Posts

Money Management Basics

The way you spend and manage your money has a significant effect on your entire lifestyle. Unfortunately, critical money management skills aren’t commonly taught in schools, although that’s starting to change.

Money Management Basics

Determine your income sources

Whether you are a student, an employee, a business owner or a retired, you need to list your income sources and determine how much income each source generates. For most of us, the main source of income is the salary or wage we receive from our employer and in the most cases, it is a fixed amount each month. If this money is insufficient, consider additional income sources: you can start a second job, offer some services as a freelancer, sell your own products or declutter your house and organize a garage sale.

Spend less than you make

Once you know how much you expect to make on a monthly basis, add up your expenses. The rule of thumb when it comes to personal finance is to spend less money than you earn. If you spend even a thousand dollars more per year than what you earn, you will end up in a spiral of debt that is hard to come out of. If you spend exactly the same amount as your income, you will never be able to save money and be prepared for unexpected events, good or bad. Spend less than your earnings and put some money aside.

Do this by setting up a budget. You need to know where your money goes. Get in the habit of categorizing your bills and tracking your spending. The easiest way to set up a budget – even a basic one – is with a pen, paper and a calculator to help you determine how much money you can spend on each category. Now that you can see your budget at-a-glance, you can decide on the expenses you can cut – do you really need that new dress? Is it really time to upgrade your car? Can you afford this vacation right now? Set a budget threshold that is below your monthly income and try to stick to it.

Make smart investments

Do you wonder why rich people get richer? The simple answer is because they invest their money. Even if you do not have a lot of money, it is better to invest some, rather than keep all of it under your mattress. If you have no financial education or investment knowledge and experience, you can consult an expert, like a financial adviser or a money management coach. They will help you select the right investment vehicle based on your personal financial situation, risk tolerance and goals. Generally, it is better to have a diversified investment portfolio, rather than put all your eggs in one basket.

Choose the right bank account

Some banks require a minimum balance to open a bank account. Some banks charge monthly fees for maintaining your account or your credit card, or if you write more checks than the limit. Some institutions combine both, while others may have no fees. Some accounts come with handy apps that help you manage money, free transfers, automated bill pay and fee-free ATM.

Use your credit card wisely

It is easy to get a credit card and it is also easy to get into debt using one. Never buy things using a credit card that you can’t afford otherwise. In other words, if you don’t have the amount in your bank account to pay the credit card installments every month, don’t make that purchase. In addition to that, some credit card companies may give you a cash back or points if you make payments on time. There are a number of different credit cards with various rewards options. If you have one and find another that suits you better, you may be able to transfer your balance at 0% interest, so it’s worth looking into. Always pay your credit card bill on time to avoid late fees and extra interest.

Please share this entry
10 Budgeting hacks that help you save more

10 Budgeting hacks that help you save more

If you have tried saving up money, you might have noticed that it is tougher than it sounds. Being part of a modern consumer society, we often find ourselves spending far more than we had planned. But with a bit of self-discipline, good organization, and our useful budgeting hacks below, you could save more.

10 Budgeting hacks that help you save more

Envision your success

Make your wish as specific as possible. Then surround yourself with it. If you want to save up for a car, the first step is to choose the specific type you want. Then print pictures of it and put them on your fridge, bathroom mirror, and on your workspace. Take a step further and set them as your phone and computer wallpaper. Make sure you are constantly reminded of what your goal is. That will help you to stay motivated and keep saving up money.

Cook at home

A lot of money is spent on food. Instead of having home cooked meals, we sometimes order food or go out to eat, which is much more expensive. In the dynamics of today’s world, few of us have the time to prepare meals at home. A solution we can offer is to cook only one day a week. Eating the same dish more than twice can be boring but you can prepare various meals and freeze them for later that week. This way you will be able to save up money and even take the food to work.

Think of the real price

When going for shopping, no matter what product or service you are about to spend your money on, first think of the real price. What we mean by that is to simply calculate how much time you have to work for the item of interest. For example, if you are looking at a dress that costs $70 and you get paid $8 per hour that would mean you have to work about 9 hours for it – an entire day and some more. Once you know how much it will cost you in terms of time, simply decide for yourself whether it is really worth it.

Grocery Shopping

Many times, we come out of the store having bought way too many things. By the time we get to use them all, we might even have to throw some away. This is mainly because we have the bad habit of grocery shopping when hungry. Besides going to the store on a full stomach, other things that can help us not waste time and money are to chew gum and wear headphones. The mint is used to counter the persuasive scents in stores. Likewise, listening to our own music blocks the one in the store usually carefully selected in order to make the customers spend more time shopping.

Use Cash

The next tip is to use cash instead of credit or debit cards. Cards are convenient because it is easier and safer to carry and use them instead of cash. The downside, however, is that one can very easily spend a larger amount of money on things that are not particularly necessary. This leads to falling off track and not reaching your financial goals. By setting a budget and carrying only necessary cash, you can stick to your budget much easier.

Sales

An important part of saving money is to figure out what your priorities are. Just because you are saving up for something doesn’t mean you have to cut all things that bring you joy. You can still go shopping and go eat out, it would just be on a budget. Sales are great because you end up buying something you want but at a lower price, of course, at the additional cost of the time, you would have waited for the item to be on sale.

Start slow

Like with everything else that requires a change in lifestyle, it is better to start slow. Take small steps by putting aside a small amount of money and then gradually increase with time.

Saving can be fun

If you get motivated by challenges, then try the 52-week money challenge.  The money you deposit each week is equivalent to the week number. So, in the first week, you will put aside just $1, during week 2 – $2, week 30 -$30 and so on. At the end of the year, you should have $1378 in savings. Another fun way to save money, besides challenges would be to use tools such as SaveUp, which reward you with cash and prizes for saving money.

