Smart consumers are always trying to find ways to stretch their dollars. After all, the first step of financial success is to live below your means! Follow these tips to help you find ways to save money, spend less, and improve your finances.
Tip 1: Deal With Your Debt
The place to start saving money is by dealing with money you’ve already spent. Overspending can lead to credit card balances, expensive personal loans, and other high-interest debt. Unless you develop a plan to pay off these debts - and then stick to that plan over time - the odds of paying them off aren't in your favor!
Set aside a specific dollar amount for debt repayment each month, and make sure this amount is above the minimums due on all of your debts. Pay the minimum due on each of your debts and then direct the remaining amount toward the debt you'd like to pay off first.
Paying extra toward the debt with the highest interest rate is the best way to go mathematically. But if you're dealing with multiple debts, starting with the debt with the lowest balance might be the best way to go since you'll start reducing the number of your outstanding debts faster.
Tip 2: Implement A Cooling-Off Period
Impulse purchases are a big reason why many of us overspend. Even if your spending habits don't lead to you having debt, they could still hurt you by taking away money that could be used for your financial goals.
One way to cut down on impulse purchases is by implementing cooling-off period. And remember it's not just big-ticket items like TVs, smartphones, and
cars that can lead to trouble; smaller purchases add up quickly! Consider implementing a cooling-off period of a week or two before making purchases. Use this time to see how the purchase will affect your budget and to determine whether the purchase is a “need” or just a “want.”
Tip 3: Stick To A Shopping List
How many times have you gone to a store like Wal-Mart or Target for just a couple of items and come out with a cart full of stuff? Making a list before you go shopping – and sticking to it once you’re there – can help you spend less.
It also helps to go directly to the part of the store that has what you're looking for. Wondering around a store aimlessly or carefully going down every aisle are two great ways to end up buying things you don't really need!
Tip 4: Use Automatic Bill Pay
Late payment fees are expensive and can add up quickly. You can make
sure you never miss a due date by setting up automatic bill pay for your credit cards, utility bills, phone bills, etc. Not only will this make sure you're never charged a late fee, but it will also free up some of your time.
Most banks offer automatic bill pay, or you could have your bills charged directly to
your credit card. I prefer to have my bills charged to my card and then have my card
automatically deduct the full statement balance from my checking account at the end of the billing
cycle. That way I get reward points and only have to worry about one draft from
my bank account each month.
Tip 5: Check For Recurring Charges
It’s easy to lose track of how much you’re paying for magazines, newspapers, credit monitoring services, video services like Netflix and Hulu, and other recurring subscriptions. So go through your bank statements and credit card bills to see
what you’re paying for and determine whether or not it’s worth keeping.
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Tuesday, October 29, 2013
Tuesday, March 5, 2013
Make The Most Of Your Tax Refund
For many Americans, tax season means looking forward to a refund when they file their taxes. If you're one of the filers that will be getting money back, I have some good and bad news for you.
First, the bad news. A tax refund represents money you overpaid throughout the year, so it's basically an interest-free loan to Uncle Sam. Instead of overpaying and receiving a refund, you can use the IRS Form W-4 to adjust your tax withholding and keep more of your money throughout the year.*
The good news is that getting a tax refund offers you an opportunity to make some smart financial decisions. The average tax refund was around $2,800 in 2012, so many people receive enough to make a huge positive impact on their financial situation.
Here are a few smart options to use your tax refund.
Option 1. Pay off debt.
Paying off debt is the first thing to consider doing with your refund since dedicating a lump sum toward your debt is a great way to get started down the road to eliminating it completely. A low interest mortgage or student loan is one thing, but what about a high interest credit card or other loan?
Paying off high interest debt is an excellent financial move. Any extra dollar you put toward a debt will save you that percentage of interest over the next year. For example, if you have a credit card with an 18% interest rate, you'd essentially be earning an 18% return on every dollar you put toward that debt since you’d avoid that interest.
Option 2: Build your emergency fund.
Most people know that you should have from 3 to 6 months in a cash reserve, but not everyone has a reserve. A tax refund could be used to start a reserve if you don’t already have one, or use it to replenish your cash reserve if you’ve used some of the funds over the past year. You can check www.DepositAccounts.com or www.BankRate.com to find a no-fee, high-interest savings or money market account to use for your emergency fund.
Option 3: Fund an Individual Retirement Account (IRA).
You have until April 15th to make an IRA contribution for 2012, but if you miss that deadline you can still get a head start on 2013. Funding an IRA is a great way to prepare for retirement, and you can choose between Traditional IRAs that give you a tax deduction now or Roth IRAs that can provide tax-free income in retirement.
The maximum contribution for 2012 is $5,000, or $6,000 over 50, as long as you had at least this amount of earned income for the year. Both contribution limits are $500 higher for 2013, for a total of $5,500 and $6,500 respectively.
Option 4: Fund your college savings.
It’s often difficult to juggle saving for retirement with other financial goals like preparing for your children’s college education expenses. Using a tax refund as a lump sum contribution toward college savings can be a great way to save money for college without adding an extra monthly bill. You can go to www.savingforcollege.com to learn more about the different types of college savings plans.
