If you have kids, you’ve probably already figured out that teaching them how to handle money is one of the most important skills you’ll ever teach them. As a parent, there are two critical areas for you to take action to help your kids the most when it comes to money and budgeting.
1. Manage your money in a responsible way. Create a simple budget that works for you. Practice good budgeting habits – know how much you have to spend before you spend it. By spending within your self-made budgeting guidelines, you will demonstrate a confidence and security about money that your kids will notice and hopefully emulate later in life. Make a habit of saving. If you don’t follow a budget, don’t save money and you frequently overspend, you will have a great deal of stress about money which your kids will easily pick up on. Which lesson do you want to teach your kids about money? Money is stressful? Or, money is to be respected and commanded in a responsible manner, bringing a sense of confidence and calm?
2. Directly teach them about budgeting and saving money early (before they become teenagers.) Some experts disagree about the effectiveness of allowances and money for chores, etc. – but don’t get distracted by this. How your kids ‘get’ money is quite a different thing from what they do with it once they have it. Help your kids to know the pros and cons of the different things they can do with their money. Kids aren’t generally known for having a long attention span, especially when the topic is boring, so keep your message simple. Encourage them to save a portion of any money they get; a great idea for reinforcing this is to match each dollar they save. Also, gradually help them to understand the different places money flows to in the adult world. For example, explain the sales tax on the receipt for the shirt they just bought – that it is used to pay for roads, schools, etc. Or, if you want something a little more fun for them, playing a board-game like Pay Day or the computer game The Sims can help a lot by giving them a frame of reference for understanding some of the basics of where money goes. However, actively helping your kids to build a habit of saving money whenever they receive it, in the real world, is probably one of the best things you can do to help them build good money skills. Explaining the pitfalls of using credit is valuable too (as well as minimizing your own use of it!), but emphasizing savings is probably more effective at a young age since it’s something they can do now. Teach them that by having a lifelong habit of saving money, they won’t need to borrow as much, allowing compound interest to work for them and not against them.
When your kids get their first summer part-time job or paper route, continue to extend your reinforcement for saving, but now add in a proper budget. After showing them the basics of listing their expected income along with their desired expenses and savings goals, reward them for creating their first budget. Be creative in offering various incentives for them to stick to their budget. By building on the savings habit you taught them earlier on, and introducing them to the concept and value of budgeting, you will have done a great deal to help your children grow into one day being responsible adults.
Most of the people get stuck in their financial problems because of the lack of knowledge about financial terms, what they are, how they facilitate, what they limit and what will be the consequences for a debtor to face if he chooses one of them. I know when I was stuck with the same problem and struggled hard to get out of it and to put things smooth and straight I realized that I can better avoid all these imminent problems if I take my first step right and that is nonetheless the debt settlement advice.
The most common mistake we make is that without considering the fact what we are earning and what are our savings, dazzled by shining offers of the creditors, agencies and commission agents who work for them, we jump into a debt financing without thinking that are we in need of this type of financing or do we have some other options too and certainly as we do not search for a proper debt settlement advice nor the personal prior calculation how to manage it, we get stuck in the end and show bankruptcy and put all the red ink on our credit score.
Even if you are stuck, it is the proper debt settlement advice that can pull things off for you and can take you back in business. For instance, if you have taken a huge debt or it has multiple years to go and in fact a secured one, it is better to go for a debt settlement advice rather than taking any step on your own because as if you try to negotiate on your own or falling short of the installments it is possible that your creditor will drag you to the court and will claim a resell on your securities to recover his amount. But on the other hand a proper credit debt settlement advice will let you understand the other ways and possibilities you might have in shape of consolidation and many others.
Introduction
Although Secured Loans have their place in the mainstream market and in certain circumstances can be useful for high value, long term, quick turnaround loans for people with good credit ratings they are typically used by people who have struggled to extend their credit using conventional means. This article discusses the organisations that an Individual can turn to if they experience bad debt problems. It is also advisable that people with adverse credit talk to at least one of these organisations prior to taking out a secured loan.
