This article contains a list of money saving and investment tips. They are in no particular order and just appear as the author thinks of them
Credit cards can be a great money saving vehicle, as long as you pay them off on time. If you purchase an expensive item on the first of the month, then typically you will have 30-60days before you start paying interest on the purchase. This gives your hard earned cash a little bit more time to earn interest in a high interest savings account.
Credit Cards
Most credit card companies offer some type of reward system, this is typically equivalent 0.5-1% cashback. It is best to choose cards that give you the rewards in real money, rather than in tokens or points for savings on some other goods and services. Otherwise instead of pocketing a couple of hundred pounds in cash you may up spending out on that all new lean mean grilling machine as you have earnt 50% off through George Formans credit card company….
Credit Cards – Company Expenses
If you end up claiming a lot of company expenses then try to put all purchases on your credit card, and make sure you claim for the expenses as soon as possible. If your company is quick at refunding expenses you may find that you get the cash before you have to pay off the credit card. Yet more interest to be earned in that high interest savings account. Further more, if you have a credit card with a reward points scheme you will earn money on expenditure that isn’t even yours!
High Interest Savings Accounts
There are a number of accounts that have been recently advertised with headline interest rates. 7-10% interest is now becoming more common place. However these deals aren’t quite as good as they seem. You can usually only put a maximum of £”50 a month into the account, and at the end of the year it will typically be swept into a current account or equivalent. This means you have to keep on your toes and make sure you swap to another account once the initial interest rate period expires.
Now what about that maximum investment per month? Even if you invested £250 a month for a year into a 10% account you will only end up earning £135 pounds in compounded interest. If you are a tax payer this is reduced to £105, or a high taxpayer would earn a measly £81 pounds. Okay, so it is better than nothing, but it is hardly a massive pay out by the banks and building societies.
You will probably be better off in the long run by choosing a good, consistently high paying online savings account, such as that offered by Nationwide or Halifax. These pay out in the region of 4.5%-5%, but their annual investment limit is normally around £50,000 a year, rather than £3,000 a year. Also with a proven track record of high interest rates you wont have to chop and change your accounts every year. Saving you lots of time and hassle.
Cash ISA’s
Invest in cash ISA’s! Especially if you are a higher rate taxpayer, but even if you are exempt from taxation you will find that they offer a good rate of interest, and will protect your interest earnings if you end up paying tax in the next few years. Also don’t forget that you can only save £3000 a year into a cash mini-ISA, so you need to make sure you make good use of your tax free savings each and every year to be able to build up a good tax free nest egg.
Mortgages
If you are on a variable rate mortgage see if you can tie yourself into a discounted mortgage. Banks and building societies are offering some eye-popping rates at the moment, but make sure you checkthe small print. A 2% interest rate in the first year may sound great, but check that it doesn't increase to 7 or 10% interest in the 2nd to 5th year.
Some financial research has shown that statistically you are most likely to be best off with a 2 year fixed rate mortgage, and then remortgage every 2 years. This may seem like a lot of hassle but it could save you hundreds of pounds each year.
Visit http://www.whatprice.co.uk for more money saving advice.
Article Source: ezinearticles.comStep 6 - Paying Off Your Debt
Hopefully by now you are committed to paying off your debt and you have freed up at least a little extra income to help you do it. Now, it’s time to start paying it off. The first step is determining which debt to pay off first. Most people are tempted to try to pay off their largest debt first, but this usually isn’t the right thing to do.
Get out your list of debts again and see which one has the highest interest rate. If you still have credit cards remaining after the refinance step, it will most likely be them. It is possible that your mortgage or student loans are the highest debt. However, these debts are tax-deductible, so if this is the case and you itemize your tax dedications be sure to keep this in mind. The way to do this is subtract the interest rate times your tax bracket from the interest rate. For example, if you have a loan at 8% interest and you’re in the 28% tax bracket, your effective interest rate would be 8 – (8 X .28) or 8 – 2.24 = 5.76% .
If you have more than one debt at the same rate, pay off the smaller one first. Although it makes no actual difference on how soon you will get out of debt or how much you will pay, it will help you see results sooner and encourage you to keep at it.
The next step obviously is to start making the extra payments on this debt. Be sure not to neglect paying at least the minimum on the other debts while you do this, though. Missing a payment can cause you to rack up late payment fees or your interest rate to skyrocket, making repaying your debt even more difficult. As you make extra payments on credit cards and other revolving lines of credit they will typically reduce your minimum monthly payment. Do not lower the amount you are paying! This should be an encouraging sign to you. As your minimum monthly payment goes down, so is the amount of interest you are being charged. By keeping the same monthly payment you are getting the principal paid off much quicker.
It may take a few months or possibly a few years, but if you keep at it you’ll eventually get this first debt paid off. This isn’t the time to take it easy though, here’s what you’ll need to do next. First, close the account you just paid off if it’s a revolving line of credit, so you won’t be tempted to charge it back up. Next, determine which debt has the next highest interest; this will be the next account you pay off. Now, continue to make the same monthly payment you were before, but add to it the money you were paying on the account you just paid off, including the extra payments you were making towards that one. For example say your first debt was for $100 per month and you were paying an extra $50 for $150 total each month, and your second debt costs you $75 per month. You will now be paying $100 + $50 + 75 on this second debt, or $225. That’s three times what your monthly payment was before, which will help you to get it paid off much sooner.
Once you get your second debt paid off, repeat this pattern again. Apply the amount you were paying to your first debt, your second debt and your third debt all to your third debt to get it paid off even sooner. As you continue to do this, the debt repayment will rapidly pick up pace. I highly recommend continuing to do this until you are completely debt free, including cars and mortgages, not just credit cards.
If you tried to refinance some of the debt in an earlier step but were unable to get approved for a loan, you may want to look into it again after paying off a few debts. Your debt-to-income ratio is now lower and you have built up a good history of paying off your debt, both of which will help your credit score and make it possible to get approved for loans you weren’t able to before. However, be sure to also re-evaluate if it’s still in your best interest to refinance, now that your debt has been reduced and you are making higher payments.
This article has been provided courtesy of Destroy Debt. Destroy Debt offers great debt relief articles for reprint, and tools and advice that provide the debt help you need.
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