Saving Tip: Save Like You’re Paying Off A High Interest Debt

Savings

I was driving down the highway on my way home from work the other day when I looked up and saw a billboard for a local bank. It had a two-sentence ad for their high-yield savings account that really caught my attention. It said:

Your future called. It said to send money

This really got me thinking about our debt culture, and how most people don’t even bother to save for their future. We value having things now, and for most people saving for the future never even enters their minds. In fact, according to MSNBC.com, the Commerce Department reported that the nation’s personal savings rate for all of 2006 was a negative 1 percent, the worst showing in 73 years. The article continues:

As the nation’s largest generation retires, that will further depress savings because typically retirees are drawing down their accumulated savings in an effort to make up the difference between the salaries they earned on the job and their smaller Social Security and other pension payments.

“We have to face the question of whether we are anywhere near where we need to be with our savings to see us through,” said David Wyss, chief economist at Standard & Poor’s in New York.

We are not saving enough for our future needs, and we need to find a way to turn that around. We need to start saving NOW!

Saving For The Future

We know we need to save for the future, but how do we start? How do we get motivated to start putting away the funds that we’ll need down the line?

I read an article on NPR.com where they were talking about debt. One of the quotes was from Financial Times columnist Tim Harford. He said:

Debt is your future self sending you money back in time. So the question is, are you and your future self both happy with the deal?

No, I’m not happy with the deal – that’s why we don’t do debt. This quote did make me think, what if this went in reverse, and it was our present self sending money to our future self?

Savings is your present self sending you money in the future.

Now that is a deal I’ll sign up for!

Dayana Yochim in her article, “Give Your Future Self a Raise” talks about how most people have been told to save 10% for retirement, but that it just isn’t enough. What does it take to turn that around? It’s pretty simple:

Save more. Work longer.  End of story.

Sounds dull, but if you get serious about those two things — work an extra two years and sock away just 3% more in savings if you can — you will turn your entire financial future around.

Saving Is Like Paying A High-Interest Debt To Your Future Self

Sometimes just saving for the future isn’t motivation enough. You need to couch it in different terms. Here’s what I’ve come up with for myself. When you have debts, the debts become a priority, you have to pay them off before you can buy the things you want like a new gadget or a vacation. If you don’t pay your debts eventually the creditor will repossess your house or other assets.

I like to think of savings as a high-interest debt that I’m paying to my future self. I have to pay myself for the future before I pay for other things because if I don’t my future prosperity will be repossessed. And I don’t want my future to get foreclosed on! Do you?

Tips To Jumpstart Your Savings

1. Treat retirement savings as a high-interest debt to be paid off.
2. Set a debt goal: Set a debt goal for your retirement savings and try to make payments on that debt as often as you can. Use the Dave Ramsey debt snowball and the concept of snowflaking to add more money to your retirement savings.
3. Save more: If you’re saving 10%, bump it up 15%. Save as much as you comfortably can. You don’t want to make your current life uncomfortable, but you do want to make sure you save enough. Check out PTMoney’s article, “7 Can't-Miss Ways to Kick-Start the Saving Habit” for more ideas of ways to start saving.
4. Work longer: Plan on working longer in order to save more. Take on part-time jobs or save other unexpected windfalls.

In my mind, the most important thing to do when it comes to saving is to just start doing it. Make it automatic, make it a habit. Turn it into a game! You’ll be happy to know that you’re paying your future self for a prosperous retirement. The billboard will now read,

Your future called, you’ve got plenty of money because you started saving!

 What are your tips for jump-starting a saving habit? Leave a comment here!

Source: http://www.biblemoneymatters.com/summer-savings-series-6-saving-tip-save-like-youre-paying-off-a-high-interest-debt/

Tax Payment by Credit Card Lauded

Tax Payment by Credit Card

KUALA LUMPUR, March 3. 2015: 

The Association of Islamic Banking Institutions Malaysia has lauded the use of credit cards to pay income tax, saying it would help avoid penalties while the government benefits from direct tax collection.

President Datuk Mohd Redza Shah Abdul Wahid said the initiative by the Inland Revenue Board (IRB) provides taxpayers with a convenient mode of payment.

“I think it is a good move by the IRB because the more the channels of payment that exist in the payment system here (the better) it is for people to meet their obligations.

“Of course credit will incur but those with no time to go to the IRB can go to the bank and make their tax payments via credit card. This will definitely ease the taxpayers.”

Taxpayers can plan their financing accordingly when using the credit facilities, he said in a phone interview.

Yesterday, the government announced that taxpayers can make their income tax payments via Visa, MasterCard or American Express credit cards as well as debit cards issued by banking institutions in the country.

