To find out just what kind of financial shape you're in, answer the questions in the following Financial Fitness Checklist.1 If you're married, print this out and take it home so that you and your spouse can work together to answer the questions. Make a note of how many questions you answer yes to.
1. Are you using more and more of your income to pay your debts?
2. Do you make only the minimum payments due on your loans and credit cards each month?
3. Are you near, at, or over the credit limit on your credit cards?
4. Are you paying your bills with money intended for other things?
5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
6. Do you often pay your bills late?
7. Are you dipping into your savings to pay current bills?
8. Do you put off visits to the doctor or dentist because you can't afford them?
9. Has a collection agency called recently about overdue bills?
10. Are you working overtime or holding a second job to make ends meet?
11. If you or your spouse lost your job, would you be in financial trouble right away?
12. Do you worry about money a lot?
If you answered "no" to all questions on the Financial Fitness Checklist, you're the picture of financial health.
One or two "yes" answers, while not necessarily a sign of impending doom, can be a warning sign of potential problems. Before things get any worse, take time now to draw up a realistic budget (including a savings plan) or to revise your spending plan. Cut back on your use of credit cards, and watch closely for other signs of financial trouble.
Three to five "yes" answers could mean that you're heading for financial trouble. It's imperative that you get your spending under control right away. If you don't have a monthly budget, draw one up and follow it. Put away your credit cards and cut out all unnecessary spending until you can answer "no" to all the questions on the Financial Fitness Checklist.
If you answered "yes" to more than five of the questions on the Financial Fitness Checklist, you may already be in serious financial trouble. But don't despair. Financial counseling can start you on the road to financial recovery.
Saturday, July 3, 2010
Friday, July 2, 2010
Financial Budgeting, Income, Costs and Hints (Part 3 of 5)
Part 3 is: Start Saving!
So you are loaded down with bills to pay each month and are wondering how you can begin a savings account for emergencies and other high-expense endeavors. In other words, where can you find that extra cash to put away for later?
Firstly, when configuring your budge, plan for your savings first. You will grow richer each month if you begin to pay yourself first. Before paying any bills, decide on a set amount that you will pay yourself first - maybe five or ten percent - or whatever you decide - of your paycheck. Then, deposit the amount into a savings account before paying any bills.
When you do this at the beginning of the month, your entire paycheck will not suddenly slip through your fingers. If you wait until the end of the month, there may be nothing left to save. Paying yourself first will give you a systematic way to make your money grow. Regardless of your profession or your income, this system will work if you stick to it.
Anoter technique you may try for saving money is to empty your extra change into a coffee can or a jar each day. At the end of the month, roll the coins and put them into your savings account. You may be able to save 30 or 40 dollars each month just with your spare change.
Remember that good money management is more than just a mathematical formula. It’s too closely tied with the ups and downs of living to be just that. Your money management plan is always subject to change if your life situation changes. The object of a good budget is to make your money go the farthest in helping you reach your goals, it is not there to force to you to abide by rules.
Don’t get discouraged if the budget plan doesn’t work perfectly right away. It may involve some revising and editing until it fits your needs. Then, make sure to review it often, and be sure it is making the best use of every penny! Because we know how helpful those spare pennies can be!
So you are loaded down with bills to pay each month and are wondering how you can begin a savings account for emergencies and other high-expense endeavors. In other words, where can you find that extra cash to put away for later?
Firstly, when configuring your budge, plan for your savings first. You will grow richer each month if you begin to pay yourself first. Before paying any bills, decide on a set amount that you will pay yourself first - maybe five or ten percent - or whatever you decide - of your paycheck. Then, deposit the amount into a savings account before paying any bills.
When you do this at the beginning of the month, your entire paycheck will not suddenly slip through your fingers. If you wait until the end of the month, there may be nothing left to save. Paying yourself first will give you a systematic way to make your money grow. Regardless of your profession or your income, this system will work if you stick to it.
Anoter technique you may try for saving money is to empty your extra change into a coffee can or a jar each day. At the end of the month, roll the coins and put them into your savings account. You may be able to save 30 or 40 dollars each month just with your spare change.
Remember that good money management is more than just a mathematical formula. It’s too closely tied with the ups and downs of living to be just that. Your money management plan is always subject to change if your life situation changes. The object of a good budget is to make your money go the farthest in helping you reach your goals, it is not there to force to you to abide by rules.
Don’t get discouraged if the budget plan doesn’t work perfectly right away. It may involve some revising and editing until it fits your needs. Then, make sure to review it often, and be sure it is making the best use of every penny! Because we know how helpful those spare pennies can be!
