Bad Money Habits We All Need to Break

Bad Money Habits

We all know the news. We are in a recession. Times are tough. We need to buckle up our wallets and learn new money and finance habits. But it can be hard to break the normal spending cycle.

Here is a listing of all money habits we all need to break, starting today and some tips on how to do just that.

Living without a budget.

You have heard all about budgets for years now, probably. But have you ever wrote up one for yourself?

It really isn’t that hard to do. You just gather your bills, estimate how much you need a month or week for things like food, gas, clothing, misc items and get to work. Of course, if you are self employed or have an unsteady job, this can be harder to work out than the person with the normal weekly pay check.

Having a budget can show the difference between shelling out $1,500 for a new television, or instead going with a far less expensive projector. Coincidentally, here are some of the best projector under 300 dollars.

Learn to buy without plastic

Credit cards are bad. Well, actually it is those interest payments on those credit cards that are bad. How can we break the habit of not using them? It is simple. Leave them at home.

Yet, do remember if you can, it is nice to have an open credit card account in case of an emergency. Just don’t carry the card around with you or you may talk yourself into thinking that cool pair of spring jeans is an emergency, a fashion emergency.

Saving only at a set time

Some people will tell themselves that they will set a budget and spend only what is listed. Then whatever amount is left over is what they will save for that month. What happens? Most months nothing is left over and nothing is saved.

A cute trick some people have been using is by saving their change or even their one dollar bills (if their budget will allow) and keeping it in a jar. Weekly, they will take this amount to the bank. How do they acquire change? If a purchase is $3.12, they will give the clerk a $5.00 and put the remainder in their pocket. That night the change goes into their savings jar. The next tip is to leave the jar alone, as well as the savings account and allow the amount to grow.

Skip the ATM visit

Okay, you say but I am doing it smart. I am going to the ATM’s where I don’t have to pay a fee. Yet, are you really playing it smart? You are taking money from your savings or checking account, not allowing it grow.

Skip those trips as much as you can. You may be able to do this if you planned that budget, stick to it and no emergencies occur.

Read your credit reports

Make this a habit that you do three times a year. Go to annualcreditreport.com and get your reports for free. Each credit bureau will allow you to see your report once a year for free. Every three months, check one. Three months later check another one. This way you are continually monitoring your credit and it is free.

Pay those bills on time

Those late fees can really add up.

Buy yourself a notebook and a calendar. Now write down when each bill needs to be paid. Each week check your list and mark off the ones you pay.

Of course, the little things such as: watching for sales, looking at the sales ads, never go to the grocery store hungry, clip coupons, watch for rebates and all of these types of tips can help as well. You may even learn some money saving tips from a friend or relative. Don’t be afraid to ask if you think you know someone who is financially secure, how they do it.

 

Why I Use Mint.Com To Monitor My Finances

Monitor My Finances

The mint.com website is a free financial management site run by Intuit, which is the company that produces the popular financial software package Quicken. Obviously nothing is really free in life and users should be prepared for the reality that the ulterior motive of any “free” site is to make money and sell products to customers. However, this does not change the fact that mint.com is a very useful site for a wide variety of financial functions and monitoring.

Tracking mechanism

One of the primary benefits of this site is the ability to track accounts. Users can input their bank accounts, credit cards, loans, assets, and investments. Not all companies are involved, but most of the major players can be accessed. The site stays connected to these accounts and provides individuals with up-to-date balances. Obviously people have to be comfortable giving out financial information of this kind, but managing finances online is increasingly becoming the standard. The site will also alert users through email or smart phone notification when various transactions are posted or statements are ready. This can be particularly helpful for avoiding fraud and knowing when items clear.

Budgeting tools

Another major function of the site is budgeting. Individuals can pick various categories and set budget limits for the month. The site will track transactions from all input accounts and send alerts to the user if categories are exceeded. Some tweaking is required to put transactions in the right categories, but overall the site does a solid job of identifying where various businesses fall in the budgetary scheme. Obviously the site won’t stop people from spending money, but tracking is often the first step towards greater financial discipline. In addition, users can run various reports and see patterns in their spending.

Extra services

As mentioned, the site is designed to provide people with various financial options. This includes different credit cards, loans, insurance, and investment vehicles. The presence of these options are all over the site, but they are no different than banner ads on various websites, and discerning customers can easily pick and choose what they are actually interested in pursuing. Again, this is an understandable part of a company providing relatively free services.