The Citizens Advice Bureau
At the time of writing the Citizens Advice Bureau, funded by charity, has around 21,000 volunteers offering advice on the telephone, on the Internet at [http://www.adviceguide.org.uk] or at its 3,400 Surgeries spread across the UK. The Citizens Advice Bureau is no stranger to dealing with people looking at Secured Loans and last September produced a comprehensive report detailing what it saw wrong with the selling of Payment Protection Insurance (PPI) for Secured Loans. At the same time it lobbied the FSA, OFT and one of the Treasury committees to get a better deal with consumers for insurance. As recently as May 2006 it also produced a report entitled ‘Deeper In Debt’ which discussed the problems their clients faced when coping with debt.
One of the major advantages CAB has over other Debt counselling advisers is their accessibility. You can literally just pick up the phone for a quick chat or just pop into one of their local advice centres. The CAB also has a very detailed website that contains a Frequently Asked Questions section, advise on how to cope with Debt, where to get the best deals on credit, how to give yourself a financial health check and where to go for further advice. The CAB is also renowned for its fact sheets and with regards to Secured Loans produces them for advice about County Court Judgements, Mortgage arrears, negotiating with creditors and provides a jargon buster. It also has a series of sample letters that can be used to help getting debts suspended or used to negotiate a re-payment plan.
The Consumer Credit Counselling Service
Whereas the CAB deals in general advice the Consumer Credit Counselling Service (CCCS) specifically deals with coping with bad debt – so is ideally placed to offer advice on Secured Loans. Although it is physically less accessible than the CAB, as it only has eight operational centres, it does provide a free phone number – 0800 138 1111 – where you can get specific and immediate advice. For those who don’t like talking to someone in person they can also be contacted via email the address of which can be found at [http://www.cccs.co.uk/contact/contact.htm]
Perhaps it is the sign of the times that the CCCS founded at one centre in Leeds in 1993 grew to four centres in 1996 and now have eight dedicated centres and two satellite sites, one in Northern Ireland and one a partnership with Direct Debt Line in East Sussex.
The CCCS is a registered charity and is fully funded by the Credit Industry. As is the case with the Citizens Advice Bureau it has a website that provides full details on how to cope with mounting debt problems. Unlike the CAB it is specifically targeted at people with financial difficulties.
The National Debt Line
The National Debt Line was set up in 1987 to provide purely telephone self-help guidance for people with credit and debt problems. All their advice is free, confidential and entirely independent and they can be contacted on 0808 808 4000. The National Debt Line is funded by the charity Money Advice Trust that is in turn funded primarily by the large players in the credit and finance sector. Most of these are also some of the larger players in the Secured Loans market like Barclays, GE Capital Bank, Lloyds and Paragon.
National Debt Line will also provide on request a selection of Self-Help packs and fact sheets most of which are relevant to someone looking for a Secured Loan. As the service is telephone based their website is limited to information about the Agency only.
Conclusion
If anyone is struggling against debt and needs credit advice prior to taking out a secured loan it is advisable to contact one of these organisations. The Citizens Advice Bureau because of its easy accessibility may be the best place to start, but for specific advice on taking out loans and whether there is another way of doing things it may be advisable to go to one of the specialist agencies like The National Debt Line or The Consumer Credit Counselling Service. Surprisingly both organisations are not that well known but both offer comprehensive advice on bad debt and, quite poetically, they are both funded either indirectly or directly by the organisations providing secured loans.
By Adrian Hudson http://www.we-introduce-you.co.uk
Many lenders are offering a solution to this lack of down payment problem for those who want to eliminate the PMI variable from their mortgage loan payment equation: a combination of a mortgage loan and a home equity loan or personal loan to complete the 20% down payment. Is this really a solution? What are the benefits? What are the drawbacks?
Private Mortgage Insurance
Private mortgage insurance protects the lender against default by covering the mortgage payments in case the borrower cannot repay the loan for one of the reasons stated in the insurance policy.
Private mortgage insurance is not required for any mortgage loan but when it comes to all home loans where the amount is higher than the 80% of the purchase price of the loan, PMI payments are compulsory (with the exemption of VA loans and other preferred home loans).
Thus, in order to avoid paying private mortgage insurance charges, the borrower needs to obtain sufficient funds for a 20% down payment. As this is seldom possible, people usually cope with the higher payments and eventually they decide to refinance with better terms.
Yet, it is possible to get financing with advantageous terms and no PMI from the very beginning by using a combination of loans instead of a single mortgage loan with PMI payments.
Remember though, that if it is within your hands to obtain the necessary down payment in cash it is well worthy to do so even if you have to wait a few months because you will not only save yourself the PMI payments or the interests on the additional loan but you will also be able to obtain more advantageous terms on your mortgage loan.
