Here are some additional ways to save when it comes to getting a new car:
1. As you look at makes and manufacturers,consider a new electris hybrid car or one that uses an alternative fuel source.Not only are these cars much cheaper to operate in the long run,they are much better for the environment.And some models allow you to take a tax credit.
2. Start at the low end of your budget and work your way to the car of your choice.It's too hard to go from looking at $35,000 vehicles to making do with a $22,000 one.
3. Try to get preapproved for a car loan before you go shopping.It's better to know up front how much you can borrow and what the terms are before you lose your senses over that new car smell.Talk to your bank to see what they can do for you.Also check with several car dealers to see what kinds of loan terms they offer.
4. Learn about the current range of interest rates on new and use car loans.Check out the national averages at http://www.bankrate.com/
5. When you're working out the total cost and payment terms with the dealer,remember that getting a low interest rate and a shorter repayment period is more important than having a low monthly payment.
6. Ask your banker or car dealer about taking out a simple interest loan instead of an installment loan (also called a front-end loan).With a simple interest loan,you pay interest only on the remaining principal.With an installment loan,you pay interest on the entire principal throughout the term of the loan.This means that even if,for example,you have paid $8,000 on a $15,000 installment loan,you will continue to pay interest on the entire $15,000!
7. You can take out s home equity loan to finance your car if you are a homeowner and have enough equity.The rate may be cheaper,and the interest you pay is usually tax deductible.
Tuesday, May 24, 2011
Reaching Your Financial Goals
The cost of most things doesn't remain stable over time.Prices go up thanks to inflation.How will this affect how you price your goals? For short-term goals,inflation isn't really an issue.The amount you determine to save today for furniture you won't actually buy for another 18 months will not be affected.(Not by much,anyway.)
Medium and long-term goals are different.Let's say you are saving to put a down payment on a house in five years.Using today's prices,you figure you need $30,000.Over those five years that you'll be saving,though,housing prices may rise sharply.At the end of your five-year saving period,you may discover that the down payment needed is now $40,000.You will have reached your original goal,yet you still won't have enough money for a down payment on a house.
To guard against this situation,you may want to factor in inflation when calculating the cost of your goals.This isn't quite as complicated or confusing as it sounds even for those among us who are severly math challenge!Simply scan the financial pages of the newspaper or listen to the news on TV for an inflation forecast.(Financial experts love to forecast the rate of inflation.)Take that number,let's say its 3% annually,and multiply it by the current cost of your goal.Add the result to the current cost.Repeat for every year that you need to reach your goal.The result is your inflation-adjusted price.
Medium and long-term goals are different.Let's say you are saving to put a down payment on a house in five years.Using today's prices,you figure you need $30,000.Over those five years that you'll be saving,though,housing prices may rise sharply.At the end of your five-year saving period,you may discover that the down payment needed is now $40,000.You will have reached your original goal,yet you still won't have enough money for a down payment on a house.
To guard against this situation,you may want to factor in inflation when calculating the cost of your goals.This isn't quite as complicated or confusing as it sounds even for those among us who are severly math challenge!Simply scan the financial pages of the newspaper or listen to the news on TV for an inflation forecast.(Financial experts love to forecast the rate of inflation.)Take that number,let's say its 3% annually,and multiply it by the current cost of your goal.Add the result to the current cost.Repeat for every year that you need to reach your goal.The result is your inflation-adjusted price.
Are You Drowning In Credit Card Or Student Loan Debt
1. I am drowning in credit card and student loan debt. How do I get a debt consolidation loan to pay it all off? How much can I get?
First,sit down and figure out how much you owe altogether,then go to your bank and talk to a loan officer.Assuming your credit is acceptable,the bank will loan you a lump sum of money that you can use to pay off your credit cards and other high-interest debts.Keep in mind that you must begin paying back the loan immediately,with interest,in agreed-upon monthly installments.Typically,however,the bank's interest rate and fees should be lower than your credit card interest,so you can end up saving a lot of money.
The amount the bank will lend you depends on your income.Usually,a bank assumes that you will be able to put aside up to 36% of your gross income (before taxes) to pay your debt. So,if your salary is $45,000,the bank will assume you could use up to $18,000 of your annual net income for loan payments.That's the amount the bank will probably loan you (unless they subtract existing debts,such as a mortgage or car loan,out of your gross salary before calculating that 36%,in which case the amount of your loan will be lower).
2. If I get a debt consolidation loan,isn't this just going to put me deeper in debt?
Not necessarily.While at first glance going deeper into debt seems like the last thing you would want to do,it actually makes a lot of sense to get a debt consolidation loan,but only if you can borrow the money at a lower interest rate than what you are paying on your other debts,and only if you stop racking up new debt in the meantime.
