Most American's live beyond their financial means. Let's see if we can't find where your money is going needlessly. Do you have the incentive to stop giving away your hard earned dollars? How much do you spend on credit card debt, extra banking fees or unnecessary insurance?
A habit starts out as a thread. As new threads are added, it becomes a rope we cannot break. Anonymous
Credit Card Traps:
You know that you need to get rid of all those credit cards. Why do you need more than 2? One for purchases and one kept empty for an emergency. Look at your statements, see how much this is costing you per month. Is it $10, $20, or more every month that you pay in interest charges, just to keep those bills? When you only pay your minimum every month, you are leaving the rest to continue costing interest again and again every month. First start paying an extra $10 or more above the minimum, that way you will be paying down the principal balance. Second don't charge any more, at least not more than you can pay (plus your interest and something on the last balance)! You know you have to stop charging - your name isn't Custer, why are you going through your life charging? Think about it, do you really need that new sweater or what ever it is that you think you can't live without? Start paying your cards off one at a time and pay the highest interest card off first. Read your statements, you need to know what you are paying for and how much interest it is costing. If you buy something for $20, it will show up as $22 or more when the interest costs are tacked on - and new interest arrives each and every month! As you pay a card off you should have cut it up and destroyed the card - you can even call the credit card company and tell them to close the account, maybe you can save more by having them stop the interest charges. Just think, saving $3 each month on 5 cards is a savings of $15 a month! That should make you happier than a new shirt. Do you have a savings account? I hope this is just a temporary park for your money, safe yes, but so are CD's and they have a much bigger rate of return. Are you receiving a whopping 2% interest on your savings, while paying 20% on credit cards? A simple savings account doesn't even keep up with inflation (3-4%). Now CD could stand for Certificate of Depreciation because this writer feels that a mutual fund is a much better place to earn money. The stock market has always produced a 10% rate of return over 5-10 year spans, even during it's lows. The best way to take the plunge is to leave it and forget it. This is a good thing to use your IRA umbrella with. You dooo have one? Remember you don't need this money immediately and your plan is to have it grow over time. It may take 5-7 days for you to get this cash, but all of it is earning tax-deferred interest!!
Phone Charges:
What about your phone bill? Are you paying extra for goodies you don't need? Each of those fancy technologies is costing you money! At about $4 a month. Do you need to know who is calling? If you don't want to talk to someone just don't answer the phone! Most of us have an answering machine and your dearest friends can be told so you can pick up the phone whenever you hear their voice. Now I know most of us can't live without call waiting. Lord forbid the perfect person in your life is calling while you can't shut up a telemarketer! Or your Mom is calling from the Caribbean and your exchanging recipes with the neighbor, over the phone. Just remember it still costs $3.50 and that adds up to $42 per year, for each of their phone services. Kind of like having cable TV only to pay $8-$10 a month in additions for HBO or The Movie and Disney Channels. With all the pagers and cell phones out there, do you really need call forwarding? If you really expect an important phone call can't you just tell them to call you somewhere else? All you really need to do is pay attention to your spending. If the phone company is answering your calls, why not just buy an answering machine? It's far cheaper than the $7-$10 each month that they charge you. And please, take the time to shop around for long distance telephone calls. Do you really think AT&T cares that you are a devoted subscriber? Just because you are too busy to check other companies, don't let them continue to charge you 23-29 cents a minute when you need to reach your Mom now. Many companies only charge 10 cents a minute - to whomever, whenever, 24 hours a day with no "special" instructions. I would be happy to send you info on this, just e-mail your request.
Insurance Costs:
Do you have a life insurance policy? Why? I know it's a dumb question, but do you realize that life insurance is paid to someone else when you die. You will never see that money. Think about it. It is a very important thing when you have a family or someone who needs it when you can no longer take care of them. If you think you will have that money as a retirement investment, realize that the same premium could be put into a tax deferred annuity of mutual fund and will accumulate at a much faster rate of interest - paid to you - when you reach 60 or later. Now you know why insurance companies have bigger offices than banks! Check out Term Insurance. This is a life insurance policy that pays at your death only and costs far less than a whole life or universal life policy. You can get a decreasing policy which pays more while the kids are young, but decreases in value as you get older and have established other investments for your loved ones and retirement. And then there is car insurance. With the costs of cars costing what many homes cost, you do need collision insurance. If only to pay for the car if necessary. But what about uninsured motorists? Do you really know what it covers? Your hospital bill when you are in an accident and the other guy is not insured. Most states won't give someone a driver's license unless they are insured anyway. Do you have a hospital insurance policy through employment? Well, that insurance will provide insurance for you if you are in an accident. So why are you still paying $50-$75 for this additional insurance, you can only use one ya know.
