How long it will take to pay off balances on a credit card if the holder pays only the minimum each month?

Trust Your Debt To The Local Folks
501c3 Non-Profit

TEN BUDGETING TIPS
 

1. Don't let the surprise be a surprise. Experts agree that it's not the day-to-day costs that cause trouble but the infrequent payments such as first semester tuition or the purchase of a major appliance. If you are self-employed, remember you'll be paying estimated income taxes quarterly.
2. Set aside about 1% of the selling price of your house or condo for maintenance each year.
3. Figure 3% of the replacement cost to keep the car going and the dishwasher washing. But, if this is the year you plan to put a new roof on the house or replace the aging Chevy, your outlays are likely to be greater.
4. There is a broad guideline that you may find useful: allocate 65% of take-home pay to the absolute necessities of rent or mortgage, utilities and food.
5. Aim to save at least 5% of take-home pay. If yours is a two-paycheck family, put away 5% of each salary.
6. You're in good shape if 10% or less of your after-tax income is going to pay credit-card and other charge-account bills. If those expenses creep beyond 15%, you're losing the battle of the budget. At 20%, you'd better leave those cards at home.
7. If you find after three months of budgeting, 30% of the money in your checking account is being withdrawn as "cash" rather than for special purposes, your budget isn't working as well as it could be. You'll need to give yourself or others an allowance for personal expenses and stay within it.
8. For your emergency fund, aim to save about three month's worth of living expenses.
9. Spouses or those living together should alternate the record keeping periodically so that each is familiar with the family finances. Regardless of who is paying the bills, finances should be discussed.
10. If a couple works and pays bills through a joint checking account, a good deal of coordination is needed to keep checks from bouncing.

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COST CUTTING TIPS

Use Cash as Much as Possible
Limit credit card use by making them inconvenient...leave them at home, with a relative/friend, or in a safe deposit box. If all else fails, freeze them in a container of water. You can cool your impulse to buy while your cards warm up!

Prepare a List of What You Intend to Buy
Especially groceries. Don't buy things that are not on YOUR list and never grocery shop when you're hungry. Clip (and use) coupons. Bring only enough cash to pay for what you need. Avoid convenience stores. Shop once a week. Buy store brand or generics. Before you get to the checkout, put back 10 % of the things in your basket. Especially prepared foods and junk food.

Stay Out of Restaurants
More than 30% of the average American's food costs occur in restaurants, snack bars and fast food joints. Eat at home and brown bag it when you are away from home.

Stay Away from Shopping Centers
According to a poll (Spring 1992) 57% of the people in this country consider shopping "recreation". Malls are budget busters. It's too easy to impulse buy when wandering through a mall. Shopping is not entertainment! It is an expensive and serious business. Find a cheaper means of entertainment.

Quantity Shopping
Get all family members to use the same brands of shampoo, toothpaste, soap, etc. These things are much cheaper when you buy in bulk!

Minimize Use of Cars
We often use the car for short trips. Walking or bike riding may be an appropriate substitute. Save "one item" trips until you have several places to go in the general area. Check out bus schedules and car pooling as alternatives.

Utilities
How about only running the dishwasher, clothes washer and dryer with full loads? Using economy cycles can help too! Everyone knows you can save money by turning off lights and radios that are not being used. Keep the thermostat at 68 degrees during winter months.

GUIDELINES FOR WISE CREDIT CARD USE

• Use a credit card for wise purchases over $25 only.
• Do NOT put purchases on a credit card unless the amount is within your monthly Spending Limit for that category on your Tracking Sheet.
• Limit yourself to a maximum of 3 cards - one universal card (Visa/MasterCard); one gasoline card; one department store card (Sears, Wards, Penny's).
• Pay off the card each month to avoid interest.
• If you plan a large purchase, plan to pay off the amount in three monthly installments on your accounts.
• Do NOT consider a credit card as your Emergency Fund.
• Save money for a trip; use the credit card for convenience and safety; pay off the credit card amount next month.
• Don't "charge it" when you have the money to pay cash or you can write a check.
• Always ask yourself: "Do I really NEED this item or service?"
• Pay off credit cards every month to avoid paying interest.
• Don't think of using credit cards for small emergencies or something you want. Saving regularly for emergencies, trips and desired purchases will free up your credit card for opportunities and major purchases that you can repay in 3 to 5 installments.
• Don't use one credit card to make the payment on another.
• Carry one credit card, good for virtually anything, if you feel it necessary to have one.
• Consider using a Debit Card with a MasterCard or VISA logo. They're accepted like credit cards but funds are deducted from your checking account balance. Don't forget to deduct debit card usage form your Checking balance.
• Check your credit card statement monthly; be aware of how much of your payment will go toward reducing your principal.
• Make every effort to pay more than your minimum payment, by at least $1, every month in order to save on interest charges and length of time to repay the debt.

