debt management

How to Make Your Financial Future Secure for Good

October 26, 2015 by arizona

Your current financial situation may feel secure, but you may have wondered about how to make your financial future good in the long term. The idea of investing your money or purchasing insurance can seem daunting, and fortunately, there are many other solutions for creating a secure, stable financial future that don’t necessarily involve large economic decisions.

[Read: 3 Solid Ways to Ensure Your Financial Security]

If you’re motivated and ready to make your financial future good — actually, great — in the long-term, here are several steps you can take to ensure a stable and secure financial future.

Envision Your Future

A simple method to make your financial future good in the long term, envisioning your future helps you to create a concrete economic plan. If you know what your ideal retirement looks like, or whether you want an early retirement, you can save according to these outlines. Knowing what you want and when you want it guides you in your savings. Once you figure out how much you need to save to reach that goal, you’ll inevitably realize how often you’ll need to save. With habitual, frugal saving, you can easily reach your goal in the designated time, and ultimately prepare yourself for a financially secure future.

Decrease the Ratio of Expenses to Income

If you’re spending more than you’re making, or just breaking even, you’re not adequately saving for the future. Capping your spending at a certain point each month can drastically change the balance of your savings account. Taking into consideration your monthly income, bills, and other necessary expenses, you can then find a number you’re comfortable with spending every month. This may require a few daily or monthly sacrifices, but it’s all in the name of trying to make your financial future good from retirement and beyond. If you’re still stuck on how to adequately decrease your spending, there are plenty of how-to guides that explain how to decrease your expenses without compromising your lifestyle in a dramatic way.

Create a System of Saving, Automatically

You may be having difficulty allocating a portion of each paycheck to your savings account. Sometimes the temptation to shop or go out on the town is too great. If that’s the case, setting up a direct deposit from your paycheck into your savings account can help you to make your financial future good on a long-term basis. If you don’t receive your pay checks through direct deposit, you can set up a date with your bank to transfer a portion of the funds in your checking account to your savings each month. This system treats your savings as an ordinary bill or mortgage payment: a necessary expense that you aren’t able to touch or spend. Out of sight, out of mind, right?

Review Your Accounts Each Day

To get a concrete idea of your spending habits and your total income, check in with your banking or budgeting app every day. You’ll be able to see your income, your spending, and your balance, as well as purchases that might have been ill conceived. Paying close attention to your financial details on a daily basis can allow you to keep track of your budget and keep you on top of any impending issues before they became a problem. To make your financial future good, you need to be vigilant; leaving your budgeting up to someone else or allowing it to evolve on its own won’t have the same benefits as being an integral part of your budgeting process.

Downgrade What You Can

Keeping up with the Joneses can be extremely tempting, but in the long-term, it actually has an inverse affect on the stable, secure future you actually desire. Downgrading your house, your car, or miscellaneous items you own can lead to an increase in your monthly buffer. Choosing a car that may not be the fanciest, but which ensures good gas mileage and inexpensive maintenance fees will allow you to have an extra bit of cash to add to your savings account each month. To make your financial future good in the long-term, you must be willing to sacrifice certain elements of your life that are too lavish for your income. Once you get in tune with a modest lifestyle, you’ll find that purchases you intend to buy become less and less lavish, as your frugality becomes a habit and your priorities sharpen.

That’s not to say you have to downgrade your life — establishing priorities and knowing what you want in the present and in the future can enable you to make wise financial decisions. If you really love your platinum gym membership, for example, you can:

Find a way to downgrade another facet of your lifestyle
Keep your gym membership but downgrade to a basic account
Seek out another gym that offers the same features of the platinum membership but for less

[Read: Is a Debt Management Plan Best for You?]

There are plenty of ways you can downgrade elements of your lifestyle without sacrificing things you truly care about — and while still keeping in tune with your monthly budget to make your financial future good (if not great) in the long term.

Celebrity Debt Scandals, And What We Can Learn From Them

October 19, 2015 by arizona

Most of the time when we hear about celebs and their money, it’s what they’re spending their millions of dollars on – new houses, fast cars and glam outfits. But every now and then a celebrity debt scandal rears its ugly head and we see that the A-listers aren’t always as fortunate as we may first assume. Some of the celebrities who have been forced to declare bankruptcy include:

Meatloaf
MC Hammer
Perez Hilton
Marvin Gaye
Michael Jackson
Willie Nelson
Larry King
Kim Basinger

So, who’s had money troubles recently, and how can we learn from these celeb debt scandals? Is bankruptcy as terrifying as it first appears, or can it actually be a good option to take?

