Financial Resources

Make a Savings Plan Your First Interest

2009-07-02T09:12:00.000-07:00

It's easy to put off your savings plan for retirement or anything else for that matter. If you have any interest in becoming more financially secure for the future, it will take time and good savings habits. Put off saving too long and you may have to work longer before you can afford to retire, or lower your standard of living in retirement. The sooner you start and the more you save, the better your retirement can be. Here are some tips that can help.

Contribute to your employer’s retirement plan. Participating in your employer’s retirement plan is one of the best and most convenient ways to save for your future, plus it offers benefits you can enjoy today such as lowering your taxable income along with receiving free money in the way of matching contributions from your employer.

Increase the amount you’re saving whenever you can. Small increases can make a big difference over time. Whenever you receive a pay raise or a bonus, make sure to increase your contribution rate. A little extra today can add up to a substantial amount in the future with the power of compound interest.

Diversify your investments. Investing in different types of investments, including stocks, bonds, and money market options, can help lower the overall risk of your portfolio. It’s important to invest a portion of your savings in stocks, which have historically provided returns that outpace inflation. Diversification does not ensure a profit or protect you against loss in declining markets.

Don’t borrow from your retirement savings. Loans allow you to use the savings in your plan account before you retire without tax penalty. While it may be tempting to borrow from your account, loans may reduce the long term growth potential of your portfolio. In addition, you may be tempted to reduce your plan contributions to repay your loan.

You may not be planning to retire until age 67, but that doesn’t mean you should put off saving. If you start early, you can save less than you’ll have to if you wait 10 years. The choice to make a savings plan your first interest is yours.

Manage Your Personal Consumer Debt

2009-06-28T09:16:00.000-07:00

Almost everyone has or will have some form of personal consumer debt to manage. Borrowing money can be a good thing. For example, it could allow you to purchase items like a new home when you don’t have the cash in hand. It can also be bad, like when you borrow more than you can afford to pay back. But if you follow the simple rules outlined below, you can manage your debt wisely, leaving you money to save and invest for the future.

Establish a good credit history. Pay your bills in full and on time. A good payment history could lead to easier access to credit when you really need it and could also make you eligible for more attractive interest rates.

Borrow wisely. Don’t take on more debt that you can afford and beware of shady lenders and aggressive salespeople. If a deal sounds too good to be true, it probably is.

Work with your creditors If you get behind. Call the people you owe money to and try to work out a reasonable repayment plan within your means. Since collecting on unpaid debts can be costly and time consuming, many creditors are willing to work with you. Get help if you need it. Credit counseling services can help get your bills under control.

Pay higher interest debt first. Try to pay down the debt that is costing you the most. Tackle the higher interest debt first and then move on to the one with the next highest interest rate.

Check your credit on a regular basis. Mistakes happen. Identities are stolen. One way to protect yourself from these pitfalls is to check your credit report regularly to make sure it’s accurate. Free credit reports are available on an annual basis from the main credit reporting agencies. It’s easy and could alert you to problems before they get out of hand.

Manage your personal consumer debt. Don't let it manage you!

Create a Finance Budget Plan for your Household

2009-06-16T20:32:00.000-07:00

Creating a finance plan for your household budget is the first step to getting your financial house in order. Gathering information and assessing your goals and needs is very important if you want to develop an effective personal budget plan for yourself. Following are steps to take in order to create a plan for your household budget that allows you to prioritize your spending and begin planning for future wants and needs.

Gather your financial information - The first step is to gather all of your financial documents, helping you get the clearest possible picture of your current financial situation. These can include bank statements, investment account statements, monthly bills, mortgage payments, pay stubs, and so on.

Inventory your income - Next, take stock of your monthly income. In addition to income from your regular paycheck, don’t forget to include other sources of income that you may have, such as investment accounts, trust accounts, rental property income, and part time work.

List your expenses - Now list your monthly expenses as Mandatory or Miscellaneous. Mandatory expenses can include groceries, clothing, mortgage/rent payments, utilities and insurance payments such as life, health, auto and homeowners. Miscellaneous expenses could include travel, entertainment, hobbies, gifts, and dining out.

Don’t forget about other expenses - Expenses should also include money that you need for your next car, your child’s education, and your retirement savings. Factoring in what you should set aside for these items is an important part of the budgeting process that is often overlooked.

Adjust your spending habits - If you’re spending more than you’re taking in each month, you should first take a look at trimming your miscellaneous spending. Try eating out less each month, selling the motorcycle, or scaling back the plans for the family vacation.

