Organize Your Financial Life

Keeping your financial life in order is one way to get yourself on the pathway to being wealthy. When you have a pile of  bills and paper work cluttering up your office, it is likely that you don’t know what is coming in and going out. You have relinquished control when you are in that state. If you have one huge plastic bin that you throw all your mail in you’ll want to update your system.

If someone needed your tax returns for the past year, could you locate them easily? If you needed your social security card, birth certificate or will, would you know where they are?

Have you left instructions for your family members to retrieve important financial information in case you passed away? Do they know where your life insurance policies, bank accounts or your property deeds are located? Dealing with the death of a loved one is difficult enough without putting the burden of locating your important information on the shoulders of your children, relatives or friends.

Create a filing system that will be easy for you to use and tell your family  where you’ve put your important papers. A filing system is important for keeping tabs on your investments, your tax returns, your will, your insurance information and other legal documents. Is your system going to help you locate the important papers when they are needed? Most people understand how helpful a filing system is once they have it working for them.

What do you do with your mail? There are so many advertisements and junk mail that accumulate. It’s best to deal with this trash on a daily basis. If you have mail that you want to get rid of, be sure to use a shredding machine. Important information can be on unwanted mail. There are people who make a point of rummaging through trash to get this information and that can put you in serious risk for identity fraud. You don’t want that to happen to you.

What about bills that come in? Where do you put them before you pay them? With the online banking services available you can simply take the bill and set up a scheduled payment for it that will be sent out when you choose it to be sent. Then destroy the bill if you don’t need it for any record keeping. If you can keep up with the mail and bills coming in  with a system that is orderly, you’ll avoid a lot of late payment fees and be able to use the money you earn more effectively.

No plan is going to work for you if you don’t actually do it and with money matters, some people just hate dealing with organizing this information. Even looking at a credit card bill can feel devastating. If you’ve had spending sprees that you regret, you won’t even want to open your credit card bills.

It may be difficult for you to imagine what is going to get you back in control of your financial life. The most important thing to do is to have the courage to create a good system that works for you. Get rid of the large bin that you toss your mail into and forget about for weeks on end. Get back on the pathway to wealth by creating a system that works for you. You’ve done much harder things in the past. Organizing your finances is one way to treat yourself well and gain back a feeling of peace in your life.

Unbalanced Financial Responsibility Sinks Couple

This is a story about a relationship between two people and some money.

Part 1

Boy meets girl. Boy moves in with girl. Household expenses are split and all seems well. Years pass. Boy wants to change cities for professional reasons. Girl wants to finish grad school. They make a deal: They’ll move when the degree is finished.

Warning signs: She is paying a greater share as the years go by and her career advances. He doesn’t take any concrete steps toward advancing his own career. He has sold his car ‘to save money’ and relies on her to drop him at the train station for his job. He has no real friends and his ‘project partners’ (in six years, there’s only one finished project) all seem to be women. And then:

Part 2

The degree is finished and true to the deal, she starts organizing a move. She researches new jobs cross-country. She rents a truck, makes hotel reservations, and arranges for a friend to drive the car in caravan with them. Oh, by the way, she’ll pay the friend’s airfare home. She puts down the money on an apartment. She lands a job, but he says he needs some time off work to get things going. They make a new deal: She’ll cover the rent for a while so he can concentrate on jump-starting his career. Years pass. His career hasn’t started. The subject comes up fairly often, but she hates to fight.

Warning signs: By the end of three years, not only is she paying all living expenses, she’s giving him an allowance to cover his “career-building” expenses. He hasn’t held a job since the move. His ‘project partners’ still all seem to be women. He has built no social or professional network and does not participate in her social life. (This didn’t bother her much when she was in grad school, but life is different now.) She doesn’t really want to live alone, and she tells herself he isn’t costing her much more than it would cost to live alone; but their relationship has become that of roommates. And then:

Part 3

She takes up an activity she’s passionate about. He isn’t interested. She meets someone new and tells her roommate she wants to pursue the new relationship. He panics. He asks her to marry him. He argues. He threatens. He marches her into the bank and stands at her back while she takes cash advances on six credit cards, a total of $30,000. He deposits the money in his own account. She tells him that they can’t continue to live together, and she can’t afford to move because she doesn’t have the money for a deposit. He won’t move out. She starts spending most nights and weekends away.

