Your home is your haven. It is a retreat away from the hustle and bustle of life. Not only does it shelter you, but, now, it can offer you financial succour when you need it. You can offer it to your lender as a security against a loan amount. You will receive a volley of advantages, such as:
* Low interest rates
* Flexible instalments
* Big loan amount
* Long repayment period
Lenders can give homeowner loans for a variety of purposes that include:
* Home improvement, such as repairing the roof, designing or furnishing works etc.
* Education
* Wedding
* Car financing
* Debt consolidation
To avail a secured homeowner loan, the borrower would be required to provide security of some sort. Generally, the collateral is in the form of the borrower's home. Homeowner loan deals can be availed from reputed high street banks that have well established network of branches all across the UK. Borrowers may also approach online banks and lenders that provide secured loans for homeowners. Online applications are comparatively less time consuming. Additionally, there is no application fees associated with it. As it is a hassle free option, more and more people are opting for it.
Borrowers can submit their personal details through the online forms and the service providers will in turn forward the loan request to a number of lenders throughout the UK. Depending upon the equity in your home, the lenders decide the quantum of loan that can be provided. In simple terms, equity is the current market value of your home minus the outstanding amount of money. It is always better to consult several lenders and go through their terms and conditions. The best solution is to compare the interest rates along with all other hidden charges and choose the deal that is most suitable for you on a long term basis.
It is really up to the borrower to see if this loan type is feasible for him or not.
Summary: One's home is the biggest asset. The equity in your home can be used to avail loans of your choice. Depending on the borrower's choice, he can opt for secured or unsecured homeowner loans.
http://www.shakespearefinance.co.uk/articles/article-homeimprovement-loans.html
Tuesday, March 20, 2007
Monday, March 19, 2007
6 funds to invest in with your kids
Are you looking to introduce your children to investing? Consider these tips and a half-dozen mutual funds with low initial outlays.
At Morningstar, we've often emphasized how important it is to start investing early in life. Not only does it give you a big head start in building a nest egg for a first home, a college education or retirement, but learning good investing habits early on can have a positive impact for years. That's why it's an excellent idea for parents to teach their kids about money and investing.
There are plenty of good ways to do this, some of which Morningstar's Sue Stevens recently described in her column (registration required).
Ultimately, there's no better way for kids to learn about investing than by doing it themselves, whether it's with money they've saved on their own or money given to them by a parent or other relative. Traditional tools such as summer jobs and savings accounts are still important, but mutual funds can also be an excellent way for older children to learn the value of a buck. Not all mutual funds are right for young investors, but with a little thoughtful research, it's possible to find some that kids can feel at home in.
What to look for
Broadly speaking, when helping kids invest in mutual funds, it's best to keep things simple. Focus on stock funds rather than bond funds because kids have very long time horizons and can take on plenty of risk. Large-cap stock funds are generally best; not only should they form the core of any long-term portfolio, but they're more likely to hold stocks of which the kids have heard. Kids will generally have no need for sector funds or other niche funds.
Young investors generally don't have a lot of money to throw around, so a fund that requires $5,000, $10,000 or more upfront is effectively closed to them. There are plenty of funds with minimum initial investments of $1,000, $500 or even $250, making them much more welcoming for beginners. You can read about some of these funds in this column by Christine Benz, and you can use Morningstar's Premium Fund Screener (membership required) to find funds with low minimums in addition to any other criteria you want. You might want to eliminate load funds; some of them have low minimums, but they're not appropriate if you're going to make lots of small purchases, as kids probably will.
Often it's possible to start with an even-lower initial investment -- sometimes zero -- if you set up an automatic investment plan, or AIP. Under that kind of plan, you arrange to automatically add a certain amount, such as $50, to the account each month. This can be a good option for kids with jobs that provide a regular income; not only does it allow them to start investing without a lot of money up front, but it will teach them how quickly that nest egg can grow when additions are made regularly. You can find out whether a fund has an AIP -- many do -- by looking on the Purchasing Information page of its Morningstar report, and you can use the Premium Fund Screener to screen for funds with AIPs.
Watch the expenses
Low expenses are a feature any fund investor should look for, and you'll do kids a favor if you instill in them early the importance of fund costs. This can be trickier than it seems at first because the cheapest funds can sometimes have high minimum purchases; still, kids can't go wrong if you steer them toward low-cost funds whenever it's feasible. Morningstar's free Mutual Fund Screener lets you screen for funds with expense ratios below their category average, and the Premium Fund Screener allows for expense screening that's more detailed.
Finally, it's often considered kid-friendly for funds to avoid alcohol, tobacco, gambling or pornography stocks because some parents or grandparents might not feel comfortable having kids investing in such businesses. Columbia Young Investor (LYIAX), a pioneer among kid-friendly funds that's soon being merged away, has always had such restrictions on its portfolio, as does its rival USAA First Start Growth (UFSGX).
This is a more personal standard than the other ones above, and it is one that parents might want to discuss between themselves and with their kids. If you do decide that you'd like a fund that screens out certain kinds of stocks, you can use Premium Fund Screener to find socially responsible funds, most of which at least shun alcohol and tobacco stocks. However, you'll also need to look at each fund individually to see whether its standards are ones with which you agree because funds can differ greatly in their definitions of "socially responsible" investing.
Six funds to consider
With all this in mind, here are some funds to consider if you have a child who's dipping his or her toe into the waters of investing. Of course, these aren't the only kid-friendly funds out there; judicious use of the screening tools mentioned above can help you find other candidates fitting the criteria that are most important to you. However, this list provides a good starting point for young investors:
USAA First Start Growth (UFSGX).
Now that Columbia Young Investor is on the verge of disappearing, this will soon be the only mutual fund explicitly geared toward young people. It's not without its drawbacks; its 1.45% expense ratio is high for a large-cap fund, and 25% of its assets are now in bonds, a higher percentage than most kids probably need. But manager Mark Baribeau avoids alcohol, tobacco and gambling stocks, and you can start an AIP for no money upfront and just $20 a month, one of the most kid-friendly plans out there.
TIAA-CREF Equity Index Investor (TCEIX).
Index funds have a place in any investor's portfolio, and kids are no exception. The big kahunas among index funds, Vanguard 500 Index (VFINX) and Fidelity Spartan 500 Index (FSMKX), are very cheap but have minimum initial investments of $3,000 and $10,000, respectively, putting them out of most kids' reach. This fund from TIAA-CREF has a minimum initial investment of $2,500, but that minimum is only $50 if you set up an AIP that invests $50 a month. Plus, this fund only costs 0.26% a year -- not as cheap as the Vanguard or Fidelity funds but still cheaper than most index funds and nearly all actively managed funds.
Vanguard STAR (VGSTX).
If you want to teach kids about the importance of low fund expenses, there's no better place to start than Vanguard. Some of Vanguard's most popular funds, such as 500 Index, are geared more toward older, more experienced investors, but Vanguard STAR is a good option for beginners. It provides exposure to 11 different Vanguard funds of various asset classes, including significant foreign exposure, and its track record is outstanding. A major factor in that good track record is the fund's rock-bottom 0.36% expense ratio. It does require a $1,000 initial investment, with or without an AIP, but nearly all other Vanguard funds require at least a $3,000 minimum, making this the best entree into this world-class family of funds.
