Frugality

How to Compare Your Utility Company Options

One of the biggest shocks to many residents is that they have a choice with regards to their utility company. Since the deregulation of electricity, many citizens have more than one option. This is not true for every state. But in those deregulated areas, it is possible that portions of the population are not aware that they can choose something else. The first thing you have to do is determine if you are in a deregulated area.

The state of Texas is one of those states that offer citizens a choice of electric companies. Where there is choice, there is responsibility. We have a responsibility to research our options, and make informed decisions about what is right for us. Here are some of the things you should look for when weighing your options:

Deregulated Areas

It is not enough to know that Texas offers areas of deregulation. You can live in Texas and still not have a choice of power companies. If you do live in a deregulated area and are enjoying the benefits, you will want to be sure that your next move is to another deregulated area where you can pick up with the service you had.

TXU Energy is one of the big electricity retailers since deregulation in 2002. A site called Local Electricity Companies shows you where you can get that service. And provides a little information about service in that area. The first, most important thing you can do is arm yourself with where, and what your choices are.

Dollars and Cents

The main thing people want to know about their electric company service is how much their monthly bill will be. While there is no way to know for certain, we can make reasonable guesses. When comparing prices between electric companies, the only number you really need to know is the price per kWh. That is the number each provider can control. The rest are fixed costs like state and local taxes. Those costs will be the same regardless of provider.

The price per kWh can vary widely within a given market. One service might charge a price of 6.59¢ kWh, while another charges over 10¢ kWh. If price is your only consideration, then the comparison math is pretty easy. The state of Pennsylvania provides a handy price chart, along with an introduction to comparing the various services offered in that state.

Beyond Price

If money is the only thing we care about, then we cannot claim the moral high-ground over the greedy and heartless companies against which we like to inveigh. In every case I could find, the highest monthly rate goes to energy options that are 100% renewable. While I cannot tell you exactly why those options are higher, it is not entirely unexpected. In the same way that healthy eating is more expensive than less healthy options, there is a price associated with responsible alternatives. Each individual must decide how important those alternatives are to them.

There is also a matter of service. Monthly savings mean little if the service is dicey. When you call, do you get a machine or a person? If a service call is needed, how much is that visit going to cost you? Good service will almost always cost more than poor service. Often, a low monthly rate is made up by poor service and hidden fees. The important thing is that all of these rates and fees can be known beforehand. For many, quality service and responsible energy management will be more important than the variable price per kWh.

Choice does not just stop at electricity providers. For heating, you might be able to choose between electric or gas. You might also have more than one water option. The important thing is to choose what is best for you. And the only way you can do that is by doing your homework for the choices in your local area.

Debt Management

Can A Car Title Loan Help You Rebuild Your Credit?

Can A Car Title Loan Help You Rebuild Your Credit

It’s a tough world out there, especially as you begin taking on large financial responsibilities and accruing debt. And the more credit cards and loans you take on, the harder it can be to maintain the financial responsibility to stay current on payments. After some time it begins to affect your credit, so that any large purchase you plan to make someday—which requires a credit check—becomes more difficult, if not impossible. 

If you have bad credit and are stuck on finding solutions to rebuild it, title loans are one of the many ways that you can regain control. If you do your homework and plan it out right, there are helpful resources like TitleMax that have valuable information on how to get your finances back in order. Title loans can help you to pay off other debt that might be causing you trouble and start building your credit back up at the same time. 

Make payments on time 

Making timely payments on a title loan is key to regaining a decent credit standing. The purpose of the loan is to give you short term access to cash. And because of that, the terms of the loans will put you at higher risk and have larger repercussions if you start to miss payments. As you make payments, however, you are showing financial responsibility while reducing other debts that play a role in your credit report. 

Can I keep my car? 

Taking out a title loan will not affect your day to day life, as most lenders allow you to keep your car while you are in repayment. Thus, you still have access to get around and continue working. This is a large benefit for this type of loan, as it provides you with quick money in an emergency or for when an unplanned cost gets thrown at you, without the inconvenience of actually giving up your car. 

Use it to pay off other debt 

Most people are reluctant to take out title loans because of their high interest or because they risk forfeiting their car if they fail to make payments. While this is true, it really comes down to you and making sure your payments are on time. As previously noted, you can use a title loan to your advantage to pay off other debt that is bringing your credit score down. 

The sooner you can eliminate debt, the sooner you can move on and begin looking towards other purchases, like a new house or a remodel. If you need a quick fix for your climbing debt, or a long term fix on your credit score, consider a small title loan to get rid of any other debt quickly and (hopefully) painlessly. The burden of unpaid debt can be stressful. The best way to fix your debts quickly is to eliminate them once and for all. With a good plan and responsible planning, you can quickly get yourself back on track. 

Image source: annulardesigns.com

Financial Freedom

2 Lessons I Learned About Car Insurance

I recently had a learning experience with car insurance. Sometimes there are things in life that we just don’t think about because they aren’t significant. This is one of those times when it was in fact significant.

Check Your Zip Code

I recently moved to a new zip code and had to update my car insurance. Apparently the zip code can make a big difference in the amount you have to pay. How significant. My 6th month premium went up $1000. That was a big shocker and was a little scary since I have a wedding coming up and that wasn’t exactly in any budget. So the lesson is, when moving, be sure to get a quote with your new location so you can budget for any changes.

