4 Reasons Why You Should Start Financial Saving Today

 

As credit cards are becoming easier to get, more people are looking to buy everything on the tab rather than the cash that they have on hand. They choose to purchase whatever they want when they want it without thinking about their budget. In the end credit card piles up will lead to higher monthly dues and ultimately in debt.

To prevent this from happening to you, here are 4 reasons why you should start financial saving today.

Closer to Financial Freedom

When you have saved money, you will also have the financial freedom to look upon. You can purchase the TV you have always wanted, take a vacation you have always dreamed of, or even start your own business. Saving money will help you to gain independence and not have to rely on paychecks every month.

Become Free of Debt

Contrary to what many may think, you will not be able to charge your credit card every time you find yourself in a tough situation. To help prevent yourself from getting into debt, make sure to pay off your debt on time. If you start saving money, you will be able to pay off your debts in no time.

Everyone has the power to save their money. All it takes is knowing how to make a decent budget and a daily habit to help you get started on your savings.

Prepare For Emergencies

In situations such as illness or accidents, these events will take a harsh turn on your finances. Having personal savings will allow you to stay prepared if your child gets sick or you need to fix a home appliance that will cost more than you can usually afford.

Save Early For Retirement

To help you secure your financial future, start saving enough money on a yearly basis to help you live a comfortable retirement. You can start saving early while you are still actively working. In the end, you will find yourself with a comfortable fund to retire when you are ready.

How you plan to save your money? Comment below and share your tips with us!

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The Ugly Truth About Credit Cards

 

The purpose of this page is to give you credit card debt facts that will show you just how bad debt really is. The numbers do not support the thought that you have to use credit to have anything. They do support the fact that credit adds unnecessary burdens to your life.

Credit card “shocking”debt facts

A $10,000 credit card balance will take 37 years to pay off at minimum monthly payments and an 18% interest rate for a total of $24,230 paid.

A $500 credit card balance will take 8 years to pay off at minimum monthly payments and an 18% interest rate for a total of $930 paid.

The typical college graduate student has six credit cards and owes more than $15,000.

The average American household has a credit card debt of $8,400.

Average credit card debt among people who have at least one credit card is $9,205. This is three times what it was in 1990.

The typical American family pays $1,200 in credit card interest each year.

The average family has 14.7 cards including bank credit cards, gasoline cards, store cards, debit cards and ATM cards.

Consumer debt, which includes credit cards and car loans, averages $7,296 per person.

A typical credit card purchase ends up costing 112 percent more than the equivalent purchase made with cash.

40 percent of American families spend more than they earn.

Credit card rates vary widely depending on your credit history from 5.5% to 23.99%.

The cost of credit cards is not just in the interest. You can easily incur other fees such as an annual fee, purchase late fees, cash advance fees, and purchase over limit fees. In one year the credit card industry collects $43 billion in credit card fees.

Some 1.6 million U.S. households filed for bankruptcy in 2003. That is 1 of every 73 households.

70% of Americans live paycheck to paycheck.

Foreclosures have increased 200% since 1980.

In 2001 there were 600,000 homes foreclosed on.

In 2001 there were 1,500,000 consumer bankruptcies.

Americans owe about $6.7 trillion dollars in household debt.

These are just a few credit card debt facts that show how dangerous it is to live in debt. Climb out of this hole and take control of your financial future.

Read the full article on MarketWatch.com

Book Review: Debt Proof Living Book Review

Debt Proof Living is probably my favorite book out of the financial books that I have read. Her writing style is plain, simple and easy to read while still getting the point across. Mary seems to have the capability of explaining money management as though it is all just common sense. When you read the book you will not be thinking, “Wow I could never do that”, she makes it look so much easier.

This book is a relatively complete plan for getting yourself out of debt and then staying out of debt. Of course no book can have every possible scenario in it but I think that Mary Hunt did an excellent job of covering all of the major bases in to help you live financially free.

Debt Proof Living tells the story of Mary and her family as they decide to jump off of the debt treadmill. Their story of sacrifice is inspiring and once again shows us that it can be done.