Pax World Balanced (PAXWX).
This is one of the best socially responsible funds out there, with a strong long-term track record and reasonable expenses. It also has a low $250 minimum initial investment, whether or not you set up an AIP, making it an attractive starter fund. The fund keeps 25% to 45% of its assets in bonds, which makes it a bit conservative for most kids' needs, but it also provides significant mid-cap and overseas exposure, which can be hard to find in socially responsible funds.
T. Rowe Price Spectrum Growth (PRSGX).
This fund of funds is good way to obtain diversified, actively managed stock exposure. It invests in nine T. Rowe Price equity funds ranging from small to large cap, value to growth and domestic to international, and it has compiled one of the best long-term records in the large-blend category. Plus, like all T. Rowe Price funds, it's friendly to beginning investors; you can start an AIP with just $50 to start and $50 a month after that.
Ariel Appreciation (CAAPX).
This fund has struggled lately, but we have enough confidence in veteran manager John Rogers that it remains an Analyst Pick in the mid-cap-blend category. Rogers avoids tobacco, firearm and nuclear-energy stocks, and prefers firms that are environmentally friendly and cultivate diversity. It's also an easy fund for youngsters to get into; you can set up an AIP with no money upfront and $50 a month thereafter. On top of all this, Ariel maintains a number of educational initiatives to help disadvantaged young people.
http://teletrade.blogspot.com/search/label/Finance
102 Personal Finance Tips Your Professor Never Taught You
If you're anything like me, you graduated from college and perhaps even took a finance class or accounting class here or there, but you didn't learn anything about managing your personal finances. In fact, there probably wasn't even an opportunity to take any such class in either high school or college. But if college is partly about training us for a job, shouldn't we learn what to do with the money we earn from a job? Especially in a country where 45% of college students are in credit card debt and 40% of all Americans say they live beyond their means, I think it's time to wise up to some of the challenges of money management. A few (say, 102) simple rules can help get your financial life (back) on the right track.
The Painfully Obvious But Rarely Followed Tips
1. Pay yourself first. Try to put away at least 10% of your pre-tax income into a savings account.
2. Spend less than you earn. While this seems obvious, Americans are notorious for doing just the opposite. Stop spending and start saving.
3. Pay your bills on time. Avoid needless late fees and know how much money you actually have.
4. Avoid debt to the extent possible. Student loans and mortgages can be "good debt", but even then, make paying them off a priority.
5. Set a budget. And live by it. Use a computer program or just a paper and pencil. Whatever works.
6. Set concrete goals. Know when you want to buy a new home, when you want to retire, and how much you are expecting each to cost you.
7. Have an emergency fund. Have at least three months' income (some say six) in a high-yield savings account that can be easily accessed.
Career and Education
8. Get educated. A college education always pays for itself and more. In 2004, bachelor's degree holders earned an average of $51,206 per year, while high school graduates earned only $27,915, according to Census data compiled by HighBeam Research.
9. Your career is your most valuable asset. Manage it with a higher priority than you would with any other investment. Remember that without this asset, you couldn't survive.
10. Save enough. You should try to save enough to cover at least one-third of your kids' total college costs.
11. Consider public schools. Especially for college, state schools can often times be just as prestigious, if not more, than private schools.
12. Consider community college or online college for your first year or two. You can then transfer these credits to a more expensive (and prestigious) school to finish your final two or three years.
13. Invest in a 529 college savings account. It's tax-free. What more needs to be said?
14. Ask for a raise. Use the Salary Wizard Calculator to see if you're making as much as you should. If not, consider asking for a raise, especially if you've been at the company for more than a year.
15. Get a professional certificate. Some professions offer a certificate that, if earned, will generally provide you with a higher salary.
16. Don't major in English. If you love studying English, there's nothing wrong with that. Just be aware that English majors generally don't earn very much. Six of the top ten list of majors with the highest salaries are engineering majors, with chemical engineering topping the list.
Credit and Loans
17. Get a rewards card. If you need a credit card, the best type to get is a no-fee rewards card that you pay in full every month.
18. Borrow no more than 30% of your available credit. Borrow any more, and your credit score won't look too good.
19. Pay off your credit card debt. Credit card debt is usually the debt with the most interest. So pay it off first. Better yet, don't accumulate it in the first place.
20. Don't use your credit card for cash advances. It will harm your credit score and the interest rates are outrageous.
21. Know your credit score. Order your credit score from Equifax, Experian, and/or TransUnion.
22. Protect yourself from identity theft. Obtain your free credit report at least once per year and follow these tips.
23. Pay all credit card balances in full each month. Leaving a balance on a credit card account will leave you susceptible to a very high APR. You may as well be throwing cash into the fireplace.
24. Consolidate your loans. Especially those student loans. With a student consolidation loan, you can lock in several loans at a fixed interest rate and have just one lender to pay each month.
25. Avoid payday loans. Bottom line: they're scammy and they charge high interest rates. If you do need an emergency cash loan, just be aware of the risk of high interest rates.
26. Beware of scams. There are a lot of scams that deal with credit. Debt suspension offers, paying fees in advance, buying credit protection, and rebuilding credit usually sound too good to be true. There's a reason for this: they are.
27. Be cautious with home equity loans. If you can't make a payment toward a home equity loan, you could lose your house.
Frugality
28. Buy a used car. The most expensive miles on a car are the first 10,000. Let someone else drive those for you. Buying used can save a lot of money considering how little value the car has actually lost.
29. Be patient. Don't buy that new gadget today. Wait a month or two and the price will certainly go down.
30. Buy airline tickets as far in advance as possible. The cheapest flights are the ones the are bought at least two months in advance. For holiday travel especially, buy as soon as you can.
31. Get the most bang for your airline miles. Be sure each airline mile you redeem is providing you with at least 1 cent toward the price of a ticket.
32. Never buy the extended warranty. Often times, your new product already comes with a 90-day or 1-year warranty (when most "faulty" things will break, anyway). There's a reason everyone wants to sell you an extended warranty: they're hugely profitable (for the business, not for you).
33. Make your own meals. Eating out gets to be expensive if you do it too often.
34. Make your home more energy efficient. Bankrate.com has a list of 17 ways to do so.
35. Get a better cell phone plan. If you've had the same cell phone plan for a couple of years, chances are there's something better out there. Look around or call your current provider and ask for a better deal.
36. Banking fees are for suckers. A lot of banks will charge you checking fees or minimum account balance fees. Find a bank that does not.
37. Keep track of your spending. At least for a month, keep a journal of everything you purchase. At the end of the month, review your spending priorities and make adjustments.
38. Ditch your car. Walk, bicycle, or take public transportation. You'll save on car payments, gasoline, parking, and speeding tickets.
39. Use your frequent flier miles often. They may expire before you know it. There's no sense in stockpiling them. If you have enough for a free flight, use them.
40. Buy through your favorite airline's partners merchant store. AA.com, for instance, has multiple retail partners from whom you can earn frequent flier miles with each purchase.
