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Tuesday September 26th 2017

Figuring Out Your Financial Goals

Most people have a general idea of what their financial goals are, but they never dig down to the specifics. If you want financial independence, for example, what does that mean? It is important to create a detailed explanation of your financial goals so that you can begin to work seriously toward them. You will have better success meeting your financial goals when you have a better understanding of exactly what they are. The sooner you start, the more you will be able to take advantage of accumulating interest that could speed you toward your goals even faster.

Make a List

Begin with a broad list of your financial goals. Think of big things, like buying a new home or paying for college tuition for your children. Once you have defined the big goals, do some research into possible ways to achieve those goals. If you want to send your kids to college, find out about the tuition and housing rates at some of the schools in your area. Give each of your goals a real number to achieve so that you can create a realistic time frame for reaching that number.

Prioritize

Once you have a good list of goals, you need to decide which ones are the most important. You may not be able to afford to save for college tuition and pay for braces at the same time. Think about each of your goals realistically and arrange them in a manner that makes sense. When they are arranged by importance, you can focus your money and energy on the goals at the top of the list first. Once those goals have been met, you can begin to work on goals that are further down the list. The importance of some goals may change as time passes, so you should update your priorities once every other year or so.

Scrutinize Spending Habits

The toughest part of working toward a financial goal can involve adjusting your daily spending habits. When you start to buy a new electronic gadget, think about how much money you are spending. How far would that amount of money put you toward your goal if you put it in savings instead? How long would it take you to make up that amount of money if you did not apply it to your goal. Find ways to remind yourself of how important the goals are. You should also allow yourself some fun money in your budget so that you don’t feel like you are always sacrificing.

Make a Solid Plan

The best way to keep on track toward your financial goals is to create a realistic plan that you know you can follow for the long term. Some of your goals may take years to accomplish, so your plan needs to fit your lifestyle comfortably for a long time. Create a budget that allows you to put a specific amount of money toward your goals so that you can reach them in a timely manner, but don’t make the budget so strict that it is impossible to live up to.


Put a Leash on It! Top Five Tips for Controlling Your Debt

Americans are facing an unprecedented level of debt. From credit cards to second mortgages, the majority of the country is in over its head. Here are five ways to get a handle on your debt and keep it under control.

Understand Good Debt vs. Bad Debt

There is such a thing as good debt. Investing in a mortgage or purchasing a car are ways that you can increase your credit rating and purchase expensive items that you need. Make sure you research the best rate options before you sign on for a large loan. Bad debt that should be avoided is usually in the form of high interest rates from credit cards. Try to pay for daily items with cash, and never buy anything with a credit card that you won’t be able to pay for by the end of the month.

Organize Spending Habits

Have a plan for your money. All of those small items that you pick up during the week are inexpensive one at a time, but they add up quickly. Make a realistic budget that includes all of the things you expect to purchase on a regular basis – including that danish with your coffee on Friday mornings.

Always Pay More than the Minimum

If you are carrying a revolving balance on your credit cards, always pay more than the minimum every month. Usually the minimum will only cover your interest payment on the balance. In order to make some headway into the principle balance, you will need to pay more than the minimum requirement.

Be Ready for Emergencies

It is important to be prepared for unexpected emergencies. Most financial planners recommend that you keep a savings account that is large enough to cover your expenses for three months. This safety net will provide you with the money you need in an emergency without having to resort to credit cards or other financial pitfalls.

Pay Debt Down in the Proper Order

How you pay your debt off is important. Begin by paying off the loans or credit cards that have the highest interest rate. Your debt will drop much faster as you reduce the balances on those loans because the interest that you are paying will be reduced right away. A good strategy is to make larger payments on one high interest loan and at least the minimum on your other loans. As you pay one off, you can start on the next one in the list.


10 Personal Finance Basics

What are the big things you are going to need to buy in the next few years? A car? A house? Financial goals are not as hard to establish as you may think, and they are the only realistic way to work toward the things you really need in life.

