Are you in debt?  And by debt…do you have bills?  Credit cards, mortgage, car payments, etc.?  Is it a little out of control?  Once you have your household budget done, below are a few smart money moves to make to help you get out of debt and continue on your journey to financial freedom!

Smart Credit Card Moves: 

This is the first thing that you need to do after establishing a budget!!

If you have a credit card to every store you need to find one major credit card with a low interest rate and transfer all your other balances to that one card.  A lot of credit cards offer a 0% interest rate for the first 3 months…take advantage of it.  This one move can save you not just hundreds, but thousands of dollars in the long run.

If you must put anything on that credit card, make sure that you are able to pay off that month what you put on AND the minimum payment.  Why?  Because if you don’t do this you will continue to just pay the interest and hardly any of the principal.

Never reducing your debt.

If you just have one credit card but the minimum payment is all that you are paying each month, shop around and find a credit card that offers a lower rate…OR you can call your current credit card company and ask if you are eligible for a lower interest rate.  (Remember, if you transfer to a different company, most of the time you will not be charged interest for the first couple of months.  This way all the money that you are paying goes directly to your principal.)

Smart Mortgage Moves:

This will always be your largest debt.  If you have had the same mortgage for years, check around to see if it would be worth your while to remortgage.  Interest rates are important but so is the term.  I would recommend doing a fixed interest rate. 

Once your credit card debt is handled, start putting more money to your mortgage each month.  For example, if your mortgage payment is $500 a month, pay an extra $25, $50 or whatever you can afford.  Make sure you specify that this extra money goes to your principal.  This will help you in the long run to be able to pay off the mortgage faster and saving you a ton of money in interest.

Are you living in an apartment?  You are throwing your money away.

When I moved from my hometown to a town that was about an hour away, my father was furious that I lived in an apartment for the first year.  He said I was throwing my money away.  And I was.  I wanted to get the “lay of the land” before I just bought any old house and wanted to be able to buy a house in a decent neighbor that was in a good school district.  I was starting a job and didn’t want the hour one way commute every day. (Imagine what my gas expenditure would have been!)

That monthly rent could be going to a mortgage payment of something that you would end up owning.  What is current monthly rent?  Are you paying over $800 a month?  If so, investigate buying a home. 

Smart 401K Moves

If you are lucky enough to work for a company that has a matching 401K I highly recommend that you take advantage.  Most companies will match around 3% of your paycheck.  Make sure that the minimum that you do is what your company offers.  So, for every $100 you make, you put in $3 and your company puts in $3…  You’re doubling the money that goes into your retirement that way.   See...Saving Money IS Making Money!

Smart Car Payment Moves

I’ve leased, bought new and bought used.  This will be preferable to what you desire…but, I would recommend buying used.  You do need to take your time and do your research.  My husband is great at this…he researches the kind of car that we are looking for and searches not only car dealerships but also car owners.  We just bought a 2000 Mercedes SL500 for only $3800.  It was advertised for $8,000.  The guy wanted to get rid of it and it did have a couple of minor issues that my husband is able to fix on his own.   My husband found this car on Craig’s list in a town about 150 miles away.  (More on Craig’s list in another blog.)

If you don’t have $4000 saved up to buy a car and your current car breaks down on you, go to your bank or credit union and find out what kind of loan would be best for you.  (Remember, interest rates…the lower the better and make sure that the term of the loan is also good.)

Smart Insurance Moves

Car insurance, homeowner’s insurance, renter’s insurance…make sure that you are covered.  Shop around.  This will take some time on your part but believe me, in the long run, it could save you hundreds of dollars every year. 

Don’t forget to bundle!  Home and auto…  Renter’s insurance and auto.  You will receive discounts by having more than one entity under your insurance.  Shop around, ask around, ask your friends, family, co-workers who they would recommend. 

If you can, pay your insurance in one lump sum because there is usually a couple dollar charge if you want to do it quarterly or bi-annually.

Remember, every little bit that you save does help you in the long run.  As Ben Franklin says… “A penny saved is a penny earned!”

Or as my husband says… “Saving Money IS Making Money.”