Budgeting Tips for Financial Independence

There are times in everyone’s life when they go through a lean patch in their finances. In the present economic situation, this is more or less across the board. With reducing salaries and job loss the situation is only getting worse. So what is it that one can do in such times to have control over the finances. A good practice is to budget your expenses in advance and try to make adjustments in your spending patterns, look for new sources of income and work towards a plan to get financial independence.

Know Your Income and Expenses

It is quite amazing how we tend to lose track of what we spend and how much we earn. Every small expense we make does not look a significant amount and we don’t track it. Make it a point to note down all your expenses. The more granular you go, the more work it is but the better picture you get. Sometimes just looking at your consolidated expenses is good enough to give you hints where to cut costs. Just knowing the items that standout in your expenses table could make you think twice before you purchase it.

Prioritize Your Needs

Not everything you purchase regularly is a necessity. So try to prioritize all the items in your list. Things like groceries, loan installments, house rent, etc. cannot be changed and they have top priority. You utility bills too are important but look at all the frills that you have with the service. If you have services from multiple providers, look at bundles; they may save some of your money. Besides, look at all the features that you have in your bundle – may be you just don’t use all of them. Possibly you are paying $15 for a set of special channels that you hardly watch. Why not trim those excesses.

Don’t Gamble

Betting, lottery, and other speculation based avenues are some of the top places where people tend to spend their extra income. These habits can be quite addicting and you must guard against them. Though the riches are good if you win, the chances of a win are relatively low. During regular times, betting is something that one could afford, but in tough times you want more assured income regardless of the amount. So it is a good time to cut down on your betting habits. That itself can save you some additional money.

Income -Driven Expenses

The credit cards and easy loans have made people look at ways purchase beyond their spending capacity. This outlook has to change. You need to understand your financial limits, eat a bit of your pride and curtail your expenses. All your calculations need to be based on your hard income and not on credit limits. A good budget would help you in this regard.

Following this strict regimen would soon see you paying off your outstanding debts and looking at financial freedom. The best part about budgeting is that once you inculcate that habit you can exploit it for better results even when times improve and you can actually build excellent financial plan for you and your family.

Save Money on Hotels in NYC

New York City is one of the world most famous and popular tourist spots. Be it Times Square, or the Statue of Liberty, the NYC catches the attention of everyone. There are a number of places in New York City that tourists can easily associate with the city, even if they have not been there. Besides the landmarks, NYC is also the hub of many cultural and social activities. All these attract loads of tourists to this beautiful city. Though NYC has many regions around, invariably all tourists prefer to book a hotel in Manhattan.

Given the huge number of tourists, the hotels in Manhattan are not cheap. This is common perception among the tourists who end up paying huge charges to these hotels. However this is not true. You can get great hotels to stay in NYC without having to pay hefty rooms rents.

Here are some simple tips that you can use:

1. Travel Off-Season
   During the peak season and festive seasons, there are many tourists that visit NYC so there is always a shortage of rooms in the Manhattan. This is the time when hotels would charge tourist astounding rates and they pay them due to lack of alternatives; avoid them. NYC is as beautiful during non peak season as during peak season and costs much less too. Try to plan you trip so as to exploit such times.
2. Avoid Hotels in Hot Spots
   Many hotels that are in premium locations charge you for the proximity and the view from their rooms. You can save a lot by avoiding such hotels. NYC is a big city with several great public transport facilities. Getting from one place to another would not take you long especially within Manhattan. If you are ready to look at hotels that are away from the hot spots, you can get huge discounts. You will be surprised at how much a premium spot hotel overcharges for a similar service.
3. Book Early
   This logic works for everything. If you want to plan a vacation, plan it well in advance. You can save a lot in almost everything. You travel charges go down, your hotel rents go down and if you plan your New Year vacation in NYC well before hand, you could actually save a lot and yet enjoy the special rooms.
4. Shop Online
   Online is the best place to find all the information that you need. There are several online reservation and travel sites that can give you excellent rates and discounts. Visit these sites to know about the best deals on offer. These sites would also give you a comparison of various rates from various hotels. This allows you to decide on what to pick. Besides, if you were to book a complete package like air travel, car and hotel you may get a bundling discount too.

By following these simple tips you can save a lot during your next travel to NYC. Then you can wear the “I Love NYC” T-shirt and actually mean it.

Tips on Picking a Good Student Credit Card

Credit cards have become the preferred choice for making payments, paying of loans, transferring or consolidating loans, etc. Adults as well as students can benefit from these cards. The adults generally have the financial security to experiment with a few cards before picking the one that suits them the most. But as a student, you may not have this privilege. You must make all attempts to get the best card compatible with your needs in the first attempt so that you don’t have to worry about it during your studies. After all, a credit card is supposed to make your life simpler not tougher. So what should you look for in a credit card company?

