Why Refinance Back into a 30-Year Loan?
Refinance Your Mortgage for Rate and Payment Reductions
By Jansen Drake, CMS
1st Metropolitan Mortgage
Marietta, GA – One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at �no cost� to the borrower.
In the no-points no-fees scenario, the mortgage consultant uses rebate monies paid by the lender to pay off non-recurring closing costs for the borrower. These are �one time� fees such as escrow or attorney fees, title insurance, document preparation, tax service, flood certification, processing and underwriting fees, etc. The borrower is still responsible for recurring fees such as interim insurance, property taxes or insurance policy payments.
Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments on time, etc.) are often candidates for better interest rates as well. If you haven't checked your credit score in a while, it's a good time to call a mortgage consultant.
The question most asked is, �But why should I go back into a 30-year loan?�
There are two schools of thought on this subject, and the mortgage consultant should work hand-in-hand with the borrower's financial planner to determine what works best for their mutual client.
One option is to take the route of the �same payment� refinance, and actually pay off the loan faster and save money on interest fees in the long-run. If refinancing results in a lower monthly payment, the borrower can still continue making the same payment they made in the original loan, and the extra money will be applied to the principal balance.
For example: Let's say you have 25 years remaining in your current loan, and you refinance back to a 30-year loan with a slightly lower interest rate, resulting in a payment reduction of $200 per month. (Note: This is just an example. The actual amount could vary.) You could then take that extra $200 per month and apply it toward the principal on the new loan. At this rate, the loan will be paid off in 22 years and 4 months, which is 2 years and 8 months less than the original loan.
On the other hand, if the borrower's financial planner is a proponent of best-selling author and investment guru Douglas Andrew's philosophies (see Missed Fortune), he or she may suggest investing the extra money in a side-fund that could earn a better rate of return and grow to the amount of the mortgage (and beyond) in even less time. This method provides excellent liquidity, but having more direct access to this money may be too tempting for some homeowners.
Regardless of the reason for the refinance, the mortgage consultant will need to know what the existing loan scenario entails, review the homeowner's long-term goals, and provide a comprehensive spreadsheet that compares and contrasts the various loan programs available.
Bear in mind, refinancing to obtain a lower interest payment could also result in a lower deduction at tax time. The homeowner's mortgage consultant and financial planner should work hand-in-hand with their mutual client's best interest in mind.
About the Author
Jansen Drake is affiliated with 1st Metropolitan Mortgage, A Georgia Residential Mortgage Licensee 15506. For free consultation and a copy of The Certified Guide to Credit Scoring ,call Jansen at 678-388-1755 or go to www.catquickloans.com.
Monday, November 26, 2007
Why Refinance Your Home?
There are many reasons why you may be interested in refinancing you home. The biggest reason is to save money. When you refinance your mortgage, you are more than likely able to substantially reduce your monthly payments. One tactic people use is to shop the rate around to several different lenders to see what they have to offer and what deals work for them. You may have bought your home in times of relatively high mortgage rates and therefore are locked into higher payments than you should be. If you qualify for a lower rate, you could lock in that mortgage rate and stretch out the payments so that every month you are paying less to live in your home than before. If you decide to refinance your home, you will undoubtedly be confronted with a variety of choices as to what sort of new loan you can get. Refinancing your home mortgage can certainly free up a lot of capital, which gives you the opportunity to do many things, such as needed home improvements, travel, investments or your children's college tuition. Many people who are deeply in credit card debt may want to refinance their homes in order to free up some of their home equity and pay off their other debts. This can be a good strategy if the debt is at a high interest rate. It makes good financial sense to pay off debt, which can be as high as 25% with a new loan at around 6% or 7%. People who refinance their homes often come out better than before. Don't forget to shop around and find the best deal your can for your mortgage and you may be able to have a lot of spare money every month. https://www.imortgagefinancial.com
About the author:
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About the author:
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Why should I refinance?
If you bought your home a few years back when annual interest rates were 12 percent, refinancing now can save you a great deal of money over the term of the mortgage. Or you might be able to switch from a 30-year mortgage to a 15-year, so you can pay off your loan in half the time with roughly the same monthly payments.
Refinancing can be worthwhile, but it does not make good financial sense for everyone. A general role of thumb is that refinancing becomes worth your while if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate.
There are various reasons to refinance your home:
1. To lower the interest rate on your mortgage, reducing your monthly payments and overall cost;
2. To reduce the term or length of your loan, doing so can save you thousands of dollars in interest;
3. To provide a means of consolidating your debt;
4. To draw on the equity built up in the house to get cash for a major purchase or for children's education;
5. Have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.
It is better to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. However, every situation is different. Some lenders are offering reduced fees or no points. Asking yourself a few questions may help you determine if you can save money:
1. How much can I lower my current monthly payment? 2. How much will I pay in refinancing costs? 3. How much will I still owe on the house? 4. How much am I currently paying each month? 5. How much did I initially pay for the house?
There are other considerations, too, such as how long you plan to stay in the house. Most sources say that it takes at least three years to realize fully the savings from a lower interest rate, given the costs of the refinancing. Itemize all the expenses of the refinance and estimate your new monthly payments. Answering these questions can help you to decide if you should refinance.
Before settling on a refinancing deal, you might want to engage a lawyer to look out for your interests and make sure everything is filled out properly. Talk with mortgage lenders, real estate agents, attorneys, and other advisors about lending practices, mortgage instruments, and your own interests before you commit to any specific loan.
About the author:
Copyright � 2005. Chileshe Mwape writes for the Mortgage Lenders website at http://banks.lending-guide.org/ and he's also a regular contributor to the Auto Loans website at http://www.motor-car-loans.org.uk/
Refinancing can be worthwhile, but it does not make good financial sense for everyone. A general role of thumb is that refinancing becomes worth your while if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate.
There are various reasons to refinance your home:
1. To lower the interest rate on your mortgage, reducing your monthly payments and overall cost;
2. To reduce the term or length of your loan, doing so can save you thousands of dollars in interest;
3. To provide a means of consolidating your debt;
4. To draw on the equity built up in the house to get cash for a major purchase or for children's education;
5. Have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.
It is better to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. However, every situation is different. Some lenders are offering reduced fees or no points. Asking yourself a few questions may help you determine if you can save money:
1. How much can I lower my current monthly payment? 2. How much will I pay in refinancing costs? 3. How much will I still owe on the house? 4. How much am I currently paying each month? 5. How much did I initially pay for the house?
There are other considerations, too, such as how long you plan to stay in the house. Most sources say that it takes at least three years to realize fully the savings from a lower interest rate, given the costs of the refinancing. Itemize all the expenses of the refinance and estimate your new monthly payments. Answering these questions can help you to decide if you should refinance.