Combination Loans Based On Equity
These home equity loans can provide you with the funding needed to obtain the 20% down payment to avoid Private mortgage insurance payments. Though the interest rates on these loans tends to be a bit higher than what is charged for the mortgage loan, in the long run, this implies lower payments than a single mortgage loan that would charge PMI fees. And sometimes, the costs are lower right away if you only need a smaller amount of money because you already have some savings for the down payment.
Whether it is advisable or not to obtain these loans instead of a single mortgage loan with PMI is a matter of discussion. But most importantly, it will depend on your particular situation and on market conditions. The smart way to go is to compare your options and have the lenders provide you with different loan quotes to see which one best suits your needs and desires. Sometimes the difference may not be too significant, but under certain circumstances you can save thousands of dollars in the long run.
Just a few days ago, someone asked, “How Can I Shorten The Years of My Mortgage?”
Indeed that is a good question, and I’ll try to explain. I won’t dive deep into all the details, but I’ll give you a quick response.
So Why Do Mortgages Last So Long In The First Place?
First, we need to address two areas: principal and interest, and how much is applied to each.
I’m sure you’re familiar with these, but let me re-establish something, so you know where I’m coming from: The most difficult problem we face in any loan is the principal balance-because the interest is charged on that balance.
Having said that, have you ever studied how your monthly payments are being allocated between principal and interest?
That is, what portion of your monthly payments go toward cutting down the principal, and how much goes toward the interest?
Though I don’t know your exact situation, I can wager that if you’re in the US, the overwhelming majority of each payment goes toward interest, NOT principal. Whether the interest rate is high or low, it’s the principal that causes the problem.
A few weeks ago, one of my friends was furious to learn that, of each payment she was making, only about $50 was going toward lowering the principal.
She was lucky, because she now has a chance to do something about it. Many Americans never realize how serious this is, because it robs us of our retirement. Banks front-load our loans, charging the majority of the interest at the beginning. The result is: we pay for our mortgages decades longer than we otherwise should.
You see, the fact that most of each of your payments go toward interest in the beginning, rather than principal, the bank is forcing you to make payments for a long, long time–much longer than you should.
Remember, we’ve established that the real problem is the principal, not the interest. Of course, interest is a factor, however, we must remember that the high principal is causing the higher interest allocation…
… and because the interest is calculated on the outstanding principal…
…so goes the seemingly endless cycle of unnecessary mortgage payments, because the principal doesn’t get reduced fast enough.
How To Shorten The Length Of Your Mortgage
So, regarding the question of how to shorten the number of years on your mortgage, a better question might be: “How do I apply more money toward lowering the principal?”
On thing’s for sure: your bank isn’t going to tell you any secrets, since their goal is maximize their profit on your loan.
It’s important that you find a way to make sure that a greater portion of your monthly payments apply toward your principal-not your interest. And there certainly are ways to do that!
People being in the clasp of multiple debts have become common today as more than 7000 loans go unpaid in UK almost everyday. So, for this huge population, there ought to be some remedies and here are they, the debt management help things.
You get into the clutch of multiple debts mainly because of your go beyond the pocket and this is somewhat psychological and indicts your behavioral pattern. You tend to spend more and here lies the problem. So, try to mend beforehand you go for management of your debts.
Anyway, there are many financial institutions that have come up with viable debt consolidation programs today. You can take any of their help. But consulting debt counselors is the best before you go. They take up your case with particular interest and bring out a comprehensive solution or a management plan for your unpaid debts.
Well, there are different financial packages these days in the market through which you can easily combat your debts. If you have multiple debts knocking at your door, there are debt consolidation loans that are proved to be enough beneficial. Here you can mush up all of your unpaid debts into a single loan and pay off all them through this. Here the main benefit is paying not only less interest but also there is a single loan instead of multiple debts and there is also a single interest rate attached to the loan, paying which is not a big matter anyway. You can take up the secured options or the unsecured options here. Secured options let you take the loan at low interest rate because of the assurance you put through the collateral pledging. Again, unsecured loans are the best for those who can not pledge any collateral for their loans.
Getting debt management help is easier online where a good many websites and web portals are flooded with articles on the debt management formulas and options. Also, lenders of debt consolidation are flocked over there and all of them are devoted to only one cause that speaks of providing a debt management plan viable for everyone.
