Managing Debt

How proper budgeting can help you contain debts?

Keeping a proper budget is very important in personal finance. It can help you prosper financially and achieve financial goals. Importantly, through maintaining a proper budget, you can get relief from debt. Here we discuss about some budgeting tips, by following these tips you can reach your financial goals.

Use credit cards wisely

One of the prime causes of personal debt woes is of course the unwise and imprudent use of credit cards. It is a very common trend in the country that many of you take out multiple credit cards and use those cards recklessly. Inadvertently, this often results into debt woes. In order to avoid this, it is recommended that you must use credit cards wisely and with discretion. However, this is not to say that you avoid using credit cards completely. Rather, it is recommended that while using credit cards, you must be very rational.

Put in place an emergency fund

Another important budgeting tip would be to build up an emergency fund so as to meet any unintended contingency. Various emergency cases may occur at any time and these can result into huge monetary loss. Natural disasters or sudden emergency cases may result into huge financial loss. If you have an emergency fund in place, you can contain all these unintended contingencies. In order to build up an emergency fund, you need to save something on a regular basis.

Examine your expenses

Another important budgeting tip would be to analyze your expenses. First of all, you need to carefully examine the expenses that you make. You need to see your items of expenses and see how much you spend on each of these items. This will help you identify the items on which you are spending more than actually required. The next step would be to prepare a realistic budget or to allocate money on each of these items. Thereafter, you need to ensure that you do not spend beyond your limits. You need to do this on a regular basis. This will help you a lot to save a lot of money.

Curb instinctive purchases

One common thing that often creates a big hole in your pocket is your impulsive purchases. Sometimes, it is seen that, you can’t control yourself and engage in tempting purchases. In order to contain this habit, it is recommended that before visiting a shopping mall, you must decide what you will purchase and the approximate amount that you will spend. You need to stick to your decision. This will in turn help you save a lot of money.

By following the above mentioned tips, you will be able to get the much needed relief from debt woes. To know more about debt relief you may visit http://www.ovlg.com/debt-relief/.

Web Tools To Help You Manage Money

Fox Television financial expert John R. Quain has specific advice on some of these individual components of a good overall plan to get control of your finances.

Eliminate Debt: To go straight to the heart of the problem, there is a free website, ReadyForZero.com. It links to your credit cards, loans and bank accounts, totals what you owe and estimates how long it will take to pay off your debts, depending on the interest rate of each account. A sliding bar of what you can pay each month shows dynamically how you can shorten the time to pay off everything, and save money in the process. Even a small extra amount added to monthly payments can make a difference over time. ReadyForZero’s graphs show at-a-glance how you can improve your economic health. The program was originally designed with credit card debt in mind, but it has been expanded to include other types of debt. It includes recommendations for improving your overall financial picture, such as calling credit card companies to arrange different statement dates to accommodate your income pattern.

Pay Bills On Time: Late fees not only cost you dearly, but they can damage your credit rating. Pageonce.com has a mobile application that is designed to keep you on track with payments, according to the site’s COO, Steve Schultz. The company is a “financial nanny,” he said, that warns when payments are due and collects monthly statements into a single, convenient place. The greatest advantage is the ability to pay directly from your Android or iPhone. That’s particularly appealing to those who travel for their business and tend to lose track of payment dates. The fee for the mobile bill-pay feature is $4.99 per month.

Plan ahead: You can get even more support in budget planning, bill notification and financial advice through Mint.com, considered by many to be the most mature app and service online. The software is free and it tracks bills and accounts to give you detailed expense balances. It automatically categorizes certain charges or fees under headings such as “shopping,” “alcohol and bars” or other expenses common to your individual spending patterns. It shows how much cash you have on hand, how much credit card debt and what your cash flow looks like. Mint is available for Android and iPhone handsets and has an extensive website. The software is not, however, integrated with the desktop software of its parent company, Intuit’s Quicken.