Before settling on a refinancing deal, you might want to engage a lawyer to look out for your interests and make sure everything is filled out properly. Talk with mortgage lenders, real estate agents, attorneys, and other advisors about lending practices, mortgage instruments, and your own interests before you commit to any specific loan.
About the author:
Copyright � 2005. Chileshe Mwape writes for the Mortgage Lenders website at http://banks.lending-guide.org/ and he's also a regular contributor to the Auto Loans website at http://www.motor-car-loans.org.uk/
Why should you refinance?
Refinancing has become a valid option for many individuals with high interest rates on their mortgage. Refinancing is essentially a replacement loan, with a different lender and (hopefully) a lower interest rate.
So why would you choose to refinance?
- You may be able to take advantage of lower interest rates.
- You may also be able to extend the repayment period of your mortgage. While you will end up paying more in interest charges for this, this will reduce your monthly outgoings.
- You may be able to switch from a variable rate to a fixed rate mortgage, giving you greater security in the future from potential rate increases.
- You may also be able to increase the amount of your mortgage, to pay off other, higher interest rate liabilities such as credit card debt, cell phone debt and personal loan debt. This will enable you to save money on interest rate charges
Why would you avoid refinance?
If you decide to borrow more than your existing mortgage, you need to be wary of your budget. If you default on your payments you run the risk of losing your house.
If you do not calculate the costs involved with refinancing correctly, you could end up paying more in interest charges.
Thoroughly review the contract of your existing loan, an early pay out could involve a penalty that would negate the benefits of refinancing.
What will it cost me?
Refinancing does carry some costs that you need to be made aware.
Valuation Fee – This is the fee for a professional appraisal of the value of your house.
Credit Report – An assessment of your credit health
Escrow – Fee for money transferred by a third party.
Lender Fees – Any other fees that are incurred by using a particular lender
Am I eligible?
Applying for mortgage refinance is just like applying for another loan. There is a set criteria for acceptance. Every missed mortgage payment will count against you in the application, either resulting in a greater interest rate or a refused application.
Should I choose refinancing?
You will need to assess your current mortgage and the changeover costs and savings to ascertain whether it will be of benefit to you. There are specific refinancing calculators that can help you determine the net gain. The best one that I have found is at calcbuilder.com.
As a rule of thumb many lenders advocate that a 1% gap between your current interest rate and a refinance rate makes refinance a worthwhile option.
Always make sure to speak to a financial professional before deciding to refinance your mortgage.
About the author:
More mortgage refinance information available at http://members.optusnet.com.au/~mortgagearticles/
So why would you choose to refinance?
- You may be able to take advantage of lower interest rates.
- You may also be able to extend the repayment period of your mortgage. While you will end up paying more in interest charges for this, this will reduce your monthly outgoings.
- You may be able to switch from a variable rate to a fixed rate mortgage, giving you greater security in the future from potential rate increases.
- You may also be able to increase the amount of your mortgage, to pay off other, higher interest rate liabilities such as credit card debt, cell phone debt and personal loan debt. This will enable you to save money on interest rate charges
Why would you avoid refinance?
If you decide to borrow more than your existing mortgage, you need to be wary of your budget. If you default on your payments you run the risk of losing your house.
If you do not calculate the costs involved with refinancing correctly, you could end up paying more in interest charges.
Thoroughly review the contract of your existing loan, an early pay out could involve a penalty that would negate the benefits of refinancing.
What will it cost me?
Refinancing does carry some costs that you need to be made aware.
Valuation Fee – This is the fee for a professional appraisal of the value of your house.
Credit Report – An assessment of your credit health
Escrow – Fee for money transferred by a third party.
Lender Fees – Any other fees that are incurred by using a particular lender
Am I eligible?
Applying for mortgage refinance is just like applying for another loan. There is a set criteria for acceptance. Every missed mortgage payment will count against you in the application, either resulting in a greater interest rate or a refused application.
Should I choose refinancing?
You will need to assess your current mortgage and the changeover costs and savings to ascertain whether it will be of benefit to you. There are specific refinancing calculators that can help you determine the net gain. The best one that I have found is at calcbuilder.com.
As a rule of thumb many lenders advocate that a 1% gap between your current interest rate and a refinance rate makes refinance a worthwhile option.
Always make sure to speak to a financial professional before deciding to refinance your mortgage.
About the author:
More mortgage refinance information available at http://members.optusnet.com.au/~mortgagearticles/
Why Talk about Your Finances to Strangers?
Blogging is the latest innovation to take the web by storm. According to blog tracking firm Technorati, there are currently 20.6 million blogs with thousands more added every day. According to Blogherald, 30% of internet users (50 million people) are blog readers. In short, a lot of people are reading and writing blogs.
A popular blogging sub-segment is the one centered on money and personal finances. The web hosts a wide variety of people talking about money, giving financial advice, and tracking their own finances electronically. But why do these bloggers share some of the most intimate details of their personal finances?
"Personal financial blogging compliments the money management articles I write," notes Jeffrey Strain of Personal Finance Advice. "While articles are able to give the basics of how to implement money saving techniques and ways to invest, the blog allows me to show step by step how I use the information in my daily life."
Others began blogging out of a need to get a handle on their money. "I started blogging because I was fresh out of college and making more money than I'd ever seen before," states Jonathan of MyMoneyBlog. "I had almost two thousand dollars of disposable income every month. Instead of moving into a nice apartment in the city and buying a BMW like my friends, I maxed out my 401(k), stayed in my college apartment, and started this blog to document my thoughts, ramblings, successes, and mistakes towards my goal of financial freedom and traveling the world."
The final perspective that seems common among financial bloggers is one centered more around the reader than the blogger. FMF of Free Money Finance and JLP of All Things Financial are good examples of this approach. "I'm sharing principles that have helped me grow my net worth substantially in an effort to help others do the same," comments FMF. JLP has similar reasons. "I have a personal finance blog to share information that I think is important with my readers. My blog essentially allows me to publish a low-cost newsletter and save trees at the same time. I also like the fact that I can link to important information (something that is hard to do with a paper newsletter)."
But no matter the reason for blogging, these financial bloggers draw from their own personal experiences and write about them quite honestly. Here are some examples:
JLP has shared the details of the H&R Block tax class he's been taking
FMF has given his criteria for when he will and won't use a financial planner
Jonathan has detailed his renting woes
Jeffrey has covered (in detail and with pictures) the $235 bet he lost
No matter what their reason for writing, all of these blogs are both informative and entertaining. It's easy to see why readers keep coming back for more.
