Recent Trends in Credit Card Spending

Credit cards are one of the most effective and practical solutions to hit the finance markets. Due to the increased convenience the number of credit cards in the market and the number of institutions issuing them has been steadily rising.

Credit cards allow you to make purchases without having to carry money around – which is safer and more comfortable. Besides, the biggest beneficiary of the credit card has been the e-commerce and online transactions. Credit cards allow you to pay for goods and services online. This means that you can actually shop from the comfort of your house.

Reports show that actual retail credit card spending in US between January and October rose by 9% from 2007 to 2008. This is a classical example of the tremendous growth that credit card market is experiencing. Over the last decade the credit card spending has seen an almost exponential growth with 100+ million transactions being executed monthly on a global basis. In 2008 over a $100 billion was spent in the US alone, showing the kind of scale that credit card market is achieving.

It is intuitive that current economic crisis would have an effect on the spending. This is seen in the statistics between 1st November to 23rd November spending trends in 2007 and 2008 in the US. There has been a dip of around 4% between these two years in the US.  Experts believe that the cost conscious customers may have held back on the spending with the Thanksgiving sales nearing. This is a good example of stiff economic conditions making the consumers take precautionary measures in spending. But this would not have been a credit card trend alone. All other forms of spending would have seen a similar dip during this period due to similar reasons.

The holiday season shopping typically sees a surge in the number of transactions as well as the amount of money spent. The Christmas season is one of the peak spending seasons as more and more people purchase gifts, chocolates and food for the celebrations. It is not just the purchasing that is fueling this growth in credit card transactions. There are many more uses of these cards. Some people look to consolidate their outstanding debts into a single credit card.

Thus it is clear that credit card was and continues to remain a growing market with astounding scale. To continue this growth most companies are coming out with some of the best marketing plans and schemes. Even within the realm of credit cards, the idea of reward points has been quite revolutionary. If you own a rewards point card, you accrue points every time you use your card. These points can be exchanged for gifts, discount coupons, additional gas or air miles, etc. Another variation of this is the use of cash back, where instead of reward points you actually get back some hard cash.

Thus the trends in credit cards have been very promising. The sheer convenience that these cards offer is reflected in the increasing spending trends despite slow downs in all other facets. Credit cards are here to stay for a long time.

Master your Finances with Proper Budgeting

Everyone runs into financial troubles. If some unexpected expense comes up, there is nothing much one can do but bear it and face the subsequent financial crunch for some days. Apart from such special cases, you can normally avoid running into financial problems with good budgeting.

Budgeting is basically a tool, a process, and a discipline that allows you to remain the master of your money – rather than the other way around. With budgeting, you have a better understanding of how your money flows, how are you managing your loans and even economize and save for your future and also for any other unexpected expenses.

The first step is to understand the importance of budgeting and actually doing it willingly. A disinterested attempt is surely going to fail. If you really desire to budget your finances and control them, you must understand that it is not a one time thing. It is a continuous, ongoing process. However, it need not be a mundane process where you repeat the same thing over and over again. As explained later you could actually look for variations to make your budgeting more interesting and save more

When you start budgeting you obviously need to look at short term as well as long term. Your short term would typically mean the present or the next month finances while your long term can extend to a 5 -10 year outlook. Thus your short term calculations would look at regular monthly incomes like salaries, and expenditures like house rent, loan repayments, utility bills, insurance, credit card bills,  groceries, etc. The long term ones would include savings, investments in stocks, mutual funds, bonds among others.

Once you identify your income and expenditure heads, it is time to record them. Enlist all your income in one column of the spreadsheet and all your expenses in the other. Sum them to check what your total under each column is. If you have a significant positive in income column, congratulations your short term finances are great and you need to invest them well in the long term savings tools. If your expenses are equal to or more than income, don’t worry. You now know why your situation is so bad and you keep getting into financial crisis frequently. Knowing the cause is 50% of the job done.

