Browse > Home / Search

3 Money Sucking Financial Innovations

August 13, 2010

Many fabulous financial innovations have been made in the last 15 years that have helped to make your life easier or better.  Unfortunately, not all the financial innovations over that time have been positive; there have been some products and services created that can be a major drag on your net worth and even on your quality of life.

We’re obviously not fond of these money suckers, as you’ll read below, but we’ve never been in the situation where we’ve needed to tap into these “creative” sources of funding.  If you’ve used any of these three, let us know why you needed to and your experiences with them in the comments at the end.

Payday Loans

Payday is a week and a half away. You have made financial mistakes in the past, and haven’t fully recovered from them.

Something happens — some financial emergency. Let’s say your refrigerator dies. You don’t have the funds to pay it, but it’s an issue that you have to resolve. (You’ve got to eat!)

You could use something like a credit card, but instead you choose to get an advance on your next paycheck. You figure that you’re working a steady job, you’ll be able to pay it back quickly enough. You get a loan for $400.

Bad idea.

These “lenders” use loopholes in state laws to get around maximum interest regulations. Your payday loan could cost you 100% to 500% depending on how deep in the trap you get caught. You write a check for the amount you are borrowing plus a fee. Let’s say you borrowed the $400 for the refrigerator and they charged you a $20 fee. You write a check for $420 to be cashed 10 days from now.

Even if you paid off the loan after 10 days you’ve paid $20 for 10 day loan on $400. That’s an annual percentage rate of 196%!

But what if you can’t pay the loan back? No worries, they’ll let you loan yourself the loan money for another 10 days, for the same fee. Now we’re up to $40 in fees for a $400 loan over 20 days.

The cycle starts there… if you can’t pay off the loan you start paying more and more in fees just to keep the loan active. Definitely a bad deal for consumers.

Interest-Only Mortgages

How does this scenario sound to you?

Mr. Banker is going to lend me several hundred thousand dollars for a home. I’m going to buy a home that I can’t afford a regular mortgage on. So Mr. Banker in all his infinite wisdom offers to let me pay only the interest on the loan. I never pay down any money on the principle of the home.

Sounds to me like you’ll be making payments the rest of your life!

Think about these scenarios that might lead you towards an interest-only loan:

  1. You can’t afford a regular mortgage today, but some day your income will go up and you’ll be able to refinance into a standard 15 or 30-year mortgage that includes principle payments that will eventually lead to you owning the home.
  2. You will never be able to afford the house, instead you rely on any gains from price appreciation from the price your purchased the house at.

Both of these could potentially result in you never putting a dime toward actually owning the home!  Doesn’t sound like a good idea to me.

401(k) Loans

Your 401k plan at work gives you the opportunity to set aside pre-tax income for retirement. You get a tax break, your employer maybe offers you a match, and you build up a nest egg to live off some day in the future.

The fun doesn’t stop there. If you haven’t planned for the future well you can actually lend yourself some of that money. Got an emergency and no emergency fund on hand? Don’t worry — just raid your 401k!

This is a bad idea for multiple reasons:

  • The money you lend yourself could be earning a higher return in your 401k’s investment options. Instead you end up missing out on potential gains (and losses) in the portfolio.
  • You end up having to pay yourself interest.
  • If you lose your job you have to pay the funds back within 60 to 90 days (usually).
  • If you don’t pay back the loan the IRS considers it a taxable distribution and you’ll get nailed with a 10% fee plus federal income taxes. Ouch, ouch, and ouch.

Money Sucking Alternatives

So what’s the alternative to these money sucking options?  An emergency fund is a good place to turn for fast cash, much better for your finances than a payday loan or a 401k loan.  If a 401k loan isn’t for an emergency but rather some planned expense, it’s obviously better to save up in advance of the purchase. 

In terms of interest only loans, a better alternative could be to rent until you’ve saved up enough money to buy the house you want.  Or you could settle on a cheaper house for now and plan to by the more expensive house in the future.

Of course we know life doesn’t always go according to plan and not everyone has emergency funds or a savings account to tap into so if you’ve had an experience with one of these, let us know how it went in the comments below.

Written by Kevin · Filed Under Loans, Personal Finance · 8 Comments 

Summer Vacation Edition

August 6, 2010

Summer vacations are definitely different than they used to be for our family. My wife and I used to travel to cool cities like San Francisco, New York, Boston, and DC and see the sites over the summer. Now that we have little kids we don’t have the money or courage to venture out on trips like that any more. Instead we stay much closer to home and pick family friendly destinations.

