Cash vs. Debit Card | Which Helps You Save?

07.20.2021 by Harry //

Do you desperately want to save but just can’t seem to manage it?

Then you’re in the right place. Whether it’s a holiday, a house, or future endeavors, this article is going to help you save money with both cash and debit cards.

Using Cash for Everyday Purchases | Advantages and Disadvantages

The main difference with using cash is that you can physically see the money that you are spending. Studies show that people spend up to 80% less when using cash over debit cards. So why is this?

Firstly, being able to see exactly how much you’re spending can reduce how much you spend. It makes people more aware of how much money they’re handing over. As a result, they will consciously make an effort to limit it.

The second reason is that debit cards have fewer limitations than cash does. Generally, if you’re going to buy something expensive, you do it via card. Cash helps you buy things that are cheaper and more in proportion to your budget. More than half of all purchases made by cash in America are less than $10.

On the downside, carrying money around is less secure than having money in your bank. If this is the method, make sure you’re careful not to lose it.

Using a Debit Card for Everyday Purchases | Advantages And Disadvantages

Debit cards are an easy way to pay for things quickly. Counter to the above, the issue with paying by card is that you cannot see the money you are spending, making it feel a little less real. Often, this can lead to spending more than you intended to and regretting it later.

Nonetheless, using debit cards for payments is the most secure way to pay. Plus, even though you cannot see the payments you’re making at the time, it will be deducted from your bank immediately, which means it can’t go unnoticed and you have time to make up for any over-spending you may have done.

Using a debit card can prevent you from getting into debt, as even though the horizons are broader than when paying by cash, you do still have a limit, as you will not be able to buy more than you currently have in your bank.

How can I save money using cash?

3 ideas for saving using cash.

Withdraw a Weekly Budget

Withdrawing only what you want to spend for that week means that you don’t have the option of overspending.

Once the money is gone, it’s gone. However, it’s also a good way of keeping you on track. For example, if you know you spent extra on one day, you can make sure you spend less the following day.

https://www.cnbc.com/select/cash-debit-or-credit-for-everyday-purchases/

Often, saving money is about separating what you want from what you need. This method helps you prioritize the essential things, from the things that can wait.

The Envelope System

The envelope system involves withdrawing all of the money that you need at the start of the month and putting it into different labeled envelopes. For example; rent, food shopping, social life, bills, car expenses.

For this to work properly, you’ll need to work out all of your finances and accurately calculate your payments. Keep in mind though, that surprises can happen. It is always useful to have a separate envelope in case of an emergency.

If this is not something that you can afford, then it’s okay to take money from other envelopes to help you get to the end of the month.

How Can I Save Money Using a Debit Card?

3 ideas for saving using a debit card.

Open a Separate Account

Something that many people find helpful when budgeting is to open up a separate bank account to use for everyday purchases.

With this method, you can transfer only the amount that you aim to spend, whether you do this weekly or monthly is up to you.

This helps people by monitoring if they are on target for their maximum spending allowance. Keeping bills separate is a helpful technique when it comes to saving.

Therefore, having your main bank account for bills and essentials, then the second one for luxuries and daily needs makes it clear how much you can spend.

Set Up Account Alerts

Some bank alerts are aimed at protecting privacy and data. Others are used for warning signs.

Some of the banking alerts you can set up to help you budget your money are ‘low balance alert’, ‘large ATM withdrawal alerts’, and ‘big purchase alert’.

If you’re very serious about saving, you can even set up an alert for every debit card purchase you make, although this option isn’t for everyone.

Conclusion

Whilst cash can limit the amount of overspending you do, it’s not suitable for every form of payment. It is possible to budget with either option. If you are overly susceptible to overspending, using cash for everyday needs will benefit you the most.

Budgeting with debit cards can be made simple and easy by setting up separate accounts and monitoring your finances on online banking, and often this is the best option for making larger payments, such as bills.

Image credit:[KAROLINA GRABOWSKA]

How to Manage Financial Stress and Anxiety

07.07.2021 by Harry //

To manage financial stress and anxiety, there are several things you can do to take care of yourself and your emotions.

Using your money wisely and taking it day by day is a good start, finding ways that you can consolidate your financial burdens, and start taking care of them little by little.

It may sound easier said than done but, you’ll be back to yourself in no time.

What Causes Financial Stress?

Many things can cause financial stress. Sometimes unexpected things happen that take us by surprise and other times we just don’t make enough to make ends meet. In some cases, you may lose your job or suffer from an injury that keeps you from working.