HOW TO SET UP A SAVINGS PLAN

PAY YOURSELF FIRST!
Do this by putting 5-20% of your after tax net income into savings. (Net income is the amount after taxes, Medicare and social security.)

Have an Emergency Fund
Characteristics of an Emergency Fund:

• Put and take fund (when needed, take money for emergency)
• Hard to get to - maybe in another city or requires double signature
• Not for impulse spending
• Have 3-6 months of living expenses in the account

Have a Retirement and Investment Fund
Characteristics of Retirement Fund:

• Put and leave for a long time
• 5-10% of net income
• Start yourself, can not rely on companies to do it for you
• IRA, Money Market, 401(k), 403(b)

Have Savings for Specific Goals
Characteristics of Specific Goal fund:

• Put and leave until ready to buy
• Each goal is a separate account
• Not the same account as your Emergency Fund
• Give it a name (example - CD Player Fund)
• Generally 5% of net income

One area where most people tend to overspend is at the supermarket. While food is a necessity, and often expensive, you may see only a small bite taken out of your grocery budget when you use the methods outlined by our shopping expert, "Carrie Coupons."

Carrie advises us that we can save 80% - 90% or more by following these 3 easy steps:

• Know the Stores Where You Shop!
• Heed the Warnings!
• Remember the Tips !

She further tells us that we need to examine our food budget and know before we go exactly how much we can afford to spend on food for the period of time for which we are buying. (See Tracking our daily spending and using a Spending Plan for more information about budgeting).

• Know Your Store!
• Learn Which Stores Offer Shopper Incentives
• Double and Triple Coupons
• Rewards Cards
• Free if Rang Up Wrong
• Price Matching
• Special Promotions
• Learn the Regular Price of Items You Buy Frequently
• So you will know a bargain when you see one
• Know which store has better meats, produce or canned food prices
• Try the store brand vs. the nationally advertised brand
• Pay close attention to weekly sales ads
• Know the Store Layout
• Save time by walking only the aisles that are necessary for your items
• Save money by staying away from impulse buys
• Heed the Warnings!
• Always Use a List
• Use the weekly sales ads to create your list
• Minimize trips to the market
• Always Shop Alone
• Don't Food Shop When You're Hungry
• Beware of Coupon Trap
• Only keep 55 cent coupons if the item is something you would buy without a coupon, or if you can also get a rebate on the item
• Even if you have a coupon for an item you rarely buy, keep the coupon until the items goes on sale
• Use your 50 cents or less coupons for stores that triple and double coupons
• Use $1 off coupons anywhere, especially drug stores offering rebates
• Should an item be on sale, you have coupon that triples it, but it still costs more than another brand, don't buy it!
• Beware of Sales Techniques
• If the sales price is 2 for $4, you don't have to buy two.
• Remember These Tips !
• Meat
• Cold cuts cost less per pound through the deli department
• Goes on sale during summer holidays - buy it and freeze it
• Cheese
• Purchase blocks and slice and shred at home
• Compare package weights, same size bag does not equal same weight
• Produce
• Purchase unpeeled, unwashed and unpackaged vegetables
• Purchase by the bag for the best value (weigh a few bags for the best deal)
• Buy Bulk Whenever Practical to Save On Cost Per Pound
• Take Advantage of Rebates and Free-Bates
• Shop Drug Stores for Beauty Supplies, Dollar General for Cleaning Supplies
• Check the Refrigerator for Items that Will Ruin if not Used Soon. Make a recipe list around These Items.