Personal Finance and Investing

In order to obtain financial success, you must begin with a reliable personal financial planning program. This program will help you address important factors relating to how you handle your everyday finances so you can maximize what money you got. With proper budget planning, you can get more value out of your money and avoid experiencing financial crisis.

Your first step is recognizing the importance of having a personal financial planning program so you can determine how you can reach your goal and what else can motivate you towards achieving it.

Getting Started With Personal Financial Planning

Today, when most people hear the word “budget”, it readily implies a negative connotation. They think that budgeting is only for those experiencing financial shortage or crisis. However, even with enough financial resources as of the moment, an effective financial planning program will ensure that you will be able to maintain your financial status.

Therefore, personal financial budgeting involves the following:

1. Financial budget for your day-to-day finances while not depriving yourself of what provides you enjoyment and satisfaction.

2. Setting up larger financial goals to which your daily budget and planning is aim towards.

3. Making sure that you have enough savings in case of emergencies or unexpected financial struggles.

The Importance of Budget

Others think that by creating a budget for your finances, it is similar to lack of financial freedom. However, it is of the exact opposite. By creating a budget, you are able to create a financial safety net so you have enough money to spend on things that you want without hurting your financial condition.

Regardless of how little or large you earn on a monthly or yearly basis, budget enables you to take an effective step towards a healthier financial foundation. Hence, you can easily realize whatever financial goals you have.

When making a budget, it is important to keep track of every detail in your expenses – even up to the last cent. Hence, you can also evaluate your spending habits. It allows you to determine whether you are placing your money on important things or whether you can do without it.

How To Set Financial Goals?

Financial goals serve as the endpoint of all efforts toward controlling your finances. Therefore, you need to clearly state what your goals are when it comes to your finances and what steps you need to achieve it.

Step 1: Choose a specific goal. It could be saving for your house’s down payment, sending one of your kids to college, buying a new computer, or going on vacation.

Step 2: Your main financial goal is typically long-term. Hence, you need to break it down into smaller goals, which will serve as your stepping stone towards that bigger goal.

Step 3: Inform yourself about ideas or strategies that will enable you to effectively handle your finances. There are several books or materials over the internet that provides the information you need.

Step 4: Keep track of your goal. Evaluate your financial records alongside your spending habits. Then, you can determine whether you are following the necessary steps that will lead towards your goal.

Therefore, you must get started on devising ways to maximize your finances and enjoy it to the fullest. A personal financial planning program would help you establish the steps that will lead towards more financial success in the future.

No Comments yet »

If you have an elderly relative or if you’re getting older and still want to live independently, you’ve probably heard about medical alert systems, and you might be wondering about the difference between no-fee and monitored systems.

A no-fee system is an affordable way to get the help you need if something happens to you when you’re alone.

Why you might want to get one:

This system makes a phone call for you if you’re injured or have an emergency in your house and you can’t get to the phone. You wear a button on your wrist, clothing, or around your neck. That’s how you activate the device.

This kind of system can help people who might have falls, strokes, heart attacks, and more.

They work for two reasons.

First, you don’t need to be near a phone to be able to call for help.

Second, once you press the panic button, you don’t have to do anything more. This is good if you’re injured.

How does a no monthly-fee medical alert system work?

When you press the panic button, the system starts dialing the numbers (up to four) you programmed in when you set it up. When someone answers, the system announces that there’s an emergency.

They system then hangs up. Your friend or relative can then call you back after 30-60 seconds to find out what happened. You can use the speakerphone in the base unit to talk to them .

If no one answers the first call, the system calls the next person, and so on.

Many people set the final number called to be their local Emergency Medical Service, or 911.

Problems with no-fee medical alert devices:

The big problem with no fee medical alert systems is the risk that all of your contacts will be away from the phone.

If this is a worry, you can simply set the system up to dial 911 first, and only use it in emergencies where you want an ambulance to come.

Advantages of a medical alert system that has no monthly fee:

Cost is the biggest advantage. Monitored systems charge you $15 to $40 or more per month to have trained operators waiting to help you if there’s an emergency. This is good peace of mind, but it’s expensive.

No Comments yet »

There are plenty of legitimate reasons for needing or wanting a personal loan – a new vehicle, a college education, a medical crisis and so forth. There are times, however, when a personal loan is a bad alternative to other payment and preparedness options. We’ll look at some of those options, but keep in mind that should you decide a personal loan is imperative avoid a short term loan if at all possible.

The disadvantage of a short term loan is, first and foremost, that you need it. If you are in need of a short term loan that means you have no savings to fall back on for an immediate emergency. Those of us who struggle to live paycheck to paycheck often think we’re budgeted tightly but going to be okay. The problem is that all too often we’ve forgotten one creditor, failed to figure in things like amusement and new clothes, and never consider emergencies. The fact is that emergencies typically happen several times a year. We head off to the dentist for a cleaning and are told we have gum problems and need that deep cleaning that costs $600. Our car breaks down. The water heater springs a lead. These things happen. Ideally, a short term personal loan is not where you will head to resolve these crises. What you want to do is have savings set aside for these emergences and head to the bank for a personal loan only for big ticket items well in advance of the event or need.

Financial planners always recommend that you set aside enough money to pay all living expenses for three to six months in case of a crisis. While this may not be practical for all, it is a goal that we should aim for.

