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Posts Tagged ‘Debt’

how to Use credit cards Wisely 

finance by using a credit card we can pay our grocery items without having to spend money on The security of your credit card is more secure than when you bring money  tens of millions of dollars. But if not wisdom in using it, credit cards can also backfire to you. The credit card was expensive means of payment. If you do not already have this credit card should not want to have it. Or if you already have one don’t ever think to add to it. Because that would just be bad for your finances. If you already have a credit card, visit a few tips how to use credit cards wisely follow:

1. Double-edged Knife Tub credit card it like a double-edged knife. If used wisely and discipline, it will be a lot of good. But it could be less harm if used carefully, uncontrolled. It can cause a huge financial disaster. So, be careful and  in using it to shop.

2. don’t just pay the minimum bills do not pay just the minimum number of payments. Because if you pay only the minimum amount of bills, bills the possibility of debt you will not pay Moreover, if the banks do charge interest system, it will only burden the finances of you. Better to pay all your debts in order not to incur interest per month.

3. Leave your credit cards at home Should bring a credit card only if you have plan to shop or conduct transactions. No need to carry every day, especially if you have more than one credit card. No need to carry all, to reduce the risk of impulsive shopping (without planning) or risk losing your wallet.

4. don’t be late paying bills Strive to always be punctual in paying your credit card bills. Because if you are late, You will be subject to fines that were already determined the bank. Your payment for this month also could have been useless because can only cover the Bills just fine instead of debt. So try to be on time when paying bills.

5. negotiate with the Bank it’s worth contacting the credit card issuing bank to discuss the schedule of credit repayment you are unable to pay. If the minimum installment can be made smaller probably would be the monthly fee You lighten it. This emergency Affairs in the hope of Your life hopefully tomorrow will be better. Bank credit card issuer also usually want invited to negotiations, rather than them having to lose the debt  at all. So, don’t be afraid to try it this way. That’s some safe way using a credit card. Don’t be easily tempted with the amenities and convenience offered by the credit card provider. Because in essence You will have trouble paying debt

Which mortgage type to choose?

• Standard Variable: Normal P&I owner-occupier home loan, (the traditional home loan that pays your loan off “slowly” over a 30 year term. Normally the Bank wins by receiving a big interest margin.
• Honey moon” Standard Variable: First 12 months offer a discount interest rate, (revert to Standard Variable rate from 13th month). The first year is a great discount, but the Bank reverts you back to the Standard Variable rate from year 2 to 30.
• Discount Variable: Similar to Standard Variable, however interest rate offers an ongoing discount. A sensible borrower option, as the interest rate is discounted for the term of the loan, just make sure the features suit your needs.
• Line of Credit, (Equity Loan): An interest only variable rate loan that operates as an “all in one” loan facility with salary paid into it and $$ access via debit card and cheque book. Popular for investment or debt reduction purposes, but a lot of borrowers find it’s like a giant credit card and your debt never seems to go away.
• 100% Offset Account loan. A standard variable P&I home loan with a “linked” transaction account. Income and $$ can redraw from the transaction account. Both splits are assessed daily and interest is calculated on the “net” difference between both loan balances, and P&I interest is calculated on the difference, so you can save years off your loan term and save significant interest expense, if your income is in “surplus” against your expenses, in most instances. Popular with borrowers wishing to minimise their mortgage interest paid.

Top tips for mortgage reduction

The secret to financial security is making your money work for you.

Here are some tips to obtain financial security:

• Evaluate – review your current financial position comparing your total income against all outgoings.
• Budget – recording your day-to-day expenses is the key to financial control. By using your cash flow more effectively you can reduce your current commitments.
• Plan – set your future personal and financial goals. This will give you an incentive to succeed.
• Select – choose a loan that offers features and benefits that match your individual lending needs, not just now but into the future. This will assist you to repay your loan sooner.
• Refinance – decide whether your existing financial arrangements still suit your current circumstances. If your current loans and/or credit card debts are not providing you with the desired results and you are paying too much, consider refinancing or consolidating your debts to achieve a financial benefit.
• There is an extensive range of loans from many different lenders available. Finding the right loan may greatly reduce your loan term, interest payments or repayments enabling you to obtain greater financial security.

Here are signs that can help you identify a little more certainty if your finances are heading in the opposite way. The first step to stay afloat is to recognize where they are failures and where we can improve:

1. You owe money to a lender.
Usually if you owe a lender is because they do not have established good credit. Lenders charge very high interest by lending you money. If you owe a lender should be more aggressive (a) in paying to be able to use that money to pay the high interest rates to get your finances afloat.

2. Using credit to buy necessities.
If you use your credit card to pay your monthly bills, or buy your food, or for any monthly spending means a red alert. You are using debt to pay for your needs. You have to evaluate your budget to know if you need more income or cut your costs. Sure, if you only do this in order to earn miles or points, and pay your card every month (which you used) is a very good strategy.

3. You do not win enough, or there is no future in your work.
You should always have a plan to increase your income, is developing your skills on the job, having a clear idea of how to be promoted (a), continue your education, learn a new trade, etc. The key is to understand that if we win just as we won now in ten years would be in a bad economic situation. It is important to continue learning, exploring new ideas, perhaps set up your own business.

Now you wonder: Where are the last two? Well, you work for today! A human characteristic is that not all are equal. We all have different priorities, concepts of money, etc. The next two signals are your own and you should make an action plan to identify and then write three things you can do to change them. We’d love you to leave a comment to know what they are and what you gonna do about it.

I wanted to revisit the book by Dave Ramsey, The Total Money to continue educating myself more on different concepts of personal financial education. I recently spent a week reading a book on personal finance, investment, prosperity, wealth, etc. And I hope you like my reviews that at the same time encourage them to study more on how to grow as a person financially, spiritually, emotionally and everything that ends in “al”.

Let’s imagine it means to live without debt. Take 20 seconds and think about the expenses you have today that deal with credit card payment, monthly auto loans, student loan payments, and everything that is not a product / service that has to do with daily living. Now think that this money was available to you to use it to accumulate wealth …

Imagine, you have between $ 500 to $ 700 a month available to be a part of your future plans. If you and your partner are able to strive to pay their debt, understanding that the debt is NOT part of everyday life, and have a plan to save for the next 20-35 years, or more, you were a millionaire with this money. Think big and make a big plan, which it does not come. Let’s do the math:

If you save $ 500 monthly for a period of 25 years at an average interest rate of 8% would have in the bank at the end of 25 years about $ 393.849, if you leave about five years and are still contributing, they would be $ 583.954 . (Note: the average interest rate of a mutual fund is 12% growth over the past 70 years, so we’re being a little more conservative).

If you have debts, try to leave them to be able to use the money you have left to save. If you have, means you should not play it because your neighbor has (and should) you’ve got to have (and should). Do not let wrap yourself in the consumer culture of wanting it all now, without thinking that you’re leaving to be a millionaire for it. All in good time. Dave Ramsey uses a very interesting phrase: “Live like no one does, so that after living like no one has done”