Best Money Market Account
When you are looking for a good safe way to invest your money you should look into a money market account. They are a great way to maximize your savings potential without any risk. Many people don’t understand the way money market accounts work and therefore they don’t know how to choose the best money market account for their financial situation.
What is a Money Market Account?
A money market account is an account that works like both a checking and savings account. They offer you the ability to earn a much higher rate of interest then a standard savings account. This is because you only have the ability to withdraw money from your account six times a month, this is standard and every financial institution has the same rules. You can either write a check or a debit card to access your money.
What to Look for in a Money Market Account
One of the first things you should find out when searching for the best money market account is if the financial institution that you are going to use is FDIC insured. This is basically saying that the federal government is insuring your money, so if your bank, for whatever reason, goes out of business your money is not lost, you will get it back.
Another important factor is monthly maintenance fees that some financial institutions have. Many of them will waive all monthly fees if you keep a certain minimum balance each month and if you look around, especially on the internet, you can find many of them that have no fees and have require no minimum balance requirements. This is especially helpful if you are just beginning to start saving, the last thing you need is having your savings eaten up by fees.
Opening balances vary from institution to institution. Almost every money market account has a minimum opening requirement. However, they run the gamut, many require only $50 to open an account but as you get the better interest rates you will often have higher opening balance requirements, in fact several of them get up to the $5,000 mark.
Where to Find the Best Money Market Accounts
Until recently the only place to open a money market account was to go to a local bank. With the internet becoming so prevalent in society, lending institutions have begun to use it to recruit new customers. Some of the best money market accounts are available by internet. They don’t have the high expensive of having lots of buildings to maintain so they are able to offer higher interest rates.
The only real difference between using an internet bank and a local branch is how you make your deposit, you will make your deposit two ways you can have your employer do a direct deposit or you can mail them a deposit. It is recommended that when you mail your deposits you send them certified.
Having a money market account is one of the best ways to save your money with no risks like stocks or bonds. You keep your money liquid and earn a great interest rated so take some time and find the best money market account for you and your financial circumstances.
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Savings. Pay yourself first. Start now stashing 10% of your income in an Emergency savings. Dont use it for anything but real emergencies. Keep a For Sure savings account for yearly expenses you know are coming and you can estimate (e.g. Christmas, insurance, taxes, etc.). Also have a Buy Stuff account. If you do, youll be able to avoid many financial disasters which will face you, and you can avoid borrowing money from high-rate lenders.
Borrowing. Dont borrow money unless you are willing and able to pay it back. Failure to pay debts on time causes severe financial, emotional, and family problems. Experts recommend you dont borrow for wants, only for needs, or for things that increase in value. Many lenders will loan you money you cant afford to pay back, especially high-rate lenders.
Co-signing. Dont co-sign on a loan unless you are willing and able to pay it back. Often, co-signers end up paying off loans they are unprepared for, and financial hardships follow. Numerous co-signors now have negative credit ratings because a primary borrower paid late. Many lenders do not notify the co-signor before reporting delinquencies or repossessions to the credit bureau.
Compare. Before you decide who to borrow from, compare! Find out who is offering the best deal at that time look for the loan with the lowest rate (APR).
APR. The Annual Percentage Rate (APR). It is the standard rate, so we may compare the cost of borrowing. It is the cost of credit expressed as a yearly rate. When you borrow, always beat 13% APR (consider 13 to be unlucky when it comes to borrowing). Some have been illegally stating other rates such as weekly or monthly rates. Compare APR to APR. If you pay your bills on time, and you arent over-extended, you can nearly always find loans or financing arrangements at rates lower than 13%. Beware though, because beating 13% does not always mean you are getting a good deal. For instance: the difference in total interest paid on an 11% versus an 8% 30-year, $100,000 mortgage loan is $64,283 (assuming all payments are made as agreed).
