Last updated 1 year ago
Are falling interest rates a good thing? The relationship between interest rates and economic growth is not readily apparent and is a complex concept for many Americans. Understanding the theories surrounding interest rates can help you better understand overall economic stimulation patterns.
This video presents an analogy that aptly describes interest rates’ impact upon spending and saving habits. Think of a car: you push down on the accelerator pedal to make your car go faster. Similarly, falling interest rates increase economic growth because there is less incentive to save money. Allowing interest rates to rise is like raising your foot from the accelerator, which slows the car. Rising interest rates encourage saving and slows people from putting money into the economy.
Understanding far-reaching economic trends can help you refine your own finances and better plan your savings.
Last updated 1 year ago
From splurging on fancy dinners to buying trendy clothes, there are a lot of purchasing habits that can get you into financial trouble. Monitoring and trimming down your spending habits can help you avoid future financial complications, including excessive debt, bad credit, or bankruptcy. Here are a few tips to follow when cutting back personal spending:
Monitor Spending Habits
Pay close attention to bank or credit card statements to see exactly what you’re spending your money on. If spreadsheets or pen and paper aren’t for you, then there are dozens of computer programs and online resources that will break down your spending habits. From there, you can analyze which categories could use a little trimming.
Create a Budget
Establish a detailed, strict monthly budget, allocating specific amounts for food, utilities, gas, clothes, and other necessary expenses. Following a budget means prioritizing essentials and identifying bad spending habits, which will bring you closer to your financial goals. Of course, the key to success is to stay on budget.
Cut Extraneous Spending
Though fun and enjoyable, it’s not necessary to dine out or go to the movies on a regular basis. Entertainment, dining, and travel are the categories that most individuals eliminate first. When making a purchase, remember to ask yourself if you want that item or if you truly need it.
Avoid Bad Habits
There’s no doubt that the occasional splurge feels great, but even small impulse purchases can quickly add up. Unfortunately, regular splurges can also quickly become a habit. Resist the temptation to spend on top-shelf products and unnecessary items.
Cutting down spending habits is an exercise in willpower. Your dedication to a financially sound future depends on how strictly you follow a budget and avoid unnecessary purchases. With proper diligence, you can reach your spending goals and enjoy financial independence.
Last updated 1 year ago
With so many store credit cards available and convenient ways to shop, it’s easy to quickly find yourself in more debt than you can handle. Once in that position, it may seem difficult to find a path to financial freedom. One of the most effective methods is to have a strategic approach to paying off debt. Here are some of the most important types of debt to pay off first:
Debts with Highest Interest
Your best approach to a debt-free future is to start paying off debts with the highest interest rates. Pay as much as you can for high-interest debts while only paying the minimum balance on the lower-interest debts. Once each debt is paid off, allot the same amount, or more, to paying off your remaining balances each month. The logic is that debtors will save money as the interest payments slowly decrease.
“Bad” Debts
Pay off debts that can be entirely eliminated. Prioritize paying off debts incurred from credit cards, car loans, and small personal loans. Don’t attempt to pay more than the minimum payment on your mortgage or student loans at first because their pay-off period is much longer.
Credit Cards
Many debtors try to pay off credit card debts first because they have an immediate impact on daily expenses and often have the highest interest rates. Exceeding or spending close to your credit limit greatly impacts your credit score, so it’s best to eliminate this debt before other types of debt. Credit card interest rates also have a tendency to rise quickly.
Establishing a plan not only puts your mind at ease, but can also free you from debt more quickly. Remember to not only pay off the right types of debts, but also consistently make the minimum payments on all debts, on time.
Last updated 1 year ago
Our latest blogs discussed ways to improve your credit and factors to be aware of when you have outstanding debt. Find more information about these subjects with the helpful links below.
Last updated 1 year ago
Credit scores can range from 300-850, but the reality is that most people will have a score between 450 and 750. Your credit score is an important number because it determines the kinds of loans and interest rates you are eligible for.
This video explains that having a score of 850 is an exceptional rarity. Only about 1% of people actually have a score over 800. If you have a credit rating of 720 or higher, then you are eligible for prime interest rates.
Maintaining your credit score is important to your financial reputation. Simply paying your bills on time and monitoring your credit with regular credit reports can help build your score to an ideal 720 or higher.
