Bankruptcy & Foreclosures

With our finances it is often easy to do okay budgeting on the big things while getting soaked with the smaller stuff. There are dozens of measures that can be taken on a daily basis that can save hundreds of dollars in the long run. Below are some tips that are easy to overlook but make quite a difference once put into practice.

Gasoline: It is possible to save a few hundred dollars annually on fuel costs just by comparing prices at different stations. Pump gas yourself, and use the lowest-octane called for in your owner’s manual to reduce prices further.

Grocery Shopping:

Use coupons, check weekly flyers for sales, purchase generic brands of products. By shopping smart, reports have shown savings of 40% on weekly grocery bills.

Phone Bills:

There was a time when consumers were forced to endure what the phone company saw as fair prices. These days cellular phones and internet phone companies have changed the way the game is played. Consider using a cell phone rather than a pricy long distance land-line plan.

Checks:

Never bounce a check under any circumstances. If you can’t make the ends meet, call your creditors and work out an extended payment plan or a possible partial payment system. Bouncing a check not only results in hefty bank fees but it damages your credit rating as well.

Take a Hike:

Whenever possible, walk to run errands rather than drive. Fuel costs are the highest they’ve been in decades so there is no reason to waste gas when there are alternatives. Not only is walking or bicycling good for the body, it keeps money for gasoline in your wallet.

Sometimes it seems like we nickel and dime ourselves in our daily lives but the key is to take a different approach in our spending habits. Saving a few dollars here and there can result in hundreds of extra dollars per year. Think of every single purchase as an opportunity to save a little.

Checking accounts are a great means of documentation and for many, organization as well. If you are in the habit of paying bills with cash, consider opening a checking account. With either bank or credit union checking accounts, you will be provided with a monthly statement and cancelled checks for your own record keeping. In addition to the obvious organization benefits, checks provide a record of your money management abilities that future creditors can look upon in determining whether or not you are eligible for credit.

An additional bonus to opening a checking account is that checks are typically cheaper than purchasing individual money orders to pay bills. On the flip side, money in a checking account is money not in a savings account. Unlike most savings account plans, checking accounts rarely pay interest. Of course interest is a concept in which your return grows over time. In its simplest form, the longer you save the more money you earn. Additionally, the federal government insures savings accounts, making them a risk free investment.

Perhaps the best advice is to look into opening a savings account in which you intend to store your money and to use the checking account as it is needed by transferring the funds directly from your savings to cover the checks you write out. In this situation, unnecessary funds earn interest while you still reap all of the benefits of having a checking account.

So you’ve reached a point in your life where you don’t want to live paycheck to paycheck but the constant flow of bills keeps you from being able to invest your money. Contrary to common belief, there are methods that can be put into practice that will allow you to reconfigure your finances to do so. The first step is to focus on paying off your high interest debts. It sounds obvious but think about it: The type of interest commonly charged by credit card companies will more than offset any gains made by investment interest. While having money invested in assets such as stocks makes good financial sense normally, it is often wise to liquidate stocks or even drain your savings account in effort to wipe out high interest debt. Debts such as student loans and your mortgage are a different story entirely as the interest can be written off. Liquidate stocks and savings to pay off high interest debt only.

Once the high interest debts are wiped out, investing is a feasible option again. A good place to start is by putting money into a 401(K) plan which allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. Individual Retirement Accounts (IRAs) are another sensible investment idea. Contributions into the IRA are often tax-deductible and all transactions and earnings within the IRA have no tax impact. Only withdrawals at retirement are taxed as income.

The bottom line is that high interest debt can destroy efforts of investing. Once the high interest creditors are paid off, retirement should be the next priority. Only after setting up a retirement plan should you begin to invest money in more short-term assets such as stocks, bonds, and mutual funds.