Interest:
These are all those little monthly pests that just keep on accumulating every month that you don't even realize anymore. I've already talked about credit cards, but what about that new computor, car or boat, and most of all your house payment? These things can be treated just like the mortgage reduction idea. Though car payments get their interest money first, you can still save a lot of interest charges by making a principal payment with your monthly payment. Just pay 2 coupons each month, the second in principal only, and you will find that bill paid off in 2 years instead of 4, saving you several thousand or at least hundreds of dollars. Most of you have heard about mortgage reduction by now. Why aren't you doing something to save yourself tens of thousands of dollars? It isn't hard, if you have a $600 monthly payment and just add $10 extra on principal every month, you can save $50,000 in payments, doesn't that make sense? Start now!
Homeowners:
If you own a home, you may have access to the best loan going. Now you can get out of debt, but to stay out you MUST freeze or cut up those credit card accounts. Get an equity loan (that's a loan on the sale value of your home, less your current mortgage) on your house. Usually these loans are based on 75% of your home's value. This loan is cheap, currently about 8%, you must use your home for collateral, however this interest is *tax free*. The IRS allows you to deduct your paid interest charges on a home equity loan. Great way to pay off those 20-25% credit card debt, but do cut up those cards after you pay them off. We want to get you out of debt, not create more avenues. Remember this strategy the next time you want to get a new car. It is never a good idea to use your home for business money. Bad enough you may lose in business, but we don't want to see you lose your home too. When shopping for a new mortgage or equity loan remember these tips: Get a 15 year loan over a 30 year loan. You will pay a larger monthly fee, but will save 15 years of payments. Those are great odds. Fixed rate loans keep the same payment for the life of the loan. ARM (Adjustable Rates) are just that. Your payment adjusts each year. Initially the interest and payment are low but will increase each year. So be sure that you won't have too big of a payment 5 years from now. Be sure that there is a cap on the increase of not more than 2% per year, meaning that if the loan starts at 5%, the second year will not be more than 7%, and so on. That there is a low 6% maximum cap for the life of the loan. This means your 5% original loan will never go above 10% interest, for the life of the loan. There is no prepayment penalty, so that you can save money making advanced principle only payments. I can give you a mortgage reduction plan showing 6 different ways to do this. Just send me e-mail to The Rose.
IRA and 401K Retirements:
I realize that we all need to stamp out legalized crime by getting rid of the IRS, but they are doing a lot to help you keep your money. Why do you think America is the land of opportunity and free enterprise? As an entrepreneur you can turn your hobby into a business and not only make some extra income, but the IRS helps you with loads of tax brakes. You can spend a few thousand for a computer, but when you buy it with the intention of making money it becomes a tax write off. That means that the same $3,000 is now an expense and comes off your income, thereby lowering the amount you will pay taxes on. When you are in the 30% bracket that equals a $900 tax savings of money that you won't have to pay. Why did you quit putting money into an IRA? Even if you don't qualify, it is still money that gets interest you don't pay taxes on. Many of you don't have a pension plan at work and therefore the $2,000 cap on your IRA is still alive and well. It is tax free money you should be keeping for yourself. If you would like a more detailed report, please send $19.95 includes postage and handling to: Rose Quaranta, 3450 S Ocean Blvd. Apt 120, West Palm Bch., FL 33411 Speaking of pensions. Most companies have some sort of 401K or pension plan where they will match your contribution or pay something extra into your fund. This is extra money you could be earning, tax free. If you put in $10 a month, your employer puts in $10 a month and you now will have $20 in your plan. That's like free money for you and you get it all when you retire, and still have not had to pay income tax on it. Am I making a point?
Any opinions on this site are strictly my own. Actual fees come from Print Monitor Reports published weekly in North Palm Beach, Florida. I would be happy to answer personal questions via e-mail at: .The Rose If I have saved you one dollar today, I am thankful. Have faith in yourself, and ... Go for your dreams, Rosie
Visit our other great sites:
[MSS Home] [Business Opportunity] [Gold Coins] [Footprints in the Sand] [Elder Help$] [Wills & Trusts] [Free Checking] [Money Strategy Solutions]
If you would like to be reminded when this site is updated
For More Information Contact : MSS Money Strategy Systems® West Palm Beach, FL Phone: 561/585-7338