DEVELOPING EFFECTIVE SPENDING HABITS

Resource: http://debthelp.blogspot.com/

Have you ever had the experience of going into a store to buy $6 worth of milk and bread, and you came out with $60 worth of items you really didn’t need? While in the store, you certainly felt they were either necessary or perhaps were on sale at a price too hard to resist. This is an example of Impulse Spending, and it is uncommon that such spending actually fits into our established budgets. Debt Reduction Services Inc. has some ideas for "resisting" the impulse to spend beyond our needs:

1. Create a weekly menu and make a corresponding shopping list prior to heading to the grocery store. Place an asterisk next to necessities, allowing for simple prioritization of items while shopping.
2. Take with you only the cash amount you have provided for in your budget. Leave your credit and debit card(s) at home. Keep a running total as you place items in your shopping cart (don’t forget sales tax, if applicable). When you reach the amount you have in cash, you can either check out or reevaluate your need for the items in your cart.
3. Plan to shop for groceries at times when the store is not crowded. Avoiding crowds helps to avoid stressful shopping. When we're stressed, we tend to justify additional purchases, so consider mornings instead of after work or Saturday afternoons.
4. Don't shop for groceries near mealtime or at other times when you're hungry. Expensive, prepared meals become more tempting the hungrier we are.
5. Ask yourself, “Do I really need this?”

There are other behaviors besides Impulse Shopping that often lead to overspending. They include:

1. Convenience Shopping – You say things like, “It’s on my way!” or “I don’t have time to shop around for the best deal.”
2. Entitlement Shopping – You think something like, “I deserve this! I’ve had a hard day! It will make me feel better!”
3. Hobby or Sale Shopping – You find it difficult to pass up yard sales without stopping to browse, or you automatically assume shopping will be the main activity when going out with your best friend.

If you can identify with one or more of these behaviors, make it your goal to become a “Disciplined Shopper,” one who plans their spending within an established budget and sticks to it. It’s not always easy, but in the end it will be well worth your effort.

Resource: http://debthelp.blogspot.com/

Debit Card Basics: Treat Them As a Check or You May Be Tricked with Fees

Resource: http://debthelp.blogspot.com/

Around this time of year, most of us prefer treats to tricks. When it comes to using Debit Cards, they may be a “treat” to use because of their convenience, but some of these cards carry fees and charges that feel more like tricks.

Now that electronic payments (such as Credit Cards and Debits Cards) account for more than half of all purchases made in the United States, we need to understand that there are proper ways to use our debit card and that there are other ways which should downright "scare" us.

First of all, debit cards are NOT credit cards and should NOT be treated as such. We may swipe them like a credit card, but they act like and think of themselves as paper checks. Regardless of whether you are asked to enter a PIN (Personal Identification Number) or sign a credit card slip, your debit card purchase will come directly out of your checking account, most often immediately.

I am often asked if using a debit card will help build one's credit. If we think of debit cards as "checks," we have our answer. They are not a form of credit and are not reported to credit bureaus.

Here Are Some Debit Card TREATS:

1. Debit Cards can be more convenient and safe to carry than cash.

2. There are no checks to write.

3. When you're traveling and not near your bank or credit union's own ATM, you can use your debit card to make a purchase AND get cash back at many grocery stores. This helps you avoid the fee many ATMs would otherwise charge you.

Generally, you can't go into debt with a debit card since the purchase amount comes directly out of your checking account. See "Tricks" below.

Here Are Some Debit Cards TRICKS:

1. Some fast food restaurants and some gasoline franchises add a surcharge to your purchase if you use a debit card.

2. Some banks charge you a per use fee, limit your number of "free" debit card transactions per month, or charge you a monthly fee to use a debit card.

3. If you have an overdraft protection on your checking, you may be allowed to take your checking balance below $0 with a debit card purchase, but you may also be charged for using your overdraft.

4. "Blocking." When you use your debit card for certain "open" transactions, where the final purchase amount is still in question (such as "Pay at the Pump" for your gasoline, renting a car or hotel room, or paying for dinner before deciding on a tip), the "estimated total" will be blocked (or put on hold) from being used for other transactions. See http://www.ftc.gov/bcp/conline/pubs/credit/credbloc.htm for more information.

Here Are a Few Debit Card TIPS:

1. Ensure that you have a Debit Card with no monthly or per transaction fees. Talk to your bank or credit union to find out.

2. Keep your PIN private. Do not give it out to anyone unless you would also trust them with your entire checking account.

3. When you make a purchase with your debit card, enter the details of the purchase in your checkbook register including the date of purchase, the payee (name of store, gas station, etc.), the purchase amount, and a few details about the item(s) purchased (e.g. “Groceries” or “Birthday gift”).

4. If you are not in a position to enter such information, make sure you get a receipt, and wrap it around your debit card before placing it back in your wallet, purse or checkbook. Don't use your card again until the previous purchase has been written down in your checkbook register.

5. Balance your checking account every month as soon as your statement arrives. The last thing anyone needs is an additional fee from the bank. Before you make a debit card purchase, know how much money is “available” to spend (within your budget, of course).

6. Never write a check or make a debit card purchase for which you don’t immediately have funds in your checking account to cover.

Best wishes as you continue working towards becoming debt free. We know it’s not always easy, but in the end it will be well worth your effort.


Resource: http://debthelp.blogspot.com/