Check out the 5 financial tips for the third week of May 2013.
Tip no 1: Plan on running into debt. That way you will have enough funds in reserve to address emergencies.
It may sound weird but it does make sense to plan on getting into financial problems. This way you'll start saving money in your emergency fund to face the financial problems boldly. You won't need to get financial help from lenders or your friends to tackle the emergency situations.
You may make the necessary cuts in your lifestyle to save money. You can set up an auto-pilot savings account in your bank so that a certain amount will be directed to that account every month. This will help to make the saving process faster.
Tip no 2: If you want something done right, do it yourself. Negotiate settlements with your creditors by yourself.
Contact your creditors and negotiate with them to pay less than what you've borrowed from your creditors. This will serve twin purposes. Firstly, you don't have to look for a reliable negotiation company in your city. The chances of getting scammed become zero. Secondly, you won't have to pay dollars to the companies for successfully settling your debts. You can save the entire amount and use it to better your lifestyle.
Learn the tricks to negotiate with the creditors. Follow those tricks to end your financial woes fast and without aggravating your problems.
Tip no 3: Before you consolidate your payday loans, check if they are legal and licensed in your state.
Payday loan consolidation is a viable option when you're struggling to pay the high-interest rates on your cash advance loans. You can consolidate those loans to get a single monthly payment plan and that too at an affordable rate. However, before calling at the toll-free number of a good consolidation company, find out if the lenders are legal in your state.
If you're resident of Pennsylvania, then you're not required to pay interest rate on the cash advance loan. What you've to do is, pay back only the principal amount.
Tip no 4: Leasing a car with the choice to buy is a better option than an outright purchase.
Usually, lease agreements give you an option to purchase the car. Some lease agreements consist of low buyout prices. If your lease agreement contains such a provision, then it is better to take advantage of the option for your benefit. You can purchase the car at a less price than what is its original price. Just consider a few factors before purchasing the car. These are (a) residual value of the car (b) market price of the car (c) penalties.
Tip no 5: A bankruptcy on your credit report might look bad but lenders generally do not consider it after 2 years.
A bankruptcy doesn't ruin your ability to obtain loans. It is a fact lenders may not agree to offer you a loan within 2 years of filing bankruptcy. However, once the 2-year period is over, lenders may forgive the fact that you've filed bankruptcy and offer you a loan.
Don't expect that lenders will offer you a loan at an extremely low interest rate. Lenders may not consider bankruptcy after 2 years, but they may very well remember that you've not been able to repay loans on your own. Plus, your credit score also went into the downward slide due to bankruptcy filing. These 2 facts may induce lenders to charge excessively high rate of interest.
Poor financial health of the parents is affecting parent-children relationships. Parents with money problems are unable to keep their children at home. Although more than 54 percent of parents opine that there's no fixed time when children should leave home, yet some are forced to leave parents due to severe financial problems.
Why kids are leaving parents early on in their lives
The economic condition of the country has not made a remarkable improvement post the Great Recession in 2007. It is true that the unemployment rate has dropped to 7.5 percent in April 2013, but this doesn't mean that people are living a luxurious life in the country. Several parents are still facing problems in managing family expenses. In fact, 26 percent of parents have been forced to incur fresh debts to meet kids' expenses. Nearly 7 percent of parents have postponed retirement just to fulfill the financial needs of their children.
Financial problems create additional mental stress upon the parents. This in turn affects the strength of parents-children relationship. The bond between the parents and children weakens as mental stress creates lots of problems in the family – fights, arguments, psychological disorder, aggression, divorce, etc. A lot of teens decide to leave parents when the monetary problems create too much stress in their life. They prefer to leave home and start earning bread and butter on their own.
Some parents are simply not able to fulfill the financial requirements of the children. As such, children are indirectly forced to do some extra tasks and earn dollars. Some are leaving home to look for jobs in order to generate cash for fulfilling their day-to-day needs.
Rising cost of education is yet another reason why kids are leaving parents early on in their lives. It has become almost impossible for several parents to pay the college tuition fees. Either parents or students have to take out educational loans to pay the college fees . In most of the cases, parents take out loans or become a co-signer on the loans to sponsor the 4 years that children spend in college campus. Students are unable to payoff the loans till they get a job. On the other hand, parents (especially on the verge of retirement) often fail to make payments on the loans due to financial constraints. As such, several students leave the shelter of their parents and try to look for jobs in order to meet their regular expenses and pay the interest rates on the loans.
