I know this is a little off the subject of credit, but it’s still very important nonetheless, and I really try to tell all my friends who have not started a retirement fund (especially those that have a good 401k account plan at work), that they are literally throwing future money down the drain. A CNN money article recently illustrated how much a different of ten years earlier savings could make in the end result and it was literally over 100,000 dollars for the person who would start saving at 22 vs. start saving at 32.
The principle of compound interest is a very powerful concept, especially when you are talking about timing of investments and socking money away. I’m so glad that I started when I was about 28 years old, but then again, I think of how much I missed out on because I didn’t start my 401k with the company I still work with when I first started with the company when I was 24 years old.
It makes me sick to think that I could have literally had so much more for myself and the security of my family had I started saving at an earlier age, but then again I’m thankful that I was able to start at 28, and saw the light then. People tend to think they cannot afford to have money taken out of their paycheck, but when they realize that the amount ends up being usually so minimal, and that after taxes take their portion of the pretax money, it really ends up being a pretty livable expense. Plus it’s a great tax benefit!
Supposedly, one of the trends that may be coming up in the world of popular rewards-style credit cards, which entice consumers to spend using their card since they will get some sort of points or credit toward cash back or other purchases, may be scaling back a bit. For example, some cards that used to offer 5% cash back for their rewards program, may start to offer something more like 2% cash back, and so on and so forth.
Also, many credit card companies are deciding that now that they’ve gotten people used to using their cards at gas pumps or in certain stores buying certain things, they may scale back on their rewards system for other things like double bonus points towards future purchases or cash back for buying in a certain store, or buying certain products online, and they will now move on to another market.
This is not such a bad thing as it sounds, because they are really just winding down on some other promotions in order to gear up for others, which can offer some potentially hefty rewards at first as an incentive to stick with a certain rewards or cash rebate credit card which translates into big savings for you, the consumer. So, keep an eye out for those new credit card offers in the mail, you may just save a lot of money on these, especially in their initial intro periods, and it may be worth it!
This one was weird, really weird, and I don’t think I’ll follow this trend, although I do try to keep up with the latest trends in credit cards and debit cards as payment methods, well, because quite simply, I don’t want to fall behind in the technology sector like so many others tend to do once they pass the age of thirty!
Well, here’s the new technology, which I guess is in some of the final stages of approval at the massive credit card giant Citigroup right now, and may be ready for release as early as six months from now. You know how a lot of cards allow you to pay for thing simply by “waving” or “tapping” your card on a reader on the credit card machine now? Well, this new technology supposedly is aiming to let you use your cell phone as a tapping/waving device to pay for stuff via credit. What’s the point, I can’t help but ask?
Is this somethiing aimed the technologically savvy, the younger kids, perhaps? Because I don’t know if I’d trust this way to pay for things, much less, NEED this type of convenience. I suppose the only convenience this cell phone credit card thing would offer to me personally would be that I would be able to carry around less credit cards with me. But….I already carry a wallet anyways.
The only other convenience I could think of would be it may save a few seconds in the grocery line perhaps. Even this is slim. Hmm…I guess I just won’t get some of these new fangled technologies that don’t really save time of increase convenience. To me, they are just technology for technology’s sake, nothing more.
Well, maybe you won’t have to whip out the airfair frequent flyer miles credit card this month, if you hop on the bandwagon and enjoy one of the newly reduced United Airlines fares that they have recently introduced in their post holiday airfare sale.
The airline has apparently done this a few times in the past to rile some interest in traveling during a typically slow period in air travel, after the holidays have settled. Most of their competitors now do the same thing, but they were the pioneers in the after holiday airfare sales for the most part.
The tickets have to purchased at 14 days in advance, so it does sort of limite the element of spontaneity, and also of course limits the amount of planning time for some of us who are avid planners, but the deals are pretty hard to resist, ranging from low $150 round trip airfares within the US, to one way tickets that are dirt cheap.
That’s right everyone, Christmas is officially over today. All that hustle and bustle, rushing around to find Aunt Wilma the perfect flower pot and Uncle Bill the perfect golf clubs is finally over, and you’re now left with, well, returns and credit card remorse.
What’s credit card remorse? Well, it’s that thing we call regret in the form of credit card bills for three months at least that are higher than we’re normally used to seeing them, thanks to the pressures of buying for everyone for the holiday season.
