Category Archives: Personal Finance

Five Tips For Resisting The Urge To Spend Frivolously

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In this day and age, spending money like water often seems like part of the American way. Unfortunately, it’s this kind of frivolous spending that gets so many people deep in debt and cripples their ability to save money for their future security.

In order to combat the problem, it’s necessary to rethink the way you spend money. Here are some tips that can help you achieve this. Continue reading

Keeping The Debt Hounds At Bay

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Maybe you’re a new graduate embarking on your first full-time job. Or, after much effort, you’ve managed to pay off all your credit card charges. Or you’ve just gotten a big raise, so that your income comfortably exceeds your expenses.

Isn’t it great not having to worry either about having to pay interest or whether you’ll have the money to meet next month’s bills? If you want to keep yourself in your happy state, follow these tips for staying debt-free: Continue reading

Personal Finance Goals For Every Stage Of Life

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Whether you are a teenager or about to retire, it is important that you are able to manage your money effectively. Although your financial goals may be different as you get older, it is never too early or too late to learn and master sound fiscal habits.

Let’s take a look at some common financial goals and how you can achieve them. Continue reading

Three Horrible Financial Decisions to Avoid This Summer

One of the most shocking pieces of information that most people eventually discover is that their spending habits can literally control their lives.

While most people want to believe that they have full power over what they spend, habits are what truly set the pace for what ends up being spent or saved. Realizing that habits have a dramatic impact on how much money we have is the first step in taking control, but after that, critical decisions must be made in order to create a life of wealth and freedom.

This summer, avoid making terrible financial decisions by understanding how to get rid of the worst of the offenders. The following three bad decisions are some of the worst that can be made, and anyone would be wise to eliminate them from their day-to-day habits. Continue reading

Financial Tips For Recent Grads

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Great financial advice is like a golden egg, you need to treasure it. For recent graduates, this concept rings even more true.

Many financial analysts point out that recent graduates tend to be extremely reckless with their finances after they graduate. Most find themselves the victims of lifestyle inflation, poor money habits, and burdensome debt.

Rather than suffocate yourself with the same financial woes as your peers, the advisable thing to do is to read excellent financial advice and to simply follow it. By taking the initiative, you’ll find yourself less stressed and ahead of the game.

Live Within Your Means

First and foremost, you should always live within your means.

Landing that $50,000 a year position does not mean that purchasing a new car, a condo, and new furniture is a sound financial decision.

To determine how much you should spend on your rent, your needs, your wants, and on your savings, financial professionals employ what is known as the 50-30-20 rule.

The rule indicates that you should regulate 50% of your take home pay to your needs, 30% to your wants, and 20% to your savings. Your “needs” is the category that includes rent, so you should take that factor into account.

Build an Emergency Fund

There is nothing wrong with living in an optimistic world, but it is also important to recognize that reality tends to come with unexpected surprises.

Your emergency fund will come in handy when you’re faced with a sudden car repair bill, a medical expense, or even that unanticipated job loss.

When building your emergency fund, your goal should be to save up at least a few thousand dollars and using your fund when you need it will prevent you from needing to rely on credit cards of financial assistance until you get back on your feet.

Credit Cards Aren’t Always the Answer

These days, the average American household has a credit card debt of nearly $16,000. This debt is the result of a financial philosophy that sets no limit upon spending.

The debt itself is also not fixed but is subject to hefty interest payments that only grow over time.

Instead of putting yourself in the unfortunate situation of credit card debt and growing interest payments, the best thing to do is to understand how credit cards work and to use your credit card to make purchases that you’ll be able to pay off.

At the end of the day, if you cannot afford something, it is best to not buy it.

Student Loan Debt is Secured Debt

Many graduates and seasoned graduates have the misconception that federal student loans are unsecured loans. An unsecured loan is a loan where there is no collateral put up, which means that if you default on your loan, there is no way for the financial institution to secure its loss.

The truth is that while you may not have put anything up as collateral for your federal student loans, the government can take steps to guarantee that it gets its money back.

