Consumer Finance Tips

Are you on the threshold of filing bankruptcy? Recent reports reveal that an increasingly large number of people are treading on the path of being a bankrupt and 2012 is perhaps going to see double the number of bankrupts that they saw in 2011. Bankruptcy is not only harmful for the debtor but it is equally treacherous for the creditors as they keep on losing the amount of money that they’ve lent to people. This can be easily be avoided by managing your personal finances so that you can repay your debts and stay debt free. Though you can consolidate debt as this is a debt relief option that can be taken resort by the debtors in order to become debt free, yet managing your money and staying safe is always appreciated. Here are some ways in which you can do so.

1. Make a list of your debt obligations: The first step without which you can’t go onto the next steps is to make a list of the total debt obligations that you owe. Take a pen and paper and jot down all the debts that you owe your creditors with the principal amount, the interest rates and the due dates. Unless you’re sure about the amount, it is almost impossible to take any further step about personal finance management.

2. Formulate a budget: If you want to stay on top of your finances, you have to make sure that you formulate a frugal budget that eliminates all the unnecessary expenses. You have to earn your dollars and therefore if you end up wasting them, it is sheer foolishness. Stay within your budget and don’t cross your spending limit as this may directly lead to debt. Make your budget and evaluate it at the end of the month so that you can keep space for improvements.

3. Save enough funds: The financial experts are of the opinion that one must save at least 10% of what he makes in a month so that he can build an emergency fund that can be resorted to during an emergency. Irrespective of your gross monthly income, you should save a small portion of it and then take help of it when you desperately need money. However, make sure you don’t use the emergency fund like an ATM card, withdrawing money whenever you want as this will nullify all the benefits.

4. Cut your credit cards into halves: The next step that you have to take is to cut your credit cards into two halves so that you can resist to the temptation of using them while purchasing things. Carry cash instead of credit so that you don’t owe money for a thing that you can’t afford with cash.

Therefore, if you’re interested in controlling your spurring debt obligations, you have to make sure you take the correct personal finance decisions. Money is everything and if you don’t take care of your funds, you can soon land up in high interest debt for which you may have to consolidate debt from a professional company.

About the Author: Ryan is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles.

Today college and post secondary education costs are steadily on the rise and with expanding technology threatening some of the higher paying jobs, its no wonder that many people are questioning the value of a college education.

Only 20 or 30 years ago no one hardly even questioned the value of a college degree. Sure, a couple of skeptics liked to point out that neither Bill Gates nor Steve Jobs graduated from college, and parents complained about the tuition bill. Still, when college acceptances went out in the spring, people cheered, believing that admission represented the ticket to a good job and career.

If you’ve been paying attention to tuition costs for colleges and universities for the past several years, you’ve probably noticed that the price of higher education has increased dramatically.

According to the IES National Center for Education Statistics, while the average cost of tuition in current dollars at all universities in the 1990-91 school year was $6,562, it nearly tripled to an average cost of $17,143 by the 2008-09 school year.

As noted by a report from the nonprofit College Board, costs for public four-year institutions in 2010 increased 7.9 percent to an average of $7,605, while private nonprofit colleges and universities jumped 4.5 percent over the previous year to an average cost of $27,293.

The steady rise in tuition over the past few decades has left many wondering whether the cost of college matches the payoff for graduates once they receive their diplomas.

To see that average incomes for bachelor’s degree recipients haven’t increased much over the past couple of decades but tuition has skyrocketed over roughly the same period makes some question whether higher education is actually worth the cost.

What’s interesting is that a recent study conducted by Country Financial revealed 26 percent of Americans surveyed believe a college education isn’t a good financial investment. The main reason respondents felt this way is because college costs have increased too much and there simply aren’t enough job prospects available once students actually earn their degrees.

However, according to the authors of Academically Adrift: Limited Learning on College Campuses, there is even more reason to believe college isn’t a good investment.

The authors found that 45 percent of students in higher education make no gains in their critical reasoning and thinking skills, or writing ability, after two years of college. Even worse, more than one out of three college seniors were no better at writing and thinking than they were when they first arrived at college.

It’s a good idea to create as long-term a plan as possible. Look at the career you want to pursue, how much education is required to obtain the training necessary and what schools provide great values for the education received.

Also, you want to look at ways to finance your education. Of course, the best route is to acquire scholarships, grants or other sources of funds that allow you to pay for college without student loans. Also, you could consider working on- or off-campus to help finance your education. You might even be able to take advantage of tuition reimbursement from your company.

