home will lower your discretionary spending.”
7. Gym Membership
Are you really using it multiple times a week? Divide your monthly dues by the number of times you go in a month and get a realistic picture of what you’re spending on a one-hour workout. Park districts or community centers often have low-cost or free programs. Also check into exercise videos or a piece of home exercise equipment that you would use regularly. If you decide to keep the membership, check to see whether the facility offers discounts for coming at off-peak times.
A family of four can quickly rack up nearly $100 on one movie with popcorn, drinks and maybe even parking fees. “Instead of going to the movies, have a game night at home. It sounds kind of corny, but it will be more meaningful than sitting in the dark when you can’t talk to each other,” says Dave Gilbreath, a regional director with Apprisen Financial Advocates in Yakima, Wash.
9. Tax Relief
Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawaii in Honolulu, says, “Many of the families we work with are struggling with credit card debt because of loss of income. One of the first things to do is re-evaluate your tax withholding on your paycheck (if your spouse or partner has lost a job). If you don’t make the change, you end up with a whopping refund. You don’t need the money a year from now, you need it now.” If you’re overpaying taxes, you’re also giving the government a free loan and are likely putting off paying for your own bills, which can lead to fees and penalties, she says.
10. Health Insurance for Dependents
“If you’re struggling with loss of income, you may no longer be able to afford $600 being deducted from a paycheck to cover your dependents,” Burkholder says. She suggests checking to see whether you now qualify for a state or federal coverage plan for dependents, such as the Children’s Health Insurance Plan, or coverage by health care providers that may offer reduced prices for basic health care for children.
Deciding what to cut first will be different for every consumer, but whatever the choice, it should be sustainable, rather than a one-time quick fix, Tonini says. Sometimes it’s cutting out the daily $4 coffee, but “they need to figure out what their ‘latte factor’ is.”
You know bankruptcy and missed payments, but they can be just as bad.
You pay your bills on time and never miss a payment. If you’re still having problems with credit, something on your credit report could scare lenders.
Everyone knows the gremlins that haunt the major credit reports: items such as bankruptcies, foreclosures and payments, late or even missed. Less dramatic items can also cause some anxiety among lenders inconsistent.
When you apply for a loan or a card account, lenders review your credit score and pull your credit report. Or they can take this report and pump through one of their own rating systems.
If they do not like what they see, you may be rejected. Or you can get approved with less favorable conditions. And it’s not just new applicants who have run the gauntlet. Credit card issuers to periodically review the records of existing customers, too.
Even more confusing is that different lenders zero elements of the credit report. So it’s quite possible that even for the same loan, no two lenders will see your credit history, in exactly the same light.
Think there might be something hateful about hiding your credit report? Here are six items that could scare lenders.
1. Multiplying Lines of Credit
Opening a new map is normal. Opening three in a short period of time could signal something bad happens in your financial life.
When it comes to card issuers of credit, “the window auditing has shrunk,” said Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association, the trade association of companies credit. “It used to be months and months. Now, you will find firms that monthly monitoring of account or every two months.”
And the only thing that these issuers do not want to see is that you ask all in town to lend you money.
“It would raise some questions,” he said. “This could be an indicator of something going on. I do not think it’s in the best interest of all consumers to go and be a collector of credit lines.”
2. A short-sale housing
“We told people short sales will not hurt their credit,” says Maxine Sweet, vice president of public education for Experian credit bureau. “But there is no such thing as a” short sale “in terms of how the sale is reported to us.”
“The way the account is closed is that it’s settled for a lesser amount than what you agreed to pay originally,” she said. “Status is” settled “. And it is just as negative as a foreclosure. ”
A tip: negotiating for the lender does not report the difference between your mortgage and what you paid as a “balance due” on your credit report, says John Ulzheimer, formerly of FICO, now president of consumer education for SmartCredit.com. Your credit score will take a heavy blow, but this action will not soften the blow, he said.
Sweet’s advice is not to dismiss the notion of a short sale, just go on with your eyes open.
“This may be the right decision to leave the house,” she said. It can be “better than a foreclosure in the economy, moving from the house and move on with your life. Do not expect to walk away with no impact on your credit history. ”
3. Someone Else’s Debt
Here’s something you might not know: When you co-sign on the dotted line to help someone else get a loan or card, the entire debt is on your credit report.
While the fact that you co-signed is neither good nor bad, it means – to the extent that any potential lenders are concerned – you of the debt yourself. And will be included in your existing debt burden when you apply for a mortgage, credit card or any other form of credit, said Ulzheimer.