1. Identify Reasonable Goals

Financial stability means different things to different people. Figure out what you want to do with your money that would make you feel the most comfortable in the long run. Make a list of the goals you want to accomplish in the next ten years, and then make a list of the average expenses of each goal.

2. Prioritize

Once you have your list of goals put together, look at each item and rank it in order of importance. For example, sending your son to college would probably rank higher than taking a cruise to Alaska. Rearrange the list so that the things you want the most are at the top.

3. Make the Tough Choices

Not all of your big financial goals are going to fit nicely together. You may have to sacrifice one in order to keep another. Remember that every dollar you spend on one item is a dollar you won’t have available to spend on something that might be more important to you in the long run.

4. Plan Ahead

Give yourself plenty of time to achieve your financial goals. Take advantage of savings accounts and investments that will help your money grow over time so that you will have more when you need it later.

5. Practical Considerations

Remember to include goals that will help keep you and your family financially secure. Think about creating an emergency fund for unexpected expenses. Begin to build tuition funds for young children. Create retirement savings that will take care of you in your older days.

6. Include everyone who is Directly Affected

If you are married, make sure that you discuss your financial goals with your spouse. Talk with your children about the financial goals that include them.

7. Begin Right Away

Getting your finances in order is like going on a diet. It’s really easy to say you’ll start next week or next month and then never get around to it. Once you choose to create a solid financial plan, put it in order and start using it as soon as possible.

8. Maintain Discipline

Daily spending is the hardest to control. Every time you think about making a big purchase, remember what your goals are. If the goals are really important to you, they will be enough to keep you from blowing your cash on something you don’t really need.

9. Give Yourself some Breathing Room

Budget in some walking around money so that you never feel too limited. It’s important to have a little flexibility to purchase less expensive items when you want them.

10. Make Changes as Time Passes

As you and your family get older, your financial situation and goals will change. Revisit your plan every three to five years and make changes so that it fits reality.


Three Core Principles for Smart Money Management

A good money management plan will keep you solvent even in the most difficult financial times. Taking care of your money is something you have to do on a daily basis. Just like dieting, it requires a little bit of discipline and planning to get it right. But a good financial plan can become a normal part of your life, the same way a healthy diet and exercise can become regular parts of your days. Begin with these three core principles and you’ll find that good money management is easier than it sounds.

Live Within Your Means

It sounds simple, but this can be the toughest part of money management. It all boils down to only spending as much money as you make. Credit cards and monthly payment plans are the fastest way to get in over your head with interest rates and revolving balances. Credit cards are good ways to increase your credit rating, and they are good for emergencies, but they have to be used carefully. Never charge an item that you wouldn’t be able to pay off completely within a month, and then really do pay them off when the bill comes in.

Some interest rates are unavoidable. Mortgages and car payments are large enough that can rarely be paid off all at once. You can be careful to shop around for the lowest interest rates and the shortest loans that you can afford. Buying your own home is not always a sound investment depending on where you live. Look into all of your options before you jump into a 30 year mortgage.

Keep Your Money Working for You

Having a savings account is an excellent beginning toward financial stability. Every bank offers a different interest rate for their different types of savings accounts. Find the account that will give you the best return on your investment. Over time, the difference between a 1% return and a 1.5% return can become substantial.

It is also possible to earn money as you spend it. Many credit cards today offer cash back programs that will give you money each time you use the cards. As long as you remember to keep the credit card spending within your budget, you can build a nice stash of money by taking advantage of these reward programs. If you don’t find a program that offers cash back, you may be able to find one that gives you points toward travel or other purchases that will save you money in the long run.

Be Ready for Anything

Life isn’t always predictable. Keeping an emergency fund available for those unexpected expenses will save you a great deal of money and heartburn. Most economists recommend that you keep an emergency fund that is equal to your salary for three months of work. That way if you lose your job or are unable to work for some reason, you will still be able to make all of your payments on time until you get things all sorted out.