Summary

Online tracking is becoming standard practice and this may be the future of money management as consumers move away from standalone software packages. This site is fairly intuitive and a good way to get a lot of information in a single place. For smart phone users, there is also a mint.com app that can used as a companion to the website.

https://www.mint.com/

More from this contributor:

Verizon iPhone Review: Why I Am Happy That I Bought the iPhone

The Importance of Financial Management Ethics

How to Use Critical Thinking in the Workplace

Taking Care of Your Finances in the New Year

Finances in the New Year

The New Year is finally here. Out of all the many resolutions floating around finances remain at the top of the list. So, what are some tips you need to remember in order to keep your finances organized and well balanced in the New Year? This article is designed to give you a few pointers.

Taking Care of your Finances in the New Year: Need vs. Want

If we were to comprise a list of the things we “need” we would probably find many things we can do without. This is our first mission, by compiling a list of all of our bills we can eliminate the different “wants” leaving a lot more money to save for the “needs”. Of course, we do all need (once in a while) to spend money frivolously. But it should be planned out and allotted-This will tremendously help your finances and give you that little extra perk.

By deciding what you really need from what you could and should do without, you can save a lot of money. The extra funds can go toward house payments, car payments and credit card debts to improve your credit score. Even if it is only a few extra dollars on top of your minimum payment a month it will significantly improve your Fico. The rest of the money you save should go into a savings account for those emergencies that the new year may hold.

Taking Care of your Finances in the New Year: Emergency Needs

Every year we all face some type of emergency or another. In order to help build our finances in these situations there is something important we can all do. Aflac is a wonderful investment. It has helped my family out tremendously when someone has been injured and could not work. The goal is to keep our finances up and stay out of debt. With a company like this it is easy to build up your bank account when you are physically restricted and unable to earn income.

Other insurances are great to have as well. So, whether it is your home, car, or other expensive purchases you have bought, getting insurance coverage could be a good idea.

Taking Care of your Finances in the New Year: Closing

I hope this first installment has helped in beginning to define basic needs regarding your finances. It is important to always be clear in your choices as to where you spend your money. Because this is a primary concern amongst most families, these guidelines can help you plan out and prepare so that you can find yourself debt free.

Using Facebook to Improve Your Personal Finances

Facebook to Improve Your Personal Finances

While Facebook is a fun place to connect with old friends and network with new ones, used correctly, it a can be a great tool to improve your personal finances. Facebook can save you money in your everyday life and even give you access to free things.

We have a Facebook page for my travel website and blog (travel4people.com) and use it to network and promote the site. But we’ve been using it more and more as part of our almost daily research to ensure we always get the best price, whether it’s at a local restaurant, our neighborhood dry cleaners, or on a new car. All those types of businesses have Facebook pages and “Like”ing their pages (joining their social network) is the key to accessing them.

If you don’t use Facebook here’s how the system basically functions. People have personal Facebook pages and business can have their own Facebook pages as well. Just as you accumulate “Friends” on your personal page to increase your own social network, or group of friends, businesses seek to accumulate “Likes”, which are shown as a number and indicate the number of Facebook users who like the business and basically their popularity. Your local dry cleaners may have 150 Likes, while a big company like Ford cars may have 4 million Likes.

Companies and businesses want and need your Likes. The more Likes they have, the more popular they seem and that encourages even more people to Like them, and so on. Businesses like having many people in their social network because it provides them a free network to advertise to, simply by posting a message. And these people are people who have expressed in interest in the product or service by Like-ing the page in the first place. So a business with 10,000 Likes may be able to generate good sales if only a small percentage act on their message, promotion or post.

They also use the social network properties of Facebook, when they post something to your wall, it will then appear to all your Friends and then Facebook makes it very easy to share information. So if a customer likes a business, they can re-post a message or link on their own wall, which then spreads the message to their entire network. Each person in their network can continue to spread the message to their own individual social networks and that is what’s called “viral marketing”, because the message spreads quickly, like a virus. For all these reasons businesses will offer your incentives to get you to Like their page, and even pay online marketing firms large sums of money, based on the number of Likes they can generate for them.