[Read: Debt Consolidation Loans for Bad Credit]

Donald Trump

When thinking of Donald Trump, there are three things that spring to mind – hair, politics and business. So you’ll be surprised to hear that the business tycoon has filed for bankruptcy an astounding four times! Many astute entrepreneurs will tell you that taking on debt can be justified, if you’re using it to help to further your finances. Sadly, Trump didn’t spend wisely, and, to put it in basic terms, took on too much debt.

However, Donald Trump is now estimated to be worth about $2.7 billion dollars! So how has he managed to come out on top? Well firstly, each time he has filed for corporate bankruptcy, not personal bankruptcy. As a man with a lot of fingers in a lot of pies, this means that the losses on one company or group still allows his to profit elsewhere. Secondly, he’s used financial knowledge to allow him to restructure his companies’ finances rather than allowing them to have all of their possessions liquidated. This all comes under the banner of the legal nuances of different types of bankruptcy. (If you’d like to learn more about the different types of bankruptcy and how they apply to different cases, the United States Courts is a good place to start.) Donald Trump also uses his business acumen to reduce his stake in the bankrupt companies and to distance himself from ‘failure’, allowing him to concentrate on his public image.

The lesson to learn from this celebrity debt scandal is simple: don’t bite off more than you can chew!

Mike Tyson

I’ll avoid the temptation to mention anything about biting off more than you can chew when mentioning this guy! Mike Tyson has had a long and controversial career. This juggernaut should be lauded for his boxing prowess (he won 50 fights out of 58 in his career; 44 through knockout). However, it’ the stories from behind the scenes that have boosted his fame, and not always for the best reasons. At the height of his prominence Tyson had earnt a staggering $400 million, but he blew it all on lavish parties and fancy cars. In fact, it’s been estimated that he’s bought a whopping 110 cars, including Bentleys, Ferraris and Lamborghinis. As for unusual buys, Tyson’s shopping list includes three white Bengal tigers and a bathtub worth $2 million dollars! It’s no surprise, therefore, that Mike Tyson was forced to file for bankruptcy in 2003. From the sad tale of Tyson we can learn several things that apply to many celebrity debt scandals. Firstly, just because we can earn money doesn’t mean we know how to spend it. Secondly, there are people willing to come to us to abuse our name as well as our finances – we need to be able to spot the genuine people from the money-grabbers.

50 Cent

One of the most recent celebrity debt scandals to hit the headlines is that of Mr Curtis Jackson, also known as 50 Cent. The rapper, once reportedly worth $155 million, filed for bankruptcy in 2015 following a lawsuit involving a leaked sex tape. But is this bankruptcy case as bad as it may at first seem? 50 Cent certainly didn’t seem too concerned by the ‘b’ word, describing it as “reorganizing his financial affairs”. The lesson to learn from this particular celebrity debt scandal is that bankruptcy doesn’t necessarily mean losing everything. In this instance, Chapter 11 bankruptcy allowed the ‘In da Club’ rapper to reorganize his finances, rather than having his assets liquidated (as is the case with Chapter 7 bankruptcy.) It’s important to seek financial advice if you feel that bankruptcy may be the only option for you.

[Read: 14 Signs you’re headed For Big Trouble with Debt]

It may be easy to believe that celebrities who make the mega-bucks have it easy. But a poor understanding of finances, the wrong people around you and a penchant for splashing out on unnecessary luxuries can land them in as much hot water as anyone else.

A Short Guide to Effective Retirement Strategies

September 29, 2015 by arizona

Last month’s whiplash in the market may have made you sit up and take account of your own savings. Now is the time to carefully look at your retirement and how you can finance it. It’s not just those approaching the golden age that need take heed. Those of us at a much younger age need to begin considering effective retirement strategies too.

Old age is a destination that we are all heading towards and we are going to need money when we get there. So don’t have your future-self cursing you tomorrow, start thinking effective retirement strategies today.

Forward Thinking: Investment

When should we start to invest for our retirement? Well, that’s easy: as soon as possible. If you start saving the moment you leave college then your money has much more time to grow. This leads to the wealth building phenomenon known as compounding. There are several investment types to consider when planning your future. Here are some of the more effective retirement strategies when it comes to investments:

Dollar Cost Averaging- DCA:

This is when you buy up fixed dollar amounts of an investment at regular intervals, disregarding the price of the shares. When prices are high then less shares are bought and when they’re low, more.

