You want to save more effectively? Create a good savings plan!

When your life situation is more or less settled, the ratio of your monthly income and spending is quite predictable and you start thinking that it is high time for you to save some money for the future, you should prepare a strategy so as to save effectively. The earlier, the better so do not hesitate thinking that saving money will take away many good things from your daily life. Saving can be much less painful when you have a certain plan and you are aware of the goals and sense of what you are doing. Read our saving suggestions and gather funds for your better future.

Go online

Thanks to the Internet many things have become much easier, saving money, too. Visit some useful websites (Mint.com, GoSimplifi.com) and create an online plan for your savings, set goals and monitor the process from your couch. It is a very helpful device which makes saving process more visible and organized.

Change your point of view

If you think of saving as a loss, it cannot bring much success. Losing everyday pleasures, like eating out in fancy restaurants instead of preparing lunch at home or cutting down on snacks, takeaway coffee etc., will result in other, but long-term, pleasures. It is just a way of gaining money for making your dreams come true. You have always wanted to visit some places abroad or buy a summer house? In fact, you are exchanging one thing to another. Instead of coffee, you will have your great trip or the house. See the goal in your mind and the process of saving will be much easier.

Realize what is your goal

You must know what you want to achieve. As it has been already said, visualizing your dreams come true will give you a great amount of motivation to set money aside instead of spending it. Keep your goal in mind every time you want to buy the next unnecessary thing – it should help make the right decision.

Higher earnings? Higher savings!

If you get a pay rise…that is great! Celebrate and then think: does it mean that you can spend more again? If you have proven that you are able to live spending less money, why don’t you continue and just save even more? Consider transferring this additional money to your investment account automatically – you will avoid the temptation to spend it.

Compound interest

When you lose your enthusiasm see how your money multiplies. Compound interest is just interest on interest, the amount of money you have invested continue growing when it is reinvested instead of being paid out. Watch the process, calculate how much you will earn in the end and keep your motivation on a right level.

You deserve rewards!

Remember about celebrating some success from time to time. You should buy something for yourself, do a thing you miss because of saving and then continue working on the next goal. Rewards help you survive and, what is even more important, keep you motivated.

How to save effectively when your earnings are low?

Spending money for various purposes has become a normal habit for many people. It is definitely easier to put something aside if you earn a lot and do not have to put too much effort to find additional money. However, a huge number of people are not in such good situation. That is why we ask: how much can you save or can you afford to save some money at all? Even if your answers are, respectively: “-Little.” and “-Not really.” we still have some good news. You can find money for saving even if you live on a shoestring. Read this article and learn what options you have.

1. Look carefully on your spending. Analyze how much you spend and for what exactly. Making a list of expenses and keeping bills or receipts will help you create an overall picture of your financial management style. If you are not used to saving money, you can waste a lot being totally unaware of it. Actually, eating/drinking out or regular unnecessary small purchases can bring big sums at the end of a month. Stop buying on impulse and prepare a shopping list before entering a supermarket.

2. Before you buy (the things you REALLY need), visit a few shops (also online), look for sales, lower prices of the same products in different shops. Such a habit may be a bit time-consuming but it is also very profitable and will bring lots of savings if it is carried out on a regular basis.

3. Collect change and money “leftovers”…on your savings account. It is little, but in the long run it will give quite a big number.

4. Stop wasting money on gifts. Birthdays, Christmas or other occasions can cost you a lot of unnecessary money. Do not buy the piles of things you are not even sure are wanted. It is better to buy one item, yet chosen reasonably.

5. Take part in a local Investment Development Account program. This will demand your participation in sessions connected with financial management and then you will receive $2 every time you save $1 through this program (it must be for home, education or business).

6. If you do not have the habit of saving a part of your monthly earnings regularly (even a small amount), you should consider making it automatic. Visit your bank and get to know more.

7. Utilize your employer’s matches to retirement savings contributions – sometimes it can concern even 100% of your contributions.

8. Get rid of or avoid any high interest credit cards or loans. You really should not pay 500% of interest rates for a payday loan in the situation when you try to find every single amount of money to save.

9. Have an emergency savings account so as to avoid taking unexpected loans. Remember about the right balance on the account if you do not want to pay fees.

10. Consider taking Earned Income Tax Credit. This is available also for employees with low income.

Simple tack which can help you save more money

Starting a new year, many of us think about our financial situation. We almost always want more, no matter how rich we are. Nonetheless, not so many of us are so rich that would not need to save some money in order to, for example, go on vacation in summer. Surprisingly, we have more options than asking for a pay raise if we want to increase our savings. There are behaviors in our lives that cost us unnecessary money. By eliminating them we are really able to finally put more into our piggy-bank. Read what you can do to improve your financial situation this year.