In this fast-paced world we live in today, you can do almost anything from anywhere as long as you have internet access and a credit card.  In the past, you would have to go through a travel agent to book a vacation, now you can simply log on and purchase a full vacation online.  Basically you can buy most any item from wherever you are provided you have a credit card.  Back in the day, you would have to apply for a credit card by phone or via mail.  It could take weeks just to find out if you had been approved or not. Then possibly another few weeks to actually recieve your new credit card.  And while waiting, you would have no credit card.  Nowadays, you can apply for many credit cards at once and have almost instant buying power.

Years ago, the actual credit card application process was lengthy and drawn-out.  Since the emergence of the internet, everything is totally different.  Now, you can apply for multiple credit cards at once. There are many different instant approval credit cards available which can be found by doing a quick search online. But before you go applying for every credit card online, it’s worth it to take a few minutes to compare things such as: the credit card’s interest rate, late fees, grace periods, rewards programs, and application fees.

More and more credit card companies are adopting a reward program that offers a cash back incentive.  This means that for every dollar you spend on the card you receive a percentage of the money back as a cash reward at the end of the year. This amount can really add up, if you use that card frequently.  Some companies offer rewards such as: enhanced security features, designing your actual card, and low apr’s (annual percentage rates).

If your credit is not good you may think that you can’t qualify for any credit card or loan for that matter. With the economy in it’s present state, it may be true that some financial companies are looking a lot more closely at an applicant’s credit than ever before.  However, there are many instant approval credit cards for people with bad credit. These cards can actually play a role in helping the person improve their credit score. The major difference with a credit card for someone with a poor or bad credit rating and someone with a perfect score is a security deposit and/or application fee. This basically means that if you have bad credit, the credit card company may require you put a deposit down and that amount will be what your credit limit is.  This means that if the customer gave a deposit of $500, the card’s spending limit would be $500. When you are granted one of these instant approval credit cards, you won’t be able to use it until the security deposit had been received by the card issuer, they will then credit the amount to your card and you could begin using it.

There are other credit cards that may require that you pay an application fee usually ranging from anywhere between $5 to $50 depending on the company.  They will then offer you a credit card with a low credit limit, say around $300.  If this is the type of credit card you decide to go with, be sure to read the terms which state late fees, annual fees (if applicable), etc.  Sometimes, these companies will charge an annual fee and application fee but deduct it from your $300 credit limit.  This would reduce your credit limit right away, and by the time you receive your card in the mail, the fees have already been deducted.  For example, if your credit limit was $300 and your application fee is $50, and the annual fee is $75, then when you receive your card your actual spendable credit limit would be $175.  So, as soon as you get your card you would already be owing the company.  This may sound like a rip-off, but for those that have bad credit this may be one of the only ways to get a credit card.  And once you pay your monthly bill you would start building your credit.  So, basically you would be “paying” for credit.

Regardless of which credit card you choose to apply for make sure read the fine print and the terms section where they state the fees and percentages.  If you follow some of the tips you will be well on your way to multiple instant credit card approvals.

With the economy in its present state, it’s no wonder we all need to make some “financial” new years resolutions!

Here are some ways you can jumpstart your finances for 2010, choose one or two that particularly apply to your situation.

• Create your 2010 filing system. This might include new file folders, a new box to hold them or space in a filing cabinet with easy access.
• Set up a folder to collect all the important 2009 tax documents which will be arriving soon. Sure to arrive at your house are W-2s, 1099s, mortgage statements, etc.
• Set up an appointment with your tax professional early so you get the appointment of your choice. This also gives you a deadline to get your information ready! If you’re self-employed, the next quarterly estimated tax payment will be due on January 15.
• Review last year’s investments especially in your 401(k), IRA’s etc. Find out what financial planning resources your company or 401(k) plan administrator offers and set up an appointment to talk to them. For non-company portfolios, talk to your investment advisor. You have until April 15 to make contributions to IRA type accounts (check with your tax preparer for eligibility).
• What about Quicken or Microsoft Money? If you don’t use software to balance your checkbook, pay your bills and keep track of your savings and investments, this is a great time of the year to get started. My personal favorite is Quicken and for small businesses, you might consider Quicken Home and Business. If you are a small business with Payroll needs, check out QuickBooks.
• Medical Insurance reimbursements. If you haven’t submitted all your medical bills to your insurance provider, now is the time to do so.
• Will and Estate Planning. No one likes to think about dying, but the best thing you can do for your family is to make sure they are taken care of by creating a will and making sure you have adequate life insurance. Think how easily you’ll sleep knowing you have provided for your family even if you are no longer there.
• Speaking of insurance… If you haven’t reviewed your health or home and auto policies in the last couple of years you might find you can save money and/or have better coverage. For example, if you still have a $250 deductible (which was my first deductible in 1979!), you will probably save by increasing it to $500 or $1000. Try to set aside some of your savings for deductibles in case you need them.
• Create your own Anti-Emergency Fund! We all know those car and home repairs, school fees, medical expenses and vacations are going to happen. Why not determine how much you’ll need and save 1/12 of it each month?
• Holiday Bonus or Money Gifts – If you received a financial gift this holiday season, hold on to it for at least 30 days while you decide what you really want to spend it on. All too often financial windfalls are spent before they even arrive. Consider dividing it into thirds: 1/3 to the past, 1/3 to the present and 1/3 to the future. Past might include paying down debt, present could be something you need or want now and future could be retirement, college savings, or a special vacation
• Financial Goals for next year - Think about where you want to be next year at this time financially. If you want to save $1000, put aside $2.74 each day and you’ll be there! Break down your financial goals into monthly, weekly and daily amounts and watch how quickly your savings will grow.