It’s been a pretty busy summer with our home buying adventures so we’re looking forward to a weekend away. Since I’m on vacation, I’ll go light on the writing and heavy on the links. Here are some good money tips from around the web this week:

Investing

Real Estate

Career

Retirement

Personal Finance

Frugality

Written by Ben Edwards · Filed Under Personal Finance · 10 Comments 

Home Loan Closing Costs

July 13, 2010

The closing costs for a home loan are something that won’t show up in in the results of a mortgage calculator.  When you enter the loan amount, the term, and interest rate a loan calculator gives you back your projected monthly home mortgage payment and sometimes an amortization schedule.

Don’t Forget Closing Costs

Although the mortgage is your ongoing cost, there are one-time costs you’ll also have to pay at the time you close the loan with your bank or credit union.  These are known as closing costs and ususally run about 1.5% – 2% of the value of the home you’re buying. Unfortunately you’ll probably have to pay closing costs even if you’re just doing a mortgage refinance to get a better interest rate. 

So how much cash do you need to plan on spending on closing costs?  Some lenders will let you roll your closing costs into your mortgage so you don’t need to have the cash at closing time.  Of course, this raises the total amount you’re borrowing and increases the amount of interest you’ll pay over the life of the loan so ideally you’ll pay your closing costs up front.

Closing Cost Calculators

You won’t find many stand alone closing cost calculators, most of them are built into lender’s interest rate calculators.  To find this, look for a button or link that says “Check Mortgage Rates” or “Get Interest Rates” on your bank’s website.

After you enter the loan purpose (purchase or refinance), the loan amount, home value, location, property use (primary residence, investment property, vacation home) and property type (existing single family, new single family, condo, multiple unit property) you’ll be given a rate quote.

Many times the quote will include the rate, the APR, and a link to the total cost of the loan.  Follow the “Total Cost” link to find out what your closing costs would be if you borrowed from that lender.

Compare Closing Costs

When you apply for a loan, the RESPA Act (Real Estate Settlement Procedures) requires that the lender give you a “Good Faith Estimate” that contains an itemized list of fees and costs associated with your loan.  The internet has made it easy to compare closing costs from different lenders, you don’t even have to apply for the loan, you can get an idea of what their charges are from their website. Keep in mind these are not official quotes and could change later on but at least give you a starting point.

Below is a table I put together recently to compare mortgage closing costs from two local lenders.  As you can see the loan origination fee and title insurance services are usually some of the biggest charges.  If you decide to pay loan points you can get a lower interest rate but I didn’t ask to have those included in my interest rate estimate.

I put the closing costs of the two lenders side by side and it was easy to see who’s the best option when it comes to cost. 

Lender ALender BA vs B
Origination charge$425.00$488.00$63.00
Your charge for this interest rate$0.00$0.00$0.00
Appraisal Fee$400.00$400.00$0.00
Credit Report$25.00$22.00($3.00)
Hazard/Flood Determination$25.00$12.00($13.00)
Tax Service Fee$65.00$0.00($65.00)
Title services and lender's title insurance$325.00$275.00($50.00)
Termite Inspection$0.00$50.00$50.00
Owner's title insurance$693.75$0.00($693.75)
Government recording charges$133.00$78.00($55.00)
Fee Total($766.75)
Initial escrow deposit$1,262.48 $1,375.00
Daily interest charges$387.74$387.74
Homeowners insurance$787.44$1,125.00

Thanks to recent legislation there’s a new standard for the Good Faith Estimate that makes it even easier to compare the itemized costs. So be sure you consider closing costs when taking out a home loan and shop around not just for the best interest rates but also the lowest closing costs.

Written by Ben Edwards · Filed Under Loans, Mortgage, Real Estate · 5 Comments 

How Your Credit Score Impacts Interest Rates

July 12, 2010

Your credit report plays a major role in the interest rates you qualify for when you apply for a home loan. A good credit score could save you a lot of money in mortgage interest charges over the life of your new loan or refinance.

Credit Scores Affect Interest Rates

I saw this first hand last week when I was pre approved for a home loan by a local bank. When the mortgage officer pulled our credit report I expected my credit score to be around 750 so I was pleasantly surprised when it was over 800.  They ran a credit check with each major credit bureau (Equifax, Experian, and TransUnion) and picked the middle score, which put me above 800.