41. Negotiate fees. For example, ask a bank to waive late fees. Often enough, they will.
42. Get your free money. Money might be owed to you. Get it.
Homeowning
43. houseUpgrade your old bathrooms and kitchens. These are often selling points on a house. A modernized bathroom can provide over a 100% return, while a modernized kitchen can return about 90%.
44. Refinance your mortgage if you can cut at least one point. The costs of refinancing are considerable, so it should only be done if you can trim your interest rate by at least 1%.
45. Never spend more than 2 1/2 times your income on a home. Know what you can afford and what you cannot.
46. Put at least 20% down on a home. Making a down payment of less than 20% will usually result in a private mortgage insurance (PMI) fee being added. This is usually 0.5%, meaning it could cost you about $1,000 a year on a $200,000 principal.
47. Use a mortgage broker. The better your mortgage, the more you'll save. Shop around.
48. Investigate different types of mortgages. There are dozens of mortgage options out there. Find the one that suits you best.
49. Buy a house that needs repairs. Buy for cheap and then add to the value with repairs. You'll save money
50. Deal directly with the seller. Avoiding agents' fees is a good thing. If you do decide to hire an agent, do your homework and get one who will be on the same page as you. You should be the one calling the shots.
51. Find out about homeowner taxes. Know what the property tax is in your area and be prepared to have enough to pay it.
52. Find out about secondary costs. In addition to monthly payments, be prepared to incur some secondary costs, including repairs, notary, escrow fees, and title insurance.
53. Get the house inspected by a professional. Have the house thoroughly inspected before making an offer.
54. Negotiate the selling price. Home prices are almost always negotiable. Never offer the asking price, but rather a few percentage points below it.
Insurance
55. Insure yourself against financial ruin. There should be no higher financial priority in your life than health insurance. Without it, if your health takes a turn for the worst, hospital bills could easily bankrupt you and your family.
56. High deductible is your friend. Keep those monthly premiums as low as you can.
57. Don't use insurance as an investment vehicle. Liquidity and certainty are not on your side.
58. Have enough. Have enough life insurance to replace at least five years of your salary, ten years if you have kids or significant debts.
59. Don't have too much. You need health insurance. If you're single and have no dependents, you don't need life insurance.
60. Think about insurance before you buy a car. Typically, the more expensive your car, the higher your insurance cost will be. Take this into account when buying a car.
61. Choose the right car insurance. Don't assume you should get the cheapest auto insurance or the one with the most protection. Find out exactly how much coverage you need.
62. Consider dropping collision coverage. Especially if you have an older car, there's not much sense in protecting it against getting wrecked if it's already a wreck.
63. Buy homeowner and auto coverage from the same insurer. You'll usually get a better deal than you would if you bought the two separately.
64. Write a will. If you have any dependents, you need a will. Write one and protect your loved ones.
Investing
65. stock graphBe wary of mutual funds. Few mutual fund managers can beat both the market and the expense fee that they charge.
66. Don't try to pick stocks. Picking stocks can be a very dangerous game, unless you know what you're doing.
67. Avoid fees. With long term investing, fees are a primary factor in total return. Avoid brokers who take high commissions and avoid funds with high management costs.
68. Stocks are high risk, high reward. Over the long term, stocks have historically outperformed all other investments. But over the short term, they can be risky if they lose a lot of value in a short period of time. So, do invest with stocks, but only with funds you won't need to withdraw over the short term.
69. Stocks first, bonds later. Invest in stocks when you're young, and then move into bonds are you grow older. Stocks are a good long-term investment strategy. If you're still young when the market turns south, you'll have plenty of years left ahead of you to make it up. As you get older, invest in bonds. They're less risky.
70. Past performance is not a guarantee of future success. Just because a stock has been up for the last six months does not mean it will continue to go up tomorrow.
71. Diversify your portfolio. Never invest more than 10% of your portfolio in any one company. Even if it's a "sure thing".
72. Build a nest egg that is 25 times the annual investment income you need. Don't think you can rely solely on social security.
73. If you don't understand how an investment works, don't buy it. Research an investment vehicle thoroughly before you get into it.
74. Don't borrow from your 401(k). Think of it as robbing yourself. You'll get hit with high fees and taxes, too.
75. Invest for the long term. There is no such thing as a guaranteed get rich quick scheme. And in investing, there is no high reward without a high risk. Use caution and diversify your portfolio for the long run.
76. Seek professional help. Don't feel the need to turn yourself into a day trader. Hire a personal financial advisor if you can afford to.
77. "Fee-only" is your friend. Go with a fee-only financial advisor, not a fee-based or a commission-based. Only fee-only advisors are legally obligated to act in your best interests.
78. Index funds are your friend. Index funds are passively managed and are generally cheaper and more tax-efficient than actively managed funds.
Retirement
79. Optimize your 401(k). If your employer offers employer match, you must set your 401(k) contribution to at least that amount.
80. Play the IRA game smart. Max out your 401(k) first, your Roth IRA second, then your traditional IRA.
81. Increase your 401(k) contribution. Especially when you get a raise. Some employers even give you the option of having your contribution automatically taken out of your paycheck.
82. Don't buy stock in the company you work for. This is the opposite of diversification. What happens if the stock tanks, and you lose your job and pension because of downsizing?
83. Don't be afraid of stocks. More than two-thirds of 401(k) money is in low-yielding bonds. Especially if you're still young, invest in stocks. Over the long-run, they perform the best.
84. Sign up for Medicare. Don't forget to sign up for Medicare before you turn 65, even if you haven't retired yet.
85. Plan. Use the Social Security Retirement Planner to ensure that your retirement goes smoothly.
Saving
86. Save now. It doesn't matter if you're six or 60. You should be saving a little bit every month, aside from retirement savings. The sooner you start, the better.
87. Pay off high interest debts before you start saving. Earning 5% in your savings account isn't going to do much good if you're accruing 17% interest on your credit card debt.
88. Save at least 10% of your annual salary for retirement. This should help to provide a nice retirement fund when you need it.
89. Keep at least three months' worth of living expenses in a savings account or high-yield money market account.
90. Open an online savings account. Online savings accounts, such as Emigrant Direct or HSBC Direct, offer yields of greater than 5%.
91. Set up an automatic savings plan. You should be able to set up your checking account so that a certain amount is automatically transferred to a savings account each month. It's a good way to force yourself to save.
Taxes
92. 1040 income tax formKnow when to file your taxes. If you expect a refund, file your taxes as early as you can. If you owe money, file as close to the due date (usually April 15) as possible.
93. Consider itemizing your deductions. If all of those tax breaks receipts you keep add up to more than your standard deduction, it is definitely worth filling out all of the extra paperwork to itemize.
94. Be aware of other tax deductions. Contributions to a traditional IRA, student loan interest payments, alimony payments.
95. Save money on tax credits. Some tax credits to look out for include the Hope Scholarship Credit, Lifetime Learning Credit, Child Tax Credit, Earned Income Credit, and Child Care Credit.
96. Bunch your deductions into one year. If you're taking the standard deduction this year, consider making charitable contributions and office-related purchases after January 1, so you can possibly itemize your deductions next year.
97. Recheck your withholding every year. If you get married, have kids, or become the head of a household, you'll want to add these allowances on your W-4 so you can have fewer taxes withheld.
98. Keep your receipts (especially on big ticket items). You'll want them if you plan to itemize, or in case you get audited.
