Showing posts with label personal finance. Show all posts
Showing posts with label personal finance. Show all posts

Saturday

Regaining financial independence after divorce

Divorce statistics in the United States are staggering.  In fact, the Centers for Disease Control and Prevention released a report in 2011 that indicated that marriage rates were 6.8 per 1,000 people and divorce rates were a staggering 3.6 per 1,000. This data was based on results from 44 states and the District of Columbia.

When you consider the emotional impact of divorce, it is not any small wonder that finances are not always at the top of the couples list until the very last minute. Once the divorce papers are signed, both men and women may find that they are having trouble regaining financial independence after divorce. Let us explore some of the financial challenges and some possible solutions.
  • Mortgage/Rent - Unless you sold a home and garnered a profit from that sale as a condition of a divorce, chances are that you have debt from a mortgage.  At a minimum, you will have monthly rent payments.  What once was easy to pay in a two income home suddenly becomes an overwhelming challenge.  Before you panic or ignore a potentially devastating financial setback, you should begin exploring your options. If you are paying a mortgage on a home, it may be time to consider some options if you feel that you will be unable to make your mortgage payments.  These options include (a) selling your home or (b) renting one or more rooms out. Either of these methods can help you regain your financial independence after divorce. If neither of these options are feasible, you may have to consider a part time job to make up the shortfall.
  • Credit Cards - Chances are very high that both the spouses in a divorce have taken on part of the credit card debts that were incurred during the marriage.  The best you can do with credit card debt is pay it off as quickly as possible.  If you believe you cannot make more than your minimum monthly payments, you may want to explore debt consolidation loans that will pay off all of your credit cards and have one monthly payment to deal with. Chances are this single monthly payment will be less than the combined minimum payments. This is another positive step towards regaining your financial independence after divorce.
Typically these are the two main debts that are going to create major financial issues for you after a divorce.  It is important that you sit down as quickly as possible and create an action plan that includes a list of your debts and your income. If your income is insufficient to maintain your current debt levels you will have to explore ways to increase your income.  This may mean asking for a raise, looking for a higher paying job or learning to earn money online in your spare time. It may also involve getting a second job.  None of these options is appealing for many, however they will be necessary if you are working towards regaining your financial independence after divorce.

Tuesday

How to Eat Healthy on a Budget Starting Today


We know eating healthy is important for everyone. Not only will it help you focus at work, it can improve your overall health which means less money spent on medical bills. You should think about healthy eating as a three-step process: Planning, Purchasing, Preparing. Following these three "p's" you too can find healthy ways to approach your meals while keeping within your budget.

Planning for Healthy Meals

While some of us are faithful about making a list, if you're going to save money at the grocery store, a list is a necessity. Planning for healthy meals begins before making shopping lists however, it starts with developing a menu. Whether you shop once a month, once a week, or every two weeks, the first step you should take is creating a menu.

Your menu can be created on note cards, online in the cloud, or you can use a meal planner app.  Whatever method you choose, you should include breakfast, lunch and dinner menus initially. If it's something new for you, consider starting off with only a single week until you get into the habit of planning a menu. Don't forget to account for leftovers when creating your menu: Even if you use leftovers to make an omelet, or for lunch, it will reduce your grocery budget.

Once you've created your menus, check your cupboards for staples which can be eliminated from your shopping list. If you are short on spices, or other necessities, consider traveling to your local dollar store to stock up at a cheap price. If there are specific items on sale which you can make a healthy meal from, you may want to tweak your menu a bit.

Purchasing Items for Healthy Meals

From your menus, develop your shopping list. Arrange the list by "type" of foods, for example, list all the meats together, list all dairy products together, etc. This will help you stay focused while shopping and may help curb impulse buying. Remember, the fewer aisles you must visit, the less likely you are to give into impulses. Before heading to the market, make sure you have something to eat: A hungry shopper is more likely to overspend on items not on their list.

Just because you've been going to the same grocery store for years doesn't mean you're getting the best deal. Scour your local advertisements for items on sale, check online for grocery coupons, and identify the store where you can save the most money. Once you're there, verify unit pricing of items — just because it has a name brand on it does not automatically mean it's a better product. Generic or store brand items often cost far less than their name brand counterparts and can save you tons of money.

Bulk purchases can also save you a lot of money. For example, even if your menu only calls for rice one night, you may save more money purchasing a five-pound bag than a one-pound box. This means you must be aware of "use by" dates so use your best judgment.

Preparing Healthy Meals

One of the biggest challenges most of us face is time — you can save time if you prepare meals on a day like Saturday or Sunday when you can spend time cooking the "major" items like roasting a chicken or cooking a roast. This will save you time during the week and help you avoid last-minute takeout orders because you don't feel like cooking. The other option is to make the most of a slow-cooker — you can put your meal into the cooker before you leave for work in the morning and let it cook while you're away.

These are just a few tips that can help you eat healthy on a budget. As you grow more accustomed to planning ahead for meals, chances are high you will spend less. Remember to use extenders like frozen vegetables, store your leftovers properly so they can be reused and take advantage of sales and coupons.

Wednesday

The pros and cons of money market accounts

Like most investment accounts, bank money market deposit accounts have both pros and cons. Before you decide to place your funds into a bank money market deposit account (MMDA) you should make sure that you understand both the pros and cons of doing so.

