• 3 Financial Management Tactics You Can Start Using Today

    by  • June 28, 2016 • Tagged: , , ,

    Financial management is about more than just balancing your checkbook and making sure you don’t spend more than you make. Let’s take a look at some of the financial management tactics you can start using today that can help you achieve your long-range goals.

    Before we do, let’s make an important distinction between tactics and strategy. A strategy represents a goal or big picture plan of action; tactics are actions you are going to take to achieve the goal described by a strategy. For instance, one strategy might be to own your own home. The tactics you might use to achieve the strategy could entail cutting expenses, making more money, saving up, exploring financing options, borrowing from family or friends, liquidating assets, etc. In turn, some of these tactics become strategies that entail tactics of their own (such as those you would use to make more money).

    You will need to take this type of tactical approach if you want to move from simplistic to a level of complexity in order to achieve the strategies described below. Here are three financial management strategies to consider.

    1. Reducing Your Debt-to-Income Ratio

    Your debt-to-income ratio is the total amount of money that goes out each month for mortgage, auto loan, student loans, credit cards, personal loans, business loans (for sole proprietors), etc., compared to the income you earn during the same month. As a formula, it’s expressed like this: Total Monthly Debt Payments / Gross Monthly Income. Here’s an example of how to calculate your debt-to-income ratio:

    $10,000 Monthly personal income from all sources
    $3,200 Mortgage
    $500 Car payment
    $200 Student loan payment
    $200 Business loan payment

    Debt-to-Income Ratio: 41 percent ($4,100 / $10,000)

    It’s important for you to know your debt-to-income ratio, since this ratio is often a key contributor to your credit score and impacts decisions lenders make about whether to extend credit to you personally. If you’re a business owner, your personal debt-to-income ratio can also affect your company’s credit rating and ability to obtain working capital. Bankrate.com’s debt-to-income ratio calculator can help you calculate your own score.

    The 36 percent rule suggests that your debt-to-income ratio should never surpass 36 percent. A high debt-to-income ratio (43 percent or above) might even automatically disqualify you from financing while a lower ratio makes you more attractive to financial institutions. Plus, the more you can reduce your debt-to-income ratio, the more you become less susceptible to financial problems. For instance, if your debt-to-income ratio is low, you have more ability to take a cut in pay or weather temporary job loss.

    2. Improving Your Credit Score

    Most credit score rating systems have a scale that ranges from 300 to 850, broken down into five results:

    • 750+ – Excellent Credit

    • 700-759 – Good Credit

    • 650-699 – Fair Credit

    • 600-649 – Poor Credit

    • Below 600 – Bad Credit

    Your credit score impacts your ability to obtain personal financing such as a home loan (mortgage), credit card, retail store financing, auto loan, etc. In addition, your credit score can also impact your cost of financing; for instance, a low credit score might mean financing companies offer you money at a higher rate of interest than they would offer if you had a high credit score.

    Reducing your debt-to-income ratio is one obvious tactic you can execute in order to improve your credit score. However, simply making your payments on time (or early) and making payments on debt in excess of minimum monthly payments required can also help you improve your credit score, especially over time.

    Given the number of financial data breaches where hackers have obtained personal identification information from retail and financial institutions during recent years, it’s important to check your credit score periodically. Monitoring your credit can help ensure that no one has “stolen” your identity and used it to rack up debt which can not only hurt your credit score, but even result in creditors pursuing you for repayment.

    There are several credit score monitoring services that offer the ability to check your credit scores; however, many offer “free” credit score results only after you agree to another fee or subscription. Your bank or another financial institution may also provide both credit reporting and monitoring services at no cost.

    3. Planning for Retirement

    Just because you have enough money now doesn’t mean you will always have enough money to live the lifestyle you want. Planning for retirement – those years when you are not likely to have any income except for social security – is important for everyone. You can use tools like CNN’s retirement planning estimator to see how much money you should put away into savings or investments at the age you are now, in order to retire by a specific age and maintain your lifestyle (live in the same type of home, spend the same amount on discretionary items, etc.)

    Make sure your financial management strategy goes beyond the basics. The more you understand how to optimize your financial position and avail yourself of tools that can help you find out where you are right now, the better you will be able to plan a strategy that gets you to where you want to be in the long run.

    3 Tips for Paying Off Credit Card Debt With a Personal Loan

    by  • June 21, 2016 • Tagged: ,

    Credit cards are both a blessing and a curse. On one hand, they expand your purchasing power. On the other, you need to pay off the balance when it comes due. Paying off the bill every month is the best way to avoid being saddled with interest, but it’s not always possible. Add other purchases and the balance starts to climb. Interest compounds quickly when there are several credit cards that carry balances every month. Getting out from underneath the debt tends to get difficult, but a personal loan might be the answer. Following are some tips for using a personal loan to eliminate debt.

