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.

Raising Selfless Children

Our children are growing up in an age filled with relentless messages to consume more, more, more, as well as immediate access to almost anything. Add to that the rapidly evolving technology available to them and the ever-present competition among peers, and the difficulty of raising selfless children in a materialistic world can seem impossible. But it’s not hopeless, of course, and there are plenty of things you can do to help them maintain a level of humility. Here are a few ways you can start:

Set limits, and when you say “No,” mean it.

One reason kids become selfish is they get too used to getting their way. It’s important to be clear about what you expect of them and then adhere to those limits. Giving in to tantrums, whining, complaining or attempts to make you feel guilty simply teaches them that they get their way if they complain enough.

Go through possessions with them and donate to charity.

You already know kids are constantly outgrowing clothes and toys. But don’t just deal with them on your own, make time to go through their belongings with them and donate some to charity. It is very useful to give them an understanding of the lives of the less fortunate and how some help can really make a difference.

Do chores with them.

Kids don’t innately understand that hard work pays off. Assign chores and then help them complete them. They may not understand that the house looks nice because you spent hours cleaning it, but if they do their part they can see concrete results and how it directly affects their world.

Nurture empathy.

Babies are by nature selfish, and so are young kids. It takes awhile for them to realize the world isn’t centered on them, so encourage them to consider how others feel. You nurture their empathy by helping them understand the mindset of someone else. “Imagine you just moved here and are walking into school for the first time. How would you feel?”

Reinforce selfless acts.

One of the quickest ways to increase selflessness is to “catch” them doing unselfish acts and praise them. Doing so will encourage them to repeat the behavior. Just remember to describe the behavior and point out the impact it had. “Did you see the smile on your brother’s face when you shared your toys? You made him so happy.”

 

 

Payment Plans for Airline Tickets: Smart or Not?

Read the fine print before buying airline tickets in installments

Airfares have been inching downward in recent months, thanks to lower fuel costs and more seats on new planes. The new lower prices are tempting many consumers to consider once-in-a-lifetime trips that would have previously been out of reach for them.

Those same would-be travelers are now facing temptation from a trend that lets people book their flights and pay for them in installments. Basically, you can now put your plane tickets on layaway.

The idea of layaway has been making a comeback lately. When you want to make sure you get an in-demand, big-ticket item, layaway allows you to claim it for a fraction of its final price, and then make small payments over time. When you’re done paying, you take your purchase home. It’s a concept popular with parents planning for holidays and couples shopping for engagement rings.

But does it make good financial sense?

CheapAir.com lets you take out a loan for your flight and pay it back over three, six or 12 months. The business model is aimed at people who don’t use credit cards, but it’s also for those who just can’t afford that flight to France all at once. A similar philosophy is in place at startup site Airfordable.com, where travelers pay a third of their ticket costs up front, then pay the rest off in monthly or biweekly installments.

Major carriers like American Airlines have had layaway-esque programs for years, but they usually require travelers to apply for an airline credit card to qualify.

These new offerings open air travel up to people who couldn’t – or wouldn’t – charge their fares in the past, usually because of bad credit. Buying tickets well in advance is usually a surefire way to get the best deals, too – even if you can’t pony up for the whole amount at the moment.

But when you look a little more closely, paying in installments has its drawbacks. A CheapAir loan is based on your credit history, with interest charged between 10 percent and 30 percent. Airfordable doesn’t charge interest, but it tacks on a flat 20 percent fee. In the end, the average traveler might not be much better off paying in installments than putting tickets on a credit card and paying them off that way.

An even better option is to squirrel away the funds for trips using a targeted savings account. You can even set up your direct deposit to direct a set amount from each paycheck, keeping your travel money separate and insulated from your everyday spending while you watch it grow.plane-airplane-airliner-passenger-sky-sky-cumulus-clouds-clouds-flight-flight-aircraft-wing-wing-morning-bright-sun-beautiful-background-blur-bokeh-wallpaper

That way, when you do purchase tickets online, you can pay your card off immediately and avoid taking that interest hit. You might have to put off your trip for a while if you want to get early-bird fares several months before takeoff. But it means you’ll have more spending money – or even more nights in a hotel – when you get there.

Paying for airfare a little bit at a time is a great idea when it’s earning interest for you. It’s not so great when you’re tied into a high-interest loan or paying more than you have to for your seat.