Pros:
  • Higher Interest Rate - Bank money market deposit accounts generally pay a higher interest rate on the amount that you have in your account.  The more you are able to deposit into your MMDA the more interest you will likely earn.
  • Easy to track - Bank money market deposit accounts in many aspects act like your checking account. The bank sends you a monthly statement of your balance so that you can keep track of how much money you are actually saving in your MMDA.
  • FDIC Insurance - Within the limits set by the Federal Deposit Insurance Corporation, your funds are protected. Currently, FDIC insurance protects you on deposits for up to $250,000.  In January of 2014 this will decrease to $100,000 after the emergency bill has expired.  There are some contingencies that are involved in this insurance so please make sure you understand it before you deposit amounts in excess of $250,000.
Cons:
  • Minimums - Because of the higher interest rates that are available on bank money market deposit accounts, there is typically a minimum deposit amount required. This amount could be as little as $500 or as high as $2,500 depending on the bank.  Before you set up a bank money market deposit account make sure you find out about minimum balances.
  • Limited withdrawals - Bank money market deposit accounts are intended for longer terms savings. Because of this there are typically significant limits on how many withdrawals can be made from these accounts.  These limits may be imposed monthly, quarterly or annually. Before you decide to invest your savings into a bank money market deposit account, be sure you know these limits.
  • Fees - In addition to the limits on withdrawals (in terms of number of times you can withdraw), there may also be fees that are associated with withdrawals.  Before you decide that you want to use a bank money market deposit account for a savings vehicle make sure you understand the fees that you might pay should you need access to your funds.
For those who are interested in receiving a higher interest rate on their savings, a bank money market deposit account could be the answer. Understanding the pros and cons of bank money market deposit accounts will help you make an informed decision.

Friday

How to find unclaimed property in Georgia


When business ventures close, or when people move or become incapacitated, they may lose track of property. In Georgia this means that depending on the type of property that is misplaced, it may fall under the Georgia unclaimed property laws. Property owners and their heirs then will have to find out how to find unclaimed property in Georgia.

What is unclaimed property?

Unclaimed property is considered property that is abandoned by the original owner. This sometimes occurs after someone moves or has passed away without leaving a full list of their assets. In the case of a move, this means that the mailing order left with the post office has expired and the original owner has lost track of the property.
Unclaimed property classifications include paychecks, utility deposits and even contents of safe deposit boxes. When banks, government entities or other companies who hold assets belonging to another person are unable to locate the original owner, there are rules in Georgia that require the assets be turned over to the state. The period of time to locate the owner varies from one year to 15 years depending on the asset.

Identifying unclaimed property

The Georgia Department of Revenue offers an online search for unclaimed property. The database may be searched by last name, or an inquiry can be made by telephone by calling (404) 968-0490. Those who find property registered by last name should know just because a name is the same or similar does not mean the property is theirs to claim. There are often more than one person with the same (or similar) names.

Filing a claim for property

Those searching the unclaimed property database that believe they have identified assets that belong to them will have to request a claim form. This process is done from the database itself versus a direct form download. Simply select the item from the list that you believe you have a rightful claim to and you will be provided with additional information and an option to request a form. The additional information should be able to clearly show if the property belongs to the person making the inquiry by providing the persons last known address as well as the institution that was holding the asset.

Once confirming that the property belongs to you or a family member and requesting the form, you will have to wait for the form to be mailed. Once received it is imperative that you read all of the instructions provided. The form will have to be filled out completely and specific documents will have to be provided to the State of Georgia. Some of the typical documentation that is required is a photo identification, a W9 form and some proof of ownership.

It is important to note that property owners can claim property from the State of Georgia’s unclaimed property division at any time at no fee. Account owners, their heirs or their estates need not pay any fee for reclaiming abandoned property. Unclaimed property in Georgia is held by the state in perpetuity for the benefit of the owner (or heirs).

Tuesday

Difference Between a Checking Account and a Savings Account

Most consumers understand when they open a checking or savings account, they are in effect loaning money to a bank. They further understand a checking account is a transactional account, meaning when they need to pay bills they can write a check, or if they need cash, they can easily obtain it from an ATM. Savings accounts are designed for longer-term needs and in general, the funds are more challenging to access. Typically, a consumer needs to transfer the funds out of a savings account or visit the bank to access the funds since most savings accounts do not offer ATM access.

Why Have Both a Checking and Savings Account?

While nearly everyone has a checking account for the purposes of paying monthly expenses, not everyone has a savings account. One of the primary reasons for having both is to provide a firewall between funds that are easily accessible versus less accessible.

Since most of us write checks out based on the balance in our account, and use "extra" funds for spur-of-the-moment purchases, having to transfer funds from a savings account tends to limit impulse spending.

Savings accounts by nature make it harder to access funds, they make it more likely you will save funds for the future. For some, this may involve saving for more immediate needs, for example using a Christmas Club Savings Account. For longer term savings, or substantial amounts, a Money Market Savings account is generally a better option.

Why Not Keep All Funds in One Account to Earn More Interest?

One aspect of checking and savings accounts that many people do not know is they do not pay the same interest rates. Generally, a savings account pays a higher rate of interest than a checking account. This is because banks understand most people tend to keep funds in savings accounts longer than in checking accounts. If a consumer keeps all their funds in a checking account, they are far less likely to save. Conversely, if they keep them all in a savings accounts, they will have to make regular transfers out to accommodate their monthly expenses. Some savings accounts put limits on the number of transfers which may be processed without a monthly fee, making this unsustainable.

Friday

Indexed annuities and college savings plans

If you are in the midst of planning to start saving for your child’s college education, it may be a good idea to work with a financial planner who understands indexed annuities.  parents are looking for a lower risk investment that offers them gains that are tax free and have the stability of a money market account.

What are indexed annuities?

