I read this article recently on MSN Money. It was titled “How I survive (actually thrive) on 12K year.” It was sitting right next to an article called “Scraping by on $150K a year”. Quite a contrast, huh?!? So I read them both. When you read these articles one after the other you realize that we really do choose our own paths regardless of any limitations set by the outside world.
The first was a single lady, recently divorced who had decided to go back to school. She had a set income that included alimony and some money left over some school grants. Her rent for the year totaled $6,000 and some change. Yet she pays utilities, eats, has car and health insurance, and enjoys her life because she knows every dollar coming in and going out and has no stress about it.
The second is a couple with 4 daughters. Now granted it costs a lot more to take care of 6 people than 1, so to be fair based on the other lady 12X6 is $72,000. They are making twice that. So where is all their money going? Apparently a rental property that they have been holding for some time and not been able to rent out. They have been cutting tons of little things out of their budget such as coffee at starbucks, etc. trying to fix the problem. Now I commend them for seeing there is a problem and something has to be done, however do you think they possibly drink enough starbucks coffee in a month to pay a mortgage? Most likely not! So each month they ignore what is draining their budget and can’t figure out where all the money is going.
So many of us live like this. FEAR. Fear of not paying our bills, fear of something happening and not having enough money. Sleepless nights thinking about money. But I would say given a choice of either of these lives, I would take the $12K and eat beans and be happy, rather than the $150K and all the stress it causes. The point is, it is human nature to spend everything we have, but if we learn the habits of living on less and implement them regardless of what our current financial situation is we will get more restful nights.
Seek Unsecured Loans And Avoid The Threat Of Repossession
It is quite natural that people don’t want to have the threat of repossession of their property while seeking loans. This is more natural for the homeowners, who have a special attachment associated with their homes.
Unsecured loans are seemingly the best way to go for the loans, without putting your home at stake. Along with this benefit, you may procure an unsecured loan quickly and that also with ease. This is because the valuation of the collateral is not done in this case. Hence, the turnaround time gets reduced, which helps in getting the loans quickly. Less paper work is involved in this loan type, which alleviates the hassles of getting the loans.
With unsecured loans, you may buy a car or consolidate you multiple debts. You may do many other things as well, like going for a holiday trip, meeting the expenses of a wedding ceremony, educational purposes etc. When you are going for an unsecured loan option, you will get a shorter term to repay your loans. So, you need to plan out accordingly when you are planning to avail this loan type.
People with County Court Judgments, arrears, defaults, bankruptcies etc. may also apply for the loans. Even if their loan application has been turned down by some lenders, they should not get disheartened and keep on applying for the loans. Each and every lender has a certain set of criteria for offering the loans. So, if those specific criteria are being met, the borrower may get loans.
Unsecured loans are seemingly the best way to go for the loans, without putting your home at stake. Along with this benefit, you may procure an unsecured loan quickly and that also with ease. This is because the valuation of the collateral is not done in this case. Hence, the turnaround time gets reduced, which helps in getting the loans quickly. Less paper work is involved in this loan type, which alleviates the hassles of getting the loans.
With unsecured loans, you may buy a car or consolidate you multiple debts. You may do many other things as well, like going for a holiday trip, meeting the expenses of a wedding ceremony, educational purposes etc. When you are going for an unsecured loan option, you will get a shorter term to repay your loans. So, you need to plan out accordingly when you are planning to avail this loan type.
People with County Court Judgments, arrears, defaults, bankruptcies etc. may also apply for the loans. Even if their loan application has been turned down by some lenders, they should not get disheartened and keep on applying for the loans. Each and every lender has a certain set of criteria for offering the loans. So, if those specific criteria are being met, the borrower may get loans.
Student Loans, Help To Bring Your Great Career Closer
Imagine you are getting ready to run a marathon; there are 26 miles of grueling road between you and your dreams. You’ve planned all your life, now you’re at the starting blocks and wonder if you have what it takes to win the prize. What if you had trained harder, maybe then you’d have an edge? As the miles pass, you begin to tire and one by one, those on your left and right pass you by; what do they have that you don’t? How did their training differ from yours?
Imagine now that this marathon is life, and the training (education) you’ll receive will cause you to make... or not make... an extra million dollars over the course of your career. A million dollars is what you stand to lose if you don’t complete your degree.
FACT: According to the Census Bureau, over an adult's working life, high school graduates earn an average of $1.2 million; associate's degree holders earn about $1.6 million; and bachelor's degree holders earn about $2.1 million (Day and Newburger, 2002).
If all that stands between you and your education is money, don’t despair, there are multiple student loans that may be the perfect fit. Look down the long marathon of life and realize you have a choice to make; you can walk away wondering “what if”, or “go for the gold” taking advantage of student loans (put in place) for exactly your situation. Before you decide do some in-depth research, no decision of this magnitude should be done with information.
As you research, you’ll find several different categories: student loans, parent loans, private loans and consolidation loans, (we’ll cover student loans and parent loans). Where you are in life (decided by current finances and other factors) will determine which loan best fits your needs. The Stafford Loan, (put succinctly) is the government guaranteeing the loan; they are awarded based on financial needs (obviously if you had the money you wouldn’t need the loan). If you do qualify, these loans are available from a variety of banks, credit unions or direct from Uncle Sam.
They come in a couple of different flavors; subsidized and unsubsidized, with the government paying the interest on the subsidized and you being responsible if unsubsidized. Since these loans ARE backed by the government, financial institutions are eager for the business and rates may vary; be sure to shop around, remember it’s your future and the loan (unlike a grant) does have to be repaid.
Next comes the Plus loan, still backed by the good 'ole USA and this is primarily for your parents (now might be a good time to say... “dad, you’re looking good these days”). Parents can use these loans to supplement your (already existing) financial aid package; and can range upward to the full cost of your education.
Another variation is the Perkins loan given to those in very difficult financial situations. Whether you qualify or not is best discussed with your advisor. The pool (available funds) for this loan is limited and it’s doubtful your entire education could be funded with a Perkins loan.
Imagine now that this marathon is life, and the training (education) you’ll receive will cause you to make... or not make... an extra million dollars over the course of your career. A million dollars is what you stand to lose if you don’t complete your degree.
FACT: According to the Census Bureau, over an adult's working life, high school graduates earn an average of $1.2 million; associate's degree holders earn about $1.6 million; and bachelor's degree holders earn about $2.1 million (Day and Newburger, 2002).
If all that stands between you and your education is money, don’t despair, there are multiple student loans that may be the perfect fit. Look down the long marathon of life and realize you have a choice to make; you can walk away wondering “what if”, or “go for the gold” taking advantage of student loans (put in place) for exactly your situation. Before you decide do some in-depth research, no decision of this magnitude should be done with information.
As you research, you’ll find several different categories: student loans, parent loans, private loans and consolidation loans, (we’ll cover student loans and parent loans). Where you are in life (decided by current finances and other factors) will determine which loan best fits your needs. The Stafford Loan, (put succinctly) is the government guaranteeing the loan; they are awarded based on financial needs (obviously if you had the money you wouldn’t need the loan). If you do qualify, these loans are available from a variety of banks, credit unions or direct from Uncle Sam.
They come in a couple of different flavors; subsidized and unsubsidized, with the government paying the interest on the subsidized and you being responsible if unsubsidized. Since these loans ARE backed by the government, financial institutions are eager for the business and rates may vary; be sure to shop around, remember it’s your future and the loan (unlike a grant) does have to be repaid.
Next comes the Plus loan, still backed by the good 'ole USA and this is primarily for your parents (now might be a good time to say... “dad, you’re looking good these days”). Parents can use these loans to supplement your (already existing) financial aid package; and can range upward to the full cost of your education.
Another variation is the Perkins loan given to those in very difficult financial situations. Whether you qualify or not is best discussed with your advisor. The pool (available funds) for this loan is limited and it’s doubtful your entire education could be funded with a Perkins loan.
Personal Financial Stress, a Hazard that Needs to Be Eliminated
It’s mid January, all the ezines are discussing goals and New Year resolutions and offering help to those interested enough to get their coming year on track and change the patterns of the past twelve months.
In most Southern Hemisphere countries the annual summer holidays are drawing to a close while the Northern Hemisphere is gearing up for the winter. However there are issues that the two opposite parts of the world have in common at this time of the year, a problem that causes tremendous strains on many families, a problem associated with psychological stress and a direct result from the finances or money spent during the December Christmas period.
The December Credit Card bills will start arriving, those who have taken out loans to purchase Christmas goodies will now be starting their repayment schedule and many will be in a deep state of psychological shock and wondering how, why and where the money went. The realization that these loans will not be paid off before next Christmas is just starting to be realized.
Christmas is not meant to be this traumatic on families, there are many ways to celebrate without causing these financial burdens as there are many ways to give and express love to friends and family all of which must be included in the goal setting exercises for the current year.
Financial stress does not just cause the arguments that occur within the family setting including abusive behavior to spouse and children, alcoholism and drug abuse. This form of stress also causes serious health problems and can be attributed to death due to Heart Attach and for those who can no longer cope, suicide. I thought Christmas was about love and joy? Having worked in Emergency, Theatre, Mental Health Units and Children’s Departments I have unfortunately witnessed the whole range of these health issues, all of which can be eliminated through a total change in personal wealth attitude.
For a period of time doctors believed that gastric ulcers were caused by bacteria, but again there is a strong emphasis being placed on ulcers and stress especially stress associated with money concerns.
It is time to change if not just to improve finances but health issues as well.
Financial stress management is a family concern, be honest with each other and learn to openly discuss concerns that are affecting the household, yes communication is a major step in achieving financial harmony. There are perhaps many avenues that you can introduce to reduce household spending and by creating a family budget allows you to all work together, learn to be strong and help each other, share your feelings and reduce your stress.
Aerobic exercise is an excellent way to let your physical body alleviate some of the health issues associated with stress, but not always able to be done on a routine basis. I have always recommended to my students and other associates that all forms of meditation will aid the nervous system to deal very effectively with stress.
In most Southern Hemisphere countries the annual summer holidays are drawing to a close while the Northern Hemisphere is gearing up for the winter. However there are issues that the two opposite parts of the world have in common at this time of the year, a problem that causes tremendous strains on many families, a problem associated with psychological stress and a direct result from the finances or money spent during the December Christmas period.