IRB expects the new initiative to increase online income tax transactions to 25% compared to 12.13% of the 7.53 million tax payment transactions recorded last year.

IRB recorded a tax collection of RM133.694 billion in 2014, up 3.6% from the previous year.

The government and IRB are confident that the new initiative will see direct tax collection reaching RM142.646 billion this year despite external challenges such as falling oil prices and the Goods and Services and Tax implementation in April.

Improve Your Health, Wealth - Without Spending a Lot

Health & Wealth

You know that staying healthy has plenty of positive benefits -- you feel happier, you have more energy, you may even live longer. But did you know being healthy can also have a positive impact on your wallet?

Here are six ways that taking good care of yourself can also pay off for your finances -- and six ways you can develop strong health without spending a fortune.

One disclaimer before we jump into this list: There are exceptions, of course. You might lead a perfectly healthy lifestyle but suffer from an accident or illness. Unfortunately, there are lots of people eat right, exercise, wear sunblock, don't smoke, floss -- and get diagnosed with cancer. It happens.

The tips in this article don't guarantee good health or low medical bills. They're simply intended to get you thinking about the relationship between your health and your money and to encourage you to take care of your health so that your wallet can hopefully share the positive effects. Yes, some people will become survivors of bad luck or misfortune, but let's do whatever is within our power to lower the likelihood of needing pricey medical care.

With that said, let's launch into six ways your health impacts your net worth, and six free or cheap ways you can improve your health.

1. Fewer Doctor's Visits

Every time you visit the doctor, you face a deductible and a co-payment (plus plenty of potential additional expenses depending on the course of treatment she recommends). If you need to see a specialist, that co-pay increases, and your co-insurance may also kick in.

But if you keep yourself in good shape and follow your doctor's advice when she recommends a certain lifestyle change or course of action, you'll be less likely to need too many visits. That "apple a day keeps the doctor away" saying has some truth to it –- and apples are cheaper than appointments.

2. Lower Pharmacy Costs

If you eat well, exercise regularly and follow your doctor's orders, you'll increase your likelihood of needing fewer medications for aches, pains and ailments. You could save on everything from pricey prescriptions to over-the-counter meds, which anyone in less-than-perfect shape can tell you could cost hundreds a month.

3. Less Time Missed From Work

Depending on how many days paid sick days your company allows, an extended illness -- or too many minor illnesses -- could wind up costing you several days' pay. Excessive absences also look bad to employers, which can affect things like your performance review, promotion potential and opportunities for raises. In other words, sick days harm your finances all around, both short-term and long-term.

4. Better Work Performance

When you're mentally and physically fit, the days you do spend in the office will be more focused, productive, and efficient. When you feel well, your mind is alert and you're better able to deal with problems as they arise. You can rise to challenges and exceed expectations -- which has quite a nice effect on those things like performance reviews, promotion potential, and opportunities for raises.

5. Less Money Wasted on Bad Habits

Plenty of things that are bad for your health are also bad for your wallet. Smoking, drinking alcohol, and existing on a diet of fast food and soda are expensive habits. Cut these out of your life, and you'll find you suddenly have much more money left over at the end of the month.

6. More Energy to Start a Side Hustle

If you've ever thought of starting a side business -- whether it's selling crafts on Etsy or launching your own landscaping company -- you'll find you have much more energy to pursue it if you're in good health. A side business can be a great way to bring in some extra money, but it's not the kind of thing you can do for a couple hours when you feel like it. As any shark on "Shark Tank" will tell you, it takes determination and plenty of sweat equity.

How to Improve Your Health -- for Free (or for Not Much)

So how can you maintain your health without spending too much of that money you've just saved by being so healthy? Here are six simple (and inexpensive) strategies.

1. Shop Smarter

You can eat better without spending a fortune by buying in-season produce, stocking up on cheap but healthy staples like brown rice and beans, planning your meals ahead of time, and keeping fresh fruits around when you're hungry and running out the door.

2. Cook Smarter

Make meals from scratch rather than paying for convenience foods and packaged meals. Use the same basic staples (such as rice or pasta, some lean protein and veggies) to make multiple meals, such as tacos, enchiladas and quesadillas, Thai curry, vegetable roasts and stir-fries. This will limit your food waste and simplify shopping.

One day per week, cook meals in bulk and freeze or refrigerate leftovers to eat throughout the week. The more easily you can pop something in the microwave during the week, the more likely you are to stick with your meal plan. Brown-bag your work lunches instead of grabbing something on the go.