Mary also writes from a Christian perspective that I can relate to easily.

In the Introduction to the book Mary Writes “We don’t need more credit or more stuff. What we need is the courage to think for ourselves, the maturity to tailor our lifestyles to fit within our incomes, and the willingness to find contentment where we are and with what we have.”

If I had to buy one and only one financial book (other than my e-book) Debt Proof Living would be it.

Book Review: 48 Days To Creative Income

I purchased 48 Days To Creative Income in the winter of 2004 when I was looking for some additional income. I was looking for what Dan Miller calls a different “work model”. After working some overtime I decided to use the extra income to purchase both 48 Days To Creative Income and 48 Days To The Work You Love. I didn’t know which one would help me the most, plus you get a cost savings for buying both so I purchased both at the same time. In addition I received the CD titled Turning Passions Into Profits.

I’m not sure how close to 48 days it was but shortly afterward I started a small business. This business has not been a get rich quick story by any means but it has grown over the last year and a half to a point where it pays for itself plus a couple hundred dollars each month. The best thing about it is that I enjoy it. Over the coming years I plan to continue and grow this business and do not plan to retire from it.

This small business that I have started did not jump straight from the pages of 48 Days To Creative Income. What the book did was prod me to search out what I was really interested in and to research and find what would fit me.

I’m like everyone else and would like to have answered a few questions and then receive a computer printout of can’t miss jobs or businesses that would fit me perfectly. Unfortunately this is impossible. Instead, Dan Miller guides you to analyze yourself to see what it is that you are made to do, your best fit.

This book along with Turning Passions Into Profits changed the way I look at work and earning a living in general.

Take a look at the chapter titles below; they will give you a good idea of what is covered. The appendix is also very helpful including a list if Internet sites and books that you can use to assist you in the process.

If you would like to step out on your own then 48 Days To Creative Income is a great first step.

When You Should Buy A Used Car?

buy used car

Many ask what is the best time to buy a used car? The answer is actually a trick. Since our site is trying to help you get out of and stay out of debt, the best time to buy a used car is when you have enough to pay for it without getting loan.

On this page we will show you how to buy a used car without going into debt. On the new car page we explained the reasoning behind not financing vehicles and not buying new cars. The alternative way to purchase cars takes discipline and is actually the best time to buy a used car.

We will assume that you wanted to buy the 2005 Honda Accord that was used as an example on the new car page. Remember that the payment for this car was going to be $341.85 per month for 6 years. The car would be paid off in the year 2011.

Since you had decided that you could afford the $341.85 payment to the finance company, then we know that you can afford to pay yourself $341.85 into a savings account.

We round off this savings and do not account for any interest and assume that you save $4,000 each year. We will also assume that you can drive your current jalopy for one more year while you save this money.

  1. January 2006 you now have $4,000 saved and can afford to buy a 1992 Honda Accord. You have now reached the best time to buy a used car.
  2. January 2007 you can sell the 1992 for $1,400, add another $4,000 to it and buy a 1995 Honda Accord.
  3. January 2008 you can sell the 1995 for $2,000, add another $4,000 to it and buy a 1997 Honda Accord.
  4. January 2009 you can sell the 1997 for $2,300, add another $4,000 to it and buy a 1999 Honda Accord.
  5. January 2010 you can sell the 1999 for $2,600, add another $4,000 to it and buy a 2000 Honda Accord.
  6. In January 2011 you have reached the value of used car purchases where selling the 2000 and adding $4,000 to it will not substantially upgrade your car, so you continue to save.
  7. January 2012 you can sell the 2000 for $2,400, add $8,000 (two years of savings) to it and buy a 2006 Honda Accord.

Now we can compare the two decisions!

If you had bought the new 2005 you would have a paid off 2005 in 2011 and you would have paid interest ($3,623.40 to be exact) on top of the purchase price. Using our example you could have had a 2006 one year later in 2012 completely paid off and your money made interest for you while in your savings account.

These numbers are all conservative and you could do much better by continuing to save and delay your used car purchases longer than one year. This would be the best thing to do so that you do not keep losing value on selling cars.