By Cindy Morus

Cindy Morus (www.cindymorus.com) is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer.

While 40% to 50% of us make New Year’s resolutions on January 1—a ritual that has existed since ancient times—approximately 60% to 80% of us have already broken them by the end of February, according to researchers.

It’s still not too late, however, to reset the trajectory on your family’s finances, experts note.

1. Build a Budget
If you haven’t already done so, create a realistic budget.

Approximately 85% of your income should be set aside for necessities like housing, food, health care and clothing, according to the professionals at VISA USA.

This leaves 15% for entertainment—and something many consumers completely neglect: savings.

2. Distinguish “Needs” from “Wants”
Make sure you have a clear understanding of what you need in life versus what you want in life.

You need to pay for the antibiotics when the doctor diagnoses a respiratory infection. You don’t need to buy the latest movie released on DVD to aid in your recovery.

You need to pay the rent or mortgage. You don’t need to buy the lovely accent pillows that beckon to you from the interior design boutique.

Always separate the needs from the wants—particularly if money is tight.

3. Monitor Your Spending
To see what you really spend each month, keep a running log of all purchases—no matter how small—for a full month. This will give you a visual display of where your money goes after you deposit your paycheck.

You may find that the $3 cup of coffee that starts each day adds up to $90 a month—a pocketbook pincher that may prompt you to buy a pound of coffee beans at the local market and grind them yourself. That $90 blossoms into $1,080 in savings at the end of a year.

4. Create an Emergency Fund
Life is full of surprises—both positive and negative. If you happen to lose your job or suffer an illness that temporarily sidelines you, you will need cash reserves to support you during the rough months.

“In most cases, consumers who find themselves dealing with a financial hardship are unprepared and have not saved for unexpected situations,” says Diane Giarratano, director of education for Novadebt, a U.S. financial management service agency, with multiple locations, that provides credit counseling, budgeting and financial education.

5. Educate Yourself
When you attended high school or college, you studied history, mathematics, language and science, but there was probably no course in basic money management.

If you need help in meeting a financial goal—whether it’s buying a home or reducing your debt—take advantage of community resources.

“Consumers should feel free to contact a good credit-counseling agency to obtain free advice with regard to establishing a budget or to learn how to handle unexpected hardships,” Giarratano says.

6. Don’t Become a Victim
Identity theft has become an international epidemic, so be extremely cautious when giving out your credit card or personal identifying information. Monitor your credit card bills carefully for unauthorized charges, and immediately report suspicious activity to the issuing company.

“Identity theft is often an inside job,” warns Robert L. Siciliano, a personal security expert with Boston, Massachusetts-based SafetyMinute Seminars and author of “The Safety Minute.”

“Lower-level help desk workers and frontline call center employees often have access to all our personal information in their databases,” he says. “What are you doing to protect yourself? If you’re not paying attention, you could be a victim, too.”

And when a disaster strikes, such as the recent killer tsunamis in South Asia and East Africa, be wary of scammers from fake charities before reaching for your checkbook. Unfortunately, there will always be unscrupulous individuals who seize such opportunities to profit from others’ misfortune.

“Avoid using your credit card to make contributions,” advises James Walsh, author of “You Can’t Cheat An Honest Man: How Ponzi Schemes and Pyramid Frauds Work…and Why They’re More Common Than Ever.”