Many lenders use a tiered pricing approach where you get the best interest rates when you have a high credit score, maybe 770 and above, but the rate you pay to borrow goes up as your credit score goes down.  Since I was over 800, instead of 750 where I had projected, that put us into the best interest rate tier.

Checking Your Credit

Fortunately for me, it was a good surprise but to avoid any bad surprises you might want to get your free credit report before you start applying for pre approval so you know if you need to do anything to fix your credit first.

The online credit report from Annual Credit Report won’t tell you your score but it does give you a chance to look at the details behind what could be giving you a poor credit rating.  If you want to check your credit score so you know where you stand there are a few different options. 

  • Sites like Credit Karma will show you a version of your credit score online, it’s not your fico score but it can give you a rough idea.
  • myFICO has a credit score estimator that asks you a series of questions and based on your answers estimates what your credit score will be.
  • Experian offers a $1 credit report and credit score that converts into monthly credit monitoring after the 7 day trial at FreeCreditReport.
  • Equifax gives you your credit score and a credit score report for $12 with ScoreWatch.

If after you view your credit report you aren’t where you need to be for a good interest rate there are things you can do to improve your credit score and rebuild your credit.  Of course it takes time for the credit reporting agencies to pick up your changes, lenders typically don’t report payments to them more than once a month.

Credit Scores & Home Loans

As I mentioned above, a good credit score can qualify you for a lower interest rate; on a big loan like a mortgage that lower rate can save you thousands of dollars.

Your credit score can also have an impact on what price home you’re able to afford.  One of the scoring factors that lenders look at is your Loan to Value ratio or LTV.  This ratio shows the relationship between the dollar amount you’re borrowing and the value of real estate you’re buying.  The higher the ratio, the more risk the bank is taking to lend you the money.

For example, if you want to buy a house appraised at $120,000 and need to borrow $110,000 (an LTV of 91.6%) that means you’re only putting down a $10,000 down payment.  On the other hand, if you had an LTV of 75% that would mean you put down $30,000 and the bank takes less risk.

Your credit score matters because banks are more likely to approve a loan with a higher LTV ratio if you have good credit.  If you don’t have much money for a down payment and you have a bad credit score, the bank might only approve a smaller loan, which means you’ll have to find a lower priced house.

One thing to keep in mind is that look at factors other than credit score, another big one is your debt to income ratio or DTI.  Your DTI is a measure of your monthly debt payments (student loans, mortgages, car loans, credit card debt) compared to your monthly income. 

Fixing Your Credit Score

There are a variety of steps you can take to fix your credit but it’s difficult to know what improvements each action will make to your overall score.  If you want to do some “what-if” analysis, myFICO has a credit score simulator that lets you enter a variety of scenarios such as on time bill payment, paying down credit card balances, opening credit lines, and missing payments to see how they might affect your credit score.

Written by Ben Edwards · Filed Under credit report, credit score, Home Owner, Real Estate · 9 Comments 

Tax Savings You Don’t Want to Miss

March 22, 2010

Here are a few tax deductions that you’ll definitely want to take advantage of if they apply to you for the 2009 tax year:

Homebuyer Credits

Granted, it would be kind of tough to miss these if you were in the home market at all last year, but there are substantial tax credits available to both first-time and repeat homebuyers who closed a deal in 2009. First-time homebuyers (defined as someone who didn’t own a home in the three years leading up to purchase) can qualify for an $8,000 credit on the purchase of a new home, and as of last November 6, existing homeowners (someone who owned a home continuously for at least five of the last eight years) can qualify for a $6,500 credit for a new purchase.

It’s also important to check income requirements. President Obama extended these 2009 credits into 2010 with some critical changes in income requirements, so it’s important to see which rules affect you based on when you made your purchase or if you’re planning to make one this year. Visit the Internal Revenue Service website for more information.

Sales Tax Deduction

All taxpayers that itemize their deductions have a choice between deducting state and local income taxes or the combination of state and local sales taxes, whichever is higher. For most taxpayers, the income tax (if their state has one) is a bigger bite and therefore the best choice for a deduction, but if you’ve made a major purchase like a car, boat or airplane, it makes sense to see what you might be able to deduct in your state.

For most citizens of income-tax states, the income tax is a bigger burden than the sales tax, so the income-tax deduction is a better deal. The IRS has an online calculator that can help you make the decision.

