Save Money on Your Utility Bills
February 27, 2009 by Staff
Filed under Saving Money
The present economic downturn has changed a lot of things on international, national and even domestic levels. For the individuals struggling to meet both ends and stick to a job, the new mantra is saving. You want to save to repay your debts. You want to save to pay off your credit card bills, that just keeping getting bloated all the while. You want to save for your children’s education which also seems to get more and more expensive with each passing year. Lastly you want to save to ensure that the next economic downturn does not catch you off-guard like this one. All these are genuine concerns that indicate the “once bitten twice shy” philosophy. There are several avenues that you can look at to save money. Your utility bills are one such aspect.
In front of the huge home loan, or car loan or even your monthly credit card bills, your utility bill may not be something that catches your attention immediately. But if you think about it, it is an expense that you can look to decrease. Your water and power bills can be targeted for starters.
Dish Washing
Studies have shown that dishwashers help save more money than hand washing the dishes. There is no denying this point, but one needs to look at the perspective. For a regular family of four or more people, the total number of dishes churned out each day is significant and hence washing them in a dishwasher would require less effort, less water and hence less money. However, if you are a single person to two people, you probably don’t generate sufficient dirty dishes to use the dishwasher to full capacity. If you don’t maximize the number of dishes per cycle you don’t save money. So for such cases hand washing is better.
A very good technique of washing the dishes is to stop the exhaust of the sink and fill it up with warm water. Now you immerse all the dirty dishes in this water and let them stay there for sometime. Even if you forget about them for over an hour, it would not harm – in fact reasonably longer duration is better. Now you can wash your dishes with dishwasher soaps and rinse them lightly in the sink water itself. Then you can drain all the water and rinse each dish separately in flowing tap water. This is a good technique of washing dishes without wasting water or energy.
Bathing
Again studies show that bathing requires lesser water than shower. If you are someone who showers, you must switch to bathing. If you are not comfortable with bathing and prefer shower, then you can fit an environment friendly water flow cap. This can help you regulate shower flow based on your needs. Besides, you must make conscious effort to come out of the shower within 10 minutes. This simple act can save you lots of water and hence money. Besides, if you are someone who prefers hot water, the switch from shower to bath can save you water heating power too.
Budgeting - The Magic Lamp in Economic Crisis
“Necessity is the mother of invention” - this is absolutely true in today’s economy. Till recently, not many Americans cared if they are overspending or not. All they focused on was leading a lifestyle which they could not afford. Low interest rates and plenty of money circulating in the market created an illusion of excess money leaving people carefree; then comes the mortgage crunch. Soon people realized that they could not afford to pay the higher installments due to the rising interest rates. All of a sudden a booming economy looks dull, the extravagant lifestyle becomes a burden.
It is such times of crisis that people start to look at ways to reduce expenditure and save money. A perfect tool to do just that is budgeting. Budgeting is basically recording everything that you know and analyzing it with the aim of cutting costs and saving money. The best part about budgeting is that you are not going to do anything special. Instead of spending carelessly as you have been doing all along, you start to list all your income and expenses side-by-side. Just having them at the same place together can give you a very good indication of how your money is leaking. You would just need to plug those cracks and soon you would be saving money!
At the start it may look intimidating to do all the accounting on a piece of paper. Well the good news is you can use the power of the Internet to help you in this regard. You will find many solutions and tools online that can actually aid you in carrying out your budgeting task. These tools would help you in tallying your income and expenditure to let you know if you are saving or overspending. That in itself is an excellent start.
Realization and acceptance is important if you are serious about preserving your diminishing savings. One of the common problems with excess spending is late repayment of loan installments and other utility bills. These delayed payments can lead to high interest rates on the missed installment or monthly rent. These interests are unnecessary expenses that you must avoid under any circumstances. Fortunately, the same online budgeting tools can help you with these. Some of these tools have a reminder service that can send you reminders to make the respective payments on time. If you cannot find such tools, then set reminders yourself. Mark a date in your calendar, or have it stored in your hand-held device, or phone. If you are determined you will not rely on an online tool alone. It is amazing how much you could save from just avoiding the delayed payments.
