Monthly Archives: September 2010

How Retirement Planning Software can Help You.


With the baby boomers retiring, a lot of them are finding out that what they thought they had in their retirement plans is not what they are going to get. This is one of the reasons why you should be an active participant in your retirement contributions, because you don’t want to make savings for all those years only to end up a pauper and nothing to show for your hard work. One of the ways of keeping track of your retirement, in addition to a financial planner (if you can afford), is using a software that can keep track of your contributions. The following article by Eric Bayne gives the advantages of using a software when it come to retirement planning,

If you are about to retire and have been diligently saving your money, investing in 401Ks, and actively taking control of your retirement funds – you are in the distinct minority. When the time for retirement arrives, well over ninety percent find that they are totally unprepared. And, as a consequence, they spend their retirement years in far different circumstances and environments than they had envisioned. No one is going to take responsibility for your retirement except you. The people that end up satisfied in retirement are the ones that figured that out early on If you don’t plan for it, you could easily find yourself destitute when you reach your sixties.

One method of starting to plan for retirement involves taking advantage of retirement planning software. This kind of software can make planning your retirement a breeze. What criteria should you look for in a retirement planning software tool? First, it should be user-friendly. If it’s difficult to understand and use, it won’t get used. Second, look for evidence that the software is well supported. You don’t want to be in a situation where you’ve spent hours and weeks entering all of your financial data into a program only to find out that the company has gone out of business and no longer supports the software. Sometimes, it’s worth paying a little bit more for a piece of software in return for having the support of a substantial company behind it.

Thirdly, an essential feature in a retirement planning software tool is for it to be able to track stocks, bonds, 401ks, IRAs, and other common financial investment instruments, and including them in the retirement calculations. It should be able to extrapolate how much a regular series of payments over a specified time frame at a specified interest rate will result in at the time that the person retires. And it should be able to work backwards as well. For example, assuming that you are 35 years old. The tool should be able to take your desired income requirements at 65 years, and determine how much you will have to save each year in order to reach that goal.

It’s not mandatory that you actually use software to plan your future. Plenty of people, especially if they have the money, are more than comfortable with leaving their retirement planning services in the hands of a professional. Even in these cases, however, it doesn’t hurt to use retirement planning software to get an idea of the possibilities available to you. You can then take these broad suggestions to your financial planner for implementation of the finer details or simply for a more informed feedback of the desirability of your plans. But also, keep in mind that financial planners aren’t gods. And they are dealing with multiple clients. It’s very possible that your tool may discover something that they missed in putting together you financial portfolio.

For many of the baby boomers beginning to reach retirement age, it’s too late to put a long-term retirement plan in motion. But even they, can make use of software to ensure that the monies they do have last as long as possible. As, for the younger workers, the best time to start thinking about a retirement plan is when you’re young. The younger you start, the less painful are the financial sacrifices that you have to make.

Understanding the Credit Reporting System and Why it is Important


Now that we are in a financial mess not witnessed since the great depression, a lot of companies are now paying a lot of attention on the credit score of a person. This is especially true for financial institutions dealing in lending money to the general public. The problem is that, people only realized the importance of the credit score when was too late to make any adjustments to your lifestyle that could improve the score on the credit report. The following article by Matt Black explains the importance of the credit report not only in times of loan borrowing, but also other areas of your life.

Your credit report is simply the way in which your financial accountability is documented. It is a record of your financial history; loans you have gotten and lines of credit that you have, and if you have kept up on your payments of gotten yourself into financial difficulties. Any time that you miss a payment or make a late payment, it is recorded on your credit score. If you ever get yourself into such a tough financial situation and you decide to declare bankruptcy, your credit report will show this information for seven years.

Your credit report basically just helps institutions that are considering giving you a loan know if you are likely to repay them or not. If you are looking into buying a car or a house, or taking out a student loan, the place that you apply for the loan will check your credit first. A better credit score will help you get a lower interest rate, which will save you a lot of money over the life of your loan. And if you have a really bad credit score, you may find that no one is willing to grant you a loan at all. This is because no one wants to loan money to someone who is likely to default on their loan.

A credit score is a number that will be anywhere from 300 to 850, although almost no one actually has a score as low as 300 or as high as 850. An excellent credit rating is any score over 700. If you have excellent credit, you can generally get much lower interest rates that customers with good or okay credit. A score between 680 and 699 is good, and a score between 620 and 679 is just okay. If you have one of these lower scores, you will still be able to get a loan, but not a very good one, and you will end up paying much more over time for your loan than someone who has excellent credit.

Increasingly, credit scores are being used in more situations besides just when you apply for a loan. It has become common for your credit to be checked before you can rent a flat, get insurance, or even to sign up for a new mobile phone contract. Some employers have even started checking credit before offering employment to a job candidate. So it is important to check your credit report at least once a year, to make sure that all of the information on it is accurate. If you find that there is an error on your report, you can actually dispute it, and if the credit bureau finds that you are correct, a note can be left next to that claim on your credit report.

