Faith:


Fear can keep us up all night long, but faith makes one fine pillow

Monday, August 31, 2009

Know your financial limits


The Financial Times recently reported that U.S. banks are set to earn $38.5 billion this year from overdraft fees alone, more than double the number from 1994. If you don't know how much is in your bank account, you could easily withdraw or spend beyond your limit or have a check clear that takes your balance below zero. When that happens, banks charge anywhere from $5-$10 in overdraft fees. And that's not all. If you fail to pay back the amount you've overdrawn, you could be hit with even more fees after a set number of days in the form of a large sum (as high as $35) or a daily tariff (often between $5-$10). According to the National Consumer Law Center, the average overdraft fee is $34.65, and considering a purchase as small as your morning latte could put your account in the red, that's a hefty price tag.

Credit cards fare no better, with late payment fees increasing as well as charges for going over your limit. According to a survey done by the Pew Safe Credit Cards Project in March 2009, 92% of credit cards had a fee for exceeding the credit limit, including 100% of student cards. The over-the-limit fee and the late payment fee were both $39 for most accounts. Also, these infringements can result in your interest rate skyrocketing up to 30% or higher. In fact, that same survey found that 93% of cards allow the issuer to raise any interest rate at any time. And once that rate goes up, it is unlikely to come down.

Friday, August 28, 2009

Ignorance is not a bliss


The worst culprit for keeping you in debt is not knowing where your money is going. Make it a priority to keep records of where and how you spend your hard-earned cash. Make a repayment plan and have set goal-dates for paying off debts. Without these tools, it's far too easy to stay in debt. You can purchase accounting software, make a simple (and free) spreadsheet on your computer or even work it out with a pen and paper; just make sure you make a long-term plan for regaining control of your finances.

Debt may seem like a life sentence, but it doesn't have to be. The number one tip for maintaining financial health is awareness. Be aware of your money and where it goes each month, and be aware of the options available to you. There are easy ways to help alleviate the stress on your finances and move from red to black, and the rewards are more than just monetary.

Wednesday, August 26, 2009

Pay Credit Card Bills Soon After They Arrive


Credit card companies will take as many as three days to log your payment, so your best bet is to pay soon after receiving your bill if you have the money in your account and can pay the balance in full. If you miss the closing date, you'll be charged the larger of a late fee (often $20) AND interest on the old and new balance.

Friday, August 21, 2009

Buying a timeshare? You got to be kidding

Few years ago, a friend went to an invitation to a timeshare demo "just to see." He and his wife were going to just say no and enjoy the free vacation the company promised. But about halfway through the presentation, he changed his mind and ended up purchasing it. He convinced himself and his wife that it was okay because it provided points that they could use anywhere. Turns out, points aren't that great; they could afford the air tickets to go to the resorts.

He paid for three years of maintenance fees before he decided he had enough. Since timeshares are so hard to get rid of, he decided signing it right back over to the resort for $0 would probably be the cheapest route. He was happy to get rid of it, but before it cost him $8,000, which could have paid for some nice vacations!

Don't Mix Siblings with Money


A friend wrote, few years ago she tried to save his brother from financial failure. He owned a car that was about to be repossessed. She decided to pay off his car with her personal loan account with the guarantee that he would make the monthly payments.

The original $18,000 loan is now up to $27,000 with cash advances and interest! Her brother made a few token payments at first, but that was not enough to even offset the cash he had advanced him. Her brother has not talked to her in two years.

The lesson learned is that repossessed is okay, and if she had allowed it, she would still have a brother and most important no personal debt. She will never again loan money to anyone again.