Review
Posted on August 15, 2008
Filed Under Free Financial Course |
In this lesson, we will review what you have learned in the previous 8 lessons. Although there is no new material in this lesson; reviewing your finances is something you should continually do.
Lesson 1: How to Budget and build Net Worth
The important thing to get from this lesson is that the more money that is spent on Wealth-building Assets versus non-wealth building assets, the faster you will achieve a higher net-worth. This also defines good debt and bad debt. You are encouraged to continue to use our Budget Calculator and Net Worth Calculator. You should continually assess where your budget is each month and you will notice your net worth increasing.
Key Items Discussed:
- Complete the Net Worth Spreadsheet
- Complete the Budget Spreadsheet
Lesson 2: Improve Credit Score
In this lesson, we covered what a credit score is and how to get your free credit score from Annual Credit Report and Privacy Matters 1-2-3. We also briefly touched on how to improve your credit score.
Key Items Discussed:
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Obtain a free copy of your credit report at: Privacy Matters 1-2-3
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Also, read the full report, and begin to determine how you can improve your credit score.
Lesson 3: How to Save Money
In this lesson we developed a savings plan to grow your personal wealth. In addition, we offered several day-to-day savings tips to help your bank account grow! As simple as this concept is, it may be the most important lesson to learn.
The knowledge and discipline to budget and save consistently is one that many people never learn. We provided you with the knowledge and offered additional support; however, it is up to you to develop the discipline to consistently save.
Key Items Discussed:
- Eat out one less time each month (estimated savings - $35/month).
- Bring your lunch to work or school (estimated savings - $20 per month).
- Create a shopping list and stick to it when you get groceries, and use coupons (estimated savings - $40 per month).
- Use generic brands
- Lower your utility bills (estimated savings - $20 per month)
- Monitoring Spending - The Cash Method (estimated savings - $20)
- Reduce Car Insurance expenditures (estimated savings - $20 per month). Get a free quote from Net Quote.
- Reduce Homeowners insurance payment. Get a quote from Net Quote and/or 2Insure4Less.
- Set a Savings Goal
Lesson 4: Debt Reduction
The first solution to debt is to stop accumulating more of it. Stop using your credit cards and start paying with cash or a debit card. This will allow you to stop the bleeding of money and begin to heal the debt wounds that you may have. Here are a few tips to eliminating your credit card spending:
- Use Cash
- Keep a written record of any credit card spending and pay it off before the end of the month.
- Limit the number of credit cards that you have (this will also improve your credit score).
- Don’t accept credit cards offers at retail stores just because of a discount or low introductory rate.
- Don’t cash checks that you receive in the mail (from banks or other institutions).
We also covered many other tactics to help you eliminate the debt that you may already have.
Key Items Discussed:
- Implement a debt reduction strategy (estimated savings - $110 per month) Decide which debts you will pay off first and whether you will pay off the highest interest rate or use the “snowball effect.” Write this plan down, and STICK TO IT!
- Shop Around for the Lowest Interest Rate (estimated savings - $40 per month).
- Try these current offers: Discover Card
- Credit Repair (estimated savings - unlimited). If you credit is damaged, begin the steps outlined above.
- Or contact Lexington Law, and they will begin the process for you.
Implementing these strategies will save the average household approximately $150 per month or possibly much more.
Lesson 5: Mortgages & Debt Consolidation
Buying a home is HUGE investment. The type of mortgage you get can make your life wonderful or a living nightmare. A few percentage points on a mortgage can really damage your financial future.
So, if you are looking to get a mortgage, shop around. It could cost you a million dollars if you don’t get the best rate possible.
When getting a mortgage, you should get at least 2 quotes. You should never rush right in and take the first offer that you get.
In addition to shopping around for the best mortgage interest rate, it’s important to do some calculations yourself. We have provided a free mortgage calculator.
To determine whether a consolidation loan is right for you, ask yourself a few questions:
- Can I afford my current monthly payments? If not, consolidation may be a valid option.
- If I consolidate, do I have the discipline to save the extra money (without spending it)? If you do not have the discipline, you are better off not consolidating. If you spend the extra money you may have saved from a consolidation loan, you will be in a worse debt situation than before the loan.
- Is there any other way that I can reduce my spending and get out of debt? If you can use any other technique, you will probably save money in the long run.
Key Items Discussed:
- Don’t Rush In to a Mortgage (estimated savings - possibly a million dollars). Take a look at your mortgage, and consider whether you might be able to get a better interest rate. Remember, a small change in interest rate really could save you a million bucks. To see if you are getting the best rate possible, go to Lending Tree and apply for a free mortgage quote.
- Shop Around. To see if you are getting the best rate possible, go to Lending Tree and apply for a free mortgage quote.
- List all of your debts and determine if a consolidation loan is a viable option for you.