How Should I Save If the Fed Cuts Rates?
It’s not all bad news for savers in a lower interest rate environment. Here’s why.*
The post How Should I Save If the Fed Cuts Rates? appeared first on Discover Bank – Banking Topics Blog.
It’s not all bad news for savers in a lower interest rate environment. Here’s why.*
The post How Should I Save If the Fed Cuts Rates? appeared first on Discover Bank – Banking Topics Blog.
Bruce Lubin is the co-author of the best-selling Who Knew? series of household hints books, with his wife Jeanne. They’ve written more than a dozen books that have sold more than 5 million copies.
You may have seen Bruce sharing his clever and money-saving tips on national TV, like the Today Show and the Hallmark Channel. Now, Bruce and Jeanne are also hosting a brand new podcast on the Quick and Dirty Tips network, which goes by the same name—Who Knew?.
[Listen to the interview using the audio player in the upper right sidebar of this page or on iTunes, Stitcher, and Spotify; for Spotify, just search the app for "Money Girl."]
Free Resource: Laura's Recommended Tools—use them to earn more, save more, and accomplish more with your money!
Some of the cool tips Bruce and I talk about in this interview include:
See also: How to Save Money on Your Electricity Bill
No matter if you own a large house or rent a cozy apartment, this interview will help you cut the cost of energy and water and save money on your utility bills. Here are a few great tips from our interview:
With today’s high efficiency dishwashers and washing machines, the expense is really heating the water. So wash everything as cold as you can.
Q: What are the appliances that suck the most energy? What are some tips to use less energy with them?
Bruce: Dishwashers, but it’s really the dry cycle, which uses steam. De-select the Dry Cycle, or, if you have an older dishwasher, just open the door at the beginning of the dry cycle.
Dryers too—use a large towel to reduce drying time. Check your dryer’s screen: the lint from the screen in your dryer may not be enough to make sure it is running as efficiently as possible. The fabric softener used in dryer sheets can get caught in the mesh, even if you can’t see it. To be sure you’re completely cleaning the screen, remove it and clean it with warm, soapy water and a brush. Leave it out to dry completely before placing back in your dryer.
Q: What about saving water?
Bruce: Back to dishwashers—you should actually wash pots and pans by hand (usually)—you save up so much room and you don’t have to do Pots ‘n’ Pans mode.
With today’s high efficiency dishwashers and washing machines, the expense is really heating the water. So wash everything as cold as you can. You also may want to lower the temp you keep your hot water heater at. We recommend 120º F, which is plenty hot, even though many water heaters come set at 140º.
Other than that, low-flow showerheads and other faucets are a must! Definitely worth the price. Just ask at the hardware store.
Q: What about teenagers taking long showers?
Bruce: Give teens an incentive to take shorter showers—5 minutes added to their curfew for every 1 minute they shave of their shower time. (Or 5 minutes more of time with their phone at the end of the night, etc.)
Q: What about tips for saving money on air conditioning?
Bruce: Keep blinds closed during the day – people probably know that! But also, close all closet doors, and seal off rooms you aren’t using. Use duct tape if your vents don’t close. And, make sure your windows and doors seal properly—that can save you big.
Q: Any other tips for saving energy?
Bruce: Believe it or not, MOST electric companies charge you more for electricity during peak times, which are usually between 4 and 8pm. Google the name of your electric company and “peak pricing” to see if yours does. If possible, keep your AC off during these times, and do more laundry and other electricity-intensive tasks during non-peak times.
Want to know the best financial and productivity tools that I use and recommend to save time and money? Click here to check out 40+ tools I recommend!
To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on iTunes or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web.
Click here to subscribe to the weekly Money Girl audio podcast—it’s FREE!
There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page. Here are all the many places you can connect with me, learn more about personal finance, and ask your money question:
Click here to sign up for the free Money Girl Newsletter!
To learn about how to get out of debt, save money, and build wealth, get a copy of my award-winning book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite bookstore as a paperback or e-book. Click here to download 2 FREE book chapters now!