If you do not pay your student loans off, you could find yourself subject to a lien on your possessions or even government deductions from your monthly paycheck.

Therefore, you should take steps to make steady and regular payments on your student loans so that you will be debt free before age 35.

Financial security is something that many Americans would trade anything for. As a recent graduate, you have the opportunity to truly start your finances on steady ground by taking the above steps.

In the long term, you’ll find that starting to work on your finances is one of the best steps you’ll ever make.

Photo: Mighty Travels / CC 2.0

Reverse Mortgages: Are You Missing Out On Free Money?

 

Investment risk and uncertainty in the real estate housing market

For many people living month to month on Social Security Income or who had once robust retirement accounts ravaged by the not-so-great recession, the reverse mortgage seems like an attractive choice. But, before you dive in there are a few things you need to know in order to make an informed decision about whether or not this is the right choice for your circumstances.

What is a Reverse Mortgage?

You may hear about other types of reverse mortgages in the marketplace today, but there is only one that is federally insured. It is called the Home Equity Conversion Mortgage, or HECM. This loan is only available through FHA approved lenders.

A reverse mortgage differs from a traditional home equity loan in that you are not required to make monthly principle or interest payments on the loan. Maturity is reached, and the loan must be repaid, when the home owner no longer lives in the home as his or her primary residence or certain other conditions, in accordance with the loan agreement, are met.

Reverse Mortgage Requirements

In order to qualify for a reverse mortgage, the home itself, along with the homeowner, must meet certain conditions.

Homeowner Requirements

  • Homeowner must be 62 years of age or older.
  • The home must be owned outright or carry a low enough balance that it can be paid off at closing with the proceeds from the reverse mortgage.
  • Homeowner must have the financial means with which to pay property taxes and insurance on the home.

Requirements for the Home

There is a little bit of flexibility when it comes to the homes themselves. Properties eligible for reverse mortgages include:

  • Single family homes
  • Two to four unit properties in which the owner occupies one unit
  • HUD-approved condominiums
  • Manufactured homes built after 1976
  • Town homes

Pros of Reverse Mortgages

There are quite a few benefits to consider when it comes to reverse mortgages, not the least of which is the easy approval for these loans. In some instances, when credit or income seems insufficient to meet the terms of the loan long-term, borrowers may be required to set aside funds in an escrow account to cover the costs of yearly taxes and insurance premiums for the home. Otherwise, approval is fairly straightforward.

Another big benefit for most seniors is the option to receive a lump sum payment or to spread the payments out over time in order to generate a steady stream of income. For those on fixed incomes, this can be extremely beneficial, just as it can benefit people who need one large payment for something like medical treatments or to make their home wheelchair or walker accessible.

No repayments necessary while the homeowners maintain the home as a primary residence.

Cons of Reverse Mortgages

While the attractiveness of a reverse mortgage is certainly attractive, there are a few considerations to keep in mind. The first consideration is a big one, or it can be. That is the cost of the reverse mortgage itself. There are many fees associated with mortgages in general include:

  • Mortgage insurance fee
  • Appraisal fee
  • Title insurance fee
  • Closing costs (which are substantially higher than with traditional mortgages)
  • Interest

The other consideration that weighs heavily upon the minds of many seniors considering reverse mortgages, as it should, is the requirement to pay back the loan, in full, if you are no longer a permanent occupant of the home. In other words, if you are required to move into an assisted care facility, then the full force of your loan will become due.

Finally, the reverse mortgage impacts how much money you leave to your heirs. While that isn’t the primary consideration for everyone considering reverse mortgages, it is important to many, and worth taking into account.

Alternatives to Reverse Mortgages

Seniors are motivated for many different reasons to consider reverse mortgages in the first place. Whether it involves tight funds for retirement, a one-time expense that is too large to easily accommodate on a fixed income, or retirement dreams gone up in smoke during the market meltdown of previous years, there are alternatives to the reverse mortgage to consider.