3. Is it better to pay off my credit cards first before I start putting money into my company's 401(k) plan?
Many experts suggest that you do both at the same time.Enroll in the 401(k) as soon as possible,up to the amount the company will match (assuming there is a match),then apply all surplus cash flow toward knocking down your credit card debt as soon as possible.
First,sit down and figure out how much you owe altogether,then go to your bank and talk to a loan officer.Assuming your credit is acceptable,the bank will loan you a lump sum of money that you can use to pay off your credit cards and other high-interest debts.Keep in mind that you must begin paying back the loan immediately,with interest,in agreed-upon monthly installments.Typically,however,the bank's interest rate and fees should be lower than your credit card interest,so you can end up saving a lot of money.
The amount the bank will lend you depends on your income.Usually,a bank assumes that you will be able to put aside up to 36% of your gross income (before taxes) to pay your debt. So,if your salary is $45,000,the bank will assume you could use up to $18,000 of your annual net income for loan payments.That's the amount the bank will probably loan you (unless they subtract existing debts,such as a mortgage or car loan,out of your gross salary before calculating that 36%,in which case the amount of your loan will be lower).
2. If I get a debt consolidation loan,isn't this just going to put me deeper in debt?
Not necessarily.While at first glance going deeper into debt seems like the last thing you would want to do,it actually makes a lot of sense to get a debt consolidation loan,but only if you can borrow the money at a lower interest rate than what you are paying on your other debts,and only if you stop racking up new debt in the meantime.
3. Is it better to pay off my credit cards first before I start putting money into my company's 401(k) plan?
Many experts suggest that you do both at the same time.Enroll in the 401(k) as soon as possible,up to the amount the company will match (assuming there is a match),then apply all surplus cash flow toward knocking down your credit card debt as soon as possible.
13 Tips On Cutting Cost While Budgeting
Need to spend less? The possibilities are endless.Here are some ideas to get you started:
1. Cut down on your dry-cleaning bills by buying only machine-washable clothes.
2. Bring rented videos back to the store on time. Those late fees can really add up. Ditto for overdue library books.
3. Want to see a movie? Catch the matinee show. It's often cheaper than the later show times.
4. Take a defensive driving course. In most state, you'll get a discount on your car insurance.
5. Stop with the expensive gifts,give of your time instead. Watch your brother's kids for a weekend or give a friend a homemade dinner.
6. Cook at home instead of ordering take-out dinners.
7. Cancel the premium movie channels on your cable service.
8. Cancel the premium services on your home phone. Instead of using voice mail,for example,buy an inexpensive answering machine.
9. When looking for a phone number,use the phone book instead of directory assistance.
10. Do it yourself,as in cut your own lawn; polish your nails; paint the house; wash the car,rather than paying someone else to do it for you.
11. Cancel some magazine subscriptions. Trade magazines with friends,relatives,and colleagues.
12. Buy used books or paperbacks rather than new hardback releases. Or better yet,use your local library or borrow books from friends.
13. Next vacation,camp in the great outdoors instead of staying at a pricey hotel.
1. Cut down on your dry-cleaning bills by buying only machine-washable clothes.
2. Bring rented videos back to the store on time. Those late fees can really add up. Ditto for overdue library books.
3. Want to see a movie? Catch the matinee show. It's often cheaper than the later show times.
4. Take a defensive driving course. In most state, you'll get a discount on your car insurance.
5. Stop with the expensive gifts,give of your time instead. Watch your brother's kids for a weekend or give a friend a homemade dinner.
6. Cook at home instead of ordering take-out dinners.
7. Cancel the premium movie channels on your cable service.
8. Cancel the premium services on your home phone. Instead of using voice mail,for example,buy an inexpensive answering machine.
9. When looking for a phone number,use the phone book instead of directory assistance.
10. Do it yourself,as in cut your own lawn; polish your nails; paint the house; wash the car,rather than paying someone else to do it for you.
11. Cancel some magazine subscriptions. Trade magazines with friends,relatives,and colleagues.
12. Buy used books or paperbacks rather than new hardback releases. Or better yet,use your local library or borrow books from friends.
13. Next vacation,camp in the great outdoors instead of staying at a pricey hotel.
Friday, May 20, 2011
Saving For A New Baby
So you're going to have a baby!As excited as you are ,you probably also know that along with those adorable smiles will come a steady stream of bills for at least 18 years.So,the sooner you can start putting money aside to fund the new arrival,the better shape you will be in once the baby arrives.
