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How to Save Money

Posted by FinancialGuruOnline.com – November 10, 2009

How to Save MoneyIn an economy that is constantly getting tighter, a consumer must find ways to cinch the belt and save money. The question most consumers are asking is “How to save money?”

There are plenty of ways to save a few pennies here and there. Whether it’s making changes in lifestyle to save over the long haul or choosing less expensive options for various items – you can save money if you try.

Start by saving long-term pennies on utility bills. Turn off lights, computers, and other electrical items when not in use. Turn your water heater temperature setting lower to reduce your electric bill. Install low-flow shower heads and aerators on your faucets to cut down your water consumption.

Rack up some savings through savvy shopping and you’ll keep more than a few pennies in your pocket. Shop local thrift stores for clothing, furniture, toys, books and other household items. When the weather is nice plan to shop yard sales for bargains.

Compare prices between stores. Peruse the sale fliers that usually come in the Sunday newspapers and compare prices from store to store to get the best deals on the items you need. Many grocery stores and even discount stores (like Wal-Mart) will do price matching if you can show them a competitor’s ad with a better advertised price.

Stay home. One of the best ways to save money is by staying home. If you aren’t in a store you won’t be tempted to buy something you don’t need.

Combine trips. Cut down on transportation costs by combining your trips. Try to plan out your week so you can make stops for groceries, household items and errands in an ordered fashion that will save gas and time. If you can have one day full of errands in stead of three partial days of errands, you will be that much ahead on gas savings.

Make a list before you go shopping. Write down the items you need to buy then stick to the list. Extra items that you notice and think “Oh hey! I want one of those!” can set your budget back.

Shop during the least busy hours. If the store you are shopping in is crowded, you are more likely to spend more money just to get out of there. This happens because you don’t compare prices, you simply grab the first items you can get to in order to just get out of the store and away from the crowd. Figure out the least crowded time for your favorite stores – whether it’s at 7 a.m. or 10 p.m. and try to plan your shopping around those times.

Make use of your local library. You can check out (for free) new release DVDs, new release books and new issues of magazines at most local libraries. You can also get free internet and wifi access at many libraries. Check to see what yours has to offer and make use of it to save money.

Personal Finance: Vital to Financial Survival

Posted by FinancialGuruOnline.com – November 10, 2009

It is important for consumers to have an understanding of personal finance. Many consumers, especially around the holidays go hog wild and spend money that they do not have. Credit cards have become a huge crutch for millions of Americans.

The problem with credit cards is that each purchase that is made incurs a finance charge. For example a fifteen percent rate credit card would make a one hundred dollar purchase actually cost one hundred and fifteen dollars. Even if you got the product on sale, after you paid the bill you still would have paid full price for the item.

Credit cards are dangerous because many people abuse their credit card limits. Once you hit the limit, the next month you incur charges because the interest rate kicked in and now you are over your credit limit.

Spending money wisely is very important in order to help protect yourself against incurring large debts, bankruptcy, and even foreclosure. Many Americans have lost their homes due to foreclosure. This is because they took out adjustable rate mortgages. This meant that the interest rates on their mortgages could be adjusted at any time. This action would then increase their monthly mortgage payments.

Many people found themselves with homes that were not worth what they had paid for them and monthly mortgage payments that they could not afford. If these people had planned for this event financially then maybe they could have stopped some of these foreclosures.

When you own a home it is important to have a healthy amount of money in your personal savings account. In a down economy many people can lose their jobs which take a huge blow on their personal finances. You need to pay yourself first when you get your paycheck. Set aside at least ten to twenty percent of your paycheck and put it into your savings account. If you are too tempted to access this money then try getting a savings account that is not linked to a debit card. This will help you really have to think about why you need to spend the money beforehand.

Preparing a budget for your monthly expenses is a great way to manage your personal finances. Many consumers just write checks online and pay their bills without actually viewing how much they are spending. Always make sure that your bill payments have been made and received by your creditors. A missed credit card payment usually makes the consumer incur a thirty nine dollar missed payment fee. If you are over your limit then you will also incur a thirty nine dollar fee for that also. This makes one mistake a seventy eight dollar mistake. Mistakes like this add up and can really hurt your bottom line.

Being aware of your personal finances is very important for everyone young or old. In order to be able to survive financially for years there needs to be a plan in place for every dollar that is earned and spent. Everyone can do it; it just takes hard work and forethought.

Individual participation in overcoming recession

Posted by FinancialGuruOnline.com – October 30, 2009

recessionIf we analyze the recession 2010 of United States, we may trace many reasons behind the financial down fall. The down fall as well as the factors may be interdependent it means that there is a possibility that the recession has been caused by lets say individual approaches towards banking and investment. And there is also a possibility that the recession has caused the individuals distrust the banking system. But individuals have less likelihood of being a reason for recession. Macro levels issues have contributed to it most probably. However, it is the case that now we Americans doubt in the safety of our money if kept in banks. It is also feared that this recession will lead United States of America to a depression like the prior great depression of 1930s. People are not investing and placing money in banks as the banks are not providing loans. Even the firms are closing down or are going through crisis due to the losses in business. Everyone is uncertain about what is going to happen in the country. Banks are unable to prevent bankruptcies.

