Here are the 5 financial tips for the 2nd week of September 2011:

Tip no 1 – Beware of 0 percent teaser rates.

Many a times, consumers opt for the balance transfer cards that come with 0% rates. They consolidate all their unsecured debts into a 0% interest card when they are unable to make payments on the high-interest cards. However, these consumers get into massive debt problems after a year or so. This is because the 0% interest rate is only applicable for around 6-12 months. The credit card companies double or triple the interest rate after the expiration of the promotional period. As such, it becomes extremely difficult for the consumers to pay such a high interest rate. Most of them are enter into the debt cycle as they are unable to keep up with the payments.

Tip no 2 – Once you get an accurate picture of your personal finances, you should figure out your short and long term goals.

You can get the correct picture of your personal finances by calculating your monthly income and expenses. Once you have a clear idea about your financial standing, you should decide upon your short and long term goals. If your total monthly savings is $200, then your short term goal can be to make a down payment on the auto loan. Your long term goal can be to save the amount every month. You can save this amount in your checking account. You can use this amount for meeting the college expenses of your children.

Tip no 3 – Build an emergency cushion on which you can fall back as the credit downgrade will push up the interest rates on loans.

It is said that the credit downgrade will compel the lenders to hike the interest rates on the personal, auto and mortgage loans. The interest rates on the credit cards are also expected to increase. As such, it has become important for the consumers to build an emergency fund now. They can use this fund to meet their various expenses without relying on the loans. Investors should invest in the stock market cautiously. The US market is expected to crash at the end of this year. It is best to invest money on good stocks only.

Tip no 4 – Visit multiple stores to get the best deals.

Before taking out a payday loan or a home loan, you should shop around the market for grabbing the best deal. There is no guarantee that the lender of your locality is offering the best deal. After conducting a quick market survey, you may come to know that the lender is charging far more than the others. In such a situation, you can simply take out the loan from the lender charging the lowest rate on the loan.

For instance, you go to lender A, B and C for a loan. Lender charges 15% interest on the loan. Lender B charges 10% interest rate and lender C charges 35% interest rate. You can seal the deal with the lender B and happily go back to your home.

Tip no 5 – Don’t always go for life insurance without medical exam.

It is better to not always go for the life insurance policies without medical exams. This is because the premium rates on these insurance policies are comparatively higher than the others. This means that you’ll have to spend a substantial amount for the premiums. The insurers will check your medical history too. They will check your medical information before approving your application. If they find that you have lied about your health problems or not shown the medical history correctly, then your policy can even be cancelled.

It is true that all of us make personal finance mistakes in life. But there are some mistakes that may have a lasting impact on your finance. Therefore, it is important to avoid them as much as possible. Glance through the article to know about 5 personal finance mistakes you should avoid.

Personal finance mistakes you should avoid

Here are some major personal finance mistakes you should avoid:

1. Indulging into frivolous spending

Many people indulge into unnecessary expenses such as eating lunch and dinners in restaurants, watching movies at theaters, purchasing clothes every week, etc. What they don’t realize is that this type of spending drains their savings accounts gradually. Hence, it is important to curtail these expenses as early as possible.

2. Using credit cards for making all purchases

Several people have the habit of making purchases through their credit cards when they have adequate cash in their pockets. They don’t realize that companies charge high interest rates on credit cards. So, more you use credit cards, your bills add up. Hence, it is better to make all the purchases in cash. This will also help you avoid overspending. Read the rest of this entry »

The next time you go out to shop for your grocery, keep in mind that the amount you spend on your grocery bills can have a direct impact on your monthly budget and eventually, your savings. A recent study has shown that an average family of four in the US spends about $6,000 on grocery bills. This shows how big a chunk, the grocery bill, takes out from our earnings.

But, you might be surprised to know that grocery bills are much easier to cut down than most other household expenditures. Let’s now check out some of the most efficient ways by which you can control your grocery bills and increase your savings.

Essential ways to save on your grocery bills

The following are the useful tips which will help you to cut down on your grocery bills so that you can pay your other bills on time:

• Make a list before you go to shop

Make a list of grocery items that you need to buy before leaving your house. A little planning before going out for shopping may save you lots of dollars by preventing expensive impulse buys.