Consolidation Loans. A consolidation loan can result in great savings to borrowers if the new interest rate is significantly lower, and if you dont run-up debt similar to what was just consolidated. But beware, because consolidation loans usually result in substantially more money out of your pocket into the lenders. For instance, mortgage loans usually involve closing costs. They increase the total debt. Many refinances involve reducing the monthly payment, but increasing the length of payback, which substantially increases the total interest paid. Borrowers, who refinance unsecured debt (e.g. credit cards) into a home mortgage, also increase their risk of losing their homes. Also, remember to keep all of your payments current until the old debt is paid off. Too many people have damaged credit ratings, and are in bad financial condition because they counted on money which didnt come when they expected it. Expect delays when applying for loans, especially consolidation loans. Dont spend money before you get it.
Desperation. Dont get desperate for money. The more desperate you are, the less likely you are to get a good loan.
Auto insurance. Keep your auto insurance current. If you fail to keep your insurance up-to-date, you could end up making loan payments for years after your car has been totaled.
Establish good credit. To avoid bad credit, don’t borrow too much, and do pay your bills on time. Inexpensive ways to establish good credit: (1) Obtain a good credit card. When you charge things, pay off the balance each month on time and pay no interest. (2) Establish a revolving line of credit (an empty loan) as an overdraft protection against bounced checks, and dont use it as a loan. (3) Get a loan to buy a car, or furniture, or etc.) and pay it off within a few months.
Late fees. To avoid late fees (which multiply the cost of borrowing), pay early, or at least on time.
Repossessions. To avoid repossessions and associated fees, pay early or on time, and keep your insurance current.
Extra principal less interest. To pay less interest on loans, pay more than the minimum required payment. Even small amounts of extra principal, can significantly reduce the total amount of interest you would otherwise pay over the life of the loan. Before doing this, however, make sure your lender accepts extra principal payments, and find out what particular procedure you need to follow to ensure your extra principal is properly applied.
Bi-weekly payments. If you get paid weekly, or every other week, paying bi-weekly is a very convenient (almost painless) way to reduce your loan term and interest. For instance, if you make of your required monthly payment every 14 days (a bi-weekly period), you pay the equivalent of 13.052 payments in an average year. If you dont get paid bi-weekly, or if your lender doesnt like biweekly payments, you can pay the equivalent amount in monthly installments. If you pay 1/12 of the sum of 13.05 payments each month, you will match the bi-weekly advantage (minor rounding differences).
Contrary to popular belief, the frequency of paying payments bi-weekly doesnt accomplish much, the real advantage is paying the extra principal (13.05 payments, or more, each year) which reduces the term and the interest paid. If you are considering signing up for a bi-weekly program, pay close attention to the cost. Some servicers have large set-up fees and transaction fees. Also consider the credibility of any company handling your money, some have diverted payments into their own pockets, leaving borrowers to make payments twice (once to a corrupt servicer, and a second time directly to the lender).
10 Tips To Make Sure Your Financial Budget Will Succeed
Youve analyzed your past expenses, put them into spreadsheets, loaded Quicken with all of your data and come up with a budget. Now what? The tough part! You actually have to stick to your budget and put your plans into action. This is easier said than done. In many cases you will have forgotten about your budget and your financial goals 6 months or a year down the road. How do you keep this from happening to you?
Heres how. Make sure you follow some of these tips below so this doesnt happen to you.
1. Create a budget with realistic targets Lets say one of your budget goals is to not eat out for lunch or dinner on a regular basis. If you are honest with yourself you may find this to be an unrealistic goal. Sometimes its a nice break to eat out and have a relaxing rewarding evening. In other words, dont set the bar too high. Drastic and unrealistic goals are one of the surefire ways your budget will not succeed.
