Debt problems? Learn the Art of Frugality

August 15, 2008 · Filed Under Budget, Debt · 1 Comment

debt Everyone needs to have a perfect balance on their life, especially when it comes to finance. If you overspend your hard earned dollars, you will fall into a financial trap. You will feel the need of a debt consolidation loan to take care of your existing debts. Be frugal and it will keep you in control. You should not become a miser in this process.

Impulsive action is very important. You can’t get everything in life otherwise you would not come here and read different articles on debt consolidation. Different credit card companies will send their offers in your mailbox. Don’t over-extend yourself and run your credit card balance. You will fall into a debt trap.

Stick to a strict financial budget when you are taking care of your existing debts. Analyze your income and expenses and find out how much you are able to save at the end of the month. If you keep a track of your finance properly, you will be able to project your future expenses. Put maximum amount of your savings towards repaying your existing debts and keep a certain amount aside for emergencies.

Once you have committed towards a frugal life and created a perfect budget, you need to be disciplined and stick to your plans. Allow yourself little rewards along the way so that you enjoy your path towards being debt free. You didn’t fall in debts overnight. It took you some time to see yourself in a situation like this. Therefore, repairing your existing situation is also going to take some time. Be patient and stick to your plans towards debt consolidation. You will enjoy the walk and being debt free.

Tags: Budget, Debt

What will you do if you were in a situation like this?

August 6, 2008 · Filed Under Personal Finance · 1 Comment

Would you cancel your phone service to save $63 a month?

I have been doing a serious planning with my finance. Before the New Year, I and my girlfriend sat together and tried to find out ways of some serious saving. We thought we will cancel our home phone service first because we hardly use it. We both have our own mobiles and the home phone number is just lying on the shelf. Well, sometimes, it does help to have a third phone when one of us is not at home and one of the cell got damaged. But we were seriously thinking about reducing our monthly expenses and $63 just for this home phone of no serious use sucks?

personal finance

We decided that we will wait for the school year to finish and by that time we will find out those contacts that only have the home phone numbers. We will give them our cell phone numbers to them so that this phone can be disconnected.

Well, its time now that the school year has come to an end and we both are sitting together and debating with each other. The home phone number is still there lying on the shelf. But in all honesty, we just don’t use our home phone and the savings could help expedite debt reduction. So, we both are really not sure what to do next. I guess we better have to make a decision. What would you do if you were in a situation like this?

Day care rates are going up!

Our biggest monthly expense goes towards the day care. We are shocked that this monthly expense is going up by the end of this month?!!

We have two kids, one is 4 years and the other one is 3 years old. They are soon going to start their kindergarten in the next couple of years. Today only, I got a notice from the day care that they are raising the monthly fees. It sucks!! Right now, it costs us $295/week and starting next month, it’s going to cost us $324/week. This is certainly a pretty big jump. It seems like we are dealing with some mafias with all the institution rules and additional fees.. ugh!!

Tags: Personal Finance

My senior negotiated for a raise and it worked

July 26, 2008 · Filed Under General · 1 Comment

I work in a University. The job is good and I enjoy its benefits and the great salary. But when its time for a raise, we have to negotiate for it and put across the board since the university is funded by the state. The raise is not tied to any performance whatsoever. I have accepted it until I saw my senior negotiating for the raise by himself.

The first step that my senior took was that he had to challenge the whole system. He found that there was a title change in the university that had a higher compensation range. He did a careful planning before bringing up the subject of the pay during his performance review. He showed examples of his strength, cited highly successful projects in which he had been involved and illustrated his value in front of the board members.

While negotiating for the raise, he was careful of few things which he didn’t want to show in front of others because it could have hurt his chances of getting the raise.

He didn’t show up his cost of living because everyone has similar situations/problems. And therefore, everyone cannot get the raise.

He didn’t show the number of years that he worked in this university, so he is entitled to it.

He didn’t compare his work with others, because he was presenting his individual picture.

He can make a higher amount if he goes to some other place.

After a thoughtful review of his negotiating capabilities, the board members agreed with his self assessment and suggested for a title change. He was going through a tight budget and realized that there is no other way to get the increase in pay. My senior had done good research ahead of time and he knew that it was a nice opportunity to accept the proposal.

My senior found out that his promotion will be granted for the 2008 fiscal year. From next year onwards, he is going to get the negotiated raise and his increased salary due to the title change.

I learnt a good lesson: it’s always good to know the system of your place of employment before meeting your boss for the raise. It’s wrong to assume that the system is the same everywhere. My senior did a careful planning before challenging the whole system rather than asking for something that can’t be always granted.

Performance is the key factor. It’s important to show your capabilities with specific examples. Everyone in the job shows their performance but you have to do something exceptionally good to stand out. Your individual value should have the impact on the growth of the business. Your chances of negotiation will be better if you keep away the “negative reasons” of entitlement, comparison, or personal needs.

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Keep your good credit ratings

July 12, 2008 · Filed Under Credit, Credit Score · Comment

There are a number of organizations that are rapidly growing up and provide services like debt consolidation, debt settlement and offer education on related topics. Their mission is to educate and assist people overwhelmed by their existing debts and finding out ways and resources to come out of their existing problems.

A good and reputed organization offering debt consolidation or debt settlement programs will have the following core values for their customers. These include honesty, leadership, love, intelligence, responsibility, fun, health, empathy, success, and gratefulness. One of such companies that set values is federal debt relief system. They help the consumers by terminating their debts completely. The programs that they offer you will terminate your debts after a certain period of time and you will be able to breathe free in the air. You will be on your way to regain your credit worthiness after repaying your existing debts.

The first step to get started and become debt free is to fill up the application form on the website and request for a free quote. You might have to answer a few questions on the website to determine whether you qualify in any of the programs offered by the debt consolidation/debt settlement company.

