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The 5 financial tips for the 3rd week of October 2012 are given below.

Tip no 1: If you are not confident of investing directly in stocks, one good option available before you is investing in mutual funds.

Mutual funds are a safe form of investment. Usually, mutual fund companies employ qualified fund mangers who have great knowledge on market. Fund managers have the inside information on the market. So, they are able to change and diversify your portfolio as per the market conditions. You're less likely to lose your precious money.

Stock market is a volatile market. If you buy a stock of a frail company, then chances are high that you'll lose your precious money. You may have even purchased the stock of a financial stable company. However, if the company gets bankrupt, then you're going to suffer. The price of the stock will go down.

Tip no 2: Write your credit dispute letter in simple words.

Credit bureaus receive millions of dispute letters from various parts of the country. They don't have time to read each and every word of your letter. So, explain the nature of your problem in simple words. You must state why you're disputing a particular item on your credit report. Don't forget to mention what you think is the correct information. If you have significant documents to prove your point, then do send them with your letter to the credit bureau. It'll help to prove your case. Avoid using legal terms in your letter.

Tip no 3: Change your lifestyle to increase your savings rate in your personal life.

If you're desperate to increase your savings rate, then modify your lifestyle accordingly. Curtail your expenses on food, clothes and shelter. You can reduce your expenses on food by purchasing fresh vegetables from the local market. You can cut down your expenses on clothes by staying away from designer garments. You can lower your expenses on shelter by shifting to a small apartment. Other than that, you can stop buying things which are not necessary. Alternatively, invest in stock market and commodity market to make money. Create a saving account in your bank too.

Tip no 4: Plan for the Christmas Eve and the New Year from now on, as this helps you avoid debt.

Christmas and New Year are only 2 months away. If you'll throw parties on these special days, then start making preparations from now on. You have to spend a lot of money for organizing a lavish party. You have to buy groceries, Christmas trees, decorative items, etc. If you don't create a budget and start buying things from now on, then it will be very difficult to host a grand party. The price of the items will be high during the festive season. This means it will create an extra pressure upon your wallet. So, sort out your guest list and start buying items gradually.

Tip no 5: Consider the changes in the mortgage market before taking out one or refinancing your home.

The housing market is changing rapidly. The mortgage rates are changing every week or month. New mortgage rules are being implemented by the federal government. Check out the mortgage rates and rules before taking out a loan. This will help you avoid costly mortgage mistakes. Find out the prevailing mortgage rate prior to refinancing. Determine if the new interest rate on the loan will actually help you save money. If you want to opt for Home Affordable Refinance Program (HARP), then get acquainted with the new rules and regulations. Know how you can be eligible for this program.

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  • Waive late fees
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  • Avoid bankruptcy
  • Have only one monthly payment
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