To reverse the negative monthly balance, look at your expense column. Focus on cost cutting by targeting all the expenses that you can live without.  Internet connection, television, phone services with many frills attached are a good place to start.  Besides, if you have loan repayments focus on removing them completely, because that amount would directly add to your income once you repay the loan. Work on these plans, set deadlines and try to eliminate the ones that are bloating your expenditure column. Soon you should be seeing an improvement in your financial situation.

Once you have the trend set, maintain it. You cannot use this scheme for a couple of months and expect financial freedom. Keep working on it. Improvise and try to bring down costs under various heads in your expenses. Another variation that you can try is to increase your income. If you have a garage filled with trinkets that you don’t require, try selling them. Use online auction and classifieds to sell your stuff. Try working part time during your after office hours, or even start a home based business. All these may not give you significant incomes, but they surely would increase the earnings and who knows help you get rid of a loan earlier.

Lastly, don’t just look to earn more and spend less. You have a life, you must enjoy it too. Just make sure that if you plan a dinner, an outing or a vacation with your family, you already have budgeted that expense in advance.

Practice these simple tips and you will be a smiling master of your money.

Handling College Tuition Costs for Your Child

College education is very important for any child to lead a good life in future. Giving their children a good college education is something that every parent wishes. College Board recently came out with a couple of reports titled “Trends in College Pricing 2008″ and “Trends in Student Aid 2008″. These reports conclude that the total expenses on college education (tuition + living) have not rising as high as inflation. In some colleges the inflation-adjusted fees have either stayed the same or have actually reduced from 2007 -2008. Besides the numbers of grants and scholarships too have gone up, meaning that the students and their parents in general have had a better 2008 than 2007. Besides this, the tax benefits that the parents get for the education expenses are also significant.

This may be true for this year, but many market analysts feel that this may not be the case in the coming years. The education costs would increase and there is a good chance that the funding may drop in future. This would mean that the parents actually have to start spending more on their student’s education.

This is a cause of concern for all parents as education costs can be staggering. Hence, it is important that you start planning for you child’s education as early as possible. With a well developed and executed could ease the financial strain on you when you child is ready to go to a college.

It is logical that the earlier you start saving the less the strain you will feel in the process and the greater the amount you would have at the time of need. If you could get a product that allows you to save and at the same time give you tax benefits too, it would be excellent. Fortunately, the 529 college savings plan does exactly that. You can start a 529 college saving plan for your child when they are in grade school itself and claim tax deferrals on your contributions.

When it comes to using this plan to fund your child’s education, the 529 plan withdrawals are tax exempted. Besides, these plans are state independent. You can start a 529 plan in a state different from you current residence. If that’s not enough you can use it to fund the education of your child in a totally different state too. Thus, you practically have complete geographic freedom with these plans in terms of investment as well as withdrawals.

You can make significant contributions to these plans giving you better tax benefits. The best part is you can control the manner in which the money gets used. Though you want to save for your child, you really don’t want an immature person to be handling huge sums of money. You can decide the expenses that can be funded by these plans too.

Apart from the 529 plans you also need to have some good plans to handle the financial needs of your child during the college studies. Plan the expenses and strategize your funding options.

Cutting Down on Wedding Costs

Wedding is a special event in everyone’s life, which is why people don’t mind spending a lot to make it memorable. This is so not just in the US, but in all the regions of the world, across geographies, cultures and religions. However, the times now are tough and financially hosting a grand wedding can be a huge strain on you. You have to look at ways to bring down your wedding costs without taking away the preciousness of the moment. There are many aspects of a wedding that can be a source of cost cutting.

Location

The weddings are common in your local church in the town. Though this is a great practice to call the local community, the associated charges in the urban areas can become a problem. Instead look to have the wedding in a small town or a rural area. This has many advantages.

The costs of everything in a small town are less. You can get a professional photographer, the hall, food, etc arranged in a fraction of the cost of your wedding in a big city. Even your wedding make up, haircuts, etc would cost you much less than having it done in your city. Besides, they are as professional and as effective as their urban counterparts. In short, you don’t have to pay for the branding which many urban stores and services have.
Having your wedding in a small town can actually be a cherished memory for more than one reason. The quite and peaceful rustic charm would leave an indelible mark on the minds of all your guests. Even they get a chance to take time out of the busy urban schedule – something that they’ll appreciate.