The December Credit Card bills will start arriving, those who have taken out loans to purchase Christmas goodies will now be starting their repayment schedule and many will be in a deep state of psychological shock and wondering how, why and where the money went. The realization that these loans will not be paid off before next Christmas is just starting to be realized.
Christmas is not meant to be this traumatic on families, there are many ways to celebrate without causing these financial burdens as there are many ways to give and express love to friends and family all of which must be included in the goal setting exercises for the current year.
Financial stress does not just cause the arguments that occur within the family setting including abusive behavior to spouse and children, alcoholism and drug abuse. This form of stress also causes serious health problems and can be attributed to death due to Heart Attach and for those who can no longer cope, suicide. I thought Christmas was about love and joy? Having worked in Emergency, Theatre, Mental Health Units and Children’s Departments I have unfortunately witnessed the whole range of these health issues, all of which can be eliminated through a total change in personal wealth attitude.
For a period of time doctors believed that gastric ulcers were caused by bacteria, but again there is a strong emphasis being placed on ulcers and stress especially stress associated with money concerns.
It is time to change if not just to improve finances but health issues as well.
Financial stress management is a family concern, be honest with each other and learn to openly discuss concerns that are affecting the household, yes communication is a major step in achieving financial harmony. There are perhaps many avenues that you can introduce to reduce household spending and by creating a family budget allows you to all work together, learn to be strong and help each other, share your feelings and reduce your stress.
Aerobic exercise is an excellent way to let your physical body alleviate some of the health issues associated with stress, but not always able to be done on a routine basis. I have always recommended to my students and other associates that all forms of meditation will aid the nervous system to deal very effectively with stress.
Four Lessons the Wealthy Can Teach You
It's a fact... people who are wealthy live in ways that make them that way. They don't believe in car loans, wasteful spending or "easy" payments. Even though most people will never have the wealth of Bill Gates or Donald Trump, that doesn't mean you can't be wealthy if you work at it. In 2004, the number of households worth $1 million (not including not including primary residences) grew 21% to 7.5 million.
So what are their secrets? The answers shouldn't surprise you.
* Give money. People who have money give a lot of money away. Dave stresses this! If you help people who are less fortunate, it will teach you to be satisfied with what you have. When that happens, you won't think the key to happiness is a new convertible with a $600 payment attached to it. Charitable giving and "paying it forward" are things that many rich people practice. Households with $500,000 or more in assets give away about 6% of their earnings, which is about 3 times the average of all American families.
* Goodbye, credit! The richest 10% of Americans are half as likely to have credit card debt. They are also 20% less likely to have installment loans.
* Hot wheels? Many wealthy people don't spend a lot of money on cars as a percentage of their wealth. The richest 10% of Americans spend about 2.4% of their net worth on cars. Translated: You won't likely go to a rich person's house and see 10 SUVs parked in the driveway!
* Stash it! 62% of wealthy Americans own or contribute to IRAs, mutual funds, 401(k) plans and other investments.
It takes time to become wealthy. Most people look at a rich person and don't see the sacrifices he or she has made or the frugal lifestyle they have lived. Once you adopt that economical lifestyle, start investing and don't carelessly spend money, it will become less of a sacrifice for you because it will be habit.
So what are their secrets? The answers shouldn't surprise you.
* Give money. People who have money give a lot of money away. Dave stresses this! If you help people who are less fortunate, it will teach you to be satisfied with what you have. When that happens, you won't think the key to happiness is a new convertible with a $600 payment attached to it. Charitable giving and "paying it forward" are things that many rich people practice. Households with $500,000 or more in assets give away about 6% of their earnings, which is about 3 times the average of all American families.
* Goodbye, credit! The richest 10% of Americans are half as likely to have credit card debt. They are also 20% less likely to have installment loans.
* Hot wheels? Many wealthy people don't spend a lot of money on cars as a percentage of their wealth. The richest 10% of Americans spend about 2.4% of their net worth on cars. Translated: You won't likely go to a rich person's house and see 10 SUVs parked in the driveway!
* Stash it! 62% of wealthy Americans own or contribute to IRAs, mutual funds, 401(k) plans and other investments.
It takes time to become wealthy. Most people look at a rich person and don't see the sacrifices he or she has made or the frugal lifestyle they have lived. Once you adopt that economical lifestyle, start investing and don't carelessly spend money, it will become less of a sacrifice for you because it will be habit.
How To Stop Collection Calls And Other Things
There are many reasons why a person may have fallen behind on there bills. Most of them are good honest reasons. But just because you fall behind in your bills doesn’t mean you should be harassed, intimidated or even embarrassed by debt collectors
I would like to state that not all debt collectors are bad debt collectors. Most debt collectors are good people doing a tuff job. But that said there are many dishonest collection firms out there. And when you’re in debt the last thing you want is to be hounded by unscrupulous people trying to get as much money out of you as they can. Any way they can.
Your best defense against dishonest collection firms is knowledge. As the saying goes knowledge is power. I my self have been the victim of Identity theft and have had to deal with a couple of unruly collection firms in my day. So this article talks about some of the things I learned along the way.
First off you should know that the law is on your side. That is the side of the consumer. Federal and state laws are written to protect you from collection scams, dishonest collection firms, protect your privacy and make sure you are treated decently.
Most likely the first question on your mind is how can I stop the phone calls. Yes, you can stop the phone calls. All you need to do to stop the phone calls is to send a letter to the collection firm asking them to stop. It is that simple. According to the Fair Debt Collection Practices Act once a debt collector receives your letter they can not contact you except to say they will stop contacting you or to let you know they intend to take a specific action like a law suite. You should remember that just because they stop calling does not mean that the debt goes away. It’s still there, they just stop calling.
Being in debt can be embarrassing. Most people are not eager to have there friends or family member know that they have fallen behind. In general state and federal laws prohibit debt collectors from talking to other people about your debt. In some cases a debt collector can contact other people but only to find out where you live, what your phone number is, and where you work. In general debt collectors are not allow to talk about your debt to other people except your lawyer or with your permission. Debt collectors are also prohibited from contacting you while you are at work if they know that you can’t take calls at work.
The next thing I would like to talk about is harassment. Harassment is when a debt collector threatens you, uses obscene language or repeatedly uses the telephone to annoy you. All of these activities are illegal. In these cases it is best that you requested by letter that the agency stop contacting you. If they continue you should file a complete with your states attorney general and the Federal Trade Commission. Your states attorney generals office may even be able to direct you to an advocate who can help guide you through your situation.
Debt collectors are also prohibited from making false statements. A false statement can be when a collector represents or implies that they are attorneys or government representatives or falsely imply that you have committed a crime. A collector is also not allowed to tell you that they are sending you legal forms when they are not legal form or to tell you that forms or paper work are not legal forms when they are. Debt collectors can not tell you that you will be arrested if you do not pay your debt.
I would like to state that not all debt collectors are bad debt collectors. Most debt collectors are good people doing a tuff job. But that said there are many dishonest collection firms out there. And when you’re in debt the last thing you want is to be hounded by unscrupulous people trying to get as much money out of you as they can. Any way they can.
Your best defense against dishonest collection firms is knowledge. As the saying goes knowledge is power. I my self have been the victim of Identity theft and have had to deal with a couple of unruly collection firms in my day. So this article talks about some of the things I learned along the way.
First off you should know that the law is on your side. That is the side of the consumer. Federal and state laws are written to protect you from collection scams, dishonest collection firms, protect your privacy and make sure you are treated decently.
Most likely the first question on your mind is how can I stop the phone calls. Yes, you can stop the phone calls. All you need to do to stop the phone calls is to send a letter to the collection firm asking them to stop. It is that simple. According to the Fair Debt Collection Practices Act once a debt collector receives your letter they can not contact you except to say they will stop contacting you or to let you know they intend to take a specific action like a law suite. You should remember that just because they stop calling does not mean that the debt goes away. It’s still there, they just stop calling.
Being in debt can be embarrassing. Most people are not eager to have there friends or family member know that they have fallen behind. In general state and federal laws prohibit debt collectors from talking to other people about your debt. In some cases a debt collector can contact other people but only to find out where you live, what your phone number is, and where you work. In general debt collectors are not allow to talk about your debt to other people except your lawyer or with your permission. Debt collectors are also prohibited from contacting you while you are at work if they know that you can’t take calls at work.
The next thing I would like to talk about is harassment. Harassment is when a debt collector threatens you, uses obscene language or repeatedly uses the telephone to annoy you. All of these activities are illegal. In these cases it is best that you requested by letter that the agency stop contacting you. If they continue you should file a complete with your states attorney general and the Federal Trade Commission. Your states attorney generals office may even be able to direct you to an advocate who can help guide you through your situation.
Debt collectors are also prohibited from making false statements. A false statement can be when a collector represents or implies that they are attorneys or government representatives or falsely imply that you have committed a crime. A collector is also not allowed to tell you that they are sending you legal forms when they are not legal form or to tell you that forms or paper work are not legal forms when they are. Debt collectors can not tell you that you will be arrested if you do not pay your debt.
Saving for Retirement-How Much Will You Really Need?
How much do you need to save to fund your retirement?
If you've ever looked what kind of nest-egg you are going to need to retire, you've undoubtedly come across the standard rule of thumb only allows withdrawing 4% a year if you want to have your savings last at least 30 years.
So if you wanted to start withdrawing $80k a year, you would need to have $2 million dollars in savings. Now that is a mighty sum, and many may consider it out of reach, especially if you are starting late in the game.
But, why only 4%? If the stock market averages 11% a year, why shouldn't your nest-egg last forever if you were taking out anything less than 11%. Let's take a quick look at the original study that forms the basis of this recommendation to understand its underlying assumptions. With that information we will see if we can shape our investment strategies to give us more from our savings.
The original work that many of these projections are based on was a paper by Philip L. Cooley, Carl M. Hubbard and Daniel T. Walz. As you read through this work, you'll find a few basic assumptions:
1) The goal of the analysis is to maximize the likelihood that your nest-egg will last for the desired period of time (in the study it is varied from 15 to 30 years). This is quite different from maximizing the most likely size of the portfolio.
2) The analysis is done by running a simulation using the historical data from 1926 to simulate the probable rates of return on your portfolio.