• Interest Rates
  The most important aspect in any credit card is the Annual Percentage Rate (APR). This is the interest that you would have to pay on your purchases on the credit card in annual terms. Obviously a lower interest rate is preferable. Hence hunt for cards with low APR. A higher APR could mean that you are expected to pay higher interests which can be financially taxing for you.
• Charges
  Many cards actually have an annual charge, an amount you have to pay the credit card company for providing you that service. Pick the ones with lower or zero annual charge. Other charges include late payment fees. This is extremely important and is typically very steep with almost all credit card companies. These fees could transform your credit card from a financial convenience to a financial crisis. Late payment not only affects you financially, but also messes up your credit history. An excellent way to avoid them is to avoid late payment. Lastly, your over limit fees. Make sure what the credit limit on your card is, and stick to it. If you are careless, you will exceed your limit and that can attract more fines and interests. These are avoidable expenses so you must avoid them.
• Introductory Offers
  Most credit card companies come up with dream offers. You would have very low APRs or even 0% APR, no annual charge, etc. Don’t pick the card based on the introductory offer alone. Make sure that you look at the duration of the offer and the charges after the offer. A sweeter introductory offer doesn’t always translate to a sweet credit card scheme after the offer period – hence the longer the offer period the better. Typically this offer period lasts for 3-6 months or even a year.
• Grace Period
  This is an important aspect of your credit card. The grace period is the interest free period during which you can repay the money spent with the card without any interest. In short, if you repay in the grace period, your credit card is literally your plastic money. The longer the grace period the longer you have to repay the bill with no additional charge, hence preferable.
• Reward Points
  Many credit card schemes have reward points associated with them. This is probably the only aspect where you don’t have to be cautious while picking the scheme. You just need to maximize your benefits with this clause. Hence, it is also a criterion that you must consider after some of the others mentioned above. Some cards may give you points that you can redeem at your favorite store or purchase something that you like, prefer such cards over others.

Lastly, always read the fine print before signing up for any card. If you can’t understand, then ask for help. But make sure that you are aware of all the terms and conditions before you enroll for a credit card. Also keep track of what you spend and pay off your bills quickly. Most credit card companies support online banking facilities to aid you in these steps.

Gaining Control of Your Personal Finances

The bills that keep pouring in throughout the month can be a real problem for anyone and everyone. We all like to use the utilities but wince at the site of the bill. More than the amount, it is usually the timing that annoys us more. Surprisingly, the bills always crop up when there is a temporary shortage of cash. Hence we tend to procrastinate the payment for a later date. Generally, that means that we don’t pay the bill within the deadline and face fines. The bill next month is bigger and looks more depressing and the cycle continues. Fortunately, there are some steps that you can take to break this vicious circle and get better paying your bills.

1. Know Your Bills
   Many people do not know how many bills they pay every month, let alone how much they pay for each bill. This is one of the primary reasons why, you have trouble paying your bill amount. Start to collect your bills at month end and look at them, to know what is your expected expense for paying them. This knowledge is important as it helps you plan to save that much money every month. Intuitively you would keep aside an amount from your income to pay these bills.
2. Align Your Bill Due Dates
   This can be an excellent follow up step to Knowing Your Bills. Once you have an idea of how much to pay and you make the effort to set aside that amount, you must call the individual companies and ask them to re-align the due dates to a suitable common date. This could be the beginning of the month or the end of the month or any other time based on your financial position. This means that you can execute your plan better and pay all the bills together on a single day. It is not difficult to remember a single important date too.
3. Cut into Balances
   Many of your bills would have a minimum payment and the total balance. What you must understand is that any unpaid balance attracts interest. If you have been paying just the minimum payments for a long time, there is a high probability that a major part of your last month’s payment went towards the accrued interest and your effective balance has not changed by much. Make it a point to pay 20-40% more than the minimum payment on every bill. You should see your balance reducing pretty soon.
4. Budget & Plan Expenditure
   With all the basics of bill payment in place, you must start to track your payments and work to bring down the bill costs. Initially, you only need to start by tracking your payments. After getting a command over your bill payment process look to cut costs. Look at all the additional frills that you may have subscribed during the better days that you hardly use today. Knock them off – why pay for something that you don’t use frequently (especially when you are hard pressed to pay the basic bills itself)

Remember that paying you bills on time not only gives you peace of mind, but also helps reduce your overall payable amount and boosts your credit ratings. The benefits are many, so even if it requires some dedicated effort the final results should you egg you on to follow the above mentioned steps.