It’s a consistent form of investment and when there is a rise in the stocks then so is there a rise in your wealth. However, when the prices fall, then your money is their to pick them up cheaper

401(k)s, 403(b)s, 457s and Thrift Saving Plans:

If you have one of these then chances are you’re already employing DCA. These plans are ways to save for your retirement that your employer or a sponsor provides. They are often described as “defined contribution plans”, because of the fact that you make contributions to the plans.

These are effective retirement strategies that contribute towards that golden dawn of retirement on a regular basis. Plus they manage your money better so that it grows healthily. Grant Engelbart, portfolio manager at CLS Investments, says that: “Sticking with that investment plan will ensure that you are both taking advantage of market selloffs and participating in strong, trending markets.”

Roth or Traditional IRA:

Most employers provide 401(k)s, which receives regular contributions. However, Engelbart claims that in addition to your 401(k), you can also contribute a set amount to a Roth or Traditional IRA each month. IRA stands for Individual Retirement Account and is basically a savings account with big tax breaks, making it ideal to stock up bonds, stocks, funds and other assets ready for retirement. Unfortunately, not all of us are eligible, there are restrictions based on income or employment status.

Target Date Funds (TDF):

These are collective investment schemes designed to provide a simple investment solution through a portfolio whose asset allocation becomes more conservative as the target date approaches. They start off with more risky investments, such as stocks, which fluctuate up and down more aggressively. But as you near the end of you career their balance shifts to traditionally safer options, such as bonds.

This is an effective retirement strategy, because the closer you are to retirement, the less time you have to recoup any losses. So you are therefore much more sensitive to negative shifts in the market than you were when you were younger.

However, not all TDFs are born equal. Some can still be heavily exposed to equities, even as the client enters their 60s. Tom Mingone claims that this is to keep them safe against the forces of inflation. Some people could find themselves still exposed to the forces of the markets in their 60s.

This is down to the fact that life expectancy is getting longer and correlating your investments until you retire may not be a reasonable solution if you are living until you’re in your 80s or 90s.

A Sure Thing

When you finally reach the golden dawn of your life it is useful never to rely on the interest garnered from your investment portfolio in order to fund your monthly expenditures. You need to finance this as well as possible using guaranteed income, such as Social Security or a pension. These are consistent forms of income that aren’t effected should the stock market suddenly crash.

However, with pensions hard to come by and fears that the Social Security pot is running empty, there is another way to keep your income steady, even if the stock market drops. Rick Salus, senior vice-president and investment officer at Wells Fargo Advisors, offers this advice:

“If you own bonds that don’t default and dividend stocks that pay income, even if a stock loses 30 percent of its value, you’re still upset, but it wont change how you’re living in that moment in time.”

What Are the Worst States for Saving Money?

September 14, 2015 by arizona

In the current economic climate, it’s a challenge to have any spare cash to save and many people are living paycheck to paycheck with nothing left over for unexpected circumstances and certainly very little to put aside for a rainy day or into any kind of nest egg for the future.

This article looks at the worst states for saving money and information has been analyzed from both governmental and private data and is based on:

Deposits Per Capita – States with a low amount of deposits made into federally insured banks were given the lowest scores.
Taxes – States which scored the lowest were those with the highest marginal income taxes.
Debts – States with the most amount of credit card debts per household were scored low.
Saving Interest Rates – States with low interest rates scored low in this section.
Coupon Snipping – States which offered the least coupons through “coupons.com” were ranked low.

The method used to determine which states were the worst places for saving are based on the weighted-average and those with the lowest overall average were believed to be the least favorable places to save.

The worst states for saving were mostly found along the West Coast and scored low due to a combination of the low amount of deposits made per person and high income tax rates which together create a very challenging situation for savers.

States Which Present a Savings Challenge

The following states are those that demonstrate the worst case scenario for savers according to the data collected and analyzed:

Oregon

Oregon has a very high income tax rate making it hard for people to save and it has the lowest amount of money deposited per person which makes it the lowest ranking state for saving.

Hawaii

The income tax rate in Hawaii is the second highest and also has the third worst credit card debt in the nation. This combination is not a great climate for savers.