3) It also assumes the CPI (Consumer Price Index) predicts the inflation rate that you would need to match in your withdrawals (e.g. if you took $10k out the first year, and the CPI in the simulation went up 5%, in the 2nd year you would withdraw $10.5K)
4) The rate of withdrawal is never modified based on the portfolio performance. (Basically you would never reduce your spending as a function of your remaining funds.)
5) No tax or transaction costs were taken into account.
The working assumption was that the portfolio would need to last 30 years. This matches the most common retirement scenario (retire at 65, median life expectancy would be around 20 years, but a 50% chance of greater than 20 years life expectancy).
Finally, the only investment options were those with historical returns tabulated in the Ibbotson report, basically the S&P 500 as the stock market, and a family of differing maturity bonds for a bond portfolio.
With those constraints, then it turns out that you would not pursue a strategy of maximum returns on your portfolio (which is the case with a portfolio of 100% stocks), but more one that gives the best risk/ reward performance. The portfolio that gave the highest probability of lasting 30 years was found to be a 75%/25% mix of stocks and bonds, even though a 100% stock portfolio yielded about 1% more a year, the risk (as measured by the standard deviation of the annual returns) was reduced by about 20% with the diversified portfolio. For a 4% withdrawal rate, there was a 98% probability that it would last 30 years.
So, what are the factors that would allow us to increase the amount we could withdraw each year (or in effect reduce the amount we need to save)?
1) Reduce the number of years you want to ensure income. The only practical way to do this is to retire later. Helpful, but not the solution most of us want to count on. Also, to give some idea of how effective this is, if the target lifetime of your nest-egg is reduced from 30 to 25 years, the withdrawal rate can't even be increased from 4% to 5% and still keep a greater than 90% probability that it will last the target lifetime. You have to reduce the target time period to 20 years just to increase the withdrawal rate from 4% to 5%.
2) Accept a lower inflation rate. If you think your costs will be fixed, or expect that your rate of spending as you hit the 80's and 90's will go down, it may be appropriate to target a higher rate of withdrawal. Of course this has it's own set of risks, but the reality is that most 95 year olds are not traveling, eating out as much, keeping a vacation home, etc. as most 65 year olds. The flip side of that is the medical and extended care costs, which aren't captured by the CPI anyhow.
If you assumed no inflation at all in the analysis above, you could increase your withdrawal rate to 6% and still have a 98% chance the portfolio would last 30 years. That may not seem like much, but it's a 50% increase in income.
3) Increase the returns on your investments. This is the holy grail that most folks look for when evaluating their investment performance. While that can be helpful, keep in mind that the best result above was achieved with a lower yielding, lower risk portfolio than the 100% stock portfolio.
If you've ever looked what kind of nest-egg you are going to need to retire, you've undoubtedly come across the standard rule of thumb only allows withdrawing 4% a year if you want to have your savings last at least 30 years.
So if you wanted to start withdrawing $80k a year, you would need to have $2 million dollars in savings. Now that is a mighty sum, and many may consider it out of reach, especially if you are starting late in the game.
But, why only 4%? If the stock market averages 11% a year, why shouldn't your nest-egg last forever if you were taking out anything less than 11%. Let's take a quick look at the original study that forms the basis of this recommendation to understand its underlying assumptions. With that information we will see if we can shape our investment strategies to give us more from our savings.
The original work that many of these projections are based on was a paper by Philip L. Cooley, Carl M. Hubbard and Daniel T. Walz. As you read through this work, you'll find a few basic assumptions:
1) The goal of the analysis is to maximize the likelihood that your nest-egg will last for the desired period of time (in the study it is varied from 15 to 30 years). This is quite different from maximizing the most likely size of the portfolio.
2) The analysis is done by running a simulation using the historical data from 1926 to simulate the probable rates of return on your portfolio.
3) It also assumes the CPI (Consumer Price Index) predicts the inflation rate that you would need to match in your withdrawals (e.g. if you took $10k out the first year, and the CPI in the simulation went up 5%, in the 2nd year you would withdraw $10.5K)
4) The rate of withdrawal is never modified based on the portfolio performance. (Basically you would never reduce your spending as a function of your remaining funds.)
5) No tax or transaction costs were taken into account.
The working assumption was that the portfolio would need to last 30 years. This matches the most common retirement scenario (retire at 65, median life expectancy would be around 20 years, but a 50% chance of greater than 20 years life expectancy).
Finally, the only investment options were those with historical returns tabulated in the Ibbotson report, basically the S&P 500 as the stock market, and a family of differing maturity bonds for a bond portfolio.
With those constraints, then it turns out that you would not pursue a strategy of maximum returns on your portfolio (which is the case with a portfolio of 100% stocks), but more one that gives the best risk/ reward performance. The portfolio that gave the highest probability of lasting 30 years was found to be a 75%/25% mix of stocks and bonds, even though a 100% stock portfolio yielded about 1% more a year, the risk (as measured by the standard deviation of the annual returns) was reduced by about 20% with the diversified portfolio. For a 4% withdrawal rate, there was a 98% probability that it would last 30 years.
So, what are the factors that would allow us to increase the amount we could withdraw each year (or in effect reduce the amount we need to save)?
1) Reduce the number of years you want to ensure income. The only practical way to do this is to retire later. Helpful, but not the solution most of us want to count on. Also, to give some idea of how effective this is, if the target lifetime of your nest-egg is reduced from 30 to 25 years, the withdrawal rate can't even be increased from 4% to 5% and still keep a greater than 90% probability that it will last the target lifetime. You have to reduce the target time period to 20 years just to increase the withdrawal rate from 4% to 5%.
2) Accept a lower inflation rate. If you think your costs will be fixed, or expect that your rate of spending as you hit the 80's and 90's will go down, it may be appropriate to target a higher rate of withdrawal. Of course this has it's own set of risks, but the reality is that most 95 year olds are not traveling, eating out as much, keeping a vacation home, etc. as most 65 year olds. The flip side of that is the medical and extended care costs, which aren't captured by the CPI anyhow.
If you assumed no inflation at all in the analysis above, you could increase your withdrawal rate to 6% and still have a 98% chance the portfolio would last 30 years. That may not seem like much, but it's a 50% increase in income.
3) Increase the returns on your investments. This is the holy grail that most folks look for when evaluating their investment performance. While that can be helpful, keep in mind that the best result above was achieved with a lower yielding, lower risk portfolio than the 100% stock portfolio.
Gearing Up For College
A generation ago there were a thousand men to every opportunity...while today there are a thousand opportunities to every man. - Henry Ford
Maybe you're thinking about going back to finish your degree. Maybe you are wondering if it's even worth it to continue your studies or begin from scratch. Here are some things to know before you jump right into forking over the cash to pay for a classroom education.
When does it make sense to go to college?
Going to college is not necessary to exist on this planet. Education is absolutely wonderful and vital, and I think everyone who wants to go to college should. Just don't go thinking that a diploma will be your ticket to a successful life.
Don't get me wrong. I think education is extremely important. However, going into major debt in order to get a degree that you will never use is ridiculous. When I hire people for my company, I don't look only at the degrees they have. I look at desire, attitude, diligence, people skills, and other qualities. These are the things that will determine if they are successful, not necessarily a degree.
I think there are 2 reasons to pursue an education:
1. If a degree in your chosen field will open doors to career opportunities. The truth is that in many fields, a degree won't open doors. Consider whether all the costs balance against the financial rewards.
2. To improve your life quality through the pursuit of knowledge. If your reason is personal growth and to do what God has called you to, make sure you go slow and pay cash to avoid getting into trouble. Use wisdom for the sake of your family. Don't make your future hostage to student loans.
What are the 4 Nevers of college savings?
1. Never save for college using insurance.
2. Never save for college using savings bonds (only 5-6% growth)
3. Never save for college using zero-coupon bonds. (only 6-8% growth)
4. Never save for college using pre-paid college tuition. (only 7% inflation rate)
Maybe you're thinking about going back to finish your degree. Maybe you are wondering if it's even worth it to continue your studies or begin from scratch. Here are some things to know before you jump right into forking over the cash to pay for a classroom education.
When does it make sense to go to college?
Going to college is not necessary to exist on this planet. Education is absolutely wonderful and vital, and I think everyone who wants to go to college should. Just don't go thinking that a diploma will be your ticket to a successful life.
Don't get me wrong. I think education is extremely important. However, going into major debt in order to get a degree that you will never use is ridiculous. When I hire people for my company, I don't look only at the degrees they have. I look at desire, attitude, diligence, people skills, and other qualities. These are the things that will determine if they are successful, not necessarily a degree.
I think there are 2 reasons to pursue an education:
1. If a degree in your chosen field will open doors to career opportunities. The truth is that in many fields, a degree won't open doors. Consider whether all the costs balance against the financial rewards.
2. To improve your life quality through the pursuit of knowledge. If your reason is personal growth and to do what God has called you to, make sure you go slow and pay cash to avoid getting into trouble. Use wisdom for the sake of your family. Don't make your future hostage to student loans.
What are the 4 Nevers of college savings?
1. Never save for college using insurance.
2. Never save for college using savings bonds (only 5-6% growth)
3. Never save for college using zero-coupon bonds. (only 6-8% growth)
4. Never save for college using pre-paid college tuition. (only 7% inflation rate)
Don't Have A Clinched Fist
Former Prime Minister of Israel Golda Meir said, “You can’t shake hands with a clenched fist.”
The fist is the international sign of anger or of a closed spirit. The open hand is a gesture of invitation and acceptance. I often see the closed fist in the area of money: a fistful of dollars tightly held so that those precious dollars never get away. Some people think if they clutch those dollars tightly enough, never giving, they are on the path to wealth. The real world teaches that the opposite is true.
The idea of holding money with an open hand might seem to violate common sense. We feel that if we don’t hold on tightly to our money and our relationships, they will slip away. I’m not saying literally hold your money with an open hand – it represents our attitude toward money. When you give, you open yourself up. You allow the dollars to leave and the freedom to enter.
Giving works because it is in your personal blueprint to be a giver, and you unleash good things in your life that you will never see until you learn the art of unselfish giving. Giving lifts us out of ourselves; we take our eyes off our rights, our problems, and our stuff. The new view gives us renewed vision and hope. Giving is powerful.
