Friday, April 18, 2014

Money Tips #5: Organize Your Purchases

Over the years, PF Stock has collected numerous money and tax saving tips from readers. In this series of posts, I have compiled some of the best money tips that I've received, each categorized by topic. In addition, I am including other money tips from the internet and from my own experience. I hope that this will come in handy my readers. Today's topic:

Tips for Organizing Your Purchases
  • Coupon, and organize with a list - the time invested will be worth it.
  • Always make a list and never ever buy on the spot for big purchases.
  • Always use your grocery store's discount card and always look for coupons before you go shopping.
  • Carry your store affinity cards in a coin purse, separate from your wallet. This way, all of your store cards are all in one place and easy to find.
  • Make a list before shopping and stick to it. Resist those impulse buys.
  • My best money saving idea is to take a list when you go shopping and stick to it.
  • Stay out of stores! Only grocery shop with a list - and stick to it.
  • I sign up for loyalty rewards from my favorite stores. Besides that I earn points whenever I use it, I also get special discounts.

Also See:
PF Stock Money Tips #1: Use Coupons
PF Stock Money Tips #2: Credit Cards
PF Stock Money Tips #3: Taxes
PF Stock Money Tips #4: Shopping

Thanks again to all of my readers who contributed most of these tips. If you have more money saving tips, please share them in the comments below. Your tip may be featured in a future compilation.

Tuesday, April 15, 2014

How Could You Save by Refinancing Your Home Mortgage?

Our homes are generally our biggest assets and they may come to our aid in many occasions. Owning a home increases your statue and it would be even nicer if you owned your home outright. However, you achieve this goal faster if you manage to save money today. Most of the time, it would be cheaper to borrow on your home equity than any other loans because of the underlying security.

A home loan is a long term commitment but that doesn’t mean you cannot replace it with a better one. This could make sense if you are still saving money after all the costs of switching taken into account. Even small savings can add up over time considering you would be paying interest for years. Here are some of the ways how refinancing a home mortgage can save you money.

Putting a Cap on Your Monthly Payments
There are many mortgages in place with adjustable interest rates that fluctuate from month to month. Low interest rates offer a great opportunity to fix your rates so that you know exactly how much you will pay each month. You will stand to lose if the rates go down even further but you will be well protected if they go up.

The main problem is that fixed rates could be slightly higher than current flexible rates. This is the price to pay for peace of mind of keeping the same monthly payments. Another option is to get a flexible mortgage with caps on rates in that rates can go up and down along the lines of underlying interest but it cannot go up more than pre-fixed ceiling rate.

Taking Advantage of Low Interest Deals
Many lenders offer special incentives for several years when you take a new home loan. Many people are attracted to those initial low monthly payments. So, it comes as a big surprise when the interest rates and monthly payments suddenly shoot up. This would be a good time to look around and see if you could find savings. A new provider is likely to offer similar incentives as well that can be used to offset the refinancing costs.

This time you should have a longer view and check carefully as to what will happen after the discounted rates end. If you are not going to go for fixed rates you should find out how wildly your rates can fluctuate. There are mortgages that are set as base rates + a certain margin of interest. For example if the base rates are 1% and the margin is 2% you pay 3% interest and this changes to 4% if the base rate goes up to 2% and vice versa.

There are many reasons why people would end up with a bad mortgage deal in the first place. One of the reasons is that you get all excited about owning a home and you overlook a few points. Another one is to have a poorer credit score at the time and can only get mortgage from certain companies. This wouldn’t be a problem if you managed to keep your payments and improved your credit score. As soon as you see a good deal you can rearrange your home loan for the better and save money

Paying Off Home Mortgage Earlier
There are many ways of saving money. Paying more towards paying off debt earlier is like putting money in the bank because you will have larger and larger equity at your home each month. Early payments can be achieved in two ways. You can either make lump sum payments as and when you have money. However, we tend to spend money before we even know it. So, if you are not confident about achieving your saving goals this way, it may be better to reduce the term of the loan by paying a bit more each month.

You don’t really need to refinance to reduce your mortgage term with some lenders. It is possible to talk to your provider and switch for a better product and reduce the term of the mortgage in the same time. While talking to other lenders don’t forget to talk to your own lender. Initially, they may not give way, but they may change their mind when they realize you are going to leave them. If they don’t you could still go with the best option for you but with another company.