Simply put, these are insurance policies that provide income. Indexed annuities are typically tied to a stock index like the S&P 500 and the returns are based on the gains in the index. When using this type of an investment vehicle, your principal investment is protected until the time the surrender period ends. Since most indexed annuities are based on 10 year investments, if your child is 8 or younger, these investments work well. Even if your child is older, you may still be able to use an indexed annuity for their college expenses.

How safe are indexed annuities?

An indexed annuity is typically a fairly safe investment since your principal balance is protected throughout the life of the policy. Gains on your investment are credited to your account based on the performance of the S&P 500 and is subject to any caps that are placed on the policy.

How much can I earn in interest payments?

Like most annuities, you can purchase indexed annuities that have a minimum return guaranteed.  Each contract should be reviewed carefully and discussed with your financial advisor so you are aware of how much you can earn. Since each contract is different, there is no single answer that would apply to each contract.

What terms are offered on indexed annuities?

Like most annuities, there are various terms available. Contract terms may be as short as one year with an option to renew at the end of the term. The most common contract length for indexed annuities is six or seven years.

Are indexed annuities right for me?

The best way to determine if an indexed annuity is the right investment vehicle for your needs is to discuss them with your investment advisor. No single program is right for every investor.

Parents are always concerned about the rising cost of college in the United States. Indexed annuities can help you save for college, protect your principal balance and provide good returns.  You can secure your child’s future by ensuring when they are ready for college the money will be there for them to attend.

Monday

Top Tips for cutting Christmas expenses

Each year we carefully plan our Christmas gift list and almost always we find that it has grown from the prior year. We are all interested in saving money, regardless of our personal financial situation. Here are some quick and easy tips for cutting Christmas expenses:

  • Yankee Swaps - This is especially helpful if you are part of a large family. Rather than trying to purchase gifts for each individual brother and sister, consider putting everyone's name on a piece of paper and have each person draw a name. Set a limit on how much you will spend. If your brothers and sisters have children, consider including the older ones (usually late teens is th
    e best time) in this. Talk among yourselves and determine if your parents will be included in the swap or if you'll each buy them separate gifts. If you feel the need to purchase something for the ones you don't "draw" then make a small donation in your family name to a charity that everyone supports.
  • eBay - If you have a limited budget and you want to get high quality merchandise you can find some great bargains on eBay. This is a great resource for cutting Christmas expenses. Make sure before you order any merchandise that you carefully check the shipping and handling costs. These can add up quickly and you may soon find you are paying more for something than if you purchased the same item in a store.
  • Handmade gifts - There are countless items that you can give as handmade gifts, even if you don't have any special crocheting or knitting experience. You can create food baskets, fruit baskets, stockings filled with treats, and the list goes on endlessly. You are limited only by your imagination when you elect to create a gift basket as a means of cutting Christmas expenses.
  • Consignment shops - If you are looking for a unique gift for someone don't overlook consignment shops as a way of cutting Christmas expenses. These treasure troves often have rare items such as tea cups, fine china, collectibles of all sorts for very reasonable prices. This is especially helpful for those people on your list who are hard to buy for.
  • Dollar stores - While most people laugh at the idea of shopping at dollar stores, they can be a great source for fun gifts. For example, you can purchase coffee mugs, statutes, hard candy and a myriad of other items that can be used for small gifts for people who you need to buy for. Consider purchasing a coffee mug and filling it with hard candy, a couple of lottery tickets and wrap it in colorful paper and it is the ideal gift for a co-worker.
  • Potlucks - Holiday celebrations can accrue significant costs if you are the host. Consider having a potluck supper (or weekend luncheon) at your home to celebrate Christmas with your friends.  Potluck meals are fun, you can pick a theme and you can do a Yankee Swap to help cut Christmas expenses.
There are hundreds of small tips for cutting Christmas expenses. These are just a few of them and they will help you enjoy the opportunity to give worthwhile gifts without breaking the bank. The holidays are a time of giving but you certainly do not want to find yourself going into the new year with extra debt and worrying about how to pay for your Christmas expenses.

What are subprime mortgages?

Over the last few years, there has been a great deal of press coverage regarding subprime mortgages. While in many cases, the accusations about these mortgages is true, there is a lot more to a subprime mortgage than most media outlets have covered. The majority of Americans are not even certain of what subprime mortgages are, they assume they were given primarily to deadbeats by crooked lenders. While there is some particle of truth to this, this fails to tell the whole story that effectively answers the question - what are subprime mortgages.

The simple explanation

The most simplistic explanation of a subprime mortgage is a mortgage loan that is made to a borrower who has a credit score of below 600 and has other risk factors that make them a more risky borrower than those with better credit scores. However, subprime mortgages were made by commercial banks of all sizes, private lenders and by mortgage companies.  For several years, subprime mortgages were an attractive option for those who were self-employed or faced other financial challenges.

Remembering the good days

Between 2004 and 2006, mortgage rates were at a lower level than they had been for some time. During this period of time, banks who had stringent lending guidelines loosened their guidelines to consumers who had less than perfect credit. Hence the birth of the subprime mortgage. These mortgages were made at higher interest rates to compensate for the increased risk that the loan presented to the bank.

Credit worthiness was not ignored

It is important to understand that the creditworthiness of borrowers was not always ignored by banks who were involved in subprime mortgages. After all, banks are not in the business of owning real estate, they are in the business of loaning money. However, many borrowers fell into “gray” areas meaning they were recovering from a bad divorce, they were returning to the work force after a long period of unemployment or in some cases, they were self-employed. Typically when these loans were sent to underwriting, these “special circumstances” were taken into consideration.