You don’t have money to give. Go to your local homeless shelter and serve food. Then sit at the table and eat with the men and women you have served. Take your spouse and your kids with you; it will do the family good to reset their view of reality. Go to a nursing home and read to the elderly for an afternoon. Help someone change a tire. It is easy to find people with real problems when you simply look. When you give of yourself, you can’t help but be lifted up and energized to fight your own problems. Your own problems are easier to fight through when you realize how small they really are in comparison to what others face.
The happiest and most joyful people are those who give money and serve. It seems contrary to everything our culture screams at us, but look at the culture’s track record: suicide, bankruptcy, divorce, murder. We aren’t very happy. True joy comes from serving. Mentally, emotionally, financially and spiritually balanced people have learned the value of giving. Seek out some opportunities to give and serve throughout the year. You’ll be the better for it.
The fist is the international sign of anger or of a closed spirit. The open hand is a gesture of invitation and acceptance. I often see the closed fist in the area of money: a fistful of dollars tightly held so that those precious dollars never get away. Some people think if they clutch those dollars tightly enough, never giving, they are on the path to wealth. The real world teaches that the opposite is true.
The idea of holding money with an open hand might seem to violate common sense. We feel that if we don’t hold on tightly to our money and our relationships, they will slip away. I’m not saying literally hold your money with an open hand – it represents our attitude toward money. When you give, you open yourself up. You allow the dollars to leave and the freedom to enter.
Giving works because it is in your personal blueprint to be a giver, and you unleash good things in your life that you will never see until you learn the art of unselfish giving. Giving lifts us out of ourselves; we take our eyes off our rights, our problems, and our stuff. The new view gives us renewed vision and hope. Giving is powerful.
You don’t have money to give. Go to your local homeless shelter and serve food. Then sit at the table and eat with the men and women you have served. Take your spouse and your kids with you; it will do the family good to reset their view of reality. Go to a nursing home and read to the elderly for an afternoon. Help someone change a tire. It is easy to find people with real problems when you simply look. When you give of yourself, you can’t help but be lifted up and energized to fight your own problems. Your own problems are easier to fight through when you realize how small they really are in comparison to what others face.
The happiest and most joyful people are those who give money and serve. It seems contrary to everything our culture screams at us, but look at the culture’s track record: suicide, bankruptcy, divorce, murder. We aren’t very happy. True joy comes from serving. Mentally, emotionally, financially and spiritually balanced people have learned the value of giving. Seek out some opportunities to give and serve throughout the year. You’ll be the better for it.
Retirement Planning
As we live longer healthier lives retirement planning takes on a new meaning and is of vital importance if you are to enjoy a happy and healthy retirement. No longer need it be a time of inactivity engendered by a feeling of uselessness. Rather, many of today's senior citizens, enjoy active, productive and enjoyable lives.
It is the time when you can take up all those hobbies you never had time for, travel more, maybe move to an area you always wanted to live in but couldn't due to work restraints,spend more time with your family, enjoy your garden and just generally spend each day doing something you find pleasurable rather than having to go to work.
Of course it can be a wrench to leave your job and colleagues. A feeling of worthlessness can settle in as the sense of "being someone" is no longer there. However accept your retirement as the next and exciting part of your life and make the most of it.
This is were retirement planning comes in and the earlier in life you start this the better. All the pleasures of retirement can only be enjoyed if your income is sufficient to support you and your spouse. In addition it has to grow with inflation as people are living longer and longer and obviously what supports you at 60 or 65 will not be adequate at 80.
Retirement Planning- Pensions.
First and foremost you need to get a pension projection from both the state pension department and also any private pension scheme you maybe a part of. Take a look at the debts you have, including your mortgage, and see if it is possible to clear these before retiring.
Generally speaking it is not felt that the state benefit provides an adequate income for retiring and so it is important to look at private pension plans, the government are in fact encouraging people to build up their own pension funds with generous tax incentives.These make the growth on the value of a pension fund tax free and allow some of the fund to be drawn in the form of a tax free lump sum. In addition any payments made by you qualify for tax relief. The majority of pension plan types give tax relief at source which means that you only pay the net amount (e.g., a £100 contribution costs you £78).
Of course the earlier you start your process of retirement planning the better but even if you do not have a long time left to save for your retirement you should still consider retirement planning. Recently there have been many changes to the charging structures applied by the Pension Providers. This means that even if the period until your retirement is quite short you should still get a good overall return on the money you invest.
You can get a state pension forecast at www.thepensionservice.gov.uk/resourcecentre/e-services/home.asp
Retirement Planning-Your Health.
In order to enjoy a long and happy retirement your health is almost as important as your money. Take stock of your general physical condition and improve it were you can. Adopt a healthy lifestyle by eating nutritious, balanced meals and taking plenty of exercise. If you take your health seriously and look after yourself it will pay great dividends as you age.
In addition you may want to consider taking out some health insurance. Whilst the NHS is there to take care of us we all know that the reality can sometimes be very different, especially with regard to the time we may have to wait for treatment, so this in itself could be a good reason to take out a health insurance policy. In addition more and more people are retiring abroad and so may want the peace of mind of adequate private health insurance.
Another form of insurance you may wish to consider as part of your retirement planning is long term care insurance. We are all living longer and most of us look forward to long and active retirements. But with longer life expectancy comes the increased possibility that we will need help or care later in life. This help is often referred to as long term care. Many people think the government will pay for their long term care, and many get a shock that this is not the case. You may for instance be forced to sell your house in order to pay for it so an insurance policy to cover care costs could prove vital.
Retirement Planning-Moving House.
With the incredible rise in house prices that has taken place in recent years many people find themselves in possession of a very valuable asset, their home. As part of any sensible retirement plan consideration should be given to selling this asset and moving to a smaller and cheaper property, downsizing in current parlance, and thus releasing valuable equity that can be invested to top up your pension. Alternatively there are various equity release schemes which are worth looking into.
Retirement Planning-Inheritance Tax.
Again due to the substantial house price rises more and more people will find that their inheritors will be liable for inheritance tax. Careful planning can help to avoid a lot of this however and consideration needs to be given to transferring assets to your children whilst you are still alive.
In conclusion then it is never to soon to start planning for your retirement. The better off financially you are at that time of life and the healthier you are the more you are going to be able to enjoy it and make your retirement years some of the best years of your life.
It is the time when you can take up all those hobbies you never had time for, travel more, maybe move to an area you always wanted to live in but couldn't due to work restraints,spend more time with your family, enjoy your garden and just generally spend each day doing something you find pleasurable rather than having to go to work.
Of course it can be a wrench to leave your job and colleagues. A feeling of worthlessness can settle in as the sense of "being someone" is no longer there. However accept your retirement as the next and exciting part of your life and make the most of it.
This is were retirement planning comes in and the earlier in life you start this the better. All the pleasures of retirement can only be enjoyed if your income is sufficient to support you and your spouse. In addition it has to grow with inflation as people are living longer and longer and obviously what supports you at 60 or 65 will not be adequate at 80.
Retirement Planning- Pensions.
First and foremost you need to get a pension projection from both the state pension department and also any private pension scheme you maybe a part of. Take a look at the debts you have, including your mortgage, and see if it is possible to clear these before retiring.
Generally speaking it is not felt that the state benefit provides an adequate income for retiring and so it is important to look at private pension plans, the government are in fact encouraging people to build up their own pension funds with generous tax incentives.These make the growth on the value of a pension fund tax free and allow some of the fund to be drawn in the form of a tax free lump sum. In addition any payments made by you qualify for tax relief. The majority of pension plan types give tax relief at source which means that you only pay the net amount (e.g., a £100 contribution costs you £78).
Of course the earlier you start your process of retirement planning the better but even if you do not have a long time left to save for your retirement you should still consider retirement planning. Recently there have been many changes to the charging structures applied by the Pension Providers. This means that even if the period until your retirement is quite short you should still get a good overall return on the money you invest.
You can get a state pension forecast at www.thepensionservice.gov.uk/resourcecentre/e-services/home.asp
Retirement Planning-Your Health.
In order to enjoy a long and happy retirement your health is almost as important as your money. Take stock of your general physical condition and improve it were you can. Adopt a healthy lifestyle by eating nutritious, balanced meals and taking plenty of exercise. If you take your health seriously and look after yourself it will pay great dividends as you age.
In addition you may want to consider taking out some health insurance. Whilst the NHS is there to take care of us we all know that the reality can sometimes be very different, especially with regard to the time we may have to wait for treatment, so this in itself could be a good reason to take out a health insurance policy. In addition more and more people are retiring abroad and so may want the peace of mind of adequate private health insurance.
Another form of insurance you may wish to consider as part of your retirement planning is long term care insurance. We are all living longer and most of us look forward to long and active retirements. But with longer life expectancy comes the increased possibility that we will need help or care later in life. This help is often referred to as long term care. Many people think the government will pay for their long term care, and many get a shock that this is not the case. You may for instance be forced to sell your house in order to pay for it so an insurance policy to cover care costs could prove vital.
Retirement Planning-Moving House.
With the incredible rise in house prices that has taken place in recent years many people find themselves in possession of a very valuable asset, their home. As part of any sensible retirement plan consideration should be given to selling this asset and moving to a smaller and cheaper property, downsizing in current parlance, and thus releasing valuable equity that can be invested to top up your pension. Alternatively there are various equity release schemes which are worth looking into.
Retirement Planning-Inheritance Tax.
Again due to the substantial house price rises more and more people will find that their inheritors will be liable for inheritance tax. Careful planning can help to avoid a lot of this however and consideration needs to be given to transferring assets to your children whilst you are still alive.
In conclusion then it is never to soon to start planning for your retirement. The better off financially you are at that time of life and the healthier you are the more you are going to be able to enjoy it and make your retirement years some of the best years of your life.
How You Can Pay Yourself First
It’s the beginning of 2007, the beginning of a new year. It is also a time when you start to make resolutions or goals for a brand new year. I am sure among them you might have some that are related to wealth creation or accumulation. (If not, you better start thinking about that now).
One of the easiest and powerful way to accumulate wealth is to follow the “Pay Yourself First” rule, which was one of the teachings Rich Dad taught in Robert Kiyosaki’s “Rich Dad, Poor Dad”.
