Personal Finance Blog

Tips And Stories To Help You With Managing Money

Paying Off Debts Pays Off

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Paying off Debt
Before making a choice, make an assessment
Debt is the ultimate treadmill. Sometimes it seems no matter how hard you try, the load never gets lighter. Don’t despair. If you are serious about wanting to whack down some of that debt, it can be done. Just be prepared for the fact that it doesn’t happen fast.

There are several approaches to the issue. Let’s start with the “Snowball Method.” That means you start your attack on the accounts with the smallest balances. That might give you the greatest boost as you see the accounts disappear. But the “High Rate Method” has the most potential for actually saving money. That’s when you concentrate the accounts with the highest interest rates, chewing them down a little at a time and reducing the amount of interest you pay.

Before making a choice, make an assessment. List all of your debt balances from lowest to highest so you can actually see what might be the best plan of attack. When you pay your monthly bills, pay the minimum amount on each account.

Then, if you have chosen the “Snowball” approach, take any available cash you have and apply it to the account with the smallest balance. If two accounts are close, choose the one with the highest interest rate. Even a very small amount of extra payment adds up over time and it always reduces the amount of interest you will pay. When you get one of your smaller debts paid off, the trick is not to use it again until you have the total debt under control. If you have to hide your card from yourself, freeze it in a block of ice or simply close it, resist the urge to start the process over again.

After you have paid off a debt, take the money you had spent on payments and use it to make additional payments on the next smallest account. Repeat this process and you’ll soon have a considerable amount of extra money to tackle the larger accounts. You’ll be surprised how fast that can happen. The “Snowball” effect really works.

If you have opted to start with the accounts with the highest interest, your first step is the same. List your debts, but according to the interest rate, from highest to lowest. Again, pay the monthly minimum and then use any extra cash you can muster to add to your payment on the one with the highest interest. That means that each month, you will pay interest on a smaller amount of principle.

Do the same thing with the account with the next highest interest payment. Over time – and it isn’t likely to be fast – you will find you have manageable debt. Unless, of course, you don’t resist the urge to fill up the cards again. Having them free and clear is a powerful incentive to start the process again, but resist. Make careful choices between what you really need and what you only want.

Which approach to debt reduction you choose is up to you and must fit your personal financial realities. But those who have take the steps to get control of debt will tell you that you just can’t put a price on the peace of mind that comes with freedom from debt. Get help from an accredited consumer credit counselor if necessary.

Microchips Replacing ID Badges?

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Microchips
Widespread use for employee identification is just beginning
At some companies, the standard ID badge that identifies employees is moving over for a microchip injected into the individual’s hand. At the Swedish Epicenter plant, it’s still optional, but the trend is growing.

The microchips are the size of a grain of rice. They function as swipe cards to open doors, operate printers – or purchase fast food items.

Convenience is the argument the company uses for the identification method. Workers at the plant hold parties for those willing to have a chip implanted. It is not a requirement. Officials say it replaces a lot of other communications devices, such as credit cards and keys.

It’s the same technology that has been used for some time to identify pets. Some companies use embedded microchips to track shipments. But widespread use for employee identification is just beginning.

Security and privacy issues are part of the development. The chips are biologically safe, but some think they are too intrusive, recording data about what time an employee arrives at work and what he or she buys. Some employees who had qualms at the outset went ahead and now feel at home with the chips. The many sorts of implants that people have had in recent times helps alleviate some of the doubts. For instance, just about everyone knows someone with a pacemaker or a port for medications.

Epicenter has 100 companies and some 2,000 employees. It began implanting ID microchips in 2015 and now has some 150 workers implanted.

The microchips use Near Field Communication technology, the same that is used in contactless credit cards or mobile payments. When activated by a reader a few centimeters away, a small amount of data flows between the two devices via electromagnetic waves. The implants are passive, unable to read information themselves.

There are concerns that hackers could conceivably get a huge amount of information from the embedded microchips. As the sophistication level of the implants rises, the concerns could multiply. Questions about who, when and where should be subjected to implantation will get more sticky.

The devices are injected using pre-loaded syringes into the fleshy area of the hand next to the thumb. The process takes just a few seconds and there is little if any blood. At Epicenter, they make a party of it. Monthly, they meet and those who want to get “chipped” get it done.

The gradual move toward implants may be the wave of the future, and there is a growing number of employees who want to be part of the movement, but the potential problems re: confidentiality and the prospect of hackers ending up with an individual’s information should be addressed.

Make Financial Mistakes? Who Doesn’t?

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Make Mistakes
Deal with issues as they arise
Financial mistakes are the norm. Even the most successful money-makers have a few on their records. It all adds to the anxiety, confusion and frustration that circulate around money.

Most people are doing better financially than they think they are, experts agree. Look at the bottom lines over time and see if there is a steady increase. That indicates you haven’t failed.

Money is not static. It is dynamic. So are the stock market and other investment options in which you may put your money. Plan for the future and don’t get too hung up on today, according to Lauren Lyons Cole, certified financial planner and editor of “Your Money at Business Insider.”