Juggling part-time jobs and studies is a tough task to follow. Moreover, several students study at out-of-state colleges to finish their education. So, they’ve to leave parents and home early on their lives naturally.
However, it would be wrong to say that a huge number of children leave parents at an early age. According, to a recent poll conducted by the National Endowment for Financial Education, nearly 40 percent of the adult children between the age group of 18 and 39 live with parents. Several adult children are moving in to their parents' home as many of them are losing homes to foreclosure. They can at least save the rentals by living with their parents. As it has already been mentioned, the job market of the country is not at all in a good condition. Several graduates are yet to find suitable jobs. As such, they're opting for higher studies. They're just staying with their parents and pursuing higher studies.
Check out the 5 financial tips for the second week of May 2013
Tip no 1: If you plan on keeping your car garaged for a long time, drop your collision coverage to reduce your monthly premium.
Drop your collision coverage if your car stays in garage for most part of the year. If you hardly drive your car on the road, then there are a fewer chances of accidents. Your car is less likely to collide with another vehicle if it remains in your garage for most of the time in the year. In that case, you can give up the collision coverage and save on your premiums. You can also think about dropping collision coverage when your car is 5 years older.
Tip no 2: If you are having your new car financed, make sure you purchase GAP insurance.
Purchase a GAP insurance policy when you're having your new car financed. You can never say that your car won't be stolen or written off anytime in future. In case your car gets stolen or written off, then the Guaranteed Asset Protection (GAP) insurance policy will reimburse you the difference between the actual worth of the car and the amount you spent for your vehicle initially. The reimbursement amount will depend upon a few factors which are (a) how much you spent on your vehicle (b) how much you owe on your vehicle (c) how much you've to spend to purchase the vehicle at the present moment.
Tip no 3: Review your home insurance policy every year to include additions and changes to your household.
It is important to review your health insurance policy at least once a year. If you're underinsured, then you add coverage to your policy. For instance: if you've renovated your home recently, then you may want to increase your coverage. On the other hand, if you're over insured, then you can drop coverage to save on your premiums. If your existing insurer charges an exorbitant amount on your premiums for including additions, then you can switch to a new insurer. Just compare the quote and switch to the insurer who charges low premium rate.
Tip no 4: The newly introduced Consumer Credit Fairness Act cuts down the New York SOL for debts to 3 years. Find out the date of your first delinquency.
As per the Consumer Credit Fairness Act passed by the New York State Assembly, the statute of limitations (SOL) period for debts has been reduced from 6 years to 3 years. So, do check your credit card statements and find out the first date of your delinquency. If 3 years have passed from the date you've made the first default on the debt, then the creditor/collection agency won't be able to file a lawsuit against you. You’re not legally obligated for the debt anymore. Hence, your wages or bank account can’t be garnished. In case, a lawsuit is filed against you at the court, then you can just prove that the debt is beyond the SOL period.
Tip no 5: Using money orders to pay collection agencies is cheaper than buying a prepaid debit card.
You can get money orders from post offices, grocery stores and convenience stores. You can get money orders from convenience stores at a cheap rate. All you need to do is spend $0.99 to purchase money orders. You can buy a postal money order from a post office between $1.05 and $1.55.
Prepaid debit cards are costlier than that of the money orders. You'll have to pay several fees on the prepaid debit cards. You may have to pay as much as $30 just to purchase and activate a new prepaid debit card. So, it is definitely better to pay collection agencies through money orders instead of prepaid debit cards.
Have you given out a loan to your friends? If yes, then it's high time to get back your money from them. Under the normal circumstances, friends pay you back as soon as possible. However, such things hardly happen nowadays. Your friends just forget the fact that they owe you money. Well, your friends can easily forget about paying you back but this doesn't mean that you should overlook the matter. Rather, you should stop being shy and ask your friends to repay you, albeit in a smart way.
Read along to know about how you can make your friends remember the loan and pay it off.
4 Ways to get back your money from your friends
If you love your friend too much, then you can just overlook the fact that the loan has not been repaid. However, if you love your financial health more than friends, then it’s time to give up all your inhibitions right now. Check out the 4 smart ways to collect money from your friend.