What kind of cost can you expect?Even before the baby arrives,there is the obstetrician's bill,which ranges from $2000 to $10000.Then there is the hospital bill and the pediatrician's bill.By the time your bundle of joy is ready to go home,you could be handed a bill totaling around $15000.That is why it's a good idea to check your health insurance policy to see exactly what it does and does not cover,then start saving accordingly.
Many people mistakenly assume that the birth itself is the most expensive baby-related cost,and they think that a baby doesn't eat much or need many things.The best way to manage these costs is to try and save for the expense of children before you have them.If you are in the family frame of mind,start rethinking your monthly expenses.Maybe forgo expensive entertainment items or put off a vacation.In other words,you need to scale back now,and certainly after your bundle of joy arrives,to accommodate baby's need now and in the future.
What kind of cost can you expect?Even before the baby arrives,there is the obstetrician's bill,which ranges from $2000 to $10000.Then there is the hospital bill and the pediatrician's bill.By the time your bundle of joy is ready to go home,you could be handed a bill totaling around $15000.That is why it's a good idea to check your health insurance policy to see exactly what it does and does not cover,then start saving accordingly.
Many people mistakenly assume that the birth itself is the most expensive baby-related cost,and they think that a baby doesn't eat much or need many things.The best way to manage these costs is to try and save for the expense of children before you have them.If you are in the family frame of mind,start rethinking your monthly expenses.Maybe forgo expensive entertainment items or put off a vacation.In other words,you need to scale back now,and certainly after your bundle of joy arrives,to accommodate baby's need now and in the future.
Your Emergency Fund
There is one financial goal that should be a high priority on everyone's list: building an emergency fund.This money will help you cover the cost of those unexpected rainy days,such as when you lose your job,the roof starts leaking,or you are seriously hurt in an accident.An emergency fund is a financial safety net.It gives you peace of mind,and it means that you won't have to stop saving for your other goals,or worse,reach for those credit cards and go into debt when a crisis come.
Most financial experts recommend that you set aside three to six months income.For most people,that is enough money to repair a problem or to cover their living expense if they are out of work for a while.This money should be kept seperate from other savings.Don't lump it in with college savings,retirement savings,or even regular checking accounts.If the funds are not kept seperate,you might be tempted,or simply forget,and use the money for a nonemergency.In addition,an emergency fund should be liquid because you may need to get your hands on cash quickly.But just because the fund is liquid,don't get into it unless it is an emergency.
Most financial experts recommend that you set aside three to six months income.For most people,that is enough money to repair a problem or to cover their living expense if they are out of work for a while.This money should be kept seperate from other savings.Don't lump it in with college savings,retirement savings,or even regular checking accounts.If the funds are not kept seperate,you might be tempted,or simply forget,and use the money for a nonemergency.In addition,an emergency fund should be liquid because you may need to get your hands on cash quickly.But just because the fund is liquid,don't get into it unless it is an emergency.
Thursday, May 19, 2011
Making Every Dollar Count
You have curbed those impulse buys.Set up a livable spending plan.You can track every cent that comes in and goes out.So,what's next? If you are committed to enjoying life and living well,but doing so within your means and not with the help of credit cards,you need to make every dollar count.It's time to s-t-r-e-t-c-h your imagination and wallet and figure out how you can get the most out for your money. This process will involve some quick adjustments to your discretionary spending.It might mean borrowing books from the library instead of buying them at the local bookstore.Switching from incandescent to flourescent lightbulbs.Hanging your laundry on the clothesline instead of using the electric dryer every day.Using grocery store coupons.Traveling in the middle of the week.Jogging around the park instead of paying for a gym membership.
In many instances,you can stretch your hard earned dollars simply by being more creative.Trade babysitting services with another parent,for example.It won't cost either of you a penny,and you will both get a free afternoon to attend yoga class or run errands.
However,these kinds of adjustments can stretch your dollars only so far.To really put some bounce into your budget,you need to play with your fixed expenses,too.That may mean refinancing your home mortgage,lowering your insurance rates,or consolidating your credit card debt with a home equity loan.
The bottom line is:Whatever you do,make the most of every dollar you spend.
In many instances,you can stretch your hard earned dollars simply by being more creative.Trade babysitting services with another parent,for example.It won't cost either of you a penny,and you will both get a free afternoon to attend yoga class or run errands.
However,these kinds of adjustments can stretch your dollars only so far.To really put some bounce into your budget,you need to play with your fixed expenses,too.That may mean refinancing your home mortgage,lowering your insurance rates,or consolidating your credit card debt with a home equity loan.
The bottom line is:Whatever you do,make the most of every dollar you spend.
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