*Be sure to consult your tax preparer for help determining your tax withholding. The IRS doesn't like it when you underpay!
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com.
First, the bad news. A tax refund represents money you overpaid throughout the year, so it's basically an interest-free loan to Uncle Sam. Instead of overpaying and receiving a refund, you can use the IRS Form W-4 to adjust your tax withholding and keep more of your money throughout the year.*
The good news is that getting a tax refund offers you an opportunity to make some smart financial decisions. The average tax refund was around $2,800 in 2012, so many people receive enough to make a huge positive impact on their financial situation.
Here are a few smart options to use your tax refund.
Option 1. Pay off debt.
Paying off debt is the first thing to consider doing with your refund since dedicating a lump sum toward your debt is a great way to get started down the road to eliminating it completely. A low interest mortgage or student loan is one thing, but what about a high interest credit card or other loan?
Paying off high interest debt is an excellent financial move. Any extra dollar you put toward a debt will save you that percentage of interest over the next year. For example, if you have a credit card with an 18% interest rate, you'd essentially be earning an 18% return on every dollar you put toward that debt since you’d avoid that interest.
Option 2: Build your emergency fund.
Most people know that you should have from 3 to 6 months in a cash reserve, but not everyone has a reserve. A tax refund could be used to start a reserve if you don’t already have one, or use it to replenish your cash reserve if you’ve used some of the funds over the past year. You can check www.DepositAccounts.com or www.BankRate.com to find a no-fee, high-interest savings or money market account to use for your emergency fund.
Option 3: Fund an Individual Retirement Account (IRA).
You have until April 15th to make an IRA contribution for 2012, but if you miss that deadline you can still get a head start on 2013. Funding an IRA is a great way to prepare for retirement, and you can choose between Traditional IRAs that give you a tax deduction now or Roth IRAs that can provide tax-free income in retirement.
The maximum contribution for 2012 is $5,000, or $6,000 over 50, as long as you had at least this amount of earned income for the year. Both contribution limits are $500 higher for 2013, for a total of $5,500 and $6,500 respectively.
Option 4: Fund your college savings.
It’s often difficult to juggle saving for retirement with other financial goals like preparing for your children’s college education expenses. Using a tax refund as a lump sum contribution toward college savings can be a great way to save money for college without adding an extra monthly bill. You can go to www.savingforcollege.com to learn more about the different types of college savings plans.
*Be sure to consult your tax preparer for help determining your tax withholding. The IRS doesn't like it when you underpay!
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com.
Monday, December 31, 2012
Improve Your Finances In 2013
Here are a few simple steps you can take to improve your finances this year.
Step 1: Start by getting out of debt.
Not only does carrying debt mean you could end up paying a ton of interest over time, but it also takes away from money you could save and invest for your financial goals. If you decide that 2013 will be the year you tackle any debt you have, then check out www.PowerPay.org, a free resource to help you develop a debt repayment plan.
Step 2: Make sure you have a cash reserve.
If you don’t have an emergency reserve, then make 2013 the year you start one. The rule of thumb is to have between 3 and 6 month of living expenses saved, but don’t worry if you can only put away a little bit of money to start. Since most high-interest, “pay day” loans are for less than $500, even a small amount of cash can save you in an emergency. You can use www.DepositAccounts.com or www.BankRate.com to find high-yielding savings accounts and CDs to hold your cash.
Step 3: Start investing.
If you’re new to the world of investing then the easiest place to start is with your company’s retirement plan. If your company doesn’t have a retirement plan, then you could start an IRA or Roth IRA at a company that offers commission-free mutual funds. Even if you're already investing in your company's retirement plan, it's a good idea to start additional savings in an IRA, Roth IRA, or taxable investment account to supplement your retirement savings. Consider starting with a “target date” or “asset allocation” mutual fund that will give you instant diversification with a single investment.
Step 4: Get a second opinion.
If you already have investments, you might benefit from sitting down with a professional to discuss things like your asset allocation, individual holdings, tax management, or risk reduction. Keep in mind that someone that earns commissions will have an incentive to recommend changes, so look for an advisor that works on a fee-only basis and never accepts commissions from his or her recommendations. You can go to www.NAPFA.org or www.GarrettPlanningNetwork.com to find a fee-only advisor
To learn more about our company - and find out how we are different from other financial advisors - visit www.VannoyAdvisoryGroup.com or call us at (210) 587-6433.
Step 1: Start by getting out of debt.
Not only does carrying debt mean you could end up paying a ton of interest over time, but it also takes away from money you could save and invest for your financial goals. If you decide that 2013 will be the year you tackle any debt you have, then check out www.PowerPay.org, a free resource to help you develop a debt repayment plan.
Step 2: Make sure you have a cash reserve.