About the author:
Courtesy of Saving Advice
A popular blogging sub-segment is the one centered on money and personal finances. The web hosts a wide variety of people talking about money, giving financial advice, and tracking their own finances electronically. But why do these bloggers share some of the most intimate details of their personal finances?
"Personal financial blogging compliments the money management articles I write," notes Jeffrey Strain of Personal Finance Advice. "While articles are able to give the basics of how to implement money saving techniques and ways to invest, the blog allows me to show step by step how I use the information in my daily life."
Others began blogging out of a need to get a handle on their money. "I started blogging because I was fresh out of college and making more money than I'd ever seen before," states Jonathan of MyMoneyBlog. "I had almost two thousand dollars of disposable income every month. Instead of moving into a nice apartment in the city and buying a BMW like my friends, I maxed out my 401(k), stayed in my college apartment, and started this blog to document my thoughts, ramblings, successes, and mistakes towards my goal of financial freedom and traveling the world."
The final perspective that seems common among financial bloggers is one centered more around the reader than the blogger. FMF of Free Money Finance and JLP of All Things Financial are good examples of this approach. "I'm sharing principles that have helped me grow my net worth substantially in an effort to help others do the same," comments FMF. JLP has similar reasons. "I have a personal finance blog to share information that I think is important with my readers. My blog essentially allows me to publish a low-cost newsletter and save trees at the same time. I also like the fact that I can link to important information (something that is hard to do with a paper newsletter)."
But no matter the reason for blogging, these financial bloggers draw from their own personal experiences and write about them quite honestly. Here are some examples:
JLP has shared the details of the H&R Block tax class he's been taking
FMF has given his criteria for when he will and won't use a financial planner
Jonathan has detailed his renting woes
Jeffrey has covered (in detail and with pictures) the $235 bet he lost
No matter what their reason for writing, all of these blogs are both informative and entertaining. It's easy to see why readers keep coming back for more.
About the author:
Courtesy of Saving Advice
Why You Should Read Personal Finance Blogs
Although still not a mainstream phenomenon, Personal Finance Blogs are an increasingly popular additional source of investing and financial planning information. Many people peek in sporadically to see what's generating buzz this week. As the arena gets more and more crowded, it begs the question: "What do the bloggers think of each other?"
Some like the variety. "It's the wide range of perspectives and the timely information that I enjoy most about all the personal finance blogs out there," notes Jeffrey Strain of Personal Finance Advice. "If there is a change in a bank's interest rate or a new financial tool that can be used, it's the personal finance bloggers that usually first have the information on how it can be best used to your advantage."
Others like the inspiration the personal finance blogs provide. "It is inspiring to me to see the success of personal finance bloggers. Personal finance blogging has gone from a handful of blogs to hundreds. Readership has also increased, which is a good thing.", observes JLP of AllThingsFinancial "I think most personal finance bloggers have the goal of educating the general public about personal finance. It's inspiring to see that come to fruition."
Other bloggers agree it's great, maybe even a little too great. "I love reading other money-related blogs", says Jonathan of My Money Blog. "Unfortunately, there are so many now that I can barely keep up. My favorite thing about reading other people's writing is the inspiration it gives me to work that much harder towards my goals. There are bloggers buying rental property, working on side businesses, or simply being frugal in creative ways."
Some just soak it all in. "I currently read almost 150 financial blogs and love every minute of it," says FMF of FreeMoneyFinance. "The bloggers are so open and honest about their financial trials and tribulations, reading the blogs are like viewing mini soap operas. The authors become my 'friends' and I find myself cheering them on, hoping for their success."
If you a bit curious about what others are doing with their money, or simply want to see a different slant to the usual fund-your-retirement mantras, go out and find a personal finance blog that suits your taste. You might just decide to start one yourself, and become part of the growing community.
About the Author
Courtesy of Saving Advice
Some like the variety. "It's the wide range of perspectives and the timely information that I enjoy most about all the personal finance blogs out there," notes Jeffrey Strain of Personal Finance Advice. "If there is a change in a bank's interest rate or a new financial tool that can be used, it's the personal finance bloggers that usually first have the information on how it can be best used to your advantage."
Others like the inspiration the personal finance blogs provide. "It is inspiring to me to see the success of personal finance bloggers. Personal finance blogging has gone from a handful of blogs to hundreds. Readership has also increased, which is a good thing.", observes JLP of AllThingsFinancial "I think most personal finance bloggers have the goal of educating the general public about personal finance. It's inspiring to see that come to fruition."
Other bloggers agree it's great, maybe even a little too great. "I love reading other money-related blogs", says Jonathan of My Money Blog. "Unfortunately, there are so many now that I can barely keep up. My favorite thing about reading other people's writing is the inspiration it gives me to work that much harder towards my goals. There are bloggers buying rental property, working on side businesses, or simply being frugal in creative ways."
Some just soak it all in. "I currently read almost 150 financial blogs and love every minute of it," says FMF of FreeMoneyFinance. "The bloggers are so open and honest about their financial trials and tribulations, reading the blogs are like viewing mini soap operas. The authors become my 'friends' and I find myself cheering them on, hoping for their success."
If you a bit curious about what others are doing with their money, or simply want to see a different slant to the usual fund-your-retirement mantras, go out and find a personal finance blog that suits your taste. You might just decide to start one yourself, and become part of the growing community.
About the Author
Courtesy of Saving Advice
Why You Should Refinance Your Credit Card
Getting the Right Rate Can Save YOU Thousands
A credit card debt can be like the worst sort of trap. Like a wound that won't heal, a monthly minimum payment – with ceaseless regularity and endless strain on your budget – leaves your account. It's to pay for the Christmas shopping, or the last July 4th party, or your holiday two years ago. You don't know; frankly you care less – you just want to see it gone. But when your next statement arrives, the hole your minimum payment should have burned in your debt is no smaller – the sore remains unclosed.
Is this situation familiar? Is it you?
If it is, you've not heard the worst of it yet. The way that credit card companies exist and thrive is by exploiting your debt burden. They'll lend and lend and lend, until you get to the point that the most you can pay back each month is the minimum payment – usually around 2.5 per cent of the balance. The problem with this is that they hit you with a load of interest, sometimes amounting to 2 per cent of the balance. If only one half of a per cent is being paid back it doesn't take much math to figure out the amount of time it could take you to pay back your debts.
In fact, if you're paying repayment insurance, in some instances you can pay back less than the amount of debt accumulating.
It's a horrible, self-perpetuating cycle of hemorrhaging money, but the good news is twofold.
First off, you're not alone. Thousands upon thousands of decent, hard-working Americans are in this position through no fault of their own but necessity and the demands of modern living.