And if the person you co-signed stopped paying, paying late or missing payments, that bad behavior is likely to go on your credit report.
So when someone tells you that co-signature is painless, because you never have to part with a penny, you can tell them that this is not true. Co-signing means accepting not only to repay the obligation, if necessary, but also to allow the debt – and all non-payment – as against you the next time you apply for credit you same.
Co-signing for a friend or family member “plays well with the Thanksgiving table, but it does not play well in the underwriting office,” said Ulzheimer.
4. Minimum Payments
If creditors make money when you carry a balance, the lenders who view your credit report does not like to see you pay just the minimum.
“It suggests that you are experiencing financial stress,” says Nessa Feddes, vice president and senior advisor for the American Bankers Association. “You can be delinquent,” she said.
Pay the minimums from time to time does not necessarily signal a problem, she said. For example, minimum pay in January, after holiday spending. Minimum one month or pay you expect your annual premium to reach.
But always pay the minimum after months months signals that you can not pay the full balance, and your current and future lenders will see that as a red giant “stop” sign when it comes to grant additional credit.
5. A Lot of Inquiries
This is similar to hiring a large number of new loans. When tightened lending standards, many borrowers, subprime borrowers in particular, had trouble getting credit, said Sweet. This meant they had to be applied several times to try to get what they wanted.
And with the VantageScore at least, that “really influenced the impact of investigations – they are more important than they used to be,” she said.
With the FICO score, the impact of investigations has remained about the same, according to Ulzheimer. Every time you allow a potential lender to pull your credit report, your score can take a small hit. The exact impact varies with the consumer, the score and the number of inquiries.
And if you apply for a mortgage, auto or student, you can minimize the damage by all applications within two weeks. When you do this, the beam score of all similar investigations and treats them as such. Unfortunately, there is no grace period for applications like credit card.
6. Cash Advances
“Cash advances, in many cases, provide the despair,” says Ulzheimer. “Either you have lost your job or are underemployed. Nobody comes out cash advances against a credit card because they want the money sitting in a bank somewhere.”
Because the interest rate is usually higher than the cost of credit card “, you are usually borrow from Peter to pay Paul,” he said.
How it hurts: first, the cash advance is immediately added to the balance of your debt, which lowers your available credit and can lower your credit score, says Ulzheimer. And all potential lenders will see your score.
Second, card issuers more regularly re-evaluate the behavior of their customers. To do this, they often get the credit report, the FICO score and history of the customer’s account and put these three ingredients through their own rating systems, said Ulzheimer. Many scoring models penalize for cash advances, which are often considered risky, he said. From your account history is only available to the issuer, only your behavior score with this card is likely to be affected, he said.
However, if the issuer slices of your line of credit or cancel your account, which could affect your credit score. And that could affect your relationship with other lenders.
There seems to be little logic to why some companies tack on nuisance charges.
Fees for this, fees for that — even a fee for paying a fee. Where does it end? I’m afraid I know the answer. In this tough economy, businesses of all types are trying to nickel and dime us with add-on charges. They want you to believe these fees are necessary to cover the cost of doing business, but more often than not, they simply mislead the consumer by adding a hidden mark-up to the advertised price.
Sometimes the fees are small, but other times they can be severe. The mortgage loan industry has been doing this forever, but now the practice has spread like the plague to many other services. I can’t be the only person who is outraged by this continuing practice. Or am I?
Here are eight classic fees that really gnaw at me. Some of them I do a pretty good job of avoiding. Others, not so much …
1. Unlisted Phone Number Fees
This is arguably the granddaddy of them all. I currently get charged $1.75 per month for my unlisted telephone number — $21 per year. Why does it cost the phone company more to keep my number out of the phone book than in it? That’s a rhetorical question, but I’ll answer it anyway: It doesn’t.
2. Convenience Fees
I recently bought four tickets online from Ticketmaster so I could take the wife and kids to see the Harlem Globetrotters. Cost: $300 for the set. But on top of that was a “convenience charge” of $5 per ticket that added $20 to my bill. Usually, buying online saves a company money that they’d otherwise spend on a telephone operator or a store clerk. So why am I being charged to make Ticketmaster’s existence more convenient?
3. Fees for Printing Tickets
I’m not done with Ticketmaster. After gagging on the $20 “convenience” charge for my Globetrotter tickets, Ticketmaster wanted to charge me $2.50 so that I could print the tickets from my home printer. Keep in mind that I also had the option to get the tickets via the postal service — for no charge. Where’s the logic in that? How much do you think it costs Ticketmaster to print the tickets on heavier stock paper, using their ticket machines, and then pay their staff to place the tickets in envelopes with the proper postage and mail it to my house? I don’t know either, but I made sure that’s exactly what Ticketmaster did.