Warning signs: The whole situation.

Part 4

After months of misery, she is able to finally get him out by renting a truck, packing it with almost all their possessions, and driving it to his sister’s home nearby. With the expenses of the move, her own living expenses, and the extortion debt, she is barely making ends meet. She has no savings and no assets. She talks things over with the new partner. They decide bankruptcy may be the best solution. She asks around and gets the name of a firm of attorneys.

Part 5

The attorneys hear the story, go through all the paperwork, and agree that going after the ex in court would be both expensive and unlikely to result in restitution. A bankruptcy petition is prepared and filed, at a cost of a few hundred dollars. She has to appear in court. She feels like an idiot, a failure, a disappointment to herself. The judge hears a brief statement of her reasons for the petition, nods, signs off. That’s all. Ten years later, the bankruptcy is off the credit report. Had she not filed, she would still be making payments on the debt.

Author’s note

This is a true story. I’ve heard similar stories from half a dozen women, and a couple of men, in my city. At least I never married him. At least I didn’t have to smuggle my belongings to my office and store them under my desk until I had all the essentials together, and leave for a new state from the office, like one of my friends did. At least I wasn’t that scared.

In hindsight, perhaps I should have either moved out immediately or had the bank call the police. But I didn’t want to feel responsible if he hurt himself, I surely didn’t want him to hurt anyone else, and his behavior was sufficiently frightening that I believed one of those outcomes was possible. So I bought him off.

What is the moral of this story?

Don’t cover expenses for another able-bodied adult without a contract, and don’t make financial deals that only favor one party. Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.

Article From www.getrichslowly.org This guest post from Maria is part of the new “reader stories” feature here at Get Rich Slowly. Some reader stories contain general “how I did X” advice, and others will be examples of how a GRS reader achieved financial success — or failure.

This story very much reminds me of the book for unmarried couples I reviewed earlier this week.

Related Articles at Get Rich Slowly:

• Reader Success Story: Debt Free on $2,000 a Month
• Sometimes Free is Expensive: A Cautionary Tale

Other Related Articles:

• Have debt, don't borrow (financialpost.com)
• Once You Reach Your Financial Security Goals, What's Next? [Ask The Readers] (lifehacker.com)
• Twitter Weekly Updates for 2010-02-28 (pocketsmith.com)

The Pursuit of Happiness Through Difficult Financial Times

In the pursuit of happiness, many of us believe that having lots of money will make us happy. According to Jean Chatzky, the author of the book “The Difference,” this is not always true because once you have money, more money won’t buy more happiness. The happier you are, the more money will come in.

Some of us have been through bad financial situations. With bills piling up, creditors calling, and the household income barely enough, life still goes on.  You can make the best of it or just plain give up and lose hope. Financial problems can  be  very stressful  for anyone but there is always room to make a change in your attitude. In such difficult times, what are the critical factors that can make a difference in your life? Jean Chatzky tells us all about the main traits that you have to be successful.

Happiness and optimism are two of the keys in making more money because these two traits help you solve problems and come up with great ideas. Even if you fail the first time, being optimistic will help you try again, and again.

Having resilience means you can overcome anything and that includes financial problems. These people never denied that their finances were suffering. They were able to concentrate on how to take control of the things that they could change and let go of the things that they could not.

Having passion to lift yourself up from your financial struggles is another key element to financial success. Loving what you do is very important and when you love what you do for a job then you are on the road to financial stability.

