One important thing to remember when you are paying bills every month, did you pay yourself first? If you answered no, you need to consider doing this as soon as possible.
What does it mean to pay yourself first? Think about it in terms of retirement. How are you going to fund your retirement? Are you going to rely on the government (please say no)? You need to rely on yourself. Paying yourself first means investing in company offered retirement plans such as 401K. By putting pre-tax money away first, you will ensure that you are protecting yourself in the future.
Paying yourself (first) for later also means saving for an emergency. An emergency fund should have between 6 and 12 months of your salary in a liquid account. Liquid is something that you can readily get at, for example a savings account.
So how can you accomplish saving between 6 and 12 months of your salary? First figure out how much your bills cost you each month and how much you need to set aside. Next, decide what is a realistic and feasible amount for you to put away. Start putting this amount away every month. I recommend a reoccurring transfer from checking to savings or a direct deposit from your paycheck. DO NOT TOUCH THIS MONEY, unless you have to. Finally, once you reach that amount, continue to put that amount of money into some sort of investment since you have accustomed yourself to living without that money.
Questions? Email me at betterbudgets@gmail.com
Wednesday, April 28, 2010
Monday, April 26, 2010
Negotiating for a new car with confidence
Negotiating the sale of a new car at a dealship is a fine art. A lot of people may feel like its out of reach but it doesn't have to be.
1. Research, Research, Research- understand the details of the car you are interested in. Car dealers will throw car jargon at you (sometimes it makes no sense) just to determine if you are an informed buyer.
2. Never Ever give them the payment amount that you can afford. Of course you want to stay in your budget and you are not planning on going over that payment amount but you are negotiating on car value and cost, not your payment amount.
3. Be firm- Allow the dealer to make the first offer. Or propose the first deal. The first person to throw an offer out is the weaker negotiator.
4. Be aware of tag teaming salesmen. When they see that you will not budge on your negotiation, they will send in their next more aggressive salesman. Sometimes the salesman will have to go speak to their "manager" about your offer. This speaker to their "manager" is just another way to try to wear you down by making you wait.
5. Be prepared to walk away- this is often hard for people to abide by, because they have taken the car for a spin, stomach is empty and have been dreaming about a new car for a long time. Remember this is a major purchase, if you are not satisfied with the cost or price, do NOT buy it. Walk away. This can also be a good tool down the line if the car remains at the dealership.
Questions on car financing or have tips on negotiating? Email me at betterbudgets@gmail.com
1. Research, Research, Research- understand the details of the car you are interested in. Car dealers will throw car jargon at you (sometimes it makes no sense) just to determine if you are an informed buyer.
2. Never Ever give them the payment amount that you can afford. Of course you want to stay in your budget and you are not planning on going over that payment amount but you are negotiating on car value and cost, not your payment amount.
3. Be firm- Allow the dealer to make the first offer. Or propose the first deal. The first person to throw an offer out is the weaker negotiator.
4. Be aware of tag teaming salesmen. When they see that you will not budge on your negotiation, they will send in their next more aggressive salesman. Sometimes the salesman will have to go speak to their "manager" about your offer. This speaker to their "manager" is just another way to try to wear you down by making you wait.
5. Be prepared to walk away- this is often hard for people to abide by, because they have taken the car for a spin, stomach is empty and have been dreaming about a new car for a long time. Remember this is a major purchase, if you are not satisfied with the cost or price, do NOT buy it. Walk away. This can also be a good tool down the line if the car remains at the dealership.
Questions on car financing or have tips on negotiating? Email me at betterbudgets@gmail.com
Sunday, April 25, 2010
Purchasing a New Car
Are you ready to make that new step into purchasing a new car? Before you make that big leap there are a few things that you need to be aware of. Before you even go and look at cars, make sure you have a clear price limit that you have in mind. Review your budget and decide on what is affordable for you.
Next step is to decide how are you going to pay for this new car? Are you going to pay cash or finance it? Right now, there are still amazing deals on financing for a new car. Let's give an example.