4. Hotel Safe Fees
There are more than a few hotels out there that charge you just for the privilege of using their in-room safes — whether you use it or not. Here’s one hotel that charges $1.69 per night. What a joke. Whenever I see this fee, I ask to have it waived.
5. Tax e-Filing Fees
Among the most egregious fees out there are the ones that charge money for essentially doing nothing more than making a mouse click or pushing a couple of keys on a computer keyboard. How much money does it cost to send some bits of information through the Internet? Well, if you ask TurboTax, it’s $36.95. That’s what they charge to e-file a state tax return. So rather than printing out the return and sending it through the mail, I clenched my teeth and reluctantly paid it. Hey, if you paid attention you’ll find a lesson on opportunity cost buried in there.
6. Tax Refund Fees
After spending four hours doing my taxes with the online edition of TurboTax, I was due a refund. “Perfect!” I thought, “I’ll have TurboTax simply deduct what I owe them directly from my refund.” Unfortunately, it turns out TurboTax charges an additional $29.95 if you choose to go that route. My only other option was to pay by credit card — at no charge. How does that make any sense? So I paid with plastic. I hope TurboTax had to pay the credit card company an interchange fee for me using it too. Dummies.
7. Mortgage Junk Fees
There are dozens of mortgage junk fees out there, some more dubious than others, that make you scratch your head and ask what the heck is that for? Re-conveyance verification fees, commitment fees, and the infamous “warehouse fee” are just three classic examples.
8. And Then There’s This
It’s bad enough that airlines almost universally charge fees to people who have the audacity to travel with luggage. But a while back, United, US Airways, and Delta took things a step further by charging their “valued” customers who chose to pay for their bags at the airport, rather than online, an additional fee of between $2 and $3 per bag.
Saving and spending are the two most important elements of your life and your money. Unfortunately, money does not control many factors in life. It controls where you live, what foods you can buy, and many other things. For those who spend more than they earn, they can “look comfortable” but those looks can certainly be very misleading. We call these types of people “keep with the neighbors,” because they are deep in the debt and buy things that may be out of their price range so they can have as many cars as nice a house as his neighbor in the street. This can get you far in debt you may have to declare bankruptcy. Of course, this is not what the goal is.
Save your money, even if you are only 10 dollars an hour, it’s very doable. Ot just a small bit of your weekly income and put it in a savings account. A great way to make sure you save is to create an “allowance” that takes money directly from your paycheck or direct deposit and put it in the savings account and you never need to touch the money. Do not know what it is in the savings account. Some people literally can not save money is in their hands. The temptation is too great. Therefore the allocation of savings to the idea is great. Even if only $ 5 a week, saving something is the key here.
When it comes to spending money, you simply need to evaluate your budget. Of course, you want to subtract all your needs such as electricity, water payments, rent or mortgage payments to pay car loan, or credit card payments, and any other important projects of the total money available. You also have removed everything you put in savings and just pretend that this is not if you have never tried to touch him. Simple as that, you can skip all that is excluded from this number when you subtract your total cost of your total cash.
However, a great thing to do is to spend only what you need and maybe a few luxuries you can afford. If you have something left after spending some money, you can put in your savings account to accumulate leave. Some people have a hard time doing this, but it is very important. You can save this much more than you ever expected when you can just control your spending. It is obviously easier said than done, as many people spend every penny they have available, and a few cents, even they are not spending and borrowing from creditors and the interests of payable on these things and sometimes to pay 20 percent more than what you paid for it because of that interest.
Saving and spending are simple but what is really important is self-control and discipline. If you can control your spending and at least put some in savings and not to plunge into it, you are really great! You do not have to be rich. Sometimes being rich means being debt and buying things you can not afford. So you buy a smaller house, but at least you have money in your poche.
These measures help young adults to prove they are accountable to the owners and lenders.
When it is time for a student to start building their credit profile? The answer is simple: when ready. You will know by how they budget their money, track expenses and manage their checking or savings and debit cards.
Building good credit is a function of managing your bills responsibly. No teenager or young adult should be in bulk with a credit card or given responsibility for a car loan until they have proven they can manage their cash flow. This means they must show that can deal with obligations without constantly ask the Bank of Dad for more money.