What does “Paying Yourself First” mean and how you can follow it? Basically, it means you simply set aside a certain amount of money each month that you will not touch (pay yourself), even before you pay your bills and expenses (pay others)!
Here’s a step by step guide which you can follow: 1. From the amount of money you make each month, you decide how many percent of your monthly salary or income you want to set aside. When you get your paycheck, the very first thing you do is to put this amount aside, hence the “pay yourself first”. The percent to set aside differs from individual to individual depending on each comfortable level and wealth target. Most people recommend 10% to 15% of the monthly income to set aside, but I suspect that you might need to go up to 20% or even 30% if you want to reach your financial success.
2. Decide what you want to do with this amount which has been set aside. Many will simply put the amount into their saving accounts. However, the idea of paying yourself first is to use it for your wealth building. You should be looking into investing them instead of just saving them. Saving alone will not help you to reach your financial success. Let the money earn you more money by investing it. Consult with your financial planner or advisor to decide the kind of investment portfolio that suits you.
I would recommend that you setup what is known as an automatic withdraw from your bank account to your investment institution for your investments. This is when money is automatically taken out of your savings or checking account each month and put into your investment. Generally, you have to select a certain day each month for when the transaction will occur, and it will happen every month on that day, just like paying your bills. In this way, it does not rely on your ability to set aside a certain amount each month. It relies on the computers who automatically invest your money for you. It is also easy once you realize how you don’t miss the money.
3. Next, you pay off your bills.
4. Live on whatever is left over from your paycheck. It does not however imply that you need to use up every single cents of what is left. If you have surplus, then good for you. If you have a substantial surplus, then go back and re-adjust your investment amount. Increase you monthly set-aside amount for investment, and let it generate more money for you.
5. And finally, NO CREDIT CARD DEBT! Don’t spend on credit. Also be very careful with home equity loans and car loans. It’s easy to get into trouble with both.
If you are disciplined, you can pay yourself first without running into a credit rut.
First, keep your personal expense low. Don’t go out and spend your money on “ego” toys like a new car, a new outfit or a long vacation. Not until the habit of paying yourself first has built up enough assests for you to afford them.
Second, when you come up short, don’t dip into your investment to pay off your creditors. Robert Kiyosaki believes that if you are under pressure from creditors, the pressure will actually inspire you to come up with new ways of making money. Look for other ways to tide over.
One of the easiest and powerful way to accumulate wealth is to follow the “Pay Yourself First” rule, which was one of the teachings Rich Dad taught in Robert Kiyosaki’s “Rich Dad, Poor Dad”.
What does “Paying Yourself First” mean and how you can follow it? Basically, it means you simply set aside a certain amount of money each month that you will not touch (pay yourself), even before you pay your bills and expenses (pay others)!
Here’s a step by step guide which you can follow: 1. From the amount of money you make each month, you decide how many percent of your monthly salary or income you want to set aside. When you get your paycheck, the very first thing you do is to put this amount aside, hence the “pay yourself first”. The percent to set aside differs from individual to individual depending on each comfortable level and wealth target. Most people recommend 10% to 15% of the monthly income to set aside, but I suspect that you might need to go up to 20% or even 30% if you want to reach your financial success.
2. Decide what you want to do with this amount which has been set aside. Many will simply put the amount into their saving accounts. However, the idea of paying yourself first is to use it for your wealth building. You should be looking into investing them instead of just saving them. Saving alone will not help you to reach your financial success. Let the money earn you more money by investing it. Consult with your financial planner or advisor to decide the kind of investment portfolio that suits you.
I would recommend that you setup what is known as an automatic withdraw from your bank account to your investment institution for your investments. This is when money is automatically taken out of your savings or checking account each month and put into your investment. Generally, you have to select a certain day each month for when the transaction will occur, and it will happen every month on that day, just like paying your bills. In this way, it does not rely on your ability to set aside a certain amount each month. It relies on the computers who automatically invest your money for you. It is also easy once you realize how you don’t miss the money.
3. Next, you pay off your bills.
4. Live on whatever is left over from your paycheck. It does not however imply that you need to use up every single cents of what is left. If you have surplus, then good for you. If you have a substantial surplus, then go back and re-adjust your investment amount. Increase you monthly set-aside amount for investment, and let it generate more money for you.
5. And finally, NO CREDIT CARD DEBT! Don’t spend on credit. Also be very careful with home equity loans and car loans. It’s easy to get into trouble with both.
If you are disciplined, you can pay yourself first without running into a credit rut.
First, keep your personal expense low. Don’t go out and spend your money on “ego” toys like a new car, a new outfit or a long vacation. Not until the habit of paying yourself first has built up enough assests for you to afford them.
Second, when you come up short, don’t dip into your investment to pay off your creditors. Robert Kiyosaki believes that if you are under pressure from creditors, the pressure will actually inspire you to come up with new ways of making money. Look for other ways to tide over.
How To Fight High Gasoline Prices
Are you scared that gas prices are going up but your income is not? Is the high gasoline price sucking too much money out of your pocket?
For people on a fixed income, it looks as if everything is going up except their pay check. In fact, the situation is so serious that some of them need to look for a new job closer to the home just to save on gas. This is true even though they love their job and don't want to change it.
You can find plenty of advice about surviving in the world of high gasoline prices. For example:
* Change your driving habits.
* Cut back on daily purchases in order to compensate for increased gasoline spending.
* Do not go out for lunch. Bring it with you to the office.
* Instead of eating out at a "fancy" sit down restaurants, go to fast food places to cover the difference between gas prices and food savings.
Basically, all these advisers are teaching how to adjust your spending habits to accommodate rising gas prices because there is nothing you can do about the rising cost of gasoline. But what if you don’t want to change your habits? What if you refuse to become a hostage to higher gasoline prices?
Well, I have a realistic solution. Instead of losing time on driving around looking for cheaper gasoline, spend your time and energy on learning about online earning opportunities. You can easily make between one hundred to three hundred dollars on the Internet monthly. This extra money could cover your gasoline expenses allowing you to forget about this problem for rest of your life!
There are hundreds of thousands people who make full time living from the Internet business and millions who choose the Internet as a part time job. Why not to begin your Internet business journey with a very clear goal to compensate your everyday gasoline expenses?
There are countless ways to make this kind of additional income through the Internet. Most of these methods are very simple to understand and quickly to learn even for beginners.
Being involving with an Internet business on a part time basis can earn you extra income straight from your home computer without giving up the things you and your family already enjoy.
For people on a fixed income, it looks as if everything is going up except their pay check. In fact, the situation is so serious that some of them need to look for a new job closer to the home just to save on gas. This is true even though they love their job and don't want to change it.
You can find plenty of advice about surviving in the world of high gasoline prices. For example:
* Change your driving habits.
* Cut back on daily purchases in order to compensate for increased gasoline spending.
* Do not go out for lunch. Bring it with you to the office.
* Instead of eating out at a "fancy" sit down restaurants, go to fast food places to cover the difference between gas prices and food savings.
Basically, all these advisers are teaching how to adjust your spending habits to accommodate rising gas prices because there is nothing you can do about the rising cost of gasoline. But what if you don’t want to change your habits? What if you refuse to become a hostage to higher gasoline prices?
Well, I have a realistic solution. Instead of losing time on driving around looking for cheaper gasoline, spend your time and energy on learning about online earning opportunities. You can easily make between one hundred to three hundred dollars on the Internet monthly. This extra money could cover your gasoline expenses allowing you to forget about this problem for rest of your life!
There are hundreds of thousands people who make full time living from the Internet business and millions who choose the Internet as a part time job. Why not to begin your Internet business journey with a very clear goal to compensate your everyday gasoline expenses?
There are countless ways to make this kind of additional income through the Internet. Most of these methods are very simple to understand and quickly to learn even for beginners.
Being involving with an Internet business on a part time basis can earn you extra income straight from your home computer without giving up the things you and your family already enjoy.
Judgements-Liens-and Other Legal Issues
In the field of debt collection and delinquencies, judgments and judgement risk factors are a very real concerns. Will a creditor sue and seek legal judgement against me? If he does, what type judgement might it be? What exactly is a judgement and what can I do about it? These are just some of the questions answered in this judgement article. But please note. The content of this article is for consumer knowledge of judgements and legal lawsuits only and it is assume the reader will act responsibly towards his/her debt.
RISK FACTORS
Collectors must abide by the their state's Statute of Limitations (SOL) for the amount of time to sue a debtor for payments. Therefore a consumer's first step is determine if the SOL for collecting a debt has past. If the SOL has not passed, the consumer must weigh the risk factor of a judgement against them when determining if they should pay a delinquent debt. A judgement could allow the creditor to garnish wages or hire an authority to come get your property. However, it is possible it may not be in the creditor's best interest to do so. Sometimes it is simply too much time and expense for a creditor to take action against you. But the possibility does exist. As stated at Credit Info Center: "The risks of judgments, garnishments, and property seizures must be properly balanced against the likelihood that such drastic collection measures will ever happen. The risk, and the decision to take that risk, are entirely yours if you're in such a position."
DEFINITIONS
JUDGEMENT - a decision issued by a court at the end of a lawsuit. If in the favor of the creditor it not only verifies the debt but can increase the debt by adding interest, court costs, collection fees, and attorney fees an may extend up to 20 years on a credit file. A decision in favor of the debtor makes the debt uncollectible and may include reimbursement of legal costs to the debtor.
JUDGEMENT PROOF - a debtor has little or no property that a creditor can legally take to collect in the foreseeable future.
PRE-JUDGEMENT ATTACHMENT - a legal procedure which lets an unsecured creditor tie up property before obtaining a court judgement.
DEFAULT JUDGEMENT - If a consumer is sued and does not file papers in response to the lawsuit in the prescribed time limit, the plaintiff can ask the court to enter a judgement against the debtor and is an automatic loss of the case. A default judgement can be set aside but this is unusual and circumstances must be notable to justify such a turn.
LIEN - a lien is a notice that a creditor has attached property. The consumer cannot sell the property without paying off the creditor because the lien makes the "title" cloudy.
SECURED DEBT Property that is purchased using the property itself as collateral on the loan is considered secured. Credit cards are considered unsecured but tax debt is considered secured.
What can a creditor do?