3. Drink More Water

Carry a water bottle with you to make sure you're staying hydrated; it will keep you fuller longer and help you stave off dehydration symptoms like headaches. Keep a glass of water at your desk and sip it throughout the day; each time you get up to use the bathroom, refill the glass.

4. Exercise for Free

Staying fit doesn't have to cost a fortune. Try exercising to YouTube videos, walking your dog, jogging with a friend or joining a dodgeball league. Download free fitness apps that guide you through exercises, play Frisbee or soccer in the park on the weekends or learn a few yoga poses that you can practice in your living room. Do push-ups, squats, lunges and crunches.

Exercise your imagination: place a circular, uncovered trash can on the top rung of a ladder and use it as a backyard basketball "hoop." Tie some string between two trees and turn it into a tennis "net." Turn a gallon of milk into a "barbell" that can help you practice bicep curls.

5. Meditate

Studies have shown that a regular meditation practice can help with a slew of medical issues, including high blood pressure, insomnia and chronic pain. It can also help reduce your stress levels, and stress brings its own set of medical problems.

Taking 15 minutes a day to practice deep breathing and relaxation can have a big payoff. If that feels like too much time, start by deep-breathing and meditating for just one minute per day. Develop this habit by repeating it every day for a week. The following week, increase this to two minutes. The week after, increase it to three minutes.

6. Use an App

There are tons of health and fitness apps available for free or very cheap that can help you to maintain a healthier lifestyle. From step trackers to calorie counters to preloaded workout routines, there's an app for any health resolution you might want to make. Scroll iTunes or Google (GOOG) Play until you find a free app that sparks your interest. Start by downloading just one app, and commit to using it daily for 21 days, until it becomes an ingrained habit.

4 Reasons to Pay Your Credit Card Bill Before It's Due

Paid in full

There are many good reasons to never pay your credit card bill late, but are there any good reasons to pay it early? It would seem to go against all common sense to send in a payment well before the due date, but the more you understand about how credit cards and credit reports work, it can be smart idea under some circumstances. Here are four reasons why you might consider paying your credit card early.

1. Save Money on Interest Charges

When you carry a balance on your credit card account, you accumulate interest charges each day, based on your daily balance. So when you make a payment before the due date, you are lowering your average daily balance, which can reduce your interest charges significantly. Also, think of it this way: Since you earn very little interest from keeping money in a checking or savings account, but pay much more for that high-interest credit card debt, you stand to save money in the long run by making payments to your credit card as soon as possible. If you want to know how long it will take you to pay off that balance, this calculator can help you.

2. Improve Your Credit Score

When your statement period ends, and a statement is issued, that balance is reported to the major credit reporting agencies as debt, even if you ultimately avoid interest by paying your balance in full by the due date. That reported debt can lower your credit score if your balance is high during a particular month. By paying off all or some of your balance before the statement cycle even closes, you can reduce your debt-to-credit ratio and improve your credit score (you can see how this factor is affecting your credit scores by checking your free credit report data on Credit.com). This can be an especially important factor when you are applying for a home mortgage or another line of credit.

3. Pay Off Your Debt Sooner

By making an early payment, you are committing your funds to pay off your debt, rather than merely planning on doing so in the future. Without having those funds available for other discretionary expenditures, you are unable to change your mind and spend the money elsewhere.

4. Free Up Your Line of Credit

If you anticipate making a large purchase, you can quickly use up your line of credit before payment is even due. This is especially true when you consider that the typical statement period is about 30 days long, and your grace period, the time between statement closing and the payment due date, can be 21 to 25 additional days. And if you are traveling and have holds placed on your account by hotels or rental car agencies, then you may have even less of your credit line available by the time the due date arrives. By making early payments, you can free up your line of credit and ensure that all of your charges are approved.

When Not to Pay Your Bill Early

While there may be some very good reasons for cardholders to pay their bills early, it won't make sense for everyone. If you are always avoiding interest by paying your statement in full, and you aren't using a large amount of your credit line, then waiting until just before your due date to make a payment can be ideal. In this situation, you aren't saving any money on interest charges, and your funds will remain available to you in your bank account for as long as possible.

Visa vs. MasterCard: Is There a Difference?

Visa vs MasterCard

Most Americans today have at least one credit card, and many, more than likely, have a number of them. As of December 2014, the average debt per credit card is over $15,600, and American consumers owe almost $883 billion total in credit card debt. The two primary credit card companies are Visa and MasterCard. While both companies offer credit cards with similar features and usability, there are some differences, though most users won’t notice them as many merchants accept both cards. The companies are publicly traded, with Visa and MasterCard commanding a $153.6 billion and $94.4 billion market capitalization, respectively

HOW CREDIT CARDS WORK

Credit card companies like Visa and MasterCard don't actually issue individual credit cards directly; rather, banks, credit unions, and even retailers issue branded cards. The issuing financial institution usually sets the credit card’s terms and conditions, including interest rates, fees, rewards, and other features. When a credit cardholder pays his or her bill, the financial institution receives the payment—not the credit card company.