5 Smart Ideas for Reduction of Debt

If you are buried under rising debt and want to get rid of it as soon as possible, then you can consider various debt reduction ideas which will ensure an improvement in your debt situation. You can consider many debt solutions such as debt consolidation, settlement, etc. However, you can also consider a few frugal debt reduction ideas to hasten the process of debt elimination.

Some of these frugal debt reduction ideas are as follows.

  1. Putting up a yard sale: If you have a lot of extra junk that is lying around your house, then you can put up a yard sale. This way you can liquefy the money that is other wise lying as waste. You can sell off all your old discarded items that may include your clothes, furniture, toys as well as house wares. After you do this you would get some money out of the things that did not have any value for you. This extra amount that you earn you can put towards paying off your debt. Try to use it to pay for the debt that has the highest rate of interest. In case you have certain valuable items that you do not need any more, you can put them up for sale on eBay.
  2. Using as many coupons as possible: A great way of saving money on the things that you need is the use of coupons. As these coupons help you save, they indirectly also help you in paying off your debts as you can use the money you save to pay off your debts. You should try and use as many coupons as possible and then try to put the money that you save towards your debts.
  3. Hiring yourself is advisable: It is advisable that you hire yourself instead of others to do certain daily household jobs. You may usually hire someone to clean your house or cook for you. Try not to do that, instead you can do those jobs yourself and save a lot of money. This money can be put to use by paying it towards your debts.
  4. Making money through online surveys: If you have opinions to express, then you can earn while expressing them by opting for online surveys. In your extra time you can fill in as many as you can and earn money. This money can be utilized for paying off your debts.
  5. Utilizing your talents: Everyone is good at certain things all you have to do is try to cash in on your talents. Try to figure out what are the things that you are really good at. Then you must think of how to turn these talents into ways to earn money. Find ways in which you can successfully market your skills and then make payments with the profits that you earn.

With the help of these ways you can gradually reduce your debt and then eliminate it.

Author’s bio : Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. He is covering debt settlement, debt reduction, debt consolidation etc. including all other financial topics.

Should You Pay Off Your Student Loans Early?

Should you pay off your student loans early? Absolutely! Paying off your student loans as soon as you possibly can is the best thing you can possibly do with your money. Tons of people graduate from college with thousands of dollars worth of student loans and completely forget or neglect to pay the money back once they are out college. This is one of the worst mistakes you can make. There are a number of reasons to pay your loans off as soon as possible.

Better Credit

First of all, paying your student loan as soon as you can will lower your debt to income ratio. This will allow you to have more money when you start to make important financial decisions later on down the road. Having a good debt to income ratio will allow you to afford a nicer house, car, and other objects you may desire. You may even be able to take the extra money afforded to you and invest it in order to start making even more money. Bottom line, the financial position you will be in later will be well worth the money you pay now.

Interest Savings

The longer you wait to pay your loans the more your loans will cost. Each month you don’t pay is more interest being added to the previous interest your loans have accumulated. The longer you wait to pay the more interest you will have to pay. The sooner you pay your loans the less you will pay altogether which could potentially save yourself thousands of dollars.

You’ve Got to Do it Sooner or Later Anyway

You cannot escape your student loans. You still have to pay your student loans even if you declare bankruptcy. Should your finances tank you will still have to climb back up with your student loans weighing you down. Paying your student loans early will allow you to deal with a financial crisis easier.

Most people start out with student loans as their only source of debt. Why not start your debt free life sooner than later by paying off your only source of debt as quickly as possible? You have nothing to lose and everything to gain from paying your loans right away.

Even if you can only pay off a portion of your loans you will still benefit more than not. Getting your finances in order as quickly as possible should always be your number one priority.


Step-by-Step Guide to Lower Credit Card Interest Rates

Credit card companies compete with each other using their individual interest rates. The following is a method in which you can use a credit card company’s competitive mindset to lower your credit card interest rates.

