Where do you keep your money that you set aside for annual or semi-annual payments or for emergencies where you need extra cash quickly? You dont want to draw funds from any of your savings or investment accounts there may be a penalty for early withdrawal or it might be financially disadvantageous at that time.
Most people just keep what they have in their checking accounts where it earns nothing or next to nothing. Some dont keep funds for emergencies and just hope for the best or depend on luck.
Luck always seems to be against the man who depends on it.
-Unknown
Heres another question. Do you set anything aside in case you need to pay the deductible on an insurance claim?
A good place to put funds for infrequent payments or for possible emergencies is in a money market account where interest rates are most often higher than savings accounts and are more accessible. Some banks offer even higher rates on Internet money market accounts. You really need to check your banks rates on various types of accounts to see which would be best. Its good to compare banks. There can be a big difference. Money market accounts require a higher balance, but the amount you will need to keep in it will more than meet that.
The good thing about money market accounts is that even though there is a limited number of checks you can write on it in a given time period, it is usually more than enough for most people.
When you plan your budget, you will need to make payments to this account until the balance is sufficient to cover your home and auto annual or bi-annual payments and cover all your deductibles for your home, auto, medical and dental policies. Once this account is fully funded, the interest earned will be able to reduce your monthly budget payments that go to replace that which was used for insurance payments or for emergencies.
With this account in place, you will be able to take the highest deductible allowed thereby reducing your monthly insurance payment. If you pay your auto insurance quarterly or twice a year, you now will be able to make an annual payment, saving on the service charges.
Money market accounts may not earn the kind of return as a mutual fund or other types of investments but it is definitely better than most savings and checking account interest rates. Money market accounts have the advantage of easy access for your infrequent financial needs.
With a little self-discipline, you can give yourself some efficient financial security by enabling your money to work for you in several ways.
Do you write checks for everything you buy?
Are you a cash only type of person?
or…
Are you like me and you live and die by your debit(debt)/check card?
Regardless of the method you use to make your purchases, it is important to not only know what was spent, but what was purchased. When you can determine where your money is going it helps to accomplish a few different tasks at one time.
The first advantage to tracking your spending is that you can visually see how much you are spending in a particular category.
What most people don’t realize is that by knowing the exact figure that is spent on a particular category will lead to a subsconscious effort to control spending in that area.
Secondly, by tracking your spending you can effectively set up a savings plan that will help you to avoid financial disasters.
The saying “Plan for the unexpected!” fits very appropriately here.
If you have savings, you can be ready in the event something unexpected happens. (i.e. car breaks down, roof collapses, you take ill, etc.)
Tracking your expenditures will also lead to better money management. You will know exactly where you stand financially. This is very helpful in avoiding or reducing overdraft fees and other associated bank fees.
If your bank requires that you keep a minimum balance in your checking account, *you* will know when you are approaching that limit and can manage your money accordingly.
Lastly, tracking can lead to piece of mind. Meaning, if done right, you can rest at ease knowing that you have a strong grasp on your finances.
Even if you are not debt free, by tracking your can create a plan that will lead you out of debt and eliminate the stress that goes along with it.
These are just some of the advantages of tracking where your money goes. Of course, for every one there may be even additional advantages that we didn’t mention here. Most importantly is just doing it. If nothing else you can save money, avoid costly fees and be prepared for just about any financial disaster that may happen.
Tips For Responsible Credit Card Use When You Have Bad Credit
If your current credit situation is not as good as it could be you need to be very responsible when using credit cards. While irresponsible spending habits are not always the cause of bad credit no matter how you ended up in this situation the privilege of credit card use should be taken seriously to prevent going into further debt.
Here are some great tips for responsible credit card use.
If you have several credit cards look into transferring the balances to one or two that have the lowest interest rates and then get rid of the other credit cards. By limiting the number of credit cards that you own you will not have to worry about juggling a repayment schedule that you cant afford to keep up with. Once you have the balances on your remaining credit card under control then try to limit your purchases to things that you really need.