Bills at Home image courtesy of Shutterstock
My world is on fire.
As you may have heard, much of Oregon is burning right now. Thanks to a “once in a lifetime” combination of weather and climate variables — a long, dry summer leading to high temps and low humidity, then a freak windstorm from the east — much of the state turned to tinder earlier this week. And then the tinder ignited.
At this very moment, our neighborhood is cloaked in smoke.
Have you ever wondered, "How many credit cards should I have? Is it wise to have a wallet full of them? Does having multiple credit cards hurt my credit score?"
If you’ve been following this blog or the Money Girl podcast, you know the fantastic benefits of having excellent credit. The higher your credit scores, the more money you save on various products and services such as credit cards, lines of credit, car loans, mortgages, and insurance (in most states).
Even if you never borrow money, your credit affects other areas of your financial life.
But even if you never borrow money, your credit affects other areas of your financial life. For instance, having poor credit may cause you to get turned down by a prospective employer or a landlord. It could also increase the security deposits you must pay on utilities such as power, cable, and mobile plans.
Credit cards are one of the best financial tools available to build or maintain excellent credit scores. Today, I'll help you understand how cards boost your credit and the how many credit cards you should have to improve your finances.
Before we answer the question of how many credit cards you should have in your wallet, it's important to talk about using them responsibly so you're increasing instead of tanking your credit score.
A common misconception about credit is that if you have no debt you must have good credit. That’s utterly false because having no credit is the same as having bad credit. To have good credit, you must have credit accounts and use them responsibly.
Having no credit is the same as having bad credit.
Here are five tips for using credit cards to build and maintain excellent credit scores.
Making timely payments on credit accounts is the most critical factor for your credit scores. Your payment history carries the most weight because it’s an excellent indicator of your financial responsibility and ability to pay what you owe.
Having a credit card allows you to demonstrate your creditworthiness by merely making payments on time, even if you can only pay the minimum. If the card company receives your payment by the statement due date, that builds a history of positive data on your credit reports.
I recommend paying more than your card’s minimum. Ideally, you should pay off your entire balance every month so you don’t accrue interest charges. If you tend to carry a balance from month-to-month, it’s wise to use a low-interest credit card to reduce the financing charge.
Many people start using a credit card by becoming an authorized user on someone else’s account, such as a parent’s card. That allows you to use a card without being legally responsible for the debt.
Some credit scoring models ignore data that doesn’t belong to a primary card owner.
Some card companies report a card owner’s transactions to an authorized user’s credit report. That could be an excellent first step for establishing credit … if the card owner makes payments on time. Even so, some credit scoring models ignore data that doesn’t belong to a primary card owner.
Therefore, don’t assume that being an authorized user is a rock-solid approach to building credit. I recommend that you get your own credit cards as soon as you earn income and get approved.
A critical factor that affects your credit scores is how much debt you owe on revolving accounts (such as credit cards and lines of credit) compared to your total available credit limits. It's known as your credit utilization ratio, which gets calculated per account and on your accounts' aggregate total.
A good rule of thumb to improve your credit scores is to keep your utilization ratio below 20%.
Having a low utilization ratio shows that you use credit responsibly by not maxing out your account. A high ratio indicates that you use a lot of credit and could even be in danger of missing a payment soon. A good rule of thumb to improve your credit scores is to keep your utilization ratio below 20%.
For example, if you have a $1,000 card balance and a $5,000 credit limit, you have a 20% credit utilization ratio. The formula is $1,000 balance / $5,000 credit limit = 0.2 = 20%.
There's a common misconception that it's okay to max out a credit card if you pay it off each month. While paying off your card in full is smart to avoid interest charges, it doesn't guarantee a low utilization ratio. The date your credit card account balance is reported to the nationwide credit agencies typically isn't the same as your statement due date. If your outstanding balance happens to be high on the date it's reported, you'll have a high utilization ratio that will drag down your credit scores.
