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Simple and Effective Rules for Avoiding Credit Card Debt

There are some basic yet very effective rules that you can follow for avoiding credit card debt, and it’s important that you know what they are. These rules can help you avoid years of frustration and financial disaster, so you will want to take them seriously. Each year millions of people go into credit card debt because they didn’t take these things into consideration before using their plastic.

Establish a Budget and Follow it strictly

The very first thing that you will need to do is to establish a budget so you know exactly how much money you can afford to spend each month. It is crucial that you follow this budget exactly so that you don’t go over and into debt. One of the biggest mistakes that people who get saddled with credit card debt make is to not write out a budget for themselves and actually follow it. Remember, establishing a budget for yourself isn’t going to do any good if you don’t abide by it.

Charge only what you can afford

You will also need to remember that you should only ever charge what you can afford to your credit card. You may want that new flat screen TV or pair of shoes, but if you cannot afford to charge it, don’t buy it at all. Think to yourself whether or not you are going to have trouble paying the balance of your card at the end of the month before putting anything on your card. Those who take the time to do this will be able to avoid a financial nightmare later on.

Avoid unnecessary balance transfers

You will also want to make a point of avoiding unnecessary balance transfers. Whatever you do, don’t transfer balances from one card to another just so you can avoid due dates. If you do decide to do this, make sure you have a valid reason for doing so. Sometimes you can get a lower interest rate by doing this, which can be highly beneficial. But if you do this just to avoid a due date, your balance will just increase because of the transfer fee you incur.

Do not miss your payments

Perhaps the most effective way to avoid going into credit card debt is to avoid being late on your payments altogether. Always make sure that you pay off your credit card on time, because otherwise you will quickly and easily slip into a deep pit of debt that can be very difficult to get out of. Most people who are deep in debt didn’t think that missing one small payment was a big until, it became one. By making your payments on time you will be able to keep yourself out of debt.

Pay your Full Balance each month

You should always make a point of paying the full balance of your credit card each month. Whatever you do, don’t get into the habit of making minimum payments. By clearing the entire balance of your card at the end of each month, you won’t have to worry about getting behind because of accumulating interest. When you do this you will never need to worry about whether or not your credit card has been paid in full.

Recognize the Signs of Credit Card Debt

It is crucial that you recognize some of the initial signs of credit card debt so that you know if you are on your way there. If you are unable to pay the full balance of your card, you are well on your way to debt. By recognizing these signs early on, you will be able to avoid a complete financial disaster later.

Stay away from Cash Advances

While you might think that a cash advance in a good idea at the time, you will most likely regret your decision later on. It is important that you make a point of not taking out cash advances if you can help it, because you will incur some pretty hefty fees. Withdrawing money from your credit card is an effective way to get yourself into debt.

Understand the Terms of your Card

You will need to look over and fully understand all the terms and conditions of your credit card, because this information will help you stay out of debt. It is important to keep in mind that credit cards all have different terms, so you will therefore need to know what the terms of yours are before you use it at all. You should also know what the features of your credit card are, because they will help you to understand how using it can actually end up costing you more in the end. The more of this information you get, the more likely you will be to stay out of debt.

Financial Planning Tips that Really Work

If you want to meet all of your financial goals as quickly and efficiently as possible, you will need to follow the tips in this article. These tips come from financial experts who have accomplished a great deal in a relatively short period of time.

Maximize your Retirement Savings

The first and perhaps most important thing to remember about financial planning is that you will need to maximize your retirement savings as much as possible. Make sure that you start contributing to 401(k) plan, setting up automatic monthly withdrawals from your checking account. The more you put into your 401(k), the better prepared you will be for retirement. The second thing that you will need to do is take advantage of an IRA or Roth IRA.

Reallocate your Investments

It is important for you to remember that long-term performance is better when stock allocation is returned to the target allocation on a consistent basis. Simply put, with the high values of equities what they are right now, the time is right for lightening up on equity and adding to bond allocation.

Have an Estate Plan

One very part of financial planning involved estate planning. Ideally, you should have six months of compensation saved in a liquid account that you or your spouse can access in the event of an emergency. If you were to die unexpectedly, you will need to make sure that your loved ones are taken care of in your absence. Make sure that you hire an estate planning attorney who will be able to help you out with all of this. The last thing you want is for there to be a financial mess when you are gone. Estate planning is a very important aspect of being financially responsible and prepared.

Invest for the Long Term

Make sure that you are investing with the long term in mind. Take the time to develop an investment strategy that is solid and stick with it no matter what the market is like. The more time you take to choose your investments the better, because this is certainly something that you will want to be smart about. Corporate and government bonds are always good investments, and they are fairly safe. If you want to be successful in the stock market, you will need to remember that it’s all about developing a good plan and sticking with it no matter what. A lot of people tend to change their plans when the market turns, but you will want to stay steadfast.