Refrain from taking out cash advances on your credit card if at all possible. Credit cards most always charge huge interest rates on cash advances so if this is a common practice for you it will certainly drive you further into debt and if you already have bad credit it will only make things worse. If you do need to take out a cash advance on your credit card make sure you will be able to repay it as soon as possible.
Repay you credit card bills on time. This is simple common knowledge but is often overlooked by many credit card users. Document your payment schedule and follow it to the letter. This will not only help you build a solid history of good credit it will save you the stress of worrying about getting your credit card bill paid.
Developing responsible spending habits with your credits cards when you have bad credit will help you regain good credit standing and will help you from going further into debt.
2007 All Rights Reserved
The road to financial freedom is a lot shorter than you may think. For those of us who did not start our lives wealthy because of our family, we only have 46 to 49 years of income producing more if you want to work into your retirement years.
During that time, we must complete our education or training, get a job or open a business, while meeting the many demands on what income we have left after
taxes.
We have to provide for food and shelter, clothes and transportation, child rearing expenses, college tuition, vacations, Christmas presents, insurance premiums and more. The list never seems to end.
How is it that some people can retire at age 50 in spite of all this while others will never retire at all. If you read the article, Get Rich Slowly – http://www.credit-yourself.com/get-rich.html – you can see how you can use the power of compound growth to amass millions if you start young. However, this is the period in
most peoples lives where the greatest demands seem to be made on their income.
First of all, youre just starting out and are nowhere near your peak earning power. You might have just married and need a home and furnishings.
You might have to buy your first suits or business dresses for your new job. And you want to enjoy life, so you vacation, buy or lease new cars frequently and just basically run up debt, many times to be piled on top of your existing student loans.
But some people manage.
First they live within their means and save as much as possible.
They take advantage of all the tax shelters the government allows and if possible, save even more.
They invest in or start a part time business, rental properties or learn to increase their returns by smart investing.
They insure against potential risks that could ruin them financially.
They use debt wisely. They dont necessarily shun debt, but use it as a tool to grow wealth. For example, they can leverage one 20% down payment into a string of
houses using mortgages. They can use margin debt to double the amount of their investment funds.
They can take advantage of tax credits, government guaranteed loans or grants offered to small businessmen or to certain minorities to fund multiple streams of income.
But they dont use debt to fill the house with things. They pay cash for their new TVs and stereos.
They take taxes into account when planning their lifestyle and investments and use all the tricks the IRS lets them get away with.
For a little over $3.00 a day, starting at age 22, you can amass over $850,000 in an IRA.
The difference between the financially independent and most of the rest of us is that they can find that $100 a month and dont consider it some kind of sacrifice to invest it rather than spend it.
Most people will complain they have no money left over and that they live from paycheck to paycheck. But in almost all cases this is a lifestyle choice.
There are many stories of very low income people managing to put multiple children not only through college, but also graduate school or leaving millions to a favorite
charity.
These people are special in the sense that they had a goal and stuck to it no matter what. They worked hard, saved their money and achieved what they wanted to achieve.
Everyone can do this. You just have to ignore the siren song of commercialism, and decide whether a secure future for yourself, a college education for your children or a large bequest to your favorite charity is worth skipping the daily double latte at Starbucks.
That about all it takes to get you well down the road to financial freedom.
The road to financial freedom is literally paved with gold, yours for the taking.
It’s become more and more difficult to bank in privacy these days, thanks to the witch-hunt of OECD and FATF under the guise of money laundering and terrorism. What a wonderful story to cover the real purpose of their; to take the privacy away from people, to control and to endlessly supervise!
Fortunately there still are a few opportunities left for us, who value financial privacy. These precisely planned strategies, which have been used for decades, have worked for people from all walks of life. For people, who has decided to keep what belongs to them and not to hand it over for greed goverments, ex-lovers, creditors etc. But no matter how good the strategy is, if you are a bigmounth and like to brag with your fancy overseas banking solutions, the cover is blown sooner than later. So keep your mouth shut and stay under the radar screen.