 

Protect yourself from debit card fraud

Debit cards – which require a personal identification number (PIN) and deduct money straight from your checking account – offer convenience without the debt-related downsides of credit cards. That convenience can be a double-edged sword, though, because debit cards are tied to your checking account, which most people think of as their everyday spending cash. img_4297

If someone uses your credit card illegally, you won’t take a financial hit while you’re getting the situation resolved, and most major card companies have a zero-liability policy on fraudulent transactions. Financial institutions are offering more protection for debit cards, but it’s far less stressful to protect yourself from fraud in the first place.

Follow these tips to keep your debit card use under wraps.

Protect your PIN.

The first and most important rule to follow is to always protect your PIN. Don’t share it with anyone. Memorize it instead of writing it down somewhere. Never give it out over the phone, and always cover keypads with your hand when entering the code.

Whenever possible, use only ATMs associated with your card issuer, and do it during regular business hours. Don’t use an ATM if other people are milling around.

Choose ATMs wisely.

Stay away from ATMs that seem to be in disrepair. Be wary of card machines at convenience stores and gas pumps as well. It’s easier to set up “skimmer” devices on them to steal your information when you swipe or insert your card. To spot skimmers, look for different-colored materials on the façade of the ATM, partially obscured lights, misaligned on-screen graphics, protruding parts on the card reader and sluggish keypads.

Keep balances lower.                                         

Think twice about keeping a large balance in checking or savings accounts that can be accessed via ATM. Check your account charges and balances regularly, and sign up for daily bank alerts if offered. Use debit card controls on your financial institution’s mobile banking app. Many users are now able to activate and deactivate their debit cards as many times as they wish. Compare monthly statements with your receipts.

Write down contact numbers for your checking account holder and credit card companies and keep them separate from your cards. Alert your bank or credit union immediately if your card is lost or stolen, and let them know if you plan on traveling out of state, to prevent potential blocks on your card. Always have other forms of payment on hand when you travel in case this happens.

Like cash and credit cards, debit cards deserve a place in your wallet. They can be a great way to track your spending and keep debt from getting out of control. Just remember that you need to use extra caution to keep your funds safe.

7 Simple Ways to Make Your First Million

IMG_3684 (Because once you make your first million you’re bound to rejoice under a waterfall with a rainbow, right?)

If a million dollars’ worth of investments sounds unattainable, you haven’t done your research. A seven-figure portfolio is absolutely doable if you start saving early, make sane lifestyle choices and avoid some common psychological traps.

Don’t limit your thinking to making a mere million over your lifetime. Aim for $10 million. Your only way to get there is to educate yourself about investing from reliable, been-there sources. After that, make a plan and stick to it.

Start with a millionaire mindset.

Building wealth begins in the brain. There are some beliefs and behaviors that you simply must avoid – taking on consumer debt, keeping up with the Joneses, trying to take shortcuts or falling for get-rich-quick schemes. True wealth takes time and hard work.

Adopt a spendthrift lifestyle.

When millionaires are studied, they surprise researchers. They’re not living in upscale neighborhoods and driving fancy cars. They treat their income like a business: spending the least possible and investing the rest. It’s not unheard of for future millionaires to invest half of their household income.

Make money from your hobby.

If there’s something you could do all day, every day, do it. The trick is finding a way to make your passion into a profitable enterprise. You can expect to fail along the way, but getting back up to try again is what separates millionaires from middle managers. Don’t be afraid to spend hours and weekends on your “side business” – it might be your bread and butter someday.

Start saving right now.

It’s all about doing the math. Most millionaires invested in the stock market for a long time, reinvesting dividends and letting compound interest do all the work.

Find an online calculator and figure out how much you’ll need to invest each month to be a millionaire by the time you’re 60, assuming you’re earning an average 7 percent return. You might be surprised.

Keep cool and play the long game.

Impatience is the enemy of wealth. It makes people buy and sell too often, and it makes them abandon promising businesses that don’t explode into success overnight.

It takes a while for investments to start ballooning into real money, and even then, you’re going to want to leave them alone. If it were easy to run your own business, everyone would do it. So take a deep breath and realize you’ve got a long way to go.

Always be hustling for more income.

If you’re not a natural entrepreneur, consider investing in real estate. A rental property that will bring in more money than you pay to maintain it is a great investment. Do some research to figure out the up-and-coming neighborhoods in your area. The quicker you own your rental property outright, the quicker you’ll be looking at steeper profits.