After you’ve gone through the time and effort to create and put your finance budget plan for your household into action, don’t forget to review it regularly to make sure you’re still on track.

The Benefits of a 401k Plan

2009-06-07T09:33:00.000-07:00

In spite of efforts to educate people on the benefits of a 401K plan, there are many who do not understand the advantages to contributing to an employer sponsored retirement plan. The 401K plan was designed to encourage working class people save for their retirement years. Below are some key advantages to participating in your company's retirement plan.

Lowering your current taxable income: Contributions to your plan account are before tax. That means they are made before taxes are taken out of your paycheck. The advantage here is when you contribute before tax dollars to your 401K plan, you lower your taxable income. Plus you won't pay taxes on your savings until you take it out. The sooner you take advantage of this tax break, the more money you could save in the long run.

Accelerated saving: If you are age 50 or older, The IRS has a provision allowing you to contribute to your 401k above and beyond the typical dollar limits set for your 401k plan. Catch up contribution provisions offer an opportunity to accelerate saving by allowing you to contribute even more to the plan. These contributions are also pre tax meaning you could see an even bigger tax break than if you are contributing the maximum amount.

Free money: If your employer offers matching contributions, you’ll enjoy watching your account grow even faster. The standard is a 50% match on every dollar up to 6% of your gross income. This essentially equates to a 50% return right away. I guarantee there aren't too many investments that will generate that kind of return.

To make the most of the tax advantages and the other benefits of your 401K retirement plan, start saving early and save the maximum amount allowed by your plan. Or save as much as you can afford to right now and increase your contribution when possible.

Estimate the Costs of Home Ownership

2009-06-04T02:20:00.000-07:00

Millions of first time home buyers often do not estimate the costs of home ownership prior to taking on a mortgage payment. The purchase price of the home along with a low interest rate and a choice area is all a lot of people need to convince themselves they are making the right decision. However, there are some very important factors you should consider prior to making a commitment to buy a home.

Property Taxes - Local governments and schools often depend on property taxes as their primary source of income. These taxes are based on a homes assessed value which occur every three to five years. It's important how much value your locality has placed on a home before making a purchase. The average is around 1% of the value of your home but it does vary depending on your state of residence.

Home Owners Insurance - This insurance provides coverage in the event of a disaster that causes damage to your property. It also covers any accidents that may happen at the home which you or members of your family are liable for. If you financed the purchase of your home with a mortgage, the lender will require you to obtain a homeowners insurance policy. Check with a local insurance agent about rates specific to your area.

Private Mortgage Insurance - If your down payment on a home is less than 20% of the selling price, you are required to obtain private mortgage insurance or PMI for short. The amount will vary depending on the amount of your down payment and loan itself. You may be eligible to have this requirement waived if you agree to a higher interest rate although that is typically not advisable. It's best to be in a position to put at least 20% down in order to avoid PMI all together. The average amount is usually around .05% of the purchase price of your home.

Home Maintenance - This is usually one of those forgotten costs that surface as soon as you have to make some sort of repair to your home. It's surprising that people and especially those who are used to renting don't account for the fact that repairs made to a home are funded by money out of their own back pockets. A general rule of thumb is to estimate 1% of the value of your home for annual repairs. Of course, if you buy an older home the repair costs can be substantial and you will have to adjust as necessary.

There are many advantages to owning your own home but there are also many things to consider prior to becoming a home owner. It's important to know and understand the costs involved to avoid getting in over your head with a mortgage payment you can't handle. If you don't estimate the costs of home ownership before hand, you may find yourself on an uphill climb for a very long time.

Risks of Bond Investing

2009-05-30T08:50:00.000-07:00

There are different types of bonds with different terms. They can help balance the risks of stock investing. Bonds do not have the growth potential of stocks, but usually offer a more consistent level of income and, over time, may be more stable in price than stocks. However, if you're considering adding bonds to your portfolio, there are some risks of bond investing you should be aware of.

Interest rate risk. A bond’s market value is closely tied to interest rates. Generally, when interest rates rise from the date of the bond's purchase, the bond's price will fall and will then be trading at a discount resulting in a lower return for the investor and ultimately a loss when you sell.

Credit risk. Credit quality is measured by the issuer’s ability to make payments on time. When an issuer misses a payment, the bond is considered in default. Credit ratings are given to bond issuers which help investors determine the risks involved.

Inflation Risk. If an investor purchases a fixed bond and then inflation rises, the bondholder will lose money on the investment simply because inflation reduces your purchasing power by eating away at the principle of your investment. It's wise for investors to maintain a certain percentage of stocks in their portfolio to help protect themselves against the effects of inflation.