Secondly, if you're stuck in this horrible cycle of bleeding money, the chances are that it can be at least partially redressed. Many Americans have – and still do – unwittingly signed up to credit card deals that are uncompetitive, over-priced and unnecessarily expensive. What many don't realize, is that simply because you have pledged allegiance to a particular credit card company doesn't mean to say that you are stuck with them for life. There's a way out that can save you hundreds, if not thousands of dollars a year and help you pay off your debt burden more quickly.
Transferring the balance of your credit card to another one is a way of paying off your existing debt with a new credit card that you take on at a cheaper rate. In many cases this can be set at 0 per cent for a period of a number of months, before reverting to a higher rate. By switching to such a card – and then another at the end of the interest free term, and maybe even another after that, it gives you a clear run at reducing your debt, without it spiraling ever further upwards. Even if you're still only paying 2.5 per cent off the balance a month, far better to do that than knocking off one half of a per cent, or less.
By bundling up the old expensive credit card debt, getting rid of it, then paying back the new credit card at a lower rate, you can save countless dollars each month. You can save even more money by paying a bit more each month, thus clearing the debt in a shorter time. By doing this you'll free up more dollars further down the line enabling you to spend them on something really nice.
Unfortunately, 0% deals are not always available to all customers. If you've got a credit rating that's in some way below scratch, it is probably unlikely that a 0% credit card will be made available to you. It's a sad fact of finance that the best deals seem to always be available for those who need them the least.
That said, there are a number of other excellent credit cards on the market through which you can save many dollars. Even if a balance transfer rate is as high as 10 or 12 per cent, if you're paying upwards of 20 per cent on your existing deal then you're clearly going to save a stack of money – even if it's not as much as you might have liked.
If you're concerned about how much you're paying each month on your credit card repayment it certainly pays to check out your existing interest rates and compare them to some of the balance transfer rates available at competitors: it's almost a certainty that you'll save yourself more than a few dollars.
Even if you're not worried about your existing credit card deal, it's worth checking out the market to see if you can get a better deal. Complacency doesn't pay, but a bit of awareness can save you a lot.
Ethan Hunter is the author of many credit related articles. If you are looking for help with Home Loans or any type of credit issue please visit us at http://www.creditcardunlimited.com
A credit card debt can be like the worst sort of trap. Like a wound that won't heal, a monthly minimum payment – with ceaseless regularity and endless strain on your budget – leaves your account. It's to pay for the Christmas shopping, or the last July 4th party, or your holiday two years ago. You don't know; frankly you care less – you just want to see it gone. But when your next statement arrives, the hole your minimum payment should have burned in your debt is no smaller – the sore remains unclosed.
Is this situation familiar? Is it you?
If it is, you've not heard the worst of it yet. The way that credit card companies exist and thrive is by exploiting your debt burden. They'll lend and lend and lend, until you get to the point that the most you can pay back each month is the minimum payment – usually around 2.5 per cent of the balance. The problem with this is that they hit you with a load of interest, sometimes amounting to 2 per cent of the balance. If only one half of a per cent is being paid back it doesn't take much math to figure out the amount of time it could take you to pay back your debts.
In fact, if you're paying repayment insurance, in some instances you can pay back less than the amount of debt accumulating.
It's a horrible, self-perpetuating cycle of hemorrhaging money, but the good news is twofold.
First off, you're not alone. Thousands upon thousands of decent, hard-working Americans are in this position through no fault of their own but necessity and the demands of modern living.
Secondly, if you're stuck in this horrible cycle of bleeding money, the chances are that it can be at least partially redressed. Many Americans have – and still do – unwittingly signed up to credit card deals that are uncompetitive, over-priced and unnecessarily expensive. What many don't realize, is that simply because you have pledged allegiance to a particular credit card company doesn't mean to say that you are stuck with them for life. There's a way out that can save you hundreds, if not thousands of dollars a year and help you pay off your debt burden more quickly.
Transferring the balance of your credit card to another one is a way of paying off your existing debt with a new credit card that you take on at a cheaper rate. In many cases this can be set at 0 per cent for a period of a number of months, before reverting to a higher rate. By switching to such a card – and then another at the end of the interest free term, and maybe even another after that, it gives you a clear run at reducing your debt, without it spiraling ever further upwards. Even if you're still only paying 2.5 per cent off the balance a month, far better to do that than knocking off one half of a per cent, or less.
By bundling up the old expensive credit card debt, getting rid of it, then paying back the new credit card at a lower rate, you can save countless dollars each month. You can save even more money by paying a bit more each month, thus clearing the debt in a shorter time. By doing this you'll free up more dollars further down the line enabling you to spend them on something really nice.
Unfortunately, 0% deals are not always available to all customers. If you've got a credit rating that's in some way below scratch, it is probably unlikely that a 0% credit card will be made available to you. It's a sad fact of finance that the best deals seem to always be available for those who need them the least.
That said, there are a number of other excellent credit cards on the market through which you can save many dollars. Even if a balance transfer rate is as high as 10 or 12 per cent, if you're paying upwards of 20 per cent on your existing deal then you're clearly going to save a stack of money – even if it's not as much as you might have liked.
If you're concerned about how much you're paying each month on your credit card repayment it certainly pays to check out your existing interest rates and compare them to some of the balance transfer rates available at competitors: it's almost a certainty that you'll save yourself more than a few dollars.
Even if you're not worried about your existing credit card deal, it's worth checking out the market to see if you can get a better deal. Complacency doesn't pay, but a bit of awareness can save you a lot.
Ethan Hunter is the author of many credit related articles. If you are looking for help with Home Loans or any type of credit issue please visit us at http://www.creditcardunlimited.com
Will You Qualify for that New Mortgage or Re-Finance?
The Federal Reserve continues to raise short-term interest rates, but long-term mortgage rates are still at 40-year lows. This may be one of your last opportunities to lock in great interest rates below 6%. So, we put together a brief checklist for you to follow in order to make sure that the process goes smoothly for you.
First, it is a good idea to check your credit report to make sure there will be no surprises when your lender takes a look at it. You can get a free copy of your credit report and credit score at http://www.trimyourdebt.com/GetYourCreditScore.aspx. Remember a score above 700 usually means you will get the best interest rates. Usually a rate below 680 is considered to be of higher risk and so the lender requires a higher interest rate to mitigate the increased risk of loss.
If you find any incorrect information in your credit report, be sure to get it cleaned up before applying. Cleaning up negative items from your credit will also ensure that you get a better credit score. For information on how to get your credit cleaned up before you get that new mortgage, visit http://www.trimyourdebt.com/CreditRepairGuide.aspx.
