Debt has today become a part of lives of the Americans. Most of them do not mind carrying the burden of debt. Some have become used to it while others do not care enough about it. But there is no reason why you can’t enjoy a debt-free life. If your mounting debt is taking a toll on you then read on to know how you can go about clearing your debts.
1) Start planning: This might sound simple but it is actually the most important part. Make a list of your debts and the corresponding interest on each of them. When you are planning, you should have funds set aside for your daily utilities. Make up a realistic payment plan so that it is affordable and easy for you to tackle your debts one by one.
2) Begin to save: Most of us end up spending a lot on impulse purchases. When you need to buy something, plan for it and start saving. Relying on credit cards to make purchases can just worsen you financial situation. Therefore, create a savings account and put a small amount of money every month into this account. This can also serve as your emergency fund.
3) Prepare a budget: It is very crucial to track your income and expenditure. Budget helps you to know where your money is being spent and thus can help you to weed out unnecessary expenditures. A budget will help you to remain within your financial boundaries and you will never have to worry about falling into debt.
4) Never use credit card: The simple formula for this is “If you cannot purchase with what is there in your wallet, better do not buy it at all”. Using credit card is almost a fashion statement today and people use it for almost all their purchases even if they cannot afford it. This ultimately lands them in debt. Use your cash and you will stay away from debt for good.
5) Pay your balance in full every month: If you want to stay away from debt then it is very important to pay your balances in full each month. This way you won’t be carrying any balance with you. You will never have to worry about whether you will be able to meet the minimum payment because your credit card has already been paid in full.
Modern life is expensive and it is causing a lot of people to become victims of debt. But if you are careful with your finances then you can avoid debt easily and always enjoy a debt-free life!
Choosing a credit card for yourself can be quiet a daunting task. With so many offers put out by different credit card companies, things can really become confusing. So how do you go about choosing the right card for yourself? You should keep a few things in your mind while shopping for a credit card.
The first thing that you should think about is how you plan to use the card. This is important as certain cards would make more sense for you depending on how you use it. Say for example, if you know that you will carry a balance on your card then you need to be concerned about the interest charges and the APR. Here, a low rate interest card should be your ideal choice.
If you are someone who wants to transfer balance from another card that you need to pay off then you should shop around for a balance transfer card that offers a 0% interest for a substantial time. Check the details thoroughly so that the card is cost effective for you.
If you are interested in rewards program then there are hordes of options available for you. You can avail good discount programs and free travel and many other similar offers. Just be sure to check out all the details properly so that you are truly benefited by the rewards card.
Be sure to check the fine print of the card that you have opted for. Some cards have changing annual fees that you need to pay each year. Many customers are charged a set fee for not using their cards for a certain period of time. Therefore, pay close attention to the fine print of the card and check the terms and conditions thoroughly.
Now you know which card you is the right one for you. Well, do you know your credit score? Credit score also determines which card you can qualify for. So, don’t miss out on that. If your credit score is low then you may need to build it up before you can get the credit that you require.
These are some points to help you choose your credit card wisely. But remember, whichever card you use, one thing always remains constant: being responsible. Proper use will ensure that the credit card company is reporting you in a good light to the credit bureaus every month and this will work to your advantage in more ways than one.
Most of the people have a hard time managing their personal budget. Almost all of them end up spending more than what they can afford to and consequently invite debt problems. Therefore, it is very important that you take certain steps to set up a budget for yourself. As you might already know, budgeting is a process of allocating one’s salary or profits according to one’s needs and expenses. Yes, it might at first sound to be a bit difficult but with a little determination it is not very tough to stick to your budget.
Take for example, you visit a supermarket today and an expensive pair of jeans catches your fancy. What do you do? Probably, you will end up purchasing the same. This would not have happened had you had a proper budget in place. With a solid budget, you would just know where you need to spend how much. All your unnecessary expenses would be curtailed and thus you will be on your way to paint a better financial picture of yourself.