Adding a bond fund or funds to your portfolio can help you diversify if you are invested only in stocks. Diversification can help reduce your overall risk which is something you’ll appreciate should the market decline. Of course, diversification cannot guarantee a profit or protect against a loss in a down market.

Generate Extra Income

2009-02-04T12:07:00.000-08:00

How often have you thought about having extra money to set aside for a family vacation? Many can even barely afford a night out with the family for dinner much less a trip to Disneyland. If you find yourself barely able to keep up with your basic needs and expenses, maybe it's time to consider ways to earn a little extra cash.

If you're somewhat of a handyman, you can always post a services ad on Craigslist. If you have a reliable vehicle and can stand an early morning schedule, you could consider a paper route. Heck, you can even start a blog like this one to earn a little extra cash. If you can read and write and have a little knowledge in any certain area then you're a perfect candidate. There are many resources online to help you accomplish this and there are many blog sites that generate a fair amount of income. With the proper tools and and a little research it could turn into a lucrative opportunity for some people. I have a fellow associate who published a really informative e-book on website marketing entitled Need Extra Cash?. He pretty much gets to the point with the title and it's chocked full of great information.

There are many options available for extra income to those who are willing to put in a few hours of their time. These are just a few ideas to help start the wheels turning.

Planing for Retirement Over 55

2009-05-24T09:17:00.000-07:00

With the economy and stock market declines all over the news right now, it’s understandable if investors are nervous. And that goes double for those who are over 55 and nearing retirement. But the news is not all bad. As a retirement investor, time is likely still on your side because retirement investing doesn’t end when you retire. In addition, there are actions you can take today to help you get back on track to a more secure retirement.

Determine your expected expenses in retirement. Expenses usually go down once you're retired. Taxes for one and specifically social security and Medicare taxes no longer apply in retirement. There are also no retirement contributions which can be significant if you've been saving aggressively over the years. Everyday expenses such as clothing, food & gas should also go down considerably in retirement. If you're able to manage to pay off your mortgage prior to retirement then you are certainly that much better off in terms of making your retirement savings last.

Consider all sources of income, Social Security is a given for retirees but if you've done a good job of planning for retirement, you should also receive retirement income from your employers 401k plan or pension plan assuming the company your worked for offered this as a benefit to it's employees. If you've managed to contribute to either a traditional or Roth IRA then that would be yet another source of retirement income. All of these sources combined can amount to a substantial income in retirement and may even surpass your income while in the workplace if you've managed to save aggressively over a long period of time.

Figure out available assets. This would be the total amount you have accumulated over the years as an investor. You need to take into account balances in your 401k, pension (if offered) and IRA accounts. You may also consider the equity in your home or any other investment properties you may own. Hopefully you will have accumulated enough retirement assets to provide a substantial supplement to Social Security as that in itself simply does not provide enough to meet your basic needs in most cases.

If you're over 55 and are worried about supporting yourself in your retirement years, a few things you can consider doing to put yourself in a better position financially are:

Hold annual withdrawals constant for the first five years.
Cutting back your initial withdrawal amount from what had been planned.
Consider working a few extra years.

Understanding Annuity Options

2009-05-22T06:00:00.000-07:00

Annuities can provide additional tax-deferred growth opportunities to help supplement your retirement savings. Annuities offer no income restrictions on contribution eligibility and there is no limit on how much you can contribute to them. You can contribute to an annuity with a lump-sum investment or you can make regular payments to your annuity over a period of time. However, it is important to understand your options for annuities before you decide if they are right for you.

Fixed annuities - This type of annuity earns a guaranteed rate of interest for a specific time period which is established by the terms of the contract with the insurance company. Once the guaranteed period is over, a new interest rate is set. However, since the idea behind a fixed annuity is to establish a long term guarantee of both earnings and principle, the recipient will most likely want to set a time period that is based on their life expectancy in retirement.

Variable annuities — With this type, the account value of your annuity is subject to market risk and may fluctuate in value which means your contributions and earnings are not guaranteed resulting in a possible loss of principal. Of course, if an individual is willing to take risks with their money for the possibility of growth potential then a variable annuity is certainly a good option to consider.

Immediate annuities — This type of annuity allows for the immediate option of payments begin as soon as they are purchased. Although immediate annuities are geared towards a single lump-sum payment from an inheritance, settlement or sale of a home you can also arrange to receive your money in regularly scheduled payments. You may also fund your annuity with distributions from a 401K or an IRA.

