Whether you want to know your current credit score, protect your credit, get a loan or apply for a credit card. We are here to help you get it done – quickly, correctly and securely.

Establishing and maintaining good credit is an important part of financial planning. Typically most individuals do not have enough money for emergencies, or to make major purchases such as a home, car, or college education.

Accessing credit has become an important part of our lives. Most creditors rely heavily on your credit reports for granting loans. Knowing what is on your credit reports and how to build and repair your credit is an important step to taking control of your finances.

Friday, November 12, 2010

Which Should You Do First? Save or Paydown Debt?

Do you know how you should prioritize debt repayment and savings? “Which should you do first?”

It’s a great question, I know that it’s hard to keep up with your living expenses, auto expenses, credit card balances and trying to add money into a savings account every month.

The best approach even though it is tough to do, is to find balance. Try to do both.

Here’s the thing:

We quite often think of saving money and paying off our debt as a trade-off. Like we believe, “If I brown bag (blank) lunch all week, I could afford the buying a new outfit!” It seems (blank) we need to give up and choose one over the other. However would certainly think about starving for a month so we're able to pay our home loan? Certainly we would discover a way to do the two. I believe that with young adults, saving as well as reducing financial debt is usually an the last thing they think about each month With that approach undoubtedly results in us feeling like we have to make “either/or” choices. Either I pay my credit card balance or I put money into the bank.

Here is my personal advice:

Budget for debt and savings when you plan for all your other monthly expenses. These are the two most critical variables in any financial plan. Following that you are able to evaluate how much house you really can afford, exactly how extravagant an automobile you are able to drive, how large of a cable bill you really can afford and just how often you can go out to to the movies.

So far as your debt goes:

Determine what your minimum obligations are and assume that’ll get deducted out of your paycheck, just like taxes. Just plan them getting paid each month. And when you might have extra cash to play with at the conclusion of the month (after saving and reducing your credit cards), put an additional payment towards the any extra debt you might have.

After that determine what your credit card minimum balance will be - and multiply that by two or three - and that ought to be the minimum to pay towards your credit cards. Paying of the whole balance down is, obviously, ideal. Next, deduct 5 to 10 % of your take-home pay and set that aside inside a rainy day savings account. I favor online checking accounts simply because they generate fairly more interest compared to conventional banks and because the money is in “virtual land” it will not end up being as simple to withdraw on impulse.

Finally, tackle retirement. In case your company has a 401k match plan contribute sufficiently to be able to take advantage of the match. If it’s a match of 50 cents for each dollar you contribute up to 5% of your salary, then contribute 5% of your salary. You ought to be aggressive in your 20s with both your rainy day savings and retirement savings.While you will earn more money as time goes on, it doesn’t suggest you will be in a stronger position to save.

After all, when we earn more, we spend more. We decide to add kids to the picture. We may decide to add a mortgage or second mortgage to our plates. Saving money, as my older, wiser friends tell me, is so much easier when you’re young because it’s just you to take care of.

So take care of yourself and form a good pattern to take into with you in life!

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