Money Management plan to ensure a solid financial future
"Money Management plan to ensure a solid financial future" submitted by SchoolGrantsfor Editorial Team and last updated on Friday 22nd July 2011
Starting out with a sound money management plan will help ensure a solid financial future. It is never too early to consider various savings, retirement and investment options. Take a moment to familiarize yourself with some facts about credit, credit cards and credit reports. Managing these basics will help you prepare for a bright financial future.
Free Credit Reports
Despite prevailing practice in America, carrying a lot of credit card debt just doesn’t make sense. Credit cards typically feature high interest rates, a short grace period and cash advance fees. They often lead to impulse purchases and emotional spending - both of which can cause your debt to spiral out of control. What’s more, if your financial situation requires you to make only minimum monthly payments, it can take a long time. More details: Credit Rating, Credit Report and Credit Bureaus
Reducing Unwanted Offers
Did you know that about five billion credit card offers are sent throughout the nation annually? Are you getting too much junk mail and too many telemarketing calls? Here’s a free and easy way to reduce unwanted offers.
Visit the Web site www.optoutprescreen.com or call toll-free 1.888.5.OPTOUT to remove your name from pre-approved credit card offers.
Enjoy fewer interruptions during dinner by removing your phone number from telemarketing lists. Visit the National Do Not Call Registry Web site: www.donotcall.gov. to pay off the principal.
By looking for more economical housing options, you can greatly reduce your monthly housing costs. Look for one or more roommates to help share the cost. Don’t forget to factor in utilities when you compare one option with another. The location of your housing may save on travel expenses.
Determining whether utility payments for electricity, gas, water and garbage pickup are included in your rent payment is essential. If they’re not, you’ll need to include utility payments in your monthly financial plan. You can make a cost difference by simply conserving.
Credit Card Traps
The world of credit cards can be a minefield—especially the fine print. This sample of fine print, taken directly from a popular credit card offer, shows how confusing it can be:
Cash Advance Fees
All cash advances: 3% of the amount of the advance, but not less than $10.00.
Translation: You will pay 50% on a $20 advance or 10% on a $100 advance.
2.9% Fixed Interest Rate
You understand that the terms of your account, including the APRs (Annual Percentage Rates), are subject to change.
Translation: Your rate will increase; it is not fixed at all.
Selling Additional Products
We may share information about you among our affiliates in order to offer products and services of interest.
Translation: Your name and address will be sold and you’ll receive more junk mail and telemarketing calls.
Method of Computing the Balance for Purchases
Two-cycle average daily balance method (including new purchases).
Translation: If you have a balance, the bank will include charges from both the prior month and current month to compute the average daily balance against which interest will be charged.
Your APR may increase if you fail to make a payment to us or any other creditor when due.
Translation: You may pay us on time faithfully, but if you miss a payment on another loan, we’ll increase your rate significantly.
The cost of borrowing on credit cards is high—often 18 percent or more. If you roll over a balance to the next month, you will incur finance charges and the real cost of your purchase increases. Avoid excessive and frequent use of your credit cards to keep monthly payments low. Keep an accurate record of all debt and work to pay it off.
Even if you buy a car, you can ease your budget by using public transportation occasionally. Don’t forget to factor in gas, maintenance, insurance, registration and parking fees to your transportation expenses. Insurance payments, though they may be assessed annually or semi-annually, should be divided for a monthly expense figure.