Category Archives: Staying debt free

Choosing a savings account

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There are a number of factors to look at when selecting the appropriate savings account for yourself or a child.

Factors to consider are:
- How much money will be place into the account, how frequently will it be topped up
- How important is the return on investment via interest rates
- How many fees are you will to pay on your savings account
- Will you require instant access to the money in the account?

The high interest saving account can supply an investor with a high profit in the end of a long investment period. However generally the highest interest is only available for term deposit accounts. That is, your money is locked in with the bank for a certain period (3, 6, 12 months the most common). If you require access to your money before the term deposit has matured, you are usually required to pay a fee.

Regular savings accounts are sometimes fairly close to term deposits in their returns, occasionally as little as half of a percent. For the saver who may require instant access to their money, this is sometimes the better option.

There are variations on savings accounts which provide clauses as to the minimum amount you are required to leave in the account and a maximum withdrawl amount over a set period. Sometimes those stipulations are beneficial for developing good savings practises, but sometimes they can be overly restrictive, so read the fine print.

When thinking about taking a step towards some financial planning it is always recommended that you choose from a few offers, and that you study the market and the competition thoroughly, do not give away your money too quickly and too soon, make sure you understand everything there is to know about the saving account you choose.

Teach your kids about saving and set them up for life!

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A good time to start your kids on the path to developing good savings habits is as soon as they begin asking for more expensive toys. By this stage the child can understand the concept of exchanging money for items he/she wants or needs. Along with that concept comes the requirement that for larger more expensive items, money may need to be put away (saved).

There are a number of basic money skills that every child should learn before they become a teenager. Kids are more receptive to your ideas before they hit 12-13, so starting early is a good way to get them thinking the right way about money.

1. Money doesn’t grow on trees! It is important that children understand from early on that money is usually a limited resource.

2. People go to work to earn money. Money is something that needs to be earned, you are never going to become financially secure sitting around not doing anything, and expecting handouts from people.

3. Credit cards are a form of borrowing. The money obtained from credit must be payed back at some point.

4. Borrowing money can lead to problems. Accumulating a large amount of debt can have terrible impacts on your personal life.

5. Good debt and bad debt. Some debts, such as borrowing to buy a house can be a future investment and essential for your goals nd lifestyle. Other debts, such as frivalous expenditure is not worth creating as the reward is less substantial.

6. If you don’t have the cash to buy something, then you can’t afford it.

7. Spend less than you earn. Many people these days are spending 10% to 20% above what they earn, creating a vicious cycle of high credit card interest rates, long hours at work to pay the credit cards & in some cases bankruptcy. The knowledge of how to budget your money seems to have been lost, make sure your child learns this important lesson!

8. Save at least 10% of your money. Like budgeting, the skill of saving money seems to have been lost over the last 20 years, with fewer people than ever before regularly saving a proportion of their income.

If you can pass on those tips to your kids, you are setting them up for financial success in the future!

Minimize credit card debt

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Credit card debt the Number One of debt issues that is not just affecting American households but worldwide in general. Many people are drowning into credit card debt and find themselves hard to get rid of it. If you are in the same situation, praying and hoping for helps from money falling from sky will not save you from continue drowning in the sea of debt. You action to start a debt elimination plan in place is your only way to save yourself from your debt issue. Here are 2 tips to minimum your credit debt that you should consider in your effort of get rid of debt.

1. Don’t Add New Debt While Clearing Your Old Debt

Every one likes to use credit card for purchases because it’s convenient and easy, until you forget about how much money you have in you account and overspend your money. When credit card bills come, only you realize that you have not enough money to pay the amount stated in your credit card statement, you have no choice but paying minimum due to fulfill the credit card agreement requirement. Later, you go out from shopping, again you forget about your financial status and spend again with your credit card.

If you continue this spending behavior, your credit card debt will continue to go up instead of reducing the amount. There is no way to get rid of you debt if you don’t get rid of you credit card first. Hence, if you find that keeping away your credit cards are too hard, take a dramatic action by terminating all your credit cards and exchange them with debit cards so that you only can spend up to the limit where your checking account allowed. Before you call up the banks to cancel your credit cards, read the fine print of your credit card agreement first because some banks will increase your credit card interest rate if you cancel their cards with balances.

The first action to get rid of your credit card debt is to get rid of your credit cards so that you can avoid from adding new debt into your existing debt amount.

2. Minimize The Interest Rate & Avoid The Finance Charges

Credit cards carry different interest rates. If you pay your credit cards’ balances in full each month, then, you don’t really need to care about the interest rate. But, now you are in debt, every extra of interest rate will make you pay more. Hence, list down all your credit card debts and their balances. There are a few options that you can use to minimum the interest charged to your debt. Credit card debt consolidation into few cards with lower interest rate is one the options. Another way is getting a debt consolidation loan which has lower interest rate to pay off your high interest credit card debt. After the credit card debt consolidation, your credit cards now have a full credit limit again. Don’t let yourself be trapped into new debt with these credit cards again.

By combining all your debts into single debt under debt consolidation process, you will have a better focus to pay of your credit card debt and transferring from high interest debt to lower interest debt will save you a good amount of interest. With debt consolidation, your overdue debt will reset back to current and help you to avoid paying the overdue or delay finance charges.

Summary

Credit card debt can be built up really fast, but it won’t go away that quick and it won’t go away if you have done nothing to resolve it. The first step of get rid of your credit card debt is reducing it by avoiding new debt added to it and minimum the interest from rolling up your debt.

Tips for remaining debt free after paying off credit card

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Credit card debt
Perhaps the number one problem facing everyone that works for a living. It is so easy to accumulate debt with credit cards that it surprises us when we actually look at our statements every month to check our balance. Though some might have landed up with credit card debt due to some unfortunate event/emergency in their life, most people carry a credit card debt due to their own wrong doings.

Here we are talking about the life after you eliminate your credit card debts and remaining debt free forever. As mentioned before, of all the people that try to become debt free
debt not everyone is able to pay off pull this off. There are so many people that will never experience what it is like to be debt free. The credit card addiction will keep them in bondage until they learn to deal with their finances correctly.

There is a group of people that have finally after years of effort made it to a debt free status but was sucked back into to it because of the resurgence of this credit card addiction. These are those people who let themselves loose and go on a spending spree as soon as they pay off credit card debt. Soon, these people again land up with a credit card debt and are again trying to pay off credit card debt.

So, reaching the milestone of paying off credit card debts and other debts is great for the moment but you cannot allow yourself to go backwards again. You have to remember the stress and heartache from having the the accumulated debts hovering over your head and know you do not want that again.

The lessons you learned to defeat credit card debt will have to be used continually after you become debt free. Here are a few additional tips to consider if you are one of the few and proud that has kicked your debts to the side.

Do not spend more than you plan to. Always follow a budget and never spend beyond your budget or plans.
Never go beyond 60 percent of your credit limit. This is a safe barrier to keep yourself protected.
Perhaps the most important rule for anyone using credit cards or those that are debt free is pay the balance off at the end of the month. This is a struggle but in reality you should not buy anything that you cannot pay off given 30 days to do so.