• Be informed about the sales

Most of the monthly staple foods that you buy, go on sales at a particular time each month. If you keep yourself informed about these sales, you will be able to buy the things at discounted rates.

• Buy generic items

Curtail your habits of buying branded items and instead go for generic items. You will be surprised to see that you’ll save around 10% – 40% on your shopping. Moreover, today, most supermarkets have their own brands covering sauces to towels. The product quality is as good as the branded items and it will cost you less.

• Try to shop at the same store

Make it a habit to shop from the same grocery store. This will help since you will be familiar with the products they carry and thus, spend less time looking for stuffs. On the contrary, if you shop at new places, you’ll tend to “look” more and thus buy more because you notice items you haven’t seen but want to try.

• Use coupons to get discounts

Discount coupons are a great tool to save extra dollars while shopping. You can find these coupons in weekly newspaper inserts, at the stores and on retailer websites.

Remember that if you lower your grocery bills, it will go a long way to manage your monthly budget. Moreover, with the recession in full swing and many families have been tightening their belts, it is the most effective and easiest way to retain some dollars in your pocket.

Ray of financialhighway.com, is a personal finance enthusiast based in Toronto. He believes that financial education is an essential part of life. Through his blog, he wants to share with the readers as to how one should be financially independent. His blog covers topic such as debt elimination, credit card usage, savings and investing, consumer protection and other personal finance topics.

Let us have a look at what Ray has to say about his blogging and personal finance experiences.

Sarah : From where did you get the idea of blogging?
Ray : I have always spent a lot of time online reading news and blogs, in 2007 I started to follow a few personal finance blogs as I found them very different then mainstream media.

Sarah :What is the significance of “Financial Highway”?
Ray : Good question! I used to work as a financial adviser before I started blogging, during that time I spent most of my time doing group presentations to educate people about the importance of early financial planning. of group presentation on the importance of having a financial plan. During the presentations I used driving on the highway as a metaphor for financial planning.

Imagine you are going from Toronto to Montreal, about a 6 hour drive on the highway, and you have to be there by a certain time. If you leave early you can drive on the first lane and chances of you getting there in one piece and on time are very good. However the longer you wait and later you leave the faster and more reckless you’ll have to drive to make it there on time and chances of collision and injury are higher.

Now think of your financial goal (retirement in most cases) as your final destination (Montreal). The earlier you start planning the less risk you need to take to reach them, the later you started the more risk you’ll need to take and decrease your chances of reaching your financial goals.

A financial plan is your map on your financial highway!

Sarah : What do you do in real life and how’d you get started?
Ray : I can’t tell you exactly what I do and where I work, but I am in the financial industry currently and completing the CFA program.

Sarah : Do you think blogging has changed your life in some way or the other?
Ray : Not sure if it has changed my life, but it definitely has impacted my life. I have met some great people from all over the world (Australia, US, Europe and Canada), over time we have become good friends and on regular basis share ideas and collaborate.

Sarah : Where do you see yourself in 10 years down the lane?
Ray : 10 years is a long time! In the past when I have made plans for long term future things have always turned out different. 5 years ago I never thought I’d be blogging leave alone running a successful blog and expanding it. I have had two successful businesses and have ended up selling both and ended in the financial industry, now I am building a good online presence through our blog and social media. I have no idea where I’ll be in 10 years from now. I hope whatever it is that I’ll be doing I’ll be enjoying it as much as I enjoy Financial Highway.

Sarah : What are the three biggest finance mistakes you have ever made in your life?
Ray : To be honest I have not made too many financial mistakes, when I was younger my parents have made some serious financial mistakes which has taught me to be more responsible with money. Having said that my worst mistake was signing up for credit cards while in University. I had about 5 different credit cards and probably about $5000 in debt with minimum wage job and sky-high tuition it was impossible to pay them back. Everything ended up in collection agency and ruined my credit for many years.

