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Friday, August 7, 2020   

DebtSmart Reader Tips: Page 1
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker

Presented here are financial tips that work, submitted by DebtSmart Readers like you!

While you're here, be sure to leave a financial tip for others. Here are three good reasons to do so:

(1) I know FOR SURE that you have something to share that can help others save money, no matter what your personal situation may be.

(2) When you share your advice, good things happen. I’m a perfect example. The more I write about saving money, the more money I’ve been saving. The more I’ve written about how to utilize bank offers, the more benefits I’ve received from using my credit cards.

(3) The more you think about a tip, the more ideas you will get for yourself and the more money you will save! (Please add your financial tip here.)



Pay on time
First and foremost, always pay your bills online! That way, nothing slips through the cracks and you always have an accurate expectation of monthly expenses. Secondly, invest in an inexpensive scanner to turn your bills/cc stmts/etc... into PDF documents. Simply put, the computer takes a sort of "picture" of your document and stores it. In this way, you can organize and store all of your documents on your computer; you can get rid of the paper clutter, and access anything you need very quickly. Just make sure you make a backup copy!

Organize to avoid being late
Late fees on bills get me really upset. So after paying too many of them, I decided to implement this system: When I receive a bill in the mail, I open it right away and put the date I should mail it on the back of the envelope, on the front where the stamp goes, and also on the lower left corner. Then, it goes in a file folder organized by dates. It makes it pretty hard to screw up. Sometimes I miss a couple of days before looking in the folder, but with a week's mail time I don't usually get late fees anymore.

Change your due dates to avoid being late
Avoid late fees by changing your bill due date. All you have to do is ask. Is the 8th better than the 1st to allow for snail mail? Is the 25th better because you always get paid on the 15th? Whatever date works for your payday and budgeting schedule, most companies are happy to make the adjustment.

Financial Mentor
Just want to say that I am in debt over my ears and got in this mess by bad choices and lack of knowledge. My advice would be that before making any major purchases, e.g., car and home; get yourself a financial mentor. I believe I would have not been dealing with these messes if I had known this.



Track Spending
For at least thirty days, write down every penny you spend and why it was spent. Be as specific as possible. This way, you can categorize what you spend money on on a daily basis and make constructive changes accordingly.

Credit Cards

Easy money for the holidays
Just in time for the Christmas season, one of my credit cards offered me a whopping 5% back on all purchases for 3 months (Oct-Dec). They will give me 5% back (up to $100). I plan to change my purchasing habits and use this credit card for everything I buy. I will pay off the card in full each month so I don't get charged any interest. At the end of the three months, I will have a $100 credit to use for anything I want. This is easy money. Note: This tip is only good for those who wisely pay off their credit card balances in full. (Unless you have zero-percent card.)

4 steps to manage debt
(1) Open your credit card bills the day you get them. Look over the statement (make sure you learn how to read them and really understand them) to ensure that your last payment was received and that there aren't any charges you didn't personally make. You also want to make sure your interest rates are what you think they are. If you see anything unusual or incorrect, call the Customer Service number right away. TIP WITHIN A TIP: Many credit card Customer Service Reps must have been found under rocks because they can be very dense. If a Rep can't easily understand or handle your question or dispute, ask to talk to the Supervisor; (2) Write the due date and the amount you are going to pay on the outside of the envelope. Place the envelope with your other bills in chronological order; (3) Pay your credit cards online. I've been doing that for many years and have never had a problem, whereas I've had many problems with the US mail making me late by losing my payment. You can actually pay your card payment right away online or schedule it electronically to be withdrawn from your checking account the day it's due, and; (4) Always print out the web page that says your payment has been submitted, with the transaction confirmation number. If you ever get in a dispute with the bank that you paid on time, you've got their confirmation number that you did.

Auto pay to avoid being late
Have your credit card minimum payments drafted automatically by the bank. This prevents any late payment penalties, improves your credit score, and saves you a stamp and check. Your credit score impacts the interest rate you pay on homes, cars, insurance and even your employment. Of course, if possible, you should pay additional money against your balance, but the purpose of this tip is to protect your credit.

Pay bill when you get it
Pay your credit card payments the day after the statement prints. This lowers your average daily balance which saves you money in interest fees. Also, several of the credit card companies have changed to having the due date and statement dates several days apart. By paying right away, you won't be fooled into a late payment either.