Alaska

Households in Alaska have the highest credit card debt and even with zero per cent income tax they still struggle to make any significant saving deposits which proves that even with the best possible income tax laws, saving can still be a challenge.

Idaho

The lowest amount of savings deposited in the entire nation are made in Idaho per person and this is surprising because the population in this state is considerably small.

Vermont

This northeastern state has the second lowest population in the United States and yet it has the seventh highest income tax rate in the nation.

Maryland

Maryland’s credit card debt is the fourth highest per household on average in the country. They are also have a high value of coupon clipper savings but overall their savings potential was still not enough to keep them off this list.

California

With the highest income tax rate in the nation and high credit card debt, California has money in the bank but the high population offsets this and makes saving more difficult. However, California does make the highest amount of coupon clipper savings in the country.

New Mexico

This state has the second lowest amount deposited per person in the United States but overall they scored competitively in all categories.

South Carolina

South Carolina is the fourth lowest state for the amount each person deposits out of all the states. They have a tax bracket of 7% which is mandatory for anyone who earns more than $14,401.

New Jersey

New Jersey has the second highest average credit card debt which is just a little lower than Alaska’s and this is the reason along with the income tax rate which has determined State’s rank as one of the worst places to save.

Summary Table

The following table shows the information about the deposits made per capita, the income tax rate, the average credit card debt and how much was saved per state by the use of coupons from “coupons.com” for each state mentioned above.

Saving Trends

Since the 1970s there has been a gradual downward trend of the amount of personal income that has been saved compared to the amount of net income that has been earned. Savings were at their highest in 1975 when people saved around 17% of their disposable income compared to just 5% today according to the Bureau of Economic Analysis here in the United States.

[Read: The Best States to Save Money]

Conclusion

Some of the results in this article may be surprising and if you really wanted to, you could consider moving to a state that has a better climate for saving. However, there are ways to start saving even if you do live in one of these states. Taking control of credit card debt and taking advantage of savings through coupon schemes is a great way to make more of your income but it will still be a struggle if you’re battling against high income tax rates.

14 Signs you’re headed For Big Trouble with Debt

January 30, 2015 by arizona

Unless you’re a little neurotic, you’ve probably lost track with your finances at least once in the past 10 years. And after you’ve gotten off the track, you probably have very high intentions to never let this happen again. It’s important for you to recognize the signs before you get into trouble with debt. It’s much harder to back track than to just avoid the situation all together.

Not paying your bills on time. You may be headed for trouble with debt if you are unable to pay your bills on time. This damages your credit score and will then make you pay more in interest rates. Be careful, if your credit score is below 580 you pay be forced to pay more for auto insurance, your rent, and your utilities.
Struggling to just make the minimum payments. The minimum payments on your credit cards refers to the minimum that you can pay per month to avoid being charged with late fees. You will be headed towards trouble with debt if you can’t make the minimum payments for your credit cards. Also, it will take you much longer to get out of debt. Now you have higher interest rates and you’ll have to pay for a longer period of time.
Using other credit cards to make payments. This is one of the biggest signs that you’re in trouble with debt. If you do this, you’re just piling debt on top of debt. The only good thing you can do with this is transferring your balances to a 0% interest balance transfer card. All of your monthly payments should go towards reducing your balance instead of paying interest.
Taking cash advances. This is a serious problem and at this point, you’re probably already in trouble with debt. Taking cash advances on a credit card is probably costing you big money. People tend to forget about interest rates. Nearly all card companies charge a much higher interest rate on cash advances. Next time you get your statement, check the interest. Cash advances typically have an interest rate that is at least 10% higher than what they charge for purchases.
Being refused for credit. The number one reason people get rejected for credit is because they have low credit score. If you have low credit score and a credit report filled with either missed or late payments, the lender will see that you are at a very great risk for represent. If you’re being refused for credit it is because the lender believes that you won’t be able to pay back the money they’re lending you. This is a very dangerous red flag that warns that you are in trouble with debt.
Earning less than you spend. If you don’t track your finances, you likely don’t even know that you’re spending more than you earn. If you are going deeper and deeper into debt, it’s likely because you’re spending more than you earn. If you don’t even know how to check, it is done by dividing your fixed monthly debts by your earnings. If you have a percentage of 40% or higher, you’re heading into trouble with debt.
Reaching or going beyond your credit card limits. 30% of your credit score is found by the amount you currently owe. If you reach the limit or even exceed it, you’ll likely be denied other lines of credit.
Taking money out of your savings or retirement. When you take money out of your retirement account, you lose the returns that you would have earned had you left the money alone. When you take money out of savings, you will have less available in case you run into a financial emergency. Many financial counselors believe that you should have the equivalence of 3 months of living expenses in your savings account to protect yourself in case of emergencies. When you take money out of your savings account, you put yourself at risk of running into an emergency.
Continually paying late fees. If you are always paying late fees, you’re either not doing a good job of managing your money, or you’re just lazy. If you’re late on just one payment, your credit score can go down by as many as 50 points. This one late payment could even drop your good credit to bad credit.
Juggling bills. This may help you short term, but not over any time. If you’re shuffling bills to make at least the minimum payments on the latest ones, you’re only paying off the inevitable. This will damage your credit score and will inevitably end up costing you money.