A great example of how we use Facebook to save money and improve our personal finances happened recently when we wanted to go to a comedy show at the Improv Comedy Club in Los Angeles to see Steve-O perform with our grandson. The tickets were $30 at the door. My son suggested we check Facebook and we searched for the Improv and Liked the Improv Facebook page, giving us access to future discounts and show information. The Improv even offers free tickets to many shows, you just pay a $3.50 service charge per ticket. But there were no discounts for the show we wanted to see. We then went to Steve-O’s page and liked that. He had a link to the comedy show’s event page, called Comedy Juice. Once we Liked that page, we could see a discount code, for Facebook fans only, getting us the tickets for $10 each, instead of the $30 each we would have had to pay at the door. Here are some other businesses where you can get Facebook discounts:

Events and Concerts

Before the event, check for a Facebook page for the artist that is performing. Also check for a page for the actual venue where the performance will take place.

Restaurants

Many restaurants are now on Facebook and offering discounts and access to other special offers and things just for their customers. Especially if you frequent big chain restaurants, they have a lot of good deals on Facebook, both fast food and higher end dining.

Local Businesses

Facebook can provide the most savings for local businesses, who can really use it to bring in customers. Any local business or service you use, check for their (or their competitor’s) page on Facebook and Like it to get any available discounts.

Banks and Financial Firms

Check for Facebook pages for your bank or financial providers and for competitors as well.

Car Dealers and Manufacturers

Both local car dealers and car manufacturers have great Facebook pages. Manufacturers offers news on new models, and local dealers use it for discounts on service.

The number and types of business with a presence on Facebook increases daily. Before you do any business with any local merchant, national retailer, really any type of transaction, check on Facebook to see about potential deals and discounts.

More from this contributor:

“Plans For Tax Refunds”

“It’s Time to Change Your Financial Thinking”

“Differences Between Roth and Traditional IRAs”

Additional Interest Insured on Car Insurance

Additional Interest Insured on Car Insurance

Car insurance can be confusing, and in this economy, it can be expensive. Understanding the different terms used that insurance agents and lien holders use can save you hundreds of dollars per year. It is important to understand what a lien holder or leasing agent requires when it comes to car insurance before you start to purchase a new or used vehicle.

When it comes to the additional interest insured part of the insurance world it is pretty simple and a necessity. What an additional interest insured is on your car insurance policy by definition is a company or person who is protected under your insurance policy if they are named in a lawsuit due to an accident that is deemed the policy holders fault.

Most leasing companies and lien holders require their car buyers to have this on their car insurance policies. Basically it will protect these companies from being sued if you are in an accident. This not only protects these companies from liability, but it can protect the policy holder as well. If this protection was not available the consumer would suffer due to increased car payments to pay for this liability.

Since additional interest insured is generally required on a person’s car insurance policy if they are leasing or financing a vehicle your insurance agent will have all the necessary paperwork to meet this requirement. Most individuals may not even know that they have this on their policy, however if you lease or finance a vehicle it is generally required. Because of this requirement that is why your insurance agent generally asks you if you are leasing or financing a vehicle and who through, that way he or she will have all the necessary paperwork ready for you when you purchase your policy.

Fiance’s and Finances

Fiance's and Finances

You have finally met the guy or girl of your dreams and you have agreed to marry them. There is so much to do during the engagement period. Where will you live, how will this affect your career, and your family are a few of the things to consider. One important thing that you must not overlook is your financial situations, and how they will affect the approaching marriage. Discussing money makes some people very uncomfortable, but it is necessary. Financial problems are amongst the top reasons that people divorce. If you want your relationship to have a fighting chance, be adults and discuss your business.

You and your fiancé need to set aside a time to have this conversation. Some preparation needs to be put into this. Each should know their current financial situation, and be prepared to discuss it. Neither party should be rushed or tired when you begin this conversation.

Tip #1

Discuss any debts that you have, and you are bring into the marriage. Yes any debt. Do not attempt to hide your debt from your fiancé, that is not a good foundation upon which to build a future on. You should both agree to work to pay off or down any credit card debt you have incurred individually. Experts state it is best not to consolidate student loans when you marry.

Tip# 2

Discuss any assets that you have. Any retirement, trust, 401 K savings, homes, cars, etc. This is an opportunity to begin to see these as mutual assets, and not individual any more.