Is debt settlement a better option than debt consolidation?
Debt for consumers is growing by leaps and bounds. More than a billion individuals are truly in debt they cannot handle. In order to understand what type of debt management plan may be best for you, you need to know what they are. Debt Settlement vs. Debt consolidation talks about the two choices you have with a debt management plan. Debt settlement varies in use to the debt consolidation in several ways, which we will look at below. Remember that creditors want to receive payment from you rather than seeing the entire account lost because of a bankruptcy.
How Debt Settlement Works
The first thing you should know regarding settlement vs. consolidation is how settlement works. Settlement will allow a person to lower their debts by 40 to 80 percent depending on the companies you are dealing with, as well as the credit standing you currently have.
Once the debts have been paid off they will be marked paid in full or settled in full. This helps with your credit report and history. During the settlement you will be experiencing a reduction on your credit score, which you will need to repair once the debts are settled completely. It usually takes two to three years for debts to be cleared under this management plan. Debt settlement also allows you to save interest on the debts because you have a smaller amount of debt you owe and are settling at a certain amount. One problem with debt settlement is the tax liability on canceled debt you may owe. This can be as much as 600 dollars.
What is Debt Consolidation?
Consolidation uses your home equity to pay off debts. When you use consolidation vs. settlement you are obtaining one loan, a reduction in interest, and one payment. Debt consolidation is not a reduction of the amount you owe, just the interest unlike Settlement. Usually under debt consolidation it takes three to five years to pay off the balance. The credit score is also going to have a short term affect and the debts will be marked paid in full. A con to debt settlement is the slow pay status you may receive on your credit report as a result of the debt consolidation. However, these marks go away in time, much faster than your original debt would.
Debt consolidation uses a loan which is not considered a secure loan. In some cases you are able to get a secure loan through the home equity loan you will take out. This could pose a small problem as you are endangering your home if you cannot make the repayments.
Take Action!
Debt settlement vs. Debt consolidation is something you need to consider when you end up in debt. We have outlined what each debt plan is as well as looking at the pros and cons of each. It is important that you take action early whether you are using debt settlement vs. consolidation to solve your problems. The longer you wait to take advantage of either debt settlement or consolidation the harder it will be for you to seek help. Companies recognize a proactive stance and are more willing to help you out than if you wait until you are two steps away from bankruptcy court.
School is right around the corner. If you’ve got one or more kids returning to school, then you’re probably looking at your monthly budget and trying to figure out ways to budget those back-to-school purchases. The National Retail Federation estimates that parents will spend on average $548.72 per K-12 student to send them back to school. If you’ve got two kids, that’s $1,097.44, and if you’ve got three kids, you’ll spend $1,646.16. Total spending for back-to-school purchases is estimated to reach $17.42 billion.
In this recession, those back-to-school purchases can seriously throw your household budget out the window. However, before you start dipping into savings or charging these purchases on a credit card, try these five tips for budgeting back-to-school purchases:
Recycle, Reuse & Borrow
Go through your kid’s closet and see what still fits from last year. Make a list of items that you can reuse this year. Go through your office supplies and compare it to what your student is going to need for the classroom. Try to use what you already have before going out and buying more. Also, talk to other parents and friends. Maybe they have an older student and don’t mind handing down clothes and school supplies that they don’t need.
Watch for Sales
Now that you know what you need, you can start to watch the discount stores for sales. Look in the newspaper or go online to get the latest information on sales. Some of these retailers will also post upcoming sales in their Twitter feed or on Facebook, so become a fan or follower and find out about the sales before others do. Plan your shopping strategy to get the best deals on the items that you need.
Check for Coupons
While you’re shifting through the newspaper or looking on their sites for sales, check out their coupon section. A few cents and dollars can add up to real savings. There are some real recessionistas on Twitter looking out for the best coupons and deals, such as @bargainbriana or @ncheapskate. Get a Twitter account and get the latest on coupons.
Buy in Bulk
You can save some serious dollars on your budget if you buy in bulk. Get together with some of the other moms in your neighborhood, and set a date to go shopping at Costco or some other wholesale discounter. You’ll be able to get what you need, below retail prices.
Buy Only What You Need
Retailers are going to constantly try to up-sell your back-to-school purchases. Whatever you do, try to only buy what you need. Bring your shopping list with you to the store, and stick to that list. Avoid temptation in the checkout aisles, and if possible leave the kids at home when you back-to-school shopping. You’ll get through the store a lot faster if your kids aren’t tagging along, asking you to buy this or that.
