Free 10-Week eCourse: Stop Living Paycheck-to-Paycheck
Financially Poor is offering a Free 10-Week eCourse to get your financial life together!
They will send you a new challenge every week, for 10 weeks and you will learn to:
- Control your money instead of having it control you
- Plug leaks in your spending
- Make a budget for your situation
- Eliminate your debt load
- Put your savings to work
- Protect yourself from the unintentional
The truth about the $1500 energy tax credit for homeowners
Accountant Michael Hanley explains that the tax credit you receive is 30% of qualifying purchases up to a maximum credit of $1,500…and not to take tax advice from your contractor.
Rule of thumb when taking on debt
There’s good debt and there’s bad debt. You only want to take on good debt – which is investment debt that creates something of value, for example: student loans, home mortgages and business loans. These debts are tax deductible and they help you produce more wealth in the long run.
Bad debt is used to buy things that will lose value – like using a credit card to pay for things like clothing or other disposable or durable goods. Every month that you don’t pay the credit card bill in full, the credit card company adds interest to your debt and you end up spending a lot more for your purchase than you originally intended.
Rule of thumb: If you’re going to buy something that doesn’t go up in value, and you can’t afford to pay cash for it, then you can’t afford it, and you shouldn’t buy it.
How to get a perfect credit score
More Americans’ credit score dip to new lows: 1 in 4 Americans have credit scores below 599, marking them as poor risks to lenders, making it impossible for them to get credit cards, auto loans and mortgages under new tighter lending standards.
Because they relied so heavily on credit for their spending in the past several years, their new restricted access to credit will make our economic recovery even that more difficult.
How do you avoid this? Do what credit score perfectionists do:
- Make payments on time (and make a long history of this, starting now)
- Don’t max out your credit lines (leave room for emergency purchases)
- Hold onto old credit accounts (don’t just close out old credit cards you don’t use – they help build your credit history)
- Shop around for the best interest rate when taking out an auto loan or mortgage (multiple soft credit inquiries by institutions that must pre-approve you have little to no impact on your credit score), however
- Don’t go opening up multiple new credit accounts all at once (don’t just open new credit card accounts to “stock up” your credit history – only open accounts when it makes sense to do so)
Only 13% of people have credit scores of 800 or higher. What do these people have in common? They have:
- 4 to 6 credit card accounts
- No late payments in 7 years
- At least 1 installment (auto or mortgage) loan with excellent payment history
- An average of 10 years credit history per account (and some accounts with 20 years of good history)
- Few credit inquiries (less than 3 in 6 months)
- No bankruptcies, foreclosure, charge-offs or collections
- Debt of less than 35% of their credit limits on each account
Follow this strategy and you should begin to build great credit or repair bad credit on your own. It takes time but it is worth it, plus you’ll form good credit habits in the process, which will benefit you for the rest of your life!
70% of cell phone users are way oversubscribed (financially)
Your cell phone plan could put you in the poor house. Especially if you have a smartphone. Mobile carriers are now requiring that smartphone users subscribe to certain data plans that give you much more data capacity than you really need.
Most people pay for more minutes and text messages than they ever use. The average household now pays $20 more on cell phone charges than they did 5 years ago.
5 ways to cut cell phone charges:
- If you usually only go over your minutes or data usage by a little bit, try adding on the next smallest amount of add-on minutes/messages, usually unadvertised by mobile carriers for around $5 or so, instead of shelling out for the massive add-on package that costs anywhere from $10-$20 more each month.
- Use your carrier’s “friends and family” option but don’t just consider friends and family – figure out who you talk to the most, whether its a business colleague or client, and add them to your list.
- Don’t pay for unnecessary charges. Cell phone insurance can be $60/year plus a $50 deductible but you can buy an unlocked phone cheaply on eBay. Don’t pay for 411 calls either – use free 800-number services like 800-FREE-411.
- Do you really need a smartphone? As mentioned above, they require a massive data plan purchase and if you use your internet connection at home or work more often than you do on your phone, do you really need to shell out $30 more each month for internet access on your phone?
- Get a free evaluation of your cell phone bill and plan options at www.billshrink.com.
