|
|
|
|
|
Newsletter to Your Friends (Use this link only if you receive this newsletter by email) Week of September 7, 2009This is an OPT-IN list ONLY! If you feel that you have received this message in error, please follow the directions at the bottom of this email to unsubscribe. Thank you.Click Here to view this newsletter online. Navigate This ColumnGrandpa Terry's Update Welcome to The Budget Stretcher! Corresponding with subscribers and members for nearly 10 years has shown me that Money Saving Tips ranks at the top of the list of important topics. I list several tips in the newsletter and on the web site every week but quite frankly these tips can't compare to the top tip site on the internet. Thirfty Fun has over 60,000 pages of unbelievable content that includes tips on every imaginable subject. That is why they are at the top of the list of my Partner Sites. Do yourself a favor and visit them often! If you pay only the minimum payment on your credit cards you are going to pay for a long time and rack up a lot of interest. But what do you do if you just can't afford any more than the minimum payment? It's simple. Pay this month's credit card minimum payments. Next month the minimum payments are likely to be lower. But, if you just continue to make this month's minimum payment each month you can pay off those credit cards in about half the time. Here is a link to an article that explains this a little better: Constant Credit Card Payments That's all for now. Remember, I really enjoy hearing from you folks. If you have any comments, complaints, suggestions or just want to say Hi, please send me an email to tre2000@midwest.net If you know someone that may be interested in subscribing to our newsletter just copy and paste the below link into an email to them and have them subscribe: http://www.homemoneyhelp.com/confirmsubs.html Have a great week, Grandpa Terry Sponsor Advertisement\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ THE FASTER YOU CAN PAY THEM OFF! Paying highest-interest debt first is the SLOWEST way out ... You can laugh at money worries - if you follow our simple plan. Discover savvy consumer money secrets your friends don't know and banks won't tell you. Limited time only. ACT NOW: How To Own Your Paycheck Again! \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Grandpa Terry's Tip of the Week(First published in September 2006) If you have been a subscriber to this newsletter for very long you already know what I think about credit cards. I know that there are many benefits and perks to some credit cards and if you manage them right they can be very convenient. By managing them right I mean that you never carry a balance. I recently completed a Debt Elimination Summary for Paul that included about $130,000 in debt including his mortgage, credit cards and a car payment. From what I could gather he had just obtained the mortgage on a 30 years note. The result of the Summary was that Paul could pay off everything in a little over 6 years by adding just $300 per month to his existing minimum payments. No tricks or gimmicks were used and I provided him with a month by month payment schedule that he could follow to accomplish this. He was extremely happy with this information but was dumbfounded when I told him it would take 80 years to pay his debt if he only made the minimum payments. He just knew this had to be a mistake because his mortgage was only for 30 years and called me on it. Here is my response to his email: First, this figure (80 years) makes two assumptions. #1 - That you only make minimum payments on your credit cards (owed about $6500) #2 - That you do not use the snowballing method and use the payments for something else when the bills are paid in full. Just to give you an example, I ran your credit cards only and it would take over 47 years to pay them off paying only the minimum payment. Most people think that their mortgage is their biggest debt and once that's paid everything will be ok. Mortgages have a set interest, payment and pay off date unlike credit cards. While you may pay more interest on your mortgage you will by far pay a bigger percentage on credit cards when you pay minimum payments. Here's what Paul had to say about that: "WOW!! That is amazing! I really didn't think my CC debt was all that extreme - although I was worried about it! I can only imagine what the vast majority of people's CC debt is! This is a real eye opener - for sure! More the reason to cut up my cards - and use cash only!" I'm sure I will get some comments on this tip stating how great their deal is with their credit card companies and all the benefits they receive. If you don't carry a balance, you could be getting a great deal. It you do carry a balance, the perks "just ain't worth it"! I would like for you to check how long you will have to pay on your credit cards using the payments you are making now. Here is a web site calculator by CNN Money where you can enter your information and it will show you how long you will have to pay: http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp I recently started using a debit card issued by PayPal with a Mastercard logo. It works just like a credit card but my purchases are immediately deducted from my PayPal account and I get 1% cash back. I just bought a