  • Cashing out life insurance policies.
  • Part-time employment.
  • Consulting with a financial advisor for ways to stretch your retirement.
  • Selling your home and moving into a smaller home.
  • Downsizing to one automobile rather than two.
  • Reducing expenses and creating a budget.

This isn’t to say that reverse mortgages are never a good idea. You can’t take it with you, after all. It’s simply not a decision to be taken lightly either. Keeping these things in mind will help you make the best choice for you and your family.

Four Tips For Improving Your Credit Score

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Credit scores are an important part of life and can greatly influence the livelihood of people.

Credit scores are established through payment history, credit utilization, length of credit history, types of credit in use, and new credit.

Due to loans taken out or having debt on credit cards, credit scores can often be low. Low credit scores make it hard to be able to apply for credit cards or get loans when money is needed.

Ontime Payments

One of the ways people can improve their credit scores is by making sure to pay their payments on time.  Payment history makes up a good chunk of the credit score itself.

One way to make sure payments are made on time is by writing down on a calendar when the bill is due. Also, a reminder can be put on the phone to make sure to pay a bill.

Also, some companies allow customers to opt into a text service, which will provide a text as a reminder to pay the bill. It is just as important to pay credit card bills as well as normal utility bills on time.

Open up new revolving accounts

Credit scores can be improved by opening up a new credit card and keeping it open.

As long as there is no annual fee involved when it comes to the credit card, there is no reason to cancel the card.  This will help with the length of the payment history component of the credit score.

It is just as important to make sure to be using the credit card once in a while because it might be closed due to non-usage.

Along with usage, it is just as important to make sure to be able to pay off the credit card purchases in a timely manner. It is very important to make sure not to open up too many credit cards because that is not helpful to improving the credit score.

Manage debt

Credit scores are greatly influenced by any debt that is accrued over time.

Everyone knows there are interest rates on loans and credit cards. These interest rates become steeper and make it hard to pay back the longer the balance goes unpaid.

When there is debt involved, people tend to try to pay off the debt by opening other credit cards or taking out more loans. This might seem like a great idea at the time, but often times the new loans end up being even harder to pay off later on.

The best thing to do is put aside certain money each month as part of the budget to pay off the debt. By doing this, the debt will slowly be paid off without adding on any more debt or loans, which will have to be repaid later.

It is important to plan out a budget of all the expenses and to make sure to include a portion of the money toward debts or loans involved. Also, people should pay off any loans or debt in small amounts without letting the balance continue to stay open.

Monitor credit reports for errors

Although credit scores are circulated every day, there can be errors in the calculation itself. It is important to double check to make sure no error were made when calculating the credit score.

There are many online sites, which could give the credit score and if any errors are present, they can be disputed. Sometimes due to these errors, credit scores can be affected without actually having any actual debts.

Credit card companies often put credit limits on credit cards based off the credit score. By continuing to make payments on time and leaving the credit card open, credit card companies will be willing to create a higher limit.

It is important to make sure customer’s spending habits don’t change as well even though the credit limits change.

Photo: Mighty Travels / CC 2.0

The Big Subjects to Talk About Before the Big Day

 

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Finances

Most couples will talk briefly about finances. Stuff like who will work, where the money will be spent, budgeting, common things like that. But, did you ever once mention who will be the main person to pay the bills? Is there going to be one joint bank account, or will each spouse keep separate bank accounts? It is important to decide just who will handle paying the bills and setting up the online accounts for those bills. This is very vital to discuss because of the confusion that can come if there is not a designated person. Now, just because one spouse is the designated bill payer that doesn’t mean that the other is completely cut off knowing anything about bills. They do have the right to know how much each monthly bill is and the password to those online accounts. Knowing the password is key because if something ever happens to the bill payer, then the other spouse will have immediate access to all that.  Also, the matter of separate or joint bank accounts is a personal one. Some people love joint accounts. It makes budgeting much easier and is very transparent. Joint bank accounts are more time consuming to budget. Remembering which account has which bill coming out or will the bills come out of one spouses account and the play money is from the other spouse. However you want to do it is fine as long as you can make it work for you.