Getting the Best Rate

Credit card companies are in the business of making money. If they could charge you a hundred percent interest rate they would. However, credit card companies are constantly competing with each other for customers on a daily basis. No one would use a credit card that charged a hundred percent interest, thus a credit card company with a hundred percent interest rate would become bankrupt in a matter of days. Just how much you do pay can depend on how far you’re willing to go to get the best rate.

Gather Your Information and Start Calling

First off you need to get your credit card statements together and call the customer service number that is list on your credit card statement. This will call will take a while and probably try your patience but it could save your hundreds of dollars in the future so stick with it. Go through the recording and push the necessary numbers until you get a hold of one of your credit card company’s representatives.

Negotiating a Better Rate

Now that you have an actual person on the phone you can start step two. Simply ask the representative to lower your credit card’s interest rate. Make sure you point out that you constantly pay your bill on time. If you make a lot of late payments you may be unable to lower your interest rate at all.

Be Nice

It is absolutely essential that you keep a polite tone. You are trying to get the credit card company to do you a favor; people do not do favors for people that show hostility towards them. Stay polite and the customer service representative will be more willing to help you out however he or she can.

Be Persistent

If your credit card company can’t lower your rate then request detailed information on why they aren’t willing to lower your interest rate and how you can qualify for a lower rate in the future. You may need to simply wait a few months before calling again. It is actually a good idea to call every few months whether they approve a lower interest rate or not. You want to get as close to zero percent as possible.

Lastly, pay your bill in full each month. If you pay your bill in full you make sure your credit card company doesn’t have a reason to increase your interest rate. The longer you pay your bill in full each month without any troubles the more of a reason your credit card company will have to lower your interest rate next time you call.

Politeness and manners are the keys to lowering your credit card interest rates. Those who ask nicely and frequently are more likely to receive lower credit card interest rates than those who demand and never ask. One phone call could save you hundreds of dollars each year


The Basics of Building Good Credit

People have been trying to build their credit since before the recession hit. A number of people ran their credit into the ground in the years before the economy took a tumble and a good many did so afterwards out of necessity. During these years thousands of teenagers graduated into adulthood to find they had no credit at all. Luckily, the credit building basics are the same whether you are starting with bad credit or no credit.

In order to start building your credit you need to limit the number of credit cards you possess. Until you have good credit you should only have one credit card. Having a bunch of credit cards at once is a bad mark on your credit report. This includes all kinds of credit cards such as gas cards and store cards. The discounts are not worth the hit to your credit. Stick to one credit card to cut down on your temptation to spend and repair your credit one purchase at a time.

You also need to set the credit limit on your card to no more than a thousand dollars. It would be best to set your limit to five hundred dollars but not everyone can handle such a small limit. You can usually call your credit card issuer, which is typically your bank, and request that your limit not be automatically increased as your credit rises. Setting your credit limit low will allow you to handle your payments easier and help you control your spending.

The most important part of building your credit is paying your balance in full each month. If you can do that then you are better off than most people that are already drowning in credit card debt. Paying your balance in full each month will show creditors that you are responsible in paying your monthly balance regularly. This is what ultimately leads to an increase in your credit score and makes your life a lot easier. You may find this easier to accomplish by only using your card to purchase things you can’t use cash to pay for or by only putting something you pay regularly on your card each month such as a phone bill.

As a final note, stay away from free offers that come with credit card applications. You may find the free stuff enticing and think you can simply cancel your credit card afterward, however; doing so will result in a hit to your credit that isn’t worth the free pizza or t-shirt. Unless it is a free car don’t fill out the application unless you plan to keep the card. Follow the aforementioned pointers and you are sure to build up good credit in no time.


Zero Percent Credit Cards are Back

Consumers with credit scores of 720 or higher may have an extra reason to celebrate this Christmas season. Zero percent credit cards are back and better than ever with many of them lasting for up to twenty-one months. That is a drastic increase from the fifteen month zero percent periods of last year. Initially these zero percent credit cards look like a blessing from above but this blessing is not for everyone.

