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Archive for September, 2010

Credit Basics That Everyone Should Know

Written by Toi Williams on Sep 30th, 2010 | Filed under: credit cards

Many people obtain credit without knowing the right ways to use credit effectively.  Using credit unwisely can create a multitude of problems that could take months or years to correct.  By knowing some credit basics, a person can avoid the most common credit issues and use their credit to enhance their financial security.

Credit Cards Can Be Dangerous

One of the highest interest credit products that you can apply for is a credit card, which can cause a great amount of trouble if balances are not paid off in a timely manner.  Many of the people that find themselves in bankruptcy court are the ones that ran up a lot of credit card debt and then found that they couldn’t pay the balance plus the interest that they owed the lender.  It is best to use credit cards sparingly, or only for emergencies, so that you are not wasting your money paying interest to the banks.

Learn To Resist Temptation

Knowing that you have credit available to purchase whatever you desire can make it hard to resist purchasing something that you really want but do not really need.  People that use credit have to be responsible enough to know when to say no to a purchase and the best credit users pay off their credit card balances each month to avoid paying double digit interest rates to the credit issuer.  If the only way you can pay for an item that is not necessary to maintaining your quality of life is by putting it on a credit card, it is probably best to leave the item on the shelf until you have saved up enough to purchase the item with cash.

Guard Your Personal Information

There are many crooks out there that would love to use your personal information to obtain credit for themselves that you will be responsible for paying back.  It is important to keep all of your personal information secure so that this does not happen.  Personal information that can be used to obtain credit in your name includes your social security number, your bank account information, and your credit card numbers.  Identity thieves and other crooks are well versed in what to say to separate you from this information so it is important to never give this information out over the telephone or online unless you know exactly who you are giving the information to and what the information will be used for.

What Should My Money Priorities Be?

Written by Toi Williams on Sep 27th, 2010 | Filed under: mindset

For people that are not independently wealthy, prioritizing their spending is a must.  There are many different things that we all desire to spend money on, but most of us do not have the money to buy everything that we want so we have to make choices about what to spend money on.  Most people will prefer to make their money priorities in the following order.

Basic Living Expenses

Your basic living expenses include your rent or mortgage payment, your car payment, utilities, child care expenses, groceries, and minimum payments required by creditors.  Paying these expenses first will save you a great deal of trouble in the long run because these are the expenses that could cause you the most trouble if they are missed.  No one wants their home to go into foreclosure, be evicted from their apartment, or have their vehicle repossessed.

Emergency Savings

It is important to have some emergency savings on hand to take care of any unexpected financial expenses that may occur.  Not having enough savings to handle financial emergencies is the number one reason for people falling into unmanageable debt that is virtually impossible to get out of.  A financial cushion of at least $500 is recommended by most financial experts.

Retirement Savings

Saving for retirement should be high on your list of financial priorities because there is a limited amount of time available for contributing to your retirement.  Every year that goes by without putting money into a retirement account reduces the funds that you will have for retirement by a significant amount and there is no way to recoup the interest and employer matching funds that you miss by not contributing to a retirement plan.  At least 10% of your income should be put towards retirement savings.

High Interest Debt

High interest debt is any type of debt with an interest rate over 10%.  This typically includes credit card balances, payday loans, and pawnshop loans.  Paying off these debts quickly can save you hundreds of dollars in interest payments each year and free up more of your take home income for expenses that benefit you, not the lending institution.

Non-essential Expenses

Non-essential expenses include anything additional that you would like to spend your money on.  Entertainment, dining out, and new clothing from a shopping mall or retail store are all considered to be non-essential expenses because you do not have to have them to maintain your current quality of life.  After you have taken care of all of your other financial priorities, then you can use part of the money that is left over for your non-essential purchases.

A Beginner’s Guide To Saving On Car Insurance

Written by Toi Williams on Sep 26th, 2010 | Filed under: saving

The rate that you are charged for your car insurance is dependent on a number of factors that are beyond your control, such as your age, where you live, your marital status, and your sex.  But they also include many different things that you can control, such as your credit score, your driving record, and the amount of insurance you purchase.  It can be difficult to figure out what you need to do to get the best deal on your car insurance, but knowing how the car insurance industry works can help you protect yourself and save you money.

Car Insurance Basics

There are a number of different types of car insurance you can purchase and each one offers a different type of coverage.  Liability insurance pays for damages to the other party’s vehicle if a crash is caused by the insured individual, but will not pay for medical bills or damage to the insured individual’s car.  The insured individual is responsible for paying for costs that exceed the amount of coverage they purchased.