99. Concentrate on tax-free investments. Tax-free investments, like bonds, allow you to earn interest without being taxed.
100. Buy a hybrid vehicle. Hybrids tend to be more expensive than their traditional counterparts, but you can save money on gasoline and possibly receive a tax credit of up to $3,400.
Lastly
101. Take a deep breath. Even if you're only able to follow the first seven tips, which are the real basics, you will have already succeeded in making a huge positive difference in your financial life.
102. Money isn't everything. Health, family, and happiness are important, too. And remember, money can't buy you love
http://teletrade.blogspot.com/2007/02/102-personal-finance-tips-your.html
The Painfully Obvious But Rarely Followed Tips
1. Pay yourself first. Try to put away at least 10% of your pre-tax income into a savings account.
2. Spend less than you earn. While this seems obvious, Americans are notorious for doing just the opposite. Stop spending and start saving.
3. Pay your bills on time. Avoid needless late fees and know how much money you actually have.
4. Avoid debt to the extent possible. Student loans and mortgages can be "good debt", but even then, make paying them off a priority.
5. Set a budget. And live by it. Use a computer program or just a paper and pencil. Whatever works.
6. Set concrete goals. Know when you want to buy a new home, when you want to retire, and how much you are expecting each to cost you.
7. Have an emergency fund. Have at least three months' income (some say six) in a high-yield savings account that can be easily accessed.
Career and Education
8. Get educated. A college education always pays for itself and more. In 2004, bachelor's degree holders earned an average of $51,206 per year, while high school graduates earned only $27,915, according to Census data compiled by HighBeam Research.
9. Your career is your most valuable asset. Manage it with a higher priority than you would with any other investment. Remember that without this asset, you couldn't survive.
10. Save enough. You should try to save enough to cover at least one-third of your kids' total college costs.
11. Consider public schools. Especially for college, state schools can often times be just as prestigious, if not more, than private schools.
12. Consider community college or online college for your first year or two. You can then transfer these credits to a more expensive (and prestigious) school to finish your final two or three years.
13. Invest in a 529 college savings account. It's tax-free. What more needs to be said?
14. Ask for a raise. Use the Salary Wizard Calculator to see if you're making as much as you should. If not, consider asking for a raise, especially if you've been at the company for more than a year.
15. Get a professional certificate. Some professions offer a certificate that, if earned, will generally provide you with a higher salary.
16. Don't major in English. If you love studying English, there's nothing wrong with that. Just be aware that English majors generally don't earn very much. Six of the top ten list of majors with the highest salaries are engineering majors, with chemical engineering topping the list.
Credit and Loans
17. Get a rewards card. If you need a credit card, the best type to get is a no-fee rewards card that you pay in full every month.
18. Borrow no more than 30% of your available credit. Borrow any more, and your credit score won't look too good.
19. Pay off your credit card debt. Credit card debt is usually the debt with the most interest. So pay it off first. Better yet, don't accumulate it in the first place.
20. Don't use your credit card for cash advances. It will harm your credit score and the interest rates are outrageous.
21. Know your credit score. Order your credit score from Equifax, Experian, and/or TransUnion.
22. Protect yourself from identity theft. Obtain your free credit report at least once per year and follow these tips.
23. Pay all credit card balances in full each month. Leaving a balance on a credit card account will leave you susceptible to a very high APR. You may as well be throwing cash into the fireplace.
24. Consolidate your loans. Especially those student loans. With a student consolidation loan, you can lock in several loans at a fixed interest rate and have just one lender to pay each month.
25. Avoid payday loans. Bottom line: they're scammy and they charge high interest rates. If you do need an emergency cash loan, just be aware of the risk of high interest rates.
26. Beware of scams. There are a lot of scams that deal with credit. Debt suspension offers, paying fees in advance, buying credit protection, and rebuilding credit usually sound too good to be true. There's a reason for this: they are.
27. Be cautious with home equity loans. If you can't make a payment toward a home equity loan, you could lose your house.
Frugality
28. Buy a used car. The most expensive miles on a car are the first 10,000. Let someone else drive those for you. Buying used can save a lot of money considering how little value the car has actually lost.
29. Be patient. Don't buy that new gadget today. Wait a month or two and the price will certainly go down.
30. Buy airline tickets as far in advance as possible. The cheapest flights are the ones the are bought at least two months in advance. For holiday travel especially, buy as soon as you can.
31. Get the most bang for your airline miles. Be sure each airline mile you redeem is providing you with at least 1 cent toward the price of a ticket.
32. Never buy the extended warranty. Often times, your new product already comes with a 90-day or 1-year warranty (when most "faulty" things will break, anyway). There's a reason everyone wants to sell you an extended warranty: they're hugely profitable (for the business, not for you).
33. Make your own meals. Eating out gets to be expensive if you do it too often.
34. Make your home more energy efficient. Bankrate.com has a list of 17 ways to do so.
35. Get a better cell phone plan. If you've had the same cell phone plan for a couple of years, chances are there's something better out there. Look around or call your current provider and ask for a better deal.
36. Banking fees are for suckers. A lot of banks will charge you checking fees or minimum account balance fees. Find a bank that does not.
37. Keep track of your spending. At least for a month, keep a journal of everything you purchase. At the end of the month, review your spending priorities and make adjustments.
38. Ditch your car. Walk, bicycle, or take public transportation. You'll save on car payments, gasoline, parking, and speeding tickets.
39. Use your frequent flier miles often. They may expire before you know it. There's no sense in stockpiling them. If you have enough for a free flight, use them.
40. Buy through your favorite airline's partners merchant store. AA.com, for instance, has multiple retail partners from whom you can earn frequent flier miles with each purchase.
41. Negotiate fees. For example, ask a bank to waive late fees. Often enough, they will.
42. Get your free money. Money might be owed to you. Get it.
Homeowning
43. houseUpgrade your old bathrooms and kitchens. These are often selling points on a house. A modernized bathroom can provide over a 100% return, while a modernized kitchen can return about 90%.
44. Refinance your mortgage if you can cut at least one point. The costs of refinancing are considerable, so it should only be done if you can trim your interest rate by at least 1%.
45. Never spend more than 2 1/2 times your income on a home. Know what you can afford and what you cannot.
46. Put at least 20% down on a home. Making a down payment of less than 20% will usually result in a private mortgage insurance (PMI) fee being added. This is usually 0.5%, meaning it could cost you about $1,000 a year on a $200,000 principal.
47. Use a mortgage broker. The better your mortgage, the more you'll save. Shop around.
48. Investigate different types of mortgages. There are dozens of mortgage options out there. Find the one that suits you best.
49. Buy a house that needs repairs. Buy for cheap and then add to the value with repairs. You'll save money
50. Deal directly with the seller. Avoiding agents' fees is a good thing. If you do decide to hire an agent, do your homework and get one who will be on the same page as you. You should be the one calling the shots.
51. Find out about homeowner taxes. Know what the property tax is in your area and be prepared to have enough to pay it.
52. Find out about secondary costs. In addition to monthly payments, be prepared to incur some secondary costs, including repairs, notary, escrow fees, and title insurance.