Here’s what you can do though, to take away some of the pain of paying off those credit card debts. If you have something you got from someone, that you don’t really love or need, see if you can get a cash return for it, and apply this to your credit card bills rather than exchanging it for something else, which will not help you get out of your short term Christmas debt.
Another helpful hint is to skimp a little for a few months. Skip that morning Espresso for 4 bucks and instead make coffee at home (much cheaper), and make your lunches at home to bring with you to work instead of picking up fast food lunches for $5 or more.
Maybe scale back on going out to eat, and the more expensive “splurges” that you’re used to treating yourself to regularly. It’s really hard to discipline ourselves again after the holidays, since this is when all around spending tends to be highest, and many of us tend to forget that we will have to face the music - in the form of bills - for those credit cards we racked up during the bustling season.
I wanted to wish all our readers out there a safe and happy holiday, no matter what you celebrate. Today is Christmas, which is what I happen to celebrate, so I will be seeing you tomorrow or the next day. Depends on how much I eat!
HAPPY HOLIDAYS!!!
I read a powerful piece by my favorite financial self help guru, Suze Orman, the short haired blonde dynamo who seems to really care about the people she tutors in the ways of money.
Suze was saying what you choose in the new year to do in January as far as paying off the balances of the credit cards you may have racked up over the holiday, or just let them have a running balance, may have a great effect on your financial life in 2007.
She says that not only will paying off your credit card balances any way you can lift a huge weight off your shoulders and allow you to focus on other, loftier financial goals for the year, but you also gain a tremendous sense of accomplishment and respect for yourself, which can have a domino effect into other areas of your life, including your financial life.
So really it’s kind of a credit card karma if you will. If you pay those balances quickly, other things in your financial life will go more smoothly. In other words, skimp for one or two months, depending on the damage done, and you just might be able to pay off some of those balances and gain a fresh perspective for the new year, and some newer, better goals for your finances.
Well, they’re usually bad - very bad. Chances are, if you have a credit card, a car loan or any other type of small loan, or even maybe a mortgage, you’ve probably been solicited by your lending institution to waive a month’s payment for the month of December, when everyone is financially more strapped due to the holidays.
You may have even been offered more than one month of deferrment in some cases. I know some friends who have actually done this, only to find out that they were either charged a high fee for the luxury of waiving a months payment, or “deferring” it, or they received a lot more high interest tacked on to the end of their loan, just making the loan more drawn out, so that - yes - the lender can get yet more money out of you.
Offers like these may be tempting around the holidays, but it is really best if you can just go ahead and make you payment as scheduled.
Or, maybe you can even call your lending inistitution and negotiate a lower payment for that one month with them to ease the financial burden a little, but without an exorbitant fee or additional interest being charged. The worst they can say is no, but at least then you know you tried.
For the first time in several weeks now, it is being reported that mortgage rates are on the rise again. However, economists are saying the the rising mortgage rates should not raise so high that they further discourage prospective homebuyers in an already weak home buying market, since they are not even expected to reach 7% in the year 2007.
Included in the overal rise of mortgage rates was the rise of ARM mortgages, which are Adjustable Rate Mortgages (we talked about them before), which can be adjusted according to the marketplace and what’s going on in the housing market.
Actually one of my friends at work has an ARM loan, and she recently found out the hard way that these types of loans, which can be tempting to some hombuyers at first due to low introductory rates, can be dangerous.
Her loan rate on her ARM went up, and so her mortgage payment increased by several hundred dollars in a matter of just a few months, so needless to say, caution is called for when looking into getting an ARM mortgage loan because of their fair amount of unpredictability.
College graduates nowadays are coming out of school with a lot of financial baggage in the form of student loans out the ying yang, and many times they start a job at the bottom of the totem pole and have a hard time even scraping by paying their existing bills, let alone putting away money in any kind of savings account.
Many times college grads nowadays are carrying twice or thrice the load that college students 20 years ago or more were carrying, because the rate of college tuition has skyrocketed as of late.
The first thing a college graduate student should do is start their 401k, this is the most important savings account a new worker can have, and it actually many times pays you to have one of these accounts since many times corporate and private employers will match your contributions up to a certain point.
Not only that, you are getting a nice little tax savings by having a 401k, in other words, your taxable income is reduced AND you’re saving money.
As far as actual savings accounts, if there is anything left over to stash away, you may want to stay away from savings accounts unless they offer a considerable return (interest) on your money. Otherwise, you are just letting your money stagnate.