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How do you choose a credit card?

By on May 13, 2013

American Express Advertising CardsWhile credit card debt can get people into all sorts of trouble, the truth is that if you’re financially responsible, having a card or two can actually be a smart move—especially if you’re able to pay down the balance in full each month.

For one thing, having a history of creditworthiness can help you get loans like car loans and mortgages. Without a credit history, it can be hard for lenders to know whether you’re a responsible person to lend money to. A good credit score shows that you’re good about making your payments on time, not borrowing too much, and keeping your financial house in order.

For another, lots of cards offer some pretty cool benefits like cash back, mileage points, a percentage off store purchases, and other rewards which, as long as you’re paying down the balance each month, is basically free money for buying the things you were already going to buy anyway.

The question is: which card do you go for?

There are a million and one card companies out there, each one with a million and one different kinds of cards to offer. Over the years, I’ve gotten mailings trying to get me to sign up for cards with my college’s name on them (I’m a proud alum, but not that proud!), cards I can customize with my own images (it would totally be BD and LD), and all sorts of other things that just don’t seem appealing enough to me.

What I go for, personally, is cash back and percentages off. I especially love my Target and Kohl’s cards, because they let me get great discounts on things (groceries, household stuff, clothes) I’d be buying anyway. I just make sure I don’t buy any more than I have budgeted for so I can pay off the balance when the bill comes in. (Otherwise, those savings would be lost in the interest that would build up.) My friend recently got a card from Bankwest and is really happy with it. It all depends on what you’re looking for.

How do you decide? With so many credit card choices out there, how you determine which is the best fit for you?

 

~Heart,

Em

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photo credit:  The.Comedian

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Are you PF savvy but not math-minded? Then these are for you…

By on May 6, 2013

CalculatorI have a confession to make: while I’m a PF nut, I’m not a big numbers gal.

I hate math, actually.

So while I love the idea of things like comparing loans for the best terms or crunching our budget so we can put aside for certain savings goals…and while I know these things are necessary…when it comes down to actually doing the math, most of the time I give it to The Hubby. I just don’t have the interest or the skill to do it myself (and know I’m doing it right).

Which is why I was super-excited when I found out that The Financial Mentor has a whole page of 80 of the best financial planning calculators. I actually called The Hubby in to take a look at it. I can’t tell if he was smiling because he knew he’d have to do less number work for me, or because he thought it was cute how excited I was getting over calculators. J

Whatever math you need help with, these calculators have you covered. You can browse by category (retirement, loans, debt payoff, etc.) or by specific questions like “How long until I pay off my credit card using various strategies?” or “How long until I reach my savings goal given the amount I’m currently saving each month?”

I see myself using these in so many different situations. I’ve actually gotten some ideas for new comparisons I can run for our financial planning, just by browsing the questions. I think these are the coolest PF tool I’ve come across since Mint.

Are you PF savvy but not math savvy like me? How do you handle the numbers games?

 

~Heart,

Em

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photo credit:  401(K) 2013 by 401kcalculator.org

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It’s my money, and I need it now?

By on May 1, 2013

Money GirlHave you seen those commercials? People screaming from rooftops and apartment windows about the cash settlements they have coming to them…but apparently not fast enough.

First of all, who are all these people waiting on legal settlements that it’s a big enough market to warrant these commercials? Is America really that litigious a society that people with lawsuit winnings coming to them (but not fast enough) are a demographic big enough for whole companies to go into business to service their needs?

Apparently so.

Anyway, it made me think of the whole concept of getting funds you “need (or want) now” but don’t currently have. We all get into situations sometimes where we could use more money than we currently have on hand. If you’re smart about your finances, you should have some stashed away in an emergency fund you can tap into, or be able to find a way to slash your budget to free up some extra cash. But what if you don’t? Or what if your savings isn’t enough?

There are plenty of ways to get your hands on some extra cash in an emergency, but some are better than others. Here are some of the more popular ones, and the pros and cons of each:

Cash advances on your paycheck. Depending on how understanding your employer is, you may be able to explain your situation and get an advance on your paycheck. This is good because you’re not borrowing money at an interest rate, but risky because you won’t have that money to use in the future on the things you’d normally spend your paycheck on…groceries, bills, etc. So you’ll have to be careful about how you cut back on your budget for the rest of that month in order to avoid going into even more debt.

Cash advances on credit cards. If you’ve got a decent credit history, you probably get plenty of offers in the mail for cash advances on your credit cards. (They look like little checks you can make out to yourself.) This is good in that you’re not taking money out of your budget like you are above, but bad because now you’re setting yourself up to incur interest charges. So think about how quickly you’ll be able to pay those advances off to avoid as many extra charges as possible. That said, depending on your card, you may be able to get these advances at a promotional rate that’s a lot better than consumer loans, so that’s something to consider.