Your 401(k) is your tax-free friend.

You might as well take advantage of the federal government’s wealth-building program: the 401(k) account. First, put in the maximum amount allowed by law ($18,000 a year as of 2016). Leave it in there, earning compound interest, and if your mutual funds return a 7 percent profit while you’re socking away that $18,000 a year, you’ll be a millionaire in 23 years. If you can’t afford to put away $18K a year, put away as much as possible.

Five summer vacation spots that won’t break the bank

IMG_3571.JPGSometimes, you just have to get away and take in some new scenery. Good thing America is full of destinations where you can choose how much you want to spend once you get there.

Yellowstone National Park

A road trip to one of America’s natural wonders will take you past enough landmarks to justify a vacation unto themselves: South Dakota’s Black Hills, the Badlands, Mount Rushmore, Devil’s Tower, the Grand Tetons and more. Take out an almanac and plot different courses there and back for variety.

Just be sure to leave enough time in Yellowstone itself, where you could spend weeks exploring geysers, waterfalls, jewel-toned hot springs, canyons and wildflowers. Bears, bison and elk provide even more photo opportunities in the park.

IMG_3568

Lodging in the nearby towns of Jackson Hole, Cody and West Yellowstone is available at varied pricing levels, so book as far in advance as you can. You can also take a tent and camp at one of the 2,000 sites within the park if you reserve it in time. Eating within Yellowstone can be pricey, so pack a cooler with food and drinks at a grocery store outside the park every day.

Myrtle Beach, South Carolina

Myrtle Beach is a popular tourist destination, with lots of flights going in and out every day on discount carriers. Look for sales on individual airlines’ sites as well as popular travel booking sites to get the best deal. There is no shortage of beachfront condo-style hotels competing to fill rooms, either.

Once you get there, Myrtle Beach has a lot to offer besides the beach. The world-class Ripley’s Aquarium is the city’s biggest draw, with the Family Kingdom Amusement Park & Water Park close behind. Companies offer ziplining, kayaking, boating and diving for the active vacationer – or you can just sit on the beach and relax.

Boston, Massachusetts

Boston has more history per square mile than any other city in America. Once you get there, you can discover the city’s rich Revolutionary War heritage on foot on your own or with the help of a guided walking tour. Business travel makes downtown hotels close to attractions, like the waterfront and theater district, popular during the week, with better deals on weekend nights.

One money-saving deal to consider is the Go Boston Card, which lets you skip lines and gets you into a long list of destinations at a discounted price. You can choose which kind of card you want based on the number of places you want to visit, or just custom-load one according to your plans.

Fort Lauderdale, Florida

IMG_3570

Once you’re out of spring break territory, this Florida beach city calms down into a destination for wide sandy coastlines, open-air dining and water sports like kayaking. The city’s arts district has grown up around Las Olas Boulevard, packed with galleries, boutiques and world-class dining. If you get tired of the city and beach, you can take a boat tour into the Everglades or tour a historic estate.

You can fly into Fort Lauderdale, but you can also check for cheaper flights into Miami and West Palm Beach. Once you’re there, you can take water taxis on the canals or use the city’s trolley service along the beach and downtown. Finding a beachfront hotel in your price range might not be as hard as you think, especially in summer, because of all the competition.

Austin, Texas

Austin has carved out a reputation that stands apart from the rest of Texas. The state capital is also the world’s live music capital, with a thriving cultural scene and welcoming attitude that keeps it hopping year round. Austin has a well-developed bus and light-rail system that connects downtown to the airport. You can also rent a bike and use the city’s system of lanes and trails.

Because Austin is such a popular destination – you’ll want to avoid the South by Southwest festival if you’re keeping costs down – it has a lot of available places to rent via services like Airbnb. There are also affordable rooms at hostels near 6th Street, ground zero for Austin’s late-night live music scene.

IMG_3567

Wherever you end up going this summer, a little research beforehand will save you money on hotels and transportation. But once you’re at your vacation spot, don’t be afraid to ask the locals their opinions on the best diners or dive bars. They’ll steer you to great, under-the-radar places you might not find in your guidebook.

Vacations are about making memories, so concentrate on finding the kind of unforgettable experiences that money just can’t buy.

What does FOMO mean for your future?