For example, if you kept saving and bought a used car every two years you could have bought a 2008 Honda Accord in 2012 completely paid for. When you stretch out your used car purchases while continuing to save, you can purchase much newer vehicles. With this method you can always purchase newer used cars and never pay interest to anyone.

The key to making this work is the disciplined savings. If you have decided that you can make a new car payment, you can put the money in a savings account earmarked for used cars.

Also remember that since you do not have a car payment, if you have a financial problem like a job layoff etc., you will not have to worry about losing your vehicle. Driving paid for used cars is a wise financial practice. It is said that it is the millionaires that purchase and drive used cars. It is those in deep debt that drive new and leased vehicles.

As you have seen here the best time to buy a used car isn’t necessarily dependent on actual time but it depends on when you are financially ready.

Our last few vehicle purchases have also taught us that the end of the month may be the best time to buy a used car once you have the money. They seem to give better deals at this time but never before you can pay for it full in cash.

The prices for these vehicles all came from Kelley Blue Book. The purchase prices are just under the KBB retail value and the selling prices are just over the private party value. The values that ISGPLANNING.COM editor used were conservative and you could do much better, especially if you hold onto your vehicles longer while continuing to save.

I use the Honda Accord as the example but this could be done with any vehicle.

3 Retirement Options That Will Help You Live Comfortably When You Retire

To help you prepare for a comfortable retirement, you will need to start early. However, it is important to consider more than one option, as you will always need to have a backup plan (or two!) to prepare you for the rest of your life.

Here are 3 retirement options that will help you live comfortably when you retire.

Employee Pension

Your pension will be the easiest plan you can have when you retire. When the employer contributes the money to your pension, you will have a professionally managed fund. All you need to do is stick with the job for a long time to qualify for the pension that is offered to you.

Keep in mind that you will have to understand the entire policy of the pension as there may be some sort of dissatisfaction with the scheme that is offered. Not many will offer a cost-of-living adjustment plan. Therefore, the money you receive might be the same amount after ten years.

Real Estate

Purchasing real estate is a great way to produce more income. It is better to purchase property without the need to apply for a loan. While there may be some risks that go with this plan, it is a great option to consider when you plan to invest on monthly-added income when you retire.

Income Annuities

This insurance product will allow you to invest your savings today to gain a guaranteed income once you retire. You will be able to receive it on a monthly, quarterly, or annual basis. Some many even receive it as a one-time payment. However, you will need to understand the policy to ensure that you can rely on the company before you invest in annuities.

When consulting a financial advisor, they should be able to help you plan all the ideal options that will suit your retirement. You can learn all you need to know to provide you information on the best options for you.

What retirement option do you plan to use? Comment below and let us know what you think!

How to Save Your Personal Finances for Retirement Savings

Once you approach the age of 40, you should have already started on preparing for your retirement. While this is a good age to get started, some might have already prepared long before they have hit the age of 35. If you plan to save for your retirement, you will need to prepare all the options you can to gain financial freedom.

Here’s how to save your personal finances for retirement savings.

Control Your Budget

Consider how much you can live on a monthly basis and work from there. Lowering your monthly expenses will help you save a ton of money and get rid of high-interest bills and debt such as credit cards and loans. Learning to live within your means will help make the cost of maintenance less.

Prepare an Individual Retirement Account

Individual Retirement Account (IRA) allows you to improve your retirement savings with a tax-advantage. Even self-employed workers are eligible to use this type of account. All you need to do is pay taxes on how much you withdraw after the age of 59. However, keep in mind that the funds must be withdrawn before you turn 70 or else you will be charged with a high penalty fee.

Work Longer

Use the time to worn longer to help you save for your retirement plan. This will allow you to earn more, save money, increase your work pension, and social security benefits.

Make Wise Investments

Consider making a diverse investment with your finances. Talk to a financial advisor to see if you are able to invest your money in property or a business and get a safe return.

Consider these four ways to help you save money and prepare your retirement fund. While most people tend to forget about saving money for their later years, this should not be the scare for you. Enjoy the time you can save now to help you become financially stable in the future.