    Compare the Interest Rates

    Credit Card Debt

    Image via Flickr by Got Credit

    If your credit cards have interest rates in the 18-to-24% APR range, you’re paying a lot to rent that money from the lender every month. An $85 purchase comes with around $5 of interest on the higher end of that interest rate range. Not paying this off and carrying a balance means the interest compounds, putting you further into debt. The issue is made worse when the interest rate is variable, meaning it fluctuates whenever the market interest rate changes, and you never know when your interest rate, and your payment, may spike.

    A personal loan is everything a credit card is not. It has a single interest rate that gets fixed at the time the loan is initialized, and it’s usually at a much lower rate than the average credit card. This makes paying down the debt more predictable, stable, and finite in its duration. Avant, a personal loan lender, is an example of a lender who offers competitive interest on consolidation loans.

    Make Every Effort to Pay Back the Loan

    It takes fiscal discipline to take out a consolidation loan to pay off the credit cards and then avoid using the credit cards. The consolidation loan takes the debt off multiple cards and rolls it into one monthly payment. Those empty cards may sing a siren song of temptation to be used, especially for a coveted item.

    Instead of giving in and using the card to buy something, ask yourself if you really need the item. If you find it’s a must-have, use the savings you realize from not paying multiple cards every month for the purchase. Don’t use your cards unless absolutely necessary. The idea is to short-circuit the impulses that created the high balances in the first place.

    Examine the Terms of the Loan

    It’s always a wise move to examine the terms of the loan, and a consolidation loan is no different. This is especially important if you decide to use an online lender.  With an online loan application, a human being may not be immediately available to explain the terms and conditions, and you are on your own to learn about the penalties for early repayment (if any) and whether the interest rate fluctuates.

    Getting out of credit card debt with a personal loan can lift the financial burden off your shoulders, simplify your bill paying process, and save you money, but only if you use it wisely. You must remember to stay away from your now empty cards, pay off your loan, and exercise restraint going forward so that another loan isn’t needed down the road.

    Bad Credit Alternative Lending Solutions

    by  • May 4, 2016 • Tagged: ,

    For a large part of America’s population, times are tough and taking out the occasional loan is a must. Without a steady job or a great credit history, they may end up looking at alternative lending solutions.

    Payday Loans

    Payday loans are the most expensive short-term loans available. Offered on practically every street corner in poorer neighborhoods, and even online, getting a payday loan is fast and easy.

    Say you need money to buy a new fridge because yours has broken down and your children need to eat. In a perfect world, you could go to an appliance store and purchase a new fridge with cash or store credit. People who don’t have that option though will find a payday loan to be the best option.

    A $500 loan will cost around $600 after a month of interest has accrued.  This is an expensive alternative.

    Short-Term Mortgages

    For the lucky Americans with home equity, an emergency is a little bit less scary. Instead of visiting a bank for a second mortgage or HELOC, try a private lender. The interest rates will be higher than at a traditional bank but money can be had quickly and easily – oftentimes even without a home appraisal.

    Private lenders also allow you to borrow smaller sums of money and to repay the money over a shorter period of time. While a bank wants to lend a lot of money over a great number of years, private lenders will give you a second mortgage for a couple of thousand dollars and a 3-year repayment schedule – perfect for someone looking to borrow money to buy a new car or replace the roof.

    Car Title Loans

    For people who own cars, there’s a third alternative lending option available. Car title loan companies are places where you can get money and still keep driving your car. There are quite a few options.  For example, car title loans Fort Lauderdale is a company that knows what the competition is offering and promises the most cash at the best rates and it’s been around for over a decade.

    Car title loans end up being cheaper than most private mortgages and practically all payday loans.  In the end, there are options for those with bad credit.

    Tax Scams You Should Look Out For

    by  • April 7, 2016 • Tagged: 

    Accountants busily working away, stressful documentation issues, and the hope for a big tax refund—yup, tax season is definitely here. The end date to file your taxes is upon us, and if you’ve waited until the last minute, you’re most likely frantically hurrying to get them done. Or perhaps you’re an early bird who had your taxes filed months ago. Whatever your situation, there’s something we should all keep in mind for the current tax season and for the years ahead—the abounding tax scams that pop up every year, designed by scam artists looking to steal money from hardworking taxpayers. Check out the tax scams commonly reported in the last few years and keep your money safe from opportunistic thieves.

    Email Phishing

    If you’ve received an email from the IRS stating that you owe money in back taxes, you may want to think twice before following the payment directions detailed in the message. It’s very rare that the IRS will resort to emailing taxpayers, and their correspondence is almost never about money owed—you’ll receive phone calls and letters in the mail long before your email app chimes. However, these scam artists are very sophisticated, and their work posing as an IRS agent can be very convincing, and supplemented with follow up emails and phone calls designed to stop you from questioning their legitimacy. Most email phishing scams around tax season will involve asking a taxpayer to update some sort of information for the IRS, including addresses, social security numbers, and more. These “updates” won’t actually be recorded by the government agency; more often than not the scammer has set up a fake website that appears to be an IRS owned entity. If you receive emails of this nature, assume a scam, and call the IRS directly and ask about said agent and the money you’re supposedly due to pay.

