Top Guilty Pleasures That Come With Hidden Expenses

Although advertising has led you to believe that businesses offering products and services exist to make your life better, they really exist to make money! The main reason for a business venture is to make a profit.

Keep this thought at the top of your mind when you consider “amazing” offers. Even though they seem to be offering you the best deal ever, it’s your responsibility to ensure you’re not being lured into hidden financial obligations.

Hidden expenses can mean the difference between your financial wellness and growing debt.

Take a look at some of the top guilty pleasures below. If you think back, you’ll probably remember being caught once or twice in similar situations!

Avoid these “deals” so you aren’t faced with hidden expenses down the road:

1. Financing a brand new car. Just flipping through channels on cable will open your eyes to the awesome offers being extended by automobile manufacturers. “Zero down payments,” “No interest for two years,” and “Your job is your credit” are some of the offers to convince consumers like you to own the new car of your dreams.

* In many cases, there will be a destination charge applied to your final price. This represents the cost for delivering a car to a dealer. It is paid for by the dealer and then passed along to you as a portion of the sales price.

* Auto detailing and adding fluids are some of the activities in what is known as dealer preparation, but don’t think these services are free! It’s always a good idea to ask your retailer what their preparation fees are before you sign.

* What can really catch you off guard is sales tax. Depending on the state you live in, you could end up paying as much as eight percent in sales tax, which would add a huge chunk to your final total!

2. Using your credit card for family vacations. It’s a great feeling to be able to take your family on vacation and treat them to a special trip, isn’t it? But what are you really signing up for when you pay for the trip with your credit card?

* Do you have enough income to pay for the vacation in full the next month when the statement is generated? Or will you end up being in arrears for months because you couldn’t resist that 14-day Mediterranean cruise?

* Paying off your vacation over time costs a huge chunk of money in interest charges. Plus, you’ll be stuck with higher credit card payments for months, causing an extra drain on your income.

* A rule of thumb is to only use your credit card for purchases that you can comfortably make with cash.

3. Applying for “free” member rewards cards. Everywhere you turn, there’s a business offering you a “free” member rewards card. However, promises of no obligations when you sign up often lead to obligations later down the road.

* Whether it’s a department store or your family’s favorite amusement park, it’s likely that you’ll have to spend a minimum amount in order to benefit from their rewards program.

* Oftentimes, the rewards pale in comparison to the amount of money you actually spend to get them!

So, the next time you see a tempting offer, ask yourself, “What’s in it for them?” The answer to that question will surely clue you in to what hidden expenses you might expect down the road.

Paying Off Your Mortgage Early Can Be Your Ticket to Financial Freedom

A mortgage is a guaranteed monthly expense. Well, at least for now it is. However, you don’t have to wait 30 years, or even 15 years, to be mortgage free. If you’re willing to put 100% effort into paying off your mortgage early, you can be mortgage-free in less than 10 years.

Below, we’ll discuss both the benefits and possible detriments of paying your mortgage off early.

Benefits of Paying Early For Mortgage

If you’re like most American families, your mortgage is your costliest monthly expense. But, what would you do if you didn’t have to make a mortgage payment each month? How many doors would suddenly open to you?

In essence, being mortgage-free provides you with financial freedom. You can continue to earn your yearly household income, without having to fork over $10,000 to $25,000 of it for a mortgage payment.

Here are just a few of the financial benefits that you’ll be able to enjoy without a mortgage:

* Pay off all of your debt in order to truly live debt-free
* Purchase a brand new car with cash
* Become a landlord; invest in the real estate rental market in order to earn passive income
* Purchase a vacation home for your family
* Take exotic vacations
* Purchase a boat for leisure
* Fully invest in your 401k
* Save 100% cash for your children’s college tuition
* Renovate your home without the need to incur more debt
* Build a fully stocked emergency fund

These possibilities are just the tip of the iceberg! For example, if you’re able to get rid of an $1,800 mortgage payment, that’s over $21,000 per year that you can save or spend in any which way you please. By saving up just 5 mortgage payments, you can pay for a $9,000 car outright. Or this can also be used as startup for a small business you can start on the side of your 9-to-5 job.

Common Arguments

Not everyone believes that paying off your mortgage early is a smart idea. And truthfully, for some people, paying off a mortgage early isn’t the best option. This includes those with astronomically low interest rates and those with an already tight budget.

Here are some of the most common arguments for opting to keep your mortgage payment:

1. Tax credits. When you hold a mortgage, you’re able to use the amount you pay in interest as a tax deduction. However, deducting $15,000 would save a mere $3,750 in taxes.

* Would you rather have $15,000 in the bank (plus the payment that is applied to your principal) or save $3,750 on taxes? $15,000 could buy you a new car, while $3,750 might only pay for your family vacation.

2. Diversification. Some people believe that diversifying your investments is the most secure route to ensuring the highest return. If you spend all of your extra money each month to pay off your mortgage payment early, you won’t be able to partake in other investments or build a hefty nest egg in case of a rainy day.

* A good rule of successful investing is certainly diversification, as it minimizes risk.

When it comes down to it, eliminating your mortgage payment provides you with the security of knowing that you’ll always have a roof over your head, whether you lose your job or not. Plus, you also gain financial freedom – and wealth – by being able to invest in opportunities which otherwise wouldn’t have been available to you when paying a mortgage payment.

Paying off your mortgage early will take hard work and dedication. And for several years, you’ll need to pour a great portion of your available cash into increasing the power of your payments. But the sooner you pay off the mortgage, the sooner you can have the life you’ve always dreamed of.