Debt And Your Personal Finance Plan
October 7, 2009 by admin · Leave a Comment
The consequences of the economy are forcing many individuals and to serious difficulties in meeting their financial obligations on a day to day basis, and month by month. Economic stress and frustration can lead to a hopeless and helpless situation. However, if you are like most people you continue to try to find a way to meet your obligations. There are more options available than perhaps you realize in overcoming a mountain of debt that you have established. The options for managing your debt range from managing your debt yourself to debt consolidation loans or perhaps debt consolidation services. Before you commit to any service or loan make sure that you have exhausted all resources for managing the debt yourself. Here are a few things you can do.
While many of these suggestions may seem very basic and elementary sometimes refreshing your self with a few financial fundamentals can get you on the road to financial recovery.
First of all any plan to relieve or restructure your debt must begin with an honest evaluation of where you are presently. Your goal is to relieve your debt and that is somewhere down the road. You can see the ending point which you must have a beginning. Where are you now with your debt? Where is it you want to go with your debt? How will you reach your goals? Do You need help with taxes ? That is the basic formula for overcoming a debt spiral that you may be experiencing.
Compare your monthly income with your monthly financial obligations, your bills. It’s very simple. Do you have more month at the end of the money? If you do you may need outside help to relieve your debt. Let’s look further. Once you have established your expenses and your income, look for ways to reduce your expenses. What can you cut out of your monthly expenses? Some areas that you may look first will include your cable TV expense or perhaps you’re dining expenses. Everyone enjoys the benefits of cable TV and going out on the town for a nice dinner, but, you may be in a position where you need to exclude these expenses to gain control of your monthly budget.
You must be able to examine your spending habits honestly. If you have a partner, a wife or a husband, this evaluation must include absolute transparency. For example, in a recent discussion of my own family finances I discovered that my wife spends about four dollars each day on coffee. Doesn’t sound like a lot of money right? She works five days a week. That equates to around $80 per month in coffee! Needless to say we arrived at the decision simultaneously to change that particular spending habit. $80 per month will buy a few groceries, which are a necessity.
How much are your utility bills? Understand that you will save money at the end of each month by the decisions that you make at the beginning of the month. No matter what you set your thermostat at in your home either winter or summer, try changing the temperature 3°. The savings you will experience at the end of the month will be worth it.
So let’s say you’ve analyzed your monthly expenses and you have made all the necessary cuts that are possible. You are still upside down in relation to your monthly income, what do you do? You may consider a debt consolidation loan or else you might prefer to use the services of debt consolidation services or credit counselors.
Whichever of these options you choose will still require a measure of discipline for your family to maintain. Choosing a debt consolidation loan will still require a monthly payment. However, the major benefit to choosing this option is relieving stress and anxiety from the pressure of not being able to meet your financial obligations. Your payment to your debt consolidation loan will be substantially lower than the combined payments were. Before choosing a debt consolidation loan make sure that you understand all the benefits and all the possible consequences that a loan of this type brings.
Other options include debt consolidation services or credit counseling services. Both of these choices may negatively affect your credit rating and you may want to get a free credit report to start. A service or company will negotiate with your creditors on your behalf in order to settle your debt for an amount less than what you owe. Qualifying for this type of service sounds easier than it is.
If you have not sure financial condition evolved into a situation where you are living beyond your means, do not despair. There is hope for you to change the course of your financial future.
Unemployment Survival Guide
August 19, 2009 by admin · Leave a Comment
Depending on whose statistics you believe about one in 10 Americans is without work. It seems like it’s a lot more than that. Unemployment has become the latest fad. So what if you have been laid off how you survive? The competition for jobs is fierce. It is easy to become discouraged.
First off don’t take it personal. It is likely that your unemployment is due to economic and financial conditions more so than your ability to do your job. It is natural to be bitter, to be angry, and to be depressed. Hopefully this lasts only a few days and you will get it out of your system.
As hard as it’s going to be to realize try to look at this as a positive. If you’re like most people you didn’t like your job anyway. Look at this as an opportunity to reinvent yourself. Most people change careers or professions six or seven times over their lifetimes. This may be your chance to get it right.
After collecting your last check, your new job is finding a new job. You need to put as much effort into this process as you did any job you’ve ever had. The motivation to look for a new job will not be great. Especially if you got comfortable in your old job. Start with updating your resume. This will not only help with the process, but define clearly who you are, and what skills that you possess.
File for unemployment benefits. You may have never been on unemployment in your life. That doesn’t mean you will be now however you need to prepare for the worst. Unemployment compensation usually takes weeks to process in most states.
You’ll want to check on your health insurance coverage. If you are married it is possible to be carried on their plan. If that isn’t an option you might be eligible for COBRA coverage, which allows terminated employees to continue insurance for a time under their former employer’s health plan. You have 60 days to decide. Covers general last 18 months and may last longer under certain circumstances. COBRA coverage is by no means cheap. Keep that in mind.
Determine what skills you have that may transfer over into another industry. For instance, an administrator in a business office, can easily transfer into another industry. Call on connections you’ve made in the past. You may find that all the networking you did in your previous job, will help you find a new one. Connecting with other unemployed friends can help with support. You must maintain a positive outlook and attitude to be successful in your job search. Don’t let fear be your daily enemy. You have talent, you have skills, and you are needed.