Tip # 3

You need to learn each others spending and saving habits. If you have dated any period of time, you already have some knowledge in this area. But when you were just dating, it was your prerogative on how you spent or saved your money, now your actions will affect more than yourself. You should work as a couple or devise plans that will satisfy the types of money managers both of you are.

Tip # 4

Be open about any negative financial situations you are currently in or are feeling the repercussions of at this time. If you have filed bankruptcy, have a low credit score, your future life partner deserves to know.

Tip # 5

You need to discuss how you will handle money issues that arise in the future. Will you lend to friends and family? Does you fiancé agree with giving to the needy or less fortunate? Will you tithe, etc? All of these are important questions that need addressing before you say I do.

How to Manage Your Credit Cards

Manage Your Credit Cards

We make many financial decisions in life- some are big, some are of lesser importance. Credit card accounts and how they are managed impacts your future more than you may realize. Whether you reply to those offers you receive in the mail or if you succumb to the “instant credit” offered by the sales assistant in your favorite store, there are several things to consider when opening these accounts.

Let’s start with the good news first. There are some positives to having a credit card. To be perfectly honest, in this day and age, a credit card is pretty much a necessity. Many times it is required to have a credit card to make a reservation for a hotel or to book a flight. Having a credit card can also be a lifesaver in an emergency. A prime example of this would be car repairs. Ideally, this is an expense that should come out of savings, however, if the money isn’t in savings, the car still has to be fixed. It’s not an option to wait and save up to pay for the repairs. Also, initially having a reasonable spending limit on a credit account and utilizing this wisely will allow for the establishment of a credit history. Managing credit by paying bills on time every month will help achieve a good credit score.

Another advantage to having a credit card is that are some rewards or points systems attached to certain cards. Points acquired through the use of a particular credit card can be redeemed in exchange for airline tickets, merchandise, or even gift cards. Finally, there are special offers on big ticket items that are only valid when purchased with a specified credit card. There are lots of retailers who advertise zero interest for promotional periods on a specified minimum purchase made with their store’s credit card. These offers may be for 90 days to 24 months. There are even furniture retailers who have offered as much as 48 month interest free as long as the purchase is made with their store card. These are wonderful deals on higher cost things as long as all the payments are made on time and within the specified period set to pay off the debt.

Unfortunately, there is a down side to having a credit card. There are more than a few horror stories and it is worth avoiding the pitfalls that come with managing credit. It has been said, although not nearly enough, that when we have to reach in our pockets for cash, we tend to think a little harder about whether or not we really need to spend that money. With plastic it is easy to overspend without thinking because not being able to afford something is not usually considered. The second thing to note is the interest charged with a revolving credit account. When this is factored into the cost of the items purchased with credit, the items easily double or even triple in cost from their original price tags.

Overuse of credit cards can quickly create a situation where more is owed in monthly bills than is being earned as income. It creates a worrisome debt-to-income ratio which can cause most reputable creditors to shy away from approving additional credit. This excess of monthly obligations can begin to affect one’s ability to pay things like utility bills on time which in turn negatively impacts the credit score. In addition, this lower credit score resulting from late payments or nonpayment can affect employability. Many employers as well as landlords now conduct a credit check along with a criminal background check prior to hiring or renting to an individual. These days bad credit can literally prevent you from getting a job or an apartment. Also, the lower the credit score, the higher the interest rate charged for new loans or credit accounts. Chronic misuse of credit cards can lead to years of trying to get out from under the yoke of debt or even ultimately, to bankruptcy. Having to go into bankruptcy may alleviate some of the burden or at least make it more manageable, but it will destroy a person’s credit for about seven years. No one likes having to go back to square one.

It seems harsh to describe credit cards as a necessary evil. They are more like a necessary temptation in our fast paced lives. Credit cards, managed properly, can help build a high credit score which leads to the opportunity for home ownership and being able to replace vehicles when the time comes. This is a good thing considering that most people have to finance such large purchases. Credit accounts that are mismanaged and overused create enormous hardship to those card holders. The resulting low credit scores and high debt-to-income ratio, can make personal finances a nightmare.

What is the Right of Rescission Notice for a Mortgage Refinance?