Social capital is acquired by seeking out advice from people who can help you get to the next level of income. Value the relationships you have and reach out to people that you can help and those who can help you. Take time nurturing these relationships.

Wealthy people have the funds to spend lots of money but most of them are not foolish spenders at all. In fact, they save money on a regular basis. This is a fundamental goal for anyone wanting to improve their personal finances.

We usually have hunches about what might happen next. These intuitions will help you make decisions about spending and investing your money. Most wealthy people have developed  good intuition and this gives  them a big advantage. Learn to listen to your intuition when you are making financial decisions.

Taking calculated risks in the market is a good way to make money whether in good times or in bad. Those that lost thousands in their investments are slowly beginning to see those dollars come back. Let your money work hard for you.

Being grateful for your particular situation is key to being able to move on and learn from the past. People who get rich and stay rich, express their gratitude by contributing to organizations and communities that they care about.

Use these principals of gratitude, passion, resilience and optimism to change your attitudes, set realistic goals and return to your path of financial prosperity.

Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful. ~Albert Schweitzer

Personal Finance Give Up-Itis

Personal Finance Plans

Have you given up trying to succeed with your financial plan? Have you gone through personal finance disasters? Do you suffer from give up-itis?

You may be wondering what give up-itis is. To explain that, let me share with you a story from Donald O. Clifton’s book, “How Full Is Your Bucket?”

U.S. Army chief psychiatrist, Major  (Dr.) William E. Mayer,  did a study of the lives of soldiers who were held as prisoners in the Korean War. He studied 1,000 cases of soldiers who suffered extreme psychological depravement as POWs.  These people didn’t suffer physically as in being tortured, but they were systematically deprived of the normal benefits one can receive from friendship and support.  They caught a deadly disease:  extreme hopelessness.

The methods used to cause this hopelessness were conniving and deceitful. The death rate in the POW camps there rose to 38%, the largest in military history. Half of those soldiers died because they had given up.

To break down the spirits of the soldiers, they were offered small rewards for ratting out their fellow inmates. Nothing happened to the inmates as a result of the news, but alienation soon crept into the camp. The North Koreans in charge held mandatory group meetings where the prisoners were forced to tell of all of the bad things they had done and any instances of good that could have been done, but failed to be done.  Without emotional support, the prisoners soon began to give up.  Some would go into their huts, sit in a corner, pull a blanket over their heads and were dead within two days.

You may have suffered from a recent financial loss of some kind, perhaps a loss of a spouse, a job or your personal health.  If you can learn from the hopelessness the soldiers  suffered as prisoners of war, you can start getting your financial life back on the right track.

Don’t give up and pull the covers over your head preparing to die. Seek out friendships that are emotionally supportive. Support other people in their struggles with life and you will fill that emotional bucket you need to avoid give up-itis.

With emotional support, you will be able to face things in your personal financial life that you never thought you could face.

Five Personal Finance Tips

1. Be honest with yourself about what has happened to you. Find out where you are right now with your money.
2. Re-examine your living expenses and what you actually need to survive. Is there any place that you can cut back on spending? Where can you most effectively decrease spending?
3. Evaluate your income as it is now and make plans to increase it. There are many ways you might be able to earn extra income to help you through. Odd jobs and piece work types of jobs are plentiful.
4. Start tracking your expenditures if you don’t already do so. Tracking what you do is the best way to help you pinpoint the problem areas that you may be causing.
5. Set goals that you would like to reach and tell a friend about them. Emotional support from friends is really invaluable to you.

What is your plan to improve your financial situation?

Learn the lessons that your money can teach you

Are you struggling to make ends meet? Is the personal financial advice that you hear from experts making you depressed?

Suze Orman has a television show that offers you personal finance advice. People are invited to call in and ask her the proverbial question, “Can I afford to buy this item?”

Some things that people want to buy seem to make perfect sense.  They may however, be outrageous to Suze.  She’s definitely on the conservative side of spending. You need to have a gazillion dollars saved to be able to afford to purchase an item under ten thousand dollars.