“Even though this can be a convenient way to proceed, many crooks are looking for credit card numbers,” Walsh says. “They will press strongly for ‘immediate support.’ Don’t rush.”

Instead, initiate the call yourself, and select a reputable charity.

“Go with recognized names,” Walsh says. “No organization is perfect; even the best-meaning groups occasionally misallocate money or fall victim to abusive employees. But larger charitable groups—like the Red Cross, the United Way and Catholic Charities—have the mechanisms in place to audit their people and performance.”

Charitable contributions are tax-deductible, so keep good records of all donations—including small cash gifts.

Thinking of buying or building that perfect home?  Before you sign on the dotted line some research into home loan interest rates will be needed.  This will give you a much better chance of obtaining some interest rate savings.

To begin finding the best home loan interest rates you will want to study the current rates and rate movements or trends.  Home loan interest rates generally reflect the over all picture of interest rates.  They basically will follow Wall Street Securities with their rise and fall.

Home loan interest rates combined with your individual financial status would then determine how much you can borrow.  This would have an impact on how much house you can buy.  Higher interest rates would mean you may have to settle for a bit smaller home than you originally had planned.

One of the things that you may consider to lower home loan interest rates is to consider if you are willing to pay points or not.  A point is 1% of the total loan amount.  It is the up front fee that would reduce your monthly interest rate and the total amount of interest over the length of the loan.  By paying points you are essentially buying your way to a better rate and trading between paying now vs. paying later.  Paying points should only be considered if you plan on keeping the loan for at least four years.  The reason this is suggested is gives you time to get back the upfront money with the lower monthly payments.

Another factor to consider in regards to home loan interest rates length of loan.  A typical 30 year mortgage will have a higher interest rate than that of a 15 year mortgage.  The 30 year mortgage will have lower monthly payments but you would pay thousands of dollars more in interest rates over the life of the loan than that of a 15 year mortgage.

Also a higher down payment would have a positive effect on home loan interest rates.  This down payment would typically need to 20 percent or more.  This would furnish you with more equity in you home giving you a much better interest rate.

Most lenders offer a variety of options to help assist you with home loan interest rates.  When shopping around make sure you are looking at comparable points and rates amongst the different lenders.

One of the final things in regards to considering with a home loan interest rates is, do you want a fixed rate mortgage or an adjustable rate mortgage.  A fixed rate will allow you more money, is fixed throughout the life of the loan.  This kind of loan the interest rate stays the same.  The other a variable rate has the possibility of going up or down bed By paying points you are essentially buying your way to a better depending on the current market.

Do your homework on home loan interest rates, choose between one of the many programs offered and then decide on how much a down payment you can afford.  In the long run this research will pay off handsomely for you.

Tired from paying interest on student loans every month, afraid of the deadline of paying back loans, there is a solution of your tensions, STUDENT LOAN Consolidation. In student loan consolidation, a student may enjoy many benefits; some of them are following below.

1. lower monthly payments
2. only one monthly payment rather than paying separately
3. Student loan consolidation rates are very low, fixed interest rate cannot exceed 8.25% at any time, coupled with national interest rates at a 40-year low.
4. For the application of student loan consolidation, you don’t have to offer any credit card check or processing fees.
5. the terms and payment plans of student loan consolidation are very flexible, the provider can mode them according to your financial needs
6. While you don’t need to consolidate in order to take advantage of this one, you can knock an additional .25% off your rate by making your monthly payment electronically. This electronic debit option does more than save you money – it decreases your chances of forgetting a payment.
7. The option to prepay your loan at any time without incurring a penalty

Sometimes a student got confused about the qualification of applying for student loan consolidation. But now government clears that students who are still in their grace period or cannot re pay their owe money on a student loans can qualify to get student loan consolidation or those who are still in school may consolidate their government-guaranteed loans

Today in the market, there are many companies offering student loans to the college students, but when it comes to their interest rates, they are charging very high. A student has to pay interest on their loans, every month, which is quite impossible for some due to lack of money and time. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career. For those, student loan consolidation is a best deal and step to follow. In this, you don’t even get low interest rates, but can enjoy other facilities including grace period of six to nine months, only one monthly payments, tension-free mind etc.

Due to existence of government sector, a student has an opportunity to enjoy the offers given by the government as they are quite competitive than private. Student loan consolidation rates is fixed and cant be changed after signing the contracts and whenever student has graduated or ceased to be a full time student, he can also enjoy the benefit of grace period of six to nine months which allows him to get employed and repay their loans easily.