For the start, you need a so-called Pass-Through Account. The most important feature of this account is secrecy, it’s paramount. This account must be opened in a jurisdiction with a bullet-proof banking secrecy laws. Bullet-proof really isn’t the case anymore, unfortunately, as way too many so called tax havens have been forced to give away information. But it still is possible to open an anonymous bank account. Even if the banking secrecy laws fail under the pressure of “Big Boys”, the “bureau-rats” still don’t know who’s the owner of the account. So, you are safe from the very beginning!
This first account is the one you make known to your clients and business associates. You will receive all the incoming funds from and send the outgoing funds to the outside World. As the name says, and this is essential to remembet, this account is not to store money. Because of that, you don’t have to be too concerner about the long-term stability of the bank and jurisdiction involved. This fact enables you to use tiny, private banks, which offer the best secrecy and confidentally. Over and above you get the most personalized service!
The second account you will need, is called Stash Account. The most important feature of this account is stability. The Stash Account must be opened in a stable, first world jurisdiction and in a well known bank. This is the account you send your profits to as soon as they arrive in your Pass-Through account. You store your money here long-term, send it off to offshore investments or shift it into spend and savings accounts. The existence of Stash Account is a complete secret! You tell nobody! Never, ever!
The third account you need, is Spend Account. Here the accessibility is the key feature. Sometime you might want to withdraw your offshore profits in cash. Even if you have multiply income streams onshore, you must always be prepared for emergencies and have an access to your offshore funds. Because of that, you will open Spend Account at a bank that gives you the best selection of
debit and credit cards and also a proper online banking access.
When you have opened these three accounts, you are ready to start fighting for your privacy. And the best part is, that you can win the fight, really! It just takes a little research and the best partners.
The Good & Bad Points Of A Prepaid Debit Card
In todays world it is almost impossible to not be able to get by without some type of credit card. From checking into a hotel, to being able to make a purchase online to filling up your car with gasoline, a credit card is helpful in all those situations. So what exactly are you supposed to do when your credit it not at its best and there just really isnt the possibility of getting a secured credit card at this time? A prepaid debit could be just the thing that you need. Now just what are the good and bad points of getting a prepaid debit card?
A advantage of prepaid debit cards is that you can use them without worrying about going into debt. Since the prepaid debit cards are paid for in advance, theres no big bill at the end of the month. In this aspect, prepaid debit cards are more like cash than like a credit card.
The benefit of prepaid debit cards that appeals to people with bad credit probably the most is that you do not have to worry about going into debit. Since you need to deposit money onto the card in order to use it you do not have to worry about a huge bill arriving at the end of the month.
One huge benefit of a prepaid debit card is that you do not need to have good credit to get a card. Just pay the activation fee and deposit some money and you are ready to shop.
Something that could be looked upon as both a good and bad point of having a prepaid debit card is that you are given no credit privileges. What this means is that you are only able to spend what is deposited on your card and nothing more than that.
Some bad points of having a prepaid debit card is you need to report it right away when it is stolen as there are much stricter timeliness with this type of card as opposed to a normal credit card. You cold be out a lot of money if you dont report things in time. Also there are monthly maintenance fees that you need to keep a look out for on many prepaid debit cards. You do not want to end up paying a lot of unnecessary fees.
Many successful people have mentors to guide them in learning the skills that lead to achievement, and Ill do my best to offer you some critical personal finance perspectives. They say that life is a school where you learn the lesson after the test. The same thing applies to money, but you cant go back in time to fix catastrophic financial mistakes that you have made over time. As long as you are alive, you are a player on the field of the money-game, and you need to know the basic rules before you get tagged by the experienced players.
Rule #1: To earn money from money. The only way to escape becoming a wage slave for the rest of your life is to set aside savings. The profit on your savings can be used to increase your lifestyle spending, reduce the number of years until you retire, or allow you to actually have any retirement at all. How are you doing so far toward saving and getting it to earn money for you?
Every dollar that you spend eliminates its ability to earn money for you in the future. I am not recommending that you stop eating at restaurants and going to movies, I am recommending that you use some common sense, like looking at your four biggest expenses over the last few months and aggressively finding a way to reduce them.