Next, list out all of the debts reported on your credit report and add up all of the monthly payments. Also include what your payment would be with your new mortgage. In order to estimate your monthly payment with a mortgage interest rate of 6%, you can use $6 per thousand dollars of mortgage. So for example, if you need a $150,000 mortgage, then multiply 6 times 150, which equals $900 per month. Add this payment to the other monthly debts listed on your credit report and this will be your total debts.
Now take out your most recent paycheck stubs to do a debt-to-income calculation. The calculation is done by taking the total debts from above and dividing this number by your gross monthly income. The ratio should be less than 38%. If your ratio is too high, then you need to do your best to start paying down your debts. The quickest way to do this is to follow the debt plan that is available at http://www.trimyourdebt.com/welcome_budget_short.aspx.
The final item that you will need to provide to your lender is documentation that shows your assets such as bank account statements, 401(k) statements, any cash value of life insurance, etc. Your lender wants to see where your down payment will be coming from.
You are now ready to check for the best rates and start looking for a lender. To get free rate quotes with no obligation and no credit check, feel free to visit us at http://www.trimyourdebt.com/MortgagePlanner.aspx.
About the Author
Don Blackhurst is the co-founder of TrimYourDebt.com (http://www.TrimYourDebt.com), which provides free budgeting tools, debt planning, and credit help. He has been working in the banking and finance industries for over 15 years and has an MBA with an emphasis in Finance and Econometrics.
First, it is a good idea to check your credit report to make sure there will be no surprises when your lender takes a look at it. You can get a free copy of your credit report and credit score at http://www.trimyourdebt.com/GetYourCreditScore.aspx. Remember a score above 700 usually means you will get the best interest rates. Usually a rate below 680 is considered to be of higher risk and so the lender requires a higher interest rate to mitigate the increased risk of loss.
If you find any incorrect information in your credit report, be sure to get it cleaned up before applying. Cleaning up negative items from your credit will also ensure that you get a better credit score. For information on how to get your credit cleaned up before you get that new mortgage, visit http://www.trimyourdebt.com/CreditRepairGuide.aspx.
Next, list out all of the debts reported on your credit report and add up all of the monthly payments. Also include what your payment would be with your new mortgage. In order to estimate your monthly payment with a mortgage interest rate of 6%, you can use $6 per thousand dollars of mortgage. So for example, if you need a $150,000 mortgage, then multiply 6 times 150, which equals $900 per month. Add this payment to the other monthly debts listed on your credit report and this will be your total debts.
Now take out your most recent paycheck stubs to do a debt-to-income calculation. The calculation is done by taking the total debts from above and dividing this number by your gross monthly income. The ratio should be less than 38%. If your ratio is too high, then you need to do your best to start paying down your debts. The quickest way to do this is to follow the debt plan that is available at http://www.trimyourdebt.com/welcome_budget_short.aspx.
The final item that you will need to provide to your lender is documentation that shows your assets such as bank account statements, 401(k) statements, any cash value of life insurance, etc. Your lender wants to see where your down payment will be coming from.
You are now ready to check for the best rates and start looking for a lender. To get free rate quotes with no obligation and no credit check, feel free to visit us at http://www.trimyourdebt.com/MortgagePlanner.aspx.
About the Author
Don Blackhurst is the co-founder of TrimYourDebt.com (http://www.TrimYourDebt.com), which provides free budgeting tools, debt planning, and credit help. He has been working in the banking and finance industries for over 15 years and has an MBA with an emphasis in Finance and Econometrics.
Wish You Could Finance Your Studies?
Financing College
Many people have avoided college because they though they couldn't afford tuition. While college is expensive there is no reason a student should let money put a stop to their education. There are many sources that help fund a person's college.
Federal financial aid, scholarships and tax credits and deductions are just a few sources that are there to help you. It would be beneficial for you if you gather first hand information about financial aid, the process of applying for a loan, opportunities that are there to win scholarships and tax credits and deductions. Several government agencies work in coordination with college management to provide financial aid to students willing to pursue higher education.
There are several programs you may qualify for:
When in search of financial aid try grants first. Grants can cover the entire cost of attendance and do not have to be repaid. They are available through state and federal governments and are available based on a student's income or that of their parents.
Also try to qualify for work study. The program allows the student to work on campus for minimum wage. The money can be used for tuition or living expenses. Work study can sometimes be based on the student's field of study or personal interest. This however is not guaranteed. The program judges eligibility by the amount of income the student receives.
Loans: There are a variety of loans that you can get to fund your college studies. You also don't need to show your financial needs to get these loans, but it would not be a good idea to do so. That would invite interests at all times. When you get a loan because of your financial need, you are not charged interests during the period of your study. To qualify for a loan you would have to submit an application form which can also be done online. It is advisable to apply for loans as early as possible.
Scholarships: Scholarships are not needed to be paid back like grants. Before applying for scholarships you would to be required to take admission. You may be automatically considered for scholarships based on your past academic achievements, achievements in the field of sports or other activities.
Discounts on a student's taxes are also available to students. These taxes include having any interest the student is paying while in college deducted from their taxes. A student must qualify for the deductions. To find out if one qualifies they should talk to a tax expert.
Finances shouldn't stop anyone from attending college. With the forms of financial aid available everyone can afford college. Deciding not to attend college is one thing, but not going because of money is stupid. There is money available and our tax dollars contribute to these funds. Therefore we should use them.
If you are thinking of joining a college and the only thing that is stopping you is finance then rethink about it. You can make use of the various provisions to help fund your studies.
About The Author
Gerald Hochschule is the premier authority on College and he has written many articles on the subject. If you want to read his articles please visit: http://www.collegeo.com
Many people have avoided college because they though they couldn't afford tuition. While college is expensive there is no reason a student should let money put a stop to their education. There are many sources that help fund a person's college.
Federal financial aid, scholarships and tax credits and deductions are just a few sources that are there to help you. It would be beneficial for you if you gather first hand information about financial aid, the process of applying for a loan, opportunities that are there to win scholarships and tax credits and deductions. Several government agencies work in coordination with college management to provide financial aid to students willing to pursue higher education.
There are several programs you may qualify for:
When in search of financial aid try grants first. Grants can cover the entire cost of attendance and do not have to be repaid. They are available through state and federal governments and are available based on a student's income or that of their parents.
Also try to qualify for work study. The program allows the student to work on campus for minimum wage. The money can be used for tuition or living expenses. Work study can sometimes be based on the student's field of study or personal interest. This however is not guaranteed. The program judges eligibility by the amount of income the student receives.
