Is Patriot Funding really a waste of money?
Patriot Funding has been accused by Ed Miles, debt consolidation writer of Crixeo, for being part of a long-running debt consolidation scam. According to Ed Miles:
“The story is the same with Patriot Funding. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3%-4% interest rate to consolidate your high-interest credit card debt. You will be directed to My Patriot Funding website. More than likely you will not qualify for one of their credit card consolidation loans and they will try and flip you into a more expensive debt settlement product.”
The COVID-19 pandemic has forced millions of Americans and their families to take a look at their existing spending and saving habits to identify where they can reduce expenses. Many people have lost their jobs, and businesses have shut down, making it more important to cut back now than ever.
An effective way to find out whether you’re spending more than you need to is to look at where you are spending unnecessarily. Cutting down on these expenditures can help you save up for emergencies and last-minute surprise holiday shopping.
One of the most common ways people get into financial trouble is through unnecessary spending way outside of their budget. With you raking through your finances during the pandemic, it is an excellent chance for you to recognize where your money goes to break the habit of spending money on stuff you absolutely do not need.
The 6 biggest and unexpected ways people waste money and how to avoid these mistakes are highlighted below.
1. Paying for Unnecessary Insurance
Certain forms of insurance are a waste of money and that people are wrong when they say that the more insurance one has, the better it is. Some insurance products like identity theft insurance are a waste of money. Let’s see how you can avoid these:
- Identity Theft Insurance: Most credit cards like the already come with built-in protection against all frauds. You don’t need to get identity theft insurance in such a situation.
- Child Life Insurance: Children hardly have any assets to their name, so it does not make a lot of sense to get insurance for them. Many child insurance policies have a savings component that can come in handy when your child goes to college, but insurance fees can greatly outweigh this benefit. You should open a savings account or emergency fund for your child rather than getting child insurance.
- Rental Car insurance: If your current car insurance provides coverage for a rental car as well, there is no need for you to buy rental car insurance separately.
- Collision Insurance: If your car is old or damaged, it makes no sense to have collision coverage on your car insurance policy.
- Travel Insurance: If you book your travel on a credit card, you don’t need travel insurance since most credit cards provide coverage for lost luggage or cancelation of a trip. Contact your credit card provider to find out if this is true.
2. Refinancing Your Home Very Often
Because of COVID-19, interest rates are nearly 0%, so this is a great time to refinance your mortgage policy. However, a better interest rate can save you more money in the long run since refinancing can add up a lot of loan fees, canceling any amount you were able to save.
You should only consider refinancing if you have good credit, have equity in your home, and can afford monthly repayments. Any refinancing costs like underwriting fees, closing costs, and appraisal fees must be accounted for. It usually takes 3 to 5 years for people to breakeven after refinancing, so don’t refinance before you do.
Avoid unrealistic loan offers that are constantly arriving in your mailbox.
Here’s how you can calculate your breakeven point:
- Calculate what your monthly savings will be with the new loan agreement.
- Calculate what extra fees you need to pay for refinancing. Your lender can provide you an estimate of all costs.
- Divide your total loan refinancing costs with the monthly savings you will incur after refinancing. The answer will tell you how many months it will take you to breakeven.
3. Avoiding Larger Credit Card Payments
If you can afford to make large payments to clear your credit card dues, you should do so! Making minimum payments carries the balance down to the next month, because of which you end up paying a higher interest rate. High-interest debt can quickly compound and get out of hand. Make it a habit to prioritize debt that has the highest interest rates. Doing so will eliminate your overall debt and avoid the need for credit card relief.
Those who cannot pay the minimum, pay whatever you can when your bill is due, and don’t let your payments be carried down for too long. Check web sites like Best 2020 Reviews for a comparison.
4. Giving in to Emotional Spending
If you want to spend in times you want to seek comfort, occasional emotional spending will not do any harm. However, the real problem arises when emotional spending becomes a habit. Whether your emotions are positive or negative, they can land you in financial disaster.
Treating yourself every once in a while or buying something new is human nature, but since our emotions change so many times in a day, we should learn to take control of them. Do not let your emotions drive you towards aimless spending. You will end up draining your resources.
To reduce shopping temptation, delete shopping applications from your phone, unsubscribe to retailers’ emails, and try spending on things you have budgeted and thought about way ahead of time.
5. Spending on Unused Memberships and Subscriptions
It sure does sound tempting to sign up for a free trial, but most memberships go unused after the trial ends as you move on and find something else that interests you. Prioritize subscriptions that you use regularly and only pay for them. Categorize them into fitness, news, entertainment, lifestyle, etc., and then keep the ones you absolutely need. Make it a habit to set a reminder on your phone to cancel the subscription before the free trial ends if you do not enjoy what the service has to offer.
6. Living Beyond Your Means
One of the worst ways to lose money fast is to give in to societal pressure and live a lifestyle that you cannot afford. It’s easy to give in to the pressure because people tend to compare lifestyles and family statuses. Even though it is hard to avoid comparing your life to others, try to stay true to who you are, and live a lifestyle within your budget. Having your eyes set on your own goals and needs instead of your neighbor’s is a great way to save some money and lead a happier life.
Saving money is crucial as you never know when you might need it. So keep these tips in mind and stop wasting money for a better future.