53. Get the house inspected by a professional. Have the house thoroughly inspected before making an offer.
54. Negotiate the selling price. Home prices are almost always negotiable. Never offer the asking price, but rather a few percentage points below it.
Insurance
55. Insure yourself against financial ruin. There should be no higher financial priority in your life than health insurance. Without it, if your health takes a turn for the worst, hospital bills could easily bankrupt you and your family.
56. High deductible is your friend. Keep those monthly premiums as low as you can.
57. Don't use insurance as an investment vehicle. Liquidity and certainty are not on your side.
58. Have enough. Have enough life insurance to replace at least five years of your salary, ten years if you have kids or significant debts.
59. Don't have too much. You need health insurance. If you're single and have no dependents, you don't need life insurance.
60. Think about insurance before you buy a car. Typically, the more expensive your car, the higher your insurance cost will be. Take this into account when buying a car.
61. Choose the right car insurance. Don't assume you should get the cheapest auto insurance or the one with the most protection. Find out exactly how much coverage you need.
62. Consider dropping collision coverage. Especially if you have an older car, there's not much sense in protecting it against getting wrecked if it's already a wreck.
63. Buy homeowner and auto coverage from the same insurer. You'll usually get a better deal than you would if you bought the two separately.
64. Write a will. If you have any dependents, you need a will. Write one and protect your loved ones.
Investing
65. stock graphBe wary of mutual funds. Few mutual fund managers can beat both the market and the expense fee that they charge.
66. Don't try to pick stocks. Picking stocks can be a very dangerous game, unless you know what you're doing.
67. Avoid fees. With long term investing, fees are a primary factor in total return. Avoid brokers who take high commissions and avoid funds with high management costs.
68. Stocks are high risk, high reward. Over the long term, stocks have historically outperformed all other investments. But over the short term, they can be risky if they lose a lot of value in a short period of time. So, do invest with stocks, but only with funds you won't need to withdraw over the short term.
69. Stocks first, bonds later. Invest in stocks when you're young, and then move into bonds are you grow older. Stocks are a good long-term investment strategy. If you're still young when the market turns south, you'll have plenty of years left ahead of you to make it up. As you get older, invest in bonds. They're less risky.
70. Past performance is not a guarantee of future success. Just because a stock has been up for the last six months does not mean it will continue to go up tomorrow.
71. Diversify your portfolio. Never invest more than 10% of your portfolio in any one company. Even if it's a "sure thing".
72. Build a nest egg that is 25 times the annual investment income you need. Don't think you can rely solely on social security.
73. If you don't understand how an investment works, don't buy it. Research an investment vehicle thoroughly before you get into it.
74. Don't borrow from your 401(k). Think of it as robbing yourself. You'll get hit with high fees and taxes, too.
75. Invest for the long term. There is no such thing as a guaranteed get rich quick scheme. And in investing, there is no high reward without a high risk. Use caution and diversify your portfolio for the long run.
76. Seek professional help. Don't feel the need to turn yourself into a day trader. Hire a personal financial advisor if you can afford to.
77. "Fee-only" is your friend. Go with a fee-only financial advisor, not a fee-based or a commission-based. Only fee-only advisors are legally obligated to act in your best interests.
78. Index funds are your friend. Index funds are passively managed and are generally cheaper and more tax-efficient than actively managed funds.
Retirement
79. Optimize your 401(k). If your employer offers employer match, you must set your 401(k) contribution to at least that amount.
80. Play the IRA game smart. Max out your 401(k) first, your Roth IRA second, then your traditional IRA.
81. Increase your 401(k) contribution. Especially when you get a raise. Some employers even give you the option of having your contribution automatically taken out of your paycheck.
82. Don't buy stock in the company you work for. This is the opposite of diversification. What happens if the stock tanks, and you lose your job and pension because of downsizing?
83. Don't be afraid of stocks. More than two-thirds of 401(k) money is in low-yielding bonds. Especially if you're still young, invest in stocks. Over the long-run, they perform the best.
84. Sign up for Medicare. Don't forget to sign up for Medicare before you turn 65, even if you haven't retired yet.
85. Plan. Use the Social Security Retirement Planner to ensure that your retirement goes smoothly.
Saving
86. Save now. It doesn't matter if you're six or 60. You should be saving a little bit every month, aside from retirement savings. The sooner you start, the better.
87. Pay off high interest debts before you start saving. Earning 5% in your savings account isn't going to do much good if you're accruing 17% interest on your credit card debt.
88. Save at least 10% of your annual salary for retirement. This should help to provide a nice retirement fund when you need it.
89. Keep at least three months' worth of living expenses in a savings account or high-yield money market account.
90. Open an online savings account. Online savings accounts, such as Emigrant Direct or HSBC Direct, offer yields of greater than 5%.
91. Set up an automatic savings plan. You should be able to set up your checking account so that a certain amount is automatically transferred to a savings account each month. It's a good way to force yourself to save.
Taxes
92. 1040 income tax formKnow when to file your taxes. If you expect a refund, file your taxes as early as you can. If you owe money, file as close to the due date (usually April 15) as possible.
93. Consider itemizing your deductions. If all of those tax breaks receipts you keep add up to more than your standard deduction, it is definitely worth filling out all of the extra paperwork to itemize.
94. Be aware of other tax deductions. Contributions to a traditional IRA, student loan interest payments, alimony payments.
95. Save money on tax credits. Some tax credits to look out for include the Hope Scholarship Credit, Lifetime Learning Credit, Child Tax Credit, Earned Income Credit, and Child Care Credit.
96. Bunch your deductions into one year. If you're taking the standard deduction this year, consider making charitable contributions and office-related purchases after January 1, so you can possibly itemize your deductions next year.
97. Recheck your withholding every year. If you get married, have kids, or become the head of a household, you'll want to add these allowances on your W-4 so you can have fewer taxes withheld.
98. Keep your receipts (especially on big ticket items). You'll want them if you plan to itemize, or in case you get audited.
99. Concentrate on tax-free investments. Tax-free investments, like bonds, allow you to earn interest without being taxed.
100. Buy a hybrid vehicle. Hybrids tend to be more expensive than their traditional counterparts, but you can save money on gasoline and possibly receive a tax credit of up to $3,400.
Lastly
101. Take a deep breath. Even if you're only able to follow the first seven tips, which are the real basics, you will have already succeeded in making a huge positive difference in your financial life.
102. Money isn't everything. Health, family, and happiness are important, too. And remember, money can't buy you love
http://teletrade.blogspot.com/2007/02/102-personal-finance-tips-your.html
Newlyweds and Housing: How can Newlyweds afford a home with today's soaring home prices
Washington Metropolitan Newlyweds are frustrated by the high home prices and the financial inability to put money down towards a down payment and closing costs on a home. Newlyweds and Housing: How can Newlyweds afford a home with today’s soaring home prices?
Newlyweds are frustrated and concerned over today’s home prices and their lack of finances to buy a home.
Washington Metropolitan Newlyweds are frustrated by the high home prices and the financial inability to put money down towards a down payment and closing costs on a home. Many newlyweds fear that they will never be able to afford a home in the area and are concerned about their future to build a better quality of life.