If you only notice one of these warning signs, you’re probably not headed into trouble with debt. But if you begin to see three or more of these danger signs, you’ll need to buckle down and get your finances under control.

Top Money Management Tips for Up and Comers

December 24, 2014 by arizona

After the 20s roll into the 30s, your life will probably go through a myriad of ups and downs. Starting a career you love, getting married and settling down to grow a family might be among some of the thrills. As you grow and progress in other places in life, your financial habits should be very closely aligned with that growth and progress. Trying to keep it together with some of the top money management tips there are out there? Keep on scrolling to educate yourself on the top money management tipsthere are to keep in mind when navigating through this wild life.

Top Money Management Tips

One of the main things to remember when trying to keep your finances in line is the fact that the longer you hold on to debt, the longer you keep yourself in a sort of prison with a sentence that only gets longer. You’ll never work yourself out of those financial troubles if you don’t stay honest and focused on paying down your debts. In your 20s, it’s harder than ever to get your debts under control: you’re probably just getting into your first apartment as an adult paying their own bills, you’re most likely working an entry-level job that doesn’t leave much to spend period after monthly expenses have been handled, and people of this age are generally unconcerned with paying down debt that will take forever to settle anyway. Around 30 is when most people can finally get serious about handling the debt bills they’ve racked up because they’re probably working into a serious job that allows them more freedom to set money aside for debt payments. If you’ve got student loan debt, credit card debt or a loan you’re trying to pay down, you should be throwing all of the extra money you’ve got at paying those balances down as soon as possible. Interest only continues to build on those debts that you leave sitting around, so nip them in the bud as a first resort!

Revisiting your budget on a regular basis is one of those top money management tipsto remember always. It’s easy for priorities to slip beyond our view, so taking time out to make sure your budget is accurate every once in a while can only help you do more. Being responsible and accountable for your budget and debt will make it all that much easier to manage. When your lifestyle allows for little changes that make it simpler to move money in your budget around, take the opportunity to redistribute and get a better idea of where you’re heading. Costs associated with children or renovating a home can make valid changes that you want to monitor constantly. Maybe you spend less on entertainment now that you’re a parent: that will definitely be reflected in your budget.

Different stages in life bring about different focus. In your 20s, it should be a top priority for you to begin building some kind of emergency fund. You never know what will happen from one day to the next, and having a chunk of change to fall back on in hard times will make living more painless. An emergency fund is the kind of thing you want to build on your entire, so don’t forget to manage it well! Deposit as much surplus cash as you can into your savings account and I can assure you, you won’t regret it. You might even need to tap into emergency funds for wedding expenses, a child’s college fund or buying a home. It would be wise to snip from your budget wherever you can to accommodate the needs of growing an emergency fund.

Make sure your insurance coverage is up to date and can do enough to protect your family (and dependents that you might have) if something sudden and unexpected were to happen. Auto insurance, health insurance, life insurance and renter’s insurance are all valid and useful forms to have at your disposal. It might seem expensive to get coverage, but it will be even more expensive to find yourself in a compromising position without it at all. Disability insurance might also be another option that you want to look into.

Another one of the top money management tipsto know is that it’s never too early to get serious about your retirement fund. Before you know it, your time at your office will come to a close and you’ll be heading into the chapter of life that’s all about enjoying the fruits of your labor. Once you’ve got an emergency fund well established, thinking about the best investments to get involved with would be wise.

Playing It Safe and Smart

These top money management tips are designed to help you navigate the different areas of life that dictate where we’re headed. Use these top money management tipsto guide your footing, and you should be able to stay ahead of your finances for years to come.