Quain suggests hiring a coach if you are serious about getting a handle on debt. That could involve signing up online and sharing details of your financial standing with a third party. If that’s a leap of faith greater than you feel comfortable with, try DebtCoach at Bills.com. The site doesn’t require you to post private account numbers, just the overall data. It may suggest that you seek professional help or simply take steps such as increasing payments, reducing spending and paying off debt early, depending on the depth of your problem. Handling debt is an individual matter. It’s a different problem for a recent college graduate, for instance, than for earners who have a family to support. Look for advice from those who recognize these differences.

10 New Years’ Financial Resolutions

Losing weight and stopping smoking are the two most common New Years’ resolutions Americans make. But harder than either of these may be the determination to get your finances into shape. In fact, if you’re in shape and your finances are not, life can be miserable.

Here are 10 New Years’ Resolutions that will help you get your finances back on track.

1. Know What You Want

Write down what you want this year. Knowing what you want will give you goals to shoot for and reasons to save for those goals. Keep a list of the things you want the most and target them by not overspending on things you think you have to have but don’t really need.

2. Kill Your Debt

Take a good look at what kinds of debt you are carrying. Evaluate whether you are able to do anything about them this year that you weren’t doing last year. Are there numerous credit cards that still have outstanding balances? Can you consolidate any of them to the lowest interest credit card. Can you make a long term plan to get rid of this type of debt? How long will it take you? Be sure to work on paying them off, not making minimum payments. The credit card companies love it when you do that because they make more money from you.

3. Pay Bills On Time

Nothing can hurt your credit more than paying bills too late. Not only do you loose money when this happens, you lose in your credit scores. That will hurt you when you try to get a loan for a home purchase or a business loan.

4. Plan Ahead

Planning helps in most areas of life, but with finances planning is key to your long term security. Talk to a financial planner to help you with estate planning. Forecasting what you will need as you age is critical to do while you are young. The longer you stick to your plan, the better returns you will get.

5. Monitor Your Credit Report

Keep an eye on your credit report. You may think that everything is alright, but you really need to make sure. Unexpected reporting errors do happen all the time. Make sure it isn’t happening to you.

6. Track Spending

You have probably heard this a million times. Some people do this with ease, while others struggle. If you have a hard time writing things down as you spend cash, make it a habit to use your debit cards for spending. You will be able to categorize your spending much more easily this way. You can also use your personal checks to act as a record of spending. Just make sure you can evaluate what is going out from your hard earned dollars.

7. Reduce Expenditures

This seems obvious, but are there areas that you don’t really need to be spending money on? Are you dining out too frequently? Take a cooking class to make your home cooking taste better so you won’t want to go out as much. Just look at things you can live without and do it. Live without it.

8. Make Money Doing What You Love

It doesn’t take a rocket scientist to figure out that you are going to do what you love to do so why not figure out a way to get paid for doing that. When you love what you do it hardly feels like you are working. Time goes by quickly and you tend to improve your skills along the way.

9. Use Financial Software

There really is no excuse for being in the dark about where your money is going. Free websites like Mint.com will help you set a monthly budget, set financial goals and help you to save money by alerting you when you are getting charged fees through your bank. Many people use Quicken software or Quickbooks to help them get organized. The price of the software is worth it to gain some peace of mind and financial plans.

10. Read A Book About Finance Every Month

Although this is the last of the resolutions, it is probably the most important. There are hundreds of books out there that can help you at any stage of your financial planning. The more you know, the better you can plan for financial security.

Depression Caused by Debt

Many experts say that getting depressed over mounting debt is normal. For many individuals just the thought of not being able to overcome their debt can trigger major psychological problems. Generally, the depression is just a phase, as the debt loan lightens, so does the depression. However, for others, the depression can lead them down a dark and tragic road, ending in suicide or thoughts of suicide.

It is critical for anyone that has had thoughts of hurting themselves or others to seek out the care of a doctor or mental health care professional. They will be able to offer a proper diagnosis and help develop a care treatment plan. In conjunction with a doctor’s care, it is also important to get to the root of the problem. If the root of your depression is seemingly insurmountable debt, a debt relief counselor can help assess your situation.