Strive for Capital Ownership

One of the best financial planning tips that you will get is to always strive to acquire more capital. You will need to realize that you are the one who is in control. The more capital you have, the better of a position you will be in to invest and save. Also, keep in mind that it’s not so much about how much you are paid as how you get paid. Take compensation in the form of a stock share whenever possible, because that is planning for the long term.

Keep your Debt to a Minimum

If you want to meet your financial goals, you will never be able to do so while you are saddled with debt. You should make a point of paying off your outstanding balances on credit cards and everything else. The only way that you will ever be able to achieve financial freedom is by first taking care of your debt. You should also get into good spending habits so you can avoid accumulating debt in the first place.

Review Insurance Coverages

You should also take some time to review all your different insurance coverages to make sure that the amounts of coverage you have are still consistent with your original needs. Look through your life insurance, auto insurance, health insurance all everything else to make certain that you aren’t paying more than you really need. A lot of people pay more money in insurance coverage than they should each year, so you will need to evaluate your coverage versus your needs at least once a year.

Refinance your Student Loans

If you have student loans that you are still paying off, now is a great time to start thinking about refinancing. With interest rates as low as they are right now, you will certainly want to look into this option very seriously. By doing this you stand to benefit a lot with very little risk and additional expense. A lot of people are refinancing their student loans right now, and it’s definitely something that you might want to do. The PAYE and REPAYE plans are income-sensitive and can help you to manage payments in the younger earning years, so you should keep that in mind as well.

Essential Tips for Refinancing your Mortgage

If you have decided to refinance your mortgage, there are quite a few different things that you will need to keep in mind. The last thing you want to do is go off half-cocked when it comes to refinancing your mortgage, because you could end up regretting it quite a bit. Anyone who is thinking about refinancing will need to take the following tips into consideration.

Don’t Wait

While it may be tempting to wait to refinance your mortgage until the “right time,” you will just want to do it now. Numerous financial experts say that right now is actually a great time for homeowners to refinance their mortgages, so you will need to take this into consideration for sure. Don’t wait for rates to lower, because it probably isn’t going to happen anytime soon.

Prepare yourself in case rates drop

Make sure that you turn your application to refinance in as soon as possible so that you can take advantage of low rates before they start going up. Another reason to do this is because you will avoid a huge traffic jam of refinance applications if rates suddenly fall. If you want to get your application to refinance your mortgage processed as quickly as possible, you will definitely need to make a point of turning it in right away.

If you are not quite ready to submit your application just yet, you should make an effort to improve and maintain your credit score. Make sure that you have all the necessary financial documents ready to go, and save up some money for the refinancing fees that you will inevitably have to pay.

Make sure you have a decent Credit Score

Something else that you will definitely need to make a point of doing is to get your credit score in good shape before your refinance. You will find that your credit score will play a major role when it comes to the rate you get on a mortgage. Just because rates have gotten lower doesn’t mean that you will qualify for them, so keep that in mind. You should always be making a real effort to improve your credit score as much as possible. The better your credit is, the better your chances will be of qualifying for those low rates.

Use rising home prices to your Advantage

There is no doubt that the value of homes is on the rise right now, so it’s a good opportunity for you to utilize your home’s equity through a cash-out refinance. If you decide to go this route, make sure that you use caution. Make sure that if you choose this cash-out refinancing option that you spend the money on things that are going to build up your credit. The last thing you want to do is waste the proceeds from a cash-out refinance.

Refinance into an ARM

One of the best things that you can do is to refinance into an adjustable-rate mortgage when rates start to rise. These loans usually come with lower initial interest rates than fixed mortgages, so you will want to remember that for sure. They can be particularly useful if you are planning on staying in your home no longer than the amount of the fixed term of the loan. Financial planners definitely seem to agree that this is the right call for a lot of people, so you will need to remember it.

Refinance to a Shorter Term

You will also have the option of refinancing into a shorter-term fixed-rate loan, which can save you money in a number of ways. With this type of loan, the interest rate is going to be lower than with a 30-year fixed-rate loan. The short-term means that you will end up saving more money over the full period of the loan by paying less interest. This is a refinancing option that more and more people have started choosing, and for good reason.

Pay Points

Before your loan finally closes, you will be able to pay points on your mortgage, which essentially means that you are paying money upfront to permanently lower your interest rate. One point will come out to 1% of your loan amount, but you won’t always have the option of paying in full points. The amount of money that you will be required to pay to buy down your rate will depend on the interest rate market as a whole. This can definitely be a good option, but it can be a bit volatile and unpredictable.

There are many different tips and options that you will need to consider when it comes to refinancing your mortgage, and it’s crucial that you keep all of them in mind when going forward. In the end you will be glad you took the time to get this information.