What would you do?
You have $20,000 in cash to spend on a new car and you also found out that you have been approved for 0% financing for 60 months.
How many of you said................use the cash and pay for the car? That way you have one less bill to pay?
In this situation paying for a car with cash when you have been approved for 0% financing is a huge financial mistake and I am going to tell you why.
When you have been approved for 0% financing, it is the same as paying for the item in cash. You will not be paying any interest on this item whatsoever. With that being said, you could take the $20K that you have in cash and invest it in something with minimial risk, something that would earn you 3% in interest. So in this case, by financing it, you are gaining 3% interest on the car by investing the money you would have used to pay for it.
Stay tuned for other car topics this week. Next time: How to negotiate for that new car with confidence.
Questions on car financing or understanding how payments work? Email me at betterbudgets@gmail.com
Next step is to decide how are you going to pay for this new car? Are you going to pay cash or finance it? Right now, there are still amazing deals on financing for a new car. Let's give an example.
What would you do?
You have $20,000 in cash to spend on a new car and you also found out that you have been approved for 0% financing for 60 months.
How many of you said................use the cash and pay for the car? That way you have one less bill to pay?
In this situation paying for a car with cash when you have been approved for 0% financing is a huge financial mistake and I am going to tell you why.
When you have been approved for 0% financing, it is the same as paying for the item in cash. You will not be paying any interest on this item whatsoever. With that being said, you could take the $20K that you have in cash and invest it in something with minimial risk, something that would earn you 3% in interest. So in this case, by financing it, you are gaining 3% interest on the car by investing the money you would have used to pay for it.
Stay tuned for other car topics this week. Next time: How to negotiate for that new car with confidence.
Questions on car financing or understanding how payments work? Email me at betterbudgets@gmail.com
Friday, April 23, 2010
Priorities
How many of us have complained about not being able to afford gas for our cars? How many of you have said that after you describe the meal you ate at a brand new restaurant? One thing that can ruin you financially is lack of direction when it comes to financial priorities. Let's talk needs vs wants.
What do you need to survive?
Food
Shelter
Clothing
What do you think you need to survive?
Cell phone
Car
LCD Television
Coach Purse
High speed internet
So in other words, understand the difference between needs and wants. Eliminate excessive wants and you will find yourself more financially stable.
If you have financial questions or concerns email me at betterbudgets@gmail.com
What do you need to survive?
Food
Shelter
Clothing
What do you think you need to survive?
Cell phone
Car
LCD Television
Coach Purse
High speed internet
So in other words, understand the difference between needs and wants. Eliminate excessive wants and you will find yourself more financially stable.
If you have financial questions or concerns email me at betterbudgets@gmail.com
Thursday, April 22, 2010
Budget Help Provided
Do you need help managing your finances or just a better way to track where your money is going? I can offer customized budgets to suit your financial goals. These customized budgets are complementary. Sound too good to be true? I only ask for your feedback on how the budget is working for you and if you found it valuable. You do not need to disclose any account information or even disclose what companies you owe money to. Please email me for more information.
Coming up in May...............................................Saving Money for all occasions
May is going to focus on reducing the amount of money we spend. How to plan a cheaper vacation, wedding, etc. Stay tuned!!!!!
Coming up in May...............................................Saving Money for all occasions
May is going to focus on reducing the amount of money we spend. How to plan a cheaper vacation, wedding, etc. Stay tuned!!!!!
Wednesday, April 21, 2010
Unsecured Debt
Do you have unsecured debt? Do you know someone who does?
Unsecured debt is a big risk for creditors who supply credit. An example of unsecured debt is a credit card or student loans. Unsecured debt means there is no tangible property that a debtor can repossess when you fail to make payments on your debt.
Credit cards are unsecured and are considered "revolving credit." Revolving credit means that there are no payment plans in place, you are required to make minimum payments every month to keep your account active, however you can still continue to charge on your account. This is why it is considered revolving, the ability to continue to charge and make payments.