Personal consumer loans. Many banks and local credit unions offer small personal loans to consumers for a number of purposes…home improvement, debt consolidation, medical expenses, and other major purchases. Secured loans (where you put something like your house or a boat up for collateral) can get you better interest rates, but then you risk losing that collateral if you can’t keep up with the payments, so consider that option carefully. Unsecured loans can be easier to get, but come with higher interest rates. Weigh your choices, and keep in mind that you usually need a decent credit score in order to get these loans in the first place.

Vehicle Title Loans. I hadn’t even heard of this type of loan before, but just recently came across it. If you’re having trouble getting funds through more traditional loans or advances, getting vehicle title loans is a way to get your money (when you need it now) by putting up your car as collateral. In order to secure the loan, you sign over the title to your vehicle (it has to already paid off so you own it free and clear). This lets you get money much faster and usually with much less of a background check and paperwork that other loans. However, you’re putting your car up as collateral. So make sure you’re absolutely clear on the terms of the loan. Some companies will try to work out payment plans with you if you’re having trouble paying them back, but others may not be so kind. Make sure you’re 100% confident you can pay back the loan within the given period, or that the company will work with you, to make sure you’re not gambling your car.

Borrowing from family. This can be a touchy subject, and one that some of us can’t even consider because our families don’t have extra funds, either. But, in a pinch, sometimes your family can be your best bet. They’re not going to start a collections proceeding on you if you have to miss a month’s repayment because things are tight (hopefully). They’re not going to charge you interest (hopefully). Just make sure not to take advantage of the family connection…try to pay them back on a regular schedule just like you would any other lender, and show them that you’re using the funds they lent you wisely. Loans can cause huge rifts in families if you don’t handle them responsibly and gratefully, so be extra nice to Mom and Dad if you go this route, and respect them just like you would a big national bank.

Have you ever needed to explore one of these options? Which one did you go with? What were the pros and cons you found?

 

~Heart,

Em

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photo credit:  Tax Credits

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EXTREME!!! frugality isn’t the answer

By on April 24, 2013

286/365+1Being a PF blogger, I’ve had people ask me what I think about the “extreme” frugality trend, as seen on shows like Extreme Couponers and Extreme Cheapskate, where people go to ridiculous lengths to save a few extra bucks (or even cents).

How extreme are they?

If you haven’t watched these shows, brace yourself. One man on Extreme Cheapskates had to buy his wife an anniversary present, so he dumpster dove and visited thrift shops. (The thrift shop I could almost get behind if you were on a limited budget, but like the show’s title says, he just does it because he’s a cheapskate.)

Oh, and this same guy? Eats off of other people’s plates in restaurants! That’s right, when people leave a table after they’re done eating, he goes over and starts scraping the leftovers off total stranger’s plates. They could be bitten-into burgers, he doesn’t care.

Needless to say, his wife is embarrassed to go out to eat with him.

Or consider Extreme Couponers. I admire people who regularly coupon. (I don’t do it religiously, and I know I could be better.) But these people will spend hours and hours clipping multiple coupon inserts, sometimes enlisting their entire family. They’ll spend an entire day inside a grocery store trying to pull off the ultimate savings heist. They’ll even steal coupon inserts off their neighbor’s porches.

There’s frugality, and then there’s this.

A more balanced approach

While I’d be the first to applaud money saving strategies, it gets to a point where your “return on investment” (as the business people say) just isn’t worth it.

Are you willing to waste an entire day if it only nets you a few extra dollars in savings? (You can’t get a grocery bills that’s 99% discounted like the couponers on the show do…no grocery store would let you split your order up over 7 registers unless you had a camera crew of your own along with you.)

Are you willing to eat the food off other people’s plates (germ risk (to say the least)!) to get a little extra bang for your dining-out buck?

As with anything in life, it all comes down to balance, balance, balance. Being an extremely frugal person can make you just as miserable as being a shopaholic eventually will.  It’s just a different kind of misery.

It’s OK to allow yourself little splurges…or even to go so far as to only eat only your own food in a restaurant! It’s OK to buy yourself a few pretty dresses for the summer, or dare to buy only one of the on-sale cereals instead of 12 with multiple coupons. Happiness is all about striking that balance between frugal and enjoying your life.

And dumpster diving? I’m sorry, but I’ll never understand that…

What do think of “extreme” frugality like these shows display? Do you think you’d be happy living like that?

 

~Heart,

Em

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photo credit:  meaganmakes

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