2. Budget for expenses that dont occur on a routine basis Make sure you give consideration to expenses that occur once a year, such as holiday presents, birthdays, vacations, weddings, car maintenance costs, etc. These expenses dont occur every month and they will bust your budget plans wide open. Make a list of these events on a calendar and put a dollar figure to them. Place them in the month they are expected to occur so you can plan in advance how you will pay for them. The regular routine expenses are not the reason your budget will fail. It is these gotchas that will wreck havoc on your budget if you dont plan for them.
3. Put your budget in writing Take the time to write down your budget plans. Making a mental note of your budget goals is a recipe for failure. Dont assume that your financial future will take care of itself by making a simple mental note to yourself. If you have your budget goals detailed in writing you can review and remind yourself weekly and monthly of your financial goals.
4. If you have a bad month or week, dont give up! Lets say you have been reaching your budget goals for three months. In the fourth month, for whatever reason, you didnt reach your budget goals. Maybe you even stopped trying to stick to your budget! If this happens, dont just throw your hands up in the air and admit to failure. Everyone falls off the wagon sometimes. Your budget is a journey. There will be bumps in the road, so the key is to realize that everyone makes mistakes. This relates to a story I like about a great old time golfer named Walter Hagen. Before each round of golf, he told himself that he would have 4 or 5 bad shots. During the golf round, if he hit his ball into a bunker, he would tell himself, There is one of my bad shots that I was expecting, hit the ball out of the bunker and move on. It didnt phase him one bit because he had knew there would be some bad shots in his round.
5. Adjust your budget over time This one is a biggie! It can take months or even years to fine tune a personal budget. When you initially made your budget plans, you probably had to guess at some of your figures. They might not have been in touch with the realities of every day life. For example, you may have underestimated your monthly grocery or utility bills. If this happens, analyze all of the underlying money that was spend in this category to see if your initial estimate was unrealistic. If it was, try to come up with a more accurate number and then to stick to that new figure. It is this type of adjustment that is one of the keys to making sure you can stick to your budget.
6. Review your budget every month This is where you will make any adjustments that are needed. Set aside the first day of each new month to review your income and expenditures and match them to your budget goals. By actively reviewing your finances and comparing it to your budget, you can adjust your spending habits. This gives you a chance to analyze areas that exceeded your budget expectations and make the adjustments in your spending habits or your budget. The goal here is to not forget about your budget. One tip that has worked for me is to put a printout of my basic budget goals on the refrigerator. That way every day, several times a day, I would notice my budget goals sheet. I may not read it every time, but I notice it and it reminds me that I need to stick to my budget. That is why tip number 3 is so important.
7. Set specific short-term goals Lets say one of your budget goals is to have all of your credit card bills paid off in two years. If your credit card balances total $20,000 that would be $10,000 a year. Divide that number further into quarterly reductions in your credit card bills, in this case $2,500 every 3 months. Now, this is a more tangible budget goal to shoot for isnt it? I find that when I divide intermediate and long term goals into short-term tangible stepping stones, I am able to feel a greater sense of accomplishment and am more likely to succeed. This brings us to number eight
8. Reward yourself Thats right! Treat yourself when you reach your some of your short-term goals. Since your financial budget is really a journey, take some time to smell the roses on your way. Sticking to your budget should not be a restrictive, unpleasant experience. Not only should you take the time to enjoy your financial accomplishments along the way, but use part of your budget for fun things that you enjoy. Just make sure your rewards dont end up breaking your budget!
9. Pay yourself first Im sure that one of your budget goals is to save and invest a portion of your income. One of the keys to make sure you succeed at this is to do what the IRS does with your paycheck, take it out of your discretionary income immediately. This way, the money is saved away right off the bat. Move the money immediately into a savings or mutual fund account. Many mutual fund companies can setup automatic deductions from your paycheck. Despite your best intentions to save, the hectic, daily demands of life can reduce the amount you are able to save.