Right of Rescission Notice for a Mortgage Refinance

Currently interest rates for mortgages are at an all time low which is enticing a lot of homeowners to refinance their loan. There are a lot of good deals out there. After signing all of the paperwork a borrower is most likely going to have a lot of paperwork to look over. Some where buried within all of that paperwork is the right of rescission notice.

Whenever someone refinances their mortgage loan they are by law given three business days to look over all of their paperwork, including the terms and agreements to see if they want to go through with this particular loan agreement. The rescission period starts the day after the loan documents have been signed and it extends for three business days with Saturday counting as a business day but not Sunday. Therefore if someone signs mortgage documents on Friday, the rescission period starts on Saturday and ends on midnight of the third business day, which in this case is Tuesday. The first day of the rescission period is Saturday and the next is Monday and finally Tuesday.

If they decide they do not want to refinance then they have to sign the right of rescission notice at the bottom and return it to the lender prior no later than the third business day by midnight. If the rescission notice is not received then the loan becomes official and the bank or financial institution will send the mortgage deed or document to the country recorders office to be filed. They new terms and agreements will go into affect and the old terms and agreements will become null and void.

You have to understand that every single mortgage transaction is not subject to a right of rescission notice. If you are refinancing your mortgage there is a right of rescission notice but as the owner you must be living in that home that is being refinanced. Others who have investment properties that they wish to refinance don’t have the luxury of a rescission notice. Even if you are purchasing your home there is no 3 day rescission period but later on if you decide that you want to refinance and you are the owner living in that property then this option will be available for you.

If someone has a home equity line there is a three day rescission period for the amount of cash that the borrower is receiving but not for the entire loan or the entire credit line. The rescission can apply to the home equity loan entire credit line if, once again, the owner of the property is living in that home.

AIG – Their Corporate Silver Spoon and Tax Payer Dollars

Tax Payer Dollars

AIG, too big to fail, propped up with another infusion of cash from the coffers of the U.S. Treasury. $170 billion of tax payer dollars that is suppose to prevent a catastrophic disaster. Instead of being grateful and humble, AIG executives prove once again the disconnect between the high powered business world and the working world. No “we really appreciate your help”. Just more excuses to justify millions of dollars in bonuses for them. Perhaps it’s time to call their bluff and let them fail. By handing out bonuses, AIG and other companies who find nothing wrong with it, are creating an atmosphere that makes it harder for congress to justify and approve more money down the road that would be intended to help them. Why should they get more?

The inner workings of business and finance are being exposed as window dressings made out of money deteriorates. Companies left too long with no one watching the store. A domino effect that has left our economy shattered and hanging by a thread. High stakes greed created a whirl wind with the force of an F5 tornado that has swept down from the corporate headquarters wiping out 401Ks, leaving small business and regular consumers out in the cold and essentially shutting down our economy. All the while, the people who sent this economic mudslide roaring down the mountain arrogantly and greedily cash their bonus checks with a smug satisfaction of business as usual. So what if it’s tax payers dollars. They have contracts and the company dare not break said contracts over fears those who don’t pocket bonuses may leave. Where are they going to go? You can bet they won’t be flipping burgers at McDonald’s or scanning your cans of Spam at the grocery store.

We, the American tax payer, get it. We do understand what’s at stake, but that doesn’t mean we have to be happy about it. The companies we have been bailing out obviously don’t. We have been told the only way to save ourselves requires handing out our hard earned money to save the likes of AIG. Big businesses and financial companies who have lived high on the hog for so many years, they can’t see their toes for their inflated waistlines. Executives who think nothing of holding out a hand and expecting tax payers to ante up so they can continue their arrogant, extravagant lifestyles and business practices. All the while smacking the American people along side the head with the other hand. Instead of receiving bonuses, everyone who contributed to our declining economy should be fired. End of story.

AIG plans to award executives another round of bonuses. $165 million. For what? A job well done? If you are confused as to what constitutes a job well done; you aren’t alone. In the real working world, if you played a part in running the company you work for into the ground, you don’t receive a bonus. You receive a pretty little pink slip on your way out the door.