Student loans are considered "installment credit." For student loans, once you complete school you have a lump sum to pay off. You arrange a repayment plan with your debtor, this is why it is considered installment.
One thing to note is that if you suffer from financial woes and decide to file bankruptcy, your unsecured credit cards could be discharged (meaning, you will not have to repay it ever), however, student loans can NEVER be discharged in a bankruptcy situation. If you fail to pay or make adequate arrangements to pay, the government can and will take any future tax refunds to pay towards your bill.
Have any more questions about how credit cards work or the ins and outs of student loans? Email me at betterbudgets@gmail.com
Unsecured debt is a big risk for creditors who supply credit. An example of unsecured debt is a credit card or student loans. Unsecured debt means there is no tangible property that a debtor can repossess when you fail to make payments on your debt.
Credit cards are unsecured and are considered "revolving credit." Revolving credit means that there are no payment plans in place, you are required to make minimum payments every month to keep your account active, however you can still continue to charge on your account. This is why it is considered revolving, the ability to continue to charge and make payments.
Student loans are considered "installment credit." For student loans, once you complete school you have a lump sum to pay off. You arrange a repayment plan with your debtor, this is why it is considered installment.
One thing to note is that if you suffer from financial woes and decide to file bankruptcy, your unsecured credit cards could be discharged (meaning, you will not have to repay it ever), however, student loans can NEVER be discharged in a bankruptcy situation. If you fail to pay or make adequate arrangements to pay, the government can and will take any future tax refunds to pay towards your bill.
Have any more questions about how credit cards work or the ins and outs of student loans? Email me at betterbudgets@gmail.com
Tuesday, April 20, 2010
Debt Settlement Commericals
We've all seen the ads on television. A company that will work on our behalf to settle our debts for a fraction of what we owe. So who are these companies and why does it sound like such a great idea?
These companies are called Debt Settlement companies. When you fall far past due with your creditors, you may be tempted to pursue a debt settlement company.
So how does it work?
When you call the debt settlement company and disclose your debt information, they act on your behalf to negotiate settlements with debtors. Many debt settlement companies require you to pay a fee for their service.
Let's have an example: Suppose you owe $3000 on a credit and it is 8 months past due. You decide to use a debt settlement company. The settlement company calls your debtor and manages to negotiate a settlement for $1200. What a relief, only $1200, right? WRONG. There are a few things to remember.
In terms of the IRS, any settlement where more than $600 is being "knocked off," you are required to pay income taxes on. In this case, the income tax is on $1200. $3000-$1200-$600=$1200. Secondly, in terms of your credit bureau report, often settlements are viewed just as badly as bankruptcy.
So.......................what other option do I have then?
Your best bet would be to contact your debtor directly and work with them. Many creditors have payment plans in place to help you make payments. Its also possible to have fees waived or interest rates reduced.
These companies are called Debt Settlement companies. When you fall far past due with your creditors, you may be tempted to pursue a debt settlement company.
So how does it work?
When you call the debt settlement company and disclose your debt information, they act on your behalf to negotiate settlements with debtors. Many debt settlement companies require you to pay a fee for their service.
Let's have an example: Suppose you owe $3000 on a credit and it is 8 months past due. You decide to use a debt settlement company. The settlement company calls your debtor and manages to negotiate a settlement for $1200. What a relief, only $1200, right? WRONG. There are a few things to remember.
In terms of the IRS, any settlement where more than $600 is being "knocked off," you are required to pay income taxes on. In this case, the income tax is on $1200. $3000-$1200-$600=$1200. Secondly, in terms of your credit bureau report, often settlements are viewed just as badly as bankruptcy.
So.......................what other option do I have then?
Your best bet would be to contact your debtor directly and work with them. Many creditors have payment plans in place to help you make payments. Its also possible to have fees waived or interest rates reduced.
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