Loans: There are a variety of loans that you can get to fund your college studies. You also don't need to show your financial needs to get these loans, but it would not be a good idea to do so. That would invite interests at all times. When you get a loan because of your financial need, you are not charged interests during the period of your study. To qualify for a loan you would have to submit an application form which can also be done online. It is advisable to apply for loans as early as possible.
Scholarships: Scholarships are not needed to be paid back like grants. Before applying for scholarships you would to be required to take admission. You may be automatically considered for scholarships based on your past academic achievements, achievements in the field of sports or other activities.
Discounts on a student's taxes are also available to students. These taxes include having any interest the student is paying while in college deducted from their taxes. A student must qualify for the deductions. To find out if one qualifies they should talk to a tax expert.
Finances shouldn't stop anyone from attending college. With the forms of financial aid available everyone can afford college. Deciding not to attend college is one thing, but not going because of money is stupid. There is money available and our tax dollars contribute to these funds. Therefore we should use them.
If you are thinking of joining a college and the only thing that is stopping you is finance then rethink about it. You can make use of the various provisions to help fund your studies.
About The Author
Gerald Hochschule is the premier authority on College and he has written many articles on the subject. If you want to read his articles please visit: http://www.collegeo.com
With Credit Cards Hitting Hardest, UK Consumers Tax Themselves With Penalty Charges On Personal Finance Options
A rise in costs for users of any financial service usually results in public outcry, why is it then that so many of those same consumers allow penalty fees and charges to accrue on their credit cards, when the problem could so easily be avoided?
The financial groups Defaqto and MoneyExpert have released a report in which the startling figure that one in five consumers have had to pay just such a charge, and while credit cards were the worst offender, a number of different personal finance services also incurred unnecessary charges. These services included charges for simple personal finance errors such as allowing an overdraft to go over the agreed bank limit, or investing in an inflexible mortgage and then paying off the debt early. In both cases either better preparation beforehand with regards to choosing the right provider (such as using an online personal finance database like Moneynet (http://www.moneynet.co.uk/credit-card/index.shtml ) or Motley Fool (http://www.fool.co.uk ) ) or taking advantage of financial options now readily available would have presented more flexible options which would not have imposed the penalties.
To take an example, credit cards allow greater control over your personal cash flow - you can pay now for a product or service even if the funds you use will not be available to you until the following month, at which point you pay off the credit card. Credit cards also have valuable incentives for their use with larger purchases, featuring, as the majority do, insurance options and traceability. However when you are making smaller purchases, say clothing or household products, then the use of a credit card may not be the best use of your money: searching for a suitable personal loan would most likely result in better short-term rates and the avoidance of penalties such as those imposed on the one in five people surveyed by Defaqto and MoneyExpert.
With the survey also producing the result that one in twenty consumers faced charges in excess of �100 it would seem that this problem is more than a trifle for a large portion of the UK population and that while there are a great number of personal finance options available out there, there are very often not used to the advantage of the consumer as they could so easily be with a little research.
Disclaimer
All information contained in this article is for general information purpose only and should not be construed as advice under the financial Services act 1986. You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.
About The Author:
Michael is a keen writer, and internet marketer living in Scotland: Contact details: E-mail: samqam@googlemail.com Phone: 0131 561 2251 Michael's Website: http://www.gransha-taxi.co.uk
The financial groups Defaqto and MoneyExpert have released a report in which the startling figure that one in five consumers have had to pay just such a charge, and while credit cards were the worst offender, a number of different personal finance services also incurred unnecessary charges. These services included charges for simple personal finance errors such as allowing an overdraft to go over the agreed bank limit, or investing in an inflexible mortgage and then paying off the debt early. In both cases either better preparation beforehand with regards to choosing the right provider (such as using an online personal finance database like Moneynet (http://www.moneynet.co.uk/credit-card/index.shtml ) or Motley Fool (http://www.fool.co.uk ) ) or taking advantage of financial options now readily available would have presented more flexible options which would not have imposed the penalties.
To take an example, credit cards allow greater control over your personal cash flow - you can pay now for a product or service even if the funds you use will not be available to you until the following month, at which point you pay off the credit card. Credit cards also have valuable incentives for their use with larger purchases, featuring, as the majority do, insurance options and traceability. However when you are making smaller purchases, say clothing or household products, then the use of a credit card may not be the best use of your money: searching for a suitable personal loan would most likely result in better short-term rates and the avoidance of penalties such as those imposed on the one in five people surveyed by Defaqto and MoneyExpert.
With the survey also producing the result that one in twenty consumers faced charges in excess of �100 it would seem that this problem is more than a trifle for a large portion of the UK population and that while there are a great number of personal finance options available out there, there are very often not used to the advantage of the consumer as they could so easily be with a little research.
Disclaimer
All information contained in this article is for general information purpose only and should not be construed as advice under the financial Services act 1986. You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.
About The Author:
Michael is a keen writer, and internet marketer living in Scotland: Contact details: E-mail: samqam@googlemail.com Phone: 0131 561 2251 Michael's Website: http://www.gransha-taxi.co.uk
Saturday, October 20, 2007
Women And Your Finances
Your finances don't have to be a problem and you don't need to be complacent and let your husband do all the finances. You have to know what's going on for your own self-preservation. Money is a subject too easily walked around. It's one of the top two problems in today's marriages. You need to know about your money and finances and even your credit score.
Money is sometimes avoided in hopes that you will find a rich, nice guy, a dream job, an unknown rich relative leaves you a bunch of money or you win a lottery. It's not going to happen. You have to sit down and examine where you are going with your money. Statistics show women born between 1946 and 1964 that have failed to save for retirement will have to work until they are 74. Who will keep you hired until you are 74? Will social security still be in place?
So maybe you did marry Mr. Right, but what if Mr. Right turns into Mr. Wrong but before you find about his subsequent name change, he financially ruins you. My friend Judy got divorced with nothing, not even a credit score. She might as well have been 18 years old again starting over. Her husband even took the shoes off her feet and made her leave. He makes $80,000 a year, she makes $6 an hour and he's suing her for child support. Her life was once picture perfect and she was all taken care of – or she thought. Now she lives on the brink of eviction. She didn't have money to contest the divorce, so he got everything – including his 401k.
Is your 401k starving? Most women have less than $10,000 in theirs. Maybe that's why 87% of the impoverished elderly are women. Most women say they can't afford to put any more into their 401k. Here's the trick. Always contribute to get your employer's 100% match. If they match up to 6%, then you have to get to 6% as soon as possible. The longer you wait, the more free money you are giving away. Then, each year, you need to up your contribution at least 1%. More if you are older. You will adjust to your net pay very quickly and never know the money is gone. Hard to believe, I know.