Mark Morrison of Green Leaf Mortgage hears these grumblings at his mortgage shop from newlyweds and young couples. One couple that lives in Montgomery County indicated to me that they may have to move to Hagerstown, MD where home prices are much lower. Another couple told me they were fearful of not being able to buy a home in their younger years where it would allow them to build a net worth much quicker than buying one when they were older.
After listening to several of these concerns, a light bulb went off in Mark’s head. “Why not create a Mortgage Bridal Registry™ for couples getting married. I remember my parents helped me out when I got married by giving me money for down payment and closing. Well, not everyone can borrow money from their parents. So I decided to have a Mortgage Bridal Registry™ where the wedding guests could contribute towards the down payment and closing costs of the couples first home.”
This would not necessarily take the place of their normal bridal registry unless they want to. It could be in addition. Of course by having the Mortgage Bridal Registry™ only, you can expect to have more of a contribution. The money would be used towards the purchase of a home for the Newlyweds to live in and start their life together.
Wedding party guests would make checks payable to the sponsoring title company and that money would be held in an escrow account for them to use. Before a Mortgage Bridal Registry is set up, Mark Morrison would speak to the couple and make sure they are mortgage ready or will be mortgage ready in the near future.
Mark Morrison of Green Leaf Mortgage is located in Montgomery Village, MD and has helped many couples buy their first home and offers a broad range of mortgage products
http://www.prbuzz.com/newlyweds-and-housing-how-can-newlyweds-afford-a-home-with-todays-soaring-home-price.html
Newlyweds are frustrated and concerned over today’s home prices and their lack of finances to buy a home.
Washington Metropolitan Newlyweds are frustrated by the high home prices and the financial inability to put money down towards a down payment and closing costs on a home. Many newlyweds fear that they will never be able to afford a home in the area and are concerned about their future to build a better quality of life.
Mark Morrison of Green Leaf Mortgage hears these grumblings at his mortgage shop from newlyweds and young couples. One couple that lives in Montgomery County indicated to me that they may have to move to Hagerstown, MD where home prices are much lower. Another couple told me they were fearful of not being able to buy a home in their younger years where it would allow them to build a net worth much quicker than buying one when they were older.
After listening to several of these concerns, a light bulb went off in Mark’s head. “Why not create a Mortgage Bridal Registry™ for couples getting married. I remember my parents helped me out when I got married by giving me money for down payment and closing. Well, not everyone can borrow money from their parents. So I decided to have a Mortgage Bridal Registry™ where the wedding guests could contribute towards the down payment and closing costs of the couples first home.”
This would not necessarily take the place of their normal bridal registry unless they want to. It could be in addition. Of course by having the Mortgage Bridal Registry™ only, you can expect to have more of a contribution. The money would be used towards the purchase of a home for the Newlyweds to live in and start their life together.
Wedding party guests would make checks payable to the sponsoring title company and that money would be held in an escrow account for them to use. Before a Mortgage Bridal Registry is set up, Mark Morrison would speak to the couple and make sure they are mortgage ready or will be mortgage ready in the near future.
Mark Morrison of Green Leaf Mortgage is located in Montgomery Village, MD and has helped many couples buy their first home and offers a broad range of mortgage products
http://www.prbuzz.com/newlyweds-and-housing-how-can-newlyweds-afford-a-home-with-todays-soaring-home-price.html
The True Economics Of Refinancing A Mortgage
On a household's balance sheet, a mortgage is a liability and, as such, is subtracted from a household's assets, which include the value of the home, to determine a household's net worth. Too many consumers fall into the trap of refinancing a mortgage in order to lower their monthly payments without considering how that refinancing affects their total net worth. (To learn how to read a balance sheet, see Reading The Balance Sheet, Breaking Down The Balance Sheet and Testing Balance Sheet Strength.)
The Payback Period
The most popular method for determining the economics of mortgage refinancing involves calculating a simple payback period. This equation is made by calculating the sum of the monthly payment savings that can be realized by refinancing into a new mortgage at a lower interest rate and determining the month in which that cumulative sum of monthly payment savings is greater than the costs of refinancing. (Find out more about payback periods in Understanding The Time Value Of Money.)
For example, if that calculation says that it will take 20 months for the cumulative monthly savings to be greater than the costs of refinancing and the homeowner will hold the new mortgage for a minimum of 20 months, then this method would say that refinancing is an economically wise decision.
Refinancing Affects Your Household's Net Worth
However, this simple payback period method ignores the household's balance sheet and the total net worth equation.
Two primary things are unaccounted for:
1. The principal balance of the existing mortgage verses the new mortgage is ignored. Refinancing is not free. The costs or refinancing must be paid out of pocket or, in most cases, are rolled into the new mortgage's principal balance. When a mortgage balance increases through a refinance transaction, the liability side of the household balance sheet increases, and all other things being constant, the household net worth immediately decreases by an amount equal to the cost of refinancing.
2. Refinancing a 30-year mortgage with a 25-year remaining term into a new 30-year mortgage means that you might end up paying more total interest over the life of the new mortgage, even though the interest rate on the new mortgage is lower than you would pay over the remaining 25 years of the existing mortgage.
Look at the True Costs of Refinancing
A more financially sound way to determine the economics of refinancing that incorporates the true costs of refinancing into the household net worth equation is to compare the remaining amortization schedule of the existing mortgage against the amortization schedule of the new mortgage. (Find out more about amortization in Appreciating Depreciation.)
The amortization schedule of the new mortgage will include the costs of refinancing in the principal balance. (If the costs of refinancing will be paid out of pocket, then the same dollar amount should be subtracted from the existing mortgage's principal balance based on the assumption that if the refinance transaction does not take place, those monies could be used to pay down the principal balance of the existing loan.)
Then, subtract the monthly payment savings between the two mortgages from the new mortgage's principal balance. (This is done because, in theory, you could use the monthly savings generated from refinancing to reduce the principal balance of the new mortgage.)
The month in which the modified principal balance of the new mortgage is less than the principal balance of the existing mortgage is the month in which a true economical refinancing payback period based on household net worth has been reached.
Note: Amortization calculators can be found on most mortgage-related websites. You can copy and paste the results into a spreadsheet program and then perform the additional calculation of subtracting the monthly payment differences from the new mortgage's principal balance. (Check out Investopedia's Monthly Mortgage Payment Calculator.)
For example, using the above described calculations, a refinance analysis of an existing fixed-rate mortgage with an interest rate of 7%, 25 years remaining term and a remaining principal balance of $200,000, into a new 30-year mortgage with an interest rate of 6.25% and refinancing costs of $3,000, which will be rolled into the new mortgage's principal balance gives the following results:
If a simple payback period analysis is used to determine the economics of refinancing in the above example, the cumulative monthly payment savings are greater than the $3,000 costs to refinance beginning in month 19, or in other words, the simple payback period method tells us that if the homeowner expects to have the new mortgage for 19 or more months, the refinancing makes sense.
However, if the net worth approach is used, the refinancing decision would not become economical until month 29, when the principal balance of the new mortgage minus the cumulative monthly payment savings is less than the principal balance of the existing mortgage. The net worth approach tells us that it takes 10 months longer than the simple payback period approach before the refinancing is economical.