Ask Around

With that sticker shock I decided to shop around a little bit and they all pretty much had the same pricing. So I was just about to bite the bullet and continue with the same company. That’s when my fiancé came home and said she mentioned our little problem to a few co-workers and one of them mentioned to try the company they have their car insurance with. I thought I did get a quote from them but tried it nonetheless and low and behold it was $700 cheaper than what my current insurance company had quoted me. The lesson is to ask around to see other peoples experiences and shop around more than you think is enough.

So now I have more money in my pocket and a wedding on budget. What could be better? Now I need to start looking into life insurance.

Mind Over Money

4 Quick And Easy Tips That Will Make You A Millionaire Fast

million%20dollar%20bill

Everyone wants to be a millionaire. Wouldn’t it be great if you could do it quick and easy?

Well it’s not. But why are people attracted to things like the title of this post? Once you get past looking at these types of articles you can move onto actually becoming financially free.

Nothing in life is easy. It takes hard work whether physically or mentally. You have to be prepared to recognize opportunities and seize them. Nothing helps that better than hard work.

Read, listen, and watch as much as you can about successful people. Learn from their mistakes and from their successes. Work what they have done into your own life

Here are real tips that will turn you into a millionaire….over time or at least make you better in life.

Be different

Don’t just do what everyone else does because then you’re not you. Still learn from others but add your own twist to it.

Persist

Like I said before, getting rich isn’t easy. So if you don’t want to work hard you will never be financially well off. It’s just not in your cards.

On that note, there will be times that you run into walls. When that happens you need to run through it. If you don’t stick through those hard times you shouldn’t even be trying because you will just be wasting your time. Just go back to your regular life until you’re motivated enough to want what’s on the other side of that wall. Success is filled with a lot of ups and downs so you need to be able to stick out those down times

Think Positive

If you don’t support yourself no one else is going to. You have to believe in yourself. You are going to be trying new things so always believe that you can do it.

Do you know why?

Because you can do it. There is no difference between you and Bill Gates other than that he seized on opportunities because he believed he could.

Have no fear

Remember “The only thing we have to fear……is fear itself”. If you truly believe that, then you can conquer fear.

I was scared to start this blog because I didn’t know what people would think or if anyone would even read it. And it really took me a while to get it started, but you know what? If I kept focusing on the fear I would have never started. Instead, I focused on “can you imagine how many people could end up reading what I write and have their lives touched?”.

I turned that fear into motivation.

If you do all of these things you will be successful. Being successful takes a lot of character, so when you do become successful don’t forget those that were there for you along the way. And always give back to those that don’t have the same opportunities that you had.

So, enjoy your success and be happy to know that your hard work has made you that way instead of spending a bunch of money on get rich quick schemes that never amounted to anything.

What do you think?

photo credit: Simon Davison

Investing

Debunking 401k Theory

Step Brothers

If you have a 401(k) retirement savings plan and you’re like the rest of working Americans, it’s highly likely that you don’t plan on touching that money until well, retirement. With social security increasingly becoming an unreliable source of income for many people, the younger generation is putting a lot of stock in their 401(k) savings.

Television gurus like Suze Orman and Jean Chatzky all preach the message that it’s a heinous crime to withdraw money early from your 401(k). But what if Suze Orman is wrong? Can it actually be smarter to cash in some of your retirement well before you will ever retire? If you have consumer debt, the answer is….yes!

How 401(k) plans work

Let’s quickly review how employer-sponsored 401(k) plans work. Employees are given the opportunity to elect to have a portion (usually no more than fifteen percent) of their pre-tax wages set aside in an investment account. In short, you get the benefit of saving money while deferring taxes.

Generally, the company will match part or all of the employee’s contribution to their 401(k), or offer a profit-sharing contribution to the plan. Because the nature of a 401(k) is that it’s an investment account, it can and usually will grow significantly over time. All 401(k) earnings (interest, capital gains, or dividends) are tax deferred, culminating in the blessed occasion when you turn 59 ½ and can withdraw funds without any penalties beyond regular income tax.

The good and the bad news

So why do all the gurus tell you not to withdraw early? It’s not because you can’t; it’s because the government imposes severe penalties to the tune of extremely high taxation whenever you withdraw early. Many 401(k) plans also allow withdrawals in the form of loans you eventually have to pay back with interest. Oftentimes, you can end up paying taxes twice over when you withdraw from your 401(k) early.

Is there really any good reason to withdraw early from your 401(k)? Absolutely, definitely, and yes. You will never hear the famous financial gurus tell you this, but sometimes waiting until you retire is quite simply too long. The number one reason to withdraw early from your 401(k) is to pay off debt.

Early withdrawal can save you money

For a person with thousands of dollars worth of personal loans that are growing at a very high interest rate, cashing out part of a 401(k) might be just the solution.

With interest rates on the rise, consumer loans and bad debt can quickly drain a person’s cash flow. Sure, early withdrawal from your 401(k) will get you tax penalties. But if the trade off is that you can move toward being debt-free and freeing up cash flow, tax penalties are a small price to pay for financial freedom

Consider the long term impact

It’s important to do long term cost analysis before choosing to withdraw early from your 401(k). If you’re in a situation where you’re only able to pay the minimum due on a high interest, high balance credit card, the long term consequences of not paying off that credit card can have a far greater impact on your finances than losing a few thousand dollars in taxes from your 401(k). For people who aren’t facing any type of hardship or significant debt burden, early withdrawal most likely isn’t the best solution.

Only you truly know your own financial circumstances. Do your own research and absorb as much knowledge as you can. Besides, it’s always possible that by the time you’re 59 ½ years old, you’ll be dead. I like to leave on a positive note so here’s a smiley face :)