The biggest obstacle for the first rule is personal debt of any kind (other than a mortgage for your home) or a lease of any kind. Every personal debt that you incur reduces your net worth which could have been working for you over your life time. Acquiring personal debt is exactly like putting a large hole in your wallet. In the money-game, a huge transfer of wealth occurs between the Haves and the Have-Nots over the words, I can afford that monthly payment. Here is a hint: the Have-Nots are the ones who make that statement. So please dont ever look at whether you can afford a monthly payment to make a purchase; pay in cash after youve saved for the item. [Everything that you buy with a 0%-interest payment plan must be over-priced. Behind the scenes, your payment contract is sold to a lender with an interest rate, and retailers dont do this without building-in an acceptable profit for themselves. Ask retailers how much the item will cost if you pay in full, and you could get a lower price.]
Rule #2 Always keep your finances under control. The first step in losing financial control and spiraling into debt and money problems is simply not dealing with personal finances. Prepare for catastrophic financial accidents with health, life, disability, and auto insurance. Plan and save before you buy something. Create a balance sheet for yourself at least once a year to see how you are progressing. Pay every bill on time, or contact the creditor to tell them what is going on and make a partial payment. If you are temporarily unable to handle any of this, ask for some help immediately and find someone trustworthy who will do this for you.
The most common source of financial trouble is a trauma in your life. This can be a health problem (large expenses or unable to work), an emotional problem (divorce or loss of loved one), or a financial problem (losing a job, cut in pay, relocation, unexpected expenses). Whichever the source may be, it leads to three emotional problems: the first is denial, the second is being overwhelmed, and the third is hopelessness. Denial causes people to not open their mail and continue spending as usual, and being overwhelmed paralyzes people from getting assistance and dealing with the situation. For example, if you just lost a loved one, balancing your checkbook and paying bills is not high in your priorities. Unfortunately, tiny amounts of debt grow with interest and penalties into seemingly insurmountable mountains of debt; leaving you with loathsome options such as bankruptcy, poor credit, declining lifestyle spending, and added stress that you bring to relationships and work.
Rule #3 Pay attention to the finances of the people with whom you spend the most time. Whether they are relatives, friends, or co-workers, these people have the most impact on your financial life. Do they consistently follow the first two rules of the money game? Do they earn about the same money as you? If the answer to either of those is no, then I recommend that you start spending a little less time with them; and this is why. If they dont consistently follow the first two rules, it is unlikely that you will either. You unconsciously model the people around you, and the more people you are exposed to that dont follow the first two rules, the more likely that you will unwittingly follow them. No one thinks they are trying to keep up with the Joneses, but we all do it to some extent, and this is the mechanism. On the other hand, if they earn a lot more money than you, you may rack up a lot of debt trying to keep up with them (meeting them at their favorite expensive restaurant, joining them for another expensive vacation, buying a new car because yours is the junker among all of your friends, etc.) On the other hand, if most of your friends earn a lot less than you, you will turn into the groups banker. For example, youll find yourself in the pattern of putting your credit card down to pay for dinner and theyll all say theyll pay you back later, but 50% of them never do; and they dont mind taking advantage of you because, after all, you earn a lot more than they do. Or, you and your friends need to pay a deposit for renting a house and they expect you to write the checks because you have the money available and they do not.
The neighborhood that you live in also creates financial pressure to violate the first two financial goals. Your neighbors are likely to become friends (and Ive already gone over this), but they also influence the size of your home, extent of your landscaping, price of furniture, and the size of your TV. So pay very close attention to the finances of your neighbors if you dont like how they are measuring up for first two rules, move somewhere more in alignment with your financial goals. If your family and friends, dont measure up financially, find some additional people to spend time with that have financial habits that youd like to emulate and learn from. I have friends with a wide range of income, but it is much more difficult to follow the first two money rules when I am with the extremes from my own income. Youll just find it easier to reach the next rule when the peer group that you hang out with aligns closer to your economic level.
