Avoid the Three Biggest Financial Pitfalls

Written by Terry Mitchell


Forrepparttar average person and/or family,repparttar 112140 three biggest financial pitfalls to avoid are new vehicles, credit car interest, and short-term loans. Any and all of these can drain a person's or family's coffers of much needed funds. At best, they create opportunity costs, i.e., money spent on them could be better spent on sound investments like a home or stocks (both of which appreciate in value overrepparttar 112141 long term) or on college or retirement savings. At worst, they can eventually create financial hardship and even lead to bankruptcy. Buying brand new cars, trucks, SUVs, etc. can be a real money-eater. They all depreciate in value, some much faster than others, of course. Most vehicles depreciaterepparttar 112142 most in their first year or two of life, sorepparttar 112143 person buying a vehicle when it is new will have to absorbrepparttar 112144 bulk of its depreciation costs. Withrepparttar 112145 price of new vehicles as they are today, that amount can be quite excessive. On top of that, many people haverepparttar 112146 financially disastrous habit of trading them in about every two to three years for another new one. That habit will result inrepparttar 112147 piling on of depreciation and debt. Instead of buying new, I suggest buying a low-mileage vehicle that's about one to two years old. There are services available now like CarFax which allow you to trace a vehicle's history. If you look around, you can find previously-owned, former-rental, or former-lease vehicles of every type, make, and model which are in like-new shape and have less than 20,000 miles on them. You can even find them on Ebay now! Once you have found one, I suggest keeping it for least three years after paying offrepparttar 112148 loan. Ideally, I would suggest paying cash for it to avoid those used car interest rates and then keeping it for at least seven years, but I know paying cash is not an option for most people. If you absolutely feelrepparttar 112149 need to give yourself or a family memberrepparttar 112150 gift of a new car some day, I wouldn't fault you for that. However, I suggest planning this out over several years, similar to how one would save for a college education for a child. Estimaterepparttar 112151 amount that you are saving by buying used cars instead of new ones and pay yourself that money by putting it inrepparttar 112152 bank on a regular basis. Over time that money will add up. Once you have saved enough, wait until a dealer that sellsrepparttar 112153 kind of vehicle you want offers one of those deals in which you can get zero percent interest or a rebate. Pay cash forrepparttar 112154 vehicle and takerepparttar 112155 rebate. That way, you getrepparttar 112156 zero percent interest andrepparttar 112157 rebate!

Debt Elimination Fast!

Written by Ephram Lucas


How would you like to be debt free in only a few years, including zero mortgage debts?! Sounds too good to be true? Well check out this easy debt elimination plan from www.nodebtever.com -repparttar planrepparttar 112139 Banks DON'T want you to know about! First off, you need to do a little groundwork. Those debts took some time to build, so getting rid of them involves a little concentration.

Get your last half year's bank records together.Ignoring taxes, bills already paid etc, mark every entry that could in theory be reduced. It will help if you group like for like stuff together (a spreadsheet is good for this) for example, clothes, entertainment, groceries etc. What you are looking for is a way to shave 10% or more off each of these items. Make a list of ideas for each category. This is easier than it might sound - for example, inrepparttar 112140 'Groceries' section, make a note to buy unbranded Supermarket generic products, rather thanrepparttar 112141 big brand high cost versions. The amount you think you can save by doing this is your 'war chest' against debt.

Once you have done this, prioritiserepparttar 112142 bills as follows:- dividerepparttar 112143 outstanding debt on each bill byrepparttar 112144 minimum amount you can pay off each month. The smallest resulting number is your target bill. What you are going to do is continue your normal monthly payments on everything EXCEPTrepparttar 112145 target. The debt target getsrepparttar 112146 usual payment PLUSrepparttar 112147 war chest. You want to POVERPAYrepparttar 112148 debt each month to break it as fast as possible. Do this each month untilrepparttar 112149 number one bill is paid. Then you move on to debt number 2 -repparttar 112150 next smallest result of dividingrepparttar 112151 bill amount byrepparttar 112152 minimum payment. This time, of course, you can 'accelerate'repparttar 112153 process by applying not onlyrepparttar 112154 'war chest' but alsorepparttar 112155 standard payments you used to pay on target number 1.

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