Collision insurance pays for the damages to the insured individual’s car in the event of an accident.  Uninsured motorist protection covers damage to the vehicle and medical costs incurred in an accident with an uninsured driver.  Comprehensive insurance covers theft and non-accident related damage to the vehicle.  Most car insurance policies are a combination of two or more of these insurance types.

Money Saving Tips

There are a number of different methods you can use to reduce the amount that you are paying for car insurance.  One of the most effective ways to reduce the rate that you are charged for car insurance is to shop around for the best rate.  Different insurance companies can charge significantly different rates for the same coverage for the same person. 

Another way to reduce your car insurance rate is to increase the amount of the deductible that you will have to pay in the event of an accident.  If you are a conscientious and careful driver, you can reduce your car insurance rate significantly and may never have to pay that deductible because there is little chance of you being involved in an accident.  It is important to ensure that the amount of the deductible is not so high that you will not be able to pay it if you need to.

Choosing only the coverage that you actually need will also help you save money on your car insurance.  All of the different types of coverage can be adjusted between the minimum required by the state that you live in and a maximum amount that the insurance company will provide.  By choosing only what you need, you can cut the amount that you are paying for car insurance by 25% or more.

3 Signs That Signal Financial Disaster Ahead

Written by Toi Williams on Sep 24th, 2010 | Filed under: mindset

One of the common threads through nearly every financial disaster is that the people affected never saw the disaster coming.  In every case, there are signs that the financial situation was spiraling out of control but the individual did not know how to interpret the signs so that they could see how bad the situation was getting and take the steps needed to correct the problem.  Here are some early warning signals that financial disaster may occur soon.

Surprising Bank Or Credit Card Statements

If you open a statement from your bank or credit card issuer and you are unpleasantly surprised at the numbers that you see, chances are a financial disaster is looming in the distance.  One of the biggest factors in many debt disasters is that the person overspent with their credit cards or spent the majority of their savings without realizing it, typically in many small transactions instead of one or two large purchases.  If your bank balance is lower than you think it should be or your credit card balance is higher, you may want to restrict your spending to purely necessary items until you can fix those balances.

No Savings At Hand

People that have little or no savings at hand find that their options are extremely limited when a financial issue occurs and all of those options are going to be expensive.  Without savings, a small financial problem turns into a large issue as the person is forced to use high interest credit, such as a credit card charge or payday loan, or neglect the issue until more funds are available, which could exacerbate the problem.  It is important to have savings available and easily accessible so that you are not caught short when an emergency occurs.

Living Paycheck To Paycheck

If the money from your paycheck is just enough to pay for your fixed expenses and you have little or no discretionary income, then you are definitely headed for a financial disaster if nothing is changed.  People that live paycheck to paycheck have no room to maneuver if something should change in their financial situation, such as an unexpected expense or a cut in their income.  If you find that you are spending all of your money before it is made, you need to sit down and take a serious look at your finances to find out were spending can be cut before you reach financial devastation.

Important Personal Finance Rules

Written by Toi Williams on Sep 19th, 2010 | Filed under: mindset

Taking care of your personal finances is a hard task under any situation, but is much more difficult for those that are new at trying to manage their own finances.  There are a number of rules that should be followed when managing personal finances to make it easier for the person to effectively take control of their financial future.  Here are some of the most important rules to follow concerning personal finance.

Save To Spend Is Always The Best Solution
Saving up to pay for a large purchase is always preferable to placing that large purchase on a credit card and paying high interest rates while trying to pay off the purchase.  The people that are the most successful at their financial planning efforts are the ones that are disciplined enough to save their money to purchase the luxuries that they desire. 

Budget Wisely
Creating a good budget and sticking to it is another secret of personal finance management success.  A budget should never include every dollar of your income, which indicates overspending, and should allow for the things that you like to have that may not be completely necessary but makes you happy.  A good budget will also include an amount for saving on a monthly basis.

Know Where Your Money Is Going
Tracking your financial transactions is one of the best ways to get a handle on your personal finances.  If you do not know where your money is going, then you will never be able to identify the areas where you are overspending.  All transactions into and out of your bank account should be tracked so that there are no unpleasant surprises when it is vital to have the amount of money that you think you should have.

Eliminate Debt Obligations
In a culture that promotes debt as the way to get all the things that you desire, it can be hard to resist the call to put items on credit and pay them off later.  Purchases that are made with credit cost more in the long run because of the interest payments and fees that are attached to paying for the item with credit.  The faster you can eliminate your debt obligations, the faster you can put more of your money towards what you want instead of lining the pockets of credit card company executives.

Pay Yourself First
Many people pay all of their bills and all of their monthly expenses first and at the end of the month, they have nothing left to save in their savings account.  Taking the amount that you would like to save out of the funds available to spend will help you grow the balance of your savings account more quickly and reduce the amount spent on unnecessary items each month.