The role of government

Legislative action between 1977 and 1986 had a significant impact on the availability of subprime mortgages. First, the Community Reinvestment Act of 1977 provided incentives to lenders to loan money to lower-income borrowers. In 1980, the Deregulation and Monetary Control act allowed lenders to make loans at higher interest (not always in the best interest

Thursday

7 tips for saving money

Today's economy is forcing all of us to consider ways to save money.  It is often a struggle to find ways that are easy to implement that allow us to save a few dollars here and there. We all understand how important savings is, but are not always motivated to save. Set up a target amount of money that you wish to save. It could be for a vacation, to further your education or simply to save for the future.  Here are seven tips to help you get started saving money.

  1. Cents off coupons - many of us already use cents off coupons. If you are not already using them, there is no better way to save money than to start today. Most Sunday newspapers full of them but there are hundreds of sources of cents off coupons online. Once you start using coupons, check the bottom of your receipt when you get home and place your savings into a piggy bank.
  2. Conserve energy - make your home energy efficient to save money. Inexpensive investments such as weather stripping, timers on your lights and heating system can all help you save money at home. Some of your conservation efforts may require you to make initial investments up front, but over time you will recoup those expenses and begin saving money on your energy costs.
  3. Price options - it is time for you to check out unit pricing at your favorite store.  You may be surprised at how much more you are spending on items that you purchase all of the time.  Buying in bulk, using store brand or generic products when possible will all help keep the cost of your grocery shopping lower. Buying  items in bulk can help you save more money than you might think.
  4. Monitor spending habits - before you stop for work to grab a cup of coffee from your local coffee shop, stop and think about how much it is going to cost you. Consider this: if you stop each weekday morning to purchase a cup of coffee that costs you $2.00, over the course of one year you will have spent $520 on single cups of coffee!
  5. Create a budget - many people have made the decision to freelance due to the tighter job market. As a result of this they often get irregular payments and the idea of a budget makes them roll their eyes. Even if you are getting regular payments, budgeting should be a priority. A budget can help you stay focused and help you understand where your money is going. Budgets are great tools to help you save money.
  6. Consider refinancing - it may be time for you to consider refinancing your mortgage.  If the current rate on your mortgage is more than one percent over current rates this might be the right time for you to refinance. Take all closing costs and fees into consideration before making a final decision. An interest rate deduction can result in significant savings.
  7. Swapping and exchanging - there is a growing group of people who do not have time to hold yard sales. However, they still have items in their home that they are still interested in getting rid of.  If you join your local freecycle list you may be surprised at the number of things that people are giving away. The list is broad and includes items like children's clothing, computers, bicycles, dog gates, books and other household items. These items will only cost you the time to pick them up and the gasoline to get back and forth.
Set your savings goals and take the steps needed to begin implementing them. These seven tips for saving money can help put you on the right track to start a solid savings plan regardless of the goals you have set for yourself and your family. Many of these tips are painless and easy to put into motion.

Sub-prime mortgages viewed philosophically

In spite of all of the criticism about sub-prime mortgages, one must be philosophical when they look at the bigger picture. There is no doubt that hundreds and thousands of homeowners were negatively impacted by sub-prime mortgages, but the fact remains that many people had a positive experience with this mortgage structure.

More people were able to afford homes

Fortunately due to lending restrictions being loosened, more people were able to afford to purchase a home. Ironically enough, this led to higher employment since more homes were being built, appraisers were busy and real estate agents were busy showing properties. Although subsequently many of these jobs are now on hold, some are still employed in the same field. Not every person who accepted a sub-prime loan lost their homes either.

Home values cannot go down forever

Home values are likely to recover over time, but in the meantime, it does not hurt to remember that housing is currently more affordable. This bonus of the sub-prime mortgage mess means that more people will be able to buy a home.  Banks of course have severely tightened their lending criteria but this is not likely to last forever. After all, once the dust settles on this mess, more people will have been out of work for 12 months or more making it nearly impossible for the vast majority of people to have perfect credit.

Because homeowners are likely to see the value in their homes increase over time (even if not to the same levels they were at previously) they will be building equity. Home equity by and large has been proven to be one of the best forms of creating wealth for the majority of the middle class.  As home values recover, wealth disparity may begin to shrink again.

Property taxes are lower

Lower property taxes is one of those good news/bad news occurrences. For property owners, it means less money out of pocket. For municipalities it means lower revenues which means either tightening their belts (meaning cutting workers or services) or it means increasing fees another way. Either way, ultimately this may not have a long-lasting positive impact on the homeowner.

Like it or not, this was a wake-up call

Many of our parents and grandparents lived their entire lives without credit cards and without using the equity in their homes unless it was a dire emergency. Unfortunately, many of us were not as smart as they were and we borrowed against our homes, ran up high credit card bills and when all else failed, we refinanced. For many, this resulted in our homes being mortgaged to the highest possible levels. Ironically enough, most of the sub-prime mortgage holders may not be in this predicament since the loan to value ratios may be different.

There is much to be learned from the sub-prime mortgage crisis: Consumers, government agencies and lenders will hopefully learn much from the missteps of this era. However, out of everything bad, some good does emerge.  If no other lesson was learned from the mortgage crisis let it be that we learn to live within our means and keep our expectations in line with our earning capacity.

Tuesday

Tips for avoiding credit repair scams


Most of us have seen the claims: We can help you repair your credit. What most of these advertisements are out for, is to get your money. In fact, consumers who have credit problems may very likely find themselves shelling out hundreds and even thousands of dollars to unscrupulous frauds who claim to be able to help.  These tips for avoiding credit repair scams can help you stay out of trouble and not spend your hard earned dollars for nothing.

Know your consumer rights

Debtors should be aware of their consumer rights granted under the Consumer Protection laws. Many consumers are not aware that they may request their credit reports free of charge one time annually.  In fact, the Federal Trade Commission (FTC) worked with the three major credit bureaus to allow consumers this right. Do not fall for advertisements that offer free credit reports with the subscription of other services.