IMG_3437The thought of being trapped in your office cube while your friends go to their third happy hour of the week drives you insane.

After drooling over your sister’s tower of artisanal French toast on Instagram, you can’t even deal with your boring bowl of cereal.

Your squad rolling up to that concert without you gives you heart palpitations.

That anxious feeling of not doing enough, not experiencing enough, is called FOMO: fear of missing out.

This 21st-century social anxiety is fittingly fueled by social media, where everyone else’s carefully edited lives seem to put your own to shame. One friend is in Greece, another is already a vice president at work, and that power couple is making cake pops for the soccer tournament.

IMG_3438

FOMO becomes a real problem if it makes you reach for your wallet instead of putting down your phone. Its hold on investors leads to bubbles and then to crashes, like the dot-com collapse in 2000. It can even hurt your career if you’re constantly unsatisfied with your position, leading you to devalue your own work until you can find “something better.”

So what do you do about it?

  • Have something to look forward to. FOMO won’t strike as hard if you’re not staring down an empty calendar. So plan some volleyball games or commit to seeing the new superhero movie with friends. It’s cheaper than buying plane tickets.
  • Don’t leave money languishing in accessible accounts. If your checking account has more than a few months’ expenses in it, start saving more aggressively for emergencies and retirement. The less likely you are to spend now, the more you can enjoy later in life.
  • Don’t let yourself be bored. Pursue that hobby you’ve always put off. Use that gym membership. Keeping busy keeps envy at bay.
  • Give social media a break. Your Instagram account doesn’t define you, so realize that it’s not a complete picture of anyone else’s life, either.
  • Let it go. You’re never going to experience everything, win every award, get every promotion. Just remember: You don’t have to impress anyone but yourself. Besides, everyone you know is probably jealous of your lifestyle already. They have FOMO, too.

Pet insurance. Is it worth it?

Is pet insurance really worth it?

Veterinary care is a lot like health care for humans: Technology, medicine and lifesaving techniques are always being developed. Your pet’s doctor can offer more advanced treatment, but it comes at a cost. Faced with thousands of dollars in treatment after an accident or dire diagnosis, many pet owners are conflicted. Many people draw the line at spending $500 on vet care, forcing themselves into a difficult decision. Even fewer pet owners are willing to spend more than $1,000.

It’s not like people insurance.

Pet insurance has a higher profile lately, with an increasing number of carriers competing for owners’ dollars each year. Premiums can range from around $10 to $90 a month, with widely varying levels of coverage. If you have pet insurance, you’ll usually have to pay your vet up front, then file a claim for reimbursement. Most vet offices will help you fill out the paperwork involved.

So is it worth it?                    

Pet insurance can come in handy in urgent situations. Just like for people, emergency veterinary care is exponentially expensive. If your dog fractures its leg and needs orthopedic surgery, the bill could top $3,000. But that’s a rare situation, and pet insurance doesn’t end up saving most owners money in the long-term. The exceptions are pets that develop a rare disease that will require long-term treatment and pets with catastrophic injuries.

What if I decide to buy coverage?

Ask your veterinarian to recommend a few carriers. Vets don’t get kickbacks on this kind of advice. Compare a few different policies from different companies and read the fine print on maximum payouts and other exclusions. Including “wellness care” on top of accident and illness coverage for your pet will probably not be worth the higher premium you will pay, so consider leaving it out. Insure your pet when it’s healthy, and don’t cancel when it gets older unless you’re willing to deal with the consequences.

Check the coverage limitations.

Some plans cover wellness visits as well as emergencies; others don’t. Common but expensive ailments such as hip dysplasia are usually excluded under most plans. Some carriers completely exclude certain breeds, such as the Chinese Shar-Pei. Some breeds, like Labrador retrievers, will be covered for only one round of surgical object removal after eating, say, your shoe. Big breeds aren’t always covered for ligament repair after a common leg injury, and so forth.

Insurance isn’t your only option. Consider depositing a few hundred dollars a year into a savings account for unexpected vet bills. If your pet leads a relatively healthy life until old age, you’ll have money to spend if problems arise.

You can also save money in the long run by reducing your pet’s medical risk factors. Spaying or neutering, keeping current on vaccinations and dental cleaning, using heartworm prevention, and protecting your pet from fleas and ticks will put the odds in your favor. Feeding your dog a vet-recommended diet will also help. Even if you decide against insuring your pet, staying mindful about its everyday health can provide peace of mind.