10. Attitude is everything When most people think of a budget, they picture restrictions and pain. Almost like a diet. You know what happens with most diets? They dont seem work for long! First, if your budget is too strict, too restrictive on your spending, it wont work either. However, you will need to limit your spending in some areas and this will take some adjustment in your attitude. I found that when I am feeling limited and sorry for myself when I cant purchase something that I want, I remember my financial goals I set with my budget. I think about the satisfaction I feel when I reach those goals. Over time, you find that you dont want to disappoint yourself by breaking your spending goals on a spur of the moment purchase. Now, I actually get more pleasure knowing that I am reaching my budget goals when the thought of an impulse purchase crosses my mind.
If you follow these tips, your budget plans are more likely to be a great success. By taking some simple steps you will find that living within a budget is not as tough as you imagined. It can actually be fun and rewarding!
Whether you are a new entrepreneur or a more experienced business owner, taking control of your finances can feel like a part-time job. Some simple tips can help you streamline your time, organize your finances and reduce the stress of business money matters.
1. Keep Your Bills in One Place
When the mail comes, make sure it goes in one place. Misplaced bills can be the cause of unwanted late fees and can damage your credit rating. Whether it’s a drawer, a box, or a file, be consistent. Size is also important. If you get a lot of mail, use an area that won’t get filled up too quickly.
2. Pay Your Bills on Schedule
Bill paying can be simplified if it’s done at scheduled times during the month. Depending on how many bills you receive, you can establish set times each month when none of your bills will be late. If you’re paying bills as you receive them, chances are you’re spending too much time in front of the checkbook. Although bills may state “Payable Upon Receipt”, there’s always a grace period. Call the creditor to find out when they need to receive payment before the bill is considered late.
3. Read Your Credit Card Statements
Most people take advantage of low interest credit card offers but never read their statements when paying the bill. Credit cards are notorious for using low interest as bait for new customers then switching to higher rates after a few months. Make a habit of looking at your statement carefully to see what interest rate you are paying each month and if any transaction fees have been applied. If the rate increases or a transaction fee appears on your statement, a simple call to the credit card company can oftentimes be beneficial in resolving the matter. If not, try to switch your money to a more favorable rate.
4. Take Advantage of Automatic Payments
Most banks offer a way to automatically deduct money from your account to pay creditors. In addition, the creditors usually offer a lower interest rate when you sign up for this payment option because they get their money faster and on-time. Consider it as one fewer check to write, envelope to lick and stamp to buy. Just make sure you record the deduction when the automatic payment is scheduled or you run the risk of bouncing other checks.
5. Computerize Your Checkbook
Using a software program is a handy way to organize your finances. Whether it’s Quicken(r), Microsoft Money(r) or another package, these easy-to-use programs make bill paying and bank reconciliation a cinch. Computer checks can be ordered almost anywhere and fit right into most printers. Once the checks are printed, all of the information is automatically recorded in your electronic checkbook. Furthermore, many banks have direct downloads into these software packages so when money is deposited or withdrawn, the transaction is entered immediately onto your computer. And, when it comes time to do taxes, it couldn’t be easier.
6. Get Overdraft Protection
Most banks have a service where, if you run the risk of bouncing a check, the money will come from another source. For a nominal fee, the bank will link your checking account to either a savings, money market, or credit card so the embarrassment of bouncing a check will be avoided. Call or visit your bank to learn about this convenient feature.
7. Cancel Unused Accounts
Whether it’s a credit card or bank account, write a letter requesting that the account is formally closed. Not only will this improve your credit score, it is a useful way to avoid money from being scattered all over the place. Don’t let department stores and credit card companies lure you into opening new accounts by offering favorable interest rates and purchase discounts. It’s easy for credit to get out of hand by taking advantage of every credit offer that comes your way.
8. Consolidate Your Accounts
If you have several credit card accounts with outstanding balances, try to consolidate them into one. Be careful and check the balance transfer interest rates and one-time fees. Also, make a list of all your open Money Markets, Savings, CDs, IRAs, Mutual Funds, and other accounts to see if any consolidation can be done. Keeping your money in fewer places eliminates all of the guesswork involved and reduces errors.