Points on a Refinance

Remember you can deduct the points you paid on a refinance over the life of the loan. If it’s a 30-year mortgage, you can deduct $33 per $1,000 of points you paid, which may not seem like much, but it’s worth a few bucks. If you sell the home before the loan is paid, however, you get to deduct the rest of the undeducted points.

401(k) Contributions

See if you can push your 401(k) contributions to their regular and catch-up limits for those 50 years of age or older. For tax year 2009, the regular contribution limit in a traditional 401(k) is $16,500 and 11,500 for a SIMPLE 401(k). For anyone who is age 50 or older in 2009, you can make an additional contribution of $5,500 for a traditional 401(k) and an additional $2,500 for a SIMPLE 401(k). 

IRA Contributions

For tax year 2009, traditional and Roth IRA contributions are limited to $5,000 for those under age 50; for those over 50 during 2009, the contribution limit is $6,000. For Roth IRAs, keep in mind that if you are married and filing jointly with modified adjusted gross income (MAGI) of less than $166,000, you can contribute up to the limit, BUT between $166,000 and $176,000, the limit is reduced.

Those with MAGI more than $176,000 cannot contribute to a Roth. For single filers or married taxpayers filing separately, those reporting MAGI of less than $105,000 can contribute up to the limit, BUT between $105,000 and $120,000 that contribution is reduced. Over MAGI of $120,000, no contribution is allowed. A 2009 IRA or Roth IRA contribution can be made up until April 15, 2010.

2009 Unemployment

Under the American Recovery and Reinvestment Act, the first $2,400 of unemployment benefits an individual receives in 2009 are tax free. This provision applies only to benefits received in 2009 (normally, unemployment benefits are taxable).

College Perks

The new American Opportunity Credit, part of the economic stimulus effort, allows a tax credit of up to $2,500 for each qualifying student in a family for the first four years of college. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less or $160,000 for married taxpayers.

This replaces the $2,000 Hope credit for the first two years of school and the Lifetime Learning credit that applies at a lower amount afterward. For more information visit the IRS website.

Written by Ben Edwards · Filed Under Taxes · 4 Comments 

Enjoying Free TV Shows Online

July 14, 2009

I didn’t get much done last week because I was watching our kids in the evenings after work while my wife was away.  One thing I did get to do was catch up on the shows from last season’s “The Office”.  Over the course of a few days I stood and watched 12 episodes from last season while I fed our little girl her bottle in the evenings. One of my favorite lines was when the boss was planning his own roast and commented, in the typical clueless Micheal Scott manner, “I’ve got to get YouTube down here to tape this”  : )

My wife was able to take advantage of the free shows on the Web as well, she caught an episode online that she missed of The Bachelorette. We won’t be cancelling our cable anytime soon, at least not until the day we can get ESPN for free online : ) but there is certainly a trend of more and more people watching video online.  Maybe your favorite shows are available free on the web.

Money Articles

It’s been a while since I’ve shared money articles from around the web so here we go:

 

Thanks to the sites below for hosting money carnivals and including Money Smart Life:

Written by Ben Edwards · Filed Under Personal Finance · Comments Off on Enjoying Free TV Shows Online 

Interest Rates & Mortgage Options

July 3, 2009

Once you’ve been pre-approved for a loan and found a house you want to buy the next step is determining the type of mortgage to use and when to lock in your interest rates. Due to the real estate decline and sub-prime mortgage meltdown, lenders and brokers are more careful with how they lend, what they lend, and who they lend to. You’ll need to consider the following when choosing a mortgage:

Interest Rates

About two months ago, the rates were at an all-time low. You could get an interest rate for less than 5%, which is crazy, but it happened. Now, you’ll see interest rates somewhere between 5.5% and 6%, which is nothing to cry about. This is purely my opinion, but I would lock in the rate as soon as possible, because with inflation rearing its head in the future and energy prices going back up, the interest rates will most likely continue to rise.

Points and Origination Fees

A mortgage point is equivalent to 1% of the loan amount, so if the price is $200,000, a mortgage point is $2,000. You can buy one of these points to buy down your interest rate, typically .25% for every point. A point is basically pre-paid interest. You pay mortgage interest up front. I wouldn’t suggest doing this, because the interest rates are so low right now.

An origination fee is usually charged by brokers, and it is a processing fee. Again, I wouldn’t deal with a broker that charges an origination fee. But be aware that if you don’t pay points or origination fees, many brokers will offer you an interest rate above prime, typically .25% above the prime interest rates.

