While paying your rent with a credit card has both benefits – raise your credit score! – and drawbacks – hello, fees – the process is nevertheless becoming easier. Now, tenants have more options and opportunities to charge their rent. Find out if it makes sense for you.Continue reading
Your minimum monthly payment is the lowest amount that you need to pay on your credit card balance. Any less could result in a derogatory mark, any more will clear more of the principal.Â Your monthly payment is one of the most important aspects of your credit card debt and failure to understand this could […]
Minimum Payments on a Credit Card is a post from Pocket Your Dollars.Continue reading
The following is a guest post from The Savvy Couple. As much as we donât like to admit it, money is a very important tool that can be used to better our lives. So why donât we take better care of managing it? Luckily, there are some savvy money moves that you can make this… Read More
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Financial Eduation is important for everybody regardless of their demographic, and yet it is frequently overlooked by both the young and those who are just trying to get get by. Tiffany Aliche is passionate about financial planning, and shares that…
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According to a 2016 Pew Research study, most borrowers who incur payday loan debt end up paying a lot in fees. In fact, most pay more in fees than they borrowed. Pew Research also notes that more than half of payday loan borrowers already struggle to meet monthly obligations. When you have an emergency you… Read More
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Financial independence can mean different things to everyone. A 2013 survey from Capital One 360 found that 44 percent of American adults feel that financial independence means not having any debt, 26 percent said it means having an emergency savings fund, and 10 percent link financial independence with being able to retire early.
I define financial independence as the time in life when my assets produce enough income to cover a comfortable lifestyle. At that point, working a day job will be optional.
But what about the rest of America? How would you define financial independence? If freedom from debt is what you’re seeking, here are five areas that could be holding you back.
1. Not having clear, financial goals
If you’re not planning for financial independence, chances are you won’t reach it. The future is full of unknowns, but having an idea of when you’d like to achieve financial freedom should be your first step.
Do you want to retire before you turn 65? Do you want to travel the world with your spouse once you reach early retirement? Both goals will require a significant amount of cash stashed away, so it’s important to start saving ASAP to make those dreams come true. (See also: 15 Secrets of People Who Retire Early)
2. Not saving enough
It’s important to identify how much you’re currently saving, and how much you need to save in order to retire when you want to, or reach another major financial goal. Using a calculator like Networthify can help you play with various money-saving scenarios and make realistic projections about retirement.
Another way to make saving money easier is to automate it. Setting up an automatic weekly or monthly transfer from your checking account into your savings account will take the extra task off your already full plate. Even if it’s as little as $5 a week, it’s enough to start building that nest egg. (See also: 5 MicroSaving Tools to Help You Start Saving Now)
3. Not paying off consumer debt
If you’re carrying a credit card balance each month, financing cars, or just paying the minimum on your student loans, compound interest is working against you. Creating an aggressive plan to pay off debt quickly should be a number one priority for anyone who is serious about achieving financial independence. Otherwise, your money is working for your creditors, not you.
If you prefer to tackle credit card debt first, there are several debt management methods you can try, including the Debt Snowball Method and the Debt Avalanche Method. The Debt Snowball Method has you paying off the card with the smallest balance first, working your way up to the card with the largest balance. The Debt Avalanche Method is similar, but here you would pay more than the monthly minimum on the card with the highest interest rate first, working towards paying off the card with the lowest interest rate. Both are highly effective methods, and choosing one really just depends on your preference.
4. Giving into lifestyle creep
A high income does not automatically make you wealthy. As you move up in your career, the temptation to upgrade your lifestyle to match your income will be ever-present. After all, you work hard, so why not reward yourself with the latest gadgets and toys?
However, if you continue to spend and live modestly, you can put more money away for travel or retirement with every pay raise you earn. Financial freedom will be just around the corner if you resist that temptation to upgrade your home, car, and electronics to match your income bracket. (See also: 9 Ways to Reverse Lifestyle Creep)
5. Being driven by FOMO
Fear Of Missing Out, aka FOMO, is the modern version of keeping up with the Joneses. Except now you have access to the Joneses’ social media platforms, and they go on all kinds of fun adventures. Social media is a great tool for keeping in touch, but it can also make you want to spend all your money on lavish vacations, clothes, spa treatments, and other extravagent things. Resist that urge. And block the Joneses on social media if needed. (See also: Are You Letting FOMO Ruin Your Finances?)
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Credit card debt is on the rise. Millions of Americans are in over their heads. Theyâre losing sleep, losing control, and worried about what the future will hold. But there are solutions, and consolidation is one of the best. Consolidation works by âconsolidatingâ multiple debts into one. Itâs the perfect solution for mounting debt, one […]
How to Consolidate Credit Card Debt is a post from Pocket Your Dollars.Continue reading
Considering a balance transfer to a Discover credit card? Here’s everything you need to know, including card options, fees, restrictions and tips for improving your chances of approval.Continue reading