Financial Articles

You can use many different methods in order to save money. Some of them come in surprising places, such as consolidation.

When you think consolidation, you often think of those in money trouble. But consolidation is an appropriate approach to finding extra money in your budget. You may not realize how much you can really save by consolidating things in your life.

Let’s consider the most obvious area — your credit card debt. Hopefully, you have a goal to get rid of your credit card debt. Consolidation can be effective in eliminating your debt and saving you thousands on interest charges. The key to consolidation is this: You must cut up your former cards and stop charging to them. If you don’t, you are just adding to your debt, not eliminating it.

Consolidation is simple. You take all of your credit card balances and move them to a single credit card with a lower interest rate. You still have the same amount of debt, but by consolidating them, you will slightly lower your monthly payment. The interest savings may actually trim years off of your debt repayment, and thousands in dollars of interest. Another added benefit of consolidating your credit card balances is that you no longer have to write five checks to pay five bills. You only have to keep track of one bill. This lessens the chance of missing a payment on a card. Plus, you save checks and stamps. And time.

You might be able to consolidate, also called bundling, some of your separate bills inot one. For example, one telephone company offers land-line, cellular, internet and satellite television. By bundling these services into one bill, you could save money through discounts. And remember, you are saving time and stamps as well.

This even works for your banking. If you have several different checking accounts with different fees on each account, you can consolidate them to the bank with the best rate and save money on fees. Plus, you only have one statement to balance, instead of three or four. This saves you time, as well as money.

Think of consolidation as something that can be weaved into your entire life. A multi-vitamin instead of separate vitamins. Buying items with multiple purposes.

With consolidation, you can save money without giving anything up. You are still getting what you are currently receiving, just for less money. Yes, it does take a little thought. Simply go through your finances once a year and see where you can consolidate things.

When it comes to contracts with financial institutions, this includes banks and finance companies, remember it was written by them to insure their best interests were covered, not yours. The contracts are designed to extract every available penny from you. It really does come down to a case of ‘buyer beware.”

Just because you’re in debt or don’t have a lot of available cash on hand doesn’t mean are still in a position of power. After reading over the contract or what they prefer to call the ‘paperwork’ you have to have the feeling that you are getting the best deal possible. If not, you may have to go to another lender to get a good deal. There are a couple of things to watch out for. Lets start with your current lenders. If you got a “don’t pay till next spring” situation, beware you don’t hold off sending the payment just before the date. It won’t matter when you dated the check; it only matters when they received it. If it arrives even a day late you’ll be charged the entire interest. Trust me, they will have a clause in the contract saying it is not their fault if the mail is slow. Or they can also have a penalty for early payments, that is really dirty pool but some companies do it.

Some tricks the new lender might do is: a low interest rate for a few months then it goes up and can even lock you into payments for a period of time. They can charge a service fee to cut a check to all of your current lenders. They can have other service fees they don’t explain fully.

It is the old thing; do not sign it if you cannot understand it. They can always try to make you uncomfortable and just sign it and get it over with. Remember how uncomfortable you will feel when they kick you out of the house because you signed a bad deal. Take your time and understand what you are signing.

Ignorance isn’t bliss

Disciplined, rigorous, dogged, determined, diligent, precise, fastidious, systematic, methodical, demanding, consistent, focused, accountable and responsible. How many of those words would be used to describe you?

A world-class athlete named Dave Scott won the Hawaiian Ironman Triathlon six times. In training, Scott would ride his bike 75 miles, swim 20,000 meters, and run 17 miles – on average, every single day. Dave Scott did not have a weight problem! Yet he believed that a low-fat, high-carbohydrate diet would give him an extra edge. So, Dave Scott – a man who burned at least 5,000 calories a day in training – would literally rinse his cottage cheese to get the extra fat off. Now there is no proof that he needed to rinse his cottage cheese to win the Ironman; that is not the point to the story. The point is that rinsing his cottage cheese was simply one more, small step that he believed would make him just that much better. One small step added to the other small steps to create a consistent program for achievement and progress. He had a plan and he stuck to it.

Do you know anyone who is overweight, out of shape or what is called a ‘couch potato’? They got that way using a program completely opposite to Dave Scott’s. They consumed more calories than they burned off, they sat around rather than being active and they chose foods based on taste than on fueling their bodies. Did they sit down and choose this health and fitness program? Probably not but they did follow it. The evidence is very clear.

What has being in debt have to do with a triathlete rinsing his cottage cheese? Whether you’re getting yourself out of debt or amassing your fortune you need to have a plan and stick with it. If you take a look at anyone who is saddled with a great deal of debt you can see they had a plan and they’ve stuck with it. They’re plan was to satisfy their wants immediately, live beyond their means and hope that it will all work out somehow. They weren’t conscious of their plan or ever sat down and chose this plan but it was their plan nevertheless.

Improving your money situation requires doing a lot of small things on a consistent basis. Simply become aware of every purchase, expense or vehicle for parting your from your money. Be smart, be wealthy.