Know what you aim at

First of all, you should set a goal. It is a cliché, yet still not everyone appreciates its positive impact on your final achievement. Think what you need the money for, calculate how much it will demand and believe you can complete the task.

Analyse your behavior

Start with taking a good look at your everyday actions and decide which of them cost you the most. Next, think without which products that are bought on a daily basis you can make do or which can be replaced by free substitutes (coffee, sweets?).

Do not forget about subscriptions

Remember that even small numbers sum up to the big ones. ALMOST free subscriptions and things like delivery payments for shops are very often unnecessary costs. And in order to save money, you should consider getting rid of such additional spending.

Work on your discipline

This tip will probably involve the biggest amount of your effort. Be strong-willed and stop taking your credit card everywhere, so as to avoid temptations to buy the next unnecessary item. Do not go shopping on an empty stomach, as it is proven that hungry people buy more than they have planned. Stick to your list of basic products needed for you to survive and exercise your willpower.

Deceive your extravagance

If you are a “compulsive shopper” maybe you should think of making your savings automatic. By the means of automatic transfers you would avoid the pain caused by inability to spend the money you have just received. Out of sight, out of mind.

Find time to work on additional money

If you are really determined, the best way to increase your savings is to make some time in your week to work. Even a few hours of additional “job” will turn out to be fruitful at the end of year. Earning $400 for a month will give you $4,800 in a year. That’s quite a good deal.

Strategy for a pay rise

Finally, it is obvious that higher salary would easily help solve your financial problems, but despite of the fact that any pay rise must remain in your dreams for now, nobody says that you will be earning the money you earn now forever. You should always aim higher and you need a plan here. Talk to your supervisor and find out what you should do to receive a better salary. Then, gradually work on being a good candidate for a rise.

What credit score do you need when you want to buy a car?

According to Experian’s report from the third quarter of 2016, the length and amount of auto loans grew last year (by 4 percent for new cars and 2 percent for used vehicles) and are still growing.

A purchase of either a new or a used car means an expense which, depending on your financial situation, can be a huge or just a standard investment.

The important matter you have to consider in advance is, of course, the loan you will probably try to receive. At the same time, you must check out your credit score which is going to be the factor deciding whether you get the money from the lender or not.

What is more, not only the fact of getting a loan, but also its rate depends on your credit score. This knowledge turns out to be crucial if you need to reduce the overall cost as much as possible. In this article we try to help you gain a deeper insight into the topic.

How does it work?

The score range used by Experian starts at 300 with deep subprime borrowers and ends at 850 with super prime borrowers. In the third quarter of 2016 around 57 percent of loan money went to super prime and prime borrowers (scores of 661 or more).

23 percent was received by subprime and deep subprime borrowers (600 and lower) and the rest went to the nonprime (with the score between 601-660).

Experian’s report shows that subprime and deep subprime borrowers are getting less and less credits from lenders who are more eager to invest in the clients with better financial prospects.

There is another bad information for borrowers with credit scores below 500 – they get five times higher rates than super prime borrowers. Clients with 781 score or higher receive the lowest rates.

How much will you pay?

In the third quarter of 2016 the average monthly payment was 495$ for a new car and 362$ for a used one. As we have already mentioned the amount that you will have to pay back depends on your credit score, thus, the super prime borrowers will pay back less.

What if your score is low?

First, you should get your credit report and analyse it. There can occur some errors so do it carefully. Having analysed your situation, the next task is to work on improving the score. Start with making sure that: your payments are always done on time, your credit balances are low and you do not open more unnecessary credits.

Even if it is possible for you to obtain a loan in a position of a deep subprime, we advise you to wait until your financial situation improves. A much lower interest – and consequently a total price – can be really worth waiting.

When you finally decide to buy

It would be reasonable to consider more than one lender’s offer and find the lowest interest. Even small differences in interests sum up to big numbers. Giving up your time to find the best offer is, actually, really profitable as it can help you save a lot of money.

Credit Karma Review

Getting an accurate credit score and finance monitoring service is something that more often than not happens on the internet these days. Since the need for better websites that do this kind of thing is on the rise, it comes as no surprise that the competition in this field gets evermore professional and secure.

Websites like Credit Karma are not only competing against other similar websites like CreditCheckTotal360, they’re also competing against professional financial advisors who operate on the internet.

This means that we can expect two things from our credit score services. One, we are expecting to get more accurate readings on the current status of our credit score; and two, we expect these sites to be as secure as possible.

What is Credit Karma?

Credit Karma is a fairly straightforward credit score monitoring service that provides its users with status reports about their current credit score ratings.

