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Frugal Living Tips

August 27th, 2008    Subscribe To Our Feed

There are plenty of money saving tips out there and given the current financial uncertainty, this is a fairly topical issue. We’ve all done it from time to time. Gone out shopping for a sweater and ended up with a winter collection of items. Or maybe you planned to get a new cell phone but the answer machine and digital camera kept talking to you and hey presto, you ended up with those too. These things happen, it’s called canny marketing and impulse buying. However adopting some simple frugal living tips can make saving easier than you might think.

Here we go.

Don’t shop on payday.  You feel flushed with money at this point and your impulsive nature may be at it’s most insistent. However, you haven’t paid the bills or put money away for savings. You haven’t budgeted for the month ahead and at the end of the shopping trip, you are a few hundred dollars in the hole and a bill goes without being paid.

Don’t shop for groceries on an empty stomach. Pretty self explanatory really but it never fails. If you shop for food when you are hungry you can be talked into buying just about anything.  The shopping list goes out the window and so does the grocery budget for the month.  Shopping when hungry could also cause you to stop for fast food on the way home because you can’t wait to fix something to eat.

Shop at thrift stores and consignment shops for certain items. This is relevant particularly for kids when they are babies or toddlers. Often these stores have lovely stuff, in pretty good condition. Provided you are prepared to rummage around a little you can discover a few hidden gems or even stuff that has hardly been used. And the cost is a snip on the new price. Thrift stores are a good alternative to “hand-me-down” clothing for younger kids. Go to more affluent suburbs or even cities and towns as the quality of hand downs is likely to be better. Name brand clothing and labels  can be found in many of these types of stores for you as well as the kids.

Buy in bulk only if it is something that actually need or use regularly. Bulk discounts are another canny marketing technique that suck many people in. The same goes for buy 2 and get one free deals. Only get stuff you actually need. Carrying a calculator to the store with you can aid in figuring up which is the best buy. Consider joining a shopping warehouse if you frequently buy bulk items.

Ask for a rain check. Some stores don’t give them for certain sale items, but it doesn’t hurt to ask.  A rain check can save you money. Don’t buy a six dollar case of water if you can get it for two dollars with a rain check. Buy up to the limit you are allowed to purchase and stock up.

Bargain shop when looking for services. There’s no rule that says you have to go with the first plumber that you call.  All companies don’t charge the same amount. Checking two or three places will give you a good idea of how the prices stack up. Choose the one with the most services for the lowest price. If you are not sure, ask a friend who may have had the same need that you do now.

Purchase gifts throughout the year.  Don’t wait until right before the holidays or someone’s birthday.  Finding gifts throughout the year saves money.  Sales after Christmas are the perfect time to find all sorts of merchandise that would make good gifts for the following Christmas.  Store your gifts in a cabinet for that purpose so that you are never without something to choose from for gift giving.

Once you make these kind of ideas a habit you will find you can save a lot of cash and it becomes second nature.

Improve Credit Score Quickly

August 12th, 2008    Subscribe To Our Feed

If you have ever had trouble getting a loan or a credit card from a financial institution or bank then it could be that you have a low credit score. Most people are aware that the credit score that you have can make a huge difference to the type of credit you can get and how you are treated by people that may lend you money. This article will look at how to improve your credit score in an fast and effective manner.

So what exactly does a poor credit score mean ? Well, in the eyes of the banks, it means you are a credit risk. You can’t be trusted to pay back any credit that you may borrow from a bank or other money lending institution. Consequently they are hesitant to give you credit. If they do give you credit, they try to balance what they perceive as a risk by increasing the interest rate on the credit or limiting the amount of money you can borrow. Whatever they do, it generally means you are out of pocket. 

Credit scores are recorded by credit agencies. There are three main agencies that perform this function. They arrive at this score by recording all the past transactions of an individual. This includes credit card transactions, mortgage repayments and various loans and bills.

If you haven’t been able to pay your bills on time, defaulted on loans, had a repossession or failed to pay credit card debt then you will have a bad credit score or a low credit score

Many people may not be aware that creditors have access to this information. However, you have to realize that this information will act as a security whether you are a person who is credit worthy or not.

