10 Mar
2010

For years, customers were being told that they could save money by saving on the little things – saving the cost of a coffee a day can add up to hundreds saved in a year. Now, however, consumers are being told the opposite. A few new financial books are recommending that customers should place their focus on large expenses – such as housing, cars, and credit card costs – to save big.

The thinking is that while you can save hundreds of dollars by scrimping on small expenses, you can easily save thousands of dollars or even tens of thousands of dollars by focusing on your biggest expenses. For example, getting rid of a car can save you thousands a year in car loans alone. Even if you keep that car but negotiate a better rate, pay in cash, buy a cheaper car or negotiate car costs you could easily end up savings thousands of dollars – with minimal time and no scrimping. Choosing a less expensive home or negotiating home closing costs can also save you tens of thousands of dollars.

10 Mar
2010

Lenders know desperation and they usually get concerned when they see it in an applicant. The time to apply for a credit card, personal loan, line of credit, or loan is when you are flush – not when you really need the money. When you are in a strong financial position, you will have the leisure to select the right lender for you and you will be able to shop around for a good interest rate because your finances are strong. If you don’t need money at once, you’ll also have the time to research loans and find the right one for you, apply, and wait for results.

When you wait until you need money, you may have no choice but a higher-cost payday loan. Traditional lenders may be wary of your financial situation and unwilling to give you cash and you simply may not have the time to research and apply for traditional loans. Build up your emergency fund, pay down the loans you have, repair your credit and apply for lines of credit and other forms of credit when you are doing well so that the money will be there for you if and when you need it.

10 Mar
2010

If you can make the minimum payments on your debts, personal loans, and credit cards each month but don’t have a sizable emergency fund, this might be the year to put debt repayment on the back burner temporarily and focus on emergency fund management first. While traditional financial advisors have suggested that customers focus on reducing debts first and savings seconds, new situations have turned that advice on its ear.

With credit card reform coming in 2010 and lenders still reeling from the economic downturn last year, it is getting harder and harder for customers without great credit to get loans and credit. Some companies are actually closing down credit cards. What this means is that if you do not have an emergency fund and you lose your job, you may not be able to secure payday loans or any other kind of loan and you cannot just rely on your credit card to act as emergency money. Now, you need an emergency fund and you need to make creating that fund a top priority.

09 Mar
2010

If you want to save money, you will of course want to save money. You will want to evaluate every financial service and every expense – from your personal loans to your shoe buying habit. One thing you will want to investigate are the fees your bank charges you for your business. These costs can add up quickly:

1) ATM and ABM charges. If you use your bank’s ABM machines, you may be charged only a low fee but when you use public ATMs, you are likely paying a fee and being charged an additional fee by your bank. In some cases, a single cash withdrawal can cost $4 or $5. Try using your bank’s ABMs and take out more cash if you have to, in order to avoid paying high convenience charges.

2) Frequent use charges. Read the fine print of your agreement with your bank. It is possible that your bank charges you extra if you use debit, ATMs or other services more than a specific number of times. If you’re regularly getting these charges each month, change accounts or your habits.

3) Service charges. If you walk into a bank and need a service – such as a check printed or a money transfer – you are likely paying a flat fee for each service you need. Some services – such as money orders – can be easily purchased elsewhere (such as the post office) for less than your bank charges.

4) Overdraft charges. If a check bounces or you drop below $0 on your bank account, you can expect hefty fees from your bank.

5) Bank fees. In addition to all the fees above, most banks charge you a set amount of money per month for every account you have. It pays to shop around to find a bank account with extra features and reasonable fees.

09 Mar
2010

Hard money lenders are professional investors who offer loans to customers. In many cases, hard money lenders tend to focus on investor clients and business clients, since these clients have assets which can secure the loan. Hard money lenders are often considered a good deal for new investors and entrepreneurs who may not have the credit rating established to get great loan rates from banks and big financial corporations. Hard money lenders charge higher interest rates in order to offer loans to a wider range of clients.

Unless you have your own business or plenty of personal assets, however, hard money lenders are often not ideal solutions if you need a personal loan. If you need a personal loan, you may want to apply to a bank, credit union, or other financial institution. If you need an emergency loan, you might want to consider a payday loan. Both types of products are better suited to the individual customer.

09 Mar
2010

Some charges are so small that we don’t think of them at all. But, over time, these small charges become large chunks of money – money that could be going towards savings, paying off loans, or your emergency fund. Make sure you’re not paying too much for these sneaky charges:

1) ATM charges. ATM machines often charge only a dollar or so for convenience, but then there are the fees that your bank charges on top of that. This can add up to hundreds of dollars a year, so it really makes sense to seek out your bank’s machines when you need cash.

2) Late fees. Late fees on movies, library books, bills, and overdraft fees on that bounced check can add up fast and these fees are so preventable. You can save yourself plenty of money each year just by noting due dates in your calendar.

3) Interest fees. Interest fees on credit cards, lines of credit, and late payments can add up very fast and remember that these fees increase the total amount you must repay, so you’re often paying interest on top of interest.

4) Small incidental purchases. A coffee here, a newspaper there, a pack of gum. Those tiny convenience store and coffee house purchases can mean a huge difference in your financial health.

