Personal Finance Help that Challenges the Status Quo

Are you looking for personal finance help that will reap results? Are you tired of dealing with a faltering budget and want to regain control of your finances? When it comes to our money, too often we simply accept the status quo, take advice at face value, and do what everyone else is doing because it is expected. We build up our retirement funds, we put every extra dollar into paying off our mortgages, and we walk through life without ever reading our credit report or knowing our credit score. Unfortunately, our financial decisions are often based on inaccurate information, but by educating ourselves, we will be able to enjoy the benefits of smarter choices.

1.Know the advantages of credit cards.

Credit cards are a great way to track spending and help you maintain control of your budget. Every month you receive a listing of your purchases so you know exactly where your money is going. This will enable you to identify unnecessary expenditures and make adjustments to help with responsible spending.

Credit cards also offer a variety of incentives such as cash back and points for travel or products for which you would normally have to pay. Points can be exchanged for necessary items or luxuries with no cost to the card holder.

If an emergency arises or a great investment opportunity presents itself, cash advances on credit cards are a convenient way to acquire money quickly and hassle free. Furthermore, when you use your card to make everyday purchases, you will not need to carry large amounts of cash. Too often, on-hand cash disappears with no record of its departure. As previously mentioned, using a credit card will allow you to keep track of how much you are spending and where your money is going.

The key is to make sure that you use credit cards as tools to your advantage. Irresponsible spending or carrying large balances will negate any benefits and create serious financial problems. Despite popular belief, credit cards can be very advantageous if used properly.

2.Know your credit report and score.

If you want to improve your credit score or maintain your good credit standing, it is important that you obtain a copy of your credit report so you know exactly where you stand at all times. Also, being aware of this information will help you identify any mistakes in reporting.

Credit cards are one of the best ways to improve your FICO score. A better or higher score will help you obtain lower interest rates, increase your borrowing power, and improve investment opportunities. A lower score means that you will be putting a lot more of your hard earned money into higher interest rates. Since part of your FICO score is based on your debt to credit ratio, having several credit cards with minimal amounts owing will work to your advantage. A high credit limit with a low balance will make you look responsible and allow creditors to see you as a low credit risk.

3.Consider an interest only mortgage.

Although it goes against what many people have been taught, an interest only mortgage can actually save you money. Since monthly payments are lower, more cash will be freed up for your use. Plus, you will have extra funds available for beneficial investments that will more than offset any extra interest accumulated by choosing this mortgage option.

Mortgage interest is a tax deduction; however, interest on other forms of debt, such as credit cards, is not. It seems like simple wisdom to take advantage of the tax benefits and use the extra money to help keep credit card or personal loan balances to a minimum.

4.Question the wisdom of 401K retirement plans.

Although qualified retirement plans are often promoted as a means of financial security, there are also many disadvantages that are rarely considered such as their lack of liquidity, future tax implications, and the inability to access any funds until retirement. There are other investment options that will give you equal, or better, return on your money and allow you to access funds whenever the need arises.

Heeding certain personal finance help or advice may require a change in mindset. And, achieving financial freedom may mean adjusting the way you view your money. If the way you have always done things is not reaping the desired results, then it is time to challenge the status quo and educate yourself about the options available to you. After all, with your financial security at stake, take responsibility to make the best decisions possible.