Pay Down Debt Quickly

Debt can have many negative effects on one’s life. It can prevent you from buying the things you want or delay major life goals, such as buying a home, getting married, and even retirement. These are the steps to take to get rid of debt fast. 

List Down All of Your Debt

The initial step you need to take if you’re ready to tackle on debt is to review the type of debt you have. List down each one and include the details- the amount, the due dates, and to whom you owe them from. For better viewing, arrange them from smallest to the highest.

Choose Your Debt Repayment Method

The way to pay off debt is not the same for everyone, but it helps if you have a clear plan ahead about which method to use. There are basically three debt repayment styles.

Debt snowball- this method involves paying your debt starting from the smallest to the highest debt first, regardless of the interest rate. In this style, you pay only the minimum in your other debts and put majority of your cash towards repayment of the smallest debt. This makes it faster to achieve a small goal, and develop some sense of psychological encouragement.

Highest interest rate first- on the other hand, this method concentrates on paying off the debt with the highest interest rate first. This one is seen as the most cost-effective method, because it helps avoid spending unnecessarily on interests.

Debt Tsunami- this method focuses on paying debt in the order of their emotional impact, which according to some can best create momentum on your repayments.

Live Within Your Means

It could really be challenging to move away from the lifestyle that you got accustomed to, but it’s up to you to decide if you want to continue accumulating debt for momentary luxuries and joy.

Living within the income that you earn may not be enough though if you’re paying off debt, because what you need is to bring down your expenses even further to get rid of debt completely. Not only can it help you save money from interests that you would have to pay, but it can ease your worries that much sooner.

Start Using Cash

It may be hard to give up the convenience of bringing plastic cards, but as of now, it could be the best way to avoid temptation, especially if you haven’t really mastered the skill to resist impulse purchases yet. Using cash alone may be counter-intuitive if you’re trying to repair your credit, but you also have to consider the further damage it can do to your credit if you begin making expensive and unnecessary charges again, which can slow the process of repaying your debt.

Consider Getting a Second Source of Income

If all else fails despite the saving measures that you’ve done, perhaps you need to take a second look at your income and expenses. If your income barely exceeds your expenditures and debt repayment needs, perhaps it’s time you get a second job. It can be temporary as you repay back your dues, or keep it permanent so you’d have more money to save for your future and your other wants instead of resorting to borrowing.

Saving Tips for Single Parents

For many single parents, saving money is not an option. It is actually a necessity. Balancing your time with your job and raising your kids alone is hard enough task. Learning how to save money can help prevent any additional burden and tension within the family.

Use generics

Most of the time, you won’t notice any difference with branded products compared to generics or store brands. For example, whenever shopping for toiletries or detergents, buy the cheapest product that is closest to the one you prefer to use.

Plan Your Meals Ahead

Planning is so powerful that it can save you both time and money, two things which you are likely short of as a single parent. Take a pen and paper and sit down to plan your meals everyday for at least two weeks or up to a month. Make sure that you create your menu based on the items you already have on hand, the items on sale, and the products on season, as they are the cheapest. By doing this, you can save a whole lot of time from thinking of what to cook the next day and you can also avoid frequent store visits, which can also save you fuel.

Cook and Freeze

Again, this can save you a lot of time and money. Schedule your cooking before those days when you’ll likely have no time so you can avoid ordering takeaways during busy nights. By cooking a lot and freezing the leftovers, you can avoid wastage and spoiling of unused ingredients.

Start an Allowance for the Kids

Rather than giving them money every day or every time that they ask for it, provide them allowance that should last within a certain period. Not only is this more convenient for you, but it can help them teach the value of money and how important it is to save, which they won’t exactly realize when they’re expecting to receive money every day.

Bag Your Snacks

Instead of shopping for individual snack-sized food for you and the kids, consider buying them in huge boxes, wherein you can possibly apply coupons and get significant discounts. Bag them in smaller zip loc containers so everyone can just grab them for snacks, even you.