Rolling Over a 401k Into An IRA - A How To Guide

You can look to rollover your 401k from your previous employers into Individual Retirement Account and get the associated benefits. You can look to do this on a variety of accounts. Given below are four accounts that you can look at for rolling over your 401k. Note that each option is governed by set of rules that differ from each other to some extent. You must understand the corresponding rule, if you want to use a particular account for roll over.

Traditional Account:

You can rollover your 401k to IRA through the traditional accounts. The advantage of this is that both, traditional accounts and your 401k contributions are provided for from your salary by your employer. The amount contributed for both are tax deductible. This means that the employee is not required to pay any tax on the amount that he/she contributed to the 401k or traditional account. Another alternative is for the persons to contribute to these accounts themselves, rather than having the employer make those deductions. Even such contributions are tax deductible.

This similarity means that all your need to do is to let you custodian know that you would have your 401k rolled over to IRA. You can execute the rollover only one time in a 12 month time frame and you have 60 days to find a new custodian for your account. This rollover gets registered with the revenue department. Hence it is mandatory that you get all the relevant documents from your custodian in this regard. Without the right documentation you could lose out on the tax benefits of this account.

Roth Type Account

Unlike your traditional account or 401k, your Roth account money is taxed like an income. Hence, if you decide to rollover your 401k to a Roth Account, you would have to pay the taxes on the rolled over amount, when you execute it. The benefit for the Roth account is that the qualified distributions from such accounts are not taxed. Note that this rollover is limited by your income, so read about such restrictions too.

Self Directed Rollover

Self directed rollovers are the rollovers that you make on your own from the 401k. You can choose to rollover your 401k to either a traditional or a Roth type account depending on your preference. The corresponding rule would apply to you. In some ways, all the retirement accounts are self directed. You could employ a finance or fund management company to do this for you, in which case it is not truly self directed rollover. Typically these companies would act as your custodians and invest the money in various avenues, the stocks being very common.

Real Estate Investment

Real estate is a very favorable avenue for investments as they tend to give some of the highest returns. Hence this is a good option to rollover your 401k to IRA. The only difference is that now you would be dealing with the real estate market. You must understand the market dynamics and return on investment concepts of this domain before investing here. There are several online resources that can aid you in this regard and all this information is actually available for free. Exploit these resources to make the most of your real estate investment.

A Poor Credit Score Can Be Improved

You probably have had a horrendous financial past that just seems to keep haunting you in all your current credit loan applications. If that’s you, then you will be pleased to know that even a bankruptcy should legally not be reported on your credit report after ten years. If something as grave as bankruptcy can be erased from your account, any bad blot can be wiped clean. But this may not happen automatically. Sometimes because the creditors don’t want that out of your records allowing them to overcharge you and other times due to genuine glitches in the complex solutions that manage the credit history.  Hence you have to carry out due diligence and work on cleaning up your report.

Beware of Credit Repair Advertisements

There are many people with poor credit records who are looking for loans. The advertisements on credit cleanups try to exploit the mental state of mind of such people and lull them into simple ineffective means of cleaning the credit score. Typically, with all the bogus claims, you may end up with software that allows you to file claims. Sometimes you may get useless advice from a self proclaimed professional who takes his fees and leaves you in dark. Or you may also get a bunch of letters and templates that you can use to file your credit repair request.

Credit Bureaus – The Database

The credit bureaus maintain the database for our credit history. They are the ones that record your credit transactions and generate the ratings accordingly. These companies typically sell your credit scores to the requesting companies and make money from it. However, maintaining information from various lenders based on your personal identification details can be a tough task leading to some glitches in the report.  The credit bureaus are companies with the best interests of the market in mind.
You must basically understand how the credit bureaus work and that can help you clean up your credit history of the negative entries.

Here are some simple steps that you can follow:

• Request for a copy of your credit report from the bureau. Avoid using any legal or technical jargon, lest the credit bureau gets an inkling that you want to drag them to court. This could delay your progress. Ask them in simple language and you should have the report.
• Typically you are entitled for one free copy of your report annually. Some credit rating companies may charge you for the same. Nonetheless you should have a credit report for a minimum amount or even free.
• With the credit report you start to find the flaws in your report. Common problems could be lingering debt records that have already been repaid, incorrect debt records due to identity thefts or incorrect entries, debts that have gone past the stipulated seven year period, etc.
• Make a list of these, get proofs to support your claim and send them to the credit bureaus for correction. In most cases the genuine errors will be rectified.
• With a correct credit record, you must work to improve the record and get a higher score. Start small, by making small purchases with credit card and the pay the bills on time. Such small steps can help you build credit ratings which are invaluable in getting your future loans at good rates.

Get your credit history cleaned and then work on improving your rating. Soon you should be one of those that credit lending companies would flock to give loans at affordable rates.