Zero Chance Getting Zero Percent on Poor Credit

If your credit score is below 720 then the chances of you receiving a zero percent credit card is about the same as the card’s initial APR; zero. Credit card delinquency is down twenty-six percent from last year alone. Credit issuers are beginning to target prime burrowers in an attempt to increase profits as delinquency rates continue to fall. Unfortunately, this leaves out those whose credit scores were hit hard during the recent recession.

If your credit is better than 720, take a serious look at zero percent credit cards. Just because your credit score is so high doesn’t mean you are completely free of credit card debt. However, right now is a great time to transfer your debt to a zero percent credit card in order to save hundreds of dollars due you would normally pay due to interest. Twenty-one months without interest is a lot of money saved and a nice security net should you run into tough times and miss a payment during the promotional period. Zero percent credit cards don’t stay at zero forever but two years is a nice time to help get your finances in order.

The Catch

However, there is a catch. Transfer fees have increased to three to five percent no matter what company you transfer with. Which means you would have to pay up to two hundred and fifty dollars to transfer five thousand dollars. Transfer fee limits are, for the most part, a thing of the past.

A few card issuers offer a limit of only paying fifty dollars no matter what the transfer balance is but there is usually an annual fee or other catch that makes them not worth the trouble. Also, after the promotional period ends you will end up being charged the normal amount of interest for the entire balance that is left over. Meaning whatever you have left will be charged the same amount of interest it would have normally acquired during the twenty-one month period as soon as the promotional period is over.

Whether this is truly a good financial decision for you depends on your finances and deals you are offered. Zero percent credit cards are definitely worth another look.


Tips for Settling Back Taxes

If there is one inescapable truth, it is that the IRS will always get what is owed to them. Being in debt to the IRS is no laughing matter. Owing back taxes can ruin your finances for years and even decades. The best way to settle back taxes are to avoid them all together. There are a number of different ways to pay off what you owe to the IRS. The best decision you can make is look at all the advantages and choices at your disposal before choosing a path towards repayment.

Partial Payments

The way most people pay off their back taxes is through monthly partial payments. This choice works in your favor only if you can make the necessary payments on-time each month until the period of time you and the IRS agree upon has ended. In some cases, people have been able to get away with paying less than they originally owed the IRS. However, you could face a great deal of trouble should you miss a payment. Be certain you can handle the amount before agreeing to a payment plan.

Offer-in-Compromise

An Offer-in-Compromise is probably the best way to settle back taxes. You simply offer what you can afford to the IRS and they choose whether to accept or reject your offer. The closer you are to the amount you owe the better chance there is the IRS will accept your offer.

If you can offer at least eighty percent of the original amount then you should be fine. The IRS will review your financial standing and liabilities before accepting your offer. Should the IRS find you could afford the full amount they will likely reject your offer even if it is ninety-nine percent of the original debt owed.

Penalty Abatement

There are two other alternatives for those significantly financially strapped. The first is known as penalty abatement. Penalty abatement is a request you can make to have the IRS completely drop all your tax penalties. The IRS will conduct an in-depth search of your financial standing to see if you are as bad off as you say you are.

After reviewing your financial status, the IRS may eliminate your tax debts altogether. Requesting penalty abatement generally knocks off a good chunk of IRS debt, if it is accepted. If you think you have a case for penalty abatement, you should speak to your tax preparer immediately.

Appeal

Lastly, should your tax problems get bad enough for the IRS to threaten seizure, you should file a Tax Collection Appeal. This will allow you to tell the IRS your financial well is dry and you cannot possibly pay your taxes. The appeal will go to an appeal officer who will look at your financial standing and make a decision in about a week.

Now that you understand what some of your options are you should be better equipped to handle the stressful task of settling your back taxes. Hopefully, you will be able to go back to avoiding back taxes altogether in no time.