Have you EVER asked yourself how interest rate will affect that loan you are about to take? Interest rate affects everything related to loans. It is what will make a loan cheap or expensive. One of the most neglected money saving tips is to understand the loan you are about to take which include the interest rate. The basic rules that you must know are :-
How much are you planning to borrow?
The more money you borrow, the longer it will take to repay. The longer it takes to repay a loan the higher interest rate you pay. As long as it is not an emergency, you should start by saving a percentage of what you are planning to invest in. Let the loan be the top-up and not the whole capital you need.
How long will it take to repay the loan?
Shorter loans always attract lower interest rates. Lenders tend to see less risk when you commit to pay on short-term. You will pay higher monthly payments of course, but it is worthy if you can afford it as it will save you higher interest.
What interest rate will be charged?
Interest rate is what determines if the loan will be expensive or not. It is never constant but keeps fluctuating depending on the economy status. Currently most lending institutions in New Zealand offer the following interest rate for personal loans:-
18.95% p.a for a loan less than $10,000.
17.95% p. for loan over $10,000.
These rates are bound to change. That is why it is good to know the status of the economy. You don’t need to be an expert at all. Just know enough to understand if the economy is struggling or growing. A struggling economy tend to increase the interest rate as the government will borrow more from the local financial institutions which interest rate to be adjusted upwards. This will definitely make your loan expensive.
We generally save for holidays right and spend there. What if we go the other way round, that is save while holidaying. Does not sound exciting? However it is not about missing the enjoyment. Friends just read on to discover how easily you can save money and enjoy more in the process while on a vacation.
Plan ahead and rent an apartment – A hotel is not only expensive but sometimes irritating. You have to face the ever snooping cameras. You cannot have a private moment without the fear. Rented apartments give freedom, privacy and save you some dollars as well.
Cook at home more – Try the local cuisine, but do not eat out daily. It will really play havoc on your digestive system. Rather cook your own meals. Renting a house/apartment helps in this regards. There is a kitchen with all equipments. Save the cash, enjoy and be healthy.
Do not buy packaged drinking water– Drinking water from after buying has become the norm nowadays. Use the water purifier and carry a metal water bottle. Plastic is not good for carrying or drinking water. If one person does this it saves 100 trees a year. DO this for the environment and the savings are a bonus for you.
Use Public transport – Hiring a taxi is the easy way. But you will miss the culture of the place. The cost is also around one – fifth of taxi. So enjoy the socializing and the savings.
Saving via apps – Last time I was booking the flight I used a download and get discount option on an app on app store. It is done for promotion, so reap the benefits.
In the last post we learnt how we can save money on electric bills and grocery. Today I am going to tell you about more places where you can save money as promised earlier.
Saving at the Banks
Yes you heard correct you can save at the banks if you pay attention to a few details.
Avoid bouncing checks – Bounced checks cost much money. If you can avoid that is your saving. A penny saved is a penny earned right.
Use home ATM’s – We invariably use the nearest ATM. Only a little bit of effort to find the ATM of our own bank can save up to $5 per withdrawal. It is a fact most people ignore, and it adds to the saving. Is it not?
Making Card payments on time – This is very crucial to save you the penalty that credit card companies earn every time you are late on your payment. So, make a note of payment dates and pay on time to save on the penalty.
Savings on Entertainment and Leisure
There are lots to save on entertainment and leisure. It will be places where you never noticed.
Unseen TV channels – Most of the times you are paying for channels you never watched and will never ever watch. This is wasted expense. Now you can choose and pick every channel. So, save on the things you never benefit from. Lack of knowledge is the reason.
Use Library and Kindle – Many of us will like to read and will buy books. Rather we can join a local library and read. It will add to your savings and you will have the extra benefit of meeting people there. Another very exciting resource is Kindle. Even if you want to buy books the Kindle version is much cheaper.
The money standing in your account is actually decreasing. Inflation is taking its toll on your savings. So how do you improvise to keep your savings from being eroded.
Here are a few tips which will help you.
Take care of the inflation – Invest a part of your savings in stocks. Always invest for a long period and you will get the returns. You can invest in Ferratum which is a good option now. It will also help you get loans when you require it,
Build a portfolio – Never ever invest in a single company or industry. Also take care to spread your investment over a range of investment products like Mutual Funds, Stocks, Debentures etc.
Assess the risks – Before investing you need to assess the risks associated with a particular kind of investment. It is an essential if you want to be in right financial health after 10 years.
Not Investing carries more risk – Always remember that investing makes you risk averse rather than expose you to risk. If you do not invest now you will face the music later.
Do not wait too long – Markets always rise and fall. That is the way they work. So do not put off investing for too long. Start today. Time is the secret to growth. The more time you give your money to grow the better growth it will show.
Start investing in small amounts – This is the recipe for success. Start with 10% of your savings. As your experience grows increase the share. Never invest all you have.
Car insurance is one of the many things we do not pay attention to while spending.Here are certain tips to save on insurance for your car.
Generally people choose to pay monthly insurance premium. However it only appears cheaper and you are actually paying interest up to 24% which will add to the cost. Hence pay lump sum to reduce cost upfront.
Check insurance coverage every six months, to see the coverage required. Coverage which is not required may be dropped. For example the coverage required for a learning driver is different from a skilled driver. Also moving to a new area where coverage may change due to local legislations.
Search for discounts when renewing using comparison on the internet. Sticking to the old insurer means on losing discounts. Generally it is found that insurance companies offer discounts for acquiring new customers. Also ask your agent about potential cost savings. The agents are better equipped to offer different kind of packages.
Claim insurance on bigger sums, and less frequently. This helps in keeping the premium low. Learning to drive safely helps in this case.
Good credit scores can help to reduce the insurance premium as well.
Always install anti-theft devices and tracking devices in your vehicle. This can result in additional discounts.
The most important thing is to not let your current insurance lapse. It increases the cost of insurance.
One more tip…tries to bundle home, life and car insurance from the same service provider. This can help to save on all three.
Driving history and habits of the driver also influences the amount of premium. Learn about good habits which will keep your history good.
Government employees or current or ex military employees may get additional discounts on premium.
I’m going to be very frank- it is not particularly easy to start saving. Most people need to have it within them to start saving money, or they will be spenders for the entirety of their life. It might be too late for you, but there is a chance your kids could be big about saving money when they grow up. All you have to do is encourage them into saving some money from a very young age.
You are probably giving your children some pocket money. What I did with my daughter was I started giving her a tad bit more money than I thought she would spend, and started encouraging her into saving the money she had not spent at the end of the week. I also followed a weekly pocket money schedule, because I felt like she might feel the compulsion to spend more money if I gave her 30 days to buy whatever she wants.
I also started a bank account for her, and made sure she knew exactly how much money was going in there. She was rather happy to realize that there was a significant amount of money in an account- money that was only hers. Of course, I would also let her buy something special for herself once she had saved up enough money- something that was kind of expensive, but would not require all the money in the account.
She’s not old enough to be earning right now, but I’m sure she will be much better at saving money than I ever was.