Know the statutes of limitations

Collection agencies call consumers on debt that they have often forgotten about. Some of these agencies use “strong-arm” tactics to get debtors to pay something on old debts. The primary reason for this is that the collection agent is only paid if the consumer makes payments, the secondary reason is that a payment restarts the statute of limitations on the debt. Make sure you know the debt statute of limitations in your state.

Understand your rights to dispute

Consumers have the right to dispute any information that they believe is erroneous on their credit reports. This does not have to be done by an attorney or a “credit repair company”, it may be done by the consumer at no charge. Credit reporting agencies are required by law to respond to all disputes.

Know the signs of a scam

The following are some hints that you may be facing a credit repair scam:
  • Upfront payments - the company is asking the consumer to pay an upfront fee before they do any work. The FTC states that these agencies are to be reported as there are prohibitions on fees.
  • Misinformation - the company does not advise you of your rights to remove certain items on your own or tells you to not contact the credit reporting agency. Consumers are always able to contact credit agencies for information regarding their own credit reports.
  • Suggests fraud - any company that suggests the debtor dispute valid debt or apply for a new social security number is likely not legitimate. Any agency that suggests that a consumer dispute legitimate debts should be reported to the Better Business Bureau or to the Federal Trade Commission (FTC).
When a consumer receives a solicitation for a credit repair service, they should be provided with a copy of the Consumer Credit File Rights under State and Federal Law. This document explains the consumers rights and helps protect them against fraud by credit repair scams. Consumers who have any questions about information can contact the FTC for additional information.

According to the Federal Trade Commission, consumers have a right to receive a contract that clearly spells out what the credit repair company intends to do on their behalf. It is important to note that under specific laws, credit repair companies cannot request payment prior to performing the services promised to consumers. These laws provide that credit repair agencies specify in the contract exactly what they intend to do and the fee for each service.

Credit Payoff and Repair Scam

As many of you know, I spend a fair amount of time on LinkedIn groups largely because there are so many diverse people on the network. However, one of the biggest problems with LinkedIn is anyone can post anything they want with little (or no) danger of getting banned. One of the posts I've seen is a group of people promoting a "Government Grants for getting out of debt". I'm here to tell you, it is NEVER going to happen! 

Here's the "overall" gist of their message "When looking to pay off credit card debt, one of the most overlooked options many people have are government grants. Many people do not look into these grants because they simply do not know about them. However, the government sets aside billions each year just for this purpose, to give them away. If you are one of the millions of people who are suffering from credit card debt, you definitely want".

Well, there's a reason that most people don't look into it and don't know about them. It's because THEY DO NOT EXIST. I've written about these government grant scams before, but unfortunately, I see these guys are back in full force. What particularly amuses me about this one is the folks who are claiming they are legit.

Like the LAWYER WHO LIES TO PEOPLE on a regular basis and rips them off for simple things they need for their website like Terms of Service and Privacy Policies. I've written about this con artist in the past too, this guy charges you over $2,000 dollars to "LICENSE" a TOS and PP. Seriously? Get a life pal!

Here are some informational articles about these Government Grant Scams that can help keep you out of trouble!

Free money from stimulus? Are you kidding? Web sites offering grant money from the government are bogus

Advertisements Promising Debt Relief May Be Offering Bankruptcy Directly from the Federal Trade Commission 

The bottom line is there is NO easy way out of debt. You'll get out the same way you got in. One payment at a time.

Saving pennies paves the way to financial freedom

You might be surprised at how quickly your pennies add up.  In fact, they are a great way to pave the way to financial freedom.  You might be thinking to yourself "how can pennies help me pave the way to financial freedom?" they are worth so little. You are correct - the value of a penny hasn't changed, they are still worth only one cent (unless you happen upon a collectible one).  Although pennies are worth only one cent, even Bank of America has instilled in us a the belief that our pennies can help add significantly to our savings using the "Keep the Change" program.  If you don't bank with them, here are some ways you can start your own Keep the Change program at home.

Getting Started
  1. Find a tall jar or bottle - Locate a tall jar (a mayonnaise jar works well) and put it on a shelf in your home.  Label it as "nest egg" or something equally as catchy to encourage your family to use it. For an added challenge, a five-gallon water bottle is also fun to use as it adds a bit of a challenge to your penny savings.
  2. Returning from the store - Encourage all of your family members to empty out pants pockets, coat pockets and purses of all pennies when they return home from the store.  If you can convince them to add all of their change, it would be even better as your pennies will add up even faster.
  3. Cents off coupons - If you regularly use cents off coupons at the store, take your coupon savings and add them to your penny jar.  This will help your penny savings grow even faster, paving your way to financial freedom.  Coupon savings can vary greatly and can result in significant savings over a year.
  4. Refundable bottles -  Nearly every home collects some refundable bottles every month. Instead of throwing them in the trash or letting the neighborhood children have them, redeem them and add the proceeds to your penny collection.
Next Steps

Once a month dump out all of your pennies in the kitchen and get your family involved in rolling and counting them.  Once this is done take your pennies to the bank and deposit them in a special savings account.  Make a commitment to not utilize this savings plan for anything since it will help pave your way to financial freedom.

Once a year, take stock of how much you saved in total through the year and find ways to save even more.  You can make it a challenge with family members by encouraging them to cut back on something and add the pennies they save to your financial freedom account.  If your savings has climbed to an amount of greater than $1,000 you should consider moving it to a money market account to add additional interest to your account.

