Budgeting Money: Simple Ways to Ensure You Don’t Spend More Than You Earn

Budgeting Money

Start putting money back into your pocket by learning how budgeting money can help you take control of your finances.

You first need to understand the basics of income and expenses. If you can learn to control these two aspects of your finances, you are on the road to financial freedom. Being in debt is tough. If you are like many Americans today, it may seem that there is no way out. Budgeting money will help you start to reduce your debt.

Make sure that your budget plan is simple and structured. What is a budget exactly? Simply put, it’s your income minus your expenses. Starting a personal budget is one of the best ways to visualize where your money is going each month.

Start first with your monthly income. Always use your net pay, not your gross.

If you have multiple forms of income, you need to make note of these. Once you have all forms of income notated, add them up. Make sure to write down your total.

Now you will want to list your expenses. It might be best to divide them into groups. Try these groups: Direct Withdrawals, Necessary Spending, and Leftover Income.

Direct withdrawals are those expenses that are automatically withdrawn from your bank account or credit card each month. This will include house payments, school loan payments, car payments, insurance premiums, utility bills, and doctor/dentist expenses. If you have an electronic withdrawal set up from your checking or savings account each month, make sure it is in this group. Add up all expenses in this group and write them down.

Necessary spending consists of credit card payments, grocery bills, cell phone bills, dry cleaning, and any other expenses. This could include eating out on Friday nights or renting a movie on Saturday night. Make sure to list all of these and write them down. You will want to add up all of these as well and write them down.

Leftover income is now what you have remaining after you have paid all other bills. You can use leftover income for vacation trips, birthday presents, and large purchases like home electronics or furniture. I would also recommend budgeting money to set aside for your savings account. It is always good to have something set aside in case of an emergency.

Following these steps will help you start the path to financial freedom. There is light at the end of the tunnel!

Can I Refinance My Car with Bad Credit?

Refinance My Car with Bad Credit

With the crumbling economy showing no signs of recovery, many debtors are unable to keep pace with their finances. Most banks are shying away from lending money. They would prefer lending money to those with good credit record, rather than lending them to those with bothersome credit report.

Most reputed national lenders would want to stay afloat by lending to good borrowers. However, there still is a huge market for debtors with bad credit because they form a substantial segment of those looking for new loans. Admits the recession, not many people would want to borrow to buy homes or cars. This is why bad debtors are such attractive bait for lenders already engaged in a fierce competition with each other. A bad creditor is a definite risk, but lenders know that they can repossess the car if the debtor defaults again.

Capital-One, Wells Fargo, Citifinancial Auto Finance and Pentagon Federal Credit Union, still manage to keep faith in defaulters and refinance their loans.

Those with bad credit can ask the new lender to simply pay off the balance to the old lender and negotiate refinancing options. Lenders who are hesitant may demand the presence of a co-signor with a good credit standing. This human element of collateral actually does wonders to renew faith.

Buyers these days may not consider refinancing a car as it is a short term loan as compared to a home loan, however with the recent upheaval in the economy, interest rates can fluctuate wildly. It’s not just the borrowers who have to watch out; lenders have a lot to lose too. In such times, it actually may reverse the situation by making the lenders scout around, to bail out buyers with a bad credit.

With much of the paperwork already eliminated with the online loan application procedure, this has not only simplified and streamlined the refinancing process, but also helped cut costs for most lenders out there in the market.

Refinancing an auto loan is a good thing because of reduced interest rates and extended loan term which allows monthly expenditure to be allotted to other needs. Moreover, the positive impact it makes on the credit standing is undeniable.

Having said that, it is important to say that buyers may be better off, just trying to pay the principal amount completely to the old lender, if they can arrange for money from their family members or some other reliable source. This is because a vehicle is a depreciating asset unlike a house. No point paying $25,000 for a car whose value will be at $10,000 after the loan is paid off.

If refinancing does not work out with those unfortunate enough to have a bad credit, they can simply ask the old lender to lower the interest rates or extend the loan term while maintaining the same interest rate. Although this slows down payments, they may agree just to avoid the hassles of repossession.

 

Does the Role of the World Bank Need to Change?

World Bank

A press release announced on Thursday that Professor Adam Lerrick of Carnegie Mellon University’s Tepper School of Business, a leading authority on international banking and finance, has appeared before a subcommittee of the U.S. Senate to argue that the World Bank is becoming an ineffective institution. Lerrick argued that the United States should demand greater accountability and transparency from the World Bank.

