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Top reasons why refinancing your mortgage is not the solution to pay your credit card debt

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refinance-mortgageWhile mortgage loans are considered good debt, credit card debts are considered bad debts. Although this may be true, this generalization has misled homeowners to refinance their mortgage loan in order to pay off their credit card debt. It is never a good idea to use your equity just to pay for your credit card bills.

You may have a good amount of equity that you can tap to and it is always tempting to cash out and refinance but here are some reasons to convince you that it is a bad idea you should not entertain:

Credit card debt is unsecured debt

You owe money when you spend using your credit card and that is unsecured debt since you do not have a collateral for such debts. The worst move you can do is make this a secured debt by putting your property up at risk. You basically gamble when you cash out on your refinancing move. You can pay off your credit card without risking your house but when you take out funds from your equity, you basically up the risk of not paying it and losing it.

Refinancing does not come free

When you refinance a property, you do not just go over the counter and say you want to get a new refinancing scheme. Taking this step will involve money. You will most likely need a home inspection and an appraisal. You also need to pay for new closing costs and a bunch of fees for the loan. You will end up spending more than just putting the money to lessen your credit card debt.

Prolonging the agony

Paying off your credit card debt thru home refinancing will just make you pay off your debt in a stretched period. Remember that it will not disappear but it will only be rolled up to what you owe to your home loan lender.

Damage to your credit score

Filing for a refinance will have a ding on your credit score since an inquiry has to be made by your creditor. This will have a considerable impact to your credit score. The effect may just be short-term since the credit card debt will be paid off but a bigger loan will appear on your credit history, and that will be another issue you need to deal with.

Grocery saving tips: Avoid products on the checkout aisle

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Checkout-girlsThe people who design grocery stores are very smart people. They know how to arrange the products and how to attract your eyes. They know how to make you spend.

They also know what when you go to the checkout counter, you will be there for a while. It is an opportunity that they make most of by putting products you (or your kids) can impulsively grab before paying. This explains why you have gums, car fresheners, magazines, candies, razor blades, among others along the checkout aisle.

All the things you will see on the checkout aisle are quite affordable, or so they seem, and attractive to the eyes. You can easily reach for them without any effort. The store makes a lot of profit on these items.

The products are placed there because the store wants you to grab it without thinking twice about it. A lot of people do it and that is why the checkout counter we have today are designed that way.

Remember that if the product is not in your cart when you go to the checkout, then do not buy it.

It is all about control. It is all about ignoring temptations. This also means you do not spend impulsively on something. You will be able to keep the money for the more important things that you need to buy.

Go to the respective aisle of the store if you need something. Avoid the overpriced products along the checkout aisle.

Do this. And you wallet will appreciate it.

  • Author:
  • Published: Sep 18th, 2012
  • Category: Money
  • Comments: None

ATM Charges: How to avoid them

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The cost of using an ATM machine can be surprisingly expensive if you are not careful. In some cases it can cost you as much as five dollars for a transaction. If you are careful however you can actually avoid having to pay the fees altogether. All it takes is a little bit planning so that you are getting money from the right places.

The most important thing that you have to do in order to avoid ATM charges is to make sure that you only use a bank that is in your ATM network. This means that for most people there is probably a bank nearby that they can use that will not charge them a fee. It might take a little bit of effort to find it so it is usually a good idea to plan ahead so that you can get money out before you need it which will make it much easier to get to a bank that is in your network.

One way to make it a lot easier to find a bank that is in your ATM network is to have your account with a big national bank. The small local bank may be great when it comes to service but when it comes to ATM fees it can be a problem. The simple fact is that the big national banks have a lot more bank machines which makes it much easier to find them and avoid paying a fee.

Another option that you have for avoiding ATM fees is to simply not use cash. Almost everywhere that you go you can pay with your debit card or with a credit card. Both may be good options for avoiding fees although you will have to make sure that you pay your credit card bill in full each month for this to be the case. A lot of places will also allow you to get cash back when you pay with your debit card which makes this another way that you can avoid ATM fees if you know that you are going to need cash in the near future, just pay for something with your debit card and get some cash back.