Which Mortgage Is Right For You?

Stay away from interest only and adjustable rate mortgages. Ask anyone currently going through foreclosure if an adjustable rate is a good idea. People were buying houses with teaser rates of 1 or 2 years, then their rates were jumping up drastically, and the monthly payments were more than homeowners could afford. An interest only loan will never pay down the principal, so why own a home if your not going to gain any equity?

With rates as low as they are, I think fixed rate mortgages are your best option. A 15, 20, or 30 year fixed mortgage is the best way to go. If you know that your income will increase in the near future, consider getting a 30 year mortgage, because you can always pay a 30 year mortgage like a 15 year mortgage in the future. It will amortize the same. Don’t spend the extra money to refinance into a 15 year mortgage.

Next, we’ll get deeper into the down payment, private mortgage insurance, and second mortgages.

Erik Folgate is a personal finance writer and social media consultant.

Written by Erik · Filed Under Real Estate · 2 Comments 

Snacking on Personal Finance

May 19, 2009

Who doesn’t like to snack?  When I snack it’s usually because I don’t have time to make a meal or just have a craving for a small taste of something.  Our new baby hasn’t left us with much spare time this last month so I’ve been doing a lot of snacking in the kitchen. 

I’ve also been snacking on personal finance articles, squeezing one in here and there between tasks during the workday or a crying baby in the evenings.  Here are some of the tasty money snacks I’ve run across recently:

Saving Money

– Lazy Man and Money –  Save Money By Turning Off Your Television

– Moolanomy – 1001 Ways to Save Money

– Cash Money Life – Baby Coupons & Deals

Retirement

– Brip Blap – Early Retirement or Meaningful Work?

– Million Dollar Journey – How Much Do You Need to Save for Early Retirement?

Insurance

– The Sun’s Financial Diary – Save Money on Life Insurance

– Free Money Finance – What It Means to Be Self-Insured

Clutter 

– Frugal Dad – 10 Secrets To Curbing Your Appetite For Stuff

– Five Cent Nickel – Preventing Impulse Buys & Combatting Clutter

– Mighty Bargain Hunter – Declutter Your Life

– The Simple Dollar – Minimize Junk Mail

Money Etc…

Carnivals

Written by Ben Edwards · Filed Under Personal Finance · Comments Off on Snacking on Personal Finance 

The Credit Crunch, Financial Crisis, and Stimulus Packages

April 20, 2009

While some pundits have referred to the current economic situation as the Great Depression 2 or some other similar crisis situation, the fact is we still have a long way to go before we get to that point. Nevertheless, we are now in what appears to be the most significant financial crisis since the 1930s. While we may not see soup lines around city blocks anytime in the near future, it is, nonetheless, a very serious situation.

How did the American financial system get to this point? What caused such a tremendous downturn so seemingly quickly? The fact is, each segment of the economy is dependent upon the others. Those who realize this can make smarter decisions when it comes to their money.

Home Mortgages
So how does it all fit together? For those who own a home, at some point in time they had to approach a bank about taking out a mortgage loan. In the past, an approval usually meant the borrower and lender were in a relationship with each other for 20 to 30 years, substantially longer than many marriages. This is no longer true.

Now, as little as minutes after the loan closing, it may be bought by a different company. In many cases, it goes to Fannie Mae or Freddie Mac and is repackaged with other loans in what are known as mortgage-backed securities. These are then sold on the secondary mortgage market.

It is not necessary to understand the minute details of mortgage-backed securities, but it is necessary to know they are groupings of mortgages sold as a package. The companies now at the root of so much of the problems — such as Bear Stearns, Lehman and Merrill Lynch — were heavy investors in the secondary mortgage market and bought up many of these mortgage-backed securities.

So how does this affect an insurance company like AIG? They, along with others like them, were responsible for insuring the mortgages. Fannie Mae and Freddie Mac also insure mortgages.

The Crisis
From 2001 to 2006, the mortgage industry was experiencing a very prosperous time. Interest rates were at all-time lows causing a boom in the housing market and everyone was reaching a state of euphoria. In some ways, it was like the Roaring 20s. But like the Roaring 20s, the bottom fell out. During that half decade, banks made loans to certain individuals, sometimes regardless of the risk, believing that they could always refinance later if things got too difficult. Often, these mortgages were variable rate mortgages with increased payments after a few years.

