Ways to pay off your debt faster: a review of Tally
If you are in any type of debt, you will probably jump at the chance to discover new ways to reduce or even pay off your debt in a timely manner. It’s important to recognize these opportunities—and even more to determine if they are legit. Read on for ways you can pay off your debt faster through services like Tally.
What is Tally?
Tally is an app that is designed to help you pay off your credit card debt. After you download the app and provide it with the necessary information, Tally gives you an analysis of your debt and a plan to help you pay it off, specifically through discovering how to maximize payments in such a way that it addresses those debts with greater interest rates first.
This app also takes financial customer service one step further: in order to utilize all the features of the app, you can apply for a line of credit with the Tally. This may seem counter-intuitive, but Tally charges a lower rate of interest than many of the credit card companies you are paying each month. If you decide to open a line of credit with Tally, they will redistribute your monthly payments to your creditors in a manner that minimizes your interest costs as much as possible.
Do I want to do this?
Sure! Okay, you should really do more research first. Tally is specifically marketed to those who want to reduce their credit card debt, especially if you are also paying on a high interest rate. Tally’s website emphasizes that they seek to level the playing field for those in debt by allowing them the opportunity to make smaller payments while still maintaining their credit.
If you are in debt but it runs more along the lines of student loans, medical expenses, etc., that are not on your credit card, this app may not make a difference for you. The website does offer some other financial resources at no additional cost, like a debt calculator, so it may still be worth your time to scroll through the options.
But really—do I want to do this?
Before you decide if Tally is the right fit for you, consider some of the pros and cons this service offers:
Pro: The app is easy to use, even for the most inexperienced money manager. Tally is set up to walk you through the steps you need to begin reducing your debt, and maintains a high user rating on its website and in app stores. This means less stress for you, and, even better, more savings.
Con: While the app itself is very user-friendly, you may have a hard time qualifying for their line of credit, which is how you reap most of the benefits it offers. In order to qualify, you need a FICO score of at least 660. Being a resident of certain states also disqualifies you, though the app is working to be available to every state.
Pro: Using Tally means paying just one bill each month instead of managing multiple payments and bills. This is not only less stressful for you, but also saves you some time each month. Plus, you can rest assured that you have not skipped any bills by mistake, since Tally is the one paying your credit card company each month.
Con: Not all credit cards participate with the app. Tally is working to secure more partnerships, but at least one major credit card, USAA, is not compatible with the app, so you would need to continue to make that payment separately.
Pro: Tally is ideal for those who are looking to build good credit habits, like paying down debt each month and keeping track of expenses you charge on a card. Using Tally can help you practice smart debt management and that experience and knowledge will continue to serve you no matter how long you decide to use the app.
Con: In spite of the app’s lower interest rate, it is still one more financial strain to consider. And while Tally encourages the habit of paying off current debt, they do not address the idea of holding off from going into more debt in the future. So when you use this app, keep in mind that you are still paying them for a service, and that the most important thing is to get out of debt in an efficient and responsible manner.
So what’s the bottom line? If you have credit card debt and you want help managing it, see if Tally works for you! Be sure your credit score is high enough, and check the website to learn if your state currently participates with the app (about 30 states currently do). At the end of the day, no app can replace your ability to be smart with your finances, so take it one step at a time.
How to start an emergency fund
Throughout the COVID-19 pandemic, people have recognized the value of having an emergency fund. People have lost their jobs, faced unexpected hospital visits, and more, leaving some struggling to pay bills. Regardless, it’s still crucial to have funds saved in the event of unforeseen circumstances—26% of Americans have no emergency savings, and only 23% have enough to cover six months’ worth of expenses. Follow these tips to help you get started on your emergency fund, so you’re better prepared for the future.
Track your expenses and spending
Before planning how much you should have in your emergency savings, it’s essential to know your monthly expenses. Calculate how much you spend on your rent or mortgage, utilities, and other necessary items. Tracking your spending is tedious, but there are dozens of budgeting apps, like EveryDollar and Wally, to help you estimate your regular spending.
Set your emergency savings goal
After you’ve gauged how much you spend per month, set your goal of how much you want to save. According to CNBC, less than 30% of households have less than $1,000 saved. That isn’t nearly enough to cover costs in the event of a setback, like a trip to the hospital or unemployment. It’s recommended to have at least three to six months’ worth of expenses saved.
Develop a plan
Once you set your savings goal, it’s time to form a plan of action. Decide what you’re going to do to reach your goal—that could be anything from setting aside a certain amount of money each week to cutting back on unnecessary spending. You can set goals all day, but it’s crucial to know exactly how you’ll reach them—otherwise, it’s easy to fall off track.