Deferred annuities — With this type of annuity, payments start to pay out after a period of time in which your money is invested on a tax-deferred basis. In other words, a deferred annuity is targeted towards those who want to save for retirement using a tax-sheltered vehicle while looking for better than average savings rates. Of course, you will be taxed on withdrawals much like a 401K or a Traditional IRA.

It's best to consider an annuity only after you have taken full advantage of other tax-deferred savings accounts, such as your employee-sponsored retirement plan (401K) and individual retirement accounts (IRAs),
Withdrawals from annuities prior to age 59½ may be subject to a 10% federal tax penalty and any earnings are taxed as regular income.

Annuities are not right for everyone and depend on your individual situation. Shop around before buying an annuity. Meet with several insurance agents who are experienced with annuities and are properly licensed in your state. Look for insurers that are authorized to do business in your state and that are in good financial condition. You should also consider talking to a tax advisor before you make a decision to purchase an annuity.

Buying the Best Penny Stocks

2009-05-10T20:35:00.000-07:00

How can you make money buying penny stocks? More importantly, how do you which are the best penny stock to buy? These are questions that many investors have who have little to no experience in investing in penny stocks. There are basic criteria used in attempting to understand penny stocks and to know the best ones to buy.

Know the historical performance of the stock. This means that you have to research the stock carefully before making any type of investment. There are many online resources that provide information on which penny stocks to buy. A personal favorite is Motley Fool.com which provides accurate, easy to read information that will assist you in your decision on which stocks to purchase.

Determine your risk tolerance. How much are you willing or able to invest will determine which penny stocks are the best option for you. One common characteristic of penny stocks is they are high risk/high reward investments. If you're an aggressive minded investor who is willing to take a risk then penny stocks are definitely a good option for you. However, conservative investors should really think twice about their investment choices before investing.

Find the right investment broker. I would suggest using an online discount broker for investing in penny stocks. The reason is penny stock investments can only amount to a couple of hundred dollars and you don't want the broker commissions to exceed your investment returns. One suggestion would be E-TRADE.com. They are a reputable, inexpensive online broker that has an excellent reputation.

Penny stocks can be very unpredictable. It's easy to lose money on penny stocks. However, they can also produce hundreds of percentage points in a short period of time resulting in significant gains. Statistics have proven that with timely planning and research, the right penny stocks can provide a substantial return on your investment.

Eliminating Your Credit Card Debt

2009-02-11T13:23:00.000-08:00

The average total credit card debt per borrower is just under $6,000.00. That may not seem like a lot but when a large portion of borrowers pay the monthly minimum payment with interest rates that range from 14% to 22% (on average), it's no wonder people are swimming in debt for years on end. Following are some tips to help you get out of credit card debt and allow yourself some room to breath.

The first thing to do is take inventory. List all of your credit cards first by balance (smallest to largest) and then by interest rate. There are 2 popular methods to paying off your debt. There is what's called the Snow Ball Method. Simply stated, you pay off smallest to largest eliminating one debt at a time. The logic behind this is that you stay motivated throughout the process as you gain momentum with each card you pay off. The next method is paying off cards starting with the highest interest balance and working your way down. The advantage here is that you will save the money you pay in interest over the long haul. However, it all boils down to your personality. If you're reward driven and need the phsychological boost of eliminating several cards within a short period of time then I would suggest the Snow Ball Method. If your patient and can remain focused on your overall savings then the 2nd method would probably suit you better.

Now that you've determined which method to use to eliminate your debt, You're going to put an action plan in place. First determine how much extra you can apply towards your debt every month. Whether it's $20 or $200 you must make every effort to apply an extra amount towards your debt even if it's just a little bit. There are online calculators to help you determine the impact that extra amount will make.

At this point you should have a pretty good sense of what steps you need to take to become debt free. You have listed your debts, decided on the course of action and have taken the first step towards becoming debt free. Credit cards are a real killer on the family budget and prevent a lot of people from realizing what it is to be financially secure. There are many sites that elaborate on comsumer debt and the negative impact it is had on the family unit. I have included a few links below to my favorite sites which will assist you in your efforts. Good luck and don't give up.

The credit card industry makes billions of dollars off of interest every year. That's on top of the numerous charges such as annual enrollment fees, late fees, over the limit fees and so forth. They count on those who make the minimum payment each month to survive. It's up to each one of us to spend responsibly and not live above our means. Let's start contributing to the needs of our families instead of supporting billion dollar corporations. You and your family will be much happier in the long run if you take action today.

Maintain Focus on Your Retirement Investment Strategy

2009-05-05T18:57:00.000-07:00

While you can’t control how the stock market behaves, you can control how much you save and how well you maintain your investment strategy through different market conditions. Maintaining a diversified portfolio may give you a better chance of achieving your financial goals than if you move money around based on short-term market factors.