Savings pennies can pave the way to financial freedom if you make the commitment to save them instead of digging them out of the bottom of your pockets or purses to pay for purchases. Saving your pennies is a good stop to pave the way to financial freedom.  Everyone has to start saving someplace, and pennies are often a painless way to do this.

Image credit: By Yinan Chen (www.goodfreephotos.com (gallery, image)) [see page for license], via Wikimedia Commons (Public Domain)

What to watch out for with internet freebies

It is very easy to get lured in with the idea of getting something for nothing. Most people are intrigued enough to at least check out the offer. The problem is that internet offers promoting something "free" often have hidden strings attached. Fortunately, there are some warning signs you can watch out for that can help you avoid some of the most common problems with internet freebies.

Read the fine print

Some of the most insidious internet freebies have catches attached to them that you might not have considered. In some cases, you will be offered free merchandise in return for taking part in other "offers" which often means a subscription, applying for (and getting approved) for a credit card or providing a significant amount of personal information. Before you fill out any forms offering you something free, make sure you read all the fine print. Whenever possible, avoid sharing personal information such as health data or email address or you may quickly discover you will get pounds of junk mail in both electronic and hard-copy form.

Something for free if you purchase

Some freebie sites offer you a free subscription for a limited period of time with the understanding you are going to subscribe for a longer period of time. During 2012, one of the most common schemes of this type was sites offering "free" credit reports or credit scores if you ordered a year-long (or more) subscription to credit monitoring services. Keep in mind, all consumers are entitled to a free credit report annually through the Federal Trade Commission offer.

Fast moving freebies

One of the most recent types of "freebie" offers have been showing up on Facebook and on Pinterest. These offers are shared by one person, passed onto the next person and before you can blink, thousands of people are sharing the offer. The problem is these offers are almost always bogus and may contain malware. Before you agree to check out any freebie, make sure you have a good virus protection software on your computer. Use caution and make sure you do your research, especially if the free offer is from a well-known company.

Researching free offers is crucial to make sure you do not wind up the victim of identity theft, credit card theft or wind up buried in spam emails. There are several legitimate free offers that can be easily verified. In addition, if you are determined to find something free, sites like WalMart often have pages of free offers for consumers. The old saying "there is no such thing as a free lunch" should be kept in mind when you are searching for internet freebies. You may find yourself on unwelcome email or snail mail lists.

Monday

Where does state tax revenue go?

All states collect some form (or multiple forms) of state taxes. Tax revenue is a vital source of revenue that allows states to meet their obligations without borrowing money for vital services. What most taxpayers do not always understand is where does state revenue go once it is collected. Many may be surprised to find out that the bulk of state tax dollars go to fund education from kindergarten through college

Educational expenses

On average, states expend nearly 40% of tax revenue on education according to the Center on Budget and Policy Priorities. 26% goes to fund schools from kindergarten through high school by providing grants to school districts (versus paying direct salaries, etc.) while the remaining 14% goes for funding higher education, typically by subsidizing education expenses for residents of the state in state colleges.

Many people believe that the federal government pays more money in public school costs than the states spend. The reality is that the federal government pays only about 10% of the overall costs of running schools. It is important to remember that along with teacher salaries, building maintenance, heating costs and long-term pension and benefits for retirees also are a portion of the state budget.

Low income aid

In addition to funding schools throughout the state, each state provides funding for aid to people who have low or no income. This may include programs such as aid to families with dependent children (AFDC) or other forms of low income assistance (depending on the program name). These are primarily in the category of monthly cash disbursements to allow families to make ends meet or for families with one parent who is not working.

Other low income aid is provided for health care. The health care programs that are offered by states are typically combined with some form of federal government funding as well. Programs include insurance for children (on aid programs) as well as Medicaid for those who are collecting disability or who are in low income homes. These medical programs help families who may otherwise be forced to go without medical insurance.

Prisons and probation programs

Each state also funds their own corrections programs. These may include corrections officers, parole officers and may also include prevention program, especially for juveniles. In spite of the climbing cost of maintaining high prison populations, on average states spend only about 5% of their budgets on these types of programs. These funds also are used to fund the prisons themselves as these facilities provide shelter and require maintenance including heat, electricity and other basics.

Transportation and roadways

States who have transit systems use state tax dollars to fund maintenance, salaries and repairs. Depending on the type of transit system the tax revenue may be supplementing fares charged to users. While states may receive federal grants to help with major road and bridge repair, most states fund routine repairs including snow removal on highways, highway maintenance and other routine repairs on bridges and overpasses with state taxes.

While many people believe that the federal government pays a large portion of state expenditures on major projects, the facts are that states are required to fund many of these projects on their own. Portions of state budgets also go to fund pensions and healthcare for retirees including state workers, state police officers and retired state officials. Individual police forces in some states receive grants from the state to help supplement salaries and pay for vehicles if the towns are unable to fund them from their property tax receipts.

How to prevent foreclosure on your mortgage

During 2012, more than 1.5 million homeowners suffered through foreclosure per RealtyTrac. While there is little doubt, the first and foremost way to avoid foreclosure is to pay your mortgage on time.
However, there are extenuating circumstances including job loss, divorce and health issues that make this option next to impossible for thousands of homeowners. Fortunately, a foreclosure notice may not always mean a homeowner will suffer through a black mark on their credit report. There are options that should be explored by anyone facing potential foreclosure.

Contacting the lender

One of the most common problems faced by homeowners is a fear of contacting their lender when they get into trouble. One of the worst things to do is ignore a foreclosure notice. Contact the lender immediately and find out if it is possible to set up an agreement with them to pay back the amount that is in arrears. Fortunately, HUD has several programs available that make it easier than ever for lenders to work with borrowers.