If you can’t get cash back when you pay with your debit card another option may be to use your card to get money from your friends when you go out. For example if you go out for dinner with a group and you split the bill one option could be to take the cash that everybody else puts in and then pay for the whole bill on your debit or credit card. This will allow you to get cash without having to pay a fee since there is not normally one charged when you pay with a debit card.

Understanding bankruptcy and avoiding it

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if there is one place you do not want to experience in this world, it is bankruptcy. In reality though, a lot of people around the world are struggling to get out of it. Overspending is often the culprit the drags individuals to the very deep hole of bankruptcy.

Debt grabbed you by the neck

It may be the tough times and circumstances but it can also be your impulsive buying that led you to a ton of debt. There could have been a medical emergency in the family, someone lost his or her job, and a long list of situations that pushes us against the wall. No matter how debt pushes you against the wall, you need to fight back and get out of it.

Just did not see debt coming

Wrong decision coming one after another in terms of finances means a debt rising in the mountain at your back without you knowing it. It will be too late before you notice it.

Ways to avoid bankruptcy

Before applying for bankruptcy, try the following steps first:

  1. Just the necessities – Remember the cliché of your wants versus your needs? That is really it. All you really need is food, water, clothes, and a roof above your head. Before buying anything, go back to this basic question.
  2. Pay your House and your car – Make sure you pay your house first before any other debt. Then pay your car loan. This ensures that you have somewhere to stay and a means of moving around.
  3. Sell them off – If you have a lot of stuff that you do not need and do not use, sell them off. This will allow you to go back to what is vital and have some extra money to pay off more debt.

The Story of Broke and a great Critique

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The great critique below helps add some other opinions to the very awesome discussion. I love this!

Money tips for couples: How to have a good financial discussion with your partner

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Money is among the top reasons why couples argue and why couples file for a divorce. You had complete hold of your money when you were single and you have to consider your spouse’s finances when you get married. If you are talking about money and the discussion turns to shouting at each other, then you have a serious problem.

The first thing you need to resolve with each other is that you will not fight about money. In case an argument is inevitable, one should step back and cool down since hot heads really do not discuss but just fight.

Here are some tips to help you both during money talks:

Balance your accounts together

The husband and the wife must be both familiar with the status of your finances. You need to balance checkbooks together and you need to monitor the income and expenses if you need to. The keyword is TOGETHER.

Set limitations

If one of you is a saver while the other is a spender, going over budget is a big risk you must face. You need to compromise though and set some spending limits. There will also be times when you need to bend the rules, and make a deal that when spending will go over this certain amount, a phone call to the other is a must.

Auto-banking

Make most of the technology. Imagine if you do not have to worry about paying your bills. Setup everything so that they will be deducted from your bank account. You do not run the risk of forgetting something and earning some penalties.

Solutions

If you know something about the finances of the family is not working, try to find a solution right away to avoid arguing about the same things. If you cannot manage bank accounts together talk on how you guys want to do it. If you have rough spots on paying bills, talk on how you can use some tools or cut on some stuff to save some money.

Investing in Diamonds: How Does it Work?

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Investing in diamonds is pretty much like investing in anything else, you buy them at one price with the hopes of selling them down the road for a higher price. Diamonds can be a good investment in this regard because of their high value and the fact that they do normally appreciate. There are however some important differences between diamonds and other investments you may be familiar with.

DiamondThe first thing that you have to understand if you are going to invest in diamonds is that they are not a great natural store of value. The price of diamonds does tend to fluctuate with the economy. This makes them very different from say gold when it comes to investing. People often put money into gold when they are worried about the economy because it tends to do well when stock prices go down. This is not the case with diamonds which are more of a luxury item. That means that prices usually rise and fall with the strength of the economy. This is not to say that you can’t make money with diamonds, it just means that you have to take other factors into consideration.

Another key thing to understand if you are going to invest in diamonds is that they are not commodities. Unlike gold where one bar is the same as another a diamonds value is based on a particular diamond. That means that there is no one price for all diamonds, your diamond is worth whatever somebody is willing to pay for it. This means that there are usually larger swings in price than you would see with other investments.

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Cooking while on the holiday to save some money

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Have you ever tried cooking for yourself or for your family while you are on a holiday? It might not be your common practice but you can try. You can still have good food without having to spend a lot of money for a decent meal.