Lerrick stated, “After 60 years and $600 billion, there is little to show for bank efforts. n the last 20 years, the world has changed dramatically, but the World Bank has refused to change with it.” Lerrick went on to describe his belief that the advantage the World Bank once had is gone as private capital now channels over 300 times the amount of funds to emerging countries than the World Bank. Lerrick continued, “The private sector dwarfs official funding and emerging nation leaders are just as smart, just as skilled and know their countries infinitely better than anyone at the bank.”

Indeed, the founding purpose of the World Bank was to provide knowledge and finance developments in emerging countries. Some, like Lerrick, believe that emerging countries no longer need money or advice from the World Bank. Lerrick went on to testify that the World Bank isn’t really lending to those types of countries much anymore anyway, “More than half of bank loans since 2000 have flowed to six upper- middle-income nations where only 10 percent of the developing world lives.”

The next portion of U.S. funding for the World Bank is expected to be somewhere between $4 and $5 billion dollars. Lerrick argues that the United States must demand more information from the World Bank, as they historically don’t release information detailing the approximately 280 projects they fund each year.

General information describing projects the World Bank is funding can be found on their website, but Lerrick believes that U.S. officials should have access to more detailed data. Projects recently approved by the World Bank range from an HIV/AIDS prevention project in Afghanistan, an irrigation development project in Armenia, a higher education project in Mozambique, and an agriculture and infrastructure development project in Liberia.

Projects like unto these would suggest that the World Bank is fulfilling their initial purpose. However, if Lerrick gets his way, the U.S. will analyze in detail their relationship with the World Bank and consider whether the role of the World Bank in the global scene should change.

Managing Your Finances Before Military Deployment

Military Deployment

When Army Major Mark Stone (not his real name) deployed to Iraq last year, he found himself more scared about what was happening at home than in the Mideast.

Shortly after arriving at his duty station, he suffered an eviction scare. The rent on his two-bedroom apartment was paid a week late. He quickly switched to online bill payment and got the help of a trustworthy stateside friend to take care of most financial issues. He also convinced his apartment manager to waive any late fees.

Whether the deployment is planned or somewhat of a surprise, members of the United States armed forces and their families are seldom covered as far as financial planning for the service member’s absence. One Army wife complained that when her husband first deployed to Iraq, he forgot to pay a credit card bill. When she tried to call the credit card company to find out the actual balance, the customer service representative refused to give her any information since it wasn’t a joint account. Her husband’s credit rating suffered as a result.

A number of Internet sites offer help for the deploying service member and his or her family. Meredith Leyva, of Pensacola, Florida, is the wife of a Navy officer. She founded the site CinCHouse.com to provide ideas for managing finances during deployment and general assistance for military families.

Another helpful site is Operation Home Front, at http://www.operationhomefront.org. Many service members and their families also find excellent advice at the site of the United Services Automobile Association (USAA). This organization was founded in 1922 by a group of Army officers seeking to self-insure each other for automobile insurance. It’s located at http://www.usaa.com.

There are some logical steps all military families can take to make their financial lives easier, according to USAA. The first is to build an emergency savings fund of three to six months of living expenses. Families facing a deployment should put aside a minimum of $2,000 more to cover unexpected expenses such as car repairs, plumbing problems, or other unanticipated bills.

Leyva says before a service member deploys, the family should set aside additional funds to cover routine responsibilities the member routinely performs, such as maintaining the lawn or cleaning the house. In the chaos of a deployment, it might prove necessary to hire someone else to take care of these services.

If the deployment results in an unused vehicle, families in the U.S. should check out potential savings on insurance. And for single service members or those with minimal possessions, it might be possible to avoiding paying any rent or utilities by placing items in storage.

All service members should realize that the Servicemembers Civil Relief Act of 2004 might qualify them to get a lower interest rate on mortgages and credit card debts well as protection from eviction after any late rent payments. In some cases, they are eligible to delay civil legal actions, including divorce, foreclosure, and bankruptcy.

Sometimes deployment to Iraq has led to an improved overall financial situation for a family. Those at home are forced to take action to pay bills, understand what’s required to keep the family afloat, and become very adept at handling financial issues.

USAA offers a handy pre-deployment financial checklist:

1 – Choose someone at home to handle bill payment and other issues. Depending upon your state of residence, you might need to execute a power of attorney to do this.