When those individuals ran into tougher times and could not find the money to make the monthly payments on the mortgage, it defaulted and went into foreclosure. In some ways, this is not a huge problem for the economy has a whole. Foreclosures happen all the time. However, with the housing industry slumping, mortgage holders were not getting back what they had invested. More was owed on the homes than the current market said they were worth.

Therefore, companies who invested heavily in these mortgage-backed securities suffered heavily. It will take a tremendous amount of effort, and probably a fundamental change in the way they do business, before they see any relief.

Mortgage-backed securities are generally considered safe because there are a lot of them. Some may pay off early and some may default, but the vast majority stick to the terms of the loan, making it very profitable for those who hold the securities. While the conventional wisdom says there is safety in numbers, these companies were finding out there could be devastating effects in those numbers if many borrowers started going under at the same time.

The Bailouts
With these companies facing mounting challenges and collapsing at alarming rates, the federal government stepped in and take control, buying bad mortgages and getting these liabilities off the books of these troubled companies. It first spent $700 billion on a Wall Street bailout, then an auto makers’ bailout. The latest bailout, referred to as the Obama stimulus package, is a massive collection of public works projects.

While it is acceptable to debate the wisdom of these bailouts, the alternative may have been much worse. Without these actions, a number of the nation’s most storied financial companies and manufacturers would no longer exist. In itself, that may not be much of a problem. However, the further collapse of these institutions and individual investors would amplify the losses already being experienced. A depression may even develop.

While the government may have had little choice but to act, the spending will likely lead to further difficulties. The budget deficit will increase and oil prices may go higher, as the dollar is further weakened. Of course, in this situation, there may be no good answers.

Contributed by Ken Black

What Have We Learned?

The main lesson I’ve learned from the “Great Recession” is to build a bigger financial cushion.  This means putting away more money in an emergency fund and also buying smaller houses, less expensive cars, and less stuff.  If you lose your job and have a $1500 a month house payment you’re in much worse shape than if you’re laid off and have a $700 a month house payment.

Another lesson is to try and diversify your sources of income.  If your whole family is reliant on one salary and that job goes away then you’re in major trouble.  If you can add even a few small extra income sources then at least you still have a little money coming in if your laid off.

Written by Ben Edwards · Filed Under Personal Finance · 4 Comments 

Lower Interest Rates – The Good & Bad of Federal Rate Cuts

April 16, 2008

When people think of lower interest rates the first things that often come to mind are the benefits of lower mortgage payments, better car loan rates, and reduced credit card interest charges.  Of course for those that are saving instead of borrowing the rate drops mean earning less money at the bank.

The Fed has cut the federal funds rate six times since last fall and while some people are taking this opportunity to refinance their homes and other loans others aren’t seeing a rate reduction at all. Some economists have a very negative opinion of the rate cuts, they believe the cuts will contribute to inflation and continue to weaken the American dollar. 

Pay Less on your Debt
So what do lower interest rates mean to you personally?  If you have any debt, why not take advantage of this time to get a lower rate on the money you owe?  Of course this new rate won’t be handed to you, you’ll have to seek it out.  If your credit card company won’t negotiate simply explain that you’d be more than happy to take your business elsewhere. 

You can also look at refinancing your debt, just be wary of adjustable rate mortgages since they’re what got many people into problems over the last year or two.  Keep in mind the low rates won’t last forever.

Earn the Highest Interest Available
Saving money on debt is wonderful but won’t if you don’t have any? The trouble for you is that low interest rates are also creating lower returns for the money you have stashed away in the bank. The online savings accounts often offer the best rates, use bankrate.com to find the highest yielding bank accounts. 

Don’t forget about the bank where your current savings are held either, shop around your local banks to see who has the best rate or is offering a promotion.  You don’t have to go through the hassle of switching banks, just open a new account and move over your emergency fund or other big chunk of money.

Leverage Some Money
If you have time take advantage of the cheap money available by borrowing some and trying to turn it into more money.  You could start off simple by starting your own eBay store or looking into other types of home based business you can run on the side.

Lower interest rates are a double edged sword, bringing along some good and some bad depending on whether you’re borrowing money or lending it out to banks.  Obviously we can’t control the economy but we can control how we respond to it’s changes by borrowing at the lowest rates possible and lending at the highest possible rates.

Written by Ben Edwards · Filed Under Personal Finance · 1 Comment 

« Previous Page — Next Page »