Avoid the Three Biggest Financial PitfallsWritten by Terry Mitchell
For average person and/or family, 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 over 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 depreciate most in their first year or two of life, so person buying a vehicle when it is new will have to absorb bulk of its depreciation costs. With price of new vehicles as they are today, that amount can be quite excessive. On top of that, many people have financially disastrous habit of trading them in about every two to three years for another new one. That habit will result in 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 off 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 feel need to give yourself or a family member 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. Estimate amount that you are saving by buying used cars instead of new ones and pay yourself that money by putting it in bank on a regular basis. Over time that money will add up. Once you have saved enough, wait until a dealer that sells kind of vehicle you want offers one of those deals in which you can get zero percent interest or a rebate. Pay cash for vehicle and take rebate. That way, you get zero percent interest and 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 - plan 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, in 'Groceries' section, make a note to buy unbranded Supermarket generic products, rather than 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, prioritise bills as follows:- divide outstanding debt on each bill by 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 EXCEPT target. The debt target gets usual payment PLUS war chest. You want to POVERPAY debt each month to break it as fast as possible. Do this each month until number one bill is paid. Then you move on to debt number 2 - next smallest result of dividing bill amount by minimum payment. This time, of course, you can 'accelerate' process by applying not only 'war chest' but also standard payments you used to pay on target number 1.
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