The Bottom Line
By calculating the true economics of refinancing your mortgage, you can accurately determine what real payback period you have to contend with if you choose to refinance your mortgage. Crunching the numbers takes a bit of work, but it's entirely possible for everyone to do. Especially if you are planning on moving in the near future, taking a few minutes to calculate the true economics of refinancing your mortgage may very well help you avoid damaging your net worth by thousands of dollars.
To learn more about refinancing and paying your mortgage, see Mortgages: The ABCs Of Refinancing, Seven Common Financial Mistakes and Paying Off Your Mortgage.
By Barry Nielsen, CFA
G. Barry Nielsen is a homeowner with a large household of six children. Nielsen holds the Chartered Financial Analyst (CFA) designation and has worked for several large mortgage lenders and financial institutions, including Freddie Mac, American General, Washington Mutual and Countrywide Home Loans. Nielsen owns and operates MortgageGraphics, Inc., a web-based software tool designed to help consumers make educated, risk-based mortgage decisions.
http://www.investopedia.com/articles/pf/07/refinancing_mortgage.asp
The Payback Period
The most popular method for determining the economics of mortgage refinancing involves calculating a simple payback period. This equation is made by calculating the sum of the monthly payment savings that can be realized by refinancing into a new mortgage at a lower interest rate and determining the month in which that cumulative sum of monthly payment savings is greater than the costs of refinancing. (Find out more about payback periods in Understanding The Time Value Of Money.)
For example, if that calculation says that it will take 20 months for the cumulative monthly savings to be greater than the costs of refinancing and the homeowner will hold the new mortgage for a minimum of 20 months, then this method would say that refinancing is an economically wise decision.
Refinancing Affects Your Household's Net Worth
However, this simple payback period method ignores the household's balance sheet and the total net worth equation.
Two primary things are unaccounted for:
1. The principal balance of the existing mortgage verses the new mortgage is ignored. Refinancing is not free. The costs or refinancing must be paid out of pocket or, in most cases, are rolled into the new mortgage's principal balance. When a mortgage balance increases through a refinance transaction, the liability side of the household balance sheet increases, and all other things being constant, the household net worth immediately decreases by an amount equal to the cost of refinancing.
2. Refinancing a 30-year mortgage with a 25-year remaining term into a new 30-year mortgage means that you might end up paying more total interest over the life of the new mortgage, even though the interest rate on the new mortgage is lower than you would pay over the remaining 25 years of the existing mortgage.
Look at the True Costs of Refinancing
A more financially sound way to determine the economics of refinancing that incorporates the true costs of refinancing into the household net worth equation is to compare the remaining amortization schedule of the existing mortgage against the amortization schedule of the new mortgage. (Find out more about amortization in Appreciating Depreciation.)
The amortization schedule of the new mortgage will include the costs of refinancing in the principal balance. (If the costs of refinancing will be paid out of pocket, then the same dollar amount should be subtracted from the existing mortgage's principal balance based on the assumption that if the refinance transaction does not take place, those monies could be used to pay down the principal balance of the existing loan.)
Then, subtract the monthly payment savings between the two mortgages from the new mortgage's principal balance. (This is done because, in theory, you could use the monthly savings generated from refinancing to reduce the principal balance of the new mortgage.)
The month in which the modified principal balance of the new mortgage is less than the principal balance of the existing mortgage is the month in which a true economical refinancing payback period based on household net worth has been reached.
Note: Amortization calculators can be found on most mortgage-related websites. You can copy and paste the results into a spreadsheet program and then perform the additional calculation of subtracting the monthly payment differences from the new mortgage's principal balance. (Check out Investopedia's Monthly Mortgage Payment Calculator.)
For example, using the above described calculations, a refinance analysis of an existing fixed-rate mortgage with an interest rate of 7%, 25 years remaining term and a remaining principal balance of $200,000, into a new 30-year mortgage with an interest rate of 6.25% and refinancing costs of $3,000, which will be rolled into the new mortgage's principal balance gives the following results:
If a simple payback period analysis is used to determine the economics of refinancing in the above example, the cumulative monthly payment savings are greater than the $3,000 costs to refinance beginning in month 19, or in other words, the simple payback period method tells us that if the homeowner expects to have the new mortgage for 19 or more months, the refinancing makes sense.
However, if the net worth approach is used, the refinancing decision would not become economical until month 29, when the principal balance of the new mortgage minus the cumulative monthly payment savings is less than the principal balance of the existing mortgage. The net worth approach tells us that it takes 10 months longer than the simple payback period approach before the refinancing is economical.
The Bottom Line
By calculating the true economics of refinancing your mortgage, you can accurately determine what real payback period you have to contend with if you choose to refinance your mortgage. Crunching the numbers takes a bit of work, but it's entirely possible for everyone to do. Especially if you are planning on moving in the near future, taking a few minutes to calculate the true economics of refinancing your mortgage may very well help you avoid damaging your net worth by thousands of dollars.
To learn more about refinancing and paying your mortgage, see Mortgages: The ABCs Of Refinancing, Seven Common Financial Mistakes and Paying Off Your Mortgage.
By Barry Nielsen, CFA
G. Barry Nielsen is a homeowner with a large household of six children. Nielsen holds the Chartered Financial Analyst (CFA) designation and has worked for several large mortgage lenders and financial institutions, including Freddie Mac, American General, Washington Mutual and Countrywide Home Loans. Nielsen owns and operates MortgageGraphics, Inc., a web-based software tool designed to help consumers make educated, risk-based mortgage decisions.
http://www.investopedia.com/articles/pf/07/refinancing_mortgage.asp
Sunday, March 18, 2007
Debt Consolidation Loan and Consolidation Loans
Debt consolidation loan services act as a third party intermediary to assist you in negotiating lower interest fees and monthly payments with your unsecured debt holders. If you are falling behind on your monthly payments, as many consumers are, you can quickly build up late fees and over limit fees. Debt consolidation loans allow you to have only one monthly payment, which is less than the total of your previous monthly payments combined. Most debt consolidation loan services cost anywhere from approximately 30 to 75 dollars per month and some debt consolidation loans require an initial account set-up fee. Of course, this will vary among the different debt consolidation loan companies.
Debt consolidation loans will provide the service of having the intermediary to contact your creditors and set a new payment schedule with them. This will eliminate "over the limit" and late fees and save you hundreds of dollars in monthly payment amounts. If you have fallen behind on your monthly payments, some of your creditors may be contacting you. When you obtain a debt consolidation loan and the loan company negotiates a new payment schedule and brings your account up to date, the creditor will no longer call you. Debt consolidation loans help provide peace of mind in knowing that you can become current on your unsecured debts and have some extra money each month to go toward other debts, such as a mortgage payment, and living expenses.
If you are faced with needing to obtain a debt consolidation loan, choose a reputable company that guarantees results. You want to be sure and do your best to keep your credit score up. Debt consolidation loans can keep you from damaging your credit scores by allowing you a lower monthly payment. A debt consolidation loan can turn what could be a very bad financial situation into a good one, providing that you do not continue to incur debt and learn how to best manage your money with an ultimate goal of becoming debt free.