Eliminate One Luxury

Most of us cannot live without our cell phone, internet, or cable TV, and it’s even harder to make sacrifices when your kids have become accustomed to them. If you can’t eliminate, at least downgrade one of your services. Consider disconnecting your cable especially when you and the kids aren’t home most of the time, or inquire about combined services to at least reduce the cost of subscription.

Find New Activities to Get Involved In

While it could be hard to bond with the kids without bringing up older memories, it doesn’t mean that you have to lock them up inside the house all day because you are emotionally and financially struggling. By being creative, you can discover a ton of fun activities, which are cheap or even free. Bring them to your relatives and especially to cousins within their age group, visit free town events, etc. The last thing that you want them to feel is that everything has changed.

Financial Planning in Your 50’s

Typically, people in their 50s have reached the peak of their salary, and most do not have kids at home any longer. It is the perfect time to pay off debt and build your wealth in preparation for retirement. While it could still be about 12 or more years before you retire, it is not wise to put off your retirement plans any longer. 

Concentrate on your retirement funds. Perhaps, you are one of those who still have other obligations, children or grandchildren under your wing. Despite the situation, you have to prioritize your retirement. Ideally, you should have already started stashing retirement funds during your 20’s, but if for some reason you had to put your retirement accounts on the back burner, it’s time to rebuild that nest egg.

Put more towards paying off debt. Debt can cause two things- either you have to delay retirement or suffer a retirement life with too much bills to pay. When you’re in your 50’s, it’s high time that you focus on reducing or eliminating all of your debt, even if you’re saving money for your retirement. You don’t want your retirement savings to go towards interests right? There’s nothing more rewarding than a debt-free retirement wherein there are no mortgage or credit card balances to settle.

Guide your kids to independence. Unless your children are disabled, you have to let them be on their own especially when they’re out of school already. By continually sustaining them, you are not only risking your future, but theirs as well. Teach them how to become financially independent instead of relying on your support.

Review your insurance policies. At this age, you should reconsider your insurance needs. If you still have dependents, make sure that your beneficiaries are named correctly and that you have the right coverage for them if you die prematurely. Meanwhile, if all your kids are independent, perhaps you no longer need a policy, except if you have a large estate. Also check on your health and disability insurances.

Review your investments. It could really give you adequate cushion if you have smartly diversified investments rather than relying on savings alone. While it’s wise to keep your savings intact, you should try to put some spare cash into a good mix of low-risk and high-risk investments, which can be very rewarding in the future. For example, if you’re looking forward to that dream vacation, you can use the money from investment returns instead of taking a huge chunk from your retirement savings.

Plan what to do when you retire. Retirement is not all fun and endless vacation. You need to sort out what kinds of activities or hobbies you are planning to pursue in order to determine how much money you would have to prepare. Perhaps you can include some cheap and worthwhile activities such as volunteer work on your to-do list. Also consider working part-time when you retire. With all the leisure time you have, you might get bored. Not only can a part-time job keep you occupied, but it can also prolong the life of your savings.

How to Save on Transportation Costs?

If you think buying a car is expensive, that’s not actually the only cost that you’ll have to worry about. Aside from your auto loan repayments, you’ll have to spend money on car insurance, repairs, and most especially gas. These are just some of the easy ways which when combined can help save you a lot on transportation expenses. 

Keep weight off your vehicle. Too much weight requires extra effort from your engine, and so thus consumes more fuel. Be sure to keep your car light by emptying your trunk, back seats, and remove all things that are not necessary. If possible, also keep your tank only partially full.

Compare gas prices. Don’t just have your tank refilled at the most convenient station. Gas prices vary between different stations within your place, so make sure to check prices if you want to see significant gas savings.

Do not stop and start rapidly. You should try to keep steady accelerations and decelerations, as stomping on the brakes too fast can waste momentum and stomping on the accelerator can waste gas.

Schedule your errands. One of the no-brainer ways to save up on fuel is to multitask on your trips. Do several tasks at once so you’ll burn less gas instead of spacing your travels.

