Tips for Smart Banking

Tips To Avoid High Bank Fees

Everyone's experienced it: the multiple overdraft charges or late fees. It's heart-sinking and budget-busting at the same time. However, many people don't realize that these are just a symptom of a larger problem of excessive fees being charged by the banks. You are charged a fee when you are late for a bill, and sometimes you can avoid that by finding a payday lender to cover the gap. However, you are also charged other fees by your bank that are more difficult to avoid like withdrawal fees, transaction fees, and monthly service charges. Shopping around for a bank or system that keeps these fees at a minimum can literally save hundreds a year.

Smaller Banks Are Better

Larger banks tend to charge more fees than smaller banks. Credit unions also either don't have as many fees or their fees are less. Shopping around for a bank that will have reduce fees and give better service is a great way to get a handle on your budget and avoid nasty, surprise, fees on your account. If you do have fees show up, negotiate with your bank to have them removed if you are a new customer. Often, you can get this done as a courtesy for a short while.

Going Cash Only

Another way to work with a budget can be to sidestep the bank and it's overdraft protection program all together. Instead, you can get a secured debit or credit card and put your money there. If the money runs out, the overdraft doesn't kick it because there isn't one. You don't need a checking account anymore to pay most bills, it's all done electronically. You have no overdraft fees, but no overdraft protection either. It's sort of the electronic way of going cash only, in such a manner that you can still use the debit card to make payments electronically to your service providers. Just watch for any withdrawal fees that might be incurred by the secured debit or credit card provider too.

Seeking Debt Help

As I stated in my previous post, I am attempting to get totally out of debt. I prefer the snowball method of paying from the lowest to highest until they are all paid of. This works for me because I have enough income to make the payments.

There are some people who have got over their heads in debt and the ends do not meet between income and expenses. These people may need to seek debt help to manage and pay off their debt. The key to seeking any kind of help is to do the most research you can to avoid problems with companies who are out to scam you.

Typically, one of the most common form of debt management is to get a debt consolidation loan. This is not always easy to do but some lenders are willing to deal with you if you have a solid plan to repay all debt. Do not attempt a consumer debt consolidation if you do not have the funds to pay the monthly payments. Basically, you are just shifting the debt with no hope of repaying. This will only cause future problems. The idea is to be debt free; not to avoid paying.

One key point is that you borrowed the money and it is important that you pay it back. If a consolidation is out of the question, there are other ways such as credit counseling. These organizations will work with you and your creditors to reduce your interest and payments to achieve a payable plan over a span of up to five years. Be careful to make sure the organization is legit before signing any papers.

There are other ways to seek debt help but these are the only two methods I recommend short of filing bankruptcy. Bankruptcy should be a last resort and only in the extreme case if you really have no possible way at all to pay your debt.

No matter how you decide to pay your debt, it is an important issue for all people and you should address it sooner then later. Even if you are able to make the payments on time, you need to consider some plan to be debt free and start paying all that money to yourself.

Debt Be Gone

There are many people willing to give advice on how to get out of debt. There are also many so called professionals who will offer expensive services to manage your money. Here is a news flash for you; you are in charge of your own money and debt.

I have been working on the best plan to remove all debt from my families life. I have listened to the likes of Suze Orman and Dave Ramsey to get some good ideas. I have to say, of all the plans out there, Dave Ramsey offers the best most common sense plan.

His plan is basically you save up $1000 for any emergency needs. You then attack the debt with all the money you can throw at it until it is gone. This is done by starting with the smallest debt and paying that off and moving on. Dave calls it the Debt Snowball.

He is the first to admit that this is nothing new and he stole all his ideas from the past generation who did not believe in debt living.

Here is a copy of Dave Ramsey's Seven Baby Steps:

1. $1,000 to start an Emergency Fund
   
2. Pay off all debt using the Debt Snowball
3. Three to six months of expenses in savings
4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement
5. College funding for children
6. Pay off home early
7. Build wealth and give! Invest in mutual funds and real estate

This is plain to the point. He has loads of other advice on his website but this is the core of all his beliefs. I do not follow everything to a tee but one thing I learned by reading and listening to Dave is that you need a solid budget accounting for every dollar you bring it and what you are going to do with it.

This is my plan for getting debt free and I hope you will consider getting your debt under control too.

HSBC charges a fortune for Rate Matcher

For many months there have been grave concerns for the many homeowners that took out cheap fixed rate mortgages two or three years ago, and were due to come off the special deals. This is because a combination of interest rate hikes over the past two years, coupled with the effects of the global credit crunch and tighter lending conditions, meant that many would end up with a far higher interest rates and far higher repayments, and many would have found this impossible to afford. This could then lead to an increase in the level of repossessions.