Household money is not properly channeled to the investment. The government sold bills for no purpose which has reduced the availability of the investment bank credit. Many things are collectively making the situation worse. The individual as well as mass level strategies are needed to come out of the situation. Although new strategies suggested by the policy makers and think tanks have flaws and draw backs but still these strategies can prevent the recession. At individual level it is required that we live with in our limited means. Self sufficiency is the most important thing US people need today at individual as well as at the mass level. The state should take measure sin which it does not have to take the funds from external sources. We must regain confidence in lending money.

Money is safe in banks. We must believe in it. The banks can only lend money if they are in strong positions and can recover the losses. The investment is possible with peace in the country. As the economy of United States has multinational firms that are contributing to its national income, they operate in the regions which are on war. Due to wars and political instability the Asian region which is a big market for western sellers, leads to losses for such multinationals.

Five Types of Budgeting Methods

Posted by FinancialGuruOnline.com – January 23, 2009

Budgeting is an essential part of your financial health – and should be completed by ever individual, every family to ensure that the finances are being met head on with honesty. There are many types of budgets which you can choose to adhere to – here are some methods that have worked for many consumers in the past.

Envelope Budgeting
Envelop Budgeting consists of the use of envelopes and spending cash. It enables the use of different envelopes for expenses or savings during the month. For example, if you have three hundred dollars for food for the month than this money is placed in an envelope labeled food. On your next trip to the grocery store you can remove the money from the envelope and replace the money with receipts from the trip to stock the cupboards and fridge.

Spending categories are created with cash in the envelopes to ensure that you do not go over these amounts every single month. This is an effective tool in maintaining control of the cash that is being spent in your household.

Spending Categories
There are two main categories in which we spend money. These categories are fixed and variable expenses. Fixed expenses are those we are unable to change throughout the course of a month. Keeping in accordance with these two spending categories the fixed expenses are subtracted from the income which is coming into the budget, the variable expenses are than divided of the amount which is left.

Tip: Don’t forget to establish a savings account in the budget to provide a safety net for consumers wishing to create an alternative to credit cards.

Daily Spending Limits
Aside from your fixed expenses, there is a type of budgeting that uses a maximum daily limit of money which can be spent to keep control of your finances. Most people implement a daily spending limit of ten to twenty dollars which is spent for expenses like food, gifts and entertainment. Although this limit may seem low, there are many ways to keep more money for categories by saving for multiple days for purchases – or excluding food from these daily savings and creating another budget for food.

E-Budgeting
E budgeting enables the use of software that can be found on the internet to keep control of your finances. There are many free software programs available for download which can keep track of your spending, your expenses and many other aspects of the budget. These powerful tools can maintain control of your money.

Regardless of the type of budgeting that you use, it is important to adhere to the same system throughout the course of six months to ensure that you become familiar with the program. If the system is not working for you, it can be simply replaced with another system which suits your lifestyle and needs.

Know More about Credit

Posted by FinancialGuruOnline.com – August 22, 2008

The trend nowadays is to make Credit  through Credit  cards. To be a Credit  card user, you will apply from a Credit  provider, which will then decide if it will approve an account for you. The Credit  card user can then make purchases by presenting the Credit  card to merchants who will accept the card. Every time an item is bought, the user consents to pay the issuer of the Credit  card. The holder agrees to pay the issuer through placing his signature on a receipt with the amount that needs to be paid or by giving his Personal Identification Number. There are establishment who accept internet and telephone authorizations.

Issuers of Credit  cards will usually forgo the interest if the balance on the debt is fully paid monthly. However, they will charge an interest on the entire balance that remains outstanding starting from the purchase of the item if the payment on the entire balance is not made.

If you have, for instance, bought an item worth one hundred bucks and you were able to pay the amount within a specified period of time, the Credit  card issuer will not impose an interest on that amount. If ten bucks of the hundred bucks is not paid, an interest will be charged on the original debt starting from the time the Credit  was made, until the payment on the debt is made. The payment scheme and the system on how interest is imposed are usually indicated in the cardholder agreement, which is also summed up in the statement that the debtor receives on a monthly basis. The usual way of computing for the interest is by dividing the Annual Percentage Rate by 100, then by multiplying the result to the result of the average daily balance divided by 365 days, then multiplied to the numbers of days the Credit  revolved. The Credit ors charge interest from the time the holder made the Credit  up to the time the debt is paid. The rate of interest may be different from one Credit  card to another. The interest rate on one card may increase if the card holder misses on a payment schedule. The number of establishments that vie for the Credit  card holder market has pushed some of the companies to give gift certificates, frequent flyer points, and a cash back incentive, which allows the user to receive a certain percentage of the entire sum of the transactions.