Furthermore, it guides its users towards some solutions they might apply in order to get a better credit score in the future. It does this by combining different types of reports and calculating them into the FICO score almost every loan service and bank in the US uses. The accuracy of this calculation Credit Karma does is inside the margin of error, which means that the score may vary by 1 or 2 points from your actual FICO score.

This kind of service is not a new thing on the internet.

However, Credit Karma offers this service for free and thus enabling even those of us who haven’t had a chance or incentive to try this kind of financial monitoring out to give it a shot without the fear of being charged for it.

Credit Karma site is straightforward

The site is fairly simple in design, but has some flaws. For a service that offers itself for free, it has to make money in one way or the other. It does this by engaging in putting ads wherever it can on its website. At least, that’s how it feels like. Not really a technical problem as much as it is a bad design choice, these ads give the site somewhat of a “trashy” impression.

Credit Karma is no scam. Far from it. But, it could do much better if the ads and the overall design of the website was a bit more fleshed out to accommodate the seriousness every one of us has while engaging into giving out personal financial data. If the customer doesn’t feel comfortable giving his or her credit information to a credit service, then something is wrong.

The other thing I addressed here was the fact that adverts play a big role in financing the service we can use for free. And sure, I’m aware that this kind of website is going to feature particular kind of adverts, mainly financial ones. However, here is another thing that can make customers feel uneasy using the site. The adverts simply feel like pushing a certain agenda on how you have to handle your money. The site suggests financial solutions tied to the institutions it’s promoting, which can be unappealing at times.

Under the hood

Now that we’ve talked about some of the aspects the facade of Credit Karma is showing, we need to take a better look at the services the website is offering.

Like many other credit score monitoring services, it offers a variety of credit score reports from different sources. It does this through their tool set, that is often most used by the customers getting familiar with new websites like this. That’s why I like to first take a look at these tools and see what they can do for you.

Credit score simulator is the standard tool for calculating your current credit score rating. It utilizes a number of processes to get as close as possible to the FICO credit score number we need. This tool is nothing special and can be accessed on many similar sites. However, Credit Karma offers in addition great tips on what can be done to change the credit score you currently have, which is somewhat convenient to have all of this in one place.

Home Affordability Calculator is a tool that simply tells you how much you can afford to pay monthly for a house you’re buying. It’s nothing special from a mathematical point of view. It does the calculation the way a few simple key strokes on your calculator could do.

Debt Repayment Calculator is another fairly easy tool that can be utilized on the go. If you’re looking for quick way to calculate the rate in which you can pay off your debt in a given timeframe, then this calculator can be handy.

Simple Loan Calculator is, as the name suggests, a simple calculator for calculating your loans. Nothing more. It has three fields you can fill out (loan amount, interest rate, number of years) in order to calculate a fairly easy operation.

Amortization Calculator is one of the more interesting tools on this site. It takes into account your possibilities to off your debt and calculates a steady and efficient way of getting rid of it. The tool requires basic information about the debt you want to amortize and gives you some numbers you can work with.

Credit Karma’s help towards a better credit score

Until this point, we’ve only talked about analysis. And while it is an important thing in finance to know the type of credit score you have and what your current status is, it is nothing more than a utensil for getting something done with your money. Here’s where Credit Karma’s advice section comes into play. It is broken down into a number of categories that will help you tackling a specific financial issue.

Auto insurance will help you find the best insurance for your car within the possibilities of your current credit score. Auto loans advises you on the best loans your current credit score rating can get you if you are looking in buying a new car.

Bankruptcy is not something we want to think about when monitoring our credit score. However, it is an important aspect in the personal finance world, and Credit Karma is there to advise you, even in the worst case scenario.

Credit cards advice helps you find the best credit cards with your current credit score. And not only that. Credit Karma will help you choose the best way to use your credit cards as well, so you credit rating reaches it maximum potential.

The Credit Karma community

If you’re considering trying Credit Karma out, you should know that they have a lively community which can help you not only get into using the service, but also get great ideas on how to improve you credit score. Like all communities, they expect that you share your positive experience and tips and tricks with them. On the Credit Karma forum, there are a lot of FAQ that will help every new user to get into using this online credit score service.

The verdict

While Credit Karma is not a service that will revolutionize credit score websites, it does a fairly good job nonetheless. The financial tools in combination with the advice it offers can help you get a more comprehensive look at your current credit score options as well as the kind of behavior you should avoid in the future.

From a design perspective, the site could be a bit more intuitive, since the service is free and will most likely be visited by amateurs in the field of personal finance. However, once you get into the inner workings of the website and services it offers, Credit Karma can become one of the best go to online services you can think of.