A recent study found that making drastic changes to your retirement strategy in response to big losses—such as switching to a more conservative portfolio could ultimately make it more difficult for you to achieve long-term financial security. That’s because a conservative portfolio does not offer the same growth potential that an aggressive portfolio does.

With the economy and stock market declines all over the news right now, it’s understandable if investors’ nerves are frayed. But, aggressive portfolios are built on the premise that investors need to plan for a 30-year retirement that will last well into their 90s. There are many important factors to consider when planning for retirement, including your expected expenses, sources of income, and available assets. Before investing in anything be sure to weigh your objectives, time horizon, and risk tolerance.

If you had a good investment strategy six months ago, chances are it’s still a good investment strategy. Do your best to stay calm and focused and to stick with it.

Reduce Your Personal Consumer Debt

2009-04-30T20:58:00.000-07:00

Many people today struggle with finding ways to reduce personal consumer debt. From loan consolidation to credit counseling, folks are looking for ways to reduce their monthly payments in hopes of avoiding a financial crisis such as repossession of your car or foreclosure on your home or even having to file personal bankruptcy.

If you don't already have a personal budget plan you need to develop one. It's very important to be organized with your finances In order to reduce your personal consumer debt you need to have a good sense of your incoming cash flow as it relates to your outgoing expenses.

Next is to develop a structured plan to reduce your personal consumer debt. I am a personal fan of the snowball method which is basically tackling your debts from smallest to largest. Essentially you will start with whatever extra you can afford to put towards your smallest debt until it's paid off. You then take that amount and apply it to the next in line and so on until your debt is wiped out.

After you've established a method to reduce your personal consumer debt, the key is to stick with your plan until completion. You must be disciplined and focused if you ever want to be free from your debt.

There are many good resources to help you stay motivated throughout the process. It's a good idea to join forums that are specific to debt reduction. Connecting with people in your situation is a great way to stay focused. Keep your eye on the prize and you'll come out a winner.

Save Money On Your Utilities

2009-04-18T10:18:00.000-07:00

It's easy to save money on your utilities if you just learn to conserve a little. Cutting back and knowing your peak hours for usage can help with saving money in the long run. Here are a few tips to help you conserve energy.

In the winter, set your furnace thermostat at 68 degrees or lower and for the summer months, set your air conditioner thermostat at 78 degrees or higher. Did you know that 3 percent to 5 percent more energy is used for each degree the furnace is set above 68 degrees and for each degree the air conditioner is set below 78 degrees? It would be a good idea to purchase and install a programmable thermostat. They're fairly inexpensive and surprisingly easy to install. That way you can set your thermostat for certain times of the day to help regulate your energy usage.

Set your water temperature at 140 degrees. You'll be surprised at the amount you can save on gas by lowering the temperature by a few degrees. While you're at it, install energy saver shower heads.

I read recently that a single dripping hot water faucet can waste 212 gallons of water a month. That not only increases water bills, but also increases the gas or electric bill for heating the water. Also, wash only full loads in your dishwasher on the shortest cycle needed to get your dishes clean. Skip the drying cycle by opening the door and allowing your dishes to dry naturally.

Use low wattage fluorescent lamps
Replace old windows with dual pane windows
Replace furnace and air conditioner filters on a regular basis
Defrost refrigerators and freezers as needed
Weatherstrip around windows and doors

There are many other ways to conserve energy around the home. Take time now to do some research and learn all the ways you can save money on your utility bills. A little extra effort will go a long way.

Finding Free Samples and Printable Coupons Online

2009-04-07T18:59:00.000-07:00

There are many great online resources for free samples and printable coupons. You can find free printable coupons for all of your favorite brands and needs. You can really take advantage of significant savings using printable coupons. Plus, who doesn't like receiving free samples of anything right? Here are some really great online resources for finding free samples and printable coupons.

Cool Savings.com is a great online resource for printable coupons and free samples. You can save money with tons of coupons you can print from your computer every time you go shopping. This is one really great free resource for valuable coupons, discounts and special offers from your favorite brands and stores.

Coupon Mom.com is another online resource for printable coupons and free samples. They advertise a free ebook that shows you how to literally cut your grocery bill in half. Plus they offer over $100 worth of free coupons to save on famous name brands like General Mills, McCormick, All, Kelloggs, Betty Crocker and Pillsbury among many others. There's also a link to obtain free samples of items and products like coffee, detergent, cereal and many more.