Put funds in an accessible place
How you save is extremely important, but where you save is just as critical—if not more. To make the most of your money, put your funds into a high-yield savings account that allows you to easily make transfers between accounts. High-yield savings accounts have higher interest rates than traditional savings accounts—sometimes 20 to 25 times more. While you earn more money in the long run, it’s important to consider factors such as initial deposit or minimum balance requirements and interest rates.
Start saving
Now that you’ve set your financial goals, how you’ll achieve them, and where you’re going to put your funds, it’s time to start saving. One way to help increase your savings is by setting up automatic transfers—you can set an amount to transfer to your savings each week, every two weeks, or each month. Even if it’s only $50, you’ll be surprised at how quickly your savings will grow. Another great way to increase your savings is by setting aside your tax refund. You can set aside all of it or even just a portion—either way, any amount will help get you that much closer to your goal.
Consider what constitutes an emergency
Now that you’ve started to set funds aside, it’s imperative to decide what constitutes an emergency, so you’re only using your emergency fund for its intended use. This could be unexpected hospital visits, car repairs, job loss, or other unanticipated situations. Defining what you consider an emergency is important so you know your emergency fund is used properly, rather than being spent on frivolous things. Remember, it’s not fun money—it’s money you’re setting aside so you know you and your family will be okay should something happen in the future.
Georgia’s Own is here to help you be prepared for the unexpected—visit our website to get started on your emergency fund today.
15 ways to save at the grocery store
It’s natural to waltz down grocery store aisles and add everything you see to your shopping cart. Strategically placed products catch your eye and make you think you need them immediately. Overspending at the grocery store is a habit that’s difficult to break—but, it can be done. Here are 15 ways you can save during your next trip to the supermarket:
Check your pantry
Before you head to the store, check to see what you already have. There are websites and apps, like Supercook or Cookpad, that allow you to find recipes based on ingredients. Depending on what’s in your pantry or fridge, you could make meals with what you have and avoid going to the grocery store altogether.
Make a grocery list
Compile a list to be sure you’re purchasing the essentials, and stick with it. Don’t stray from your list—you’ll spend more money than you intended.
Compare stores
While you’re determining your list, create a grocery store comparison chart. Pick your essential items, choose your stores, obtain the prices, and compare. It’s an invaluable tool that will ultimately save you money.
Use coupons
This seems obvious, but using coupons can help tremendously. There are dozens of websites, like coupons.com, that have free, printable coupons. Also, be sure to read your local store’s circular—it promotes items that are on sale. In addition to circulars, look for digital coupons that are store-specific.
Don’t shop hungry
The golden rule of grocery shopping: don’t shop hungry. According to Psychology Today, when you’re hungry, you overload your shopping cart with items you don’t need. Your brain focuses on finding its next food source, so you grab everything appealing within sight. To combat this, be sure you’ve eaten before you go. You’ll avoid the temptation of grabbing unnecessary items, and your wallet will thank you.
Leave the big spenders at home
Whether it’s your kids or your spouse, there’s always someone adding more than you need to your cart. It’s not always easy to say no, so avoid the situation entirely by leaving your big spenders at home, if you can.
Keep a running tally of your cart’s cost
Steer clear of the dreaded, “I spent how much?!” when you make it through the check-out line. As you add items to your cart, keep track of the running cost. It doesn’t need to be exact—just a rough estimate.
Avoid eye-level items
It may be easier to grab the first option you see, but scanning the shelves is critical. Stores use the motto “eye level is buy level” for a reason. We look at items that are eye level, so that’s where grocery stores place the most expensive items. Look for cheaper items on higher and lower shelves.
Don’t purchase pre-cut food
It’s often simpler to purchase ready-to-eat salad and fruit, but that’ll cost you more in the long run. You won’t receive as much, either, and pre-cut food doesn’t stay fresh for long. Trust me—just buy the head of lettuce and make your salad. It’ll take less than ten minutes, and you’ll save money.
Ask for a rain check
Did someone get too greedy during the BOGO sale? You can ask your store for a rain check on items that sold out during a promotion. If your grocer allows it, you can snag the item once the store restocks.
Don’t always buy in bulk
It appears cheaper, but buying in bulk isn’t always the best choice. Sometimes, depending on the unit price, it can wind up being more expensive. If you’re debating whether you should purchase items in bulk, it’s crucial to check the unit prices and compare them to see if you’re saving or spending more.
Try generic brands
Don’t be afraid to try the store brand. It’s often just as good as the national brand but a fraction of the cost. If you don’t like it, most grocery stores will allow you to return it and get your money back or swap for the national brand.