Thursday, July 1, 2010
Financial Balance: Reducing Unnecessary Spending
If Americans were polled about their personal concerns, at the top of the list would be finances. Finances are important in our lives, from the national budget to the family budget, and when our finances are unbalanced, it can lead to serious trouble. Not only are bad finances linked to a significant number of failed marriages, but our personal financial history becomes public record when we apply for a job or credit.
Living month-to-month or buried in debt is hard, but many people don’t have to live that way. Simply reducing unnecessary spending will help to balance the budget at home and free up money for paying off debts.
Implement one or more of the following helpful suggestions to aid in balancing the home budget, and breath a little easier.
Limit eating out
If you're like most Americans, you eat out at restaurants, fast-food or not, far too often. Setting a limit to the number of days or times we eat out per week will not only help our waistlines, but our wallets as well. The cost of one restaurant meal can feed an entire family of four for dinner at home, and simply eliminating that cup of coffee and donut in the morning can save up to $1,300 per year! Spend less than half that amount by making coffee at home and popping a bagel in the toaster.
Take stock of your utilities
Utilities are impractical to eliminate, but their cost can be greatly reduced. Many gas and electric companies provide discounts for upgraded appliances, or percentages off bills that show a decrease in power usage. Also, eliminate any unnecessary phone services, such as Caller ID or Call Waiting. Remember to check the monthly water bill for signs of a leak, which can cause a huge financial impact. Overall, review charges and statements each month to avoid paying for unused or undesired services.
Get a new quote
Many people go year to year not realizing they can make a change on their homeowner’s or vehicle insurance. Getting a new quote can be as easy as spending a few moments on the internet providing some key information. The savings can be drastic, especially if multiple insurance policies are purchased from the same company. As with the utilities, coverage should be reviewed periodically for changes that can be made.
Reduce unnecessary travel
Most people have multiple errands to run each week. Running all errands in one weekly trip will save gas money, as well as costly wear-and-tear on the vehicle. Also, limit vacations and out-of-town travel to the most necessary of events, such as weddings and funerals. Forgoing unnecessary travel will tremendously help the budget.
Give up a little entertainment
Eliminating a few channels on the cable or satellite television service can save substantial money each month. Are the movie channels really necessary, and are they watched that often? Magazine and other entertainment subscriptions should also be looked at as a possible area in which to save money. Do you really need 14 magazines every month? Anything that isn’t used or read should be eliminated.
Keep a budget and stick to it
Finally, the most important aspect of balancing a budget is to know what the budget calls for. Make a list of all necessary items and their cost each month, and on that same paper write down the expected monthly income. Remember to budget a little extra for emergencies or savings. Cut down wherever possible to keep expenses below earnings. As the amount of money left over increases, more money to pay off debts or enjoy a splurge here and there becomes available. Remember to make a new list each month, crossing off bills as they are paid, in order to avoid late fees - which will only add to next month’s bills.
Living month-to-month or buried in debt is hard, but many people don’t have to live that way. Simply reducing unnecessary spending will help to balance the budget at home and free up money for paying off debts.
Implement one or more of the following helpful suggestions to aid in balancing the home budget, and breath a little easier.
Limit eating out
If you're like most Americans, you eat out at restaurants, fast-food or not, far too often. Setting a limit to the number of days or times we eat out per week will not only help our waistlines, but our wallets as well. The cost of one restaurant meal can feed an entire family of four for dinner at home, and simply eliminating that cup of coffee and donut in the morning can save up to $1,300 per year! Spend less than half that amount by making coffee at home and popping a bagel in the toaster.
Take stock of your utilities
Utilities are impractical to eliminate, but their cost can be greatly reduced. Many gas and electric companies provide discounts for upgraded appliances, or percentages off bills that show a decrease in power usage. Also, eliminate any unnecessary phone services, such as Caller ID or Call Waiting. Remember to check the monthly water bill for signs of a leak, which can cause a huge financial impact. Overall, review charges and statements each month to avoid paying for unused or undesired services.
Get a new quote
Many people go year to year not realizing they can make a change on their homeowner’s or vehicle insurance. Getting a new quote can be as easy as spending a few moments on the internet providing some key information. The savings can be drastic, especially if multiple insurance policies are purchased from the same company. As with the utilities, coverage should be reviewed periodically for changes that can be made.
Reduce unnecessary travel
Most people have multiple errands to run each week. Running all errands in one weekly trip will save gas money, as well as costly wear-and-tear on the vehicle. Also, limit vacations and out-of-town travel to the most necessary of events, such as weddings and funerals. Forgoing unnecessary travel will tremendously help the budget.