Want To Avoid Credit Card Late Fees? Here’s How!

Written by Toi Williams on Sep 12th, 2010 | Filed under: credit cards

The amount of money that banks are earning from the late fees charged to credit card accounts is increasing every years and is resulting in billions of dollars of profit for the banks annually.  Late fees on credit card accounts can end up costing the person much more than the initial fee levied against the account for making the payment late, so it is best to avoid late payments on credit card accounts at all costs.  Avoiding credit card late fees is not difficult if you follow a few simple tips regarding your credit card account.

Pay The Bill Immediately

The easiest way to ensure that you will never have a late payment on your credit card account is to make sure that the credit card bill is paid as soon as it is received.  This way, you do not have to worry about keeping track of the due date or being able to find the bill at a later date.  The trick is to keep enough money in your bank account to be able to pay your credit card bill no matter when it arrives.

Mark The Due Date

If you are unable to pay the credit card bill as soon as it arrives at your home and must wait until closer to the due date to make your payment, you will want to make sure to mark the due date of your credit card bill in a prominent place to ensure that the due date is not forgotten.  Most of the cases that trigger late payment fees are because the person forgot to send in the payment by the due date, not because the person did not have the money to pay the bill.  If there is a calendar that is used for marking important dates, be sure to mark the due date of the credit card payment on the calendar so it will not be forgotten.

Use Electronic Reminders

Many of the electronic tools that are used every day now have the capability to provide alerts for important events that are programmed into their system.  Learning to program these electronic reminders will give you an alert system that you will be sure to see on a regular basis, reducing the risk that you will forget to send in the payment for the credit card bill by the due date.  Most cell phones have this capability, along with PDA’s and many computer scheduling programs.

Where Can I Obtain A Loan?

Written by admin on Sep 10th, 2010 | Filed under: Uncategorized

Obtaining the right loan products may require a great deal of dedication on the part of the borrower to get the products that are best for their needs. The first step to obtaining the right loan is to choose a lender that has the financial products that you are looking for. There are many different types of lenders available across the nation and each one will offer a number of different loans for people to choose from.

Finding A Lender

The traditional methods of finding a lender in the area involved leafing through the phone book to locate the names and contact information for lenders or asking others whether they could recommend a good lender for cash loans that they have used in the past. Using these methods for finding a lender would take a large amount of time and there was no way to tell whether you were choosing the right options available. Fortunately, there are more options available today for finding the lender that is right for you.

Today, it is easy to use the internet to find which lenders have the best personal short term loans for your needs. Using the internet to find a lender allows you to search through the different types of loans available from lenders across the nation and compare the loans to find the one that is the best deal for you. Many of the websites for these lenders will also allow you to apply for the loan online by submitting the information that is needed by the lender using an online form.

Many of the lenders will have a list of the different types of loan products that they offer available on their websites which will allow the person to compare the terms of the different loans to see which ones will fit their needs. In some cases, the lender will have a loan calculator available that will allow the person to input the loan amount that they are looking for, the length of time that the person would like to hold the loan, and an estimate of their credit score. The loan calculator will return the total amount of the loan plus interest and estimated monthly payments for the loan.

When you use the internet to find a lender for bad credit loans or loans with no credit check, you are not limited to the lenders that are located in the area that you are in. Having the ability to review the loan products from companies all over the nation can help you reduce the interest rate that you pay for obtaining the loan and you may be able to find loan terms that are more favourable than what is being offered by lenders that are closer to where you live. Finding the right type of lender to obtain your loan from will take time, but the result will be a loan product that fits your needs with lower interest rates that can save you money in the long run.

Busting Your Hunger Without Busting Your Budget

Written by Toi Williams on Sep 9th, 2010 | Filed under: saving

One of the most expensive purchases that we make is the food that we buy to eat.  Across the nation, there is a wealth of ways to find different things to eat, giving our culture one of the most varied menus on the planet, but with large selection comes the ability to spend more than you can afford on your food purchases.  There are a number of methods that you can use to reduce the amount that you spend on food annually and each method is effective in its own way.

Stop Dining Out

It is estimated that the average family spends nearly 40% of their household income on the food that they eat, with the majority of the money going to restaurants and fast food purchases.  People are so conditioned to the ease of eating out that they do not realize that dining out can routinely cost as much as 5 times the amount it would cost to cook the same meal at home.  Even if you factor in the cost of purchasing the raw ingredients, cookware to use, and some cookbooks to help you get started on cooking for yourself, you will still save money over dining out on a regular basis.