set of tires for my truck this morning and paid $441.23 and got $4.41 back. It's not a lot but it will buy a gallon of milk and a loaf of bread!! Best of all, no interest charges. That could save me thousands. Premium Members can get a free Debt Elimination Summary to organize your Debt Pay Off schedule at http://www.budgetstretcherpremium.com/paiduser/credit.htm Free Subscribers can order this same Debt Elimination Summary at http://www.homemoneyhelp.com/debtelimsummary.html Sponsor AdvertisementAre you frustrated trying to get by on the money you make? Would you like to get a good view to where all your money is going? Would you like to start saving your money, or save even more? Looking for something easier then software like Quicken or Money? Would you like to teach your children about finance? Click Here to check out My Budget Planner Today Grandpa Terry's EmailDear Grandpa Terry,My husband and I are wanting to refinance our home for a lower interest rate. Our 1st loan is $85,567.04 $570.77 a month and we pay $600.00 a month. The interest is 6.750%. The second is $11,702.50 $90.90 a month and we pay $100.00 a month. The interest is 8.250%. Would it be worth out time to do this? My husband wants us to consolidate our credit card debt but I don't like that idea. We have $18,371.09 in credit card debt. We have 3 cards and all of them have raised the interest rates terribly. If we can refinance what is the best way to find the right mortgage company? Alot of the credit card debt was due to my sons surgeries. He was born with a bilateral cleft lip and palate. Now we have Shriners Hospital which was a prayer. They cover all procedures. Thank you, Tammy My Response: Hi Tammy, I'm sorry to hear about your son but thank God for Shriners. If you have enough equity in your home and feel you can totally give up using credit cards I think you best option would be to consolidate your 1st mortgage, 2nd mortgage and your credit cards. Before you do this check your credit reports to make sure there is no derogatory information and that your credit score will allow you to get a good interest rate. Get your free credit reports at: https://www.annualcreditreport.com/cra/index.jsp Learn where to get your free credit score at: http://www.budgetstretcherpremium.com/paiduser/credit.htm I have been recommending http://www.eloan.com/ for several years because of a personal experience I had with them. Eloan does not do the financing themselves but they find a mortgage company that will give you the lowest rate. The process was quick, easy and efficient. You may want to consider refinancing for a shorter term if you can afford the payments. The savings can be enormous. I hope this helps. If you need anything else just let me know. All the best, Grandpa Terry Grandpa Terry, this isn't so much a hint as a precautionary measure. We have two adorable basset brothers who seem to find everything they shouldn't. We always keep the bathroom door closed because they love waste baskets. The other day I was in the bathroom with the door closed of course. And I was taking some medication when I realized that if I were to drop a pill and not find it at least the little guys wouldn't be in any danger of getting to it. I guess my idea is to take your meds where your pets can't find a dropped lost pill. Featured ArticleBy Chemain Evans From radio spots and junk mail to television and newspaper ads, American consumers are bombarded with invitations to utilize various banking and checking services. And even though they come with the obligatory fine print, so much of it remains a mystery to most of us. So how can you really know whether you are better off staying where you are at, or switching to a new service? From checking accounts to home loans, and a whole lot in between, here are some answers. Checking You can save more than $100 a year in fees by selecting a checking account with a low (or no) minimum balance requirement. There are usually stipulations attached so make sure you can meet them. Request a list of these and other fees that are charged on these accounts and compare carefully. In addition, banking institutions often will drop or lower checking fees if paychecks are directly deposited by your employer. Direct deposit offers the additional advantages of convenience, security, and immediate access to your money, so look into it if you don't already have it. Savings and Investment Products Before opening a savings or investment account with a bank or other financial institution, find out whether the account is insured by the federal government (FDIC or NCUA). An increasing number of products offered by these institutions, including mutual stock funds and annuities, are not insured, which means you absorb 100% of the risk. To earn the highest return on savings (annual percentage yield) with little or no risk, consider certificates of deposit (CDs) and treasury bills or notes. These are not liquid (easily accessible) investments and need to be left alone until they reach maturity, but they do carry a better return than a traditional savings account. Plan accordingly. Once you select a type of savings or investment product, compare rates and fees offered by different institutions. These rates can vary a lot and, over time, can significantly affect interest earnings. Credit