Top 5 Effective Methods That Can Improve Your Personal Finance Savings
When we are regularly spending thousands of dollars on personal expenses. We really don’t bother to think about, How we are spending?
Moreover, according to human nature, it is obvious when it’s not affecting me in any way, I am too comfortable with it.
That is where everyone doesn’t think much about on savings.
When remembering simple methods can actually save hundreds.
But, Today, after reading this article. You will be smarter on your regular personal finance activities. That can save you money and interest.
Effective Methods To Improve Personal Savings:
- Use cash back credit cards to pay for everything.
- Take Peer-to-peer loans, when you need to borrow money.
- For debts, use debt consolidation.
- Credit card balance transfer to lower interest.
- Use automatic debt repayment plan.
Cash back credit cards
Cash back credit cards let you accumulate cash rewards on your credit card. If you can use your credit card to pay for pretty much everything, and not just those purchases that earn the most rewards, you can max out your cash earnings. For example, if you spend around $5,000 each month on bills and other expenses, you can earn $580 a year on a card that pays just 1 percent in rewards. Many cards offer flat cash back for all purchases, while others offer higher cash back across rotating categories like dining, groceries, and shopping.
Cashback can raise up to 5% depending on different purchasing nature. You can select one from Best credit cards 2019
In peer-to-peer lending, borrowers obtain a loan from individual lenders without going through a traditional financial institution. The greatest benefit of P2P loans are their interest rates, which can be as low as 5% for borrowers with good credit — this means you can save money in the long term. The two largest P2P platforms are Prosper and Lending Club. Both charge fees for new loans (1% to 5% of the total loan amount at Prosper and 1.11% to 5% at Lending Club), depending on the size of the loan.
Once you’re approved, you’ll receive the funds in a few business days (which is much faster than a bank loan). Another notable difference between P2P loans and those issued by banks are that they come with a fixed term for payment, meaning the borrower typically has a deadline of three to five years to pay the loan off entirely, with monthly payments to meet. Fixed rate and low rates make it more conformable for people with low saving scale.
Recommended: How Risky is Peer-To-Peer (P2P) Lending & Legitimacy
Debt consolidation is the combination of several unsecured debts—payday loans, credit cards, medical bills, personal loans, —into one monthly bill having a lower interest rate, lower monthly payment, and simplified debt relief plan.
Simplied: Debt consolidation is a sensible solution for consumers overwhelmed by debt with higher interests. It can be done with or without a loan. Consolidation cuts costs by lowering the interest rate on debts and reducing monthly payments.
There are two major forms of debt consolidation – taking out a loan or signing up for a debt management program that doesn’t include a loan. It’s up to you, to decide which one best suits for your solution.
Debt consolidation is also referred to as “bill consolidation” or “credit consolidation.” By any name, consolidating debt effectively should get you out of debt faster and eventually improve your credit score.
Credit Card Balance Transfer
A balance transfer could help you save money on your existing credit card debt. It can also help you pay down your credit card debt faster.
If you’re carrying debt on a credit card with a high-interest rate, by transferring the balance onto a new card with a lower rate you will be saving big. Some cards offer promotional interest fees as low as 0%, which can be monumental in helping you conquer your debt faster. But it’s essential to have credit ratings in order to qualify for a card with a low-interest rate. There’s typically a fee in the range of 3% of your debt that you will pay upon shifting your balance onto the new card. Always remember that the introductory 0% interest rate won’t last forever. Most of these offers expire in 15 months or less, so use that time wisely to pay down your debt quickly.
Just pay close attention to terms and balance transfer fees before you apply for a credit card. Keeping in mind that balance transfer credit cards generally require a good credit score for approval.
Active Automatic Monthly Payments
Many of the best installment loans plans, particularly those associated with personal loans, offer an interest rate reduction if you sign up for automatic monthly billing. You should never pass these up – not only do they save money automatically on each month. they are also incredibly convenient and ensure you won’t miss a payment or incur a late fee. If you have any installment payments for personal loans, see if such an offer is available to you.
Also, for all your other monthly bills like utility and rest, you can set up the monthly payment and you never miss any payment.
Its the habit that you change and you save more.
None of the benefits of the card will be worth it if you carry a balance and pay finance charges. Pay your balance in full on time each month to avoid paying interest and late fees.
Just remember, whatever you choose to do with the money you have saved, learning how to budget effectively and save money when you need to can set up good financial habits for the long run.