Consider contacting an attorney

One option a struggling homeowner may wish to consider is a bankruptcy filing. While the new bankruptcy laws are very stringent, requiring a credit counseling service and a means test, this may be a viable option. When a consumer files bankruptcy and with the approval of the court, there are some assets that are "safe" from liquidation. In nearly all cases, a primary residence is one of these assets. Bankruptcy filings will stop any foreclosure actions placed by a lender allowing the borrower to work with the bank to repay the arrears on their mortgage over a longer period of time. While most people do not want the stigma associated with bankruptcy, in some cases, this may be a viable option.

Consider a short sale or deed in lieu

While most homeowners do not want to consider losing their home completely, this is not always the best option. For a homeowner who feels they are going to be unable to meet their mortgage obligations going forward, a short sale or deed in lieu of foreclosure may be viable options. These options work as follows:
  • Deed in lieu: Some mortgage notes are written in a manner allowing the homeowner to turn the deed of the property back to the lender instead of going through the foreclosure process. Before agreeing to this process, a homeowner should speak with the lender and confirm they will not be held liable for any deficiency. This is especially important if the amount of the existing loan is higher than the value of the home. Some lenders will not accept a deed in lieu unless the home is listed for sale.
  • Short sale: The short sale procedure is more complex than a deed in lieu of foreclosure. Before a homeowner elects for this method, it is imperative they have a discussion with their lender. A short sale occurs when a home is sold to another person for less than the amount of the outstanding mortgage. These sales are impossible to complete without the lender agreeing to the terms and conditions. In addition, it is crucial the current homeowner ask the lender about any deficiency, especially if they live in a state where deficiency judgments are allowed.
When a homeowner is facing foreclosure it is likely because they are facing some unusual financial problems. There are options to foreclosure that must be investigated carefully before deciding which is most feasible for your individual circumstances. When a homeowner wishes to keep their home, bankruptcy, forbearance agreements or loan modification are options. When a homeowner feels they are unable to maintain their home, a deed in lieu of foreclosure or a short sale may be the best option.

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Wednesday

Steps to saving more money at the store

As the recession forces all of us to tighten our belts, there are some steps that we can take to save more money at the store. While these steps will not save you hundreds of dollars a week, they will certainly save you hundreds of dollars a year.  Each step you implement will help you save more money at the store.
  • Step 1: Think about bulk purchases - Whenever possible, purchase items in bulk.  In general, bulk purchases will lower your cost per "piece" and can result in significant cost savings. Make sure if you are purchasing in bulk that you carefully check expiration dates - you do not want to have to throw items away when you are trying to save money.
  • Step 2: Look into store specials - Look for in-store specials on items you would normally purchase. You can often find vegetables and meats that have special "managers special" flags on them. These are typically items that are close to expiration date so be certain that you are going to use the items right away for the best possible value.
  • Step 3: Find cents off Coupons - Even if you do not get a local Sunday paper that contains cents off coupons, you can easily locate online cents off coupons.  Websites like Coupon Surfer allow you to browse by category or brand, and can help you save money off items you would purchase anyway.
  • Step 4: Apply for and use your store "Rewards" cards - Most stores today offer some type of a rewards program. These programs not only can help you save money at the store, but many of them also offer additional benefits.  If you do not have a rewards card, do not hesitate to contact a sales associate and ask if they have one that they allow for use by customers.
  • Step 5: Take advantage of rain checks - If you see an item on sale that you would normally purchase and it is out of stock, ask the store for a rain-check. Combining a rain check with cents off coupons and other rewards programs can help you save more money at the store.
These five steps are merely a few of the possible options for saving money at the grocery store. Every consumer is looking for the most cost effective ways to feed their family.  Using one or more of these steps each time you go to the store will help you save more money.  Shoppers should take advantage of every opportunity to save money not only during tough economic times but every day.

Tax deductibility of IRA contributions


As tax time approaches, many people are wondering what to do about their Individual Retirement Accounts. Today, IRAs have become even more important with the decline in safety of Social Security and the lack of traditional pension plans. Because most investors today do not know what the future will hold for either of these plans, IRAs become even more important.

Regardless of other changes, IRA plans will remain important for tax planning purposes. The good news is that some or all contributions may be deductible depending upon what plans are offered by employers. Taking control of retirement savings will mean that nearly everyone will have to consider how to use an IRA for the best return.

IRA contribution growth

A small contribution of $1,200 annually with a six percent return over 20 years would allow an accumulation of nearly $50,000, a $2,000 contribution with a six percent return would allow you to save nearly $78,000. Maximizing IRA contributions could result in retirement savings of almost $200,000 at the same rate of return.

IRA savings should be started as early as possible.  The sooner an IRA is opened, the more significant your savings becomes. There are other ways to increase your retirement savings such as:

Tax deferred savings
IRAs earnings are usually reinvested and because of that they generate additional earnings. At retirement, there may be taxes due, however opting for a ROTH IRA allows for the withdrawal funds tax-free depending on the requirements of the plan that is selected.

Contributions to a 401K plan in conjunction with contributions to an IRA can also boost retirement savings and minimize taxes due. 401K's can be use in many ways for those who face a change in their financial status. They often allow more leverage than simply having an IRA.
Investors who have multiple retirement accounts due to changing employers should consider consolidating them into one account. This helps investors avoid paying multiple annual fees, allows more control and increases the diversity of an investment portfolio.