Cake

The wedding cake is special and is a major expense during that time. You can cut costs here too. You can also choose the not-so-popular types of cakes and save loads of money. Alternatively, you can ask someone to bake the cake for you and have professional decorate it for you. The last and probably the best option is to have the whole cake made by friends, family and close relatives. Having such home-made cakes can make the event really special and memorable than the professionally made, great looking ones.

Wedding Gowns

These are also an important expense that you have to pay close attention to. There are many ways by which you can get a wedding gown. You could use a close relative’s gown. Else you could have a tailor or a friend good at sewing make it for you. You could also look to go for the lesser known brands to get a gown of similar quality but much lower price. You can order it from the low-cost developing nations – given that most branded textiles come from there you may just skip the middle men and save on their cut. Lastly you can look for it online. The classified sites are great places to look for wedding gowns and accessories at low rates.

The real timeless memories are not the material aspects like the cost of the cake, or brand of the company whose dress you wore, or services you used; it is the joint effort of the whole family to make the special day happen and execute it successfully. With your friends and family playing a greater role in organizing your marriage, it would be remembered forever by them. So cut your wedding costs and make your wedding extra special.

Collectors Bothering You – Repair Your Credit

Many of us know the importance of a good credit. That’s the reason why we would look at ensuring that every outstanding debt is paid off immediately. There are many collectors that try to exploit this aspect of the individual and make money out of it. While ignorance is bliss in most other aspects, with regards to collectors, your ignorance is their bliss. There are some facts about the credit records that you must know. If you don’t understand them, you would be paying the collectors your hard earned money for the rest of your life… unnecessarily.

There are some important concepts in credit reporting that you need to become aware of, with these you can look to repair your credit history and avoid the collectors hot in pursuit.

Statutes of Limitation (SOL)

This is the time limit for which your debt can be dragged to the court to elicit a repayment. In other words, it is the time duration during which the collector can force you legally to pay the debt. Beyond the SOL , it cannot be done so. SOL durations vary depending on many conditions like the kind of loan that you applied for, the state in which you applied for, and others. Although after the SOL it is not legally binding on you to repay the debt, it does not mean that you are safe. Not paying up the debt would continue to reflect in your credit report for sometime beyond the SOL.

Reporting Period Limit

This is the time duration for which your debt would be reflected in your credit record. Typically this is longer than SOL. In other words, while you could escape scout- free by not paying the debt in part or in full, the record would not leave you till the Reporting Period Limit expires.

You must understand this difference in the two terms and the corresponding legal and credit information. Once you know that the SOL on your debt has expired, you need not heed to the whims of the collector. The Fair Debt Collection Practices Act allows you to send the bothering collector a Cease Communication Letter, which officially requests them to stop bothering you. As tempting as it might be to send that letter before your SOL expires, it can attract legal proceedings to do that.

Credit Repair

Besides, you must also track whether the collector claiming the debt still owns the debt or has he sold it to someone else. Typically, the collectors must strike out the debts from your record, which they don’t do. This can affect your credit record. Hence a quick repair in this regard can save you loads of financial and mental hassles.

Credit Reporting Period

Any derogatory information on your debt is typically reported in your history for just seven years. In case of a missed payment which leads to a collection, the credit reporting period is actually seven years and 180 days from the day of the first default.

Remember these aspects while analyzing your credit history. Keep a regular check on all the items reported in your credit history and get rid of those annoying calls from the collectors.

Shopping During a Cash Crunch

During tough economic times, meeting ends meet itself can be challenging, leaving very little to save for the future. On top of if you get into the festive season, you could be really stretched for liquidity. Holiday shopping can’t be avoided, neither can your regular purchases. If choosing between the two is not an option, you have to get both at lower prices. Fortunately, this is possible. There are several stores and alternatives by which you can purchase gifts as well as regular items at very economical prices and save lots of money too.

Here are some avenues that you can tap into to save money.