9. Establish Automatic Savings
Create a link from your checking account into a savings account that will not be touched. This can usually be done through the banks and automatic amounts will be transferred over each month. Most people will not put money into a savings account on a regular basis. They may wait until a large tax refund check arrives or some other event to actually deposit money into savings, retirement or other accounts. If you establish an automatic savings deposit every month, your accounts will begin accumulating money faster than you think.
10. Clean up Your Files
Make sure your paid bills are organized in a filing cabinet. Keep individual files for paid bills. Go through your files at the end of each year and throw out bills and receipts no longer needed for auditing purposes. Contact your local IRS office to see how long records need to be kept for audits. Usually federal tax return audits can be done three years back but cancelled checks may need to be kept for seven. Consult the Internet for auditing and records-keeping procedures for your state or region.
(c) 2005 DebtGuru.com(r). This article may be freely distributed as long as the signature file and active link are included.
Michael G. Peterson is the Vice President of American Credit Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling organization that has assisted thousands of individuals and families with their financial situations through seminars, education, counseling services, and, debt management plans. For more information, and free consumer resources visit http://www.debtguru.com.
When it comes to using balance transfer credit cards, many consumers are filled with questions and concerns. While there are many benefits to using a balance transfer credit card, it is always best to have these questions answered and the concerns satisfied before moving forward with applying for one of these cards.
How Can Balance Transfer Credit Cards Save Me Money?
Balance transfer credit cards can save you money by reducing the amount of finance charges you pay every year. If you transfer even a small amount of money, such a $1,000, from a card with a higher APR to one with a lower APR, you will see a difference. For example, if you have a credit card with a 20% APR, you will pay $200 per year to maintain that $1,000 balance. On the other hand, you will pay only $80 on that same balance if you have a credit card with an 8% APR. That is a savings of $120! Imagine how much you will save on larger balances.
Even better, the best balance transfer credit cards offer 0.00% introductory APRs, which means you will pay no finance charges while that introductory period is active. With some balance transfer credit cards, this special rate remains in place until the entire amount you transferred is paid off.
What is an “Introductory Rate?”
An introductory rate is a special APR that lasts for a limited time. Often, the length of time this rate is in place is determined by your credit history. The introductory rate can be in place for as long as one year, though more common durations are six months, three months, and one month.
What is a “Fixed Rate?”
A fixed rate is a rate that does not change. Balance transfer credit cards with a low fixed rate may not offer a 0.00% introductory APR, but they might offer a 7.99% APR that remains this low no matter how long it takes you to pay off your balance, rather than skyrocketing up to 19.99% after the introductory period is over.
Why Does Everyone Say Balance Transfer Credit Cards are More Convenient?
Many people feel balance transfer credit cards are more convenient because it places all of your debt in one place. This makes it easier to track your expenses, to create a budget, and to get your bills paid on time.
Is it OK to Pay Only the Minimum Payment on My Balance Transfer Credit Card?
From a legal standpoint, all you are required to pay on your balance transfer credit card is the minimum payment. From a financial standpoint, however, this is a bad habit to get into. If you pay only the minimum payment, it can take you decades to pay off your debt – and that assumes you are not adding any more debt to your balance. So, if you want to get out of debt (and who doesn’t?), it is best to pay off more than your minimum payment. Set up a budget that allows for regular payments above your minimum payment to be sent to the credit card company – and stick to it.
Will a Balance Transfer Credit Card Get Me Out of Debt?
Yes and no. If used alone, a balance transfer credit card will not get you out of debt. If you transfer all of your credit card balances to your balance transfer credit card and pay only the minimum payment, it can still take you years to pay off the debt. Therefore, a balance transfer credit card should be viewed as one tool in you tool belt for helping you work your way out of debt. If used correctly and to its fullest advantage, it can help you get out – and stay out – of debt.