So how can you go about building a budget? List down all the things that you need to make payments for. It could be groceries, transportation, gasoline, mortgage payments and the like. After that is done, set up an estimate on how much you can afford to pay for each item on the list. This is the perfect time to cut down on all your extra expenses. Weed out such expenses and start concentrating more towards your savings and investments.
It is also important to compare prices before you set out to shop. Settle for the shops that offer discounts and reasonable prices. Purchasing items in bulk is also a good idea to bring down your overall costs. Cut back on snacks and convenience foods. A major chunk of expenses is lost on entertainment, so it is advisable that you bridle your expenses on this front too.
Buying brands is a hobby and a matter of ego for most of us. Realize that opting for cheaper products might as well offer you the same advantages. Make use of coupons to avail discounts and you can also shop at thrift stores to purchase items at really low prices.
You should keep track of your savings for at least three months. This way you will be able to make adjustments to your budget plan if needed. Treading a little carefully with your finances can reap rewarding results and this in turn will motivate you to stick to your budget and enjoy an ever-lasting financial success.
Many people are wary to start off their financial career with investment in the stock market. And why not? If stock markets have made a few people millionaires overnight, it also has to tell a great number of riches to rags stories. So what can you take away from this? Should you altogether abstain from the stock market? Or should you try your luck with investment? Well, there’s no need to panic. Keeping a few simple points in mind can help you to avoid common blunders that people commit. This is especially important for beginners who eagerly want to make their money grow in the stock investment market.
1) Don’t trade too often: Beginners usually get carried off with “hot tips” about stock investment on the TV or if they hear that a particular stock is doing very well. Stay away from all these advertisements and marketing gimmicks. Trading too frequently might cause you to pay short-term capital gains tax. The broker also might try to convince you to trade in a particular stock and ultimately he will be the one raking profits with trading fees.
2) Stop panicking: It’s understandable why investors lose their sleep when the market goes down. But never let it take over the better half of you. Panicking when the market is not doing well will only cause you to take unwise decisions. This way you invite more losses. Be calm and prudent while you are trading in the stock market. That’s the most important key to success.
3) Don’t be too greedy: In your school days, moral science lessons taught you to not to be greedy. Now is the perfect time to implement what you have learnt. Impulsively buying and selling stocks in the hope of making more money can actually pave the path to your becoming penniless. In the process, it’s your broker who will become filthy rich with commissions in course of time. Each trade comes with transaction costs and taxes. Gauge your investments carefully to maximize your chances of making profits.
4) Never risk your money with something you don’t understand: So your friend bought a new car with the profits he made in the stock market? That does not mean you will jump to try your luck with the same company. Something that has worked for him might not be the one for you. Before you want to try your luck with any company, try to gather as much information about the company’s business model and its financial history. Also check for the stability of the company. Only after assessing all these factors should you decide whether it will be fruitful for you to purchase stocks of that company.
5) Don’t put all your eggs in one basket: Do not just acquire stocks from one single sector. It might cause your entire investment to go down the drain if that sector suffers a nosedive. The solution lies in diversification. Purchase stocks from all major sectors like property, industry, oil etc. and diversify your portfolio. Limit your investment in one sector to 10% of your portfolio and you should do well.
Keeping away from such blunders in the stock market ensures that you gain an upper hand for yourself. Of course, there are a lot of mistakes that you will commit once you start with your investments but the important thing is to learn from your experiences. Didn’t you already know that billionaire investors have also come up the hard way?
Saving money is a topmost priority for people choosing the frugal way of life. No wonder these are the people who are never bothered by bad credit or debt. If you are not careful with your finances, you are just paving the path to future debt. Listed below are some tips which can help you save some cash this New Year. Read on to know what you can do to get more prudent with your money.
1) Track your spending: This is a common problem with most people. They do not keep track of their money which consequently results in spending beyond their means. Keeping a track of one’s expenditure is very important. This is the only way you can weed out unnecessary expenses. It helps you to stay within your budget and greatly reduces your chances of falling in debt.