You need to look financially responsible in the eyes of the credit reporting agencies. So, here are some simple tips to raise your credit score quickly. 

The first step is to find out what your credit score is. You can ask for a free report from each agency once a year. Apart from finding out whether you have a low or poor credit score, you can also look at all the transactions that have been used to give you this score.

Although it is unlikely, your poor credit score could be the result of credit card fraud or identity theft. Someone may have used your identity or credit card to buy items and put you in debt. A far as crime goes, identity theft is a growth industry so it pays to check this out. Indeed, even if you have a good credit score, you should check your free credit reports for potential identity fraud from time to time.

Another factor about checking the credit score is that an error may have been made that is contributing to your poor score. By looking through the transaction details you can clear any errors up.

With your history sorted out, you want to start focusing on the present and the future.

If you have any debts, be they credit card or loan debts, make some firm plans to eat into this debt. Work out a budget so that you can divert some of your monthly income towards the debt. You don’t have to pay it all off at once. Just make it obvious that you are addressing the debt and this will translate through to your credit score.

For example, if you have a credit card debt, you don’t have to pay all of it at once. The point to all this is to pay down your credit card debt up to the point that it will not have a balance that exceeds 50% of your credit limit.

And possibly the most important thing to raise your credit score is to pay all bills on time. Credit agencies will not have anything negative to report if you do this and this will raise your credit score rapidly. Paying bills on time involves being organized on two fronts. The first is to not extend yourself – live within your means. Develop that budget that was mentioned above so that you stay in the black each month.

The second organizational skill is to know what needs to be paid and when. Some people consolidate debts into one lump sum to make this easier to do. This may be an option for you, but the first task is to record all the payment dues dates on any debts and put money aside for this payment. Missed payments increase your debts and lower your credit score.

Choosing To Use A Debit Card For Personal Money Management

July 1st, 2008    Subscribe To Our Feed

Debit cards are secured by your bank account. They are generally issued to people that open or have a checking account. After that they pretty much work like an ordinary credit card. The main advantage of a debit card is that your credit is limited to the amount in your bank account. This is a good check and balance for people that find it hard to control their credit card spending. It can prevent people getting into serious credit card debt. The downside of course is that the card will not work if your account is empty or has reached a certain cut off point. This article will examine the pros and cons of debit cards for personal money managment, especially when dealing with credit card debt.

So a debit card generally has a visa or mastercard logo on it to denote that it can be used as a credit card. It also doubles as your card to use at an ATM. A Debit card can be used as if it was a credit card. The credit limit is generally set to a certain amount or is limited by the amount of funds in the bank account linked to the card.

There are no fees attached to getting a debit card. There are no penalties or increased interest payments if you fail to pay off a monthly debt because the money is debited from your account immediately.

So a major benefit with the debit card is that it gives a person the convenience of using plastic rather than carrying a wallet full of cash around. For many purchases these days, paying via a card is the preferred method too.

Apart from the convenience, a debit card teaches a person to manage their money. They cannot simply buy and buy and worry about the consequences when they received their credit card statement in the mail. If they do not have the funds in their bank account, the debit card will fail. This is a very public failure as it is often in front of a sales assistant or clerk and maybe a few people waiting behind in the queue.

If this happens once, it is generally a good enough lesson for them to avoid this happening again. And even if this does not serve as a lesson, the debit card ceases to work until the funds are made available in the account.

Now that we know how a debit card functions, here is a word of warning. Debit cards are a smart choice if they are handled with care. Pitfalls do exist and a debit card user can fall victim if they are not careful.

Since they are tied to a checking account, transactions need to be recorded in a ledger or a computer program. The enemy of the debit card is the ATM machine. It really does seem like a genie in a box. You put a card in and push some numbers and money spits out at you.

Just as quickly as that money was deposited in your account it can disappear if you are not careful. The checking account can become overdrawn without ever bouncing a check. ATM receipts can be deceiving, because they don’t always reflect the true current balance in the account if other transactions haven’t cleared the bank.

Debit cards are also subject to “blocking” just like a credit card. This means that some merchants can block off a set amount of money in the account until your transaction with them is processed. Case in point: using a debit card to pay for a $20 visit to the gas station, but the store blocks off $50 on the card. If the extra $30 was earmarked for something else, you will run into problems until that block is removed.