Creditors from secured debts may be able to obtain a judgement for repossessions. Mortgagors can depose and landlords can evict. Garnishment or taking of wages is an option of any creditor. The decision to sue a debtor is usually based on the amount owed (usually over $500), the cost of getting it back, and whether there is a reasonable expectation that something can be collected.
If the matter can be sorted out with the person making the claim before it goes to court, it will be cheaper. If you lose in court, you risk having to pay the other side’s costs. Even if you agree that you owe the money but don't agree on the amount, you can try to negotiate the matter before it goes to court. If you reach an agreement, you will need to submit an agreement as to judgement form in the court, which tells the court that there is no need to have the matter heard.
Some judgments can be fought by challenging their validity. For example default judgments at times can be reversed by claiming the debtor was never served or was ignorant of the facts. Before reversal, however, you must back up the claim with facts. Judgments which include selected stipulations can be reversed if the debtor can prove coercion or misrepresentation. Of course winning an appeal in a higher court can reverse a decision as well.
Payment of Judgments
Once a judgement has been issued, settlement may still be an option if the debtor and creditor can come to terms. This is often the case when dealing with a temporary judgement-proof debtor who will have assets freeing in the future. The creditor might want the debt cleared sooner and might be willing to settle.
Contrary to popular belief, a judgement can be removed from a credit file by the creditor. This requires a fair amount of work and therefore the creditor would have to be motivated to do so in some way.
RISK FACTORS
Collectors must abide by the their state's Statute of Limitations (SOL) for the amount of time to sue a debtor for payments. Therefore a consumer's first step is determine if the SOL for collecting a debt has past. If the SOL has not passed, the consumer must weigh the risk factor of a judgement against them when determining if they should pay a delinquent debt. A judgement could allow the creditor to garnish wages or hire an authority to come get your property. However, it is possible it may not be in the creditor's best interest to do so. Sometimes it is simply too much time and expense for a creditor to take action against you. But the possibility does exist. As stated at Credit Info Center: "The risks of judgments, garnishments, and property seizures must be properly balanced against the likelihood that such drastic collection measures will ever happen. The risk, and the decision to take that risk, are entirely yours if you're in such a position."
DEFINITIONS
JUDGEMENT - a decision issued by a court at the end of a lawsuit. If in the favor of the creditor it not only verifies the debt but can increase the debt by adding interest, court costs, collection fees, and attorney fees an may extend up to 20 years on a credit file. A decision in favor of the debtor makes the debt uncollectible and may include reimbursement of legal costs to the debtor.
JUDGEMENT PROOF - a debtor has little or no property that a creditor can legally take to collect in the foreseeable future.
PRE-JUDGEMENT ATTACHMENT - a legal procedure which lets an unsecured creditor tie up property before obtaining a court judgement.
DEFAULT JUDGEMENT - If a consumer is sued and does not file papers in response to the lawsuit in the prescribed time limit, the plaintiff can ask the court to enter a judgement against the debtor and is an automatic loss of the case. A default judgement can be set aside but this is unusual and circumstances must be notable to justify such a turn.
LIEN - a lien is a notice that a creditor has attached property. The consumer cannot sell the property without paying off the creditor because the lien makes the "title" cloudy.
SECURED DEBT Property that is purchased using the property itself as collateral on the loan is considered secured. Credit cards are considered unsecured but tax debt is considered secured.
What can a creditor do?
Creditors from secured debts may be able to obtain a judgement for repossessions. Mortgagors can depose and landlords can evict. Garnishment or taking of wages is an option of any creditor. The decision to sue a debtor is usually based on the amount owed (usually over $500), the cost of getting it back, and whether there is a reasonable expectation that something can be collected.
If the matter can be sorted out with the person making the claim before it goes to court, it will be cheaper. If you lose in court, you risk having to pay the other side’s costs. Even if you agree that you owe the money but don't agree on the amount, you can try to negotiate the matter before it goes to court. If you reach an agreement, you will need to submit an agreement as to judgement form in the court, which tells the court that there is no need to have the matter heard.
Some judgments can be fought by challenging their validity. For example default judgments at times can be reversed by claiming the debtor was never served or was ignorant of the facts. Before reversal, however, you must back up the claim with facts. Judgments which include selected stipulations can be reversed if the debtor can prove coercion or misrepresentation. Of course winning an appeal in a higher court can reverse a decision as well.
Payment of Judgments
Once a judgement has been issued, settlement may still be an option if the debtor and creditor can come to terms. This is often the case when dealing with a temporary judgement-proof debtor who will have assets freeing in the future. The creditor might want the debt cleared sooner and might be willing to settle.
Contrary to popular belief, a judgement can be removed from a credit file by the creditor. This requires a fair amount of work and therefore the creditor would have to be motivated to do so in some way.
Get Paid for Answering Survey Online
Getting paid for answering surveys online is an easy way to make some extra money. Surveys are a great way to earn extra money while you sit at home in front of your own computer. Many people take the money from their survey pay day and use it as a part-time income. It is possible to take surveys and make a pretty decent living.
Paid surveys have been around forever. We have all heard the statistics in the news and in newspapers. The newscaster will quote, "a study...". That study was likely conducted through a paid survey. There are a variety of ways to take paid surveys, but online is the most convenient. Other paid surveys often occur at shopping centers or malls at various times during the year.
The pay for an online survey can range drastically from $10 to $100, depending on the company you are taking the survey for. It is important to look at all the details of the questionnaire before you begin taking it. All reputable survey companies will explicitly state the terms under which you will get paid. If the terms of the survey have not been shared with you, the survey may not be legitimate or you may not get paid to take the survey.
Once you develop a system for taking online surveys, it will be easier to begin earning money. After you have completed a cash paid survey and any other requirements of the survey company, your pay is often transferred into an easily used online payment system like PayPal. Many people use these types of systems to transfer money while conducting business on the Internet.
Through an online payment system, you can access your pay easily and conveniently. It is a secure way to get paid for your survey taking. You can also elect to receive a check for the surveys you take. Checks are a little more inconvenient because you have to wait for them to come in the mail. But for people who are not comfortable using an online payment system, checks offer a way to participate in the paid survey market.
Taking surveys online and getting paid for your opinion is a great way to make extra cash. Many different market research companies use paid online surveys to help them make decisions about their product lines, marketing, and other consumer decisions.
If you can devote a couple of hours per day to online surveys, then it is possible to make a pretty decent income from them. For others who just want to do an occasional survey, you can earn some decent spare cash for just sharing your opinions.
Paid surveys have been around forever. We have all heard the statistics in the news and in newspapers. The newscaster will quote, "a study...". That study was likely conducted through a paid survey. There are a variety of ways to take paid surveys, but online is the most convenient. Other paid surveys often occur at shopping centers or malls at various times during the year.
The pay for an online survey can range drastically from $10 to $100, depending on the company you are taking the survey for. It is important to look at all the details of the questionnaire before you begin taking it. All reputable survey companies will explicitly state the terms under which you will get paid. If the terms of the survey have not been shared with you, the survey may not be legitimate or you may not get paid to take the survey.
Once you develop a system for taking online surveys, it will be easier to begin earning money. After you have completed a cash paid survey and any other requirements of the survey company, your pay is often transferred into an easily used online payment system like PayPal. Many people use these types of systems to transfer money while conducting business on the Internet.
Through an online payment system, you can access your pay easily and conveniently. It is a secure way to get paid for your survey taking. You can also elect to receive a check for the surveys you take. Checks are a little more inconvenient because you have to wait for them to come in the mail. But for people who are not comfortable using an online payment system, checks offer a way to participate in the paid survey market.
Taking surveys online and getting paid for your opinion is a great way to make extra cash. Many different market research companies use paid online surveys to help them make decisions about their product lines, marketing, and other consumer decisions.
If you can devote a couple of hours per day to online surveys, then it is possible to make a pretty decent income from them. For others who just want to do an occasional survey, you can earn some decent spare cash for just sharing your opinions.
What is a Credit Report?
For most people having good credit is a necessary part of their financial well being. Your credit history has a large impact on the ability to receive a mortgage, car loan and credit cards. Most of time your credit rating is based and formulated using information that is found on your credit report. If you are new to having credit or finally realized how important credit can be, here is some information on what a credit report is and its importance in the credit process.
A credit report is a document that is used to summarize your financial reliability. Usually credit reports compile information that includes current loans and credit cards you have, your payment history, your outstanding debt and other personal information such as your current and previous address, full name, aliases, and companies or lenders that recently requested your credit report.
Credit reports are a very useful tool for companies and lenders to determine if a person they are either loaning money to or can be providing a job or an apartment for is reliable and stable with their finances. For instance, if you would like to apply for a credit card, when filling out the application, you sign a waiver giving the credit card permission to pull your credit report and analyze it. From this point the credit card company will look at your credit report to see if you have lots of other credit cards, the debt that you owe on those credit cards and if in the past were you late paying the monthly bills for the credit cards.
Credit reports are instruments used by lenders and other entities to protect themselves against risk. While a credit report with lots of negative info can be bad for the person that is applying for a loan or apartment, credit reports are in most cases very helpful for consumers that keep up on their payments and are financially responsible. These consumers are able to acquire import loans such as mortgages and business loans that can help them reach their life goals. Because credit reports are so important to the process of acquiring loans and a big factor in renting an apartment or applying for a job, it is extremely important that consumers know as much as possible on how credit reports are used, how they are scored and strategies on how your credit report can show you as being financially responsible.
A credit report is a document that is used to summarize your financial reliability. Usually credit reports compile information that includes current loans and credit cards you have, your payment history, your outstanding debt and other personal information such as your current and previous address, full name, aliases, and companies or lenders that recently requested your credit report.
Credit reports are a very useful tool for companies and lenders to determine if a person they are either loaning money to or can be providing a job or an apartment for is reliable and stable with their finances. For instance, if you would like to apply for a credit card, when filling out the application, you sign a waiver giving the credit card permission to pull your credit report and analyze it. From this point the credit card company will look at your credit report to see if you have lots of other credit cards, the debt that you owe on those credit cards and if in the past were you late paying the monthly bills for the credit cards.