There are even Credit  card issuers that charge no interest at all. However, the main disadvantage in this kind of arrangement is that the span of time wherein only a minimal interest is usually until a year. After which, a high interest is then charged to users. The holders are informed though, through some services, when the period of low interest period is about to end. However, there is usually a fee attached to such kind of service.

The grace periods given to holders, at which time they have to pay the balance of the Credit  before the issuer imposes an interest is usually only between twenty to thirty days.

 

 

Effective Ways to Erase Bad Debt

Posted by FinancialGuruOnline.com – August 22, 2008

Buying new clothes, shoes, and gadgets definitely sound like a very enjoyable past time — but not so, when you are using a credit card for this past time and are paying a very high interest for such purchases. If you feel happy after making new purchase, you will not feel as blissful afterwards so much so if you can not pay the balance and the interest charges of your credit card debt. As your financial obligations increase, making it difficult for you to meet the payment schedules, the more the credit card issuers will charge higher interest on your debt. If you are one of those caught in the cycle of debt, yours is not a hopeless case because there are actually things that you can do to erase bad debt.

Credit card should not be made as a substitute for cash. This means that your credit card should be used as much as possible, only when you have run-out of cash when you need purchase an item and it is really important for you to make the purchase. If you are also expecting a sum of money that you can use to pay your credit card debt, then it is alright to make use of your credit card.

As much as possible, do not use your credit card when shopping and for paying stuff you buy at the stores. Using your card every now and then will just make you acquire more and more debt that will eventually become difficult for you to pay. If you miss to pay the balance, the credit card issuer will charge more debt until your outstanding debt will become twice as much as your original credit, making it more difficult to erase bad debt. Consumers should not be compulsive in making their purchases and should only buy items with their credit cards when truly necessary.

You can start to erase bad debt by making a firm commitment to refrain from bringing your credit card with you when you are planning to shop. You should be mindful of the items that you are planning to buy because most of the time, they are not really essential. For instance, there are so many of us who would indiscriminately buy the latest gadgets in the market even if we already have our own phones. Some of us no longer buy cell phones for the phone’s use but more because they are considered as status symbols. It is therefore good to think first before making such purchases if the items that we are buying are actually the kind of things that we need.

If you have a significant credit card debt, try to pay more than just the interest to gradually erase bad debt. Make use of your credit card less. Slowly pay your way out of your debt. Be conscious also of your debt payments because if you miss just one, interest will be charged on your debt, making it more difficult for you to pay the credit card company. So erase bad debt to live a worry-free life.

Does Credit Rating Matter?

Posted by FinancialGuruOnline.com – August 20, 2008

Why do we need to be reminded of the credit rating we have? What role does good credit play in our daily lives?

            These two are the nagging questions we gnaw at when matters of credit rating abound. Before get to answering them, the first thing we need to know is what a credit rating really is.

            Credit rating or scoring is a way of indicating whether we have good or bad credits. We score or rate credits as either good or bad in the micro level as well as the macro level. While the micro level of credit scoring or rating is entirely a personal process of knowing how our financial credits are, the macro level of determining a society’s credit rating or a corporation’s credit rating is entirely a different matter altogether. While a micro level credit scoring may be distinguished as a personal matter, the macro level credit rating is more technical and the methods used in this kind of credit scoring is more difficult to digest and oftentimes are kept by the credit rating companies themselves. Simply put, a lot of factors come up when we speak of identifying credit ratings in the macro-economics or business level.   

How de we know if our credits are good or bad? To roughly put it, we know we have good credits if we have made minimal to zero debts, we do not overspend, and we have more than enough finances we need to even come up with a savings account for other uses such as in cases of emergencies. Its either we rarely cross roads with debt or we don’t go making them at all.

Now, you may ask what the role of good credit ratings are in our daily lives. The thing is that having good credits is very important. That fact is something we cannot refute because we do experience the best of what it is like to have good credit ratings and we also go through financial hell when we accumulate bad credit ratings in whatever aspect of life we are in, the businesses, our financial relations with others and such.

Good credits matter. If you have good credit ratings, the more chances you have of getting really good financial deals. Example, let us say that you have one or two credit cards and you want to apply for another credit card account in another credit card company or bank, one of the things that a credit card company or a bank with credit card services look for is your credit rating history. If they find that you have maintained good credit ratings in the past up to the present such as you pay your monthly credit card bills on time, you have minimal to no debts at all, you are capable of paying another set of credit card bills in their company, then you may just get yourself another chance at opening a third credit account. If they find that it is beyond your financial capability to pay off another set of monthly credit balances, you may just get yourself refused by the company. That is just one of the many financial scenarios that a good credit rating or a bad credit rating can affect. There are many others.