Children

Now on to the subject of children. You have probably discussed the number you would like to have. Did you discuss who will be their main caregiver? It used to be no question, Mom was in charge of the home and family and Dad worked. But, nowadays those roles are changing and so is the scope of the family. If both parents want to work that is great, but who will be the one to take the day off to take care of the sick child? Who will be the designated chauffeur when it comes to sports, ballet, school functions, etc.? It is also important to decide on the type of punishments you both find acceptable for your future children. Kids are notorious for pitting parent against parent. They love to play I asked mom and she said no so I’ll go ask dad because I know he’ll say yes (or vice versa). Deciding on how to handle those situations will save your sanity in the long run.

Religion

Religion is a tricky subject to converse about. If you are marrying a person of a different religion you want to make sure you respect their beliefs. Even though this is difficult to discuss it is a crucial conversation that you will both need to make time for. Some of the talking points could center on what religion your children will be raised in. How will you handle holidays and celebrating certain religious specific ones? How will you attend church, will you go together to one spouse’s specific church or will you go separately to your respective churches? Is converting to a different religion open for discussion and if so which spouse will convert?

Politics

Politics is a huge one that you need to talk about before the big day. Some thing to remember about voting is that when you go to vote, don’t cancel each other out. Take the time to discuss which candidate you like and why. This may be hard if you like opposite parties, but still try to do it. You don’t want to get into that booth and essentially have your vote not count because you voted against each other.

You love your spouse enough to stay with them until “death do you part”.  If you can talk to your spouse openly about these subjects your marriage will be all the better for it.

Six Tips For Creating An Innovative Business Card

Are you a new graduate on the job hunt? Are you in an established career and you’re looking for a new challenge?

If you’re getting ready to venture into the world of job searching, you need a great business card that will be memorable, is clear and will get you noticed.

Don’t know where to start? Follow our guide of creative ideas for business cards and get started on making an impression with your future employers.

The key to remember in deciding on a business card is to avoid cards that are too gimmicky or cute that they leave an impression that you shouldn’t be taken seriously. That’s a fine line to walk, but we’ll help you right now:

Increase the Weight of Your Card

There is something that happens in the psyche when you have a weightier card. It feels like more a library card or a credit card. It feels more serious.

Consider increasing the weight of your business card’s paper stock, and you’ll have an instant payoff in the minds of whomever is holding your card next.

Invest in Letter-pressing or Embossing

If you’ve got the budget for it, consider adding an element of letter-pressing or embossing to your card. It’s going to be a little pricey, as this is a craft, niche operation, but your card will look beautiful.

This is something for designers especially to consider. Your business card needs to match your profession or the field you hope to enter.

Try Out a Smaller Card

One trend in business cards today is to try an alternate shape from the traditional rectangle. A square card or even a smaller rectangle add interest and set your card apart from the pile of others.

Consider Wood

Are you going into a field involving sustainability or the environment? Are you a craft woodworker? Consider a wood business card.

These cards are made of layers of thin wood, but they are sturdy, creative and are much different than any other card your future employer may receive.

Die-Cut Cards

Add some creativity and professionalism to your card by adding a die-cut element to your business card. This could just be in the form of your business logo or the initial of your last name.

It may be a little pricey to get a die-cut because it is a custom design element. However, it will add some style and interest to your card and make it memorable to future employers.

Digital Cards

A new trend in business cards is to forego paper altogether and make your business card digital. You can do this by making a digital card on your iPad.

Take the iPad with you to visits with employers. The card needs to have a QR code on it so that the person can scan your card with his or her smart phone and record the information about you.

An alternative is to keep the traditional business card but to include a QR code directly on the card. You’ll not only make it easy for a future employer to keep up with you, but you’ll score major cool points for being tech savvy.

Are you inspired yet? Use our guide of handy tips for finding an innovative business card that is professional and memorable. You’re on your way to finding a great job — or least leaving a really great impression by investing in a great card. Good luck in your search!