Three Reasons Behind The Failure of Family Budget!


I have always stressed the importance of having a budget in order to achieve your financial goals and dreams. Now more than ever, it is crucial that every family creates their own family budget that is unique to their family. But when all is said and done, a lot of families still find it a challenge to come up with a budget, and sticking to it in the long-run. Jim Desantis gives a few reasons why the family budget is not successful, and what you need to do to make yours a success and not a statistic.

There is no question that family budgeting should be taken seriously by every family. A healthy cash flow is the only tool available to secure your future and the future of your family, and to live a good life starting today. Unless you get your money habits under control and start treating your household like a banker, you are destined to struggle financially for the rest of your life.

Here are 3 things you must face and overcome:

Family Budget Blocker #1 – A Fearful or Negative Attitude

Let me say that –a positive attitude about family budgeting is basic to your success. If you think of budgeting with doom and gloom (such as a lifestyle diet, lifestyle handcuffs, deprivation, penny-pinching, a major sacrifice), you are sure to fail. Of course you may have a martyr or a masochist complex, and are addicted to a punishing and stressful experience. However, let’s think positive and assume that you are really desperate to get a handle on your finances. A positive attitude about your financial situation will help you think of your family budget as a positive means to a positive end. You will learn that it is a way to achieve your personal dreams, and financial goals. You will see that resisting the instant gratification of spending all the money you earn is worth the rewards you will earn in the end.

Family Budget Blocker #2 – Poor or Weak Motivation

What is behind your desire to create a family budget? Are you trying to calm a stressed out spouse? Are you being forced to live up to the terms of a debt consolidation plan with a finance company? Complying with judge’s order made in bankruptcy court? These are not true motivators because they are outside motivators, and will probably not be easy to maintain under constant stress. The best motivators are internally generated. You must be motivated by the idea that family budgeting will really help you meet your goals and give you a better life.

Family Budget Blocker # 3 – Magical Thinking

What do you expect to gain from creating and following a family budget? Do you think that setting up a family budget will somehow magically make tons of extra cash available quickly? Perhaps you think that the family budget will somehow magically transform your spending habits next week and make you a financially responsible person who has all their bills paid and money left over for luxuries?

Sorry, but, family budgeting is just as serious as any business. Only those who stick to their personal finances, through every setback, will be successful financially. Do not expect pennies from heaven. What you will get, if you work your family finances, is steady and measurable progress towards the goals that really matter to you and your family.

Creating a family budget without a positive attitude about your abilities to handle it; internal motivation to overcome all obstacles, and realistic expectations, will likely set you up for failure, before you even get started. You can greatly increase your chances of success by overcoming the three Family Budget Blockers before you even begin. Family financial crises make most people want to shut off the telephone, stop answering the door, and crawl into bed, but the solutions are really simple.

  • One of the easiest steps for any debt or credit repair strategy, is to take an honest look at the spending habits and financial patterns within the household especially if you have a family! It is almost like running a diagnostic on your vehicle. You need to get family members together, and put your family budget under critical examination. This can prove both challenging and painful because most family members will be asked to change their spending habits. This is the first step.
  • A close second, and sometimes overlooked, is using a reward system for those family members who get with the new budgeting strategy. Rewards will keep the motivation going! In other words, as you achieve budget goals give yourself or your family members a treat as a reward for a job well done.

As you begin your family budget plan it may seem to be an uphill battle at first but, if you stick with it, you will begin to experience the benefits of family budgeting. Before you know it, you will see big financial benefits on many fronts. Active and hands-on cash management, including savings, planning for retirement, and setting financial goals are becoming increasingly important for the survival and well-being of our families. The marketplace has become extremely competitive for jobs, prices fluctuate wildly for basic commodities such as food and energy. More than ever we need to be prepared by getting our family budgets under control.

It will take a leader in the family to make this work. You can be the one who motivates others to come up with new ideas on how to save money, budget better and spend less! Together you can create unique strategies from a deep understanding of your own situation, demands, and needs. Discover which tips and ideas work best for everyone because money management, and financial strategies are definitely not one-size-fits-all. Your lifestyle, needs, and wants are personal and unique to your situation, and so are the solutions you need to find. Find them and apply them to your family budget plan as soon as possible.

How Financial Planning Can Help with The Recssion


A lot of people are wondering how there are going to survive a recession, when they have so much to do with so little money. The secret is all in the management of your cash, and this should also be practiced in times of economic boom, because people tend to forget quickly where they have been resulting in financial management being thrown out the window. Denise B gives a few tips on how to survive a recession in this following article.