A debt counselor can offer just as much help in lifting depression as a doctor or psychologist can if debt is your main source of stress. They will take note of your financial crisis, develop a plan of action to start managing your debt and a budget that will help you avoid new debt and financial pitfalls in the future.

Financial stress can, at times, feel unbearable. Whether you are stuck in a cycle of late payments, growing credit card debt or you unexpectedly lose a source of income, it can negatively impact all aspects of your life. This allows depression to take hold as you feel a distinct lack of control over your situation.

The brain does not always think logically during a depressive phase and debt that can be successfully managed looks like a never ending battle. Some people feel they cannot face a battle that seems like it offers no way out. That is why it is so critical to seek outside help if you or someone you love exhibit any signs or symptoms of depression.

Seeing outside help through a debt relief counselor is one of the best things you can do for yourself. Many times, just the act of asking for help can make you feel more in control of your situation and lighten the dark cloud hanging over you. A debt counselor can help you determine the best course of action to begin paying down your debt and recognize any areas that you may be able to save money in order to maintain you living within your means.

Being in debt can feel like a heavy burden around your neck, but there is help out there and often it is just a phone call away. You do not have to wait to hit rock bottom before seeking help. Debt should not be a source of depression or anxiety, but an opportunity to better your situation by taking control over your finances once and for all.

You can tackle your personal finances by first recognizing that it is a problem beyond your means and acknowledging you need help. Climbing out from under deep debt is not easy and it does take commitment and some sacrifice, but you will be better off accepting that and deciding you are willing to fight rather than give up because of money problems. There are solutions out there that will work for you.

Guest post by Suzan Bekiroglu

Christmas Shopping Budget Tips

The crunch is on. With a few days to Christmas, too many shoppers are in panic mode and throwing the budget out the window. If it’s happening to you, stop, take a deep breath and take back control.

Even those who manage to keep a lid on Christmas shopping during the early days of the shopping season sometimes find the temptations too much in the final days leading up to Dec. 25, credit counselors say.

Merchants —literally— bank on it. They offer last-minute bargains designed to bring the shopping throngs through their doors. Free photos with Santa, holiday food samples, special in-store events, buy-one-get-one-free deals are all crafted with the buyer —and his wallet—in mind. Keep firmly in mind that nothing is a bargain if you can’t afford it. Keep your Christmas shopping budget in mind.

Experts offer several strategies to help you avoid temptations during the final days of the annual frenzy.

Stick with the budget you made to begin your shopping spree. Avoid the temptation to add to your list or fudge a little on what you planned to spend for each recipient. Trying to be Santa to too many is a sure-fire budget-buster. Be a friend all year round instead. Biting off more than you can reasonably chew is a sure way to take the ho-ho-ho out of the holidays.

If last-gasp gift requirements do pop up, consider gift cards. They’re more convenient and less time-consuming than looking for bargains. The longer you spend in a place of merchandising, the greater the temptations become. If you go, have specific items in mind, find them, pay for them and go home. Browsing only gives you time to weaken.

Remember that groceries are part of the equation. The come-ons in the grocery aisles can be as tempting as those in other stores. Plan what you want to offer family and friends and stick with it. A cupboard full of crackers is not a particularly good Christmas leftover.

Shift your focus to other things. Avoid the stores. Think of places to go to celebrate the season without the urge to lay out cash, checks or the plastic. Remember for whom the till tolls. It tolls for you. Find some good entertainment that doesn’t involve walking through a mall. Or throw on the holiday music and spend some feet-up time. Contemplate the good things about the season, spending aside.

Avoid credit cards. Leave them home if you are venturing out. In extreme cases, have someone you trust put them away for the duration.

Communicate, even if it is belatedly. If the first 11 months of the year were tough, leaving your Christmas budget on the thin side, say so. Share your situation with relevant family members. Look for unique gifts that won’t break the bank. A little of your time may be more appreciated than a lot of your money. Chances are that if you talk with others, you’ll find they are hoping to cut back on their Christmas outlay too.

Use some of the time you are saving by avoiding the stores to look ahead to next year. Plan in advance to keep expectations reasonable and to make the season fit your situation. Plant firmly in your mind this year’s temptations for last-minute spending and recognize it when the same thing happens next year.

