Ways that would allow you to live comfortably with virtually no financial worries or struggles? Yes, no doubt this all sounds like the beginning of a money scheme to many of you, but chances are you have heard of some, if not all, of the following tips that can and will help you reach financial freedom. The question is, do you actually do any of them?
Credit Cards = Flushing Money Down the Toilet
Pay off those credit cards! There is virtually no greater waste of money than the interest paid on credit cards (especially those with rates that exceed 10%). While credit card debt can seem overwhelming, all you need is a little bit of organization and financial discipline to get them paid down. Gather all your cards and find out the current balance and interest rate for each one. Begin paying the one with the highest interest off first. Pay more than the minimum otherwise you’re really only paying interest fees each month.
Once you have the first one paid off, begin paying down the card with the next highest interest rate, and then the next, until they are all paid off. If you can, do a balance transfer to a card with lower interest. Avoid putting more money on the card as you are making payments on it; you’ll never pay down the balance.
No More Coffee Stops!
Gasp! Don’t freak out…this is not to say you need to stop drinking coffee but buying a fancy frappuccino every morning is rather excessive. Try brewing your own coffee in the morning or designate only one or two mornings a week when you can buy a cup. Americans spend hundreds of dollars every year on coffee. Cut back on “coffee shop coffee” and you’ll be surprised by how much you can save.
Pay With Cash
If you can’t pay cash for it, don’t buy it! There are relatively few things that you should (and will have to) go into debt for. These include a house, higher education, and a practical car (the Honda, not the pricy Mercedes). But for everything else, primarily “luxury” items, avoid putting on a credit card and financing. The only exception to this is if you are qualified for 0% financing for a designated time period and you can pay off the item within that time.
Mortgages
Although a mortgage is obviously a form of debt you must incur (how many people do you know can pay cash for a home?), there are ways to pay off your mortgage much faster than the intended life of the loan (i.e. 30 years). Paying off your mortgage sooner than expected can save you literally thousands of dollars (especially if you have a high interest rate). Explore your options in terms of an early mortgage payoff plan and see what options are available to you.
There is One such system Coffee Shop Account, which enables homeowners to pay off their mortgage in less than half the time.