    Phone Calls

    While phone calls are more trustworthy when it comes to IRS interactions, be sure to tread lightly when you receive threatening rings that threaten further action if you don’t send money or provide sensitive information. Like emails, your best course of action is to call a direct line to the IRS, which can be easily found at www.IRS.gov, and ask about the agent and your current standing with the government agency. According to the IRS, phone calls have become one of the most popular ways scammers gain access to sensitive information, and trusting citizens become victims through this tactic almost every day. Beware of callers that get aggressive when you ask questions; they’ll often use scare tactics to convince taxpayers to pony up the money or sensitive information quickly and may threaten you with jail time or audits. Be aware of calls from banks as well; a trusted bank will have a customer service number, so call back and check if the call came from an authorized bank employee.

    Identity theft is one of the most common ways thieves benefit during tax season, as they have all of the information they need to file a bogus tax return and receive what you were owed. With the rates on identity theft on the rise, be sure you keep your sensitive information safe in every facet of your life. Leave your social security in a safe, protected place and never give out your SSN without knowing exactly how and why it will be used. Even things like searching for an apartment can see you handing out your sensitive information to near strangers; in cases like this, be sure to use a secure service like www.mysmartmove.com to keep your info safe.

    Bogus Charities

    It’s a sad world we live in when even those asking for charity are potential con artists. During tax season, you may see an influx of organizations or individuals approaching you for donations to their cause. Beyond philanthropic interests, some individuals can be swayed to donate with the promise of tax deductions, and scammers rely on this way of thinking. If you receive a request for money, do your research on the organization and look at the IRS’s approved list of charities. If you are looking to donate, use CharityNavigator.org to find legitimate charities that are near and dear to your heart.

    Scammers are highly sophisticated these days, and it’s essential that you stay on your guard during tax season and the rest of the year to ensure your money, assets, and family remain safe. If you believe you’ve been approached by a scammer, be sure to contact the IRS immediately. File early to avoid any fraudulent filings, and keep your sensitive information secret, unless prompted by a legitimate source you know and trust.

    Things to Note when Considering the Effects of loans on your Credit Score

    by  • February 23, 2016 • Tagged: , ,

    It is well known that installment loans are typically a great way for people with bad credit to still acquire a loan; however, it is good to understand how these loans may affect your credit so that you can get back on track towards having good credit once again. Below are three major things to note when it comes to considering your credit future while paying off an installment loan:

    Low risk equals low score impact

    Firstly, the debt from installment loans are typically stable relative to other types of loans over time; however, the early effects on your credit score of paying the fixed rates are also more modest. The stability of the installment loan comes both with good and bad news. In fact, it is the stability of the loan itself that actually explains why the debt payoff does not significantly improve your credit because it simply never lowers the score in the first place. The logic is that when a creditor is not worried about being paid back, there is less reason to incentivize you through a score deduction. It is not un-heard of to have a score between 650 and 750 or higher despite holding a six figure installment loan. On average the recipients of installment loans actually do hold a six figure amount of this debt, and there is no indication that this is a particularly more risky.

    Prioritize making regular payments

    Installment loans are unique because the total amount you receive has far less of impact on your credit score than the overall payment history does. Your history is considered in a more holistic way which can be an advantage to many with lesser but steady income streams. This means that making those regular payments in a timely way will ensure that when your history is reviewed you end up better off than you were before.

    Have Patience

    One should not shy away from installment loans due to the worry that they will not improve your score; in fact, it is actually very likely to improve. There is no disputing the fact that by lowering your balance by paying off your installment loan, that your credit will improve overall. As long as you pay careful attention to the advice above and use a steady income to ensure timely payments, your score will begin to better, however, in a relatively slow way compared with many other loans. It is therefore important to understand the importance of patience when improving your credit through an installment loan as they often are set to mature after a few or perhaps even a dozen years.

    In general, installment loans are a very safe alternative to other options for those seeking to acquire money and improve their credit while doing so. It is important to understand that with these loans it is far more important to focus attention on the management of regular payments and a steady stream of income rather than paying off a dauntingly high balance. This is because with installment loans, a steep balance should simply not daunt you, including those with poor credit scores. Educate yourself further on the specific type of installment loan before receiving one so that you can cover the necessary steps to slowly and steadily improve your credit score.