What to do? Keep your eye on the bottom line. Take baby steps to get there so you don't get overwhelmed, but keep abreast at least once a year where you are heading financially or face the consequences of trying to live on the dwindling social security benefits. Watch the family budget and total money spent. Review your money with your husband at least once a year. It's not a trust thing, just as a curiosity. Make sure your name is on some loans so you will have credit, but if they are on the loans, make sure they are paid. You can keep your financial security intact no matter what your future holds.
About the Author:
Stuart Simpson http://www.401k-review.com
Source: www.isnare.com
Money is sometimes avoided in hopes that you will find a rich, nice guy, a dream job, an unknown rich relative leaves you a bunch of money or you win a lottery. It's not going to happen. You have to sit down and examine where you are going with your money. Statistics show women born between 1946 and 1964 that have failed to save for retirement will have to work until they are 74. Who will keep you hired until you are 74? Will social security still be in place?
So maybe you did marry Mr. Right, but what if Mr. Right turns into Mr. Wrong but before you find about his subsequent name change, he financially ruins you. My friend Judy got divorced with nothing, not even a credit score. She might as well have been 18 years old again starting over. Her husband even took the shoes off her feet and made her leave. He makes $80,000 a year, she makes $6 an hour and he's suing her for child support. Her life was once picture perfect and she was all taken care of – or she thought. Now she lives on the brink of eviction. She didn't have money to contest the divorce, so he got everything – including his 401k.
Is your 401k starving? Most women have less than $10,000 in theirs. Maybe that's why 87% of the impoverished elderly are women. Most women say they can't afford to put any more into their 401k. Here's the trick. Always contribute to get your employer's 100% match. If they match up to 6%, then you have to get to 6% as soon as possible. The longer you wait, the more free money you are giving away. Then, each year, you need to up your contribution at least 1%. More if you are older. You will adjust to your net pay very quickly and never know the money is gone. Hard to believe, I know.
What to do? Keep your eye on the bottom line. Take baby steps to get there so you don't get overwhelmed, but keep abreast at least once a year where you are heading financially or face the consequences of trying to live on the dwindling social security benefits. Watch the family budget and total money spent. Review your money with your husband at least once a year. It's not a trust thing, just as a curiosity. Make sure your name is on some loans so you will have credit, but if they are on the loans, make sure they are paid. You can keep your financial security intact no matter what your future holds.
About the Author:
Stuart Simpson http://www.401k-review.com
Source: www.isnare.com
Your Competitors Offer Leasing Finance, you should ask yourself WHY?
The simple answer to this question is that they are offering finance to their customers as a sales, marketing & deal closing tool. It cements their relationships with their customers because leasing finance can usually be offered the same day. The customer is then more likely to return in the future because of the financing is arranged with minimum hassles and no time consuming trips to the bank manager. This type of financing arrangement is known as a "Vendor Program"
Can I Offer Finance to my Customers?
Again, the answer to this question is yes. You can benefit from establishing a relationship / partnership with an appropriate lender and start taking advantage of the sales & marketing opportunities and shortened sales cycle. Your Company, Sales Team and Customers all benefit from a Vendor Program arrangement that can be set up with minimal training and effort on your part.
So now, let us take a look at the benefits in a few more details
Sales Benefits
Finance adds value to your product, by including finance as part of your whole package you make it easier for your customer to buy therefore your sales team will find it easier to close more deals. Deal closing opportunities present themselves via price flexibility, you could discount products & claw back via finance or sell at full price but offer low cost finance. If you have customers who arrange their own finance then you already have the demand for the service, which means that some customers who require finance are probably going elsewhere! Fast finance decisions means that customers are less prone to changes of mind or finding a better deal elsewhere. If you allow others to offer finance facilities you will not be in control of the interest rate & sales could be lost / delayed. Finally, additional Leads can be gained by innovative pricing schemes.
Customer Benefits
You offer, a single point of contact for customers requiring finance for equipment. Quick finance decisions means quick delivery of equipment. Leasing allows customers to upgrade and replace equipment easily with just a simple adjustment in rentals. A near guaranteed acceptance of all finance proposals, start up companies are the more difficult proposals but can be done. Finally there are the tax benefits of leasing, payments are 100% tax deductible, cash and existing credit lines are preserved.
Company Benefits
If you offer finance it presents a barrier to competitors, if it's easy for your customer to keep trading in and trading up with you, your competitors do not get a look-in and as used equipment comes back to the vendor, the second-hand market can be controlled. Vendor maintenance can be made a condition of the leasing, increasing the vendor's profits from maintenance activity. Your company can earn commission on finance deals all for filling in a simple finance proposal form. You can choose whether to earn a commission on any deal because you set the interest rate and best of all any commission earned is 100% profit. Just think what could you do with the commission on finance sales, it could allow you to employ extra salesmen with the profits and generate even higher profits!
If you are NOT offering vendor finance & your competitors are you should ask yourself why Today?
Copyright - Mark Dalton
Eland Business Services Limited
www.ebslfinance.co.uk
About the Author
Mark Dalton is the founder of Eland Business Services Limited. For more information about business finance in the UK please visit www.ebslfinance.co.uk
Can I Offer Finance to my Customers?
Again, the answer to this question is yes. You can benefit from establishing a relationship / partnership with an appropriate lender and start taking advantage of the sales & marketing opportunities and shortened sales cycle. Your Company, Sales Team and Customers all benefit from a Vendor Program arrangement that can be set up with minimal training and effort on your part.
So now, let us take a look at the benefits in a few more details
Sales Benefits
Finance adds value to your product, by including finance as part of your whole package you make it easier for your customer to buy therefore your sales team will find it easier to close more deals. Deal closing opportunities present themselves via price flexibility, you could discount products & claw back via finance or sell at full price but offer low cost finance. If you have customers who arrange their own finance then you already have the demand for the service, which means that some customers who require finance are probably going elsewhere! Fast finance decisions means that customers are less prone to changes of mind or finding a better deal elsewhere. If you allow others to offer finance facilities you will not be in control of the interest rate & sales could be lost / delayed. Finally, additional Leads can be gained by innovative pricing schemes.
Customer Benefits
You offer, a single point of contact for customers requiring finance for equipment. Quick finance decisions means quick delivery of equipment. Leasing allows customers to upgrade and replace equipment easily with just a simple adjustment in rentals. A near guaranteed acceptance of all finance proposals, start up companies are the more difficult proposals but can be done. Finally there are the tax benefits of leasing, payments are 100% tax deductible, cash and existing credit lines are preserved.
