Cheap Living Tips

Credit Card Eradication

Take a pair of scissors and do the needed to eradicate your additional/ unwanted credit cards. The temptation of plastic cards has become so severe, that consumers must “trash” the additional cards to secure his or her financial situation, and avoid falling prey to debt.

More Cards=More Debt

Many people have the ability to control and manage their finances though they have a number of credit cards. However, this is not the case with all. In reality, many people struggle with monetary issues due to abundance of credit cards. Only due to this, many people no longer able to stay ahead of payment obligations. This problem can be easily resolved just by reducing the number of credit cards.

One Low Cost Credit Card

Consumers are always advised to opt out a single credit card that has a low interest rate. Is it really necessary to have a bunch of credit cards? Financial experts say “no” and ask consumers to apply for a single credit card that has a low interest rate. According to financial experts, if a consumer holds a single credit card, he will be able to manage his monthly payments in a better way.

Keep Accounts Open

Even though consumers are advised to lessen the number of credit cards, it is vital to keep all accounts open. By closing an account, a consumer’ credit will be adversely affected. The consumer has to eliminate the usage of the additional cards, and not needed to close the accounts.

Budgeting has long been hailed as a key to successful personal financial management, and rightfully so. Those who actively budget their income each month tend to make smarter financial decisions. In this article, we are going to discuss why a budget is an essential part of achieving true financial freedom, and how to practically establish one.

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Why Do We Need It?

Keeping a budget is not easy. It requires discipline and persistence, and if a person is not easily amused by numbers and detail, then committing to consistently tracking a budget can be quite a foreboding task. That is why it is very important that a person first understand why it is essential to keep a budget.

It’s easy to write out financial goals. It’s easy to say, “I want to have $50,000 saved up in 3 years.” The difficult part is walking out the process to achieve the goal, and that is where the power of budgeting comes in. First of all, let’s use a metaphorical example, and let’s assume that you are going to travel to Florida for vacation.

Therefore, you pull out the Atlas, and you bring out the map of the United States. You look in Florida, and you find Orlando, which is going to be your vacation destination. How do you get to Orlando? Actually, let’s rephrase that question. What’s the first thing you need to do in order to find out how to get to Orlando? Well, the answer is…you need to know where you are currently located. And that is the power of budgeting.

If you have a financial goal of saving up $50,000 in 3 years, or saving a certain amount of money for retirement, you cannot make real headway toward that goal unless you know where you currently are, and budgeting is the financial equivalent of “finding out where you really are.” Furthermore, once you begin budgeting and identify where you are, your ongoing monthly budgeting will also keep you on the path toward your ultimate financial goal.

How Do We Do It?

Setting up a budget is easy. When broken down into its most basic elements, budgeting simply consists of tracking two things: income and expenses. A simple way to establish a basic monthly budget is to follow these steps: (fill out in monthly figures)

1. List out all of your fixed expenses – mortgage, car payment, debt payment, cable, internet, etc

2. List out all of your variable expenses – these are things you have to buy every month, but the amount can vary (gas, food, etc)

3. List out your income

Now once you finish these three steps, add up the figures from step 1 and step 2. The total must be lower than step 3. If it is not, that means you are in the negative each month, and that is dangerous. In that case, serious lifestyle changes must be considered. However, assuming that steps 1 and 2 equal less than step 3, you now know how much net income you have each month. Once you have your budget established, you can look into diversifieng your portfolio with some investments like stock trading or forex trading. Keep in mind, these markets carry a significant amount of risk, and should not be a part of your initial savings plan.

Now, you can begin to budget what you will do with that net income. True financial freedom consists of being free from all bad debts including credit cards and other revolving debt. Thus, the first thing you may want to do with extra net income is to simply funnel that cash toward paying down bad debts. This will not be enjoyable in the near term, but in the long term it will lead to great gains, both financially and emotionally.

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by Miles Walker

Photographer: Salvatore Vuono

In a tight economy, everyone is looking for new ways to tighten their budget. One area nearly everyone could spend a little less on is their vehicles. Here are ten tips to follow to save money on your car.

1. Use Your Car for Longer

This is perhaps the piece of advice most likely to save you money in the long run. If you use your car for five to six years instead of just three to four, the yearly average cost of your vehicle could drop significantly.

2. Alter Your Car Insurance

There are many ways to create savings through adjusting the kind of car insurance you own. For example, if you have a $200 deductible on your comprehensive car insurance, you may be able to save as much as 40 percent on your insurance by raising that deductible to $1,000.

3. Forget Accessories

Going for optional accessories with your vehicle can quickly drive up the cost of your car significantly. These accessories always come with a significant mark-up. Instead, go for much cheaper after-market add-ons.

4. Consider Pre-Owned

One of the biggest expenses of owning a car is depreciation. With a pre-owned car, though, someone else pays the majority of that expense. However, always make sure to get a decent warranty on a pre-owned car to cover repair costs.

5. Avoid Conspicuous Consumption

If you don’t need that sports car, luxury model, or big SUV, don’t purchase one. Only purchase the vehicle that you actually need. If that is a much smaller model with fewer bells and whistles, so be it.

6. Perform Your Own Maintenance

You may never have the skill to rebuild an engine. However, learning how to do an oil change yourself is one way to certainly save some needed cash.

7. Shop Around

The internet has become a great tool for those looking to buy a car. Use internet price comparisons to make your self educated. This way, you will actually have an advantage when you try to haggle with a salesperson.

8. Increase Fuel Efficiency

This can be done by simply purchasing a more fuel efficient car. However, your driving habits can also be altered to save on fuel. For example, driving less aggressively and avoiding sudden accelerations and decelerations can save plenty of gas.

9. Find Cheaper Insurance Rates

Competition in the auto insurance industry is extremely high. In fact, over 200 different companies operate in many states. Use the internet to help you find the most reasonable rates possible.

10. Don’t Be Fooled by Dealership Gimmicks

Promotions, such as offering free gas for a year or even a cruise with a new car, are often used by dealerships to lure in unsuspecting customers. You should always mathematically assess whether or not these gimmicks will actually save you any money on the purchase of your car.

Miles Walker is a freelance writer and blogger who usually compares car insurance deals over at CarinsuranceComparison.Org.