Your child may be ready to manage credit as a rookie, especially if you are willing to look over his shoulder. I prefer to send children to college with pre-paid housing, a checking account and debit card related that does not allow overdrafts. In this way, they have no large monthly bills and can get used to the convenience of plastic without much threat dinging their credit profile.
On the other hand, this approach does little to build good credit. Debit cards and checking accounts do not count for much in the context of the major credit bureaus. Therefore each student must take specific steps to start building a good credit profile. In the real world you want and need from a potential employer or the owner or the car dealer who sees your credit report to see that you are reliable.
Contrary to what many people believe, you do not start adult life with a higher credit score falls as you embezzlement debt. You start with a score around 600 (highest score is 850) and must build through a history of timely repayment of borrowed money.
My oldest daughter is entering her final year at university and for us it’s time to start working on their credit score. After an overview of Erik Larson, founder of NextAdvisor, a financial comparison site oriented, here’s how we approach it:
• Get a credit card. This is by far the quickest and most effective way to begin a credit profile. If I did not think my daughter was ready, I would find a prepaid card or warranty that the reports for the watchdogs of credit (it will say on the application, or just ask). Because she is ready, we’ll choose from credit cards are best suited for students.
• Use credit cards wisely. A credit card opens all sorts of ways to damage your score. Never miss a payment. Pay in full if you can. If you must carry a balance that will not hurt you unless your balance is relatively large. Never charge more than 30% of your credit limit and preferably keep it close to 10%. And do not apply for more than one card at a time or with any frequency.
• Get another form of credit. Having different types of debt helps your score. Thus, a car loan or personal loan or other installment credit can help. It can even help to have a second type, but different card, like a gas card or card store. In some cases, buy furniture or appliances can help conditions monthly. But you have to ask the finance company if they report to credit bureaus.
• Pay all bills on time. If you live off campus, to pay the cable bill or electricity bill or the monthly fee for a new office or on television is a must. It will not do much to build your score. But if you relax and get referred to a collection company is a major ding on your score.
• Do not close unused card account. It’s against-intuitive. Canceling a card can lower your score, because it leaves you with less credit overall, and instantly raises the percentage of the debt capacity you use. A long credit history is part of what makes for a high credit score. So keep those old accounts and ensure that they are in order.
Consumers should be especially vigilant during the holiday season because identity thieves out en masse. Therefore it is essential that consumers keep their debit cards on the ice, “said Beth Givens, director of the Human Rights Chamber of privacy and exchange one of the foremost experts on the nation Protecting your private information confidential.
What makes debit cards so dangerous? Givens has so many reasons, his organization has developed a comprehensive information sheet if you must use cash, credit or debit card when you shop. (The report also explains the failure of gift cards.)
Here is the short version of the dangers of speed:
1. Limit Losses
Like credit cards, federal law limits your liability for fraudulent transactions on a debit card at $ 50. But only if you notify your financial institution within two days of discovery of theft. If you are a cadet of the space and do not check your bank statements for a couple of months, you could lose everything.
2. Pay Now / Reimburse Later
If someone has fraudulently used your credit card, you do not pay the fee. But when someone has fraudulently used your debit card, money is deducted directly from your account in real time. That means you’re out of money while the bank does have a quiet examination of their records to assess your application fraud. Many consumers complained to the Privacy Rights Clearing House have said they have lost access to their funds for several weeks. In the meantime, they have been caught short and unable to pay their bills, Givens said.
3. Merchant Disputes
The same problem affects merchant disputes. If you pay with a credit card when ordering something online, and that the product is damaged, broken or not at all, you can dispute the charge and stop payment by credit card. If you used your debit card, fees are paid when you order. When you find the goods were not what was announced, the merchant has your money and you are in the unenviable position of having to fight to get your money.
4. Phantom Expenses
If you use a credit card in a hotel, the hotel makes an impression when you register, but do not charge your card until you visit. It is a very different story with a debit card. Generally, the hotels put on hold “on funds in your account for more than you spend. Yes, more. They hold the entire amount of your stay, plus an estimated amount for “false”, such as meals at the hotel restaurant and diving into the mini-bar. This is not a real charge, the hold comes off your account at the end of your stay. But it affects the available balance in your checking account anyway and can lead to overdrafts. One consumer said that these accusations phantom cost him $ 140 in overdraft fees. These takeovers are usually placed on transactions made by debit card at hotels, service stations and car rental companies.