If you need more available credit to cut your utilization ratio, there are some easy solutions. One is to apply for an additional credit card, so you spread out charges on multiple cards instead of consistently maxing out one card. That reduces your credit utilization and boosts your credit.
Having the same amount of debt compared to more available credit instantly reduces your utilization and improves your credit.
For example, if you have two credit cards with $500 balances and $5,000 credit limits, you have a 10% credit utilization ratio. The formula is $1,000 balance / $10,000 credit limit = 0.1 = 10%. That’s half the ratio of my previous example for one card.
Another strategy to cut your utilization ratio is to request credit limit increases on one or more of your cards. Having the same amount of debt compared to more available credit instantly reduces your utilization and improves your credit.
Credit card companies are in business to make a profit. If you don't use a card for an extended period, they can close your account or cut your credit limit. You may not mind having a card canceled if you haven't been using it, but as I mentioned, a reduction in your credit limit means danger for your credit scores.
A reduction in your credit limit means danger for your credit scores.
No matter if you or a card company cancels one of your revolving credit accounts, it causes your total amount of available credit to shrink, which spikes your utilization ratio. When your utilization goes up, your credit scores can plummet.
Anytime your credit card balances become a higher percentage of your total credit limits, you appear riskier to creditors, even if you aren't. So, keep your cards open and active, especially if you're considering a big purchase, such as a home or car, in the next six months.
In general, I recommend that you charge something small and pay it off in full several times a year, such as once a quarter, to stay active and keep your available credit limit in place.
If you have a card that you don't like because it charges an annual fee or a high APR, don't be afraid to cancel it. Just replace it with another card, ideally before you cancel the first one. That allows you to swap out one credit limit for another and avoid a significant increase in your credit utilization ratio.
If you're determined to have fewer cards, space out your cancellations over time, such as six months or more.
Now that you understand how credit cards help you build credit, let's consider how many you need. The optimal number for you depends on various factions, such as how much you charge each month, whether you use rewards, and how responsible you are with credit.
There's no limit to the number of cards you can or should have if you manage all of them responsibly.
According to Experian, 61% of Americans have at least one credit card, and the average person owns four. Having more open revolving credit accounts makes you more likely to have higher credit scores, but only when you manage them responsibly.
As I mentioned, having more available credit compared to your balances on revolving accounts is a crucial factor in your credit scores. If you continually bump up against a 20% utilization ratio, you likely need an additional card.
You can keep an eye on your credit utilization and other important credit factors with free credit reporting tools such as Credit Karma or Experian.
Also, consider how different credit cards can help you achieve financial goals, such as saving money on everyday purchases you're already making. Many retailers, big box stores, and brands have cards that reward your loyalty with discounts, promotions, and additional services.
If you continually bump up against a 20% utilization ratio, you likely need an additional card.
I use multiple cards based on their benefits and rewards. For instance, I only use my Amazon card to get 5% cashback on Amazon purchases. I have a card with no foreign transaction fees that I use when traveling overseas. And I have a low-interest card that I only use if I plan to carry a balance on a large purchase for a short period.
There's no limit to the number of cards you can or should have. Theoretically, you could have 50 credit cards and still have excellent credit if you manage all of them responsibly.
My recommendation is to have a minimum of two cards so you have a backup if something goes wrong with one of them. Beyond that, have as many as you're comfortable managing and that you believe will benefit your financial life.
It’s been a goal for decadesâa vacation homeâand now it’s time to realize that goal. And while you should absolutely seize this opportunity, there are a lot of details to figure out before buying a vacation home during retirement. Here’s what you need to know about owning a vacation home from start to finish. Paying… Read More
The post The Complete Guide to Buying a Vacation Home in Retirement appeared first on Credit.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The new show “Frozen in Time” follows Maureen McCormick and Dan Vickery as they renovate old homes stuck in a long bygone design decade.
The post A ‘Brady Bunch’ Star Returns To Renovate Homes ‘Frozen in Time’ appeared first on Real Estate News & Insights | realtor.com®.