Cards You can save as much as a thousand dollars or more each year in lower credit card interest charges by paying off your entire bill each month. If you are unable to pay off a large balance, pay as much as you can and switch to a credit card with a low annual percentage rate (APR). For a modest fee, RAM Research Corp. (800-344-7714) will send you a list of low-rate cards. You can obtain a list of low-rate cards by accessing "www.ramresearch.com" on the Internet. In addition, you can reduce credit card fees, which may add up to more than $100 a year, by getting rid of all but one or two cards, and by avoiding late payment and over-the-credit-limit fees. When shopping for a credit card, look for more than just the low interest rate. Compare other fees (such as over-the-credit-limit or late payment) and also look at the billing cycles. Some cards have a 28-day billing cycle instead of a monthly one, which can really throw off your budgeting. Also, you know all the "freebies" that the credit card companies offer you-like cash back, airline miles, etc.? You pay for them in the form of a higher interest rate, so decide whether they are really worth it! Auto Loans If you have significant savings earning a low interest rate, consider making a large down payment or even paying for the car in cash. This could save you as much as several thousand dollars in finance charges. Think about it-you could be earning minimal interest by keeping that money in the bank, or saving yourself substantial interest by paying cash up front. If you need to finance your auto, you can save as much as hundreds of dollars in finance charges by shopping for the cheapest loan. Contact several banks, your credit union, and the auto manufacturer's own finance company. Get the lowest interest rate for the shortest amount of time that you can. First Mortgage Loans Although your monthly payment may be higher, you can save tens of thousands of dollars in interest charges by shopping for the shortest-term mortgage you can afford. On a $100,000 fixed-rate loan at 8% annual percentage rate (APR), for example, you will pay $90,000 less in interest on a 15-year mortgage than on a 30-year mortgage. You can also save thousands of dollars in interest charges by shopping for the lowest-rate mortgage with the fewest points. On a 15-year, $100,000 fixed-rate mortgage, just lowering the APR from 8.5% to 8.0% can save you more than $5,000 in interest charges. On this mortgage, paying two points instead of three would save you an additional $1,000. If your local newspaper does not periodically run mortgage rate surveys, call at least six lenders for information about their rates (APRs), points, and fees. Then ask an accountant to compute precisely how much each mortgage option will cost and its tax implications. If you are considering an adjustable rate mortgage loan (ARM), be aware that the interest rate on most ARMs can vary a great deal over the lifetime of the mortgage. Most ARMs lock you into a rate for 3-7 years, and then begin varying. An increase of several percentage points might raise payments by hundreds of dollars per month. If you know you will only own your home for just a few years, an ARM might work for you if you plan to sell before you move into the variable period. Mortgage Refinancing Consider refinancing your mortgage if you can get a rate that is at least one percentage point lower than your existing mortgage rate and plan to keep the new mortgage for several years or more. Ask an accountant to calculate precisely how much your new mortgage (including up-front fees) will cost and whether, in the long run, it will cost less than your current mortgage. Keep in mind that most refinancing loans reset your mortgage length to 15 or 30 years, not to where you are currently. Home Equity Loans Be cautious in taking out home equity loans. Although the financing industry touts these loans as a great solution to debt or as a way to get what you want right now (vacation, remodel, etc.), these loans reduce the equity that you have built up in your home. If you are unable to make payments, you could lose your home. Compare home equity loans offered by at least four banking institutions. In comparing these loans, consider not only the annual percentage rate (APR) but also points, closing costs, other fees, and the index for any variable rate changes. Your home is probably one of your greatest assets, so take this kind of a loan very seriously. In Conclusion As is the case with most things, a little investment of time can save you quite a bit of money on your banking and credit services. However, your time is valuable, too, and the cheapest option may not always provide the services you need. Consider your options and make the best choice for your individual situation. ************************************************************ © Simple Joe, Inc. Chemain Evans is a quality control specialist for Simple Joe, Inc., makers of the popular Simple Joe's Expense Tracker PC software. Expense Tracker is a quick and simple way to keep track of your expenses and stay within your budget. Expense Tracker (http://www.simplejoe.com/expensetracker/index2.htm) is ideal for tracking personal, business, home and club expenses. |
|
Copyright © 2000-2009 Budget Stretcher All rights Reserved. |