1. Go out for lunch with your friend but make him pay the bill
Have you paid the bills whenever you went to restaurant with your friend? If yes, then make special plans for lunch or dinner with your friend. Just casually pop in the question –“So, who will pay the bill this time?” If your friend gives a shrug or a non-committal answer, then be bold and ask him to pay this time. Make sure you’ve this discussion before going to the restaurant. Both of you can avoid embarrassing each other.
2. Ask your friend to give you a free ride
Carpooling is a fantastic way to save dollars. If your friend also happens to be your neighbor, then just ask him to give you a free ride on his car. Don’t wait till your friend gives you the offer. Just hop in your friend’s car and tell him that the cost of fuel has increased a lot. So, you’ve decided to keep your car in the garage for the next 1-2 weeks and commute by his car. Give this piece of information to your friend with a bright smile. Your friend won't be happy with you, but will get your message.
3. Have a frank discussion about the loanSometimes polite talks are not enough. You've to be bit tough. Remind your friend about the loan at least once a week. If your friend doesn’t bother to pay you back, then tell him that you need money desperately. You've offered financial help when he needed money. Now, it is the payback time.
4. Take legal steps against your friend
This is perhaps the worst way to get back money from your friend. However, if the loan amount is too big and your friend doesn’t show any interest to repay it, then you may go to the court. Think about the pros and cons of taking legal steps against your friend before going to the court. Your friend can turn your foe after the court case. There is yet another point that you need to consider. If you haven’t drawn up a contract, then it may be difficult to win the case. Verbal agreements are not always legally binding.
Money matters complicate relationships. So, if you want to have a beautiful relationship with your friend, then avoid giving out a loan unless there is no other way out. If you do agree to lend money, then draw up a written agreement where the repayment terms and conditions will be specified.
Check out the 5 financial tips for the first week of May 2013.
Tip no 1: Have a clear understanding of how health insurance works. It might just save your life.
Check out different articles on health insurance policies. Get detailed information on the various types of policies, premium rate, coverage, etc. Get an overview of the main health insurance policy terms. You'll be able to know how a health insurance policy can actually help you during medical emergencies.
When you're purchasing an insurance policy, do read the terms and conditions of the agreement carefully. Find out about the policy exclusions and your out-of-pocket expenses. Know about your deductible amount. This will help you calculate the amount you've to pay before the insurer makes any payments.
Tip no 2: Learn how to allocate your assets carefully. It will help you cushion the impact of future costs and losses.
Diversification is very much important in asset allocation. You need to have a balance between aggressive and less aggressive investments. This will help you minimize risks and attain your goals.
Various types of investments are affected by the changes in the economy in a different manner. So, owning various types of investments is a good way to lessen the chance that your portfolio will be negatively affected by a specific risk type.
Develop a solid asset allocation strategy. Try to avoid making such investments which will never help you achieve your financial goals.
Tip no 3: Disability insurance is indispensible. You never know when you might meet an accident at work.
You would never like to imagine a life wherein you're disabled and out of work. However, the real life is vastly different from our imaginative world. People do meet accidents and get disabled. They are unable to work. As such they have to live life without any income. Disability insurance becomes indispensible during such times. This is because it helps to replace a part of their income when they can't work due to disability.
In fact, a normal group plan can help disabled people to earn around 60 percent of their wage for a certain period of time. However, no plan gives coverage for the entire lifetime for the insurers are afraid that disabled people won't have any motivation to resume work.
Tip no 4: Begin your estate planning by taking inventory of your assets.
Your assets comprise of various things such as your nest-egg, insurance policies, real estate, investments, etc. You need to analyze your assets before starting your estate planning. Other than that, think about the person to whom you want to leave your property and assets. Think rationally about the person who can tackle your financial affairs when you're not fit to make any decision. There is another factor, which you need to consider before beginning your estate planning. There must be someone who can make the medical decisions when you're not in a position to make them for yourself. You need to choose that person carefully.
Tip no 5: Cut down on your estate and gift taxes by setting up a trust.
There are multiple benefits of creating an asset. The first benefit is that you can decide how to allocate your assets after your death. You'll be able to allocate your assets amongst your heir without bearing the expenses of probate court. The second benefit is that you can reduce estate and gift taxes efficiently.