Credit reports are instruments used by lenders and other entities to protect themselves against risk. While a credit report with lots of negative info can be bad for the person that is applying for a loan or apartment, credit reports are in most cases very helpful for consumers that keep up on their payments and are financially responsible. These consumers are able to acquire import loans such as mortgages and business loans that can help them reach their life goals. Because credit reports are so important to the process of acquiring loans and a big factor in renting an apartment or applying for a job, it is extremely important that consumers know as much as possible on how credit reports are used, how they are scored and strategies on how your credit report can show you as being financially responsible.
A Mathematical Look at How Gas Companies Rip Us Off
The fact that since the first of the year crude oil has slid over 16% while the national average price of gasoline has fallen only 5% really bothers me. So, on that note, I've decided to do a little bit of research and a whole lot of math in order to try and figure out what the heck is going on.
First off, let's assume that we're working under the premise that the price of crude oil makes up about half of the price of gasoline. After doing some research, this seems to be a pretty standard and accepted idea.
On January 1, the national average gas price was $2.33 per gallon while the price of a barrel of crude oil was at $61.25. In sticking with the theory that the price of oil makes up half of the cost of gasoline, the $61.25 per barrel equaled $1.165 worth of gasoline.
As of January 16, the price of oil had fallen to $51.21 - 16.4% lower than the price on January 1. According to the above theory, the price of oil on January 16 should now equal $.974 worth of gasoline:
(1 - .164) * $1.165 = $.974
Assuming the non-oil 50% of gasoline (taxes, additives, advertising, salaries, etc.) was a fixed cost - not that unreasonable - the new price of gasoline should be $2.14 per gallon, roughly 8.2% lower than it was on January 1:
$1.165 + $.974 = $2.139
Unfortunately, the national average price of gasoline on January 16 was $2.22 - only 4.7% lower than what it was on January 1.
This leads me to one of two conclusions:
1. The "fixed" costs actually increased by 6.9% as oil prices went down, or
2. The system is rigged so there is enough lag time built in for oil and gasoline companies to take advantage of the arbitrage.
First off, let's assume that we're working under the premise that the price of crude oil makes up about half of the price of gasoline. After doing some research, this seems to be a pretty standard and accepted idea.
On January 1, the national average gas price was $2.33 per gallon while the price of a barrel of crude oil was at $61.25. In sticking with the theory that the price of oil makes up half of the cost of gasoline, the $61.25 per barrel equaled $1.165 worth of gasoline.
As of January 16, the price of oil had fallen to $51.21 - 16.4% lower than the price on January 1. According to the above theory, the price of oil on January 16 should now equal $.974 worth of gasoline:
(1 - .164) * $1.165 = $.974
Assuming the non-oil 50% of gasoline (taxes, additives, advertising, salaries, etc.) was a fixed cost - not that unreasonable - the new price of gasoline should be $2.14 per gallon, roughly 8.2% lower than it was on January 1:
$1.165 + $.974 = $2.139
Unfortunately, the national average price of gasoline on January 16 was $2.22 - only 4.7% lower than what it was on January 1.
This leads me to one of two conclusions:
1. The "fixed" costs actually increased by 6.9% as oil prices went down, or
2. The system is rigged so there is enough lag time built in for oil and gasoline companies to take advantage of the arbitrage.
How Gas Credit Cards Work
Do you drive regularly? If you do, then you probably know how difficult it is to deal with the ever increasing price of gas. The fuel industry has become quite unstable because of the conflicts that often happen among major petroleum producing countries. Even the rumors of a possible conflict in the Middle East are enough to make the price of oil rise rapidly.
Many people became aware of the fragility of our energy infrastructure because of the problems with production and distribution capacity in recent years. This problem has also been highlighted by the natural disasters and malfunctions that are personnel and equipment based. Due to the instability of the fuel industry, people across the country have been forced to lessen the impact of the rising cost of fuel. They turn to gas credit cards, car pooling, use of public transportation and other similar techniques to save money on fuel.
You can also try some of these creative solutions to reduce the effect of high gas prices on your personal budget. Many people have turned to gas credit cards because they seem to be an enticing way to save money. However, you should first understand how gas credit cards work if you want to go by this route. You need to find out if you can really save money by using these credit cards.
If you are considering the idea of getting gas credit cards, then you should know that they usually charge much higher interest rates than standard credit cards. This means that you will to pay off all of the balances of your credit cards on time. You will not save money if the added finance charges are bigger than the savings that the credit cards offer.
You should also be aware that the issuers of gas credit cards may change the terms and conditions of your account at any time. It would be wise to read every piece of correspondence that you receive from your gas credit cards issuer. You can choose between negotiating special terms with the issuer and discontinuing the use of your credit card if the terms become problematic.
You can also get the gas credit cards that are offered by some oil companies. However, these credit cards offer gas credit cards only work at gas stations that use gas products supplied by that particular company. If you consistently buy gas from the same station, then you can benefit from these credit cards. However, these credit cards may not work for you if you travel a great deal. In this case, you have to make sure that your gas credit cards will work during your travels.
Many people became aware of the fragility of our energy infrastructure because of the problems with production and distribution capacity in recent years. This problem has also been highlighted by the natural disasters and malfunctions that are personnel and equipment based. Due to the instability of the fuel industry, people across the country have been forced to lessen the impact of the rising cost of fuel. They turn to gas credit cards, car pooling, use of public transportation and other similar techniques to save money on fuel.
You can also try some of these creative solutions to reduce the effect of high gas prices on your personal budget. Many people have turned to gas credit cards because they seem to be an enticing way to save money. However, you should first understand how gas credit cards work if you want to go by this route. You need to find out if you can really save money by using these credit cards.
If you are considering the idea of getting gas credit cards, then you should know that they usually charge much higher interest rates than standard credit cards. This means that you will to pay off all of the balances of your credit cards on time. You will not save money if the added finance charges are bigger than the savings that the credit cards offer.
You should also be aware that the issuers of gas credit cards may change the terms and conditions of your account at any time. It would be wise to read every piece of correspondence that you receive from your gas credit cards issuer. You can choose between negotiating special terms with the issuer and discontinuing the use of your credit card if the terms become problematic.
You can also get the gas credit cards that are offered by some oil companies. However, these credit cards offer gas credit cards only work at gas stations that use gas products supplied by that particular company. If you consistently buy gas from the same station, then you can benefit from these credit cards. However, these credit cards may not work for you if you travel a great deal. In this case, you have to make sure that your gas credit cards will work during your travels.
The Effects Of Interest Rate Hikes On You
An increase in the interest rate by the Bank of England always scares people until they work out exactly what affect the increase will have on their lives. The people who will suffer the most will be those people who have taken out loans that have left them financially stretched before the interest rate increase occurred. The actual amount of the increase isn’t as much of a problem as the psychological effects of the increase. People who can be hardest hit are those who own homes although they can sort out some of their problems by consolidating their debts. One of the problems is that the interest rate increase will affect people in a variety of different ways, not a single way.
Many people will be able to make plans to accommodate the increased interest rate on loans and mortgages, but may be unprepared for its effect on other general costs. To be hit on multiple sides with rising costs will greatly increase the pressure on those people who have loans outstanding. The burden of the loans will increase and the more stretched a person is financially before the increase, the more they will feel the effects of the increase. While the increase may be as little as a quarter of a percent, it can result in a increase of £20 pounds per month or more in monthly payments on a loan of 10 000 pounds.
The additional money will have to be taken from another aspect of the household budget, which in turn can have affects on people’s quality of life. Most people will deduct it from the amount of money allocated to leisure activities and non-essential aspects. This can be exacerbated by the fact that other bills may also be increased through the interest rate increase. This is coupled with the fact that council tax rates can be tied to interest rates and can increase in line with increases in the interest rates. This means that the person will have to cope with increased bills at a time when they are trying to reduce costs to pay off loans or mortgages that have been also increased.
Many people will be able to make plans to accommodate the increased interest rate on loans and mortgages, but may be unprepared for its effect on other general costs. To be hit on multiple sides with rising costs will greatly increase the pressure on those people who have loans outstanding. The burden of the loans will increase and the more stretched a person is financially before the increase, the more they will feel the effects of the increase. While the increase may be as little as a quarter of a percent, it can result in a increase of £20 pounds per month or more in monthly payments on a loan of 10 000 pounds.
The additional money will have to be taken from another aspect of the household budget, which in turn can have affects on people’s quality of life. Most people will deduct it from the amount of money allocated to leisure activities and non-essential aspects. This can be exacerbated by the fact that other bills may also be increased through the interest rate increase. This is coupled with the fact that council tax rates can be tied to interest rates and can increase in line with increases in the interest rates. This means that the person will have to cope with increased bills at a time when they are trying to reduce costs to pay off loans or mortgages that have been also increased.
Compare Car Insurance Quotes Online - You can Save Money
It is not surprising that statistics show that most Britons simply do not shop around to get the best deal on their car insurance. The choice of motor insurance policies, and insurance companies, is almost bewildering.
However, if you do accept the first quote you are given, whether you are an experienced driver or not, you are simply giving away your hard earned cash to your motor insurance company far too readily.
There are a huge amount of car insurance policies advertised online, in your local press, and a myriad of deals available from the larger retail supermarkets. Yes you want to save time and money, but if you target your requests for quotes properly, you could save hundreds in less than an hour online.
Many car insurance companies claim to offer policies for all types of drivers. Simply asking just any random insurance company for a quote, isn't going to save you money. If you are a new driver, a learner, a student, or a motorist with little driving history, you need to get a specialist number quotes.
So where do you find these companies?
You could start by using a search engine, asking a friend for a recommendation or phoning a company up for a quote, but before you do anything else -
Stop!
Decide what you want to achieve before you take any action.
Do you want a fancy car insurance policy with lots of extras? Policy add-ons that could cost you more are:
- Having a replacement courtesy car - Insisting on a protected no claims bonus - Extra Legal protection - Taking fully comprehensive insurance if you don't need it
There are other services on offer from insurance companies, but if you do not really need it, why bother.
So do you want a really cheap price in the least amount of time instead?
Yes, if you simply want a really cheap price, you're in good company because that's what over eighty seven per cent of people said in a recent survey.
Follow this simple three step plan to reduce your car insurance premiums online:
1. Set aside just one hour to request your motor insurance quotes online.
2. Get four car insurance quotes (use three price comparison sites and one specialist insurer).
3. After you have received your quotations, telephone the insurance company with the cheapest quote and ask them to beat your best online quote (you don't need to tell them where you obtained the quote).