2) Food expenses: Spending money on food consumes a major chunk of your expenses. How about setting a food budget? This can help you in ways more than one. Use coupons to get discount on food items. Use leftovers the next day in your menu plan and always buy sale items. These are just some of the ways you can opt to save cash.
3) Wait is the word: This one works at the psychological level but why not utilize it in your financial life too? Make a list of all the items you need to purchase from the supermarket. Now wait for a few days before you finally go to the market to buy it. Often, you will see that you will be in a position to strike out some items from the list. What you need to buy today might not be so necessary after a certain time.
4) Use cash: This one’s too clichéd but it can’t be stressed enough. Stop using your credit cards and start using cash to make your payments. If you can’t afford something, simply give up the urge to buy it at all. Using credit cards to meet your needs is unwise and will only put your financial life in danger.
5) Recycle: We always throw away things which we think cannot be used for any useful purpose. The trick is to be innovative. How about using your newspapers as wrapping papers or worn out socks as dust rag? Hey you can even use that coffee can as storage for pens or kids crayons! Just a little creativity from your end and you will be surprised at the amount you can save up.
These are just a few suggestions you can utilize to save money. Have you planned out a few yourself already? All the best!
Inflation is a dreaded word for many people. As the saying goes, “in inflation everything gets more valuable except money”. It can sound the death-knell for the financial position of many individuals. So does it mean that you should not consider investing your money during inflation? Wrong. Planning out some wise strategies can help you with investment opportunities during hard times also. Read on to know how you should go about it.
During inflation, you can consider investing in inflation indexed securities. The other option is treasury inflation protected securities. The reason is that these always move with the inflation, i.e. the investment is not affected by inflation risk. The Treasury inflation protected securities (TIPS) are a good option to consider as these have the backing of the government. The good thing about them is that their par value increases along with inflation but the interest rate is not affected. There are different types of TIPS available and you should seek the best one for yourself, the one that is suitable for your financial position. You can purchase these from the government. Inflation Indexed securities can be purchased in the form of bond and notes. These give the user the advantage of a higher return than the inflation rate if it is held till maturity.
If you are somebody who is planning to buy property during inflation, then the best thing to do is to select the property with fixed mortgages. Buying property with a fixed mortgage protects it against the risks of inflation.
There are a multitude of securities and assets that can protect you against inflation. Gold mining stocks are also a good option to consider. Precious metals are also preferred but gold remains the topmost choice for most of the people.
With so many options to consider, you can very well become confused with which investment option to go for. If you are unsure, then you can seek the advice of a financial advisor who can help you in taking the right investment decision.
The last 30 years has seen an exponential rise in the growth of credit card industry. This has also led to the massive increase in consumer debt across the world. There are many options of debt relief available, viz. debt settlement, debt consolidation, debt negotiation etc. Let’s take a closer look at debt settlement, the most preferred option of resolving debts today.
How debt settlement works?
Debt settlement programs help both the creditor and the loan taker mutually if done in a proper way. In the process of debt settlement, the creditor accepts a sum lesser than what the loan taker actually owes him. The creditor generally agrees to this compromised payment because he will actually stand to lose all the money if the customer files bankruptcy. If you are not sure about settling your debts yourself, you can take help from a debt settlement lawyer. The lawyer will negotiate with the creditors on your behalf to lower your payments and reach an amount acceptable to them. A skilled lawyer can reduce your payments by 40%-60%.
The duration of the process of debt settlement depends upon the total number of debts, the kind of debt, the total amount of the outstanding debt and the amount the debtor can afford to settle. Generally, settlement cases take 15 to 36 months to complete. The more you can pay, the earlier your debts get resolved.
Debt settlement helps you in the following ways:
1) You do not have to pay the total owed amount
2) Your debts are cleared much faster
3) You avoid filing bankruptcy
4) You get rid of creditor harassment.
But remember that debt settlement damages your credit score when you first enroll. However, this damage is not permanent and starts to recover as your debts get settled. You have to take care to stay away from scam debt settlement companies. Ensure that the company is a genuine one registered with the BBB.