Shop in season
If you’re purchasing produce, be sure to buy items that are in season. Not only is it fresher and tastier, but it also costs less. It’s all about supply and demand. When produce is in season, there is an abundance—therefore, it costs less per pound. Compare that with something out of season—there is less of the product in-store, so it’s more expensive.
Pay with cash
When budgeting, cash is king. Paying for items with cash allows you to set a budget and stick with it—once your cash for an item runs out, that’s it. Finance expert Dave Ramsey swears by this method. Bring enough money to cover your groceries for one trip. If your total runs over, take items in your cart out. It’s hard but better than ruining your monthly budget.
Changing how you grocery shop can have a notable impact on your financial well-being. By shopping sensibly, you can stick to your monthly budget, as well as reach other money-related goals you may have. Try one, or some, of these tactics next time you’re at the grocery store—you’ll be amazed at how much you save!
Does a balance transfer affect your credit score?
Balance transfers are an excellent way to consolidate your debt and pay it off as quickly as possible. But, it does have positive and negative impacts on your credit score. Despite some minor negative impacts, balance transfers can immensely transform your credit score. Here’s how:
How does a balance transfer negatively affect your credit score?
A balance transfer can cause a dip in your credit score in the short run. When you apply for a balance transfer, lenders conduct a hard inquiry to determine if you’re a capable borrower. Hard inquiries remain on your credit report for about two years. Several hard inquiries show you’re seeking credit from too many sources, which could indicate you may not be a reliable borrower. This differs from a soft inquiry, which is when you check your credit or a lender is trying to pre-approve you. Soft inquiries do not affect your credit score.
Balance transfers can also lower your credit score by reducing the average age of your accounts. If you have three cards with an average account age of 48 months, and you decide to open a balance transfer card as your fourth, the average age of your accounts would lower, which could drop your score.
This has a minimal impact on your credit score, but it’s still critical to be aware of. It’s imperative to keep old, unused accounts open to maximize the average age of your accounts. But, if an old account has a high annual fee that you can’t afford, then it might be in your best interest to close it—weigh the pros and cons before closing the account.
How does a balance transfer positively affect your credit score?
Despite some hindrances, a balance transfer can considerably raise your credit score. Balance transfers reduce your credit utilization rate, which is the percentage of available credit that you’re using.
Low rates show that you’re not accumulating debt. Ideally, you want your credit utilization rate to be below 30%. For example, if you have multiple credit accounts and move the balances to a single account, your credit utilization rate shows as 0% on the old accounts. It’s crucial to take advantage of the 0% APR period so you can pay off your debt as soon as possible. This will then decrease your credit utilization rate over time.
Your credit utilization rate accounts for 30% of your FICO® Score, which is the score most used by lenders.
What should I do after I apply for a balance transfer?
After you’ve applied for a balance transfer, avoid applying for more credit. Limit the number of hard inquiries on your credit report as much as you can, and only apply for loans unless they’re necessary.
Don’t make purchases with your balance transfer card. The sole purpose of your card is to pay off debt, not accumulate more. When you add to that debt, it makes paying your balance during the 0% APR period more challenging. Create a budget to cut out unnecessary expenses and avoid accruing more debt.
Lastly, set up auto payments to ensure you’re paying your credit card bill on time each month. This boosts your credit even more—payment history accounts for a large portion of your FICO® Score. Choose a specific amount to transfer from your checking account to pay your bill. It should be enough to pay off your card within your 0% APR period.
Balance transfers can do wonders for your credit score, despite some drawbacks. When you use a balance transfer card responsibly, your credit score can grow in the long run. Check your spending habits, stick with your budget, and you’ll be debt-free in no time with a credit score on the rise.
If you’re ready get your finances in order, try a balance transfer.
9 ways to make your budget actually work
You need a budget. No, really—you need a budget. Even if you just won the lottery and are now trying to decide which castle in Europe you should buy, you need a budget! So how do you begin? Read on for some ideas on ways you can make your dollars count, whether you have a million or only a few.
1. Make a budget
Yes, we already said this. But it bears repeating, because too many people feel that they can maintain a budget in their head. Unless you have a perfect memory, this is not a viable option. Create a written, planned budget that you can adjust as your life circumstances change.
2. Detail your spending
Creating a budget is not the time to skimp on the small details. The more you plan and track your spending, the better your money skills will be. This means you need to plan for different categories of your life, like utilities, the mortgage payment, your taco needs (definitely don’t skip this one), your grocery spending, after-school activities, clothes for growing children, and everything in between.
