Learn how to save money and increase your income.

Why make financial plans?

Most people don’t plan to fail, they fail to plan.

Small daily changes will help improve your finances

Take a bag lunch to work. Let’s do the math. If you spend $10 five day a week on lunch you are looking at $50 a week. $50 x 52 week =$2600 a year. When making your grocery list, plan your lunch for the week.
Limit your gourmet coffee and tea purchases at coffee shops.
If you are a smoker, stop smoking. Although I have never smoked, I’m aware of the cost of cigarettes. Let’s do the math. The average pack of cigarettes cost $6.95. $6.95 x 365 a day =$2536.75

How do credit scores affect your income?

Most people don’t realize bad credit is a significant income siphon. A low credit score will create a higher interest rate. Interest rates determine monthly loan payments. Let’s do the math. ( Interest rates may change without notice.)

Household (A): 2 adults 2 children

Yearly net income: $75,000

Credit Score:700-759

Mortgage 30 years :$100,000 , interest rate 2.98% monthly payment: $420.53

Car loan 7years: $25,000, interest rate 3.48% -5.49% monthly payment : $385.23- $408.33

Total monthly loan payments:$805.76- $828.86

Household (B): 2 adults 2 children

Yearly net income: $75,000

Credit score:620-639

Mortgage 30 year: $100,000, interest rate 4.39% monthly payment $500.41

Car loan 7 years: $25,000, interest rate 6.61%-10.49% : monthly payment $421.56-$469.35

Total monthly loan payments:$921.97- $969.76

Household( A) has $116.21 to $140.90 more disposable into than household (B)

Disposable income is important because it helps to build a financial foundation. Once both households have paid off their car loan, they should put the loan amount into a savings or investment account.

Make a get out of debt plan.

Don’t use debt consolidation companies'(This is my personal opinion.). Those companies charge fees to negotiate consumer debt settlements. Many consumers are unaware they can settle their own debt for less than they owe.

One of the best ways to pay off your debts is the snowball method.

The debt snowball method is a five-step debt-reduction strategy popularized by Dave Ramsey, a nationally syndicated radio talk show host who believes that momentum, not calculation, is the key to debt elimination.

Ramsey claims that if you list all credit card bills in order of amount owing and pay off your smallest obligation first, then work your way up the ladder and eliminate them one by one, you will have a better chance of paying off all debts. He believes that victories over modest debts develop confidence and lead to victories over larger debts. Debt avalanche, on the other hand, uses a more quantitative approach and will really save you money.

Snowball Alternatives

Debt Avalanche vs. Debt Snowball: What’s the Difference?
Paying off debt is a difficult task, especially if you only pay the bare minimum each month. It’s common to have to speed payments in order to get free and clear. The debt avalanche approach and the debt snowball method are two unique strategies for settling outstanding bills in this manner.
Most types of consumer debt are affected by debt avalanche and debt snowball, including personal, student, and auto loans; credit card balances; and medical expenditures. (They don’t work with mortgage payments and shouldn’t be tried.) Each approach asks you to prepare a list of your debts and pay the bare minimum on all but one of them. That’s the one for which you pay extra money in the hopes of eradicating it.

Debt Consolidation Loan vs. Debt Snowball

A debt consolidation loan typically has a 5-year payoff period at a fixed interest rate. If the borrower got the loan at 18% APR, the monthly payments would be $571.35, or about $6 a month more than the snowball method.

However, the debt would be paid off in five fewer months at a total cost of $34,281.13. That means a savings of $1,910.

Use discount programs to save money.

You are saving money when shopping can add money to your income. Join every saving program that stores offer. Some stores send special discounts to saving program members only. Most stores will ask for an email address.( If you don’t like giving your email address, open another email account you provide to stores. Google will allow you to open multiple email account. ) In addition to individual store saving programs, a cashback program can help households save money. The great thing about these programs is that they are free to join and pay you a bonus.

List of cash-back programs.