Finance Blog

Controlling Your Assets

Personal Finance

To help get control of your money and life, it may be necessary to find money you may not realize you have. By re-aligning your assets you may be able to free up additional income to pay down your debt, to put into your savings program, or to invest. You may need to move your assets around a bit to produce that extra money.

One way to re-align your assets is to consolidate any loans that you may have. You can talk to your bank or finance company to help you with this. How a consolidation loan works is that the lender (the bank or finance company) pays off all your creditors and combines the balances owing into one loan with one payment. This usually allows you to pay a lower interest rate and therefore have a lower monthly payment. The extra money you save by the lower payment can then be used to lower your debt. The key element here is that the extra money you save with your lower payments MUST be used to pay down your debt (and not on other things)!

Another way to re-align your assets is to take money from an existing savings plan you may have and invest it into an area that will give you a higher rate of return. For example, if you move the money you have saved in a savings plan that pays 3% interest and invest it into a mutual fund that has the potential to pay you a 10% interest rate, you will have increased your savings potential by a great deal.

You can also look to your life insurance policy to possibly find extra money. If you have an expensive whole life insurance policy it is possible to save a lot of money over time by switching to lower cost term insurance. You can save on your monthly premiums, and possibly recover any cash values that your whole life policy may have had with it. Those cash values can then be used to pay down your debt. You could also use the money you save in monthly premiums to pay down your debt even further, or to start a mutual fund savings program that would pay you more interest than the whole life policy would.

Possibly you could save more money by reducing the amount of car insurance you pay as well. If you increase the amount of deductible you pay out, your monthly premiums may be reduced. How many claims do you have anyways? If your monthly premiums are decreased will that make up for the extra deductible amount you may have to pay out once in two years? The savings in premiums again can be used to help pay down your debt or be put into a savings program.

You may be able to use the above method to save on your home insurance as well (increase your deductible and pay a lower monthly premium). Also, if you combine your car insurance and home insurance with one company, they often offer a better payment package.

Getting control of your assets is a good way to get control of your finances and your life. It can also help you start on the path to controlling your debt. Take a look at other areas where you may be able to save and discover other ways that you can gain control of your assets.