5. Overdrafts, Overdraft and Most Found
Overdraft charges have soared in recent years and the vast majority of consumers who pay to explain their discovery is the result of a transaction by debit card. Many consumers naively that if they have insufficient funds in their accounts, their bank would not approve a slip flow. But they were wrong. The result: a $ 4 coffee could trigger an overdraft fee of $ 35. Government regulators are reigning in these costs by requiring banks to give consumers the opportunity to “opt out” of overdraft protection automatically, but that does not begin to existing accounts until August. (If you have a new account, it starts in July.)
Financial scammers have obtained sophisticated in recent years and that you use “skimming” machines to read your card information and charge your account, “said Givens. When your debit card is skimmed, your bank account can be drained before you know you’ve done.
These tricks could raise your income or reduce expenses without affecting your quality of life.
It’s painfully clear Americans are still hurting financially. Jobless claims are far too high if we’re actually in any kind of meaningful recovery. Penalty withdrawals from 401(k) plans have been increasing, not shrinking. Mortgage rates are hitting 40-year lows with regularity and we still can’t find a pulse in the housing industry.
If there was a magic wand that would sharply raise incomes or reduce expenses, we’d be out there waving like mad. But that doesn’t mean there aren’t ways to cut and stretch. If you can afford it, give yourself some transition time to get used to spending cuts. Some will come at too steep a price in terms of your quality of life. But others may be painless, and you’ll never look back.
1. Know where your money goes.
This is Number One Obvious Idea that many people don’t follow. How can you possibly know how to save money if you don’t know what you spend it on? There are a growing number of online budgeting sites to help you. Use one, or do this yourself. Whatever you’ve been spending each month, try cutting it by 5 percent. Then cut it by another 5 percent the following month. Keep it up if you can, and put the savings in the bank or pay down debts.
2. Make a grocery list and don’t stray.
Once you’ve tracked household spending, you will see how much you spend at the supermarket. What’s less clear is that you also probably spend a lot of money on stuff you don’t need. In our house, we began downsizing our grocery spending by seeing what we were throwing out and the items that had freezer burn and should have been tossed. This helped sensitize us to unnecessary purchases. (My mom passed away nearly 30 years ago and I can still remember her hollering at me about wasting food.) We also save money by making fewer runs to the store. Our greatest savings come when we make a weekly meal plan, create a shopping list for that plan, and then buy nothing but what’s on that list.
3. Mothball a car.
If your household has two cars, try leaving one in the garage for a month. See how it affects your life. With a modest amount of planning, a lot of households might be able to make do with a single car. Once you’ve determined that you can do likewise, sell the second car, bank the money, and also begin enjoying lower bills for auto insurance, gasoline, and maintenance.
4. Try free phone service.
I’ve bought and used the MagicJack service, which is the most popular of its type. You order a small device — perhaps an inch and a half by three inches and about an inch thick — and it connects to your home computer. The software that launches when you connect the device provides easy-to-follow instructions. MagicJack also links from the computer to your existing phone set. So, you are making your phone calls over the Internet but using a regular telephone to do so.
I’ve found the audio quality higher than with products that require separate headphones and microphones. And picking up the phone is such a long-ingrained habit that there didn’t seem to be much to learn. You do need to get a new local phone number, which Magic Jack will provide at no extra charge. After the initial fee, there is no charge for domestic phone calls. This switch can easily save you hundreds of dollars a year. Think about keeping your existing phone line for a transition period in case MagicJack or a similar device doesn’t meet your needs. If you like the MagicJack and also have a cell phone, if could make sense to cancel your home land line and switch your home phone number to your cell. You’d lose your existing cell number but you’d at least be able to keep your old home number.
5. Trim television services.
Hey, I love my cable, and millions others love their satellite dishes. But if the times demanded, I would wave goodbye to a bundle of monthly cable charges. I’d also be in mourning during football season but I’d survive. I would install a digital antenna. And I’d begin making much heavier use of free online video sites that the networks and other providers offer.
6. Recheck insurance rates.
A year ago, I went out shopping to explore replacing all my insurance coverages. I wound up saving a bundle. When you’ve had your auto, home, life, and other insurance policies in place for several years, it’s easy to forget what I call “creepage” — those annual bump-ups in premiums. They really add up after a while. And while constantly rising health insurance rates may make it seem like premiums can only move in an upward direction, that’s not true. When you do shop around, you also may discover that your coverage needs have changed. If your cars are the same ones you had five years ago, for example, you probably don’t need as much collision insurance as you once did.
7. Forget about green; go brown!
The summer has been brutal where I live. But with dollars at stake, I am becoming very environmentally responsible. So what if even the goats pass by my yard?