Rule #4 Accelerate the other three rules:
Add to your savings by increasing your income through advancing your career. It doesnt matter whether you enjoy it; it is a means to an end with the end being progress toward the fulfillment of rule #1. Increase the amount that you save by aggressively lowering four of your highest expenses. Start spending time with people that talk about investing money and are systematically building their wealth the fastest. The combination of all four of these rules will hopefully offer a next-step for you to take today to start getting more wins in the money-game.
The world stock markets are going through quite a turbulent period at present and on average around ten percent has been wiped off some of the leading markets over the last month. In this article I write about how on a personal note I try to save in a series of different financial products which helps me to spread the risk, including when we have these stock market falls.
I started saving money on a regular basis about five years ago. At this stage the stock market in the UK had just had some dramatic falls after the terrorist attacks in New York. I wanted to build up a kind of rainy day fund and decided to invest monthly premiums into a unit trust. I started saving 50 a month and over time I increased this figure.
I have to say that I have been very lucky as my investment has done very well, I have even over the last couple of years cashed in some of the units to pay for our family holidays. At the start of this year the stock market in the UK was showing its highest levels in five and a half years.
In the five years that I have been investing, I have bought and now own a large number of units in this unit trust fund. What it now means however, is that if the stock markets have a period just like the one it has had, it costs me financially on paper quite a lot of money.
I now believe that my exposure to the stock markets is high enough and have decided that I will leave the units that I have invested in the fund as they are, but that I will not be adding to them. Instead I am going to put my regular savings into one of the high interest regular savings online bank accounts. This of course is a way of spreading the risk.
I have no idea which way the world stock markets are going to go over the next few months. Many people are saying that the United States interest rates may rise and that this could have a damaging affect on world markets. There could well be another major terrorist attack which could of course result in dramatic stock market falls.
I am hoping that the stock markets will continue to rise in the same way that they have over the last five years and that the falls over the last few weeks are just a blip. I just think that I have enough money invested and would like to start building some form of other savings in a safer type of environment.
With health care costs continuing to increase, the future of Social Security unclear and pension plans available to fewer and fewer workers, America’s retirement readiness is a major concern for both individuals and the nation as a whole.
Since June 2004, Fidelity Investments has completed about 200,000 income plans for retirees and pre-retirees who faced the daunting task of gauging their preparedness for retirement. Fidelity learned that some simple, yet often ignored, investment strategies can help ensure a more comfortable retirement. Here are some basic strategies to consider.
* Make it work while you’re still working. Investors in their peak earning years should take full advantage of employer-sponsored retirement plans, individual retirement accounts and deferred annuities.
Asset allocation should be age appropriate and investors should avoid two common retirement savings mistakes: being overly cautious or taking excessive risks when deciding how much of their assets to invest in cash, stocks or bonds. Remember, though, that this does not ensure a profit or protect against a loss.
Individuals also may want to take into account simple tradeoffs that can reduce expenses and increase savings, such as holding on to the family car a few extra years once it has been paid off.
* Make it last as long as you do. Once you reach retirement, stretching retirement savings to make it last is very important. Some investors are planning to work in retirement while others are postponing retirement to take advantage of added income and continued health care benefits.
Pre-retirees may want to consider putting their salaries into income annuities, which some call “self-made pensions” because they provide guaranteed lifetime income.
Finally, given that Americans are living longer, and that market returns are unpredictable, smaller withdrawals in the early years of retirement could lead to greater long-term financial security.
* Make it count to live the lifestyle you want. Typically, investors who are able to achieve the retirement lifestyle they want have created a detailed, realistic budget for retirement living expenses. Investors should plan for rising health care costs and other financial contingencies. To help stay on track, individuals and their spouses should review their plans annually, including expenses, investments and asset allocation.
Creating a successful retirement takes more than a one-step solution. Whether it’s finding a “fun” part-time job, eliminating one of the family cars or taking a vacation locally, retirees have implemented multiple strategies to extend their incomes, control their spending and maximize their savings. – NU