Depreciating Assets Can Hurt Your Finances

Everyone has them— depreciating assets. What are they? Assets that lose value over time rather than gaining value. It isn’t possible, it seems, to avoid purchasing a car, major appliances and electronics. They are financial realities. However, the trick is to purchase what you need rather than what you want and to be aware up front what depreciation rates assets can have. There are some assets you probably could do without if you took into consideration how fast they depreciate. If you can’t do without them, take special care in acquiring them.

Common Depreciating Assets

Timeshares: Many people purchase them without realizing the money holes they can become. Unlike the majority of standard real estate, most timeshares lose 50 percent of their value immediately upon their purchase from a resort. Additional depreciation, up to 90 percent, occurs over the next few years.

Boats: There is a reason why boat owners often lament that the two happiest days of their lives were the day they bought their first boat and the day they sold that same piece of property. The dream of boat ownership is quickly absorbed in the reality of the expense such ownership entails. Boat rental may seem an expensive alternative, but it is usually far less expensive than to own your own. Your own boat is usually a depreciating asset you could do without.

Recreational vehicles: Just like cares and boats, RVs love a large percentage of their retail value the minute you depart from the dealer’s parking lot and they continue to lose value as they age. Few people use RVs as much as they expect to when they plunk down the purchase price. Add the costs of gas and the space rental many people have to pay for the RVs when they are not in use and ownership doesn’t make much sense.

Luxury cars: There is not much chance of avoiding a car purchase forever, but keep in mind that it is a depreciating asset. To get the most out of your purchase, focus on what you really need, not what suits your ego or what will keep you in the running with the Joneses. A used car in good condition has already seen much of the initial depreciation priced out. The corollary is someone who wants to have the benefit of gold’s stability and buys jewelry instead. You can’t have it both ways.

Electronic Gadgets: They not only depreciate, they do it quickly. Owning the latest and, purportedly the greatest in computers or electronic gadgets may be popular, but it also is the least cost-effective option. The latest models always come with a premium price. Last year’s model is usually just as effective for most people. And last year’s models will be heavily discounted as soon as the new model appears on the horizon. Make sure your purchase checks out with your wealth building plans.

The prospect of any large purchase should trigger the question: “Do I really need this?” If the answer is “Yes.” proceed wisely. Opt for the product that fulfills your actual needs at the best possible value. Depreciating assets eventually affect your finances, so avoid them when possible and consider devaluation as one of the factors to evaluate as you make your purchasing decisions.

Eight Holiday Savings Tips

Save more for the holidays. Shop online —wisely

Faced with the fallout from a lingering bad economy, many online merchants are offering deep discounts on the most-wanted holiday gift items, often throwing in free shipping with low or no spending threshholds. The holiday promotions began before the masks were off the Halloween trick-or-treaters. Lands End was one of the first, with a $40-off deal on orders of at least $100 and free shipping if the tab goes over $50.

Nearly 93 percent of online retailers say they will offer free shipping at some point through December, says the National Retail Federation. A good number of the merchants say the promotions will be more tempting than last year. Shoppers put off by the sense of a very slow move toward a robust economy will want some special deals to prod them into digging into their pocketbooks, experts say. The Federation says it expects the average shopper this season to do about 36 percent of his buying online. Last year, the figure was 32.7 percent.

Some online retailers such as Walmart, are offering not only expanded free shipping for those who purchase at least $45 in goods, and they have online-only bargains that can’t be found in stores. A spokesman for Bradsdeals.com predicts all-time low prices on televisions, computers, cameras and tablet computers.

In what has become a well-entrenched custom, the holiday online shopping frenzy is expected to launch on Black Friday, the day after Thanksgiving, with more to come on the following Cyber Monday.

Shoppers can multiply their holiday shopping benefits by following these tips from the experts:

MONITOR DAILY DEALS

Sites such as Groupon.com, Eversave.com, Living Social.com and PlumDistrict.com offer half-off buys from a variety of online dealers. For example, Groupon recently offered a $40 Body Shop certificate for $20.