Home equity loans are a form of debt consolidation loans if you use the equity in your home to pay off other debts. This leaves you with one monthly payment to your bank or mortgage company at one low interest rate. Some of the debts that qualify for a debt consolidation loan are student loans, credit cards, medical bills, department store credit accounts, and car loans. Debt consolidation loans can keep you from having to file bankruptcy, but it is important to take steps to learn how to manage your debt and be a good steward of what God has blessed you with. "Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee."
About the author
Christian N
http://www.funinusa.com/investing/finance/article_263.shtml
Debt consolidation loans will provide the service of having the intermediary to contact your creditors and set a new payment schedule with them. This will eliminate "over the limit" and late fees and save you hundreds of dollars in monthly payment amounts. If you have fallen behind on your monthly payments, some of your creditors may be contacting you. When you obtain a debt consolidation loan and the loan company negotiates a new payment schedule and brings your account up to date, the creditor will no longer call you. Debt consolidation loans help provide peace of mind in knowing that you can become current on your unsecured debts and have some extra money each month to go toward other debts, such as a mortgage payment, and living expenses.
If you are faced with needing to obtain a debt consolidation loan, choose a reputable company that guarantees results. You want to be sure and do your best to keep your credit score up. Debt consolidation loans can keep you from damaging your credit scores by allowing you a lower monthly payment. A debt consolidation loan can turn what could be a very bad financial situation into a good one, providing that you do not continue to incur debt and learn how to best manage your money with an ultimate goal of becoming debt free.
Home equity loans are a form of debt consolidation loans if you use the equity in your home to pay off other debts. This leaves you with one monthly payment to your bank or mortgage company at one low interest rate. Some of the debts that qualify for a debt consolidation loan are student loans, credit cards, medical bills, department store credit accounts, and car loans. Debt consolidation loans can keep you from having to file bankruptcy, but it is important to take steps to learn how to manage your debt and be a good steward of what God has blessed you with. "Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee."
About the author
Christian N
http://www.funinusa.com/investing/finance/article_263.shtml
Saturday, March 17, 2007
How to Control Your Expenses To Eliminate Debt
Controlling your living budgets will definitely help you to get rid of you debt faster. It's sound so simple but for many people, it's a hard mission which need a lot of sacrifice to live on a budget. Read this article to find out what expenses you can control and it may not as hard as you think.
This sounds simple, but to control your expenses you first must understand what they are. The only way to be sure you know what you spend is to record everything. This is hard to do. Then you will need to do something even more difficult, Sacrifice and Live on a Budget.Ouch, all people including you and me hate those two words. But it will take sacrifice to get out of debt. The good news is that it will be worth it.
Every time you make a sacrifice and stay on budget you will be investing in your future. Always keep that in mind. Every step you make towards getting out of debt means you are closer to having your money work for you.
The major expenses you can control on a day to day budget are:
General Expenses It could be music equipment, car washes, computer games, anything. Any things you can figure out which are not your needs. Maybe there isn't anything you can think of, but there probably is. Maybe at least once a month, when you go to buy something on impulse, you force yourself not to do it.
Food Expenses Stop going out to eat. This will be a huge sacrifice for most, but you have to stop going out to eat;it's too expensive. You need to bring your lunch to work and, if you have a Starbuck's addiction, stop buying $2 cups of coffee. Many people can save $50 a month just by brewing their own coffee, another $100 by bringing their lunch to work, and another $200 by not going out to eat for dinner.
Clothing Expenses Always decide what you are going to purchase before you go into the store and stick to it. Do all your "shopping" at home. If you truly need a new jacket because the old one has a hole in it and it's really cold outside then you can go get a jacket. But don't start looking around for the skirts and hats while you are there. Get the jacket and run!
Entertainment Expenses You like to have fun and you need to have fun. However, if you are in debt then, you need to sacrifice at least one major entertainment expense a month. Whatever it is you like to do (movies, concerts, plays, out to eat, sports, etc.) you need to reduce the frequency by at least once a month.
Gasoline Expenses As everyone is aware,gas prices have grown astronomically in recent times. For many years gas prices had been relatively level and it seems that they are making up ground ina short period of time. At $3 and more per gallon, gasoline has become a major expense for most households and needs to be specially addressed when looking at ways to control expenses. Getting a car with a good gas mileage and reduce your total driving miles can save you some significant amount of money. If you have colleagues leave close to you, then get them to carpool with you and share the gasoline expenses.
If you follow some basic rules on each of these tips on reducing debt and budgeting expenses and are willing to sacrifice you can save a good significant amount of money each month. That will put a dent in your credit card debt in no time.
About Author
Cornie Herring is the Author from http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics and debt consolidation. Visit "StudyKiosk-Credit Basics" to get more information on "Debt Relief & Debt Consolidation"
: http://www.1888articles.com/author-cornie-herring-2384.html
This sounds simple, but to control your expenses you first must understand what they are. The only way to be sure you know what you spend is to record everything. This is hard to do. Then you will need to do something even more difficult, Sacrifice and Live on a Budget.Ouch, all people including you and me hate those two words. But it will take sacrifice to get out of debt. The good news is that it will be worth it.
Every time you make a sacrifice and stay on budget you will be investing in your future. Always keep that in mind. Every step you make towards getting out of debt means you are closer to having your money work for you.
The major expenses you can control on a day to day budget are:
General Expenses It could be music equipment, car washes, computer games, anything. Any things you can figure out which are not your needs. Maybe there isn't anything you can think of, but there probably is. Maybe at least once a month, when you go to buy something on impulse, you force yourself not to do it.
Food Expenses Stop going out to eat. This will be a huge sacrifice for most, but you have to stop going out to eat;it's too expensive. You need to bring your lunch to work and, if you have a Starbuck's addiction, stop buying $2 cups of coffee. Many people can save $50 a month just by brewing their own coffee, another $100 by bringing their lunch to work, and another $200 by not going out to eat for dinner.
Clothing Expenses Always decide what you are going to purchase before you go into the store and stick to it. Do all your "shopping" at home. If you truly need a new jacket because the old one has a hole in it and it's really cold outside then you can go get a jacket. But don't start looking around for the skirts and hats while you are there. Get the jacket and run!
Entertainment Expenses You like to have fun and you need to have fun. However, if you are in debt then, you need to sacrifice at least one major entertainment expense a month. Whatever it is you like to do (movies, concerts, plays, out to eat, sports, etc.) you need to reduce the frequency by at least once a month.
Gasoline Expenses As everyone is aware,gas prices have grown astronomically in recent times. For many years gas prices had been relatively level and it seems that they are making up ground ina short period of time. At $3 and more per gallon, gasoline has become a major expense for most households and needs to be specially addressed when looking at ways to control expenses. Getting a car with a good gas mileage and reduce your total driving miles can save you some significant amount of money. If you have colleagues leave close to you, then get them to carpool with you and share the gasoline expenses.
If you follow some basic rules on each of these tips on reducing debt and budgeting expenses and are willing to sacrifice you can save a good significant amount of money each month. That will put a dent in your credit card debt in no time.
About Author
Cornie Herring is the Author from http://www.studykiosk.com/creditbasics . "StudyKiosk-Credit Basics" is an informational website on credit basics and debt consolidation. Visit "StudyKiosk-Credit Basics" to get more information on "Debt Relief & Debt Consolidation"
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