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Let’s say that tomorrow morning you wake up to discover that overnight—gulp!—your car was destroyed beyond repair. You’re not covered and you’re devastated.

You can’t live without a car. But you have no money—not a nickel in savings. So what do you do? If you’re like most people in that situation, you head to the only dealer in town who’s offering $0 down financing and a monthly payment that somehow you’ll figure out how to afford.

Salesman handing over the keys to the car of your dreams

Realistically, what payment can you afford if you pull the plug on cable TV, stop eating out, and basically cut out all frivolous spending? $200? $300 $600? 

Okay, back to reality. Your car isn’t destroyed, and you’ll keep driving it for a while. But remember the amount you said you believe you could afford each month if you really put your mind to it? Let’s say it’s $300. Keep reading. 

RELATED: How to Eliminate Odor of Gasoline Spilled Inside Family Vehicle

The Bank of You

Open a savings account somewhere convenient and begin immediately to make $300 monthly payments into that savings account. Just as if you were in that terrible scenario mentioned above. Every month. Make the sacrifices now, cut the spending now. Be strict with yourself—rigid and unbending! No late payments, no slacking. 

In the meantime, and as you are making these big new payments to yourself, continue driving the car you have now for at least one more year, even if it is a real clunker. You can endure anything for a short time when you have a plan for it to end.

Soon, you will begin earning interest —Ally.com currently 2.20% APY—on the growing balance instead of paying interest on a conventional auto loan. 

At the end of one year—12 payments to yourself—you will have accumulated $3,600 cash plus interest. Not bad! 

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I once flew in a chartered jet, not exactly like a rockstar, but I did feel quite pampered. The flight was awesome, but I have to admit to momentarily freaking out when the pilot unbuckled, stood up, left his pilot seat, and came back to chat with his three passengers over snacks and sodas.

While he sat with us for more than an hour, it took only a few minutes for me to relax, enjoy the company and the ride.

Relying on autopilot in both flying and finances is quite an amazing thing.

 

woman-laptop-setting-up-automatic-payment-online bill-pay

 

Creditors, especially banks and credit-card issuers, are unbelievably sensitive to whether you pay your bills on time. So is your credit score. One slip-up could cost you dearly if that means you lose your low- or no-interest rate, or a late payment results in a big late fee.

Late payments are reported to the credit bureaus and that can mean a serious blow to your credit score, which may result in higher insurance premiums now and higher interest rates on your next mortgage. If you’re thinking “domino effect,” you are exactly right.  Bottom line: Do not pay late!

An excellent way to make sure you always pay on time is to automate (sometimes referred to as  auto bill-pay) even when you’re on vacation, sick, or for some other reason suffer from brain freeze.

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For years (and years), I lived under a dark cloud of worry that I would end up financially destitute—a bag lady, all alone living under a bridge.

A study conducted by Harris Interactive for Allianz Insurance Group reveals that I’m not the only one. In fact, most of us have felt that way, not because we’re broke, but because we don’t have confidence when it comes to managing our money. That makes us timid, worried and financially insecure.

 

We don’t have to accept financial insecurity as some kind of life sentence. And that constant and gnawing fear of becoming destitute? Forget it! We can do something about this.

Financial confidence is a choice. It’s a matter of changing bad habits and choosing to learn simple financial principles. Then by consciously applying them over and over again, those principles will become automatic responses—financial habits.

Happy senior woman with laptop experiencing best money year ever

Are you ready to make 2019 your best money year ever? Here are four simple things you can do starting today to improve your financial confidence—and take control of your money.

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Saving money is a curious term with two meanings: 1) To spend less, as in “I buy things on sale to save money,” and 2) To physically place money where it is safe from being spent, as in “I save money in my secret savings place.” 

overhead-close-up-photo-of-a-woman-putting-money-into-her-purse

Okay, that’s fine. But here’s the problem. It’s easy to trick ourselves into thinking that 1) and 2) are the same. They are not unless of course, you stop by the bank to actually deposit the difference between what you would have spent had the stuff not been on sale, right into your savings account or wherever it is that you stash cash.

Actually, that is one clever way to boost your savings this year. Here are eight more:

1 Tax yourself

This year assess yourself a specific “tax” each time you make an ATM withdrawal. It might be $5 or $10, you decide. Whatever the amount, make sure you become a tough tax collector AND that you carry through and put the tax you collected into your safe savings place. No slacking, no IOUs.

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Want a simple, pain-free plan to increase your savings this year? CPA, author, and blogger Mike Piper says to save 1 percent more. “Increase your savings contributions by 1 percent of your gross income,” suggests Piper.

It might be difficult to imagine how such a small change could make any difference at all, but according to Piper, this strategy can work wonders, especially if you are young. I could not agree more.

Yellow piggy bank and calculator with 2019 year on window

Anything you can do to become a consistent saver is going to come back to bless you in many ways in the future. A personal program of consistent savings does more than increasing your bank account. It changes your attitude. It quiets your insatiable desires and moves you away from the edge where it is easy to worry and panic.

Money in the bank changes everything. Read more

Imagine paying outrageous amounts of interest to a greedy finance company and loving every minute of it. Or how about making off-the-record, back-alley deals with a loan shark so you can skip all the credit checks and paperwork?

great white loan shark

Impossible? Not if that loan shark is you. You’ll be borrowing from yourself, making payments to yourself and collecting high rates of interest—all from you, for you.

The original idea of the credit union was to get the little person out of the clutches of the big money institutions. Credit unions are still a good idea! But even credit unions have their limits and standards when it comes to qualifying for personal loans. Being your own lender simplifies even the credit union strategy to just one person—you. And when you’re wearing the loan officer hat, dealing with you the borrower, both the lending and repayment benefit only you. What a deal!

So, how does it work?  Read more