Here are some tips to turn low interest rates into an advantage financially for you and your family! With interest rates remaining at record low levels it’s a good time to see how you can impact your future by making a few adjustments that could result in big savings! You might not be able to tackle them all at once, but you can review what makes the most sense for you to determine what would make the most impact.
- Start a savings account. Many banks offer no-fee savings accounts. Choose an amount you are comfortable going without with each month and deposit it into savings. Once it’s there make every effort to leave it alone. Periodically as you accumulate some level of savings, consider moving it to an invest account to help build your retirement fund (consider taking out) or college fund for your children. Starting this early in your career rather than later will be a big benefit!
- Pay off credit card debt. Credit card debt comes with some hefty finance charges and even more expensive penalties if paid late. Choose your cards with the highest balance and high interest rate or an expensive loan of some other kind, then work to get it paid down as quickly as you can. Before you start a savings account it would be wise to pay these balances down first to avoid the high interest payments. Another key is to resist the urge to use these cards until the balance is paid down so that you can actually free yourself from the high interest charges. If you have some cards with high balances you may even want to see if you qualify for a 0 percent rate to help accelerate your payments. Depending on the level of debt that you are facing, here are nine more suggestions to consider on how to chip away at your debt. Debt consolidation is also another alternative. You can refer to this guide to see the pros and cons or to see if debt consolidation is right for you.
- Save and pay cash for larger purchases. There are many ideas and ways to save to buy a new computer, afford that dream vacation or even purchase a car! If you don’t have a bank loan on your current vehicle consider paying yourself payments each month instead. Put it in a special account and then when the time comes you’ll have the down payment required for a new loan—or even the savings built to pay in cash! Calculate the cost of the item or vacation you are interested in and develop a timeline to save for it.
- Spend To Stimulate the Economy! Now this is completely opposite of what was recommended to this point, but let’s face it, you have to live and have a little fun too, so if you are going out for an evening or need to shop for anything from gifts to groceries to restaurants and recreation, shop in your local community and it will go a long way to stimulate the economy in your area.
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