KNOW RETURN POLICIES

Not all online merchants allow to return an item in-store. Find out up-front and save the hassle.
COMPARE PRICES: Begin your shopping with a Web search of the particular product you have in mind or consult a comparison site such as Bizrate.com or PriceGrabber.com

READ PRODUCT RATINGS

One of the great advantages of online shopping is being able to access websites that include customer ratings of products.

AVOID SHOPPING CHARGES

Many retailers recognize shipping costs as one of the deterrents to online shopping. They offer ways to get around them. Amazon.com offers free “SuperSaver” shipping on orders over $25, although the deal doesn’t apply to all products. Some of the free-shipping offers are tied to a spending minimum . Freeshipping.org can be a guide. Some online dealers offer a buy-online, pick-up-in-the-store option, eliminating the shipping charge.

USE COUPON CODES

Among websites that can give you information about money-saving coupons are RetailMeNot , Coupon Cabin and Coupon Dealing. Some sites will accept more than one coupon code per order. For the best savings, compare coupon offers between a couple of sites. There are many combinations, so do the math.

GO SOCIAL

Many major online merchants are offering more money-saving offers via Facebook and Twitter. Get on the “Like” or “Follow ” lists of your favorite retailers.

GET CASH BACK

Ebates.com, ShopatHome.com and FatWallet.com and other cash-back websites earn a small commission for referring shoppers to online merchants. They then share that commission with shoppers who buy. Start with one of these Web pages and then click on the merchant with whom you would like to shop. Not every merchant works with a cash-back site, but many do.

Distribution of Wealth Between Young, Old is Growing

The recession that keeps dragging along has had a serious effect on the difference in what older Americans have accumulated and what younger Americans are expected to end up with over time. A relative dearth of work opportunities for young adults, coupled with housing and college debt, has doubled the disparity since 2005, Census figures show. And the gap is nearly five times what was evident a quarter century ago, after adjusting for inflation.

Older Generation May Be Better Off

It is expected that older people who have accumulated over a lifetime, would be better off than those who are just starting down the economic trail. But the current figures show the gap growing wider at an escalated pace. The Census figures were prepared for a special congressional committee that is working to find where they can cut $1.2 trillion out of federal budgets over a 10-year period. The figures tend to pit the benefits paid to older Americans in the form of Social Security and Medicare against programs that benefit those at the younger end of the scale, such as education and assistance for the poor. The debate is narrowing down to whether some of the money allocated to the elderly might be better spent at the opposite end of the spectrum.

Net Worth Of Younger Generation

The current economic downturn has hit younger Americans particularly hard. Many of them are paying for higher education and many are accumulating debt while they wait for the job market to regain its equilibrium. Many are paying for homes, sometimes for homes that are worth less now than when they bought them during the housing boom that preceded the economic slide. The Census figures show that the median net worth of households headed by someone 65 or older was $170,494 — 40 percent more than in 1984. The median net worth for households headed by younger people was $3,662, down by 68 percent compared to a quarter-century ago, according to the Pew Research Center. The older folks often have paid off their mortgages and built up more savings than their younger peers. In 2009, households headed by someone under 35 saw their median net worth reduced by 27 percent, largely due to credit card debt and student loans. It was the largest hit in any age group. Those in the 35-44 age category saw a 10 percent dip.

In all, 37 percent of younger-age households have a net worth of zero or less. That’s nearly double the figure posted in 1984. Among households headed by a person 65 or older, the percentage of those labeled at zero net worth has hovered nearly unchanged at 8 percent. While the young face the highest unemployment rate since World War II, older Americans are staying on their jobs longer.

Social Security accounts for 55 percent of the annual income for the older-age households. The payments are indexed to inflation, so have not lost relative value. Young people, on the other hand, have seen increases far in excess of inflation in such items as college tuition. At the same time, college aid has dwindled. While Pell Grants to needy students have increased somewhat, they cover a smaller portion of higher education costs.

If the current trends continue, experts say, the rising generations may be the first in America for whom the long-held expectation that each generation will do better than the one before will not come to fruition.

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