2 – Set up a record of all your personal or family accounts and take a copy with you once you deploy. Singles should provide this data to a responsible individual in the States, preferably the one with the power of attorney. For married service members, all accounts should be in both spouses’ names.

3 – Arrange for automatic payroll deposit, investments, and bill payments whenever possible. You might need to find a bill payment service that permits you to pay obligations online from any place in the world with access to the Internet.

4 – If possible, set up any loans your family might need while you’re away. You might be able to secure lower interest rates based on your military service.

5 – Create a special folder in which to store receipts and financial and legal documents during your deployment.

6 – Take the time to update life insurance policies, beneficiary forms, and wills. Also check out insurance savings if one or more vehicles won’t be driven while you’re overseas.

7 – Notify any creditors and other financial institutions that you’re deploying. Be sure to furnish them, as well as the representative you designate to handle emergencies, with a way to contact you if problems arise.

8 – Consider the benefits available through Servicemembers’ Group Life Insurance. It presently includes traumatic injury protection, which could keep your family afloat if you suffer certain types of injuries.

Once you’re completed the checklist, you can deploy knowing you did everything possible to protect your family and your credit rating while you’re gone.

Taking Control of Your Finances After Graduation

Finances After Graduation

If you have recently graduated from college, now is the time to take control of your financial situation. Many college graduates have little or no idea of how best to keep track of their money, especially if the temptation to blow a paycheck proves too strong. Fortunately, you do not have to be a financial expert to have a good understanding of how to keep control of your finances.

Set up a savings account

While it is likely that most of your income will be spent on rent and bills, you should aim to pay as much of the surplus into a savings account. Ideally, this should be a savings account that gives you easy access to your money in case you need to use it at a later date. If you are confident that you will not need to touch the money for a set period (for example, six months or one year), you can “lock away” your money, which often offers a more attractive interest rate than instant access savings accounts. Sometimes, these accounts may specify that you cannot make a withdrawal during the set period, or that you will lose interest for the month in which you make a withdrawal.

Look for a savings account that offers a good rate of interest, as this will obviously mean that you will see maximum reward for your savings. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate. In either situation, make sure that there are no hidden conditions attached to the savings account or interest rate. For example, some savings accounts offer a very attractive interest rate to new customers for the first year only. After this, you are demoted to an interest rate that is average, at best. If you already have a savings account, you might want to consider switching your money to one that has a better interest rate.

Tax-free savings accounts are the best option, as nothing is deducted from your interest. Unfortunately you cannot put an unlimited amount of money into a tax-free savings account. They are capped, meaning that you can pay in a certain amount of money per tax year. While the government is keen to encourage as many people as possible to have savings, they do not want to be waiving tax too much as they gain nothing from it.

Budgeting

Drawing up a budget is a handy way to see whether your outgoings are in line with your income. This might seem obvious, but many people are shocked to find that outgoings such as rent, bills, food and socialising far exceed their monthly income. Listing all of your outgoings is also a good way to pinpoint exactly where your money is going each month. It is often the little things that add up the most. Buying a coffee on the way to work can soon cost you several hundred dollars over the course of a year.

Once you have worked out where your money is going, look at any areas where you can cut down on frivolous or unnecessary spending. Most people will find at least one area in which they can cut down on their expenditure. It is vital that you stick to this plan if you want to see an improvement in your finances.

Many college graduates are afraid to sit down and work out how best to take control of their finances, but it is something that should be done to avoid sliding into debt. With a little bit of research or help from a financial advisor, you can seek out the best ways to make your money work for you.

Teach Your Teenager to Manage Money

Manage Money

In these uncertain financial times, it is important to teach your teenage children how to manage money. You are a role model for your teenager to learn budgeting techniques and now is the perfect time to show him how to manage his finances.

There is no need to tell your teenager every detail of your family finances, however he should not take for granted that he is well provided for. It is essential that he becomes aware of the need to manage his own money responsibly.

Pocket money

Ask your teenager to prepare a written budget. This budget should be for a period of three months and should take into account the cost of the season’s clothing for those months. The teenager should also include irregular spending such as purchasing Birthday gifts and visits to the cinema or similar entertainments. Everyday spending, such as fast-food on the way home from school, also needs to be budgeted for.

Once your teenager has written a budget, it is time to sit down with him and negotiate. Does his pocket money cover his expenses? Are you giving him enough money? Has he been realistic in his assessment of his needs? If he feels he needs more money, where can he cut down his expenses? It is important to have a written budget to refer to, as teenagers tend to impulse buy and not consider how far the money needs to go.

