Hey PF,
So I thought I would share some helpful ways to save money and ways to optimize your spending.
The first way (and the best way) to save money is by lowering your expenses by developing a budget. You might be surprised to see how much you are paying for some expenses. Some popular websites include YNAB, Mint, and Personal Capital. I personally just use Mint, I just like the format and I find it easy to track my day to day expenses as well as any debt you have. As far as some advice if paid bi-weekly I would recommend budgeting based upon 2 pay periods per month rather than taking your bi-weekly paycheck * 26 (pay periods per year) / 12 to come up with your monthly income. If you budget based upon 2 pay periods instead of your monthly income, you will be able to treat your 2 extra paydays a year as a "bonus" (when you have 3 pay periods in one month). Take a look to see what expenses seem higher than you thought, see if there are ways to reduce them.
Build an emergency fund, first aim for 1,000 initially and then after paying off the debt you can look to build up the EF up more (3-6 months expenses). This flowchart does show you the steps to help you reach your goals.
With all the excess, unallocated money, you should start to pay down your non-mortgage debt. The "best" way to pay the least amount of debt is by paying off your debt with your highest interest rate and working your way down to the lowest. If you are someone who needs to see the immediate improvement and see debts getting paid off, then paying the debts from the lowest balance to the highest might be the best route for you. This might not be the best way to save the most money, but you can more easily knock off lower debts and you can use that as motivation to continue paying off the debt.
Additional ways to earn more money (money in the bank or through spending)
Take a look at where you bank. Are you banking at a nationwide company or are you banking with a local bank/Credit union? Are you paying fees based upon your balance? Are you paying fees if you take your money out of an ATM that is not your bank? You should look to see how much you are being charged to keep your money in the bank also you should look to how much interest you are earning on your money. There are a lot of banks and credit unions other there that don't charge fees or give you interest rates up to 3%+ (make sure to read the fine print). I open look over Deposit Accounts every once in a while to see if there are any changes or higher rates out there. I bank at Lake Michigan Credit Union and earn 3% on balances up to 15K, which comes out to $450 per year in interest. I also get $10 refunded for ATM fees (if I do not use the ATM at the bank). I house a good portion of my "emergency fund" within the checking account. Itself. You can also use the same website for the best rates for Savings Accounts (make sure to review the terms of the savings account for limits for deposits and withdrawals) or even CD Accounts (just set the term and possible penalties). Don't just "settle" for a big bank, explore your options.
Once you have stopped paying interest and started earning interest from your money in the bank, the next way you can earn money is through credit cards (Make sure to pay the debt off in full every month, the 2%-6% you might earn is not worth paying interest of 25%). You can either focus on Cash Back or Travel Points, personally, I just like to look at the cash back, as I like to just like to redeem my points for cash instead of travel. This website is a great resource that breaks down the best cards for each category. From your budget, you can see the areas where you spend the most money and work your way down the list to the smallest category. The Citi Double cash card is an easy way to get 2% cash back on everything, most cards get you 1% back, so it is the best "everything" card, but you can get cards for 6% on groceries, 5% on Gas, 5% on Amazon or Target, or 4% on eating out. You have to determine if it is "worth" you to get another credit card to pay for the specific category.
I have the American Express Blue Cash Prefered (6% groceries, 3% Department Stores, 3% Gas) Uber Credit Card (4% eating out, 3% on Airfare and Hotel, $50 Statement credit on streaming services if you spend enough, $600 cell phone coverage if you pay the phone bill through the credit card, Discover IT 5% revolving categories, Amazon Prime Credit Card 5% Amazon, Citi Double Cash 2% everything). I could continue to go deeper with the credit cards, but the additional gains were minimal.
These are the ways that you can have your money in your bank do work for you and how you can earn additional cash back on your day to day spending.
If you are trying to save money on a mortgage, make sure you shop around. Don't just default to using your current bank that you have. I would suggest looking for a local broker shop to find the best rate and price, this also helps support local business. They have the ability to shop across multiple different lenders to find a solution to your current needs compared to being stuck with what the bank gives you. ALSO more times then not, you will get a better rate with your current bank IF you go through a broker shop (for example if you bank at Chase, you will get a better rate if the broker goes through Chase then going directly through chase). Now there are exceptions to the rule, especially if you are a private client, you very likely might get a better rate but you should still shop around. Also just as far as mortgage credit pulls within 14 days count as 1 inquiry.
Loyalty might help with mortgages (if you have a lot of assets with the institution), but the same does not apply to Insurance. Again you should look at your current coverage and shop around every 3-5 years. You might see the rates slowly creep up. Which is why it is important to shop around. I don't have a great source for Insurance, the only one I found is this one, but it doesn't necessarily get everyone one in your area. I might rely on google maps to find a local one. Try to avoid going to insurance companies that do a bunch of commercials, as you are paying for their advertising
Edit: Fixed a couple of typos. Added part about Mortgages and Insurance, I forgot to originally add.
Submitted December 01, 2018 at 12:46PM by ReallyBoredMan https://ift.tt/2refvIP