5) Upgrades. Whether you’re upgrading a plane ticket or a fast food meal, it always seems like a deal to get a little bit more for a bit more money – but those small chunks of money add up.

08 Mar
2010

Lending scams and money scams seem to pop up every day, but many customers continue to be lax about their personal and financial security. Even you could be making these common security mistakes:

1) Doing online banking without being careful about computer security. Online banking is convenient but it can also be dangerous if you don’t have a good security system in place. Update your computer often, use firewalls, and have a good anti-virus suite in place.

2) Being lax with your PIN. You should never choose a PIN that is easy to guess. You should also never share your PIN or write it down. When typing in your PIN at an ATM or when making a debit purchase, check for shoulder surfers and cover up your PIN.

3) Not looking at paperwork – bills, statements. Bills and statements are a clue to your financial life. If you notice charges and uses that aren’t yours, you need to alert the companies in question. You could be the victim of fraud.

4) Not checking your credit score. Once or twice a year, at least, you should read your credit report to see whether there are any signs of criminal activity (such as personal loans in your name that you did not apply for).

5) Not reporting strange mail activity. If your mail suddenly stops or you start getting mail from banks you do not do business with, you need to investigate further.

08 Mar
2010

Many people are unaware of the perks on their credit cards, and even customers who do know about these perks rarely use them. However, these credit card extras can save you money:

1) Rental coverage. Many credit cards offer collision coverage on car rentals. This can cover towing fees, theft, and more. When renting a car, read up about your credit card coverage to avoid paying extra to the rental company for coverage you already have.

2) Lost luggage coverage. If you lose your luggage or have it damaged while traveling by bus, plane, helicopter, train, or ship, this coverage can reimburse you for the luggage and its contents. This can save you hundreds of dollars if you run into trouble while traveling.

3) Roadside assistance. If you have this type of coverage, you can get roadside assistance at pre-set fees.

4) Extended warranties. If you buy a new gadget, this coverage doubles the repair warranty offered by the manufacturer. If your gadget comes with a one-year warranty, for example, this coverage bumps it up to two.

5) Purchase protection. If you have this perk on your credit card, you are covered on many new purchases. If your new purchase malfunctions, is stolen, or damaged in the first 90 days after purchase, your credit card company will refund you what you paid for the item.

6) Concierge services. These services allow you to get help booking travel, picking up tickets, finding gifts, making restaurant reservations and more.

08 Mar
2010

There are times when you need to tighten your spending – and times when you need to go into financial survival mode. If you are in over your head with payday loans, credit card debt, and personal loans and have just lost your job, for example, it is a good time to go into survival mode. If you are facing foreclosure on your home, it is time for survival mode. Survival mode means that you instantly stop absolutely all unnecessary spending – no matter how minor – to focus on basics such as food and shelter. You should be paying the minimum on all your bills to keep them up to date and trying to save as much as you can on food and shelter.

Survival mode requires you to tap into as many resources as possible. You may need to visit a discount store or even a food bank to reduce your monthly expenses. You may need to take on a roommate or tenant in order to pay for your living costs or you may need to find more affordable living costs. While living in survival mode can be difficult, it is better than acquiring lots of debts while you cannot repay them and it is much better than going into bankruptcy. It is also important to remember that this type of living does not last forever. While you save, keep looking for new income opportunities that can give you a fresh start.

07 Mar
2010

When people think of earning more money or saving money, they usually think in terms of the tried and true – they imagine putting aside a few dollars into a savings account and taking on some overtime work. However, there are plenty of creative ways to improve your savings and earnings, have a little fun, and even get your finances on track faster:

1) Rent your home or part of your home. If you don’t want a tenant or roommate, rent your home on vacations for a little extra cash. No home to rent? Rent your parking space. In urban areas, your parking space can be worth a nice little extra cash each month while you’re at work.

2) Deposit spare change and small bills. At the end of each day, empty out your pockets into a savings account. You’ll be amazed how quickly this adds up.

3) Recycle bottles and cans. Recycling can net you a few hundred extra dollars a year and is great for the environment.

4) What can you sell online? There is likely something. You can sell crafts you make, the stuff you no longer need, even your time as a tutor.

5) Have garage sales. Anything you don’t need or want anymore can earn you cash and will make your home look better.

6) Help someone and earn. Teach English or a skill you have and you could make $20 or $30 an hour a few hours a week.

7) Use coupons and combine rebates with coupons or visit stores that double up your savings. Clipping can save you hundreds of dollars on your groceries a month, especially when you visit stores that double your coupon savings.

8 ) Seriously consider drastic moves – roommates and getting rid of a car. If you don’t absolutely need a car for work (because you can take transit), consider ditching it. An older car can cost thousands in repairs each year (not to mention insurance and gas) and funneling this towards personal loans can get you debt free fast. If that’s not an option, consider a roommate for a temporary time. It can save you hundreds of dollars.

9) Take on one odd job a month. Distributing leaflets, doing some handy work –  a few hours a month can bring in hundreds of extra dollars a year.

10) Give to science. Medical researchers often pay people to take part in clinical trials and some clinics pay for blood donations.

11) Sign up for mystery shopping and focus groups. Make sure you sign with an agency that is free to join.

Be sure to check out our savings guide for more creative tips.