Choosing to use a debit card makes good sense if you have problems with money management. It forces you to think about how much money you can afford and how much money you have in your bank account before using it. This contrasts to a credit card that allows you to indulge an impulse buy or any other buying decision, only to regret it later. However, you should understand how a debit card works, especially if you issue plenty of checks.

Changes To Your Spending Habits Is Key To Getting Out Of Debt

June 27th, 2008    Subscribe To Our Feed

It is unlikely that you will fall into substantial debts overnight. In all probability it is a slow drip process where you gradually build up debts on your credits cards or miss one or two mortgage repayments. And, seemly before you know it, there is a huge pile of debt dragging you down. The key to avoiding this scenario is by managing your spending habits before things get out of control in the first place.

Examine your spending habits in an objective fashion. In this respect most people lean towards one of two categories. They are either a spender or a saver. There are distinct characteristics for both types of people that you may be able to recognize in your own actions.

Spenders love to buy things. They go with their first impressions. Impulse buying is their specialty. Not allowing time to think about a purchase before making it leaves them with stuff that they could have done without. Spenders live for today with little thought to the future. Why save when you can be happy now?

Savers are on the opposite end of the spectrum. They think about the future all the time. In fact, they give more thought to the future than they do to the present. They sacrifice to the point of piety. Enjoyment of life is not in their equation. The sad part is that they may not even enjoy themselves when they reach the point in life that they have been saving for. A penny saved is a penny earned.

The aim of most people is to try to get a balance between these two polar opposites. You should consider the future and make some plans for it. But you should become obsessive about it. Ultimately, money and money matters are a means to living a happy life, not an end in themselves.

Start with last month’s purchases. Look at bank statements, credit card statements, and ATM receipts. The ATM machine is usually the fastest way to overspend. The convenience of an ATM machine is very tempting. Many people use the ATM without getting a receipt making it hard to track where your money is going.

A budget is a great way to keep an eye on your money. Set some budget goals and do your best to stick to them. Constantly refine the budget as you get more in tune with your spending habits. Don’t cut yourself to the bone, thus making a budget hard to follow. On the other hand, don’t give yourself so much leeway that you go over budget every month.

Do you need that new outfit? Check the closet. There may be a clothing item or two that fits just fine and still looks good. Visiting the mall just to “window shop” is too much of a temptation for the spender. Instead of walking out empty-handed, they’ll pick up a few things that were on sale.

If ATM’s or debit cards are a too much of a temptation then carry cash. Make one withdrawal a week for groceries, gas, and other incidentals. When the money is gone, that’s it. Writing checks for bills encourages you to track them in a ledger or electronically. Using cash may seem antiquated in today’s society, but it is still the best way to keep track of your spending. Receipts can be kept until the end of the month and then reconciled.

The key to getting out of debt or never getting into it in the first place, is to know where the money comes from and goes out. For most people the going out bit is the problem. By knowing exactly where your money is going you can rein in your (bad) spending habits. Ideally you want to spend a little and save a lot each month. Avoid impulse shopping. Wait a month or so and see if you still want the item you were keen on. You may find that during this time you have managed to save a fair amount of the money needed to buy the item in the interim anyhow.

Get Out of Debt With A 6 Step Plan

June 5th, 2008    Subscribe To Our Feed

Digging yourself out of a huge mound of debt is a daunting prospect. The first issue might be as basic as what path to go down to remove the debt. Should you go for credit counseling and debt consolidation. There are lawyers offering to have your debt reduced for a fee. There is even bankruptcy but this should be seen as a last resort. With all of these choices available it may be easy to fall into the trap of looking at ways to get out of debt without actually doing anything. Well, this article offers you a six step plan to get out of debt that you can start today, without resorting to outside help or bankruptcy court.

The truth is that it is quite possible to get out of debt with no outside help. Even those who don’t think there is room in their budget to pay down their debts are often surprised. It takes willpower and determination, but you can usually get out of debt on your own.

How do I get out of debt on my own?

Are you too far in debt? If so, in order to get out of debt on your own you will need to develop a plan and stick to it. Here is a good plan to follow:

1. Stop accruing new debt. Put the credit cards away, and refrain from taking out new loans or refinancing old ones to borrow more money.