Sarah : There’s A Million Money Blogs Out There; Why Should I Read Yours?
Ray : There are many finance blogs out there and everyday more and more pop up, it is hard to be different and stand out. We mainly thrive to educate our readers in their financial planning process, we also try to promote DIY investing to avoid the cruel and expensive mutual fund industry.

Sarah : So can you tell our readers about some of your Famous Followers?
Ray : Most of our followers are either journalists or finance bloggers a few famous ones are: Mighty Bargain Blogger, Million Dollar Journey, MSN Smart Spending, Wisebread, Wallet Pop Canada, Rob Carrick from Globe and Mail and Larry MacDonald.

Sarah : Please advice our readers how to pay off their debts from your past experiences?
Ray : First of all don’t get in debt! If you already are and truly want to get out of debt, you’ll need to make some sacrifices. Have a written plan in place and start following it, no excuses no if’s, but’s and why’s just do it! Forgo some of your luxuries, pick up a part time job, stop using credit cards basically live a more frugal life. When you see the large amount of debt decreasing and your networth increasing you will not stop until it’s all over. Then NEVER DO IT AGAIN!

Sarah : How do feel by becoming a part of world’s largest debt consolidation community now?
Ray : I feel very honored to be part of such great community.

Mrs. Money is a 26 year old bank supervisor. Her blog is about saving money, getting out of debt, and living a simple life. There are some attractive sections in her blog – recipes, design, etc. The blog is also about living green. She learned the ways to get out of debt while trying to handle her husband’s student loans. However, she had always been very particular about handling money. Thus, she loves sharing tips in doing the same.

Let us see what Mrs. Money has to say about her blogging and personal finance experiences.

Sarah : From where did you get the idea of blogging?
Mrs. Money : My husband is a chef so I have a lot of time on my hands by myself.  I knew I needed a hobby to keep me occupied, and one day I decided I would start a blog.  From there, it morphed into what it is today! I would love to blog full time one day soon.

Sarah : What is the significance of “Ultimate Money Blog”?
Mrs. Money : When I was thinking of blog names, I wanted something that stood out and gave the website significance.  I wanted something strong.  “Ultimate Money Blog” popped into my head, and the domain name was created.

Sarah : What do you do in real life and how’d you get started?
Mrs. Money : I work full time at a bank currently.  Five and a half years ago, I thought it would be interesting to be a teller, and I got hired on as a teller supervisor.  I’ve done pretty much every position in the branches, from teller to office manager! It’s been interesting.

Sarah : Do you think blogging has changed your life in some way or the other?
Mrs. Money : I’ve met some awesome people because of my blog.  I think that’s the most rewarding – meeting people and also when people tell me that I’ve made a difference in their life.  I get great satisfaction from that!

Sarah : Where do you see yourself in 15 years down the lane?
Mrs. Money : Oh gosh, I hope I have at least a couple kids, married, living on some property out in the middle of nowhere on my homestead. I’d love to be off grid, but if I was at least partly self-sufficient, I’d be happy.  I’d also like to be closer to family.

Sarah : What was your best personal finance decision ever made?
Mrs. Money : I would say living frugally throughout the years.  I have always striven to save money, and I’m thankful I did because there have been times that were tough.  We also were able to move cross country so my husband could attend culinary school because we had saved up money.

Sarah : How do you feel by attaining financial independence at the age of just 26?
Mrs. Money : That’s funny – I don’t feel I have attained financial independence yet. I know that we’ve accomplished a lot by paying off debt and saving, but I always feel like I could and should be doing more.

Sarah : What are the three biggest financial mistakes you have ever made in your life?
Mrs. Money : Letting a friend borrow money that she never paid back, purchasing a brand new car at 18, and wasting too much money on little things.

Sarah : Please advice our readers how to pay off their debts from your past experiences?
Mrs. Money : Develop a budget, stick to it, make as much extra money as you can without sacrificing your sanity, and just do it.  It’s hard, but you will feel so much better when it happens!

Sarah : How do feel by becoming a part of world’s largest debt consolidation community now?
Mrs. Money : Awesome! I love helping other people become debt free!  It is a fantastic feeling.