Getting the Highest Rates on CDs
August 8, 2009 by admin · Leave a Comment
It appears that low interest rates are going to be sticking around for a while. This makes it an opportune time to get as much of a return on your bank deposits and the best cd rates as you can. Lately, bank deposits are paying out more than money-market funds. However, unlike all these mutual funds, your deposits are federally insured. There are a few steps that you can take to increase the money you are making on your deposits.
Keep an eye on websites that regularly monitor high yield accounts, just so you know what to expect at any given time. There are plenty of sites out there; something like bankrate.com should be sufficient. Also search online for high-yield bank CDs. A number of great offers should come up immediately. Be cautious since some of them might be a scam or may not be based in the US. Verify their legitimacy through the FDIC. Their website is the easiest way to do this. Just put in their name and you will find out if they are a real company. No matter what if you are doing business online, make sure you are cautious. If something sounds too good to be true, it probably is.
You can also look into an account with a credit union. They tend to offer higher yields than banks. No matter what account you choose, try using a laddering strategy to earn higher yields over time. This involves staggering your maturities. For example, if you have $10,000 to invest don’t put it all into a 5-year CD account. But some in a one year, some in a two year and so on until you run out of money. Then you have a CD account that matures every year for a number of years. Over the long term, you will get a higher return this way.
If rates start to rise, stick only with short term CDs. When the rates are relatively stable, this is the time to invest in long term CDs. This way if the stable rate starts to fall, your rate is locked in no matter what. But if the rates are continuing to rise, you capture it on its way up with the short-term accounts.
First Time Home Buyers and The Housing Market
July 25, 2009 by admin · Leave a Comment
Written by Linda Kay
When I look around and listen to the mainstream media calling the housing bubble bottom-out and enticing would be home buyers into the market with low interest rates, government backed incentives, and claims we have hit the bottom, it makes me wonder what reality “viewers” are living in.
If you are a first time home buyer, take some good old fashioned financial advice. The best time you can buy, is when interests rates are high and home prices are low.
Here is a simple example. A $500,000 mortgage at 5% is roughly $2500 per month after your tax savings (not counting property taxes or hazard insurance, but that’s another story). If rates go up to 10%, that very same loan now costs about $4500 per month. If the market can only support a $2500 per month mortgage payment, how will you ever be able to sell your home? You won’t, not at the price you paid for it, even if you could afford it. That $500,000 mortgage would have to drop approximately 40% to roughly $300,000 in order to maintain the cost per month. Wait for interest rates to skyrocket because they surely will.
If I were a first time home buyer, and living though this current economic crisis, I would be holding on to my money and waiting for interest rates to start rising before I took the plunge into a market that will likely NEVER AGAIN see the kind of escalation in values as that of the housing bubble. The current mentality is that “Ohhh, we have to buy now, because we don’t want to miss buying at the bottom”…we are a few years off of the bottom.
Another point supporting this position is considering the economic turmoil states are currently facing regarding revenue and the huge cuts being made in services and education just to balance current budgets, the next looming factor many have yet to consider is the even steeper declines in revenue generated from property taxes.
Foreclosure rates continue to rise, I live in Florida and read that 1 in every 142 houses is in foreclosure. That number is staggering. What is going to happen when those taxes are due for 2010? There will be more fiscal and economic hardships on States already struggling to balance their budgets with already historically high levels unemployment not seen since the 70’s and they are still climbing.
If you are a first time home buyer and have been prudently saving in order to invest and buy a home, look around at what’s happening and stay in “waiting.” It’s going to get worse before it gets better. The good old days are long gone and the frenzy right now to spend in this current disaster is fueled by those who have created and profited from all the delusionary hard selling that drove the housing bubble in the first place.
Investing In Treasury Bills
July 19, 2009 by admin · Leave a Comment
When you are looking to invest your money, you have many different options of where to put your money. During such crucial times everyone is more concerned than ever with his or her funds. Everyone is looking for a way to keep his or her hard earned money safe and secure. You can invest that money in the stock market or into any number of businesses instead, they will undoubtedly give you a higher return. But it is also the highest risk. In the long run you will lose money during a crisis of an increase in inflation.
With the financial market in it current state, letting your money remain stagnant in risky investments is not advisable. This brings up the subject of investing in treasury bills. A bond, or bill, is defined as an interest-bearing certificate issued by a government agency or business, that promises to pay the holder a certain amount at a specific date. Treasury bills are considered very safe as the investment is completely backed by the government in case of a problem. There is little risk for negligence and this is a secure way to keep your money. Treasury bills generally earn more than a regular savings account and are very reliable. Another perk of investing in treasury bills is that if the market takes a plunge the bills are usually minimally affected.
The government sells treasury securities, but they are also available on the open market. The government issues treasury bills in very large denominations, upwards of a million dollars, and distributes these to banks. The banks then break them up and sell them to you. You can also buy them at auctions held a few times a year. They are currently the second most popular short-term individual investments, second only to money market mutual funds. Investing in treasury bills is further secured by the fact that they are transferable. Should you need your funds ( money) before the end of the term you can sell them. While the minimum amount required to buy a treasury bill may seem a bit high at $1,000, the ability to sell this bill whenever you like can offset that.
Treasury bills are short-term securities that always mature in a year or less. Not only that but you buy them for less than their face value. When the treasury bill matures you get the full face value. For example, in your investing in treasury bills for $5,000 and it matures in 26 weeks. You may only pay $4,500 for the bill, when it matures the extra $500 is the interest you have earned. And that interest is entirely free from state and local taxes