Whatever the case, the inability to maintain your necessities can cause stress. This stress leads to anxiety, making you feel nervous and anxious. Anxiety and stress can affect everything in your life, making you feel uneasy, unconfident, and restless.

Over time, if you don’t address these issues, you’ll have bigger issues and could develop panic attacks and general anxiety disorder.

6 Ways to Combat Financial Anxiety and Stress

When you start to feel anxious about your paychecks, you may be suffering from financial stress. A good place to start is to assess your financial situation, looking for the root cause.

Getting to the bottom of what’s causing your anxiety is a good way to start taking care of it, getting your life back, and taking charge of your emotions. You can also tackle your financial stress with these 6 tips.

1. Stay Positive

First and foremost, you should stay positive. We are not perfect and sometimes things happen that are out of our control. Admitting that your finances are in turmoil, you can start taking the first steps to fix them.

Try and keep a positive mindset and realize that you just have to take things day by day. Your financial stresses won’t be around forever, and you can start working on them.

2. Start with the Most Important

When tackling a debt, start with the most important first. Whatever collects the most interest or weighs you down the most is where you should start, jumping on a payment plan when you can.

You can start by taking a look at your credit report and making phone calls if you need to ask questions about totals.

Once you have that in place, start taking steps to plan how you’re going to pay.

3. Be Real

When you have financial stress, the last thing you want to do is be unrealistic. Don’t be afraid to face the total that you owe, coming to terms with your debt. In this way, you can truly see what you have to work on and avoid thinking you owe much less than you do.

If you need to, work with an attorney, a financial advisor, or even a friend to talk it out and make sense of it all.

4. Use Your Money Wisely

Just because you’ve come to terms with the amount you owe doesn’t mean that you should start to blow your money. It means quite the opposite. Take care of your money and don’t spend it on unnecessary things.

It can help to get on a strict budget, one where you know exactly where your money is going. Try writing out your monthly income and setting aside the amount you need for essentials like food, gas, and utilities.

5. Take Small Steps to Success

When you’re trying to relieve your financial stress and anxiety, try and keep from overwhelming yourself. That means taking small steps instead of overthinking and trying to tackle too much at a time.

When you take small steps, you start to realize that you are hitting smaller milestones that get you closer to your final goal. In the end, you can use those small successes to build yourself up and put a dent in your debts to start feeling relieved fast.

6. Be Honest with Yourself

There is nothing worse than underestimating the amount of financial burden you feel. Not being honest with yourself could lead to more stress as you start to realize how far in debt you are.

Start by finding out what you owe and then, take steps to eliminate it.

How to Tackle Financial Stress

Dealing with financial stress is not easy but, with the right attitude and small steps, you can get yourself on the right road to becoming debt-free and more at ease with yourself.

https://thethirty.whowhatwear.com/financial-anxiety

If you have financial stress, here are three things to look into.

1. Consolidation

Consolidation is one loan that you can use to combine all of your debts into one place. Most of the time, those who have debts benefit from consolidation, able to reduce the interest and pay only one payment per month.

2. Bankruptcy

Bankruptcy is another option but, it comes with a few consequences. Your credit will show bankruptcies for up to 7 years, something that could affect your ability to buy things like a house or vehicle. Before filing bankruptcy, it’s best to check all of your options and save that for last.

There’s No Better Day Than Today

Sometimes, it’s easy to put off paying for your debts. Instead of waiting, start taking control of your finances to reduce your stress and anxieties.

There is no better day than today to start taking control over your life and start living more freely. Remember to check your debts, be honest with yourself, and find options that work for you.

Help is out there and there are more options than you might think. From attorneys to credit cards, you have a number to choose from. Whether it’s contracting an attorney or creating a budget yourself, you can do it, and your start living a worry-free and debt-free life.

Image credit:[KAROLINA GRABOWSKA]

When to Refinance Student Loans

06.29.2021 by Harry //

Refinancing student loans can be a great idea, but it is not the best option for everyone. Refinancing student loans allows you to pay a lower interest rate while merging your payments into one.

You should not refinance your loans if you need to take advantage of federal student loan protections.

It may be a good idea to refinance student loans if you are a private student loan borrower, but it is generally not a good idea if you are a federal borrower.

This article describes refinancing student loans, when it is a good idea, and the pros and cons of refinancing student loans.

What Does It Mean to Refinance Student Loans?

To refinance student loans is to take out a new loan that replaces an old loan (or more than one loan).