You need to be firm and not give extra money to your teenager when he makes mistakes. If he buys one pair of designer jeans, instead of two or three pairs from a department store, then he must be prepared to wear the one pair of jeans everywhere he needs to wear jeans. Your teenager will quickly learn to manage his clothing account and be more careful when he prepares his next three months budget.

The Part-time Job

Teenagers should experience the financial benefit of having a part-time job. You may need to renegotiate with your teenager how much pocket money you are now prepared to pay him. If you decide to reduce your working teenager’s pocket money give him a clear explanation, so that he understands why he is receiving less pocket money. One reason, for example, may be that he uses the family car to drive to work, thus increasing your fuel costs.

Allow your teenager to enjoy the advantages of earning his own money. He should be able to purchase the occasional extra treat or spend more on his clothing and entertainment.

You might consider suggesting to your teenager that he makes a small donation to charity. In these hard financial times such a donation would really be appreciated by the charity, and your teenager would learn that part of managing money is to share with those less fortunate.

Saving money and Investing

Once your teenager has a regular income, you may wish to encourage him to save towards a future goal, such as purchasing his own car. Teenagers are more likely to save if they have an obtainable goal.

Due to the volatility of the share market, it is actually a good time for your teenager to purchase a few shares. Shares will eventually bounce back and a young investor may find they have made a very nice profit if they have the patience to wait.

You have now taught your teenager to adhere to a written budget and he will manage his money much more effectively. Remember teenagers learn best by example, so if you have never prepared a written budget for yourself, now would be an excellent time to start. It is never too late to learn how to manage money and your whole family will benefit, not just your teenager.

Skype as a Business Tool

Skype as a Business Tool

Starting a home based business is not an easy task. One of the most important things to be concerned about is finances. Every penny you spend has to go towards benefiting your business. You will have to consider products that will become an important asset to your new business. That is why I try my best to look for products that cost me very little. Despite the fact that I am being cost conscious, I only want to use products that are fully functional and have great quality.

Skype has become one my most valuable business tools. I started to notice that most of my daily work is done over the phone. I started using my cell phone on regular basis for these business calls. Soon my phone bill started increasing each and every month. I needed a more cost effective solution immediately. That’s when I considered using Skype.

I had used the program occasionally to call some of my family and friends. It never crossed my mind to use it for my business needs until I started looking at some of its features. My phone troubles were definitely over when I began to use Skype regularly.

Getting Skype Unlimited for only $29.95 was an unbelievable bargain. I only had to pay it once a year instead of a monthly bill. This saved me a bundle. No longer did I have to worry about how many minutes I was using because it was unlimited calling within the United States and Canada.

In order to have others call me from a mobile or landline phone, I decided to get a SkypeIn number. I was even able to choose the area code I wanted my number based out of. Voicemail was a free feature that came with the SkypeIn number. For those times that I was unable to answer the phone, callers are still able to reach me by leaving a voicemail.

There are so many extras that you can use to customize your Skype experience. For some of my clients, I use the desktop sharing application called Skype Unyte. I am able to share my desktop with them in order to display some of the documents needed. This allows me to basically have a business meeting without having to email them to my customers and then wait for a response. I am able to be more productive with Skype and it has become a necessity for my business.

3 Tips to Help Get Your Home Loan Mortgage Approved at Standard Rates

3 Tips to Help

The statistics for rejection rates on home loans are now over 30%. Around a third of all home mortgage loan applications are rejected at the first hurdle. This has resulted in a steady increase in the amount of mortgage loans completed by so called “sub-prime” companies in the USA ( currently out of all home loans approved over 34% are issued by sub-prime lenders).

Why is it that some people get their mortgages approved with no problems whereas others often struggle, seemingly having to negotiate obstacles set up by the mortgage finance company, even then not getting the loan they want and having to approach sub-prime lenders with higher rates? What is the difference between a successful application and a rejected one? What are main stream lenders looking for when they evaluate your application?

The reality of the situation is, that getting your home mortgage approved really depends on how closely your circumstances match the criteria set out by the lender. All lenders have a set of “rules” or “criteria” that are used in deciding whether or not to approve a loan. Obviously, all applicants should at least show themselves to be creditworthy and be able to provide documented proof to support this. The FICO score is a popular credit scoring method used by many lenders (but not all – some have their own in-house credit scoring system, although most work in much the same way). The FICO scale runs from 300 to 850. The vast majority of people will have scores somewhere between 600 and 800. Above 720 or so means you will be offered good terms on mortgages, loans and credit cards.