Visa, MasterCard, and other credit card companies, such as American Express and Discover, make money by charging merchants and businesses a fee for accepting their cards as a method of payment. These firms don't consider themselves financial companies: instead, Visa refers to itself as a payments technology company and MasterCard prefers to be called a technology company in the global payments industry.

Today, not only do businesses accept credit cards, but services such as PayPal and Square let everyday people accept payment via Visa or MasterCard.

WHERE VISA AND MASTERCARD DIFFER

While differences in interest rates, credit limits, rewards programs, and perks are controlled by the issuing financial institutions, Visa and MasterCard compete for those financial institutions. The credit card companies will offer certain perks such as identity theft and fraud protection, travel, and car rental insurance, or purchase protection as incentives. Business credit card customers may also be entitled to certain discounts at hotels, airlines, and gas stations. Merchants may also be able to negotiate different fees with the credit card companies depending on volume.

Since the only underlying difference between credit cards are the perks, choosing the right card network comes down to what the customer values most. For example, Visa tends to have a better “Loss of Use” coverage on car rental insurance than MasterCard; however, Visa's benefits exclude car rental insurance in certain countries entirely. MasterCard offers “Return Protection” with very few cards, whereas Visa's Signature cards widely carry that service. For gold or other elite cardholders, the credit card companies may also offer concierge services to handle certain tasks and save time for the consumer. These services vary and may provide access to event tickets, restaurant reservations, hotel recommendations, or even assist with gift purchases given the recipient’s age, preferences, and the buyer’s spending limit.

Many credit cards that participate in bank-offered rewards programs can be changed from Visa to MasterCard or vice versa upon request and reissued. It’s also worth noting that among the most common credit card networks, American Express usually offers the greatest perks. However, these cards usually carry an annual fee and are less widely accepted than Visa and MasterCard. Discover often has the lowest degree of perks, having no purchase or return protection, no rental insurance, and no concierge services. 

THE BOTTOM LINE

Visa and MasterCard are two of the most popular credit card brands in the world, though these companies don't issue credit cards themselves. Banks and other financial institutions issue the cards, setting interest rates and credit limits and sponsoring rewards programs. Since Visa and MasterCard are usually accepted wherever credit cards are taken, the consumer should focus more on the interest rate and features of the card rather than the brand. The actual differences between the credit card companies are subtle but may impact a consumer when it comes to perks such as fraud protection, travel or car rental insurance, and purchase protection.

Source:http://www.investopedia.com/articles/personal-finance/020215/visa-vs-mastercard-there-difference.asp

7 Hidden Perks of Credit Cards

From extended warranties to roadside assistance, some credit cards

offer more than just credit

There are so many warnings that come with credit cards – don't abuse them, don't let a thief get his grubby hands on them – that it's easy to forget there can be perks to using them. And these extend beyond the obvious, ultimate perk: being able to pay for merchandise or services when you don't actually have cash in the bank to pay for them.

So if you'd like to better utilize your credit cards, you may want to sniff out any bonuses you're unaware of. "The quickest and easiest way to locate that information is to go directly to your card issuer's website," says Randy Hopper, vice president of credit cards for Navy Federal Credit Union in Vienna, Virginia.

Once there, Hopper says those perks will typically be located in the product program guide and disclosures space.

You may also find them hiding in the benefits and services section or some other out-of-the-way spot on the website. While some credit cards have no special benefits, here are some of the perks you may have been missing out on:

Extended warranties. Say your television went kaput. You might be covered for that. Visa, MasterCard, Discover and American Express all offer credit cards that extend a manufacturer's warranty for an extra year. Just remember that it isn't good enough to be a customer – you'll need to have purchased the TV with your credit card and not with a debit card, check, or a store credit card. That's generally the case with most credit card perks: You need to have bought the product or service with that particular credit card.

Roadside assistance. Some perks require no upfront purchase. If your car breaks down, your credit card may offer roadside assistance. But slow down before canceling your current roadside assistance without looking over the terms first. Often, what your credit card will do – after you’ve called the number on the back of your card – is call a local tow truck driver for you. Then, you'll pay for the costs with your credit card. (But some cardholders with premium cards do get free roadside assistance.) While it may not seem like the flashiest perk in the world, you might think otherwise if you find yourself stranded on a country road at midnight.