If, however, you don’t have the money you need to get you through the crisis and you must have the money now, head to the bank or the mortgage company. Don’t head to the payday loan or title loan company. The fees are exorbitant for either and, of course, the latter risks your transportation to and from work. Once the crisis is over, and you’ve secured the personal loan, you might benefit from credit of financial counseling to help you get on the road to a steady payment into an emergency savings fund.

Before you apply for a personal loan, think about your spending habits. Ask yourself if they are compulsive. The U.S. National Consumer Council says that for 10 percent of Americans the answer is a resounding yes. Ask yourself these questions: “Am I clear about my finances? Do I know my bank balances, my monthly expenses and the interest rates I’m paying on any personal loan or to any creditor? Am I using one credit card to pay the balance on another? Do I enjoy spending money?

If the need is great and you must have the money, think first of the options to a personal loan. Might you get an advance on your pay, or might your employer actually lend it to you with no interest? Might you take on some extra work? Taking a night time job waiting table will give you tip money from the very first night you work. Can you sell something? Most community newspapers now offer free classified ads for private individuals when they’re selling small ticket items. Or you can put something up on online auction site. Get creative about solving your financial problems. There are many interest-free options to taking out a personal loan.

No Comments yet »

Whether you are applying directly to your lender or claiming eligibility under HAMP, the practical decisions are all to be made by the lender. You do whatever you can to set out your side of the proposed bargain with a clear set of accounts showing money in and money out. The need is to demonstrate a guaranteed slice of your monthly income that can be devoted to paying a reduced instalment. So list everything you are obliged to pay to keep body and soul together, from food to utilities to transport to health insurance, and so on.

Without the modification, this is going to be negative, i.e. on paper, you are spending more than you earn. The “trick” is to show enough to cover a modified instalment, perhaps with a tiny slice of money left over for the inevitable emergencies. If the modified instalment you prove can be paid is enough to keep the lender less unhappy, the modification will be agreed on a trial basis. But if the minimum instalment the lender requires will leave you in negative territory, your offer to modify will be rejected. Why reject a good faith offer? Because people who have to juggle monthly payments to fit into the available money almost always default again. Your income must cover all outgoings.

If the modification is agreed in principle, it moves on to a formal trial basis. In theory, this is a three-month trial, but the reality is that the lenders usually drag their feet and are very slow to convert the trial into a permanent modification. This ought not to affect you. After all, you are paying the agreed amount. But there is a problem. Until the modification is made permanent, the lender will report you to the credit rating agencies as still delinquent. This is grossly unfair.

You are paying what is agreed. But, as the law stands, the unpaid balance each month will be reported as late. Thus, the longer the trial period is allowed to drift the worse your credit score will become. This requires action. You should contact the three major agencies, Experian, Equifax and TransUnion, and ask that details of the trial be added to your credit file. That way, even though your score will continue to decline, all other lenders will be able to see what is going on.

So what is happening during the trial other than you proving your ability to pay the reduced instalments on time? The answer is slightly disheartening. It is always in the lender’s interest to collect as much money from you as possible on your mortgage. But, while you stay in default, the lender is entitled to foreclose at any time. If the lender judges it will make more money by foreclosing rather than accepting the reduced payments over the rest of the term, it will always foreclose.

It is simply collecting as much cash from you as possible before triggering your eviction. No-one said the home loan industry had to work fairly, and it does not. The only time the lender will accept a permanent modification is when the accounts clearly show more profit in keeping the mortgage alive. While the housing market remains depressed, the odds are in your favor. But if resale prices start to rise, the odds will swing against you.

No Comments yet »

Unless you step up to the challenge of controlling your finances, your debt level and your financial future, who else will? Preparing a budget is the ideal tool to get you started. It’s also really quite easy.

#1. A budget will show your current financial position.

Without a budget you are not able to clearly see the extent of your spending compared to your income. This is the most important role of your budget. It will show you whether you are living within your means or whether you are living on borrowed funds. It is also the tool that can show you where all your money is being spent. This allows you to answer important questions, such as “Am I wasting money on things I don’t really need?” “Is my credit card debt to blame for my predicament?” and “How much better off would I be if I could manage to be debt free?”

#2. A budget points you to the areas that need your attention.

There are reasons why you are in this worrying financial position. It could be that you are spending more than you earn, you are not paying off the credit cards quickly enough and are paying interest on the interest. Or it could be that you’re not saving for those inevitable emergencies and large financial bills that arise from time to time. The budget can provide answers that show you what is required to fix each situation.

#3. A budget helps you set goals to pay down the debt and save for emergencies.

A budget can help you calculate how much you need to put aside to save for emergencies and large unexpected bills. Is it the children’s education? Is it a holiday for the family or yourself? Is it to set some money aside for retirement? Or, is it to replace the car, furniture or washing machine? If you are spending all you earn and not saving any, you may be condemning yourself to lifelong poverty. Not a happy prospect.

#4. A budget shows whose money you are really spending.

The budget can show you how much of your spending is being funded by others. How much is being funded by the Credit Card provider or the bank. The cost of this funding is interest. The interest costs are most likely the reason you are in this situation, currently. It can clearly show how much you need to reduce your spending to live within your means

#5. A budget can keep you on track and motivated.

Once you have set up a budget it is no use putting it into the drawer and forgetting it ever existed. It is meant to be a living document that can help you often. It can keep you motivated to stick to your plan by tracking your progress towards the goal and seeing your savings rising and debt falling.

A budget is the key to getting your finances under control and the debt worry off your back. Preparing your own budget is very enlightening and offers you the chance of finally getting control of your financial future. Isn’t it worth a little effort? Don’t you deserve it?

No Comments yet »