Company Benefits
If you offer finance it presents a barrier to competitors, if it's easy for your customer to keep trading in and trading up with you, your competitors do not get a look-in and as used equipment comes back to the vendor, the second-hand market can be controlled. Vendor maintenance can be made a condition of the leasing, increasing the vendor's profits from maintenance activity. Your company can earn commission on finance deals all for filling in a simple finance proposal form. You can choose whether to earn a commission on any deal because you set the interest rate and best of all any commission earned is 100% profit. Just think what could you do with the commission on finance sales, it could allow you to employ extra salesmen with the profits and generate even higher profits!
If you are NOT offering vendor finance & your competitors are you should ask yourself why Today?
Copyright - Mark Dalton
Eland Business Services Limited
www.ebslfinance.co.uk
About the Author
Mark Dalton is the founder of Eland Business Services Limited. For more information about business finance in the UK please visit www.ebslfinance.co.uk
Your Finances
By Terry Rigg
Which category do you fall in?
I have determined that financially, people fall into one of three categories.
1. Family 1 has all the money they need for necessities and more and manage it very well.
2. Family 2 has all the money they need for necessities and more but live payday to payday with ever increasing debt.
3. Family 3 don't have enough money for necessities.
The funny thing about the three families above is that they could have exactly the same income and family size. This is not to say that special circumstances has nothing to do with it, but on the average most people live above their means.
Family 1 has established a workable budget. They don't pay more than they can afford for housing, transportation, utilities, etc. They also have money set aside for long and short term savings. This short term savings provides two things. First, it makes money available when the car breaks down, you need a new washer or any number of unexpected expenses that crop up. Second, it prevents the need to use credit cards for these items. The savings here could be hundreds of dollars. Family 1 planned.
Family 2 is still struggling to establish a budget. In many cases their house payments or rent is much more than they can afford. They don't take the time to evaluate the money that could be saved with little effort. Usually there is no short
term savings, let alone short term. They use credit cards as if they were cash and pay hundreds of dollars in unnessary finance charges and penalities. These people find themselves with financial problems that often leads to bankruptcy. Family
2 either didn't plan or may not know how the handle their finances.
Family 3 has given up on a budget. No matter what they do there isn't enough money to pay for housing and other necessities. They struggle to put food on the table. Most don't qualify for credit cards, which is a good thing. In some cases this
situation is self inflicted and some are due to circumstances.
What is the answer to these problems?
Family 1 - Leave these people alone unless you plan to ask their advice.
Family 2 - These are the people that need to seek help and stand a chance of becoming a family 1 family. The possible solutions include a debt management company like Consumer Credit Counseling Service. They need to establish a budget and stick to it. If their housing and other expenses are too high, then they need to cut back, even if they have to move. They also need to cut up the credit cards and think about consolidating. Depending on how far they are in debt, this could take years.
Family 3 - While their struggle seems useless, there are things that can be done. First, they need to see to it that everything is being done to keep expenses down. The electric bill is a good example. There is federally subsidized housing that only
charges a small fee based on your income. Make sure that they are receiving all federal and state benefits that they are entitled. If they are able, they should seek job training or some other means to make their life a little better.
Which family are you? No matter whether your are family 1, 2 or 3, there is hope. The primary thing that must be done is to educate everyone that learning to managing their finances is absolutely for their peace of mind. With the vast amount of
information on the internet providing help, this is possible.
If you are a family 2 or 3 family, "The Complete Budget and Bill Organizer" http://www.homemoneyhelp.com/BBOonline.html can help.
About the Author
Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of The FREE Budget Stretcher Newsletter and Budget Stretcher web site http://www.homemoneyhelp.com. He has 25 years of experience counseling individuals and families concerning their personal finances. Use this email link to get a list of all of Terry's articles by autoresponder at: articlelist@budgetstretcherpremium.com
Which category do you fall in?
I have determined that financially, people fall into one of three categories.
1. Family 1 has all the money they need for necessities and more and manage it very well.
2. Family 2 has all the money they need for necessities and more but live payday to payday with ever increasing debt.
3. Family 3 don't have enough money for necessities.
The funny thing about the three families above is that they could have exactly the same income and family size. This is not to say that special circumstances has nothing to do with it, but on the average most people live above their means.
Family 1 has established a workable budget. They don't pay more than they can afford for housing, transportation, utilities, etc. They also have money set aside for long and short term savings. This short term savings provides two things. First, it makes money available when the car breaks down, you need a new washer or any number of unexpected expenses that crop up. Second, it prevents the need to use credit cards for these items. The savings here could be hundreds of dollars. Family 1 planned.
Family 2 is still struggling to establish a budget. In many cases their house payments or rent is much more than they can afford. They don't take the time to evaluate the money that could be saved with little effort. Usually there is no short
term savings, let alone short term. They use credit cards as if they were cash and pay hundreds of dollars in unnessary finance charges and penalities. These people find themselves with financial problems that often leads to bankruptcy. Family
2 either didn't plan or may not know how the handle their finances.
Family 3 has given up on a budget. No matter what they do there isn't enough money to pay for housing and other necessities. They struggle to put food on the table. Most don't qualify for credit cards, which is a good thing. In some cases this
situation is self inflicted and some are due to circumstances.
What is the answer to these problems?
Family 1 - Leave these people alone unless you plan to ask their advice.
Family 2 - These are the people that need to seek help and stand a chance of becoming a family 1 family. The possible solutions include a debt management company like Consumer Credit Counseling Service. They need to establish a budget and stick to it. If their housing and other expenses are too high, then they need to cut back, even if they have to move. They also need to cut up the credit cards and think about consolidating. Depending on how far they are in debt, this could take years.
Family 3 - While their struggle seems useless, there are things that can be done. First, they need to see to it that everything is being done to keep expenses down. The electric bill is a good example. There is federally subsidized housing that only
charges a small fee based on your income. Make sure that they are receiving all federal and state benefits that they are entitled. If they are able, they should seek job training or some other means to make their life a little better.
Which family are you? No matter whether your are family 1, 2 or 3, there is hope. The primary thing that must be done is to educate everyone that learning to managing their finances is absolutely for their peace of mind. With the vast amount of
information on the internet providing help, this is possible.
If you are a family 2 or 3 family, "The Complete Budget and Bill Organizer" http://www.homemoneyhelp.com/BBOonline.html can help.
About the Author
Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of The FREE Budget Stretcher Newsletter and Budget Stretcher web site http://www.homemoneyhelp.com. He has 25 years of experience counseling individuals and families concerning their personal finances. Use this email link to get a list of all of Terry's articles by autoresponder at: articlelist@budgetstretcherpremium.com
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