However, in April the HSBC launched what looked to be a tempting offer aimed at these homeowners, where the bank offered to match the rate that they were currently on enabling them to continue with their affordable repayments. There were eligibility conditions that had to be met, and borrowers were asked to pay an arrangement fee of up to £5000 depending on how much they were borrowing and the rate of interest being charged on the loan.

However, it has now emerged that HSBC has hiked up these fees further. The Rate Matcher mortgage loan was only supposed to be offered on a short term basis, but the popularity and demand resulted in the bank extending the offer. However, the fees have now rocketed, and those taking out a £250,000 mortgage at 4.79% will now pay nearly £8000 by way of an arrangement fee rather than the previous £5000. Some other customers could even end up paying up to £10,000.

An official from the bank said: 'We were left with a choice of pulling the offer or increasing fees.' In the meantime Alistair Darling, the Chancellor, has been warning banks to stop ripping customers off with hefty arrangement fees, and is in talks with the Financial Services Authority with regards to coming to a figure that can be classed as a fair fee.

Getting Rid of Debt

This is a follow-up to my article on Debt Relief. Debt is a problem that is caused when you spend more than you have and use credit to pay for the things you need. It is easy to say "charge"; however, it is much harder to fix the problem later. The smartest way to avoid debt is to consider all your purchases prior to buying anything. However, this article is for helping those who are already past that point.

The first thing you want to do when in debt is to get rid of the debt. To do this, start a list of all the creditors you have including loans, credit cards, mortgages, and store accounts. Once you have the list with the amount owed, interest rates, and monthly payments, see how it compares to your income. If you can afford the debt and pay more than you are paying now, formulate a plan by paying extra on the largest interest rate and working your way down the line.

Set a fixed amount to pay each month for all debt and pay that amount each month until all debt is gone. This means when you pay off the highest interest account, apply all that payment amount to the next highest interest account and continue to the next and the next until all debt is paid off.

If your income is not equal to what your payments are every month, it may be time to contact a Debt Company. There are many companies out there that specialize in helping people get out of debt. Most of these work only with your unsecured debt. These companies operate in two forms, as a for profit company or a non profit. Be sure to research what each offer and read and understand what you are getting into before signing anything.

If you use one of these companies, they can offer you a plan that does what I recommended above except they will negotiate a lower interest and lower payment consolidated into one monthly payment that you pay until the debt is paid off.

Some debt companies offer to negotiate with your companies to pay off you debt for a lower set amount. They see the best debt settlement possible. This is normally possible when you have gotten way behind on a loan and the creditor is just trying to get something out of you. It is a solution but I caution that you do your research and make sure that it is both legal and the company is reliable. Above all, get everything in writing!

You caused your own debt! Take ownership of it and work as hard as you can to get out of debt. I have included some links to some good resources that will further help you achieve this goal. Good luck and be sure to come back and leave a comment when you take control of your debt.

Finding Good Insurance

There are many reasons to have insurance. One is it may be required by law. Another reason is that it is just plain smart. Recently I found out how smart it really is when during a huge storm, huge trees fell on my house. I would not have been able to afford the repairs without good house insurance.

Having insurance does not mean you have to pay through the nose. Part of being frugal is finding ways to get the best for less. For example, to find the best auto insurance quotes, one should search the Internet and seek the best rates you can find for your needs.

Finding Cheap Home Insurance is also possible. There are many companies available who are just as good as the big name companies but spend a lot less money advertising. Who do you think pays for all those fancy commercials? That's right; it is you the customer, you pay with higher rates.

Be sure when looking for new insurance or to replace your old policy, you fulfill your family's needs without overdoing it. One example is in the deductible. The higher your deductible, the lower the premium will be. However, if you have a claim make sure you will be able to afford the deductible.

There are many factors to consider when buying insurance. I could write a book on insurance but the key is that there are cheaper more frugal companies and doing your research will provide the best coverage at the best possible rates.

Debt Relief Solutions

The number one thing that many people struggle with is debt. This is a struggle for even the best of us. It is easy to get into debt but hard to get out.

Basically, the best way to get out of debt is to pay off your bills as quick as possible and in the shortest time. However, this is sometimes easier to say than to do. What if you payments are more than what you make? This is the time to seek help to get relieve your debt.

Debt Relief comes in many forms.The first possibility is to see if it is feasible to get a lower interest. Consolidation Loans help you reduce your monthly payment and get lower interest if your other debts have high interest rates. This is OK if you have excellent credit and have not got behind on your credit.

The next possibility is to see a debt counselor who can help you negotiate lower interest rates and lower payment. This could reduce your interest and save large amounts of money. This may also consolidate into one set monthly payment until all your debt is paid off. These types of services are only available for unsecured debt.

The final step, if the other possibilities fail, is bankruptcy. This is never a choice I would recommend; however, there are times when you have no other choice. Do your research and make sure you have exhausted all other avenues before doing this.

Getting out of debt is never easy. However, following my recommendations will get you on the right path to being debt free.