Another aspect is to follow your spending habits. If you continue to record your expenses for a few months, you can see a pattern. Analyze these patterns and try to bring the excess spending down. The online tools too can aid you in this regard.
In short, budgeting is the magic lamp that will bring you face to face with your finances and help you bring down expenses and curb overspending. Soon you will be leading a debt-free life of financial freedom.
Credit Cards – Excellent Payment Alternative for Your Needs
February 16, 2009 by Staff
Filed under Credit Cards
Credit cards have been one of the major revolutions in the banking and finance domain. Their impact has been quite significant on the manner in which companies conduct their businesses and even customers conduct their purchases and shopping.
Today it is not uncommon for people to go online to shop for almost everything right from air line tickets, to rent cars, to book hotels, book vacation plans, order food for home delivery or take out, refill their gas, and also make all other kinds of payments like monthly rent, utility bills and even repayment loan installments. Credit cards have become an inevitable part of a modern urban person.
Not to be left behind the credit card companies actually have come out with host of credit card schemes that provide the customers with various benefits depending on their style of expenditure.
It is tough to ascertain whether the various offers from credit card companies triggered its popular use among masses or vice versa. It is like the “Chicken and Egg” situation. But the point is today the market is bursting with all kinds of credit card users and commensurate diversity in the kinds of credit cards too.
It is typical for people to own a vehicle for transport. This would mean that almost everyone needs to refuel their cars. Most credit card companies have exploited this segment with a petro card that rewards the customers for purchasing the gas with their card. Similarly, mobile professional also tend to use air transport frequently and stay at various hotels and lodgings and also dine out regularly. Special card schemes have been developed for such people that allow them to garner reward points which they can trade for gift cards, discount coupons or even purchase certain items. Some cards also allow you to accumulate air miles which can be redeemed in your next flight booking.
Not only individuals, even businesses and corporate houses have benefited from the credit cards. Now these companies can provide their employees with corporate credit cards which can be used to pay for all the company related expenses. This is vital as it eases the strain on the employees to segregate personal expenses from business expenses. Not only this, many employees can also benefit from the corporate plans that credit card companies offer for certain companies. These have benefits of reward points, greater credit limits and even lower interest rates.
Lastly if you are someone who prefers to shop for all your needs with credit card and would prefer to get cash instead of reward points, well even this option is available with the credit card companies. You can opt for cash back credit cards that give you a small fraction of the spent amount back to you. So if you are an ardent credit card “swiper”, you could be looking at some decent cash backs in a few months.
A final note of caution – though credit card eases your shopping experience and giving you a stress free shopping alternative there are some steep charges associated with delayed payments. If you miss paying your credit card bills, the steep interest rates would mean you are in debt with bad credit history within no time. Hence use your credit cards prudently.
What has the 2008 Financial Downfall Taught Us?
The 2008 credit crunch can be attributed to many developments in the financial world over the past two decades.
- The financial deregulation allowed private players to compete bringing down interest rates and inflation. This allowed people to take greater risks with the resultant backlash when the economic slowdown affected the interest rates and job markets.
- The complex financial engineering ideas were implemented with the aim of diversifying risks without focusing on minimizing them. As a result while lenders sold and bought housing loans, they didn’t focus on repayment. This came back to haunt them.
- The US sub-prime crisis became a global phenomenon because of the close integration of the global economy in terms of investment companies and their exposure to fast developing nations like China. The investors in developing nations fueled the real estate boom and they also got affected when it went bust.
The crisis was a combination of ignorance from the borrowers, greed from the investors and financial institutions and negligence from the US government. This has left the whole of developed world in a huge financial mess; with many looking to step back on the financial reforms undertaken over the last couple of decades.