My Savings.com advertises as having the most most comprehensive directory of brand name free samples available on the internet along with printable coupons available for members. They also have a section where members rate, review and discuss the free samples they have tried. This is a great free online resource to determine which items are right for you and your family.

There are many other online resources for free samples and printable coupons. These are just a few of the more popular ones people are using today. There's no cost or obligation to becoming a member of any one of these online cost savings communities. As most today are pinching pennies and looking at ways to save money, we need to take advantage of any opportunity that offers a way to make that possible.

Rebuild Credit After a Car Repossession

2009-04-03T18:49:00.000-07:00

Trying to rebuild credit after a car repossession can seem like a monumental task. Considering the fact that a car repossession can have a detrimental impact on your ability to obtain credit in the future, it may seem like there's no hope in sight for ever being able to recover from such a financial set back. However, with diligent planning and a concerted effort on your part, there are steps you can take to rebuild your credit.

To rebuild your credit, you'll first need to know first hand what's on your credit report. It's equally important to know what your credit score is. This will be a major determining factor when applying for credit in the future. You can obtain a free copy of your credit report from Experian, Trans Union and Equifax at Annual Credit Report.com. Although this report will not include your credit score, you can pay a minimal fee for that information as well.

Once you obtain your credit reports, you should start targeting all accounts that are reported as unfavorable. If you find legitimate negative items it's only to your benefit to contact each creditor to negotiate a plan to satisfy the amounts owed. This will be a huge step towards your efforts to rebuild your credit after a car repossession.

Eventually, there will come a point and time when your car will have been sold by the finance company to help satisfy the amount owed on your account. However, there will most likely be a balance you will be responsible for which the finance company will expect you to pay. There's no need to panic if this occurs since they will most likely work with you on the balance owed. The important thing is to make every effort to negotiate an agreement in order to avoid a serious negative mark on your credit report.

Continue your efforts to rebuild your credit and you will eventually see your score improve over time. There's no getting around the fact that a car repossession will remain on your credit report for seven years. However, a mutual agreement negotiated with the creditor will be reported more favorably than simply avoiding the problem all together. If the amount is very high, there may be a judgment against you and you could end up having your wages garnished. That's why it's very important to make every effort to come to a resolution that both parties are in agreement on. Also make sure you obtain your agreement in writing in case of a dispute later on.

Keep in mind that a car repossession is certainly not the end of the world. For instance, filing for bankruptcy will have a much more negative impact on your credit score than having your car repossessed. Taking responsibility for your obligations and communicating with your creditors will make all the difference in the world as you make efforts to rebuild your credit.

Save Money With a Home Equity Loan

2009-03-21T10:59:00.000-07:00

If you're thinking about taking out a loan to consolidate your debt, you may want to consider a home equity loan to save money. By borrowing against the equity in your home, you can obtain a low interest loan to pay off your high interest credit card debt or personal loans and save a substantial amount of money in the process.

Many are burdened with the financial strain of credit card debt and usually with interest rates of 14 percent or higher. Consolidating your debt onto one card is an option but you're not really saving a whole lot with that option. A home equity loan however, can save you quite a bit of money since the interest rate is most likely to be considerably lower than you can obtain by doing a balance transfer to another credit card

You may even want to use your home equity to buy a car or pay off an existing car loan. Unless you have excellent credit chances are you have a car loan with an interest rate of 10 percent or higher. A home equity loan is really the best option to greatly reduce the amount of interest you'll pay on a car over 4 to 5 years depending on the terms of your loan.

Maybe you have little to no debt but need to add an addition to your house, or make some renovations. A HELOC or home equity line of credit is a better option since you only borrow the amount you actually need and only pay interest on that particular amount. This particular type of loan is generally extended for a term of 10 to 20 years.

One important fact to consider is that the interest on a home equity loan is tax deductible so you get the benefits of the ability to save money on high interest debt along with an added tax benefit. One other consideration is that the collateral on the money you borrow is your home so you'll want to make sure you can afford the monthly payments before making the decision to take out a home equity loan.

Strategies for Retiring

2009-03-17T19:38:00.000-07:00

Preparing a strategy for retirement in this down market can be very challenging to say the least. There are many factors to consider with the main area of concern being when the market will start heading in a positive direction. It's impossible to predict how the market is going to perform in the near future. One thing is for certain though...we will all continue to get older and as time goes on we need to make sure we're properly prepared when it comes time to retire. I encourage you to follow the link below to a great article entitled Strategies for Retiring Successfully in a Down Market.