If your accommodation has provisions like an equipped kitchen, then make most out of it so you can stretch your budget.

How can cooking your own food during your holiday be amazing:

You do not have to wait – On peak times, ordering food may mean a long wait time but cooking your own food completely changes the picture.
Good bonding time – whether it’s just you and your partner or you are having a vacation with the whole family, cooking is always a good activity where you can strengthen your ties.
Different experience – If you haven’t tried cooking during a trip, you should as this will be a unique experience that you might like.
Savings – This is the biggest benefit of cooking your own food. You can save some money which in turn can be used for other things or as budget for another holiday in the future.

Cooking and saving

It might not be a common thought that saving during your holiday is a big concern. You need to enjoy it but at the end of the day, a few dollars of savings is always welcome. Be creatie and think out of the box and you will uncover ways to save money.

Do not be afraid of new things. You might not have tried some things before but you do not know if it work for you.

  • Author:
  • Published: Dec 30th, 2011
  • Category: Debt
  • Comments: None

5 deadly sins that bury you under big debt

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keep out of debtThe holiday season reminds us of a culture of excess which most of the time leads us to a lot of financial problems. We list down some of the worst things you may have committed in the past or you can also look at them as the deadliest financial sins you want to avoid:

Co-signing a loan

Never co-sign a loan for a friend if you know that you have enough to really cover for it in case something goes wrong. Remember that you are equally responsible if your friend defaults payment or does not pay at all.

Going beyond what you can

If you are using your credit card for your fuel, grocery, and other purchases and you do not have anything in the bank to back these expenses up, you must do something as soon as possible or you will be neck deep in debt soon.

Spending on wants and luxuries

Shopping for fun? Swipe it ‘til you drop? Booking a hotel suite even when you know you cannot afford it? If you answered mostly yes to these questions then you know that you must think of something since your spending will lash back at you pretty soon.

Splurging like it’s your last day of spending

You need to follow a budget and control your income or else you may lose control. Let us say you are eating a restaurant, decide what you want to eat or else the waiter will be spending your money.

You are not saving

It is a cliché but it is an absolute truth— you must prepare for the rainy days. You need to make sure that you save something that is equivalent to half or a year’s worth of expenses ideally. You also need this for emergency expenses like when your car breaks down or when a member of your family falls ill.

Money Tips: How to save money with the Auto Insurance for your teenage kid

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Teenage Driver InsuranceThe leaves of the calendar fly quite fast as you see your kid playing with a rattle and then asking you for car keys after a few years. It is pretty tough for everyone when they realize that their teenagers are ready and eager to drive a car. Having a teen driver does not get easy as you have to look for an insurance to cover your new driver. Normally, the insurance premiums will go sky high as you add a teenage driver to the police but there are still ways to keep the costs affordable:

Review your collision and comprehensive insurance

Even when you have a new car, you need to review your collision and comprehensive car insurance as you may not need the best of the coverage. You may want to consider increasing your deductible to around $1,000 so you can save a lot on the premiums. Just make sure that you save some money in case you need to file for a claim. If you have an old car, you might want to drop these policies. Know the value of your car discuss with your provider the most reasonable coverage based on your car’s depreciation.

Add your teen driver your car insurance

It will be cheaper for you to add your kid to the same insurance policy as the family’s. You can save some money by bundling your home insurance with your car insurance policy. If the child is not buying her or his own ride, you might want to assign your or your spouse’s car to the newest driver of the family so you can keep the premiums on the same level as the adult-only vehicle, and you will have the option to assign the cheaper vehicle. You might also want to check with other insurance companies if they have cheaper options for you.

Encourage good grades in school

Remember that insurance policies are about risks, and studies found out that kids with good grades in school end up to be better drivers. You can even get discounts if your young driver maintains a certain average.

Explore discounts for teens

Insurance companies are willing to give discount for teen driver car insurance when your kid has gone thru proper driving course, driving safety programs, and defensive driving courses. The discount will save you money but more importantly, you will have the peace of mind that your kid is well equipped in terms of skill and knowledge important to be safe on the road.

Buy the right car

You do not want to build speed racers, you want to hone a good, responsible driver. So buying him or her a speed monster vehicle will not serve the family good. You might want to get a safe, second hand to car to start with.

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