Credit Score: Small Debt Forgiveness

November 5, 2014 by arizona

There are a large percentage of individuals that have debt. The sizes of those debts vary tremendously. Most individuals with large debts are offered deals to get their debts erased and financial status back to normal. However, what about the individuals whose debts are not large enough to receive those offers? If you have found yourself in a small debt that you want to erase, fear no more. There is a new credit scoring that is responsible for forgiving small debt. In 2009, FICO released a way of credit scoring that aims at increasing your credit score based on you being an individual who is able to manage credit. Continue reading to find out more about small debt forgiveness through new credit scoring.

Small Debt No Longer a Problem

Before 2009, all debt, regardless of the amount, was reported on your credit report in turn affecting your credit score. Since then, any debt that started at a number totaling under $100 is eligible to be erased from your credit score. Even if your small debt has increased from $50 to $500, the debt qualifies under FICO’s new scoring system. Keep in mind though— any type of debt, whether big or small, is still recorded on your credit report. This type of thing must still be available for lenders to see when you are trying to get a loan or open a new line of credit. So, do not involve yourself in the pattern of accepting small payments and deciding not to pay them. Those companies will report nonpayment to the credit bureau and it will be reported on your credit report. It will not be reflected by your credit score, but it can result in your inability to do a variety of things that depend on the findings on your credit report, including buying a new house, getting a credit card, or purchasing a car.

Large Debts Still Exist

Although small debts no longer affect your credit score, large debts still play a big role in your credit score. FICO’s credit scoring system is designed to help creditors determine how well you are able to manage your credit. This includes a combination of different debts, like student loans, credit cards, mortgages, personal loans, and any payments that are currently in collections status. In turn, larger debts depend on a few factors:

The age of your debt—a debt that has accumulated in the past few months will be more of an effect on your credit score than one occurring a few years ago.
The size of your debt—the larger the debt, the bigger the impact will be on your credit score.
The quality of your debt—for instance, if your debt is from just one student loan, your credit score will not be as affected.

Get Your Credit Back on Track

Regardless of your size of debt, it is important to work toward getting a decent credit score. At first, getting your credit score to a decent number may seem difficult, but be mindful that the task will require a lot of hard work and determination to complete. You may even find yourself needing the help of a financial advisor. Getting a decent credit score can be beneficial for you if you want to purchase a new car, receive a new loan, get a credit card, purchase a new home, or even obtain good employment. If you are ready to get your credit score at a decent number, below are some tips you can use to get your credit back on track:

· Keep Up With Payments.

Having a pattern of missing payments can hinder your ability to maintain a good credit score. When you keep up with payments, you let creditors know that you can manage your credit.

· Mark Your Credit Limit At 15%.

Constantly reaching or going over your credit limit can negatively impact your credit score as well. A good rule of thumb is to keep your credit card use minimal and keep your credit card limit below 15%. If that number is currently not achievable, start of slowly and build to that point.

· Keep Credit Card Applications At A Minimum.

It may seem beneficial to have more than one credit card, but if you do not need it, do have them. If creditors see that you apply for more than one card at a time, this could throw red flags and encourage them not to approve you. More than one credit card rejection will negatively impact your credit score as well.

In conclusion, the new scoring system set up by FICO has help many individuals improve credit score by getting rid of small debts. But this new scoring system does not eliminate all debt and credit report findings. It is still your responsibility to manage your credit properly and avoid increasing your own debt.

Analyzing Financial Mishaps: What Poor Credit Costs You

July 13, 2014 by arizona

Your future financial lifeline

Credit history is and has always been crucial to your financial status. If you have poor to bad credit, chances are you cannot get any financial institution to loan you money. No one wants to deal with a person with bad credit. They don’t care how you got it, so long as you have it. The worse it gets, the more they turn you away. In America, that is the norm of things. You don’t get a second chance either, unless you really work hard at it to get to good standing.

Having good credit is your monetary lifeline. Without it, don’t bank on getting approved for various things like a car, house or even a company that wants to give you clothes and then pay later.

What poor credit costs you is your ability to even find a job. Apparently, Some Employers are doing credit reports for potential employees (I don’t see the relevance) before they consider hiring you.

Outlined are ways on how what poor credit costs you. How it affects your life and the future of your financial status.

Paying High interest Rates

This is the most common one. When you want to borrow money, an interest is put in place for you to pay every time it is pay day.

