Tuesday, January 25, 2011

6 Easy Money Saving Tips

In the last post, I mentioned a little bit about our goal of paying debts off.  Along with that, comes with a few easy to-do money savers I thought I'd share with you, my few lucky readers. :) 

1 - Pay your bills on time.  This may seem like a "Duh" thing to do, and one many of us do quite frequently, but giving the credit card company one more reason to take $10 from your pocket is not a good way to save money.  It helps your credit score, and gives you better leeway with the company in the future.  Don't believe me?  Check out #2.

2 - Ask for grievances on fees. Maybe you lost the bill, maybe the due date was a few days shorter than it usually is, but for whatever reason, you paid your bill a little late.  If you've been a good customer with the company in the past (see #1), they're more likely to work with you to get that fee either removed, or at least keep it from rearing its ugly head again in the future.  After all, they want you to continue to use their company, and the best way of doing that is to honor the relationship they have with their truly great customers. 

Many companies have a policy in effect for these type situations.  The requirements?  Usually it's a history of on-time bill pays, paying at least the minimums if not the full total, and of course, being nice can't hurt.  You merely need to call the company of choice, explain that you received your statement and noticed the late payment, and would like to see what you can do to get it removed.  Make sure you have your pay history handy in case they need verification, and remember, the customer service rep is at the mercy of the company's policy, so be nice to them - don't shoot the messenger. 

The first time my husband witnessed this, he laughed about how easy this was.  Then he thought back to all those times he opened the bill to see the late fee and would be bitter about paying them their $10.00. 

One key note - Do not make it a habit to pay your bills late and then ask for forgiveness.  Most companies have a policy they can only remove the fee once within a certain time frame, usually 6 months to a year, but it can be even longer.  It is a courtesy they extend to their customers who they see do not make a habit out of this, so don't expect them to break rules, no matter how angry you get.

3 - Ask about promotions and offers for your area.  Companies frequently offer special rates to new customers, select areas, or certain plans of service.  If any of those are available for your area, ask about how you can take advantage of those offers.  Remember from item #2, they want to keep your business, not lose it.  If they see you're looking for better rates, they're likely to offer you a discount to keep you there with them.

4 - Ask about lowering your interest rate.  Believe it or not, there are policies that exist within credit card companies where you can work out a deal to lower your interest rate.  Sometimes it's as easy as asking a question, and sometimes it requires a little deal making on your part.  Are you willing to increase your minimum monthly payment by $15.00 if it means you're going from a 25% interest rate to a 8%?  You better believe I'm making that deal.  If you're on the "Dave Plan" you're probably working on your debt snowball as well, so think about when exactly you need to call those companies.  Majority of time, they'll want to get the deal in effect the same day, so if you're not going to be able to make a higher payment for 2 months, hold off and pay off that lower total on the other debts before starting your negotiating. 

 5 - Don't let your credit cards go over the maximum limit.  If you've not paid close attention to #1, or #2, and #4 hasn't seemed to help your interest rate, you may find yourself closer to this than you might think.  Those late fees, coupled with the high interest, and the minimum requirement payments could have have you owing much more than you ever spent with them in the first place.  Some of these over the limit fees can be close to your minimum monthly payment, making it nearly impossible to pay them off.  This may seem like a kick back to #4, but call the company and see what you can do to get a deal that both parties are happy with. 

When you are ready for negotiations, have all your payment history handy.  Remember they want to get paid their money due, and you want to stop paying them.  If they think they're never going to get all their money due, they'll likely work with you to reach a common ground.  The basics of credit cards?  They want your money, and as much of it as they can get.  Their point of charging you over the limit and late fees is to persuade you to pay them more as soon as possible.  If that tactic doesn't work and they see over months fees and no increase in your rate of return, they start getting ugly.  They'll probably start calling you 3, 4, 5 times a day to harass you into giving them money.  It might mean taking money from other budgeted areas, like food or mortgage, but do they care?

6 - When you can, pay off the total on credit card statements. Credit Card companies thrive off interest.  They know that people are willing to hang thousands of dollars of debt over their heads every month, owing the company sometimes close to 30% interest can be daunting to anyone, and seem like a never ending mountain to climb.  When you can, pay those cards off, and do a victory dance.  You'll owe them less money over the long haul, and no longer be enslaved to their high interest evil. 

The other benefit of paying off your total?  It increases your maximum limit.  Now, I'm not recommending you go back in debt with them, but that higher limit means a higher revolving credit on your credit report, which will increase your credit score and save you money on big purchases, like a house.  A higher credit score, and you're more likely to get a better interest rate on a mortgage.  Ever look at an amortization schedule on a mortgage?  That low interest rate can save you hundreds of thousands of dollars over the typical 30 year fixed rate mortgage.

So no point in hiring a debt relief counselor, when you can do all the work yourself, with just a few calls and knowing your payment history.  Put these in effect with your carefully crafted budget, and you'll see a significant difference in no time. 

What do you think?  Do you have tips not mentioned here?  I'd love to hear them, and I'm sure others would love to save money thanks to you as well.

Tuesday, January 4, 2011

Do unto your kid?

This might a bit of venting, so this is your fair warning, However - I do think it is something everyone should think about.

Since John and I have been together (5 1/2 yrs counting dating) we have openly discussed everything - money, politics, beliefs, love, hate, sex, etc.  As a result of these very open, very honest, and judgement free conversations, we have learned to trust each other to handle more mature situations, and have grown to rely on each other for things that we otherwise would not have been able to do.

One of those things is our finances.  In the beginning, one of us never spent anything, and the other lived on credit cards. At various times, one has been the "bread winner" while the other was paid less.  Now, over the course of time, we have made what we feel are monumental leaps in this area.

I'll spare you all the number details, but we often are asked if we're on the Dave Ramsey Plan.  And our answer is always odd:  We were on the Dave Ramsey plan before it was Dave Ramsey - it was called the "Scott Shackleton Pay off Sh*t Plan."  Which is essentially the same plan as Dave, with a few modifications.

If you're unfamiliar with this plan, I highly encourage you to check it out.  However, my point here today is not to glorify us and our spending frugal ways, or Scott (although we love you dearly), or Dave Ramsey (sorry Dave).

Instead, I'd like you to consider something I came across while perusing the Dave Ramsey site today. It comes via this forum in which the mother of a 16 year old High School Student recounts her son's work habits, income, and her choice to keep half of his paycheck.

I could debate with you that while I think this mother has great intentions, she is doing her son harm.  And some could say that since he's earning all this money, he should get to spend it.  And then some would say he needs to pay the family since he's living under their roof.   All of which, I could understand (although I may not agree with them all).

But here's what I thought:

All these people are on here, because they've had problems in the past with being in debt - yet all I read, post after post, was "Well, when I was a kid ....."

What the Hell people? 

Obviously whatever happened when you were a kid didn't teach you good money management skills!  So why are you suggesting, and even placing guilt on this woman into doing the same thing to her child? 

Why do we do this?  Why do we think the best way was the way we were raised, and often shoot down any and all other options as below us?  Can we not look at our own past and learn from it, are we really that ignorant?

Didn't Einstein say insanity is doing the same thing over and over again and expecting different results?  

Then why do we force our actions on our children.   Do you really want them to pay the same price you did for those same mistakes?

Isn't it time we started teaching our children the things we wished we had learned, and stop pushing our mistakes off onto them.