3. Update your budget
This is another area that may seem obvious, but budgets work by first planning your spending, and then tracking your spending. It is unlikely that you will spend the exact amount for every item down to the penny, but that doesn’t mean you shouldn’t record your spending. Knowing exactly what you needed for each category every month will help you plan for the future.
4. Share with others
This is not a suggestion to post your budget on Facebook. Don’t be that person. But this is a suggestion to share your budget with the people it affects. Your spouse, for instance, needs to be part of your initial budget creation. Making a money plan won’t help if you are the only one with the information.
5. Regularly review your spending
Now comes the hard part—regularly reviewing your budget. Why is this so important? Well, budgets and bikes have one thing in common: you have to practice to be good at them. (They also both start with the letter “B.”) This means that you need to create a regular habit of looking at your budget, seeing where it works and where it needs improvement, and making those adjustments accordingly.
6. Respect your budget
Spoiler alert: Your budget is only effective if you adhere to it. Sure, emergencies happen. But blowing your clothing budget for an adorable pair of heels is not an actual emergency. Stick to your budget as closely as possible in all categories to maximize the efficiency of your hard work.
7. Look for adjustments
Do you still feel your budget could use some improvements, even after you have stuck it for months? Look for areas where you regularly overspend or underspend, and see if adjustments could be made. You may find that your budget needs some reworking to account for changes in your life.
8. Account for emergencies
We already talked about what constitutes a true emergency. Unfortunately, there may come a time where you have unplanned medical bills or need to fly out to visit a sick relative. You can’t predict these things, but you can definitely prepare for them. If you don’t use your emergency funds, great! More birthday presents for everyone. But it’s always better to be ready.
9. Simplify your budget
There are dozens of options for creating and tracking your spending. Our vote is for something useful and easy to operate, like the You Need A Budget app for your phone or tablet. The app focuses on spending only what you have available to you, and nothing more. You can even set budgeting goals for the app to track your progress. Having your budget at your fingertips will go a long way in tracking your spending, and preventing those impulse purchases.
We’ll say it again: you need a budget. Whether you decide to track your finances on paper or make use of an app, it all starts with making a plan. Do it, stick to it, and watch as you become a financial force to be reckoned with.
6 tips for stronger savings
If you’re wondering when you need to start saving money for the future, that time is now. Whether you’re saving for a trip, a house, a car, retirement, or something else, setting aside money now for future benefit is an action that has to be repeated until it becomes a habit. Here are several helpful suggestions—perhaps you’re already doing some of them. The more steps you take, the faster your savings will grow!
Tip 1: Avoid instant gratification
Some call it the 30-day rule. Before you make a significant purchase, wait a month. More often than not, your urge to buy the item has waned or passed completely. Now, you’re enjoying the effects of your patience instead of suffering from buyer’s remorse. A short wait can save you a lot of money.
Tip 2: Set up an emergency fund
One of the fastest ways to get in debt is to be financially unprepared for an emergency. This can include everything from a medical emergency or sudden job loss to unexpected car repairs. As a rule of thumb, you should have at least 3–9 months’ worth of living expenses saved up for these situations.
Tip 3: Record your expenses
When you document your purchases, you avoid the familiar “where did all my money go” scenario. This includes even small purchases, such as that fancy cup of coffee. If you want, you can cross-reference your list with your bank statements to ensure accuracy. Now that you’ve collected your data, break it out into categories (gas, groceries, rent, etc.). Where can you trim? Are you going out to eat too much? Maybe it’d be better to brew that java at home.
Tip 4: Automate your savings
Virtually all banks and credit unions offer automated transfers between your checking and savings accounts. Determine an amount that can be automatically transferred and saved without straining your budget. You’ll be surprised how fast your savings account grows. Just set it up and forget it.
Tip 5: Renegotiate your terms
Whether it’s your cell phone or cable bill, the closer you are to the end of your contract, the more leverage you have to get a better deal. Call and ask to speak to the retention department. Let them know that you are considering a new provider and see what they offer to keep you as a customer. You’ll be surprised at how much you can save. Also, keep an eye on aggressive offers from its competitors. It may be time for a switch. The same goes for your home and auto insurance. Get a quote to make sure you’re getting the best price.
Tip 6: Install a programmable thermostat
Why pay to keep your house or apartment comfortable while you’re away? Programmable thermostats can be set to reduce your heat or air conditioning use during certain times to boost energy savings. According to Energy Star, you can save approximately $180 a year with a programmable thermostat. Now that’s a
good investment.
This is just a small sample of what you can do to maximize your budget and savings. The important thing is to get started!