Individual bumps or dips in your net worth are not necessarily indicators of success or failure. One mistake doesn’t doom you to a lifetime of struggle any more than one lucky break assures that you’ll never have tough times. Enjoy the ups and don’t let the downs get you down.

Since money is dynamic, your financial goals also can fluctuate with circumstances. Long-term planning is essential, but not beyond adapting when necessary. Don’t underestimate your potential.

Deal with issues as they arise. If you lost your job, look for a new one. If you have too much debt, cut spending to the bone while you pay it down. If your progress toward the goals you have set seems too slow, don’t give up. Keep working toward them. If you can cross some off the list, set new ones. Keeping the target in view is the secret to making your personal goals come to fruition.

How To Buy Stocks

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Buy Stocks
You’ll be wise to find a broker to guide you through the maze.
Now that you’re on your way financially, settled into a business of your own or working at a good job, you might begin thinking about investing, particularly in purchasing stocks.

It’s really a simple process, but there are things you should know as you dive into the market.

It’s as easy as setting up a bank account. Complete an application and choose how you want to fund your stock account. You can mail a check or transfer funds electronically.

You’ll be wise to find a broker to guide you through the maze. If you have to pay a little more at a brokerage that provides high-quality service, do so, especially if you are starting out with little knowledge of the market and how things are done.

Things to consider:

How much money you have for investing. Many online brokers have minimum requirements. How frequently do you plan to trade? Again, different brokers, different rules. Commissions on stock trades range from $5 to 10. Low commission costs are most attractive to investors who expect to place 10 or more trades per month. If you are an infrequent trader, choose a broker who charges inactivity fees.

Consider how much support you will need. You can choose a level of support that accords with how much you know on your own and how much conversation you need – personal telephone conversation, email correspondence, online chats or face-to-face.

Nerdwallet, OptionsHouse and Ameritrade have lists of the best online stock brokers to help you make a choice.

Once your fund is set up, you can start picking stocks. Begin with researching companies with which you are familiar as a consumer. Don’t allow yourself to get bogged down in the daily deluge of market information. Your objective is to find the companies in which you want to become a part owner. Don’t let the anticipation of a return be your only objective. A good, reliable company may pay better dividends over the long haul than a flash-in-the-pan company that is here today, gone tomorrow.

Use the company’s annual report, including the annual letter to shareholders, to get a sense of what you could expect from its stocks. Your broker’s website is the next source of information on an ongoing basis. It will post SEC filings, conference call transcripts, quarterly earnings, etc., etc.

When you feel you have settled on a good company, decide how many shares to buy. It is generally wise to start small so you get a feel for the market. You may want to purchase just one share to “practice” on. Your own ability to absorb the inevitable ups and downs the stocks normally experience may be the guideline you need to determine how far into it you want to get.

A market order indicates that you will buy or sell the stock at the best available market price. Your order will be executed immediately and fully filled if your request is reasonable. Don’t panic when you find that the stock you were buying or selling changes in value at the moment. The market is fluid, with the potential for many changes in a single day.

Be aware that your broker may bundle all customer trade requests to execute all at once at the prevailing price, either at the end of the trading day or at a special stated day or time in a week.

How Much Better Can Jobless Rate Get?

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Jobless Rates
Could the rate of joblessness in the United States actually get too low?
Could the rate of joblessness in the United States actually get too low? It’s an interesting question that economists are considering more closely as the unemployment rate reaches new lows for this post-recession era.

The crux of the matter is that a pool of unemployed people anxious for jobs is necessary to support any growth in the number of jobs created. The latest report on unemployment , calculated by the Department of Labor, shows the figure at 4.3 percent, down a tenth of a point since May, when the rate was 4.4 percent.

In June, employers offered 209,000 more jobs that contributed to the small dip in the rate. In July, the greatest surge in job availability was in the restaurant/bar sector. Some 53,100 jobs were added to the tally, probably indicative of the rising wages being offered to restaurant and bar workers. Average hourly pay increased by 4.7 percent over June of the previous year.

The United States is benefiting from steady economic growth around the world. Europe and Japan have both posted gains and China’s somewhat teeter economy has showed signs of stabilizing.

The new figures suggest that Americans who had become discouraged with the job market and quit looking are now coming back to the search. Many who went back to school or decided to just stay home and care for family are being lured back by the abundance of jobs.

The rate of hiring has stayed about steady over this year compared with last, but some 184,000 new jobs have become available each month through July. In 2016, that figure was 187,000, a sign that the post-Great Recession economy was righting itself. This July, 81.8 percent of people aged 25 through 54 had jobs or were looking for one, the highest number since December 2010. Economists focus on this age range because it includes the Baby Boomers who retiring and the younger generation that is likely still to be pursuing higher education. The current figure, however, still lags behind the 84.6 percent that was registered in 1999.

Economists expect that the 81.8 percent could jump by another 0.7 percentage points if current trends continue. That would add another 1.8 million jobs.