The fastest and best way to pay off big credit card debt

credit-card-cut-upWhat’s the best way to pay down a large credit card balance as quickly as possible? All while paying the least amount of interest and not hurting your credit? Glad you asked.

First, understand that the sooner you pay down the principal, the sooner you erase debt. For example, if you owe $10,000 on a credit card and pay $200 a month, $150 of your payment goes toward paying interest. Only $50 goes toward paying down the $10,000 principal (based on an annual APR of 18%).

At this rate, it would take 94 months to pay off your debt, while costing you a whopping $8,622 in interest! That’s an uphill battle everyone should avoid.

Luckily, credit card companies, competing with one another, actually make it easy for consumers. By simply leveraging their special introductory rate programs, you can be on your way to paying down that 10K in no time.

Find a new credit card offer with a zero percent introductory balance transfer – one of the best deals in personal finance. Many banks offer these cards, which today are the strongest promos and longest zero percent APR intro periods since before the 2008 financial crisis. So, apply for one of these cards. Once you’re approved, immediately transfer all your credit card debt to the new card.

Need help finding an offer? Here’s a list of zero percent APR credit cards (with terms).

Once you’ve transferred your balances, it’s time to capitalize on the interest-free period to really break free of debt. And it’s so simple. Just keep paying the same amount you were paying your old high-interest card, only now to the new no-interest card. Now you’re paying off principal at 100 percent.

Pay attention to the terms because once the introductory period is over (typically 12-18 months) the interest rate could actually be higher than your original card. Use this period to pay down as much of your debt as possible.

Stop getting crushed on interest. And start planning that going-away party for your debt. Move your high-interest balances to a zero percent interest card now.

Your wedding can be beautiful on a smaller budget

Planning a wedding can be equal parts maddening and intoxicating. The possibilities are endless – and gorgeous, when you start looking at décor and dresses and flowers …

It’s easy to see how things can get out of hand. But it’s just not a good idea to go deep into debt for one weekend’s worth of celebration. After those initial conversations about who’s going to pay and how much, you can set a budget and start figuring out what’s truly important to you and what your guests will really remember.

Just a few areas where you might encounter sticker shock (and how to prevent it):

The venue: Can you believe that some places charge up to $30,000 to get married there? That’s a down payment on a house. Or a car. Or two cars.eric-alves-145943.jpg

There’s no rule that says you have to get married in a church and have your reception in an event hall. Think outside the box a little. Make a list of places that have significance for you as a couple.

People get hitched on the porches of family homes, in parks and at lakes, in underground caves, at wildlife refuges and theme parks, in museum sculpture gardens, on covered bridges, at railway depots and botanical gardens. Just make sure you get a permit to keep your nontraditional venue legal.

The dress: There is no law stating that brides have to gather an entourage, try on white dresses and twirl around until their credit cards are maxed out.

You don’t even have to go to a bridal salon if you don’t want to. Stores like White House, Black Market carry lovely formal pieces. Look for white dresses during prom season at department stores. Online retailer BHLDN is disrupting the market by offering couture design for around a grand.

You can also stalk trunk shows and end-of-season sample sales, and comb through sites like OnceWed.com to take advantage of other brides’ rejected or lightly used dresses. If you fall in love with a dress that fits you well in a bridal salon, see if you can buy the sample.

If you do order a dress, keep alterations to a minimum by buying the right silhouette for your body type and ordering your real size. Corset-backed dresses are great for keeping alteration costs down.

The flowers: If you come up with something else to put in the middle of your tables, you could save yourself thousands. Spend your flower money on the bride bouquet, and think of something creative for the rest of the wedding party to carry, like feathered fans, beaded purses or a beautifully wrapped book that is meaningful to you.

The photography: Wedding photographers earn their money, but you have other options. Photojournalists frequently make extra money on the weekends shooting weddings, as do college students in art and photo programs. Some couples book ceremony-only packages and let their guests crowdsource the reception photography with disposable cameras.

Music: Unless you’re really committed to the chicken dance, you can save money by not hiring a DJ. A playlist of your favorite tunes and a friend with a laptop will do just as well, without entrusting the personality of your reception to a stranger.

Wedding planners who share wisdom online point to sit-down dinners, programs and favors as the most overlooked and unappreciated extras that couples waste money on. Your guests will remember your vows and remember the personal touches you bring to make your reception a great gathering, whether it’s a more toned-down family affair or a raucous party with an open bar.

