| Stop Debt Save Money |
| By Credit Federal |
Published
08/9/2008
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Debt Help
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Free Tips to Save Money and Stop Debt
If you have a teen in your household, you may have noticed how sometimes he/she has more cash on hand than you do. How'd that happen? Often it's because the teen was either too busy; or had no transportation, to spend the money and it over time it accrued. It's the ease of spending money that gets most of us in trouble. Thanks to credit cards, adults don't even need to leave home to spend... they can login to the internet and shop online.
Many may suggest that the first step to saving money is to create a budget. But due to today's ease of spending, perhaps the first step should be to remove that ease... cut up credit cards and stay home while not at work.
If your excuse is that you don't make enough money to pay bills, you may be living above your means. We'd all prefer a large home complete with satellite/cable in every room, a fancy sound system, spa, and dress in fancy clothes and drive an expensive car. Some of us even consider those things our 'rights' versus a luxury.
Remove spending ease:
Cut up your credit cards to reduce the temptation to spend. Don't close credit card accounts, because doing so can lower your credit score. How? Because one factor of your credit score is how much available credit you have, versus how much you've already obligated. If you have a credit card with a $10,000 line of credit and you have a $5,000 balance, that means you have only $5,000 in available credit.
Ignore the ads. Using another child example, parents are often bombarded with requests to buy products; such as cereal, simply because of a commercial their kids had seen. Parents; too, are tempted by these ads. Whenever watching TV, browsing the internet or listening to the radio, ignore the ads. Often we buy things we don't even need, on the premise that we might enjoy it. Luxury and pleasure does not equal necessity.
Stay focused. When you go out to shop for necessities, avoid temptation by not browsing sections of the store that do not contain what you absolutely must have.
Next, create a budget. We have free budget software that can help you quickly calculate income, track expenses, and sum your available free cash.
Plan for short term and long term goals, including retirement. Short term plans are for vacations, a new car downpayment and so forth. Long term planning should be to get out of debt, send children to college, save for retirement and so forth. Use our free savings calculator to estimate how much you can earn in interest based upon your monthly savings deposits.
Establish an Emergency Fund. An emergency fund is different from a savings account. Whereas your savings account is for specific purchases and occasional splurges, your emergency loan fund is to cover the necessities of life; for 3 to 6 months, should you lose your income. You should never dip into your emergency fund by using it as a typical savings account.
As part of your long term goal to pay off debt, the best advice is to first payoff credit cards with either the highest interest rate or the lowest balance. Also consider paying off a card that is at; or near, its max limit because the more available credit the better the credit score you could have. Also, you don't want to risk going over-limit by missing payments, accrued interest fees, etc.
Avoid wasteful expenses. As soon as your bills come in, pay them so you will avoid late fees and eliminate or reduce interest charges. To help you remember, use our free bill reminder software. Try to pay bills through automatic deductions or perhaps online and keep your payment confirmation number should there be a dispute later.
Get more free tips on how to save money and to budget.
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