How Else You Could Save Money?
The next money saving opportunity could be looking at your insurance arrangement. People achieve large savings on their home and automobile insurance every day especially when they buy both policies from the same provider. When you are getting your home loan make sure that you are not tied down for your home insurance. Both your lender and financial advisor may try to steer you toward the products they are affiliated with. Check your options carefully before making your mind.

When you can control your main outgoings you can budget better for the future. Many people go to considerable trouble to save a little money. They cut coupons, give up eating out and even leave home with a mug of coffee instead of picking their coffee on the way from their favorite vendor. However, they do nothing about possible large savings they can get with refinancing, switching home and car insurance providers.

About The Guest Author
This article is written by Joe Moore who comes from financial services background. He currently helps building an auto insurance forum called Talk Car Insurance.

Wednesday, April 2, 2014

Citi Dividend Card Q2 2014 Categories

I had written before that I have a Citibank Dividend MasterCard. One of the benefits of this card is that it offers 5% cash back on rotating categories of merchants. The main problem I have with this arrangement is that I always forget which categories are currently offering 5% cash back when I am at the store. As a result, I often miss out on the bonus dividend dollars. In order to help me remember, I have decided to post the categories which change every three months here.

For Q2 2014, you will earn 5% for purchases from:
  • The Home Depot
  • Home Furnishing Stores
  • Home & Garden Stores

Note that "Q2 2014" means from April 1 - June 30, 2014. Also note that even if you have a Citi Dividend Card, the enrollment is not automatic. You have to login and sign up for this offer at the Citibank website.

See also Discover Card Q1 2014 Cash Back Bonus Categories.

PF Stock

Tuesday, April 1, 2014

The Quick Guide to Setting Appropriate Credit Limits

Credit limits can be a bit of a prickly question, particularly following 2008's terrifying credit crash. How much is too much? How much is irresponsible? How low becomes restrictive and starts to eat into potential profits? It can be a complicated minefield. For companies who are not sure how much credit to allow individuals or businesses, we've put together a quick guide to setting appropriate credit limits which protect your business from defaulted payments, keep your clients from financial trouble and ensure that you don't put the dampeners on potential growth.

Everyone's different
It may sound simple but this is an important consideration to take into account when setting credit limits. Every client you take on is different, with different financial situations, different needs and different patterns of behaviour. Taking a closer look at each prospective client on an individual basis is an important way to get to grips with where their individual credit limit should be.

Many businesses set blanket credit limits, but a quick look at a sample of businesses in just one industry using RM Online's free company checking tool shows that there are radically different financial situations to contend with and, more importantly, varying degrees of risk to protect against. By showing a company's financial position, recording non-payments and CCJs and disclosing any legal issues, this tool clearly demonstrates why careful research needs to be conducted before credit limits are set.

Categorise your clients
It can help to segment your customers on the basis of your findings and research. Take a wide-angle view of the businesses you offer credit to and consider their similarities and differences. If possible, group them into categories ranging from the high risk to the low risk. If you can build profiles around each group then you can create different credit limits which fit each group, minimising how much work must be done to decide on each business's credit limit. If you will be delegating the setting of credit limits to staff, this process can be very helpful, particularly if it can be condensed into a short series of questions i.e.:

  • What is the the company turnover?
  • Does the company have any outstanding invoices?
  • Has the company been flagged for non-payments?
  • Has the company been given a CCJ?

Define your goals
If you have a clear idea of the effect you want to achieve with your credit limit, you can tailor your policy to help make it happen. For instance, if you want your customers to feel confident and spend more, higher credit limits can encourage bigger spends. Meanwhile if you are particularly vulnerable to non-payment, lower credit limits will provide peace of mind and ensure clients only have access to credit they can easily afford. The overall goal for most businesses will be to give low risk clients the freedom to make the most of your services and ensure high risk clients have structures in place to avoid slow or non-payment.

Monitor trends
This is an ongoing process and it is important to keep a close eye on the effect of your credit limits. Watch for emerging trends and focus on things like slow payment, delayed payment and customers who repeatedly hit their upper credit limit and consistently pay on time. Evaluating the effects of your limit over time will help you to find the perfect system which protects both your business and your clients, while giving low risk customers the freedom to help your business grow.

What is your approach to setting credit limits for your customers? Do you use a blanket approach or do you invest time and resources in tailoring limits to particular customers? Share your thoughts and experiences with our readers below.