Give up a little entertainment
Eliminating a few channels on the cable or satellite television service can save substantial money each month. Are the movie channels really necessary, and are they watched that often? Magazine and other entertainment subscriptions should also be looked at as a possible area in which to save money. Do you really need 14 magazines every month? Anything that isn’t used or read should be eliminated.
Keep a budget and stick to it
Finally, the most important aspect of balancing a budget is to know what the budget calls for. Make a list of all necessary items and their cost each month, and on that same paper write down the expected monthly income. Remember to budget a little extra for emergencies or savings. Cut down wherever possible to keep expenses below earnings. As the amount of money left over increases, more money to pay off debts or enjoy a splurge here and there becomes available. Remember to make a new list each month, crossing off bills as they are paid, in order to avoid late fees - which will only add to next month’s bills.
Wednesday, June 30, 2010
Federal Reserve Bank – Controlling Mortgage Interest Rates
Homeowners often become very interested in the Federal Reserve Bank system. Every time the board of directors meets, mortgage interest rates are at risk.
Federal Reserve Bank
The Federal Reserve System acts as the central bank of the United States. Created in 1913, the Federal Reserve sets monetary and financial policies for the financial industry and trades currency with foreign countries. The Federal Reserve also acts as the bank for the federal government. When you send a check in with your tax return, it ends up in the Federal Reserve.
The Federal Reserve System is made up of 12 branch offices. The New York office is the primary office with other branches located across the country.
The primary job of the Federal Reserve is to manipulate fiscal policy. The goal is to fine-tune the economy to create a stable, predictable situation in which businesses can function. Wildly fluctuating economic keys, such as interest rates, can lead to chaos. In the late 1970’s, for instance, interest rates shot up into the high teens, causing a major economic slow down.
The Federal Reserve effectively controls mortgage interest rates in a unique manner. Many people mistakenly believe interest rates are actually set by the Federal Reserve. They clearly are not. Instead, the Federal Reserve directly dictates the rates at which one bank can loan money to another. Let’s take a closer look.
Every bank in the United States must hold back a percentage of its monetary assets. Put another way, the bank is forced to maintain a savings account. While this money cannot be loaned to consumers, it can be loaned to other banks. In exchange for the loan, a bank agrees to pay back the loan at an interest rate known as the federal funds rate. The Federal Reserve determines the federal funds rate. When you here Alan Greenspan has increase the rate a quarter point, this is what they are talking about.
You are probably wondering how the federal funds rate could possible impact mortgage rates. While there is no direct link, there is a practical one. Banks universally react to the federal funds rate, particularly whether it was raised or lowered. If the federal funds rate is raised a quarter point, you can expect mortgage rates to move up a bit. The bond market also impacts mortgage rates, which is why you will not see the exact same movement as occurs with the federal funds rate.
The Federal Reserve System makes a major effort to maintain a low profile. Most people, however, feel it is the real power behind the economy, not politicians.
Federal Reserve Bank
The Federal Reserve System acts as the central bank of the United States. Created in 1913, the Federal Reserve sets monetary and financial policies for the financial industry and trades currency with foreign countries. The Federal Reserve also acts as the bank for the federal government. When you send a check in with your tax return, it ends up in the Federal Reserve.
The Federal Reserve System is made up of 12 branch offices. The New York office is the primary office with other branches located across the country.
The primary job of the Federal Reserve is to manipulate fiscal policy. The goal is to fine-tune the economy to create a stable, predictable situation in which businesses can function. Wildly fluctuating economic keys, such as interest rates, can lead to chaos. In the late 1970’s, for instance, interest rates shot up into the high teens, causing a major economic slow down.
The Federal Reserve effectively controls mortgage interest rates in a unique manner. Many people mistakenly believe interest rates are actually set by the Federal Reserve. They clearly are not. Instead, the Federal Reserve directly dictates the rates at which one bank can loan money to another. Let’s take a closer look.
Every bank in the United States must hold back a percentage of its monetary assets. Put another way, the bank is forced to maintain a savings account. While this money cannot be loaned to consumers, it can be loaned to other banks. In exchange for the loan, a bank agrees to pay back the loan at an interest rate known as the federal funds rate. The Federal Reserve determines the federal funds rate. When you here Alan Greenspan has increase the rate a quarter point, this is what they are talking about.
You are probably wondering how the federal funds rate could possible impact mortgage rates. While there is no direct link, there is a practical one. Banks universally react to the federal funds rate, particularly whether it was raised or lowered. If the federal funds rate is raised a quarter point, you can expect mortgage rates to move up a bit. The bond market also impacts mortgage rates, which is why you will not see the exact same movement as occurs with the federal funds rate.