Unfortunately, the interest rate is determined on how good your credit is.

As we all know, poor credit is not very forgiving. To any lender, it means that you have a history of not repaying or being late on loans. These financial institutions are in business to make money, not to lose it. Paying thousands than the original sum you borrowed in the first place is the number one setback of having poor credit. That is what poor credit costs you in the long run.

Lack of Access to Certain goods and services

You lose the privilege of being granted access to certain products and you can’t be granted approval in purchasing certain services as well if you have poor credit.

These things may include:-

A credit card– The credit card company will not give you a credit card if your credit report is bad. Those that do entrap you in high interest rates and you end up in more bad credit woes.
Smartphone– They might not give you a good phone just because your credit history is bad. The service company itself might not approve you in getting cellular phone service either.
Banks– They may not allow you to set up an account because you have bad credit. You end up going to check cashing places and getting high interest credit cards. That is what poor credit costs you; the luxury to be treated with some financial respect.

Having High Insurance

The premiums suddenly become harder to attain when trying to shop around for insurance and if you should finally get it, they too, will slap a very high premium for your monthly payments. Eventually, you end up paying a lot more than the person who has good credit.

Your love life suffers

When you are wallowing in debt, such a situation just puts a strain on the relationship with your spouse or lover. Different situations start to arise and you are not very keen to share with your significant other because you don’t want them to think that you were reckless with money or some people would rather handle a problem on their own.

This cause a lot of tension and you are both unhappy. You start to snap and are irritable at everything. The relationship will obviously suffer.

Your relationship with the kids is no exception either. You are not unconsciously pleasant to them since you are so miserable. That is what poor credit costs you.

Some Jobs will simply refuse to hire you

Some banks and other facilities always run a credit history background check to see how good you are with money.

If you are going to be handling a lot of money per day, then they want to see if you are good at it, or just make poor judgments. That is the bitter truth of what poor credit costs you.

What poor Credit costs you

It costs you everything; let us be frank about it. Not only does it mess up your life, but it can potentially ruin the credit of your spouse.

The only way to get out of debt is to start making arrangements on how you can clear it because no lender or institution is ever going to take you seriously if you want to get money from them.

What is worse, it can follow you for years and still keep showing up even when you think that the coast is clear. That is what poor credit costs you.

How to Raise Your Credit Score

June 18, 2014 by arizona

Your credit score is always a part of your life whether you pay attention to it or not. So, it’s extremely important to make it a top priority when it comes to your financial health. With a poor credit score, you will find yourself unable to accomplish the things that you want to without paying huge penalties. This includes things like getting credit cards, home loans, car loans or even renting an apartment, among others. If they have already taken abuse, you can rest assured there are ways to raise your credit scores. But, first you should understand how they work.

Understanding How It Works in Order to Raise Your Credit Score

Your credit scores are calculated using by looking at a combination of different types of histories, account types, payments and inquiries. For example, your actual use of credit only accounts for 30% of your score, while the history of your payments is 35%. In addition, how long you have had credit accounts for 15% in this model, account types make up 10% and inquiries on your credit account for only 10%. This means that even if you have a lot of debt to handle, you can significantly improve things for yourself by making your payments on time.

Paying Your Rent on Time Can Raise Your Credit Score

There are certain things that you would usually see on a credit report and rent was not one of them until recently. Below is a list of what has traditionally been mentioned in your report.

Debt from credit cards
Educational loans
House payments
Loans on installments
Liens from taxes
Debts held by collectors
Utility bills and phone bills that are unpaid

Many property owners and managers are now being encouraged to report rent payments to the different credit reporting agencies in a bid to increase the scores for sub -prime consumers. Bureaus like Transunion and Experian are making this even easier for them to report by setting up special services to report payment histories of renters. In this manner your property manager can send in information each month on the timeliness and amount paid, in addition to any extra owed. In order to make it an even bigger draw, Transunion in specific does not charge for this service. And, if requested, they will share this information with other national reporting companies.

Experts have supported this decision by adding some great data to show that this certainly a credit improving strategy for consumers. One such expert found that 79 % of consumers found an increase in their previously reported scores within just one month of renting a new apartment. This is a huge opportunity if you are looking to raise your credit score. It is worth your time to find out if your management company or landlord reports to the national agencies. If they don’t, simply ask them to! Don’t miss out on such a small way to make giant difference to your credit score.