If you don’t have an emergency reserve, then make 2013 the year you start one. The rule of thumb is to have between 3 and 6 month of living expenses saved, but don’t worry if you can only put away a little bit of money to start. Since most high-interest, “pay day” loans are for less than $500, even a small amount of cash can save you in an emergency. You can use www.DepositAccounts.com or www.BankRate.com to find high-yielding savings accounts and CDs to hold your cash.
Step 3: Start investing.
If you’re new to the world of investing then the easiest place to start is with your company’s retirement plan. If your company doesn’t have a retirement plan, then you could start an IRA or Roth IRA at a company that offers commission-free mutual funds. Even if you're already investing in your company's retirement plan, it's a good idea to start additional savings in an IRA, Roth IRA, or taxable investment account to supplement your retirement savings. Consider starting with a “target date” or “asset allocation” mutual fund that will give you instant diversification with a single investment.
Step 4: Get a second opinion.
If you already have investments, you might benefit from sitting down with a professional to discuss things like your asset allocation, individual holdings, tax management, or risk reduction. Keep in mind that someone that earns commissions will have an incentive to recommend changes, so look for an advisor that works on a fee-only basis and never accepts commissions from his or her recommendations. You can go to www.NAPFA.org or www.GarrettPlanningNetwork.com to find a fee-only advisor
To learn more about our company - and find out how we are different from other financial advisors - visit www.VannoyAdvisoryGroup.com or call us at (210) 587-6433.
Monday, December 21, 2009
Recommended Reading
The Millionaire Next Door by Thomas J. Stanley and William D. Danko
This book profiles US households with net worths of at least $1,000,000. Not only does it dispel the myth that most millionaires inherit their money, but it also details the saving and spending habits that helped these individuals accumulate their wealth. Since this book focuses on their lifestyle choices rather than investments, you don’t have to know anything about investing to benefit from reading it.
Why Smart People Make Big Money Mistakes and How to Correct Them by Gary Belsky and Thomas Gilovich
This book studies why we make the decisions we make when it comes to spending, saving, and investing. The authors believe - and I wholeheartedly agree - that by studying the psychological factors behind your economic decisions you'll be able to change your behavior in ways that will benefit you financially.
Investing in an Uncertain Economy for Dummies® by Sheryl Garret and Members of the Garrett Planning Network
This book contains over 80 investing and financial planning "tips" from independent, fee-only advisors. The fact that it touches on so many topics - rather than focusing on a single area like "mutual funds" or "insurance" - makes it a great resource for new investors or a reference for experienced investors. Full disclosure: although I’m a contributor to this book, I don’t receive any compensation when someone purchases a copy.
Common Sense on Mutual Funds by John C. Bogle
Most investors are better off investing in mutual funds rather than selecting individual stocks and bonds. Unfortunately, even if you narrow down your investment choices to “mutual funds”, you're still left with thousands of alternatives. This book will help you sort through the noise and get a better understanding of the world of mutual funds.
Deal with Your Debt: The Right Way to Manage Your Bills and Pay Off What You Owe by Liz Pulliam Weston
Most books on debt focus on how to eliminate it completely and encourage readers to avoid debt at all costs. But since most people find completely avoiding debt unrealistic, this book helps readers understand how to manage it effectively. It covers strategies for dealing with every form of debt including credit cards, student loans, auto loans, and mortgages.
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com
Monday, December 14, 2009
Free Financial Resources
www.PowerPay.org
If have credit card balances or any other unsecured debt you’re having trouble eliminating, or just want to get your spending under control, then you should check out PowerPay.org. This site has several helpful calculators you can use to eliminate debt, develop a spending plan, and save more.
www.Investopedia.com
The investment world is filled with specialized terms, acronyms, and other lingo, and Investopedia.com is the place to go when you come across something you don’t understand. This site has information on asset allocation, zero coupon bonds, and everything in between.
www.Bankrate.com
Bankrate.com is a useful resource if you want information on mortgages, checking and savings accounts, CDs, credit cards, debt management, and other similar topics. Use this site to see the latest mortgage rates, check savings and money market yields, and read about numerous other financial topics.
www.SavingForCollege.com
The obvious purpose of this site is to help people save for college education expenses. It’s a great website to use if you want to know more about 529 plans, Coverdell ESAs, applying for financial aid, or anything else associated with college savings.
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com
If have credit card balances or any other unsecured debt you’re having trouble eliminating, or just want to get your spending under control, then you should check out PowerPay.org. This site has several helpful calculators you can use to eliminate debt, develop a spending plan, and save more.
www.Investopedia.com
The investment world is filled with specialized terms, acronyms, and other lingo, and Investopedia.com is the place to go when you come across something you don’t understand. This site has information on asset allocation, zero coupon bonds, and everything in between.
www.Bankrate.com
Bankrate.com is a useful resource if you want information on mortgages, checking and savings accounts, CDs, credit cards, debt management, and other similar topics. Use this site to see the latest mortgage rates, check savings and money market yields, and read about numerous other financial topics.
www.SavingForCollege.com
The obvious purpose of this site is to help people save for college education expenses. It’s a great website to use if you want to know more about 529 plans, Coverdell ESAs, applying for financial aid, or anything else associated with college savings.
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com
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