The Federal Reserve System makes a major effort to maintain a low profile. Most people, however, feel it is the real power behind the economy, not politicians.
Tuesday, June 29, 2010
Fed Hikes Interest Rates Again
On November 1, 2005, the Federal Reserve Bank [Fed] raised interest rates one quarter of a percentage point. Since Summer 2004, outgoing Fed Chairman Alan Greenspan has been raising interest rates on a regular basis since hitting its low point of just 1%. Now at 4%, Greenspan is expected to raise rates two more times before exiting office in January 2006. Will the higher rates stave off inflation? Will the new Chairman continue Greenspan’s incremental adjustments upward or will he let rates level off? Speculation is rampant but there is one thing you can know for sure: you will pay more for many of life’s expenses.
A rate hike by the Fed means that you will likely pay more for something including:
Credit cards. Not known for showing much restraint, you can bet credit card companies will continue to jack up interest rates except for their best customers. Rates of 12, 15, and even 21% or more are reappearing.
Mortgage rates. Holders of fixed rate mortgages are fine, but those with variable rate mortgages will pay more. A lot more if they haven’t felt previous rate hikes and their mortgages are due for an upward adjustment. More money to pay mortgages means less money for disposable items.
Car loans. If you need a new car and can still find zero percent financing, then grab the offer. Car loans, personal loans, home equity loans, home equity lines of credit, loan consolidations, will all continue to increase.
Add in high fuel prices, anticipated hikes in medical costs, and Americans are getting squeezed. With the holiday season fast bearing down upon us, retailers will have to slash prices in order to attract customers who are holding a dwindling cash reserve.
For people not holding excessive debt, the Fed rate increase will be have little or no effect on them. For everyone else, the pinch is on!
A rate hike by the Fed means that you will likely pay more for something including:
Credit cards. Not known for showing much restraint, you can bet credit card companies will continue to jack up interest rates except for their best customers. Rates of 12, 15, and even 21% or more are reappearing.
Mortgage rates. Holders of fixed rate mortgages are fine, but those with variable rate mortgages will pay more. A lot more if they haven’t felt previous rate hikes and their mortgages are due for an upward adjustment. More money to pay mortgages means less money for disposable items.
Car loans. If you need a new car and can still find zero percent financing, then grab the offer. Car loans, personal loans, home equity loans, home equity lines of credit, loan consolidations, will all continue to increase.
Add in high fuel prices, anticipated hikes in medical costs, and Americans are getting squeezed. With the holiday season fast bearing down upon us, retailers will have to slash prices in order to attract customers who are holding a dwindling cash reserve.
For people not holding excessive debt, the Fed rate increase will be have little or no effect on them. For everyone else, the pinch is on!
Monday, June 28, 2010
Fantasy Income
As Einstein said, everything in life is relative, and one’s income is no exception. While the vast majority of the world lives with an income that is below poverty level (eating only one small meal a day), there are others who make up the jet set and fly first class across the planet to share dinner with a friend. Who is happiest? Hard to say, for income ultimately has little to do with happiness. It’s all relative.
The income of many corporate executives boggles the mind. Newspapers refer to these salaries as ‘breathtaking,” “mind-numbing,” “eye-popping,” and “scandalous.” While it takes courage and dedication to be the top person in today’s major corporations, shareholders still have a hard time grasping that the CEO is worth $10 million a year before benefits. No one really knows if these corporate officers are really happy or not.
School teachers have dreams of sharing and shaping the future of the young generations. They put in as many hours as the CEO’s, and in today’s world struggle along with kids against drug and alcohol use, the violence and abnormal sex presented by TV, disintegrated family lives, a multitude of languages, and poverty life-styles. The daunting challenge of a teacher’s work environment would destroy anyone not truly dedicated to teaching. Income counts to a teacher, but it does not control the final choice to teach. Almost every-body agrees that teachers are way underpaid. Their satisfaction comes from nurturing the future the best they can under the circumstances, not from their income. Doctors and dentists have the amazing distinction of not blinking an eye at charging a poor person an entire year’s income for healing or ‘fixing’ them. True, the doctors do have medical school bills and technical equipment to pay for. However, the poor person can experience more pain from the dentist describing the new yacht he bought then he does from having his tooth drilled. When they go home at night, who is happiest? There’s no way to tell. Money doesn’t buy happiness, it’s only a tool.
Although the grass on the other side of the fence always looks greener, following one’s own dreams of creativity and service, and loving your fellow humans just the way they are, remains the most exciting, happiest way to live one’s life. Making decisions based on income alone leads down a pathway of defeat. Loving the income you have right now magnetically can attract more, and the loving adds the happiness.