Where was AIG when the people of New Orleans attempted to collect on insurance policies underwritten by AIG after Katrina pounded the city with Gulf Coast waters? The people who dutifully paid their monthly premiums with a guarantee their property would be protected. We have gotten use to hearing how insurance companies aren’t there for policy holders after a natural disaster (hurricanes, tornadoes, forest fires). Every trick in the book is dug up in their attempt to break their contract to policy holders. Yes, it is a contract. We pay you each month for protection. You take our money agreeing to provide said protection. That’s a contract. AIG, among others, didn’t seem to have a problem trying to scheme their way out of paying on claims after a storm of the century. Yet, they can’t figure out how to break a contract to reward bad decisions that brought their company to their knees. That’s because they don’t want to.

AIG justifies the intended bonus payments by assuring the government they will scale back 2009 bonuses by 30%. We are told these bonuses have to be paid because of legal obligations of the company. What about moral obligations to the country and their shareholders? Rewarding failed leadership demonstrates AIG’s lack of understanding and only accentuates what appears to be fat cat greed regardless of job performance. One of several companies, who are now considered to be too big to let fail. Companies who rejected and lobbied against oversight from outside sources. Some of the very people who helped create this pot of boiling goo now expect their contracts to be full filled come hell or high water.

Edward Liddy, AIG Chairman and CEO, saysthat if the company doesn’t honor their agreement to top executives, they will have trouble attracting and keeping the best people in the business. If these executives are the best, why did the company fail? Why are they asking us for our money? Liddy complains his employees would be concerned the government will interfere with and limit bonuses. He contends this could be detrimental in retaining qualified executives. If AIG had failed and the executives had lost their jobs, would they still have walked away with millions of dollars in bonuses? Would AIG have honored those contracts then? Contracts are broken all the time. The auto workers were forced to renegotiated their contracts in order to receive bailout money. Why not AIG executives?

The American people know how to sacrifice. When money is tight, the last thing you do is buy expensive furniture while remodeling or go on a fancy retreat or vacation. We don’t have a cash cow that will bail us out and our only option is to hunker down, cut costs and wait for the storm to pass. We now have companies and banks who are in an elite class where the common wisdom is, these mega corps are too big to fail. Perhaps we should take our lumps, let them fail and come out on the other side with smaller, more manageable companies once the dust settles.

Finance Definitions: Market Liquidity

Finance Definitions: Market Liquidity

Market Liquidity refers to an investment’s capability to be transferred instantly to cash without diminishing its current value. Cash or money is the supreme example of a liquid asset. Determining a liquid asset is quite easy, as long as it can be exchange quickly with little or no change in value. One other factor is the presence of buyers and sellers at any given time. If the there are a large amount of buyers and trader, then an asset is considered very liquid. When this happens, the effects of the transactions will most likely have definite impact on the overall market prices.

On the other hand, an asset that cannot be exchange quickly and may have difficulty in marking its value is called an illiquid asset. A product’s liquidity can be calculated by how much it is traded by buyers and sellers, and the result of this is volume. Investments such as stocks and futures are liquid compared to other assets such as property and real estate. Speculators and investors usually cause market liquidity. They profit from the stock market by anticipating the current prices of each asset. The effect of their trading and transactions provide a continuous flow of money and capital to promote liquidity.

As we move along to the futures market, there is no definite guarantee that a market’s liquidity will occur to make up for the commodity contract at any time. Future trading is known as a very liquid trading environment. The most common factors to check for liquidity are the volume of trading and open interest.

Liquidity in banking has a broader term. In this sector, it is known as the facility to reach financial objectives without suffering any undesirable losses. Bankers who manage liquidity keep an eye on trends and cash flows to make sure that proper amount of liquidity is sustained. It is important to maintain stability on short-term assets and liabilities. Primary funding in banks is mostly sourced thru deposit accounts, while primary assets are from the loan portfolio. The main source of liquidity comes from the investment portfolio. Investment assets and securities have the ability to be liquidated to complement bank withdrawals and growing loans. By selling loans, borrowing from other financial institutions and raising capital, these factors all contribute to generate liquidity. In times of financial difficulties, the depositors can ask for their finances if the bank is incapable of generating cash without getting more money losses.

Financial institutions such as banks can usually maintain a certain level of liquidity required, and this is because the government insures bank deposits. If liquidity issues do arise, rates can be raised to ensure that it goes back to normal. Take note that banks attract more money thus providing more liquidity that influences all the movement of money in the world.

Market Liquidity is such an important factor in finance. It plays a part in transferring various stocks to their respective values, and vice versa. So, be safe all the time. Invest in investment assets with fast liquidity.