Wild About Saving

Kids-Being-Crazy

Let your kids get wild this month. (About saving, that is.)

April is Youth Month, when credit unions look for ways to help kids learn about the value of a dollar. There are many ways to do this, but if you need some fresh ideas keep reading.

Give them examples they understand.

Our furry friends in nature are always busy setting some great examples for ways to get wild about saving. Squirrels for instance – the bushy-tailed savers spend months stockpiling mushrooms, acorns and tree cones for the winter. Deer mice construct intricate tunnel systems under the snow to hide their supplies of seeds. Beavers take the time, even during dam-building season, to gnaw down saplings of aspen and cottonwood for safekeeping in their ponds. If wild animals can do it, so can your little critters!

Make money part of the daily conversation.

When your little one asks for the toy of the moment, throws out food, or even plays with mommy’s purse, bring up the idea of finances in a non-threatening way. When children ask why you have to go to work every day, have an answer ready: “I would rather spend all day with you and Timmy, but going to work means we have money for this house, your dinner and all your toys.” Talk about money in ways that stresses its value as something to be earned, valued and conserved.

Incorporate games and books.

Monopoly is the classic board go-to for teaching kids about saving and investing, but it’s not the only game in town. Cashflow for Kids, The Game of Life and The Allowance Game are just three options among many that build money consciousness among children as young as 5, emphasizing responsibility and planning for real-life events.

Take them shopping.

Turn your weekly grocery trip into an educational experience. Start by having your kids make a list, broken down into “needs” and “wants” for the family. Put them in charge of coupons. At the store, challenge them to comparison-shop for prices among name brands and generic labels. Reward them by choosing between the “wants” on the list, so they’ll learn that spending less per item means better snacks down the road.

Set up an allowance system.

Some families keep allowances simple, with a set amount per week, while others create complex systems where kids can earn more by doing chores. The key is to be consistent about the rules while offering guidance. Smaller kids might need permission to break into their piggy banks, while middle-schoolers can be allowed more independence. Once they’re teens, make them responsible for budgeting their own gas, movie tickets and fashion statements.

Encourage them to set goals.

Kids are bombarded with images of stuff they suddenly really, really want. Talk to them about how long it will take them to save up for that blinking gadget or those talking boots, and they might reconsider. Or they could surprise you by faithfully socking away enough for their dream toy. Both possibilities are valuable learning experiences.

Let them make mistakes.

Don’t feel the need to step in every time your youngster blows his allowance on candy. It’s easier to learn hard lessons about money in kindergarten than college, where credit cards and emergency loans get financially inexperienced students in hot water.

 

Guest Blog by Gina Overmann

Guest blog post by Gina Overmann, 2016 Spending Freeze winner.

I was honored to be chosen as the Missouri Credit Union 2016 Freeze winner! Our family is very excited! During the 10-day Freeze, we learned more about teamwork and how to make saving money fun. We had some challenges along the way. Our dishwasher broke, and we realized quickly how spoiled we had been. I grew up without a dishwasher and remember helping my parents wash and dry dishes when I was a kid. We used this as a learning opportunity, rolled up our sleeves, and got to hand-washing. In fact, we got so used to hand-washing our dishes after every meal, we still haven’t bought a dishwasher! This not only helps save money by not running out to buy a new kitchen appliance, but also allows us to spend more time together as a family. We all help clean up and do dishes instead of sitting in front of the television after mealtime. Now, it’s a habit to spend this time together after meals, and our television gets a much-needed rest!

When asked how we will spend the money, I am excited to say we are planning a wedding for this summer, so we will be using our winnings toward that. We found someone to make a beautiful rustic wedding cake for $300, so this money just about covers that cost!

We wanted to share some tips for future Freezers. What helped us the most was keeping focused on the goal to not spend money. Planning ahead, making a meal schedule and grocery shopping ahead of time helps avoid panic toward the end of the freeze. Ten days can feel like a long time if you don’t have a plan of attack. On the flip side, 10 days is long enough to form good habits, so take advantage of this time to change the way you look at money. We are big fans of Dave Ramsey, and love to save, but you don’t have to attend Financial Peace University to win big with money, although we do recommend it!

Thanks, Missouri Credit Union, for hosting this Freeze! We participated last year as well, and really enjoyed the challenge each year.

IMG_5146