Once you sit down and figure out your priorities, you’ll determine where to best spend your money – even if it’s on the honeymoon.

 

Eight great ways parents pass along financial success

Tommy Jr. has his dad’s home run swing and your love of gardening. Lorelei got your love of baking, but also your less-than-ideal kitchen cleanup tendencies.

On their road to becoming full-fledged individuals, kids start off by taking parts of you. It shows in the things you pass down, whether you mean to or not. Hopefully, all your kids will get your savvy saving habits. Money: You can’t be an adult without it.

Families pass down financial habits, just like football Sundays and rib recipes. If you ask parents what they most wish to bequeath to their children, a responsible attitude about money is usually at the top of the list.

But all families are different, so those “inherent inheritances” take different forms. Some of the most common:

Aim for the 80/20 split.

Live on 80 percent of what you make and save the remaining 20 percent. A less specific form of this philosophy goes by the title “Spend Less Than You Earn.” As long as you follow this philosophy, major financial disasters can be avoided.

Credit card debt is poison.

Don’t put more on cards than you can pay off every month, or you’re letting Borgia-strength financial toxins into your life. Think of interest payments as flushing fistfuls of cash down the toilet. Until it clogs, and you have to pay the plumber with a credit card, too.

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Keep an ace in the hole.

The people hit hardest by recessions or job losses are those who were already living paycheck to paycheck. Those who keep six months’ worth of bill-paying emergency funds stashed away in a savings account sleep better at night, even if they never have to use it.

It’s not about stuff.

Life is about experiences, not the pursuit of material goods. If you’ve got good friends and a blanket in the sun, you’re richer than everyone standing in line for the latest gaming console or smartphone.

Except when it’s about stuff.

If there’s something you really want, it will be there tomorrow. Sleep on it. Sometimes, 24 hours of perspective takes the shine off impulse purchases. If you still want something after saving the money for it, go ahead. Just try not to assume debt for luxuries.

Have a plan for any and all stuff.

When it’s time to make a big purchase – or even a weekly grocery store trip – don’t put yourself in danger of making impulsive decisions. Research cars thoroughly before wandering through a lot filled with temptation. Try on leather jackets at several different stores. Above all, make lists.

Don’t pass up free money.

There’s no such thing as a free lunch, but employer matching funds to retirement savings come pretty close. As soon as you get a full-time job that allows you to contribute to a 401(k), put in enough to maximize your company’s matching funds. Even if it hurts. It’s like picking up $100 bills on the sidewalk that never belonged to anyone.

Productivity is its own reward.

Happy people attack their jobs with gusto. Even the superrich keep themselves busy with creative pursuits or charity work. The more you think of your job as a chance to be rewarded for true accomplishments, the more successful your career will be.

If these sound similar to adult-focused money-management tips you’ve heard, that’s no coincidence. After all, kiddos absorb most of their values through example. That’s why your admonitions about eating healthy ring hollow if you’re clumsily stashing Oreos all over the house.

Want to pass on good habits? Just make sure you’re following your own advice.

Making the Down Payment

Buying a house is part of the American dream. But for most, the biggest roadblock to that dream is coming up with a down payment. Many lenders require five percent down. If you can put that together, you’ll have a much easier time getting approved.

The problem is, that kind of money is hard to come by for first-time buyers. The average price for a house in Boone County is $152,500 according to Zillow. Buyers would need $7,625 for the average Boone County household. And that doesn’t even include added homebuying expenses like closing costs and pre-paid items such as taxes and insurance.

Saving that much can take years. And for renters facing rising rent, health costs and more, it can be hard to save anything at all.

The good news is, there are several programs designed to help you become a homeowner with as little as 3 percent down. The Federal Housing Administration, for example, helps homebuyers, especially first-time buyers, get approved. Fannie Mae and Freddie Mac, government-sponsored companies that drive the residential mortgage credit market, also offer low down payments. And if you’re an active or retired service member, or live in a rural area, you may have access to zero down payment programs through the Department of Veterans Affairs or the United States Department of Agriculture Rural Development Program.

Sounds like an easy decision, right? Sure, but don’t skip the fine print. A lower down payment makes you a bigger risk in the eyes of some lenders. So you’ll have to pay private mortgage insurance (PMI) and you’ll likely pay a higher interest rate for the life of the loan, in addition to other fees.

Shop around and find an experienced mortgage lender that can provide good advice on your down payment options. Lenders are required to disclose all fees so you can compare easily. Plus, the more you explore your options, the more you’ll learn about the process.