Advanced Technique Make Money
Here’s an advanced technique I developed after digging out from under a pile of credit card debt. As I paid off one card after another, the card companies became more and more generous with low rate offers on old accounts as well as new ones. When one company offered me 0% for a year, I said “Why not?” I borrowed $10,000 (deposited to my checking account) and bought a one-year certificate-of-deposit paying 5%. It’s important to check the transfer fee--often 3 or 4% but usually limited to a maximum of $75 to $90. If the transfer fee has no maximum, the scheme doesn’t work. With regular minimum payments of $200 a month, by the end of the 0% year, I only owed $7600 plus the transfer fee, and I cashed out the CD for $10,500. Of course, most of the effect comes from forced saving of the monthly payments, but it is nice to have the banks pay me interest rather than the other way around! I use on-line banking so was able to pre-schedule the payments each month a few days before the due date guaranteeing I wouldn’t have any late payments, which would ruin the deal.

Attach Debit Card
Sometimes it's smart to have a debit card, attached to your checking account, instead of a credit card. You can't spend if you don't have it! You don't have to have a good credit rating for it, and if you use credit instead of debit, you won't be charged for the transaction.


Debt Management

Hang a sign
My husband hates his job and we are working hard to be debt free so he can quit. We have a graph that we drew with how long it will take us to pay everything off (30 months) on our fridge. Each month that goes by brings us closer to our goal. The graph is also a great reminder of why we should continue to make wise choices and not splurge. We also try to never crank up our cars to go anywhere but work, unless we have THREE GOOD reasons to!

Keep Your Rates Low
Personally, as someone who's been deeply in debt, and I've surfed money all over the place to 0% cards, there's really no better way than to pay your debt off. Why do people think that they somehow save money by keeping high-rate debt? If life hits hard, and we get deeper and deeper into debt at high rates, we will never pay it off. Your greatest wealth-building tool is your income, and if it's tied up in paying off debt, you can't use it to your best advantage.



Tea at work
Tea at work costs 80 cents or 5 cents for a cup of hot water. If I bring my own tea bag, and use my own cup, I'll save about $220.00 per year.


Dollar stores and doggie bags
These are a couple of simple tips that save me money at the supermarket weekly. I reuse the plastic shopping bags as garbage bags. I also reuse the plastic long bags that my newspaper comes in daily, as doggie poop bags. This way I don't spend money on garbage bags or poop scoop bags--those dollars add up. I also buy many household products at the Dollar Store--I even find name brands such as Disney in there. The people who run the store tell me that they buy huge truckloads for a reasonable amount of money. This is how they can sell even name brand items for $1. I also get all my greeting cards there, which are 2 for $1. At Hallmark, you would pay $3 to $5 dollars for cards and also gift bags, which I also purchase at the dollar store.

ID Theft

Photo of wallet
Take a photograph of what’s in your wallet so you know whom to call if it’s lost or stolen.
--Bobby Shaw, host of The Family Friendly Morning Show, KFSH

Bad smells protect you
A great way to avoid any possible type of identity theft is to mix your shred with anything stinky--such as used cat litter, diaper pail or compost. Any thief who has a sense of smell will not bother to sift through this stinky shred to get your information. It will be too much trouble for them, and they'll look for a less "offensive" target.



Save 10 percent
If there is financial advice that I am glad I follow, it's: "Save 10% of whatever income you make." Ten percent, that is it! This simple advice has put me in route to become a millionaire within the next 4 years. I always hear the lame excuse that I cannot do that because I need that money. My reply has always been: “If you could not survive without 10 percent of your salary, you are doing something seriously wrong.” I had my 10% taken out of my paycheck and I do not even notice it. Funny thing is that if their employer tells them that their salary will have to be cut by 10 to 15 percent or else the plant will close, they will find a way to live on their new salary in a heartbeat.


Pay yourself instead
Instead of paying someone to do a job or task that I can do, I do it myself. Then, I pay myself the amount I would have paid them, and I transfer the money to my savings account.

Bank the difference
When you use coupons or buy something on sale, we say, "We're saving money." We never really save that money unless we put the savings into a savings account. This is what my wife and I do: We put the total amount she saves on groceries indicated at the bottom of her register tape into our Vacation Savings Account. Likewise, if I find a deal on something I wanted for the shop, or house, we subtract the difference between the price the item was most frequently advertised at, and what we paid for it, and put it in the Vacation Savings Account. We may not use it to take a vacation, but we have saved enough each year to make an extra car payment or buy things we wanted for the house. We really do save when we shop.



Save money at online auctions
Check ebay for items you need or want. You can often get them for a significantly lower cost than in a store. Some sellers have monthly payments for higher-end items. And it's not just used items--you can get brand new items! Some stores are also on eBay, as well, holding auctions for their items.

Please add your financial tip here.



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