2. Create a budget. You need to know where your money is going each month, and in which areas you can cut back to free up more money to pay off your debts. If you’re not sure where your money is going, write down all of your expenses for a month and then make your budget.

3. Cut the unnecessary items out of your budget, and cut back anywhere else you can. Set this money aside to pay down your debts.

4. Determine which debt needs to be paid off first. If you have secured debts other than a long-term mortgage, you may want to pay them off first. Debts with high interest should also take priority, unless you have lower interest credit cards that charge exorbitant annual or monthly fees.

5. Pay the minimum payment each month on all of your debts except the one that you have given top priority. Put all of your extra funds toward that debt, and continue to do so until it is paid off. If you get a bonus at work or unexpected money from some other source, consider putting it toward your debt as well.

6. When you get one debt paid off, start putting your extra money toward the next one. Repeat until all of your debts are paid in full.

Paying off debt on your own is often easier than you think. By taking a realistic look at your finances, you can find ways to come up with the money to pay debts off. By sticking to your budget you can live within your means and ensure that your debt doesn’t increase.

Once you get your finances and lifestyle expenses under control you can start looking at ways to increase the speed at which you pay the debt off. For instance, consolidating your credit card debts under one credit card can save you money. Look for a credit card that has an introductory offer of no interest on balance transfers for six months.

You will have six months in which to pay off these debts without any interest to be paid. This will make it easier to pay off the debts but make sure you clear the debts, or at least get the bulk of the debt paid, within the six months or you may be paying a high interest rate on this debt. And don’t use the credit card to get new debts that will have interest charged on them. Stay focused and disciplined on achieving your goal of being debt free.

Cut Up Credit Card And Cut Down Credit Card Debt

May 29th, 2008    Subscribe To Our Feed

It seems that most people have at least one, if not more credit cards these days and the temptation to use them on even the smallest of purchases is greater than ever. First of all, it’s really more convenient to carry a small piece of plastic around than coins and notes. But also, stores offer al sorts of incentives to use a card over money like cash back on purchases, flyer points or some other scheme. So it is very easy to let your credit card usage get out of control even before the lure of easy credit gets you dreaming of that new pair of shoes or the latest xbox 360 game. This article will cover how to discipline yourself when it comes to credit card spending and how this can save you from getting into a whole lot of debt. You can cut up credit card and cut down your credit card debt.

Did you know that some credit cards carry an interest rate as high as twenty-nine percent? You wouldn’t want an interest rate that large on your home or car, so why settle for it on your credit cards? For those credit card companies that offer a super low interest rate at the beginning, if you miss one payment, the interest rate jumps up to around a whopping eighteen percent or more. Read the fine print.

Credit cards are a way of establishing credit. Purchasing items and making payments on time lets potential credit lenders know that you are an acceptable risk for them. Good credit helps people to qualify for low interest loans on houses, cars, and furniture.

But that good credit standing can quickly change if you begin to charge more on those credit cards than you can possibly pay back. Interest is tacked on each month that the credit card carries a balance. It may be only a few dollars now, but let the balance linger for a few months and you will see the difference.

Using credit cards for intangible things encourages debt. It is convenient to purchase groceries, gas, pedicures, and other services on a credit card, but in a few weeks there will be nothing to show for it. When the bill comes, the food will have been eaten and the gas gone from the tank.

There’s no need to get rid of all of the credit cards. Keeping one card is sensible for emergencies. We’ve all had the odd bit of car trouble now and then. Or, even worse, something happens to the heating unit or something else in the house. A credit card provides emergency money for the types of things that are unexpected.

What about the other cards? Cut them up! As soon as the balance reaches zero, call the credit card company and cancel them. Be aware that the representative will try to entice you to stick around. They may even offer to up the credit limit. It’s a trap, so don’t fall for it.

Get rid of your debt for good. Keep one credit card for emergencies and let the rest go. Try to use cash as much as possible to make purchases as this will prevent getting into debt. If you do use your credit card for larger purchases then make sure that it fits into your budget or that you can pay off this credit within the interest free period of the card (generally 55 days or sometimes 30 days).

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