Economy Stores

Look to shop at goodwill stores, Salvation Army and thrift stores. These stores not only have used items, but you can even find loads of brand new stuffs. Besides, even the used items are not always poor in quality and appearance. You can actually get a great deal on a dress or any other item that was hardly used by the owner. The chances are that the original owner decided to sell it off, as he/ she did not find much use for it after purchasing. In that regard, you may even get a brand new item for throw away price. Now that can be a great buy – even a great gift.

With goodwill stores and Salvation Army stores, you actually get dual benefits. While you got the dress in a bargain, major part of the proceedings actually are pumped back into the community to help support the underprivileged people. How proud would you feel if the dress that you wear or the wallet that you use actually gave some unfortunate hope or something to cheer about. It would even make the gift special too. Hence look to exploit such stores and make the most of it.

Store Sales and Discounts

Many of the regular stores would actually have regular sales when you get good discounts on some of their listed items. Over time you would realize that most of the items that the store sells would have a sale at some point or another. By tracking these sales meticulously, you can get the best from such sales at low costs.

Some stores also come out with discount coupons that give you good discounts even on regular days. Take time to go through the flyers and cut out the coupons. Carry them with you when you go shopping and save money.

Always be on the look out for renovation sales, end of season sales, etc. These are times when the store has to get rid of all its stock, so you can get amazing deals. If you are charming enough, the person at the counter might just throw in a small gift for free too.

Retail Sales

Many people put out a garage sale to clean their garage up. Over the years, a garage can become a place to store a lot many things and not just a place to park your car. On these garage sales, you would get some interesting utility items that you can purchase at extremely cheap prices. The best part being that this is a sale by an individual or a family. So you can always negotiate the prices and try to make bulk purchases at even lower rates. Exploit such avenues to the best possible extent.

You can also look at online classifieds for items that you want to buy. Many people put out some very interesting items for sale on these sites and with a bit of luck you could just find what you wanted at much lower price!

Annuities Are a Safer Investment Than Stocks

Many of us work to earn money, but it is commonly said that top earners make their money work for them. If you are interested, you can look at annuities as a good investment tool. Annuities are basically a collection of bonds, stocks, deposits, etc. The advantage is that annuities diversify you investment into unrelated products. With this diversification, you can reduce the risks in case of problems in any single product.

You can actually diversify within stocks itself, by investing in companies in various domains. This is an excellent technique to reduce the risk in stock investment. But there are economic times and events that can affect the stock markets across the board; in such cases, you end up risking a lot.

With annuities, you can minimize the risk as part of your investment would be in bonds and other securities. When the stock market is booming the returns are much better than bonds, but so are the risks. When markets face a bear run, your bonds yield a better return. By distributing your investments, you can ensure that regardless of the stock market performance, your money is growing. Just the rate of growth may change depending on the economic situation.

While there is safety in diversity, there is also a lot of management with diversification. Now you have to worry about your investments individually and keep changing the ratio of investment in each product depending on the situation to maximize your profits and this can be quite a lot of work. If that is your main business, it is fine, if not it could affect your main employment.

Such fund management functions can be delegated to the mutual fund companies. These companies have experts that know about the finance markets and are better educated to deal with the market fluctuations. You can rely on their experience and knowledge to make the most of your investment.

Unless you are some one who likes to get his hands dirty and personally get involved in managing your investments, mutual funds are excellent alternatives for your annuities.

Another advantage of mutual funds is their convenience. Mutual fund units can be bought and sold easily with limited paperwork. With stocks you have to go through a more detailed process as it involved ownership of a company. If you want to buy a stock, you have to go through rigorous paper work and ditto for selling the shares. With mutual funds, you are dealing with units which are a lot easier to trade.

This ease of trading also translates into ease of getting back your investments. If you are in urgent need of money, getting it back from a mutual fund unit is a lot faster than selling a share. This is another reason why you should prefer a mutual fund for your investments.
One last point to remember is stock markets are risky and highly volatile. This means that you need to be on top of the market to actually make money. A part time hobby of investing in stock markets can lead to doom, if not followed properly. However, there are great benefits in stock markets. So if you don’t want to miss the action and avoid the extensive tracking and research, leave it to experts at the mutual fund company.

A mutual fund assures you top class investment management and peace of mind.