Controlling Your Assets
Oct 30, 2008 Personal Finance
To help get control of your money and life, it may be necessary to find money you may not realize you have. By re-aligning your assets you may be able to free up additional income to pay down your debt, to put into your savings program, or to invest. You may need to move your assets around a bit to produce that extra money.
One way to re-align your assets is to consolidate any loans that you may have. You can talk to your bank or finance company to help you with this. How a consolidation loan works is that the lender (the bank or finance company) pays off all your creditors and combines the balances owing into one loan with one payment. This usually allows you to pay a lower interest rate and therefore have a lower monthly payment. The extra money you save by the lower payment can then be used to lower your debt. The key element here is that the extra money you save with your lower payments MUST be used to pay down your debt (and not on other things)!
Another way to re-align your assets is to take money from an existing savings plan you may have and invest it into an area that will give you a higher rate of return. For example, if you move the money you have saved in a savings plan that pays 3% interest and invest it into a mutual fund that has the potential to pay you a 10% interest rate, you will have increased your savings potential by a great deal.
Tips on Using Your Credit
Oct 28, 2008 Credit Cards, Personal Finance
Many people do not realize the importance of a good credit rating. Having a good credit rate can make the difference of your being able to purchase your own home. If you have a bad credit rating, you can be declined when you put in your application for a home mortgage. Here are a few tips on using credit wisely:
Having a credit card is not necessarily a bad thing. But you do need to use is wisely. There are many times when having a credit card comes in handy—and no, when you want to buy that ‘must-have’ item is not the time. Today many hotels, airlines and car rental companies prefer to take credit cards. Also sometimes emergencies crop up where you need to use a credit card (perhaps when your car breaks down and you need it for the towing company.) Those are the times you should reserve for your credit card usage.
You need to distinguish between your ‘wants’ and your ‘needs’. Only purchase items on your ‘wants’ list when you have enough money saved to pay cash for the item. Do not buy things you cannot afford, or you may abuse your credit rating when you cannot make the payments on it.
If someone asks you to co-sign a loan for them, stop and think twice. If it so happens that the original party defaults on the loan, you are the one left to make the payments. Ask yourself if the person asking you to co-sign is trustworthy and reliable, and also consider if you would be able to make the payments if necessary. If you fail to live up to your end of a co-signed loan, this can hurt your credit rating as much as it does the original person. Another thing to consider is that co-signing a loan can count against your debt ratio which could affect you being able to get a loan you may need for something else yourself. Read the rest of this entry »
Learning to Control Your Debt
Oct 26, 2008 Debt, Personal Finance
It is no secret that debt in today’s society is a major problem. Learning to control your spending and debt is a lesson that is not taught in schools. As a result many people have fallen victim to the “debt trap”. In other words, the debt they have is out of control.
In life you will find that there are many things that you cannot control, like the old saying that “nothing is surer in life than death and taxes”. You know that it is a certainty that some day you will die and that you will always have to pay taxes. These things are out of your hands and out of your control. But, there are things that you can control and there are ways to reduce the amount of taxes you may have to pay.
Let’s take a look at some of the things that you cannot control and some of the things that you can. First, you cannot control what the government does with respect to the benefits you receive, especially at retirement time. However, you can build up your funds for retirement so that you do not have to depend solely on those government benefits.
As mentioned, you cannot control how much taxes you have to pay, but you can learn ways to reduce your taxes. You also have no control over inflation, but by maximizing your investment potential you gain some control over how it can affect you. You cannot control the rising costs of everything today, but by saving more you can still have some control over what you can buy. You can also control the type of investments you make even though you may not have control over the risk of a single investment. You also may not have control over what your employer pays you, but you have choices that can give you more control in this area as well. Read the rest of this entry »