While it is not something that experts did not foresee, no one could predict when it would arrive and how it would arrive. Given that such an event was being talked about for nearly a decade implies that the early warnings were in place, but given its success for 10 years, it was difficult to put a finger on when it would happen.
Now the real question is how would this affect the global economy? The impact of this meltdown has been significant. Some statistics indicate that it is probably one of the largest meltdowns of such proportions in over 70 years. Given its magnitude, it is bound to have some serious impact of the future of finance markets across the globe.
- First would the roll back of deregulation steps taken, as many blame it for today’s crisis. The bailouts and government funding for various banks in US, Europe reflect this trend.
- Spending in public infrastructure would increase dramatically to trigger the economy and major players could be from Asia along with other places.
- Financial Engineering may see significant scale back. Tools and schemes that are difficult to understand are tough to predict and hence are loaded with risk. The bull run masked the risk, but this slowdown as exposed it, so that would be seen with a lot of skepticism.
- Direct investment would come back to fore and innovative investment solutions may be shown the door. Investors globally have burnt their fingers with these products and would think twice before engaging in something like that again.
- Lastly, the credit crunch has shifted the financial might eastward towards Asia. Many Asian nations have accumulated loads of foreign exchange and as a result have a banking system that is still robust. Post 2008 Asia would play a vital role in financial resurrection and hence become a dominant player.
A major lesson for the individual investors from 2008 is to focus on the basic investment tools and avoid the complex products. Besides you must focus on the longer term and forget about the short term volatility and this will continue in an uncertain market.
Be Vigilant to Avoid House Foreclosures
February 10, 2009 by Staff
Filed under Personal Finance
Getting a dream house is something special. Most of us would look to take a mortgage to purchase the house. But there are many ways that a house mortgage may lead to house foreclosure. To stop a house foreclosure, you have to make all the necessary checks. However, good and caring the mortgage companies may seem and behave when you first get the loan, they would not be so considerate after you get the loan. They look for your documentation and payments which they are entitled to receive. If there is any delay, they would foreclose your house. You may be surprised that the mortgage companies would actually foreclosure rather than inform you of a missing or delayed documentation. In other words, avoiding a house foreclosure is completely dependent on your vigilance.
Here are some checks that you can use to stop house foreclosures
Prompt Payment
Be prompt and punctual with regards to all your documentation related to the mortgage. Any delay in the payment can lead to problems as the mortgage companies would foreclose your house.
Check Contact Details
Always check the contact details of the mortgage company before sending out any information. This is very important. Given the typical duration of your mortgage, you may find that the mortgage company actually does change the address and fax numbers. If you have the fax number that you used when you first got the mortgage, chances are that it has changed. In that case, you would be sending your documents to a wrong fax number. This would mean that your mortgage company did not receive your documentation on time; again a good reason for them to foreclose. Always take the worst case that the mortgage company has changed its contact details and has not informed you about it. If you adopt this approach, you will always call the company up first and clarify the documentation that they need and the number where you can fax. Even if they have not changed anything, it does you no harm to make the call and be 100% sure of what you do.
Get Acknowledgments
Well, getting all the relevant information is great. But you must not leave at that. If you have taken that much care to send them the right documentation on time, why not do a double check on that. If it is sent by mail, try to send it by a medium that can be tracked by you. If it is an online tracking system, keep following the progress of your packet till it reaches the destination. Once you know that the company has received it, make a quick call and get their acknowledgment. Ask them if they have all that they need and in the format that they need.
Track Payments
While documentations are important, everything in mortgage is about money. Make sure that you track every payment meticulously. Some of the mortgage companies may have specific forms of payment that they accept, so ensure that you stick to those. Also, once you make or authorize the payment check if your bank account reflects it. Once you ascertain that they payment has been made, call the mortgage company and confirm the payment.
These simple steps and dedicated vigilance can help you avoid house foreclosure.