There are many organizations that will offer you some budgeting sessions while they are walking you towards a debt free life. They will educate you with the best ways to use your credit card and stay out of debts. They have experts who will offer you the counseling anytime during the program. If you have any difficulties in tailoring your budgets, you know there is professional help at an arm’s length or just a phone call away. These experts will analyze how much your monthly income and expenses are and figure out how much you can save in the program after settling your existing debts. They will show you the calculations and if you follow their suggestions, you will never be in debts again. While you are using your credit cards, make sure that you do not go over your spending limits. You have to keep your debt to income ratio low as much as possible so that you are able to save more for a better and healthy life.

If you are taking the precautions of staying with your spending limits and finding all sources of income and taking care of your existing debts, you should be able to see your credit improving and protecting your financial future. It is very important to have very good credit scores so that you are able to shop for new credit with different potential lenders and get the most competitive interest rates.

Tags: Credit, Credit Score

Importance of Personal finance

July 2, 2008 · Filed Under Personal Finance · Comment

Personal finance and its management came into effect when the money could be exchanged for goods and services besides fulfilling the other basic needs such as food, clothing and shelter. People need a job to make a living and get compensated in cash. The concept of personal finance and its management came into effect when human wants increased in exchange of resources. Everyone wants to live comfortably and have all the basic amenities in life. Next important thing that a person needed to maintain is a check book, and avoid getting into debt. With the easy availability of new credit for the individuals, it has become literally mandatory to become skilled in making the right decisions for a better life.

The best way of managing money starts from childhood when a child start getting pocket money at a young age. As he grows up, he starts learning the ability to plan and budget his money. Budgeting and planning your expenses, investing for the future requirements and retirement planning broadly covers the different aspects of personal finance.

Budgeting plays a vital role in keeping your personal finance in good shape. No matter how much you earn, it’s very important that you have a perfect control over your spending habits and it is well within your income. There are so many people who can live quite a comfortable life even if they have a modest income. If you try to spend more than your income, the debt to income ratio will keep rising and it will be tough to catch up. Once you have a perfect control over your income and expenses, and create a little savings, you will know how much you have available to invest for your future. Experts say that you should keep at least half of your yearly income invested so that you can use this fund during an unexpected emergency. Create realistic plans is a big help in your budgeting while you are aware of the difference between wants and needs.

Tags: Personal Finance

Bad credit loans

June 28, 2008 · Filed Under Credit, Loan · 1 Comment

People who are going through hard financial situation and have a questionable credit history can consider bad credit loans as one of favorable options to meet the urgent need of cash. There are two types of bad credit loans. One is called secured bad credit loans and the other one is called unsecured bad credit loans. Each type of bad credit loans has its own advantages and disadvantages.

Secured bad credit loans:

You get a secured bad credit loan in exchange for a security deposit. This is equal to the amount of loan applied by the consumer, or valuable assets owned by him. You will get back the security deposit once you have paid the loan amount in full without any defaults. Most people consider these types of secured bad credit loans to build up their bad credit history. They want to see some positive accounts in their credit report that will help them in getting future credit. Using that money, you will have the option to open multiple secured credit cards and boost up your credit file with positive payment history. The FICO scores will go up because of the account variety. The only downside of this type of bad credit loan is that you have to show some assets to secure the loan. And if you default in your payments, your asset will come under risk.

Unsecured Bad Credit Loans:

This type of bad credit loan does not require you to come up with the money or assets to secure the loan. You don’t have to show any collateral to secure the loan. The disadvantage is that these types of unsecured bad credit loan are charged with very high fees and interest rates. You might be paying an interest rate of 30% or more on this type of loan. If you are in a financial trouble and are paying just a little more than the minimum, you will hardly make any dent on the principal amount. This kind of loan is not good for those people who are already going through a hard financial situation and can’t afford to make the monthly payments.

If you are looking for a bad credit loan, make sure that you have the ability to pay back the monthly payments. This type of loan will help you to build up your bad credit history as long as you are making monthly payments on time. Be aware of the fact that if you default in your monthly payments, your delinquency will still be reported to the credit bureaus even though the bank has your assets as a security.

Tags: Bad Credit Loans, Credit, Loans

Debts discharged in bankruptcy

June 20, 2008 · Filed Under Bankrutpcy, Debt · Comment

The word bankruptcy discharge of debts means legal eradication of a debt. When a debt is discharged under bankruptcy, it can no longer be enforced against the debtor, however if any liens are put against the debtor, those debts will still survive in the bankruptcy filing process. If you are overwhelmed by your

existing debts, you can get your financial liabilities erased or completely wiped off. However, discharge of a debt is allowed for certain debtors and for certain cases. For example, non-individual debtors cannot get their debts discharged in chapter 7 bankruptcy. If a partnership or a corporate debtor is liquidating under chapter 11, and the business is stopped upon completion of the plan, the debtor cannot receive a discharge.

People who have committed fraud against the court by lying or by deceitful methods cannot get their debts discharged and will remain liable for pre-petition debts.

Certain kinds of debts are not discharged under chapter 7 bankruptcy.

These are:

1. Debts resulting from fraud, misuse of funds, embezzlement, or larceny

2. Debts arising out of false pretenses, including bogus representation, fraud or by presenting false financial statements.

3. Certain kind of tax debts

4. Debts resulting from the purchase of luxury merchandise or cash advances.

5. A debt resulted due to negligence of obligations to list in the bankruptcy schedules.

6. Alimony or child support, or debts resulting out of a divorce or separation

7. Student loans

8. Debts resulting from willful and malicious injury.

Debts that can be discharged under chapter 7 bankruptcy filing are as follows:

1. Auto accident claims