By taking out a new loan, your old loans will be paid off, but you still have to make payments towards your new loans.

The new loan will give you new terms, a new lender (sometimes), and most importantly, a new interest rate.

Should I Refinance My Student Loans?

When deciding whether or not to refinance student loans, take into account the following factors:

Your current loan interest rate. High-interest private student loans can be a challenge to pay off. If you want to lower your interest rates, and thus lower your monthly payments and your total loan amount, you should consider refinancing.
How much money you would save. You should only refinance if it allows you to save money on your interest rate, monthly payments, and overall loan payment.
Your credit score. A solid credit score will make you more eligible for student loan refinancing. It should at least be above 670. The higher your credit score, the more likely lenders will work with you and offer you lower rates. You also need a solid credit score because new credit applications will trigger a hard credit inquiry, which will limit your ability to apply for other types of credit such as credit cards, auto loans, and mortgages.
If you need a co-signer. Some lenders will allow you to have a co-signer. Having a co-signer can help you qualify for student loan refinancing. It is a good idea to opt for a loan that will release the co-signer after a certain number of on-time payments.
Your payment history. Lenders will look at your payment history. This is the determining factor in your credit score. Lenders may not allow you to take out a new loan if you are having trouble affording your current student loans.

Who Qualifies to Refinance Student Loans?

To qualify to refinance your student loans, you must have a good credit score. A credit score is the determining factor to get approved for student loan refinancing.

Lenders need to know how likely you are to repay your loans, and they get this information from your credit score.

You also need a steady income to refinance student loans. When you take out a loan, you must prove you earn enough money to repay it. If you have a reliable income, you are showing that you will eventually repay your loan and that you won’t fall behind on payments, even if financial emergencies happen.

To qualify for student loan refinancing, you must also have a low debt-to-income ratio.

A debt-to-income ratio represents how much debt you have compared to how much money you earn. You want this ratio to be low, so lenders trust that you can comfortably pay off the loan.

Private Student Loans vs. Federal Student Loans

The majority of borrowers are federal student loan borrowers – about 92% of borrowers. Private student loan borrowers make up the rest.

When it comes to refinancing your student loans, which type of borrower you are will determine whether or not it is a good idea.

https://yourfinancialpharmacist.com/my-experience-with-first-republic-student-loan-refinance-after-6-months/

Student Loan Refinancing Guide

Both federal and private student loan borrowers can refinance their loans, but federal loan borrowers have payments on freeze right now because of the pandemic. Federal loan borrowers would lose this benefit if they refinanced.

Until September 2021, federal student loan borrowers are not charged monthly payments and their interest rate is set to zero. Since the only reason to refinance is to get lower interest rates, it is not a good idea for federal borrowers to refinance at this time.

Federal loans also come with other benefits such as income-driven repayment plans that can lower monthly payments and Public Service Loan Forgiveness for working at non-profits, government agencies, etc.

If you refinance federal loans, you lose these benefits. Even when payments resume for federal loans, you should only refinance federal loans if you don’t think you will ever use the other benefits offered.

If you believe your income will be stable throughout your loan payments and you won’t qualify to be forgiven, then you can refinance your federal student loans.

Another aspect to consider when refinancing federal loans is President Biden’s plan to cancel student loan debt.

While no plan has been passed yet, federal student loans could be forgiven at least in part. If you refinance your loans, you will no longer be eligible for forgiveness.

On the other side, it is a good idea for private loan borrowers to refinance right now to take advantage of low interest rates. If you have taken out private student loans and are paying too high of an interest rate, it may be a good time to take advantage of low interest rates from private lenders.

Private student loan borrowers who want to refinance should choose a lender that offers fixed APRs. This will lock in your low interest rate.

Refinancing student loans may help you get a lower interest rate and reduce your monthly payments. However, it may not be the best way to get out of debt. Refinancing is not the best idea for every borrower.

WHEN TO REFINANCE YOUR STUDENT LOANS:

You should refinance if you want to pay off your loan sooner. You can pay off your loans quicker by lowering your interest rates.

You should consider refinancing if you are not making progress in paying off your loans. If you are struggling to keep up with monthly payments and interest, refinancing can help you start to make more progress each month.

You should only refinance your student loans if your income and credit are good. These factors are necessary to qualify for student loan refinancing and will help you qualify for lower interest rates.

Another great reason to refinance is that market interest rates are at a historic low. Private student loan borrowers can take advantage of low market interest rates by refinancing

Image credit:[KAROLINA GRABOWSKA]