Use maps before going to unfamiliar places. Not only does getting lost along the way can cost you time, but a lot of fuel as well.

Make adjustments to your work schedule if your job allows it. For example, if you work 40 hours per week, ask your employer if it’s allowed to work four ten-hour days instead of five eight-hour working days. In addition, consider bringing your job at home and communicate via phone or email. Many jobs nowadays can be performed without actually going to the office so just ask your employer if it’s allowed.

Use gas cards. Using gas cards at your favorite station can help reduce the high cost of fuel over the long term through rebates. This can also help build up your credit score if you don’t have any credit cards yet.

Carpool as often as you can. This is one of the easiest ways to save huge cash on transportation. You can ask colleagues who live nearby or inquire about carpooling services in your city. Not only can you save money, but it can reduce wear and tear on your vehicle.

Keep your car for as long as you can. While driving a new car is one of your greatest goals, you should think twice before replacing your auto. Of course, you should consider repair expenses against the cost of a new vehicle. If you’ve been spending more on repairs and definitely need to replace your vehicle, consider buying a used one instead.

Consider public transportation. Using the bus or subway can help you save cost in a number of ways. By using public modes of transport, you can save money on gas, parking space, car maintenance, and possibly even reduce your insurance rates because you’ll be using the car less.

Credit Questions Everyone Should Know

Everyone hears about the terms credit, credit report, and credit score most of the time, but few know exactly what they really are. 

What is Your Credit Report?

Your credit report is a file that lists down your credit history, from the moment you first obtained credit to your current credit standing. It contains all information related to your debts, such as outstanding balances in your loan and credit accounts, types of accounts that you have closed or have kept active, your credit limits in each account, and your payment histories. Your credit report also lists down public records against you, such as bankruptcies, repossessions, foreclosures, tax liens, and judgments.

What is Your Credit Score?

Your credit score is a three-digit number that pretty much rates how good or bad a borrower you are. It is calculated based on how timely you are with your payments, how you keep your balances below your credit limit, the mix of credits that you have, and your average age of credit.

Why is Credit Important?

Your credit is important because it affects your ability to borrow money. The higher your credit score, the better your chances of getting approved in every loan or credit application. However, even if you don’t intend to borrow money, there are other aspects in life wherein you can see the importance of credit.

First, not only is your credit necessary if you’re trying to apply for a mortgage loan, but it is vital even if you’re just renting an apartment. Many business owners, including landlords, would like to determine if you habitually make payments on time, and they will pull out your credit report in order to see that.

Second, credit also affects your ability to apply for utility or mobile phone services, for the same reason that these companies like customers who pay diligently. If you have bad credit, it would be hard to get approved for these services without shelling out a security deposit.

Lastly, good credit can help you find better employment or achieve your well-deserved promotion. Nowadays, credentials alone aren’t enough. Most employers are cautious when a person has bad credit because it might reflect financial distress and irresponsibility.

How Soon Should a Person Start Building Credit?

Ideally, the best time to start obtaining credit is during college or as soon as the person reaches legal age. This can help establish financial discipline early on. While people in this age group might be the most risky borrowers, they are also the ones who can become financially successful sooner if guided and taught properly.

What You can Do to Protect Your Credit?

While obtaining credit alone is challenging already, maintaining it requires extra effort. To start with, make sure to always pay your bills on time. Keep constant watch of your balances and as much as possible pay off every balance in full. Keep your old accounts active and maintain a good mix of revolving and installment accounts. Additionally, you should protect yourself from identity theft, which can ruin your credit and everything you’ve worked for overnight.

Best Financial Tips for Newly Grads

As a new young adult ready to face the real-world, you should be prepared for what lies ahead. These financial tips can help you go through the many challenges that you would face right after college. 

Think like a student. Most newly grads get excited about getting out of college, having a full-time job, and earning a decent salary for themselves. Unfortunately, this may give way to a totally new lifestyle, wherein they mostly get trapped in unnecessary spending.