Guaranteed returns. You know how it goes in the world of shopping. You buy some merchandise and for whatever reason, you later wish you hadn't. Maybe it didn't fit. Maybe it's something you just aren't using. But the return date is passed, and you're stuck with it.

Or maybe not. Some credit cards have a guaranteed return policy – if the store won't give you your money back, the credit card will. But before you start scouring your house for unworn items with the tags still on, know that "there are rules and limitations," says Matt Schulz, a senior industry analyst for CreditCards.com. "For example, the item should be in good shape, and you should have the original receipt. You should also have the original packaging."

There are also price limits. "Many issuers have limits of around $200 to $500. Still, getting $200 back is a lot better than getting nothing at all," Schulz says.

Special access to airport services. Frequent fliers often relax in posh airport lounges that keep out the riffraff (regular travellers, like this writer). But it doesn't have to be that way. Some high-end credit cards allow free access to an exclusive airport and railroad lounges, says Bruce McClary, spokesman for the National Foundation for Credit Counseling.

"Nobody wants to be the person who pays for an expensive public Wi-Fi connection, only to find out afterward that their credit card allows the same access at no charge," McClary says.

Event ticket protection. If you end up missing a concert, Broadway show, or some other big event due to weather, a car wreck, or perhaps even lost tickets, some credit cards, like Citi Prestige and Citi/AA Advantage Executive cards, will refund your money. (Obviously, restrictions apply, so read the fine print.)

Emergency travel assistance. If you're travelling overseas and you run into trouble, some credit cards will kind of function as your own, personal American embassy, offering you phone-based translation services or helping you find a hospital, for example. And emergency or not, many credit cards, especially the high-end ones, also specialize in assisting with lost luggage.

If you're in Bahrain, but your suitcase is in Boise, your credit card might give you an allowance to buy enough of a wardrobe until you catch up with your suitcase. Every card is different in how it assists you when it comes to missing baggage. Some cards focus on helping you find your luggage, while others offer money to keep you afloat. Still, other cards will replace your luggage if it's stolen.

Replacing stolen and damaged items. Some credit cards will replace stolen merchandise purchased within the last 90 days. But there are exceptions (there are always exceptions). For instance, some Discover credit cards will replace most merchandise, but nothing considered perishable – food and even perfume – is covered. They also won't replace any items stolen from a car.

And if you pay your cell phone bill with your credit card, your credit card may have a policy that replaces your damaged or stolen phone. But not your lost cell phone.

That's why it helps to have a reality check. There are enough restrictions and guidelines surrounding these benefits that you can't rely on your credit card to bail you out of every jam. Nonetheless, many credit card issuers offer reasonable perks designed to help consumers who fall victim to unfortunate circumstances. A police report demonstrating that your iPhone was stolen from you at gunpoint demonstrates to your credit card issuer that what you say happened did. If you left your new iPhone on the front seat of your car, and it was stolen, your credit card probably won't help you out.

In other words, your credit card will often save you from bad luck. Very rarely will it save you from yourself?

Source: http://money.usnews.com/money/personal-finance/articles/2015/01/29/7-hidden-perks-of-credit-cards?

World’s Worst Passwords: Did Yours Make the List?

Password 123456

If you think using the word “password” for your actual password is clever, you’re wrong. Using “123456” is even worse.

That’s according to a list of the top 25 worst passwords from SplashData, a password management service. “123456” and “password” have the dubious distinction of topping the annual list as the two worst passwords since the list was first started in 2011.

SplashData used more than 3.3 million leaked passwords in 2014 to create its “worst of” list.

Although the lack of imagination in selecting “password” or “123456” (or even “qwerty”) for a password is almost laughable, it’s actually a serious issue. Selecting a good password is an important (and easy) way to help protect you from hackers and identity thieves.

“Passwords based on simple patterns on your keyboard remain popular despite how weak they are,” said Morgan Slain, CEO of SplashData. “Any password using numbers alone should be avoided, especially sequences. As more websites require stronger passwords or combinations of letters and numbers, longer keyboard patterns are becoming common passwords, and they are still not secure.”

The top 10 worst passwords, according to SplashData, are:

1. 123456
2. password
3. 12345
4. 12345678
5. qwerty
6. 123456789
7. 1234
8. baseball
9. dragon
10. football

Click here to see the rest of the top 25 list.

SplashData said there are two simple rules to creating a good password:

• Use eight characters or more, including numbers and letters, as well as mixed capitalization.
• Don’t use the same username and password combo for more than one website.

I can usually think of decent passwords. My issue is remembering them. Sigh.

Source: http://www.moneytalksnews.com/worlds-worst-passwords-did-yours-make-the-list/