What Your Credit Report Says About You
February 9, 2009 by Staff
Filed under Credit Repair & Debt Relief
Today you can achieve your dreams much earlier with the help of lines of credit, credit cards and loans. You like an item that is on sale, but you just don’t have the cash to buy it. Swipe your credit card and it’s yours. You want to own your own house get a loan and its your. The monthly installments that you pay could be comparable to monthly rent in a similar house. Eventually once you repay the loan the house is your. Be it a car, or any other expensive item, credit lines allow you make those purchases and achieve your dreams. But all this revolves around a primary factor – your credit score and credit history. While it is always great to know that there is someone who can fund your spending, it is important that you repay them on time to get help from them in future. The credit rating or credit score is a very good indication of who you are and what has been you repayment record in the past.
What does a credit report card contain?
- Personally Identifiable Information: This is basically information about you, your personal details that ascertain that this report is actually yours. You could also have you SSN, past and present addresses, driver’s license , date of birth, telephone numbers, employers’ names, spouse details etc.
- Credit History: This section contains all your past and present credit transactions. You would have the name of the creditor, the reference account number, details of the account, the loan amount, repayment information, etc. It will also have credit card details like credit card number, credit limit, minimum payable balance, total unpaid balance, and other information.
- Records of Inquiries: This is the list of all the institutions that had requested your credit report for verification.
Based on your transaction history, you are allocated a credit score. This is reflective of your proven ability to repay loans on time. Most creditors would look at this score before deciding on lending you the money. For them, your credit score is a good measure of the risk that they take in giving you the loan.
Thus it is clear that having a good credit history and a high credit score are two important aspects for you. You can also request your credit report for free and look at what is your status in the loan market. Typically, these are very complex operations and hence may have some errors. Other times, you could also have issues with stolen credit cards and identity thefts leading to some discrepancies in your records. It is always good to get these clarified so that they don’t affect your credit ratings adversely.
Next time you decide to purchase a car, apply for a home loan or even an education loan, you probably figured out a way to make your future payments, but forgot to clean up your past credit record. You would either be denied a loan or granted one on steep terms and conditions. You really don’t want to be caught off guard with that. Hence, be vigilant and protect your credit history with a lot of care.
How to Go About Investing in Real Estate?
Real estate is a great investment to make. Historically, many people have made loads of money in the process of buying and selling houses. In the present economic condition, finding cheap real estate is not that difficult, but looking to turn it around within a short duration to make some quick money, is going to be tough. However, if you have a long term view, there is money to be made in real estate - even today. As you might have heard, the real estate prices have cooled down, meaning that you should be able to get them at rates lower than their actual market value. If you can hold on to this property for sometime, you can make decent returns on your investments. Here are some steps that you need to follow while investing in Real Estate.
Preparation
This is an important step in real estate investment. You must be prepared to play in the market and make money. To start with talk to the experts and professional and understand the basics of the market. Aspects like the financing options, the legal aspects, etc. Financial institutions giving loans for property purchase can be a good source of information and guidance for you.
Planning
Once you have a decent idea of the market and the how it functions, you need to plan how to address your needs. Decide what part of your savings are you willing to invest in the real estate and how are you going to fund the rest? You could look to rent your real estate to get a steady stream of revenue and use it to pay off part of the loan installment, or even use it as an income.
Do a solid risk management analysis and have a contingency planning. This would aid you if something goes amiss. Real estate dealings are pretty complex and things can go wrong, so you must be well prepared for any such problems – again use expert inputs for such planning.
Execution
Find a seller that is actively looking to sell. You can plan is to target properties in foreclosure or the ones where the status or financial situation of the owner has changed recently. Such properties can be purchased at great prices and rather quickly, reducing the risk of a failed deal. However, due to obvious benefits you will find many pursuers in the market for them.
Look to have a team of professionals inspect various aspects of the house to ensure that you do not have to invest significantly on repairs after purchasing it. Heavy repairs would nullify the benefits of a good deal.
Have your financing instruments ready, so that once the modalities of the deal are finalized you can pay the owner immediately not giving him time to vacillate on the decision.