December 2008

Factoring Personal Loans Into Your Budget

2009-03-13T09:38:00.000-07:00

When preparing a personal budget you must consider every expense to have a clear picture of your financial situation. One item most people fail to consider is personal loans. For this example, we are considering a personal loan as money you have borrowed from friend or family member. We have no problem considering everything from rent or a mortgage payment to credit cards and auto loans. However, unless a person is very responsible and honest, personal loans are usually considered a low priority and are often paid back slowly if ever.

Maybe your friend or family member loaned you money with the understanding that you were in a financial bind to begin with and has told you to take your time in paying it back. How many have heard the saying, “The best way to lose a friend is to loan them money?” I’ve experienced personal situations in my life where relationships have gone sour over money lent to another individual. A financial obligation, whether it’s legally binding or accepted via the honor system, is still an obligation and should still be considered a legitimate expense.

The point is to establish a habit of taking care of those expenses you are responsible for. The lost art of closing a deal with a handshake is a lost art for a reason. Too many times have individuals not met their obligations to others only causing hard feelings along with hardships for the lender. A bad credit rating is one thing but can be repaired over time. A bad name however….isn’t so easily repaired. Just food for thought.

My Take on Payday Loans

2009-03-10T21:53:00.000-07:00

Payday loans are generally for those who can't qualify for a signature / personal loan. For those of you who aren't familiar with this type of loan, you basically apply for a cash advance by trading a personal check for a loan until payday. You then return with cash in hand to pay off your loan plus the interest that applies depending on the initial amount of your loan.

The catch is you can end up paying a pretty hefty interest fee when it comes time to settle up. There has been a lot of controversy surrounding the payday loan industry. Granted there are those who have got caught up in taking out multiple loans at once only to find themselves in a real financial bind. It's especially easy to do so now with many payday loans available online. I can see how a person could easily accumulate a large amount of debt in a short period of time since there is typically no credit check required to qualify so it really opens the door to those who would otherwise not be credit worthy.

In my opinion, it really boils down to the responsibility of the individual to not overextend themselves financially. Although this type of service may be beneficial for the occasional emergency, you shouldn't abuse the system by taking out multiple loans or even consecutive loans with one organization. The best and smartest thing to do is to set a little aside out of each paycheck to prepare for any unexpected expense. Any money you save is interest free and since you're borrowing from yourself , you're likely to be much more lenient than any payday lender.

Determine Your Investment Risk

2009-03-08T10:23:00.000-07:00

Are you a conservative with your investments or one who like to takes risks? In this volatile market it's a wonder every investor doesn't have their money buried in their backyards or hidden under their mattresses. The Dow Jones has literally dropped in half ever since the economy started to take a nosedive. So many have lost so much and it doesn't appear things will improve any time soon. Granted President Obama has made efforts to revitalize the economy with the new stimulus package, it will still take a fair amount of time before we begin to see the positive effects it's meant to accomplish. Until then, we're going to have to endure this recession for the time being.

Statistically speaking, you should not lose money on any investment over a 15 year span. Experts agree 15 years should allow enough time for your investments to survive any market fluctuations. However, there are many who are preparing to retire within the next 5-10 years and if you're one of those who have lost a fair amount of your future retirement income, you're probably hoping for a recovery before that time comes. Sadly, I've known individuals who have literally gambled with their investments so close to retirement only to come up way short of the amount they need to sustain a comfortable living for the rest of their lives.

Although I'm not trying to scare anyone I am trying to get you to take a look at your goals and objectives as they relate to your personal situation. If you're still years away from retirement, chances are you're fine with higher risk investments. If you're nearing retirement age, it might be wise to consider safer, more conservative choices. The following model is one I use for my personal investment strategy:

Years to Retire 30 plus Stocks 90% Bonds 10% Money Market 0%

Years to Retire 25 Stocks 80% Bonds 20% Money Market 0%

Years to Retire 20 Stocks 70% Bonds 20% Money Market 10%

Years to Retire 15 Stocks 60% Bonds 20% Money Market 20%

Years to Retire 10 Stocks 50% Bonds 30% Money Market 20%

Years to Retire 5 Stocks 40% Bonds 35% Money Market 25%

Years to Retire 0 Stocks 30% Bonds 30% Money Market 40%

Again, evaluate your own investment risk to determine the best approach for your personal needs. If you're within 5-10 years of retirement, I would suggest speaking with a qualified financial advisor.

