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Millionaire Money Habits

June 20th, 2009 at 10:09 am

Consolidating Your Finances to Save Money

Life is always better when you have fewer things to worry about, so you look for shortcuts when they’re available.  You take the shortest route to work, cook meals that take 30 minutes or less, text message instead of calling (and use “TXT” talk to make that even faster still).  You’re probably looking for ways to save money, as well.  Consolidating your bills can help you save both time and money, and maybe even lower your stress level, too.  Here are some ideas to help you get going:

  • Have your paycheck direct deposited into your checking account.  It will save you a trip to your bank and you’ll have access to your money sooner.  You will still get a stub for your records showing the deposited amount, taxes taken out, etc.
  • Go a step further and arrange to have a certain amount or percentage of your paycheck direct deposited into a savings account.  You won’t have to consciously think about saving money because you’ll automatically be paying yourself first, and if that money never passes through your hands, you won’t be tempted to spend it and probably won’t miss it.  Even a small amount can be helpful by time you need to access your savings.
  • Sign up for online bill payment or even automatic payment.  If you opt for automatic, make sure you trust yourself to have available funds in the account you attach to your bill on the due date.  If you have a creditor that doesn’t offer you the option to pay online, most banks offer bill pay programs.  You simply enter your creditor’s information and your bank will send them a check.  With this option, you’ll want to allow yourself an extra couple days before the due date, as your bank’s check still needs to reach the creditor by mail.  In all cases, you’ll be saving yourself the time of writing out a check, as well as saving money on envelopes and postage.  You’ll be more likely to avoid late fees, too.
  • Consider transferring high balances on your credit card to one with a lower interest rate (visit for best deals).  Some companies may even offer you a no-interest deal for a certain period of time.  I personally took this option because I knew that interest was the factor preventing me from paying down my balance as quickly as I could.  If you’re confident that you can pay off the debt within the time frame and refrain from adding extra charges to that card, this can be an option for you.
  • If your immediate financial future is looking bleak, but you know that you can get yourself back on track with minimal help, try contacting your credit card companies or other lenders and asking if they have a financial hardship program.  If they do, you can potentially have your monthly payments and/or interest rate reduced for a short period of time.  They might even waive your monthly payments completely for a couple months.  (Be careful, though.  Those charges might be tacked onto your next set of due payments, so read the fine print.)  Your credit rating will mostly likely take a hit, but if you can get back on track right away, your score will improve right along with your financial situation.
  • If you know you need more help to get out of debt, consider a debt consolidation service.  They essentially pay off your old debt for you and approve you for one large loan to cover the cost, leaving you with only one monthly payment.  The good news is that you could owe less overall than before, as these services are able to negotiate with your creditors to lower your payments.  The bad news is that all of those accounts will be closed, leaving you with no emergency credit cards, the interest rate on your new loan might be high, and your credit score will definitely drop.  However, if this is your only way out, you have a better chance of getting out of debt quicker and redeeming your credit score faster than if you opted to file bankruptcy or simply stopped paying your bills and got sent to collections.  Just beware of scammers that claim they can completely eliminate your debt right away (usually if you pay them a large sum of money) or secure a low interest rate for you.

You can keep track of your own finances with a budgeting program, as well.  Knowing exactly where your money is going can help you get a good idea of how much money you might be wasting.  Renegotiate as many debts as possible to save money.  Even simpler things like adjusting your cell phone bill can help.  (For example, do you text a lot?  Add a feature to cover x amount of texts for x amount of money to save, etc.)  Consolidating your finances in these ways will allow you extra time and money to enjoy the more exciting parts of life.

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