You can apply this approach to any kind of real estate deal. If you are looking for a larger house, you could purchase a duplex house instead. This allows you to stay in your house and rent the other section. This will give you a good source of income too.
Strategies for Personal Budgeting
Personal budgeting is an excellent practice that will familiarize you to your spending trends. The major problem with the financial crisis or cash crunch that many people face today is the fact that they don’t know how and where the money flows. They have a good idea of their income, but little clue about their expenses. Realizing the outflow avenues is most important aspect of controlling your finances and personal budgeting helps you do just that.
Budgeting is not the most exciting thing that you can do on any day, which is why many people don’t bother with it. A little time spent on budgeting can save you a lot of headache on your financial situation. It may not be ‘cool’, but it can give you a cool mind. So stop complaining and start budgeting.
Remember, this is not a budget for a nation or a company. This is your personal budget, with a simple goal – ending your financial distress. So you need not be an expert in budgeting or accounting, neither do you have to get it right the first time and every time. It is a means of improving your financial position, so you can make some mistakes and learn from it too. Every mistake may lead to a slight miscalculation that could lead to overspending. If you realize the mistake and rectify it from next time, you will have a better understanding of budgeting can come up with a much better plan.
You can start budgeting based on as little as two simple principles: Identifying your expenses and Planning for them in advance.
Identifying Your Expenses
Planning Your Expenses
Follow these steps and you should soon be a master of your budget. Once you nailed down your budgeting skills, the results of you\ budget would be much better than the government’s.
How to Maximize Your Credit Card Benefits?
February 1, 2009 by Staff
Filed under Credit Cards, Headline
Credit cards have now become an indispensable mode of payment. It is not uncommon to find special purses and wallets being designed to hold several credit cards. It is the sheer convenience while shopping and the added benefits like bonus points that really make credit card so essential to the modern lifestyle. However, many people facing credit crunch and financial problems would tell you that it was credit cards that pampered them and led them to their present doom. So it is clear that the credit card is a double edged sword. You can get convenience and comfort but if not used properly it can cause you serious financial harm. So how does one make the best use of credit cards?
Immediate Plastic Cash in Times of Need.
One must understand how the credit cards work and what is the benefit that they offer. Credit cards as the name suggests are credit given to you while making those small purchases while you are shopping.
They have a dual goal
- To give the non-cash alternative for your shopping convenience
- To let you make a payment in advance in case of temporary cash shortage.
Your use of credit card must be restricted to these two uses alone. If you don’t want to carry wads of dollar bills in your wallet while shopping, use a credit card. Besides, if you need to buy something urgently, but don’t have enough cash in your bank account to pay for it use the credit card – only if you can afford it in the first place.
Credit Card is Not Free Money
The convenience that credit cards provide is that they de-link our financial capacity from our actual purchasing capacity. If you had allocated just $400 for your monthly shopping, and used cash or a debit card to make those payments, you would not have exceeded the limit. With credit cards, you can spend up to your credit limit and still be left with the $400 in your account. This gives you the false financial safety. The real crunch comes at the time when the credit card bills are mailed home.
Though it is easy to look at credit cards and bank account separately, one must instill this in his mind that it is not true.
Credit Card Interests: The Real Killer
More often than not, it is the money that you spend on credit card purchases, but their interests that lead to your doom. The credit card companies look to tempt you into paying a minimum monthly due to help you keep your credit ratings intact. This is very attractive as you begin to believe that paying just part of the bill is good enough. What you miss here is that the minimum payment only takes care of credit ratings, not the interests. Since you have borrowed credit from the company, you have to pay the interest and these are typically pretty steep. If not checked in time, your interests would grow too fast for you to handle.
Besides, paying just the minimum monthly due does not really keep your credit score intact. It adds to the balance to credit limit ratio. A larger ratio affects your credit ratings adversely. Thus, you end up losing on both the counts.
So if you really want to make the most of your credit cards, settle the complete bill every month. This way you only pay the company whatever you lent from them and still enjoy the convenience for shopping with credit cards.