Shop By Unit Price

Many grocery stores list the price per unit on the sales tags of their products, typically in small numbers so that it doesn’t overshadow the larger product price that they would like for you to pay attention to.  Looking at the unit price while shopping will help you make a more accurate comparison between brands and product sizes, because they will typically all use the same unit of measure for the unit price.  A smaller price per unit equals a better deal at the checkout counter for the consumer.

Look For Specials

Many grocery stores will regularly have sales on staple items that you can stock up on and keep for the rest of the year.  For example, during the week before the Labor Day holiday, many grocery store offer sales on the items that people typically purchase for their Labor Day celebration, such as meats that are good for grilling, barbeque sauce, baked beans, and condiments.  Because the meats can be frozen in the freezer and the other items can be stored, you can stock up on the items when they are on special and avoid paying the higher prices for the items later in the year.

What Is The Difference Between A Debit Card And A Credit Card?

Written by Toi Williams on Sep 8th, 2010 | Filed under: credit cards

Debit cards and credit cards are similar in appearance and many people assume that since the cards look the same, they work in the same way.  The truth is that there are many differences between a debit card and a credit card and there are times when it is better to use one or the other.  Knowing the differences between a debit card and a credit card can save you a lot of money by helping you make the right choice about which one to use.

The Money

The primary difference with debit cards and credit cards is where the money paid by the card comes from.  With credit cards, the money that is sent to the merchant is borrowed from the credit card company and must be paid back by the cardholder along with a calculated percentage of interest as payment for borrowing the money. 

With debit cards, the money that is sent to the merchant is deducted from the person’s saved funds, typically from a bank account, and the purchased is entirely paid for immediately with no future payments needing to be made.  There is no interest payment required with a debit card payment because the money is not being borrowed.

The Amount

The total amount that can be used for purchases is also different between a debit card and a credit card.  Debit card users are limited by the amount that they have saved in their bank account and are heavily penalized for going over that amount.  With a credit card, the person doesn’t have to worry about having the money saved up in their bank account because the money that they are using is not coming from their account – it is being borrowed from the credit card issuer.  The only spending limit with a credit card is the borrowing limit imposed by the credit card issuer.

Typical Use

Most of the individuals that use debit cards use them for everyday purchases, such as groceries, gasoline, and meals on the go.  These purchases are usually smaller dollar amounts and are purchased more frequently than the purchases made with credit cards.  Credit card purchases are typically for high dollar amounts and are made much more infrequently, such as when the person does not have the funds available in their bank account.

Knowing the differences between a debit card and a credit card will help you make better financial choices and ensure that you are using both types of cards in the best way to benefit you.

Convenience Fees Are Killing Us

Written by Toi Williams on Sep 7th, 2010 | Filed under: mindset

One of the biggest fees on consumers across the nation today is the convenience fee, placed on everything from coffee to meals to services.  This fee is generally hidden inside the total cost of the item, but is easy to spot because the items that are more convenient for the consumer often cost more than the other products.  People across the nation spend billions of dollars every year on convenience fees without ever realizing that they are paying for something that they could easily do themselves.

Fees On Foods

If you would really like to tally the cost of a convenience fee, there are no better examples than the ones in the food services industry.  With these businesses, the convenience fees added to the price of the product can double or triple the overall cost of the item.  Take a large iced tea drink into consideration – typically close to $2 per cup regardless of what business you go to.  If this iced tea drink was made at home, it would cost around $0.04 for the tea bag, less than $0.01 for the water, about $0.02 for the electricity to heat the water, and $0.16 for the sugar used to sweeten it – a total cost of $0.30 for a savings of $1.70 per large serving.  Drinking 3 large iced teas in a week would result in a savings of $265 over the course of a year, simply by making the iced tea instead of purchasing it pre-made.

Another example would be to calculate the difference between making a steak dinner at home versus purchasing a steak dinner at a mid-tier restaurant.  A dinner of an 8oz. steak, broccoli, and a baked potato would cost close to $20.00 at a restaurant, but at the grocery store, the broccoli would cost about $1.00, the baked potato would cost about $1.50 for all of the ingredients, and the steak would cost close to $5.00.  This means that a $20.00 steak dinner would cost you about $7.50 if you made it yourself.

Fees On Services

The hidden convenience fees on the services that we use on a regular basis can also be a budget killer.  The cost having the car washed quadruples when you compare doing it yourself at home with a bucket, soap, and rags to going through one of the automated machines at your local gas station.  There are also convenience fees for parking the car in a crowded lot (valet service), for using the closest ATM instead of going out of your way to find one that is branded for your bank, and for paying your bills by any method other than a check in the mail. 

In most cases, these fees could be avoided if the person simply slowed down and took the time to do these things for themselves.  People that have tried to cut convenience fees out of their lives end up saving thousands of dollars each year by simply not allowing others to do things for them that they are perfectly capable of doing for themselves.