Save money and refinance.

5 Ways to Cut Your Monthly Expenses

Save money and refinance.
Little changes make a difference!

Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement. One way to get lifestyle creep under control is to have any future raises you get direct deposited into savings – like a 401(k) account through your employer, or an Individual Retirement Account (IRA). But here are five things you can do right now to cut your monthly expenses.

  1. Make a Budget
    The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store.
  2. Lower Your Mortgage Payment
    The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment.
  3. Get an Insurance Checkup
    If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.
  4. Examine Your Auto-Payments
    Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched.
  5. Cut the Cord
    If you’ve already ditched your land line, good for you! If not, doing so is one of the quickest and most pain-free ways to trim your expenses. Most all of us have our cell phones with us all the time anyway, and if you really like the feel of a traditional phone in your hand, a VOIP (Voice Over Internet Protocol) plan that provides phone service over the Internet is a lot cheaper than traditional land line service.


Is leasing right for you?

Read This Before you Break Your Lease!

Many tenants find themselves in a situation where they need to or want to move out before the end of the lease term. If you are breaking your lease, it is important to keep in mind that a lease is a legally-binding document, and if the remaining months’ rent is not paid, the landlord can sue you and obtain a judgment (which may allow them to garnish your wages or take other collection actions against you). Losing your job, taking a new job in another location, not liking the place, or buying a house does not allow you to be released you from your lease. However, there are a few exceptional circumstances in which you may be able to have your lease invalidated, including:

 

  • The landlord lied about a fact that he or she knew played an important part in your decision to rent the unit, and the fact could not be easily verified by you in advance.
  • The landlord failed to keep the unit in safe and habitable condition.
  • You are a victim of domestic violence or stalking.
  • You or your spouse is in the military and received orders to move or deploy.

 

Rental laws vary by state, so it is a good idea to do research or speak to a lawyer or tenant organization about whether your situation allows you to invalidate the lease before you move out.

 

While breaking your lease does not release you from the responsibility to pay rent, you may not actually have to pay it all. You should talk with your landlord as soon as you know you will be moving out. In most states, the landlord is obligated to look for a new renter for the unit. You can also look for a new tenant yourself. Generally, the landlord cannot refuse to rent the unit to a qualified applicant and still hold you responsible for the rent. Once a new renter is found and starts paying rent, you are off the hook—with a caveat. If the landlord can only rent the unit for less than what you were paying, you can be held responsible for the difference in rent until the lease expires. For example, if you were paying $1,100 a month and broke the lease with 6 months left, and the landlord could only rent the unit for $1,000 a month, the landlord is entitled to $600 from you.

 

Some landlords also allow tenants to be let out of the lease by paying a fee. Landlords are generally only allowed to be compensated for what their actual loss is, so they cannot demand that you pay an arbitrarily-determined fee. However, if your apartment is located in a soft rental market and it is unlikely that a new tenant will be found soon, it may be to your advantage to pay the fee if it is offered. You may want consult with a lawyer or tenant organization before signing a lease-breaking agreement and paying the fee.

 

If you choose to break your lease, you will likely have some financial loss. However, careful planning on your part can help you keep the loss to a minimum.


Establish good credit

5 Ways to Establish Credit

Establish good credit
Establish good credit today!

When it comes to getting a credit card, qualifying is actually one of the easiest parts of the process. Establishing a positive credit record, however, requires dedication and patience.

Whether you are new to credit or are trying to “clean up” past mistakes to reestablish a favorable record, you may encounter a frustrating paradox: you must have and use credit to create a credit history, yet many financial institutions are reluctant to extend credit to someone without an established record. But don’t despair – there are several good remedies for both situations.

A Secured Card
An excellent start is a secured credit card. You are granted a credit line based on a percentage of a cash deposit you make to your financial institution. Because deposits are usually low, so too will be your credit limit. Application and annual fees for secured cards are often higher then those associated with unsecured credit cards.

The Retailer’s Card
Consider a local retailer’s credit card. Their criteria is often less rigorous than larger credit issuers. Be sure they subscribe to the major credit reporting agencies though – if not, you won’t be establishing a credit history.

A Co-Signer
Another option is having someone with a positive credit record co-sign an account for you. This requires a great deal of trust on the part of the co-signer – if you fail to pay, he or she is responsible. You could end up jeopardizing a relationship as well as a credit record.

Review Your Credit Report
Finally, if you have damaged credit, you might need to rectify the past as you’re building your future. Paying old debts and correcting errors on your credit report as soon as possible might be the way to go.

Pay off Your Debts
Once you have a credit line, establish a good history by using it responsibly. Keep balances low, always pay on time, don’t pursue unnecessary credit, and stick with a few good credit instruments of various types.


Buying Vs. Leasing

Buying Vs. Leasing a Car

Buying Vs. Leasing

 

There are big differences between buying and leasing. Typically, if you were to purchase a new car, you would make a down payment and finance the remaining cost. At the end of the term, the car would be yours. Leasing is essentially renting, with your payment going towards the car’s depreciation. If the lease includes a purchase option, you may buy it at the end of a specific time period.

So which is better? That depends on your individual situation and needs. You will have to decide for yourself by analyzing the advantages and disadvantages of each:

Leasing Advantages 
There are short-term cost advantages to leasing. The monthly payments on a leased car are usually far less than on a loan – even for a luxury model. The down payment usually works out to be less than what you would pay for a bought car as well. Because the typical lease is for three years, most repairs are covered by factory warranty. Sales tax is cheaper too, as you only pay it on the financed portion.

An attractive feature of leasing is the ability to drive a new car every few years. You never have to go through the hassle of selling it; you just turn it in at the end of the term.

Leasing Disadvantages 
While the payments are often reasonable, you never gain equity in the car. If you were to buy it at the end of your contract, it would cost you a lot more than if you had just bought it in the first place.

Leases are restrictive. If you exceed the yearly mileage limit you can be assessed an extra charge. You must take good care of the car as well, as any nicks or dings can be considered “wear and tear” and could cost you.

Comparing lease offers can be very confusing, making it hard to know if you got a good deal. And you will find it difficult to get out of your lease early if you want to – a problem if your driving needs or financial circumstances change.

Buying Advantages 
When you buy a car, it’s yours. You can customize it and drive it as hard and far as you want, penalty-free. Rather than having infinite payments, buying means you will eventually pay the car off. Once paid off, if you want to sell it you can do so at any time, as Erik Fortier you are not locked into a contract.

Buying Disadvantages 
Down payments on bought cars can be substantial. Monthly payments are usually higher than a leased car, and once your warranty expires, you will be responsible for the maintenance costs. When you want to sell it (or trade it in) you will have to go through the hassle of doing so. And, as an investment, new cars depreciate rather than appreciate.