In order to avoid this, you should try to spend like you’re still a student, wherein you’re living on a limited budget, keeping up with an older car for too long, and cooking your own meals instead of dining out. If you choose to forget that you have more income now and stick to your old spending habits, you can pay off your debts, if you have any, more quickly and begin planning for bigger goals.

Contribute towards retirement accounts. Make sure that a retirement account will be arranged at your new workplace for you to take advantage of employer-matched contributions. That’s free money put towards your retirement so be sure to maximize your contributions.

Keep your credit in check. At any stage in life, you don’t want to mess up your credit, unless you want to jeopardize your ability to borrow, buy a car, buy a home, or even get a job. If you’ve had a credit card while in college, it would probably be easier to obtain additional credit now compared to starting from scratch. Just make sure you watch out your spending, pay your dues on time, and keep your oldest credit cards active.

Get rid of highest interest rate debt first. Many newly grads do not only have student loans to pay for, but credit card debt as well. While it could be tempting to get rid of your student loan first, it might be wiser to focus on reducing your credit card balances, which carry higher interest rates that can cripple you for a long time.

 Prepare for unexpected dangers. You can never tell if anything happens to you, if you’ll get sick or get fired. What’s worse, you’re starting to live independently now and you can’t just expect your parents to bail you out. If you got ill or lost your job, the bills would still come, and if you have no source of income, you have to resort to borrowing in order to pay for them. To avoid accumulating unwanted debt, better build up your emergency fund so you’ll be able to make ends meet without resorting to debt.

Create a budget and commit to it. It’s hard to plan on pulling away from debt and preparing for a brighter future if you do not have a budget to follow. When creating a budget, it is important that you look closely at your income and expenses, and assess which areas you can cut costs. More importantly, you should set a realistic budget that you can follow through the long-term.

Financial Planning in Your 20’s

Not many people in their 20’shave gained financial discipline and maturity. Although it might seem that you are still too young to worry about bigger responsibilities in the future, planning early can keep you well ahead in the game. 

Save a Little

Saving at this stage may be too early in the mindset of most in their 20’s. Particularly if you just got off from college, you might think that you’d rather have fun than worry about distant life changes such as retirement, and saving could ruin your enjoyment plans for today, right? On the contrary, building the habit of saving as early as now can help you become financially free sooner. If you dream about retiring early one day, one of the things you should learn first is the habit of saving. It doesn’t have to be that huge, what’s important is that you get started. Even if you just save 10% of your salary today, you’d have more funds in the future compared to if you started saving 20% 10 years later.

Live Within Your Means

Again, it’s hard not to spend every paycheck on things that you weren’t able to buy while you were a student. But earning your own income doesn’t necessarily give you much financial advantage. In fact, there are more obligations that you have to worry now. If paying for your car or rent will put you into financial distress, consider moving back in with your parents. It may not sound independent and obviously contradicting to your views as a young adult, but it can save you a lot while you’re yet to stand up on your own feet.

Start To Pull Away from Debt

If you have student loans left, it is always best to prioritize getting rid of this in order to focus on other goals sooner. It’s hard to save up for a home or get married if there are huge responsibilities left behind, so it’s best that part of your saving plan would be allotted towards debt reduction.

Build Your Emergency Fund

Before any major endeavor, you should put money into your rainy-day fund. Illness, accident, or job loss doesn’t typically occur to people in this age group, but you have to remember the fact that you are not invincible. A three to six months worth of emergency fund can give you safety net during these unforeseen disasters and can save you from impending financial doom.

Diversify Your Portfolio

Kudos if you’ve been able to stick to your saving plan, but saving alone will not give you the best returns on your money. You can go a long way with little experiments on low-risk and high-risk investments which can provide you extra funds which are impossible to earn in a regular savings or time deposit.

Start Working on Long-Term Goals

Though starting your own family or buying a home may be far away, it’s smart to visualize it as early as possible. If you figure your goals earlier, you can come up with a financial plan that is aimed to reaching those goals soon.