Takin' It To The Limit

2009-01-21T18:37:00.000-08:00

Are your credit cards maxed out? Have you spent friviously only to find yourself broke until payday? Albert Einstein once said “The definition of insanity is doing the same thing over and over again and expecting different results”. Yet, people continue to ride that roller coaster of debt and never seem to be able to stop the ride long enough to get off. What is it that compels an individual to spend with little or no consideration of the consequences? Today's economy has resulted in millions of people losing their jobs. It's many of those same individuals who didn't plan for a layoff and consequently has resulted in financial ruin for many households.

I've long been a fan of saving for emergency situations. Whether it be for minor repairs to your vehicle or replacing an old washing machine or a job loss, it's imperative you have some sort of cushion to fall back on. If you don't start preparing today for those future unexpected expenses, you'll wish you would have if and when that time comes. It's always a matter of when and not if so do what you can to prepare yourself.

Here's a link to an article I wrote recently about saving for emergencies.

How to Save For Your Emergency Fund

Battle Of The Budget

2009-01-20T20:02:00.000-08:00

The statistics of people living from paycheck to paycheck are staggering. Most people have not prepared themselves for a major expense such as the transmission going out in their car or an appliance that needs to be repaired. Worse yet, many people are one paycheck away from being destitute. The gradual increase in the cost of living has made it harder and harder for the average middle class family to survive. There was a time when the average family could live comfortably on one income. We now live in an age of dual income households which in theory should provide significant financial benefits. Sadly, we seem to be in worse shape than ever before.

Personal bankruptcy is at an all time high. People are living above their means by overextending themselves with credit. We live in an impulsive society where a person does not have the patience to save enough to pay cash for whatever luxury item catches their eye. The "I want it now" mindset has caused many to fall into financial ruin. Clearly, people need to take drastic measures if they are ever to reverse the direction in which they're headed.

I came across a very interesting video which was a real eye opener about the financial crisis in American today. It's quite long but well worth your time. Especially, if your in dire financial straights. Click on the link below to view the video.

The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net

Time To Take Inventory

2009-01-23T11:26:00.000-08:00

In this economic downturn people are faced with having to scrutinize where every dollar goes. We still have our monthly expenses. Whether it’s the mortgage payment, rent, insurance, utilities or food (which just covers the basics), most are hesitant to spend anything above what’s absolutely necessary for survival.

Thousands are being laid off of their jobs daily. Coming into work this morning I witnessed a poor individual coming out of the business next door with his personal belongings in hand. The look on his face was one of hopelessness and it made me realize just how lucky I am to still be employed. I personally feel most people have lost the secure feeling of knowing their jobs will be there the next day.

It’s important now more than ever to look at ways to take inventory of your expenses to see if there’s anyplace to cut back. Obviously you can’t do much about the fixed basic expenses. Look at fluctuating expenses like groceries and utilities. You can start by buying disposable items like toilet paper & paper towels in bulk. You’ll have to plan for this since you’ll be paying more up front but the cost savings over time can be significant.

For Utilities it’s smart to invest in a programmable thermostat. You can get an inexpensive model for around $35 to $40 at Home Depot or any other store that supplies hardware items. They’re very easy to install and can help regulate your energy usage which can turn into a tremendous cost savings. If you already have one then program your temperature accordingly.

These are just some examples of cutting back to save money. Saving in one area may not seem like a lot but if you save a little in a few areas, you can see a difference that could be substantial in some cases. Just remember to spend wisely, save regularly and be consistent in your efforts.

Live For Me Wyatt

2009-01-24T19:00:00.000-08:00

How many remember the line from Tombstone when Doc Holliday, on his death bed, was speaking his last words to Wyatt Earp. Many people, like Doc have developed the mindset of living for the moment and not preparing for their future until it's too late. How many of those retired today are just barely scrapping by on what little Social Security provides because they set too little aside to help sustain them into their later years? Yet many who have witnessed this first hand in the lives of relatives or close friends don't seem to be too concerned.

Unless our elected officials intervene very soon, Social Security will no longer be a viable source of retirement income. Studies show that benefits will be reduced by 25% to 30% for those who plan to retire in the next 30 years unless some sort of reform plan is put into action. Even those figures may be generous depending on who you talk to. The bottom line is, we as individuals have to take matters into our own hands if we ever plan to retire comfortably. Otherwise we may have to end up working for the rest of our lives and never be able to enjoy a comfortable retirement in our golden years. I wrote an article entitled, How to Plan for Retirement Living which gives you some tips and advice on how to start preparing for your future. Don't be like Doc Holliday and live with the regret that you didn't do more to prepare for your final hour (or years as it pertains to this article). He said it best when he told Wyatt Earp, "Go grab that spirited actress and make her your own. Take that spirit from her and don't look back. Live every second, live right on through to the end. Live Wyatt, live for me."