Non-deductible contributions
Non-deductible contributions made to an IRA can also be used to enhance savings. Depending on the plan, these savings may also grow tax deferred.  Tax deferred savings allow those who are in higher income brackets to save now and withdraw the funds later when their tax burden is usually lower.
Those who are self employed, will want to look into the various types of plans that are available. Many plans offer 'catch-up' options and vehicles like SEP plans may allow for contributions up to 24 percent of compensation (up to a preset limit which is $46,000 for 2011).  It is also important to note that those who are self-employed can also open a 401(k) plan if they desire to do so.

Unless investors have a dire financial need, they should avoid withdrawing money from their IRA account(s) before they actually retire. These withdrawals can be very costly and may also result in penalties and additional taxes. In addition, these withdrawals often put a retirement nest egg at risk in the event that the investor is unable to replace the money they withdrew.

The easiest way to contribute to an IRA account is through automatic deposits. This provides not only convenience for investors, but also forces them to save for retirement without depending on investing monies after they have been paid.  Investors should consider working with a tax adviser to understand what options are available to them for retirement planning and understand the tax deductible nature of their IRA contributions.

Ten home insurance myths

There are many myths that surround homeowners insurance. Here are the 10 most common:
  1. If my home is flooded my homeowners policy will cover it. - Homeowners who are concerned about flood damage should consider purchasing a separate flood insurance policy. Not all homeowners policies come with built in flood insurance. Check your policy to see if it is covered.
  2. If someone in my family is hurt on my property, insurance will pay. - Standard homeowners policies do not include residents or family members. Liability insurance is included to protect you from being sued if someone outside your family is hurt on your property.  If you feel you need additional insurance for family members, contact your insurance agent to find out what type of policy is required.
  3. If my home is burglarized the contents will be replaced. - Without an inventory of contents including photographs and details of the purchase, your contents may not be reimbursed.  If you have high-value items in your home, you should file a report of contents and carry a separate rider for valuables. Your insurance agent can help you determine if this is necessary.
  4. If I file a claim, my premiums will increase. - Insurance companies will review your claims history, but this is only one factor in determining insurance rates. If you are filing claims for items that are only slightly more than your deductible, it may increase your rates.  Consider not filing a claim for items that are close to your deductible amount.
  5. I will be reimbursed the full value of  items that are stolen if my house is broken into. - Many insurance companies enforce maximum claim amounts in the event that jewelry, fine art or other valuables that may be stolen during a robbery. Carefully review your policy to see what the depreciation and maximum claim amounts are on your policy.
  6. If my house is damaged, even if I did not maintain it properly, my insurance company will pay for the damages. - It is your responsibility to ensure that your home is not damaged due to a lack of maintenance. Most insurance companies will not cover claims that can be proven to be caused by a lack of proper home maintenance.
  7. Unless I live in an area where it is designated a flood area I cannot get flood insurance. - If you own a home in a flood zone, your mortgage company will require you to have flood insurance. You can purchase flood insurance regardless of where you live.
  8. Premiums are high and I will have to reduce my coverage to save money. - You do not need to skimp on coverage to save money on homeowners insurance. Most insurance companies offer "package discounts" that allow you to insure your automobiles, vacation homes or life insurance. Having alarm systems installed in your home can also lower your premiums. Check with your homeowners insurance agent to find out what other discounts are available to you.
  9. I can insure my home for what its worth regardless of what it would cost to replace it. - Insurance coverage on your home should be based on "replacement value" (e.g., what it would cost to replace your home in the event of a total loss.) Your insurance agent or an appraiser can help you determine the amount of homeowners insurance coverage you should have.
  10. I do not have a mortgage so I do not need insurance. - If you purchase a home for cash, you may not be required to have insurance. When a lender does not require you to have insurance (or you have no lender), it still makes sense to have a homeowners insurance policy.  It is not sensible to risk the loss of your home by not having insurance.
In spite of all of the myths surrounding homeowners insurance, you should always check with your insurance agent before making a decision on what coverage is best for you.

How to pay off a mortgage early

For most people, a mortgage is the largest debt they must pay monthly, In addition, mortgages are usually the most long-term debt a consumer has.  While there are tax benefits to having a home mortgage, some prefer to be able to pay these loans off in a shorter period of time than the standard 30-year mortgage. While it may seem overwhelming, there are some methods that may be used to pay a mortgage faster.

Consider refinancing

During 2012 and continuing in 2013, average mortgage interest rates are very low. In many cases, mortgage rates are below four percent. For a homeowner who has 25 or more years left to pay on a 30 year mortgage, refinancing their loan and taking a 15 year mortgage can mean a considerable savings in time and interest payments. Before considering refinancing a home, it is important to evaluate fees, if the new mortgage will result in higher payments and what the closing costs of the loan will be.

Extra payments can help

For a homeowner with a 30 year mortgage, it may be possible to make additional payments on their mortgage on a monthly basis. For example, a homeowner who has a monthly mortgage payment of $1,000 each month may elect to make a payment of $250 each week for the life of the loan. In this case, 52 weekly payments would total $13,000 versus $12,000 if monthly payments were made. This may reduce mortgage length by as many as six years.

Principal reduction

Another easy method for reducing the term of a mortgage is through principal reduction. Extra payments monthly will reduce the term of a loan but, one time lump-sum payments accomplish the same thing. Homeowners who win the lottery, get an inheritance or get an annual bonus may consider sending a lump-sum payment to their lender. Many lenders will require the borrower to specify this amount is to be used to reduce the principal amount of the loan. In this case, provided the borrower continues to make the same monthly payment after a principal reduction, the loan will be paid off faster than if no lump sum payment was made.

Most people understand that an investment in a home is a long-term obligation. However, there are several methods of reducing the overall term of the loan. Before a homeowner makes any additional payments or refinances their loan to reduce the loan term, it is important to review loan documents and make sure there is no prepayment penalty.