Some Other Ways to Raise Your Credit Score

Rental agencies and landlords aren’t your only opportunity to start exploring. There are other providers that may not currently report your payments that can. You should always ask if they do report to the credit agencies and if they don’t, you might be able to convince them to. It is also very important to remember that even the service provider in question does not report accounts in good standing, your history may be reported if you don’t pay or if you pay them late.

So, besides paying on time, what else can you do to raise your credit score?

You can set your payments up with automatic withdrawals on a twice a month schedule. In addition to reducing your debt in a swifter manner, this will also keep you from ever missing any of your payments or paying late on anything. It also allows you to reap the reward of lowering your credit utilization on a daily basis.
Keep a watchful eye on your credit report. You can check it for no cost at annualcreditreport.com. If you find any errors, you must dispute them for them to be removed. It’s a necessity for you to protect your report from erroneous negative marks because no one else is going to check it for you.
Work on increasing your credit limits, however, just because they give you more doesn’t mean you should use it. This will lower your credit utilization and bring your score up.

Always remember that it is your credit score and you are the one that has to make the decision to take control of it. The ways that you pay your bills have a direct effect on you reported score, so make sure you are following the steps set for here, and you will have it improved in no time!

How to Save on Child Care

June 9, 2014 by arizona

Child care costs are at an all time high in the nation and many of us with young children are spending a fortune on paying for it.

Cost Equivalent to a New Lamborghini

Statistics reveal that it takes around $241,000 to raise a child until they have attained the maturity age of 18. For those that love flashy cars, that amount is enough to buy you a new Lamborghini. Many people need child care unless they are stay-at-home parents.

Tips to Help Save on Child Care

Fortunately, there are several tips that all of us can utilize to help us save on child care. Whichever option you choose, safety should be your top priority and should not be compromised at any time.

Be organized. Avoid waiting until the last minute to find child care, but plan ahead as the best and cost effective child care providers get fully booked first. To save on child care, know exactly when you need it and book it as soon as possible to avoid the rush.
Find child care online. You can save on child care by doing your research online to find the most suitable one for you. Register on child care websites such as Care.com and Sittercity that will give you access to your local child care providers for a small fee. Since all providers are screened and you can access a background check on them before proceeding, this will give you peace of mind.
Consider private care. Try and find child care from those referred to you by trusted relatives and friends if you cannot afford expensive day care centers where you live. There are many people running in-home facilities that offer a smaller child-to-caregiver ratio and are more affordable than day care centers. These are normally family-run where the provider cares for her own children as well.
Utilize employer-sponsored child care. Some employers offer child care services at the work place. Save on child care by taking advantage of these. This will help you feel settled knowing that your child is near you and it will also save you money on gasoline.
Know benefits offered by your employer. Find out from your employer whether there are any discounts or dependent care programs offered by them. This could include a small percentage off or a certain number of days in a year of backup care at a discounted rate with select providers.
Share child care duties with other parents. Consider starting or joining a co-op for baby-sitting in your local area where you can help care for other children on a few occasions in return for your child or children being cared for by other parents. This is a good way to save on child care if you work on a part time basis and don’t want to pay an occasional baby sitter hourly.
Use a student. If you need child care services for a few hours, you can find a college or high school student who is affordable and who can keep your child occupied.
Share a nanny. Save on child care by sharing a nanny with other families to lower costs. A nanny will then look after your child and other families’ kids in a location that has been agreed on. It is important to agree on terms and conditions and put this in writing at the beginning to avoid conflict. Read more on nanny share online.
Use relatives. Ask a reliable relative such as a grandparent to help with child care a few days a week.
Quit work. If your child care costs outweigh the income you receive from work after taxes, you may need to consider quitting your job.
Set up a flexible spending account. You can get a dependent care FSA that your workplace offers and use the funds to pay for preschool, day care and summer day camp. At the end of the year, this will lower your tax liability. Ensure you use the funds as you will lose them if you don’t.
Take advantage of federal and state tax credits. Save on child care by using tax credits from your state and federal government. You can get between 25 to 35 percent of your child care expenses reimbursed by the federal Child and Dependent Care Credit scheme so that you can work or look for work. Get up to $3,000 for a single child for a year and $6,000 a year for two or more children. Additional dependent care credits are also offered by 24 states.
Check income-based programs. Explore the Head Start or Child Care Aware Program where you live. The U.S. Department of Health and Human Services also has a website called the Office of Child Care that can be of great help.