Powerful, forceful, decisive and intimidating, Suze will tell you the good or bad news about whether you should make a purchase or not.  She always says, “Show me your money!” You will be asked to list your current income, your savings, your retirement savings and the amount of debt you have accumulated.

After watching a few hours of this show, you may look at your own situation and feel like a total failure and that you’ll never measure up to the standards you “should” meet. You may have been through a job loss, a divorce or a medical catastrophe and not have the assets you see other people having.

The ironic thing about this show is that a few experiences in Suze Orman’s past may actually make you feel better.  Recently on Oprah’s website, Suze revealed that as a young woman, she had been lured into the rich lifestyle and the feeling she needed to own things to impress other people. She frankly admitted, “I, Suze Orman, took money out of my 401(k) to pay for that pricey Cartier watch. And when I ran through all my money, I started using the bank’s. I eventually had more than $60,000 in credit card debt.” So she has been in trouble financially and knows what kind of misery it brings.

Dave Ramsey, popular author, radio show host and personal finance advisor had a similar brush with disaster. By the time he was 26 years old, he had a net worth of $1 million dollars. That sounds wonderful, doesn’t it?  However, he ran into some problems with borrowing money.  Soon, one of his creditors demanded that he pay his short-term notes totaling $1.2 million. On top of that he had only 90 days to do this. He was sued, foreclosed on and with a wife and baby added to the mix, the Ramsey’s were finally bankrupt.

It is just this type of experience that led him to develop his expertise on financial advice. He sought out every type of financial advice out there. He read everything he could get his hands on. Now he has helped thousands of people to achieve financial security.  He took to heart the admonitions of F. Scott Fitzgerald, considered to be one of the twentieth century’s greatest writers.

“One should … be able to see things as hopeless and yet be determined to make them otherwise.”

If you are struggling financially, become determined to make things different.  You can learn your money lessons by paying careful attention to getting out of debt, building an emergency fund, and living on a reasonable budget.

Managing Your Checking Account

Managing your checking account can be summarized into five simple steps. These steps are essential to master so that you can properly manage your household expenses and your budget as well.

The first step is to choose a bank that you like. Go to the various banks and credit unions and ask them about the different kinds of checking accounts that they offer to their clients. The most important question you might ask is about all the fees that go with the account such as the ATM fees, cost of check, monthly fees, overdraft protection and overdraft charge. You should also ask if the account in question would be available for online banking transactions. Free checking is always a good bonus but do not base your decision solely upon it.

The second step has to do with recording your transactions. It is a tedious and boring job but you really need to put all transactions into writing. Put down in writing every monetary transaction, all deposits and even ATM withdrawals. This process will help you keep accurate bank records.

The third step is to balance your checking account transactions every month. When you get your monthly statement from the bank, reconcile it with the data you input in your check register. When you do this, you can often find mistakes and most often it is your mistake. Sometimes it is a true banking error or it could even be fraudulent activity. It is always helpful to be able to find these mistakes and keep all your records straight. In case there are errors and discrepancies, contact the bank immediately in order to correct it as soon as possible. If you cannot go personally to the bank and you use the telephone instead, be ready to discuss the situation in detail to the service representative.

Documentation is the key to money management. It is the proof of all your financial transactions so it is essential that you keep a copy of them for your future reference. Not just any copy but you need a written records so print them out. Even your online banking transactions should be printed out. When it is time to throw your records out, shred the documents first for they contain vital information you would not want other people to have.

Step number four is to keep a close eye on all automatic payments and deposits so you can be assured of its accuracy. Even if the system is in automatic already, you should not assume anything. You should have a general idea of what your normal transactions look like so you can spot things that are out of the ordinary.