The above three steps sound almost too easy, but using price comparison sites really is the most efficient way to begin your search for low prices.
There are a number of price crunching web sites online. To provide you with a rate, they will ask you some basic information about yourself, what level of cover you need, and then request quotes from up to 300 different car insurance companies in a single search.
However, if you do accept the first quote you are given, whether you are an experienced driver or not, you are simply giving away your hard earned cash to your motor insurance company far too readily.
There are a huge amount of car insurance policies advertised online, in your local press, and a myriad of deals available from the larger retail supermarkets. Yes you want to save time and money, but if you target your requests for quotes properly, you could save hundreds in less than an hour online.
Many car insurance companies claim to offer policies for all types of drivers. Simply asking just any random insurance company for a quote, isn't going to save you money. If you are a new driver, a learner, a student, or a motorist with little driving history, you need to get a specialist number quotes.
So where do you find these companies?
You could start by using a search engine, asking a friend for a recommendation or phoning a company up for a quote, but before you do anything else -
Stop!
Decide what you want to achieve before you take any action.
Do you want a fancy car insurance policy with lots of extras? Policy add-ons that could cost you more are:
- Having a replacement courtesy car - Insisting on a protected no claims bonus - Extra Legal protection - Taking fully comprehensive insurance if you don't need it
There are other services on offer from insurance companies, but if you do not really need it, why bother.
So do you want a really cheap price in the least amount of time instead?
Yes, if you simply want a really cheap price, you're in good company because that's what over eighty seven per cent of people said in a recent survey.
Follow this simple three step plan to reduce your car insurance premiums online:
1. Set aside just one hour to request your motor insurance quotes online.
2. Get four car insurance quotes (use three price comparison sites and one specialist insurer).
3. After you have received your quotations, telephone the insurance company with the cheapest quote and ask them to beat your best online quote (you don't need to tell them where you obtained the quote).
The above three steps sound almost too easy, but using price comparison sites really is the most efficient way to begin your search for low prices.
There are a number of price crunching web sites online. To provide you with a rate, they will ask you some basic information about yourself, what level of cover you need, and then request quotes from up to 300 different car insurance companies in a single search.
Quiz: Are You A Shopaholic?
A lot of people enjoy shopping, but for some people the enjoyment of shopping goes beyond mere bargain hunting and can be part of an addiction. There are many names for this addiction.
Excessive spending is known as compulsive spending, spending addiction or being a shopaholic. What it boils down to is recognising whether your spending habits are out of control. If you get urges to spend that you are unable to control then you may be a shopaholic or spending addict.
Shopaholic Quiz:
Read the following list and count the number of statements that apply:
* Being unable to pass up a "bargain"
* Making impulsive purchases on a regular basis
* Leaving price tags on clothes so they can be returned
* Not using items you've purchased
* Lying about the cost of purchases
* Using shopping as a "pick me up"
* Buying luxuries before necessities
* Trying unsuccessfully to curb shopping impulses
* Spending more time or money shopping than you intend
* Devoting a large amount of time shopping and planning future shopping expeditions
* Spending to an extent that interferes with your life (excessive debt) or relationships
* Experiencing withdrawal symptoms from shopping
* Giving up other social or recreational activities to shop
Excessive spending is known as compulsive spending, spending addiction or being a shopaholic. What it boils down to is recognising whether your spending habits are out of control. If you get urges to spend that you are unable to control then you may be a shopaholic or spending addict.
Shopaholic Quiz:
Read the following list and count the number of statements that apply:
* Being unable to pass up a "bargain"
* Making impulsive purchases on a regular basis
* Leaving price tags on clothes so they can be returned
* Not using items you've purchased
* Lying about the cost of purchases
* Using shopping as a "pick me up"
* Buying luxuries before necessities
* Trying unsuccessfully to curb shopping impulses
* Spending more time or money shopping than you intend
* Devoting a large amount of time shopping and planning future shopping expeditions
* Spending to an extent that interferes with your life (excessive debt) or relationships
* Experiencing withdrawal symptoms from shopping
* Giving up other social or recreational activities to shop
Balancing Your Checkbook
Balancing your checkbook is little more than making certain you and the bank both agree on what's happened to your bank account each month.
The bank provides a monthly statement of all transactions during the period. It is important that you balance your checkbook by comparing your checkbook register to the bank statement in a timely manner in order to:
* correct errors by the bank;
* find your own errors and know how much money you actually have
Reconciling your account register to the bank statement is a matter of comparing deposits and withdrawals and adjusting the bank statement for outstanding items not yet reflected by the bank. This process will go more quickly and smoothly if you make sure your bank register is up to date. Be sure all of your transactions are entered -- including direct deposit, ATM transactions, and debit charges -- before you start trying to reconcile to the bank statement. Here is a step by step:
* 1. Start with the bank balance from the bank statement
* 2. Determine if you have made any deposits that do not appear yet on the bank statement. List and total these "deposits in transit."
* 3. Determine if you have any outstanding checks (checks you have written and recorded in your checkbook but have not yet come through the bank). Make a check mark by each item that has cleared the bank as you match them up. When you finish going through the checks, the ones without a check mark are your outstanding checks. List them in the blanks under "outstanding checks" on the form and total the amount.
The bank provides a monthly statement of all transactions during the period. It is important that you balance your checkbook by comparing your checkbook register to the bank statement in a timely manner in order to:
* correct errors by the bank;
* find your own errors and know how much money you actually have
Reconciling your account register to the bank statement is a matter of comparing deposits and withdrawals and adjusting the bank statement for outstanding items not yet reflected by the bank. This process will go more quickly and smoothly if you make sure your bank register is up to date. Be sure all of your transactions are entered -- including direct deposit, ATM transactions, and debit charges -- before you start trying to reconcile to the bank statement. Here is a step by step:
* 1. Start with the bank balance from the bank statement
* 2. Determine if you have made any deposits that do not appear yet on the bank statement. List and total these "deposits in transit."
* 3. Determine if you have any outstanding checks (checks you have written and recorded in your checkbook but have not yet come through the bank). Make a check mark by each item that has cleared the bank as you match them up. When you finish going through the checks, the ones without a check mark are your outstanding checks. List them in the blanks under "outstanding checks" on the form and total the amount.
14 Household Budgeting Tips
1. Stay busy after work
One "easy" way to avoid overspending and thus stay within your budget is to have something else to do after work. Get a second job that is fun, go to school, volunteer or get into great physical shape. The more you do, the less you will spend!
2. Watch those miscellaneous categories
Make sure you have enough well-defined categories to capture your true spending. Putting too much into a miscellaneous category makes it harder to track what you have spent and harder to control, especially the splurges!
3. Need
If you did not know you need it, you probably do not. Do not buy things just because they are on sale. If you had no use or want for it before you saw it on sale, then you will have no use for it later.
5. Don't Forget to Budget for Special Occasions
When forecasting your expenses, remember to include gift-giving occasions. Mother's Day, Valentine's Day, birthdays, Christmas, and anniversaries are good examples. If you plan to spend money on these occasions, remember to include this in your budget.
6. Don't use a debt to get out of another debt
Do not take out a consolidation loan to pay off your other debts. The point is to get out of it, not to squeeze them together and end up paying interest on the loan while paying off your debts. Try consulting a "free" debt counselor service first.
7. Remember To Budget Time As Well
We have all heard "time is money." Well-spent time can be an investment. Take a few minutes to plan ways to save on bills - 15 or 20 min. researching lower rates on electricity or long distance can pay off. You will know when time spent is not worth it.
8. The envelope system
Total yearly/monthly bills, divide each into 12 months. Divide monthly amount into bi-weekly payments. Use envelope for each bill; put in cash every 2 weeks. Use only the cash in envelope till it is gone. Do not touch your account/debt card! Envelopes ONLY!
9. Good teeth cheaper
You can go to a dental school to have your teeth cleaned, filled, orthodontic work done, etc. The cost is approximately half what you would usually pay. Note: Make sure you have some extra time as this takes a little longer.
10. Avoid expensive friends
Avoid friends who want to go for drinks all the time or suggest an evening at home. The money you spend on drinks and snacks, can buy something better, or go into your savings account. Also avoid friends who want to have supper at your house because you are a "good cook" what that really means is that they are saving money while you are grocery shopping.
One "easy" way to avoid overspending and thus stay within your budget is to have something else to do after work. Get a second job that is fun, go to school, volunteer or get into great physical shape. The more you do, the less you will spend!
2. Watch those miscellaneous categories
Make sure you have enough well-defined categories to capture your true spending. Putting too much into a miscellaneous category makes it harder to track what you have spent and harder to control, especially the splurges!
3. Need
If you did not know you need it, you probably do not. Do not buy things just because they are on sale. If you had no use or want for it before you saw it on sale, then you will have no use for it later.
5. Don't Forget to Budget for Special Occasions
When forecasting your expenses, remember to include gift-giving occasions. Mother's Day, Valentine's Day, birthdays, Christmas, and anniversaries are good examples. If you plan to spend money on these occasions, remember to include this in your budget.
6. Don't use a debt to get out of another debt
Do not take out a consolidation loan to pay off your other debts. The point is to get out of it, not to squeeze them together and end up paying interest on the loan while paying off your debts. Try consulting a "free" debt counselor service first.
7. Remember To Budget Time As Well
We have all heard "time is money." Well-spent time can be an investment. Take a few minutes to plan ways to save on bills - 15 or 20 min. researching lower rates on electricity or long distance can pay off. You will know when time spent is not worth it.
8. The envelope system
Total yearly/monthly bills, divide each into 12 months. Divide monthly amount into bi-weekly payments. Use envelope for each bill; put in cash every 2 weeks. Use only the cash in envelope till it is gone. Do not touch your account/debt card! Envelopes ONLY!
9. Good teeth cheaper
You can go to a dental school to have your teeth cleaned, filled, orthodontic work done, etc. The cost is approximately half what you would usually pay. Note: Make sure you have some extra time as this takes a little longer.
10. Avoid expensive friends
Avoid friends who want to go for drinks all the time or suggest an evening at home. The money you spend on drinks and snacks, can buy something better, or go into your savings account. Also avoid friends who want to have supper at your house because you are a "good cook" what that really means is that they are saving money while you are grocery shopping.
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