Outside the Box

Just the Facts: Saving Money

As hard as it can be, saving money is the smartest thing anyone can ever do.  Even if it is just a few dollars a month, any money saved will start you toward retirement, a new car, or whatever it is you truely want.

The Bank

The bank is a scary thought for some people.  Placing your money into a certified bank is one of the smartest things you can do, however.  Money that is saved in a jar under your bed isn’t smart for a few reasons.  The first reason being that money that is kept in  your home can be stolen.  Stolen money is lost money, unless you happen to be lucky enough to catch the robber.  Chances are you won’t, and the money (not to mention all the time, energy, and patience that you put into saving that money) will be lost forever.  Secondly, money in your home does not earn intrest, thus losing value over the years. Lastly, your money is insured up to $100,000 (currently $250,000) by the FDIC, so your money is safe, even if the bank goes under.

Banks are a great tool to save money, but it is also easy to get in debt with nothing to show for it.  If the bank issues you a debit card and you have a nasty habit of compulsively buying things, cut the card up.  An overdraft, even if just $.01, can cost anywhere from $25-37 or more depending on the financial institution.  Most of the time, Credit Unions have better policies regarding overdrafts than regular banks since Credit Unions are owned by their members and are not-for-profit organizations.  Set up an overdraft protection if you can’t live without your debit card, because it will save you money if you ever overdraft.

Auto-Saving

Most banks have online banking where you can configure scheduled transfers from your checking account to your savings account.  Every Saturday, I have five dollars transferred from my checking account to my savings account.  This is only twenty dollars every month, but that is 240 dollars a year that I now have saved.  I also have my extra financial aid deposited directly into my savings account.  I keep track of what I have actually saved and what is my financial aid, however, since I do buy my books and other school equiptment with that money, but the extra stays and earns interest.

CD’s

A CD is a great way to save money and not be able to take it out without some effort.  A CD usually has a higher return rate than a savings account, has a set amount of time before you can remove it, and has consequences if removed early.  If you’re looking for long-term saving and a high return, a CD might be right for you.

My Advice

Start saving today.  The sooner you start saving, the sooner you will begin to earn interest.  My goal is to have enough money saved to live off just the interest if I’m ever in financial stress.  I also would like to leave my family in a very comfortable position when I die.

Popularity: 1% [?]

My Thoughts On… Credit Cards

If someone offered to give you five hundred dollars if you gave them a thousand dollars, would you do it?  Hopefully not.  However, if you’re one of the millions of Americans over your head in credit card debt, you were dumb enough to take that deal.

Credit card companies love giving away freebies, earning you points and giving you 5¢ off each gallon of gas at Speedway.  They do this to lure you in.  You may save ten dollars on gas in a year, but Visa, Mastercard, and all other credit card companies end up sucking hundreds from you wallet.

The Gimmick

Every single time you use your credit card, you make credit card companies rich in two ways.  First, unless you pay your bill in full every single month that it comes in the mail, you’re going to be paying interest on what you’re buying.  Secondly, the establishment that you are buying the good/service from is also paying just to be able to swipe your card and collect your money.  This fee rangest anywhere from five cents to fifty cents or 1%-3%+ of each transaction obtained through a credit card.  It’s a double edged sword that hurts both consumer and producer, and the only one who benefits from the deal is the credit card company.

Step One

Step one to stopping this horrible scam is to take your credit cards and chop them up.  Stop using money you don’t have.  You’re done trading one hundred dollars for fifty dollars, a thousand dollars for five hundred.  It’s dumb, it’s pathetic, and it’ll leave you in a financial mess.  The only type of credit card I carry with me is a prepaid Visa card that my money is uploaded on when I donate Plasma at Biolife Plasma Services.  This way, the only money I can spend is the money that I’ve already made.  I can’t overdraft, like other banks, so I don’t pay fees ranging from $25-$37 from a traditional bank’s debit card.

Step Two

Only spend money you have!  Why would you want to stress yourself out later and spend money you don’t have?  Frankly, it’s dumb.  Budget your money.  If you want to go on a cruise, save for it. It’ll mean more if you wait for it than if you go on a whim.  Plus, using cash to pay for goods or services makes you actually think about the product you are buying.  A little piece of plastic, unfortunately, still has no general meaning to most people in America.  The link between credit card and cash still hasn’t been made.

Conclusion

You should ask yourself this question every time you use your credit card; “Do I want to pay $xxx(ticket price) for this item, or do I want to pay $xxx time 2?  times 3?”  Almost everything you buy with a credit card ends up being 1.5 or more times the original value.  The only way I can stop myself is by seeing pricetags as the inflated amount.  Just my thoughts, you can take them or leave them.

Obviously, I think you should take them. 

NR

Popularity: 1% [?]