Step number five is to avoid a zero balance like the plague. Do not totally deplete your checking account. You should always keep a cushion of a few hundred dollars in your account so you can use this money as a hedge against emergencies and overdrafts. If you are smart, you’ll have set up an overdraft protection account so you don’t get charged excessive fees if you do make a mistake in your records that causes you to go below zero.

Following these five suggestions will help you on your way to good money management skills and help you live life more comfortably.

Save money by ordering personal checks online.

Effective Use of Credit Cards

Credit cards may be one of the most innovative and helpful inventions in the modern era. Through this little electronic card, we are able to make cashless transactions and online purchases. We are now able to live in comfort for credit cards make us think we can afford the finer things in life.

This is one of the advantages of having a credit card. The downside is that we also have to pay the banks interest fees for this service. People who do not manage their finances well can be charged high interest rates and huge penalty fees for late payments. This is a cycle they may never escape unless they seek professional assistance.

If you use credit cards regularly and you can control your spending, there are some ways you can get low interest rates. Read on and find out how.

There are essentially two paths you can take if you want lowered interest rates. The first one has to do with dealing directly with the credit card company. If this is not appealing to you, you can use the second option, which is to find a separate loan that has lower interest rate than your existing credit card rates.

In dealing with the credit card company, before you request a lower interest rate, you need to have a good credit rating. Remember that you can only qualify for lower interest rates if you have good credit scores. A good credit rating is an indicator that you pay your debts regularly and that they can rely on your monthly payments.

Now, if you want another way to go about this, you can approach other lending firms that are willing to offer you a lower interest rate as well. You can refinance your home loan. You may receive a lower interest rate because of this and it may allow you to pay off some of you high interest credit cards.

If you are serious about getting your finances in order and you instill in yourself a sense of discipline, there are a lot of ways for you to get the lowest interest rates possible. You should not expect overnight success when you are in search for a competitive interest rate, instead, practice some patience in the course of your research. Why not begin your search today? Call your credit card company or search the web for other options. There are numerous websites that can help you get started.

Debt consolidation

Having debt is nothing to be ashamed of. There are not many in the world that do not have some kind of debt in one form or another. You may have debt from your credit cards, your home loans, auto loans or student loans. Debt actually is now an uncomfortable part of life, whether we like it or not. Having too much debt and not having the money to pay for it is where the people get into trouble. In these trying times of the economy and rising interest rates, you need a solution that will get you out of debt or simply help you make your payments. The answer to this is debt consolidation.

Debt consolidation is a choice preferred by many not only to relieve the financial pressure but also to manage the debt more accurately by paying just one monthly payment. It is financially helpful and convenient as well.

How do you consolidate your debts and where will you ask for assistance? Let us take a look at the second concern first. There are lending institutions who are willing to consolidate your debt for your. The trick is finding the one that has the lowest interest rate. If you consolidate with a bank that has high interest rates, it would be impractical and foolish for because you would have to pay more. If you go to a lending firm that has the same interest rate as you have now, then the only help you get is convenience when it is the financial assistance you are really going after.

After finding the right lending institution for you, you may need to first pay off your smaller debts. You would not like that to mix with your debt consolidation.

Probably the cheapest way to go about consolidating your debt is to access the capital from the equity in your home loan. This is an essential advantage for the interest rates will definitely be lower than the rate of your credit card agreements.

Now, how about those who do not have enough equity available in their mortgage? There is still hope for you if this is the case. You could just refinance your property. This way, you will have in hand extra capital to be able to pay off your other debts having much lower interest rates. If you still feel like you need sometime before you get your finances back into shape, you can request a longer repayment term. The more years or months you add to your term, the less monthly payment you will get, but the more interest you will have to pay.

Secured loans are popular among property owners. This is because it is the property is considered the security of the loan lender. Secured loans usually offer long repayment terms, low interest rate and large loan amount.

The next time you are in debt, you know now some feasible options for you. There are a lot of lending institutions willing to consolidate your loan for you. Plus, banks appreciate it when people take the initiative to pay off their debt. They are more than willing to serve.

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