The income of many corporate executives boggles the mind. Newspapers refer to these salaries as ‘breathtaking,” “mind-numbing,” “eye-popping,” and “scandalous.” While it takes courage and dedication to be the top person in today’s major corporations, shareholders still have a hard time grasping that the CEO is worth $10 million a year before benefits. No one really knows if these corporate officers are really happy or not.
School teachers have dreams of sharing and shaping the future of the young generations. They put in as many hours as the CEO’s, and in today’s world struggle along with kids against drug and alcohol use, the violence and abnormal sex presented by TV, disintegrated family lives, a multitude of languages, and poverty life-styles. The daunting challenge of a teacher’s work environment would destroy anyone not truly dedicated to teaching. Income counts to a teacher, but it does not control the final choice to teach. Almost every-body agrees that teachers are way underpaid. Their satisfaction comes from nurturing the future the best they can under the circumstances, not from their income. Doctors and dentists have the amazing distinction of not blinking an eye at charging a poor person an entire year’s income for healing or ‘fixing’ them. True, the doctors do have medical school bills and technical equipment to pay for. However, the poor person can experience more pain from the dentist describing the new yacht he bought then he does from having his tooth drilled. When they go home at night, who is happiest? There’s no way to tell. Money doesn’t buy happiness, it’s only a tool.
Although the grass on the other side of the fence always looks greener, following one’s own dreams of creativity and service, and loving your fellow humans just the way they are, remains the most exciting, happiest way to live one’s life. Making decisions based on income alone leads down a pathway of defeat. Loving the income you have right now magnetically can attract more, and the loving adds the happiness.
Sunday, June 27, 2010
Family Finance
One of the hardest things that young couples report during their first year of marriage is getting to grips with joint finances. While most are willing to share what they have with their partner, they are not sure on the best way to bring this sharing into effect so that they can share with their new partner, but at the same time maintain financial security and a degree of independence. Some couples resolve this by resorting to separate finances and others find a way to keep things together, but it is generally reported as one of the biggest strains on newly married couples.
As well as this, there is also the problem that many people find it difficult to budget and control their finances. It is one thing to fail to keep track of expenditures when you are single, but when you are married you have more to answer to than just yourself. This is especially true once you have children. If one partner fails to keep control of their spending while the other is forced to worry about finances, it can create an enormous strain on the relationship.
Family Budget
One of the best answers to this dilemma is to create a family budget. This should outline what is allowed for the various expenses, which is to be responsible for what expenses and how much each partner can spend on discretionary expenses. While this may seem like a drastic response that takes away all the responsibility and financial independence from both partners, all it is really doing is getting both parties to sit down together beforehand and work out how much they can afford to spend on what, and then sticking to this. It is about being in control of your expenses rather than letting them have control over you.
Other ways of taking care of difficulties between married couples is to divide out the family expenses depending on how much each partner earns. This way both will feel responsible for the security of the family and will feel like they are an important contributor to the family finances.
Financial Matters
While each partner should have a degree of financial freedom, and also privacy, finances should be discussed openly and with without shame. Past debts or mistakes that one party has made should be put in the past and should be forgotten. At the same time, if one partner shows that they are unable stick to the budgets they have agreed, their financial freedom will have to be taken from them and they should be given a tight leash in financial matters.
As well as this, there is also the problem that many people find it difficult to budget and control their finances. It is one thing to fail to keep track of expenditures when you are single, but when you are married you have more to answer to than just yourself. This is especially true once you have children. If one partner fails to keep control of their spending while the other is forced to worry about finances, it can create an enormous strain on the relationship.
Family Budget
One of the best answers to this dilemma is to create a family budget. This should outline what is allowed for the various expenses, which is to be responsible for what expenses and how much each partner can spend on discretionary expenses. While this may seem like a drastic response that takes away all the responsibility and financial independence from both partners, all it is really doing is getting both parties to sit down together beforehand and work out how much they can afford to spend on what, and then sticking to this. It is about being in control of your expenses rather than letting them have control over you.
Other ways of taking care of difficulties between married couples is to divide out the family expenses depending on how much each partner earns. This way both will feel responsible for the security of the family and will feel like they are an important contributor to the family finances.
Financial Matters
While each partner should have a degree of financial freedom, and also privacy, finances should be discussed openly and with without shame. Past debts or mistakes that one party has made should be put in the past and should be forgotten. At the same time, if one partner shows that they are unable stick to the budgets they have agreed, their financial freedom will have to be taken from them and they should be given a tight leash in financial matters.
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