Smart Money Tips
These days, more than ever, we must be smart with the money that we have. Here are 7 Smart Money tips that may help.
1. Charging Credit Cards To The Limit
Using credit cards responsibly can help you build good credit so you qualify for lower interest rates on loans. However charging your cards to the limit and not paying them off is a sure ticket to trouble. It's very easy to say to yourself that you will use your charge card and pay it off when the bill comes. That almost never happens. So, pay in cash instead to keep spending within your means.
2. If It Can Happen, It Might
If you're involved in an accident the day after your auto insurance policy expires, you can really be up the creek without a paddle. If that happens to you, the financial fallout can be devastating. You can literally be on the hook for hundreds of thousands of dollars. Be sure you stay fully covered with auto, life, renters or home owners health care and disability insurance at all times.
3. Not Saving
Due to compound interest, when it comes to saving, time can be your friend. The earlier you start saving, the easier it will be. By waiting even just a few years, you make it much harder to meet the same goal. Try to set up a "just because" savings account. Put a set amount in it every pay day and never plan to withdraw the money. This can be as little as $10-20 per paycheck. Pretty soon you will save up a nice little nest egg that you will be able to use if you have an emergency. What you will find is that you often find other ways to handle the emergency and your account will continue to go. Whatever you do, don't get an ATM card for this account.
4. Giving Away Free Money
If your employer offers a 401(k) plan with a company match, make sure you take full advantage of it. Put simply, a company match pays you. If you're not contributing enough on your own to get the full match, you're giving away free money.
5. Save First
Basing your investments on what you have left over at the end of the month will get you nowhere fast. Instead, set up an automatic that takes money out of every paycheck. You'll probably never miss the dollars you don't see.
6. Co-Signing for Loans
Never, Ever Co-Sign Period!! Next time a friend or family member asks you to vouch for them on a loan, politely run the other way. Remember, if a person needs a co-signer, it's because the person applying has no credible history of paying debts on time. In other words, they have bad credit. If they didn't pay past debts, what makes you think they will pay this one? If the person who received the loan is late on payments or simply doesn't pay up, you'll be responsible. And it could damage your credit.
7. Driving Upside Down
Let's say you buy an expensive new car and finance it for five years. Since new cars depreciate quickly, after a short time you may owe more on the loan than the car is worth - being "upside-down" on the loan. To get the most for your money, put at least 20% down or, better yet, buy used and drive it till it dies.
Leander McClain, Burlington Township Realtor & Real Estate Consultant, Keller Williams Realty, 1814 Route 70 E, Suite 200, Cherry Hill, NJ 08003, 856-321-1212 Bus., 856-685-1677 Direct
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