 

So does a good or bad credit rating matter? One simple answer: Yes, it does.

How helpful are Debt Counseling Services?

Posted by FinancialGuruOnline.com – August 19, 2008

Many of us have already enlisted the help of debt counselors to aid us in cutting down on the debts we have accumulated over the years. Many of us remain adamant to the fact that we need the service called debt counseling.

            Let’s face it, in these times when technology quickly advances and when many commercialized products are on the market, our wants are being fuelled. We cannot avoid spending for things we want and bring debts into our supposedly debt-free life. For those with debts that have already reached a lot, there is the need to undergo debt counseling, for those who are about to measures to avoid making debts need to be taken and seriously.

            The first question to answer with the concept of debt counseling is: What is debt counseling?

            Debt counseling deals with debts that are unsecured. This kind of services comes up with ways and means to clean out credit card debts, medical debts, loan debts, and even overdue utility debts.

            Again, let’s face reality here. Thousands of people, especially in the first world countries, are heavily indebted and debt counseling services are mostly sought after in these places. We do need help with managing our financial resources.

            The next question is: Who gives these services?

            Individuals who have expertise in finance budgeting and financial matters are those who are being attracted into this kind of career. These finance experts guide the heavily indebted individuals and households in completely paying off the heavy debts they have accumulated and help them recover from the after effects of having getting out of being in moderate to heavy debts.

We cannot deny the fact that once we are freed of these debts that chained us to personal and financial troubles, there are after effects. We may be freed of the heavy debts we have had but we, again, feel the need to stabilize our household’s finances. We even go as far as repeating our past habits. That is, we tend to go back into overspending and debt accumulating. In this light, perhaps debt counselors need to be placed as prominent fixtures in the financial and economic world.

How do we get hold of these services?

Availing of debt counseling services is fairly easy. Debt counselors can be contacted by phone, through the internet, or by going onto local offices that have this service. 

The last question is: Why do we seek this kind of service?

As consumers of those commercial products offered in the market, we need help in distinguishing what we need from what we want to avoid adding up to the debts we already shoulder or to avoid making them at all if we don’t have one yet. In this day and age, when all kinds of problems arise aside from financial matters, solving the financial matters may be the best way to go through to answering the next problem. We are no stranger in this case scenario. Many have undergone debt counseling to free themselves from debt and to start anew after.

 

So how helpful are debt counseling services? One word: Very.

 

           

 

 

Debt Relief, a Farce?

Posted by FinancialGuruOnline.com – August 17, 2008

We’ve been hearing so many about the idea of debt relief. The word itself clearly means relief of debt or freeing ourselves of some if not all of our debts. However, the question in our minds stands…how true is it that we can be relieved of the debts we have concurred?

            In the macro-economic level, debt relief happens with the countries that are laden with huge amounts of debt from the world unions such as the World Bank. One example of a nation that has been given the opportunity to relieve themselves from these debts is Africa. Oh, we’ve heard of it. The issue has been all around the TV and the local and international papers. We’re left to ponder on whether this debt relief was truly helpful to the impoverished nations or if it is given at a price the nation has to pay for.

            As much as 33 poverty-stricken countries have benefited from the debt relief program that the World Bank has come up with, the HIPC or the Heavily Indebted Poor Countries initiative, Africa included. For a country to qualify for the HIPC program, there are certain qualifications that one has to satisfy.

            How helpful is the HIPC program for these countries?

            The aim of the World Bank Union’s HIPC program is to help these heavily indebted countries to rise from poverty by lifting the heavy debts they have concurred over the years and by providing them with the needed funds to start anew. The union raises the amount that a country needs for to answer this matter.

            Despite this amiable aims that the Union has come up with, with regards to the true purpose of the HIPC program to help these poverty-stricken countries, many still argue that the debt relief program is a farce. It’s an argument that has been going around for months.

            Many argue that the debt relief services that the World Bank Union has come up with, the HIPC program, is actually a ‘blank check’ given by the Union to governments of these many heavily indebted countries. What’s more is that many of these heavily indebted countries have corrupt government officials and there is this fear that the funds that the HIPC program provides these countries only reaches the hands of those with power seated on these governments.

When we take this thought into our own perspectives, the ones who oppose the ideals of the HIPC program actually do have a point. Living in a country with a corrupt government helps us in identifying this fault in the program. The funds that the HIPC give these countries’ governments don’t actually go down to the people, to answer their needs, but instead, the funds end up in the already fat pockets of corrupt officials seated in power in the government.

This matter may be difficult to digest for those who live in the convenience of a country that does not have a corrupt government. But the question still stands, is the debt relief program by the World Bank Union a farce?