Banking and BorrowingGood knowledge of banking and borrowing can mean the difference from faring well or living on welfare. You can let your money work for you, or you can work for your money. Wise choices make the difference in your lifestyle. Look at your last 3 bank statements and circle each fee. You may be paying $300 or more per year with knowing it. Find ways to reduce those fees by maybe switching to another type of account at your existing bank or try changing to another institution. You want to get top dollar on your savings and checking accounts. Online banking institutions tend to pay the highest interest on your savings. One source we recommend is IngDirect. Credit cards are a very real necessity in today's world. But you must be careful not to abuse credit cards. We show you how to find the best credit cards for your situation and some tips to avoid getting into the credit card trap Identity Theft is a very unpleasant but real ocurrance in todays world. Learn to prevent identity theft and how to cure it if it happens to you. An excellent service that we personally recommend is ID Watch Dog. They provide identity theft protection, detection and resolution. Correcting identity theft problems can take up to 400 hours. ID Watch Dog will take on that task for you. You should have at least 3 - 6 months of living expenses available in a liquid account. But your don't want to park that money in regular passbook savings account, earning far far less money than you could in other savings vehicles. You want to get top interest for your savings, yet allow it to remain accessible enough for times of emergency. One way to accomplish both goals is to use the ladder cd principal. Say you have $13,000. You can split that into 5 groups of $2600 and put one in a six month cd. The second cd put into a 12 month cd, the 3rd into a 18 month cd, a fourth into a 24 month cd and last into a 30 month cd. When your 1st cd expires in 6 months you can reinvest that into a new 30 month cd. the same when your 2nd cd expires then invest it into a 30 month cd. Every 6 months you'll have a cd expiring and being reinvested. If case of an emergency, you can cash just the lowest interest cd to enable you to minimize the loss due to penalties for early withdrawal and do you forfeit your entire lump sum of interest. One particularly good institution for higher rates is IngDirect. Order checks and deposit slips from reputable, less expensive third party vendors, such as checks Unlimited. Ask for discounts on automatic payments such as mortgages and utilities. Some banks will give give a discount on your interest rate for using the automatic payment option. Get cash from your bank's atm to minimize charges for using other bank atm. Also try limit your trips to the atm to once or twice a month. Withdraw a sufficient amount to tied you over till the next scheduled visit. This will help minimize atm fees and help you to stick more closely to a budget. Pay your mortgage every two weeks instead of once a month. At the end of the year, you will have made two additional payments than if you had paid monthly. Thus you will pay off your mortgage years ahead of schedule and save tens of thousands of dollars in interest. If you are paying PMI (Private Mortgage Insurance) on your mortgage, check with your lender. If your debt to equity ratio is 80% or less, you can probably have that extra expensive removed from your monthly payments. Return to Teach Money Management
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