Remember, try to avoid putting those purchases on a credit card. If you put that $548.72 on a credit card with a 14.99% APR and only make the minimum payments of $15 per month, it is going to take you 4 years and 1 month to pay off that back-to-school purchase. You’ll pay $176.57 in interest. If you do put those purchases on a credit card, try to pay it off as soon as possible.
Creating a personal budget is at the core of financial freedom. If you do not have a plan to track how you spend your money, chances are things will get out of control. Once this happens, it is much harder to get back on track than if you had followed a plan all along.
How do you make a budget? Where do you start the budgeting process? Well, here are some tips on creating your own monthly budget plan.
Creating List of Income and Expenses
The first step in creating a workable family budget is to make a list. List all of your income first. It is important to include all of your sources of income. Even that small interest check that comes in should be listed. If you cut the occasional neighbor’s lawn, put down those ten bucks. Little things add up, and having an accurate picture of your income is very important.
Next, list all of your regular bills. These include things like your mortgage, auto and home insurance, electric, water, cable, phone, cell phone, and any other regular monthly bills. List when they are due and how much each is. If it fluctuates, write down an average amount.
After you have listed your regular bills, you should account for any other types of expenses. This means things like groceries, gas, clothes, personal items, haircuts, and other variables.
It is important to also budget in your fun items. These are different for everyone, but examples could be things like movies, scrapbooking, eating out, and stamp collecting. If you don’t budget money in for those things then you will quickly become disillusioned and give up on your budget.
Finding Areas Where You Can Cut Back
So now you have listed all of your income and all of your expenses. If you have a hard time thinking of all the categories, there are lots of great budget spreadsheets and budget programs that will help you make up your financial plan. Take your total expenses and subtract them from your total income. This will give you the amount that you are over or under budget.
If you are over your budget that means that you are spending more than you make. This is a very bad thing. For many of us, that overage ends up on a credit card. Then you are paying interest and this is just not necessary. You should never use a credit card to supplement your income.
Take the number that is over and see where in your personal budget you can cut back. Sometimes that means making hard choices and giving up some things. In the end, though, the reward is worth the effort.
While some people think of a household budget as a constraint, it is actually allowing you freedom from stress and worry about finances. You know that the money has been set aside for your expenses and you can focus all that energy on other things.
The unique investing opportunities offered by the United States government’s tax deed systems are not exclusive to United States’ residents. An over-the-counter system facilitates purchases via the mail, and as technology has evolved, the internet has become yet another option for purchasing tax deeds. No restrictions exist on who can participate in these sales-if you have a registered social security number or tax payer identification number, you can purchase U.S. tax deeds from anywhere in the world. A tax payer identification number is easy to obtain. It is used on the United States tax form W-9, which is required for all independent contractors.
The earning potential as a tax deed investor is astronomical; however, it entails a much larger degree of responsibility than tax lien sales. This is especially true if you live abroad and cannot visit the United States to view the property you are purchasing. Distance investing should not equal blind investing. Now is the time to discover your inner Sherlock Holmes. Contact the counties you may bid in and request whatever free information they can give you. If feasible, have them e-mail or fax inventories, appraisal histories, et al, to you for your review. Make sure that no tax liens will remain active on the property after you have purchased the deed. It’s tricky for any new investor to manage real estate, but getting entangled in a legal battle for property that a lien took a percentage off is terribly frustrating. This is the last thing you want to have to manage from across national borders.
U.S. Tax Lien Sales
If you are leery of managing real estate from thousands of miles distance, consider tax lien sales as opposed to tax deed sales. Tax liens seldom end in the acquirement of real estate. The odds are about 1 in 250. Usually the owner redeems the property and you get a check for your investment plus interest. This a great way to build your investing skills and gradually familiarize yourself with real estate entrepreneurship.
Should the opportunity one day arise to travel to the United States, whether for business or recreation, check out a live auction if your schedule allows. This will instill you with a whole new depth of understanding of U.S. tax deed and lien sales, providing you with a diversity of knowledge that cannot be mastered from behind a computer screen. You can also network with other investors-imagine the possibilities of a coalition between you and a local investor. Explore all the rich opportunities of U.S. tax deed and lien auctions and begin your journey to success and wealth as an investor today.