Avoid

“Quick” visits to the shopping center and going out with friends are usually the types of activities where we get tempted to spend money most easily. Restrict yourself from giving into these temptations too often. At the end of the day, homemade coffee is as good – if not even better – as the one you are going to spend $9 for.

Treat yourself

Just because you are saving money doesn’t mean you have to stop doing/eating/shopping for what you like. Definitely treat yourself, whenever you reach a milestone. For example, when you have saved up the first $500 for your dream car, in order to treat yourself on reaching the mile stones, you should set a “fun” fund beforehand.

Saving money is not for everyone and we know for a fact that in some cases it isn’t even an option. For the times when you need money urgently, call us at Fast Money Loan. You will have cash with no credit check in as little as 30 minutes.

Please share this entry
Loan for Students

Smart Strategies to manage your Student Loans

Student loan debt can be overwhelming and many people end up paying it off well into their 40-s and 50-s. We have a few strategies to help you manage your loans better.

Understand Your Loans

Many students don’t really understand the terms of their loans and end up overpaying down the road. Know the type of loans you have, the interest rates, balances, and grace periods. You may have Perkins loans, subsidized and unsubsidized Stafford loans or private loans. If you visit your loan servicer’s website, you will be able to see each loan account, balances, interest rates and current repayment plan. Be aware that frequently students have loans managed by 2 or 3 different servicers. Two common servicers are Navient and Great Lakes. If you go to the Department of Education website, you will find help creating a smart repayment plan.

strategies-to-manage-student-loans

Know the Numbers

It is crucial for you to know the precise amount of money you owe if you want to have control over your student loans. Most students end up with multiple loans and sometimes lose track of them before and during repayment. Know how many loans you have, how much you have to pay each month, the interest rates of each loan and the grace periods.

If you are a current student or a recent graduate, ask your financial administrator at School for assistance or visit the National Student Loan Data System website or Clearinghouse Meteor Network website to find out how much you owe. You can also see all of your loans and debt by checking online your credit report at AnnualCreditReport.com.

Accelerate Your Loan Repayment

You can either pay less money for longer time at a high interest rate, or you can pay more money than the minimum for a shorter time with a lower interest rate. Basically, the faster you pay back your loan and the more money you pay each month, the less interest you will have to pay, thus paying less overall and getting out of debt sooner.

Refinancing

A lot of students end up refinancing their federal student loans; however, this means that you will lose your right of using benefits, such as loan forgiveness and income-based repayment plans. If you are interested in refinancing your student loans consider contacting different lenders to compare total repayment amounts and get a complete picture of your options.

SoFi, CommonBond, Citizens Bank and LendKey are decent lenders who offer good interest rates. LaurelRoad has interest rates starting from 2.99% to 6.99%; Earnest has very decent interest rates, too, between 2.57% and 6.39%; CommonBond offers interest rates starting from as little as 2.57% to 7.12%. SoFi and Earnest might even help you get employed if you struggle with finding a job.

Avoid Default

Depending on what school you are attending, your loans may have a grace period of 3 months, 6 months, or more and the same goes for the total repayment period. Despite most students starting a job right after graduation, often times they are stuck under the burden of repaying these student loans.

If you are more than 270 days late with your payments, your loans will go into default, which is going to lead to taking away your social security benefits. Remember that no matter how difficult your financial situation is, you ought to make at least the minimum payments.

Federal Student Loan Consolidation

This gives you the option to merge all of your student loans into one, thus get rid of all the different interest rates, however, bear in mind that you will, indeed, pay one interest rate but it is going to be quite high.

Aim Higher

Firstly, focus on the loans with the highest interest rate because they will add up the most to your overall debt. Afterwards, shift your focus on the second to last debt with the highest interest rate. This may be challenging, but you will save a significant amount of money if you pay off the costlier debts first. Since your interest rate is based on your principal, another smart move would be to pay extra principal because this will lower your interest payment.

Automatic Payments

Once you have started a job and have consistent, reliable income, you can set up your payments to be automatically withdrawn on a monthly basis. This is just a precaution in case your life gets too hectic and busy and you forget to make your payments on time. Another bonus is that you will get a small reduction on your interest rate.

Programs And Forgiveness

Income-based repayment programs allow you to be forgiven from your outstanding loan money after 25 years of regular payment. However, there are certain criteria to be met if you want to use the benefits of IBRP, like the payments you have to make on your federal student loans must exceed 15% of your total earnings above 150% of the poverty level.

Pay As You Earn (PAYE)

This is a good program which will forgive outstanding money on your federal student loan after 20 years of regular payment. To be eligible to use PAYE your payments must exceed 10% of your total income above 150% of the poverty level. There are other criteria which must be met in order to qualify for the program.

Public Service Loan Forgiveness

Certain people can be eligible for PSLF after 10 years of qualifying payments. One of the stipulations is that you must be hired by a non-profit organization, volunteer organization or other public service organization. It is worth doing your own research to see what your chances of benefiting from this program are.

The approximate number of people with student loans in the USA is 40 million with around $1.3 trillion total debt. In 2014 the federal government seized portions from the social security checks of about 135,000 people because their loans went into default. Get educated about your student loan repayment options, pay more than the minimum whenever you can and do whatever is necessary to avoid defaulting on your loans. Don’t worry, you are not alone. There is free student loan counseling available from the Federal Government, from your loan servicer and from most reputable banks. If you feel overwhelmed or fell behind on your payments, contact your servicer as soon as possible. Do not wait. You can get back on track with some timely action.

Please share this entry