    Is Owning a Rental Property Worth It?

    by  • January 13, 2016 • Tagged:   • Comments

    The buy-to-let market should be going through something of a boom. With first time buyers still finding it hard to raise the required mortgage deposit, often 25%, the housing rental sector continues to increase with almost 3.5 million people today living in private rented accommodation in the UK. But is owning a rental property worth ... Read more →

    Taking On Wedding Debt Is a Bad Idea

    by  • August 21, 2015 • Tagged: , ,  • Comments

    Getting married can be a wonderful thing if you’ve got rich or generous parents and an unlimited budget to fulfill your wildest wedding dreams. But if you’re like most people, the cost of getting married can unfortunately detract from the happiness of what should otherwise be your special day. According to The Knot’s 2014 Real ... Read more →

    How to Save Money on Monthly Expenses

    by  • February 16, 2015 • Tagged: , ,  • Comments

    1.      Verify You’ve Signed up for the Right Plan The wrong cell phone plan can eat up a lot of your income. So you want to be sure you are signed up for the right plan. Contact your carrier and check to see how many minutes you are actually using versus what you are paying ... Read more →

    When Should You Buy Your First Home?

    by  • November 20, 2014 • Tagged: ,  • Comments

    Are you thinking about purchasing your very own home for the first time? Perhaps you’re sick of renting or you’d just like a permanent place to call your own. Whatever the case may be, make sure you’re certain that you’re ready to buy your first home and are doing it wisely. Follow the helpful tips ... Read more →

    Maximize Profit on Your Business Website

    by  • November 19, 2014 • Tagged: , , , ,  • Comments

    Every business needs a website. Local market searches are a driving force for businesses to increase market share locally. Organic web traffic is not just about local traffic, though that is where the bulk of online traffic generates. It is also about global traffic. Shoppers in other countries use the web to find better products ... Read more →

    8 ways to monetize your website

    by  • September 29, 2014 • Tagged: , ,  • Comments

    The Internet is a great way to make money. In order to do this though, it is necessary to know how to monetize a website. There are all sorts of different ways to do this, but knowing the ins and outs of this process is helpful. That is why understanding the eight different ways to ... Read more →

    Budgeting for Traveling and Using a Great Rewards Credit Card to Help Along the Way

    by  • July 8, 2014 • Tagged: , , ,  • Comments

    Learning about different cities, cultures and customs is educational and exciting! Everyone loves to visit different places, whether it is to visit friends or family or for a vacation. You may be wondering if it is possible to travel more without spending a lot of money. It is possible, with careful budgeting and using a ... Read more →

    Loan Shark Guide

    by  • July 3, 2014 • Tagged:   • Comments

    With research suggesting that the number of illegal money-lenders operating in the UK continues to soar, read our handy guide to how to spot a loan shark and what to do if you fall victim to one.  Our guide covers the definition of a loan shark, how to handle a loan shark as well as ... Read more →

    How to Cruise on a Dime

    by  • May 23, 2014 • Tagged:   • Comments

    Cruise holidays are some of the best deals out there for budget travellers. All-inclusive cruise deals mean that most food, accommodation and transportation are all nicely wrapped up into one very reasonable sum for a journey that can vary from the Caribbean to Asia. With a range of amenities that are included in the cost ... Read more →

    Best Money Tips for Single Parents

    by  • May 22, 2014  • Comments

    If you are a single parent, trying to have enough money for everyday bills is hard enough. Yet, you want your children to have an enjoyable life. Follow these money tips to save money and have enough to cover your bills without the worry. Keep an Emergency Account An emergency account is necessary for every ... Read more →

    Can You Write Your Own Will?

    by  • December 18, 2013 • Tagged: , ,  • Comments

    It’s a common misconception that you have to hire an attorney to write your own will. Yes, an attorney will know how to draft a will properly and they know your state’s estate laws, but there are plenty of legal websites out there that can help you draft just as good (if not better) of ... Read more →

    Getting Rid of the For Sale Sign: How to Get Approved for a Home Mortgage Loan

    by  • November 24, 2013 • Tagged: ,  • Comments

    The dire straits of the economic recession are still taking their toll, especially within the struggling real estate market. There are millions of people throughout the United States who are eagerly searching for ways to qualify for a mortgage loan so that they can get the keys to their new home as soon as possible. ... Read more →

    Ways to Save Money on Sports Shoes

    by  • November 13, 2013 • Tagged: ,  • Comments

    If you’re a sportsperson then taking care of your body will be essential and your shoes will be far more than a fashion statement. There are many different models of sports shoe for each sport. Some are better than others and some are cheaper than others. The trick to buying the perfect sports shoe is ... Read more →

    Vegas Baby!

    by  • October 1, 2013 • Tagged:   • Comments

    When we started our blog, we were freshly engaged, and had started to plan our wedding. Readers of our blog know that we had some expensive ideas for the wedding and not many of you agreed with our decisions. We went ahead with our own plans anyway a few years after that first post. Five ... Read more →