5 Simple Financial Techniques That Will Save You Money

It’s in everyone’s best interest to ensure they have a cash reserve. This extra cushion of money allows you to deal with any unexpected financial adversity such as an emergency dental treatment or unexpected car repairs. Without such a cash reserve many people will resort to short term loans or advances on their bank accounts. Here are a few Financial Techniques to help you build up your cash reserve.

Financial Technique #1- Cut up the credit card.

Financial Techniques

 

This may sound a little extreme, but for many of us the convenience of the credit card is often our downfall. It is far too easy to rack up payments with your plastic- all in a short period of time, be it grocery shopping or paying for your newest Amazon purchase. Whilst hugely convenient the credit card can often remove us from the position of control we require over our money. We are given no warning when our credit card begins spending money we do not own. Of course if you can pay off the entire balance on time each month you will not incur the interest wrath of the bank, but miss your payment by even one day and you can be hit with substantial late payment fees. Often the first warning you will have that you are about to be issued a late payment fee is when you see that it has already been debited from your account. So take direct financial control and spend only the money you have, avoid the banking traps and ditch the credit card.

Financial Technique #2- Research the Best Savings Account for You.

Research the best savings account for your money. ‘Best’ generally means two things regarding savings accounts. The first being finding the account that offers you the highest percentage interest rate on your savings. Put simply the better the interest rate, and the higher the balance of your deposited savings the higher the interest that savings account will earn.

The second factor is the flexibility your money has while in the savings account. It’s no good to you if every time you need to withdraw funds from the savings account to meet an unexpected payment you are paying a withdrawal penalty fee. This is something you need to research before committing your money to one of these accounts, generally those savings accounts which offer the highest rate of interest will often be under the condition that you cannot move your money around for at least a minimum amount of time (6 months, 1 year, 5 years for example.) You must carefully negotiate the pros and cons of each of these factors to decide upon the most suitable account for your finances. One choice is EverBank® Freenet Checking Account and EverBank® Yield Pledge(SM) Money Market Account

Financial Technique #3- Never Miss a Scheduled Payment

Missing a scheduled payment whether it be your mortgage, credit card or any other payment will result in an adverse entry into your credit report thus making credit more expensive (or impossible to obtain) the next time you are looking to borrow. But more immediately it will also subject you to late fees which can be much higher percentage wise than the interest itself. So even if you have to make the minimum payment, it is better to do that on-time, than to miss it altogether. But even better still is to avoid debt and pay for everything as you go.

The best way to ensure that you don’t miss any payments is to use an electronic bill-pay system. These days, almost all checking accounts have one attached that is free. By scheduling your bills in advance you know how much you owe and you can be sure that the bills are paid on time, every time.

Financial Technique #4- Beware of Overdrafts

This technique ties in very closely with #3. If you have scheduled your bills you need to be sure that you don’t overdraw your checking account. Because, once again the fees are high. Some checking accounts allow you to tie overdrafts to a savings account, so if there isn’t enough money in the checking account the bank will automatically transfer just enough to cover the check from the savings account. Often this privilege is limited to three free transfer transactions a month. So it is better that you keep an eye on it and transfer enough to cover all your transactions than for the bank to transfer enough to cover 3 small transactions in a row and then start charging you fees again.

Financial Technique #5- Avoid Vices

They don’t call them “vices” for nothing. They almost always put your finances in a vise. Ever wonder how someone can win the Lottery and still end up broke a few years later? The easiest way to blow a big wad of cash is through vices. If you buy commodities of any sort at least you have something tangible for your money, but alcohol, drugs, cigarettes, gambling, etc just burns up money and you have nothing to show for it except in most cases higher doctor bills. Avoid vices and you will have a lot more money to pay for your other expenses.

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This article has been provided by Todd McCullough – an independent blogger and finance researcher. He writes financial advice and money saving themed articles for financing and loan websites.

Image courtesy of Nongpimmy / FreeDigitalPhotos.net

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