Nowadays all lenders have a credit scoring system for aspects of your background, your credit “score” is derived from your background in the following areas:-

1) Credit History – The next indicator of your credit-score is your existing payment history, i.e. your credit card and loan repayments. if your credit file shows you have been making timely payments towards existing debt then this increases your score. However, too much existing debt on credit cards or loans can obviously count against you. Generally, lenders are most interested in the last six months of payments made, so, if you have had any “hiccups” in last 6 months perhaps you should postpone your loan application and make your credit as clean as possible.

2) Employment background – Generally speaking, for best chance of approval, you should have been in continuous employment for at least 2 years, preferably with same employer but at the very least within the same industry. In the lenders eyes this vastly reduces the chances of you being unemployed and shows some stability in employment – lenders love stability!

3) Existing commitments – Your income dictates the amount of repayments you can support. As a rough rule of thumb, finance companies say that a person’s total monthly liabilities should not be greater than 42% of his or her net monthly earnings. It is worth spending a few minutes checking this out yourself, it could mean that in order to qualify for your mortgage loan, you may need to reduce your monthly repayments to make the proposal acceptable to the lender.

Many lenders now offer a “pre-approved” home loan if you might there standard criteria, the benefits can include a written 120-day commitment which gives you extra leverage to negotiate with sellers with written proof of an approved mortgage amount. It would be wise seek this approval before making any commitments or even viewings to avoid disappointment.

 

Got Debt? How to Regain Control of Your Finances

Regain Control of Your Finances

Debt. Who doesn’t have debt? Barely anyone I know! However, debt can be controllable, or it can be over-whelming. Which category of debt are you in? If you’re ready to take charge of your debt and get in control of your finances, here’s how to do it.

Add Up Your Total Debt – Yes, put it all on paper and figure out exactly how much you owe. Ignorance may be bliss, but knowledge is power. The first step to debt freedom is knowing how much you owe and who you owe it to. Don’t leave anything out, and more importantly, don’t freak out when you see the bottom line!

Stop Spending – In case that was difficult to understand, let me put it another way – Stop Spending Money! Take the time to figure out exactly where your money is going and cut out what is not necessary. Many will be almost shocked to see where their money is going. The good news is that by simply finding out where you spend, you have also found places to cut back.

Repay Your Debt – This is the hard one, but you need a plan of repayment for the debt you have. More importantly, don’t take on more debt during this time. Your primary goal now is to pay off the debt you currently owe to others. Contact your creditors to see if you can work out a lower interest rate or a more suitable payment plan, but get that debt paid off. Remember, this will not happen over-night, but as each outstanding debt gets paid off, you will feel financially lighter!

Create a Monthly Plan and Budget – A healthy financial budget will have you spending no more than 35 percent on a mortgage (or rent), 15 percent on vehicles and gas (don’t forget insurance), 10 percent to savings, 15 percent to paying off debt, and 25 percent on your future. Figure out what you bring in each month then distribute your funds to each category. Stick to your budget.

Make a Priority List of Your Debts – Secured debts (as in loans attached to your home or car) come first. Pay these bills on time all the time as well as your utility bills and necessary expenditures (like doctor visits, etc). Second is the government. Make sure your taxes are paid. Unpaid taxes can cause some real havoc down the road so take care of it now. Lastly, pay towards your credit card bills. As stated previously, take the time to contact the credit card companies. Many will work with you as far as interest rate and repayment options.

Earn More Money – Simple, but there are only so many hours in the day, aren’t there? Any opportunity to bring in a little extra cash to the household is worth it.

Tough Love and Tough Choices – If bringing in more money isn’t an option, but you can’t cut it financially with the amount of income already coming in, you may need to make some tough decisions. A less expensive place to live is one option. Perhaps only one car payment may be a needed alternative until you are financially stable again.

Save, Save, Save – A little bit of money can sure add up. Just think, if you can muster up $10 a day to save and can get 8 percent interest, you will have $57,000 in ten years! In twenty years, you will have $180,000! All that off $10 a day! Keep in mind that a $10 a day investment is an investment into you and your future! To me, that is the best investment of all!

With some time and effort, as well as this step-by-step plan of action, you can be on the road to seriously regain control of your finances and debt. There is no better investment than that of you and your family. Start today!