Economics is not a complicated topic when viewed in a broad sense. The economy can either do well or do poorly. When it does well, prosperity lasts for a while, but it almost always slows down and starts to do poorly again in the future. Then, it will swing back up again. Those times of economic slow down are called “recessions.”

Recessions are inevitable, so it is only sound financial advice to tell you to plan ahead for them, even if you are currently experiencing a time of economic prosperity. If you are in a recession, there are steps you can take to keep it from impacting you too much. The most dangerous thing that happens in a recession is job loss. As the economy slows down, people slow down their spending, and businesses suffer. This forces them to lay off workers, and those workers are the ones that suffer the most during a recession.

The best way to protect yourself from this possibility is to lay up some cash reserves. Economists recommend having three to six months worth of living expenses saved. This takes time, but you need to start working towards this goal in your financial planning. Another danger of a recession is price increases. As companies try to make up for the lack of sales, they are often forced to raise prices. You can combat this by learning to cut coupons, shop sales, and stock up on your necessities when they are at a good price. Also, make sure you are only buying what you need. Save the “extras” for an occasional treat, but learn to tone down your spending habits. A recession is not the time to buy a lot of “extras.”

Finally, whether the economy is good or bad, make sure you do not take on too much debt. Your non-mortgage debt should be as close to zero as possible. If possible, keep your monthly payments that are going towards debt, including your mortgage payment, around 30 percent of your total monthly income. Anything more than this is dangerous, particularly during a recession. Learn to live without using your credit cards, as this is one of the most expensive and dangerous forms of debt.

Financial planning through a recession is not as difficult as it might seem. Make sure you are saving your money, and limit your credit spending. Soon you will see the economy swing back toward the positive side, as it always does.

Seven Reasons Why an Emergency Fund is MUST Have!


A lot of people always ask the importance of this emergency fund that financial experts talk about. There are numerous advantages that can come with an emergency fund, apart from the obvious one of being in control of your financial affairs, there is also the psychological benefits of knowing that your financial future is well taken care off. Other benefits of an emergency fund are laid down in the following article by Miss Ann.

  • Expect the unexpected. The state of the economy today has just about ensured us that the unexpected can pretty much be expected. A sudden job loss, unforeseen medical expenses, car or home repairs, can add an extra burden to an already fragile financial situation.
  • Your credit card is not for emergencies. Credit card companies are increasing interest rates and decreasing credit limits. If you are still able to use them, it will only set you back even further. Cash is always the best way to be prepared when it comes to emergencies.
  • Everybody’s doing it. This economic downturn has nearly everyone spending less money, and putting away more money for emergencies. People are taking this time to learn from their past mistakes.
  • More than likely, family and friends will not be able to help you. Since most people are spending less, saving more or out of work, in the event of an emergency there will not be many people you can turn to.
  • We now know just how bad things can get. Most of us are learning for the first time what it feels like to be out of work for long periods of time, and to be short on mortgage, car, and student loans payments.
  • Your peace of mind is priceless. Having cash for emergencies will ease those foreboding doubts about your financial well-being. Being prepared for what may lie ahead will virtually relieve all of your money worries.
  • The security of the economy depends on it. One aspect, of getting the economy back in fiscal shape, includes people becoming more financially responsible. As this happens, we will begin to feel better about spending more, and in turn fell better about the economy as a whole.

Find Out How to Get Rid of Debt Permanently!


If there is one thing that would come as a big relief to most people is how to get rid of their debt. This is one area that is giving people sleepless nights, and mental anguish. Getting rid of debt is one the hardest things to do, and accomplishing this task is one of the greatest achievements in one’s life. I don’t want to sound as is this is an easy job, but it can be done if you follow the steps explained clearly by K D Garrow in the following article on how to get rid of debt permanently.

We are all in debt to some extent, but problems arise when we are unable to keep up with repayments. This is an increasingly common situation but the good news is that however bad your debt crisis is you can almost certainly get rid of it yourself with a little advice and guidance.

Not By Borrowing Or Spending More Money

If you are experiencing debt problems and you surf the net to find help, you will be bombarded by websites offering to solve all your problems. Unfortunately the vast majority of the websites you will find are only offering solutions by commercial companies, designed to generate income for them. That is why the only solutions you will normally come across are consolidation loans, secured loans, Debt Management Plans and Individual Voluntary Arrangements. All of these will cost you money and make money for the organisations providing them.

If you think about it logically, how likely is it that the solution to owing too much money is going to be borrowing more money, or paying more money to someone for their services? It is far more likely that such action will either make your long-term situation worse, or at least result in it taking longer than it should to get rid of your debt. If you are fortunate enough to find one of the few sources of unbiased debt help out there (advice from someone who isn’t trying to sell you something), you will see that the real solution to debt problems is always the same, and never involves borrowing or spending more money.

Follow These Simple Steps

Nothing is going to magically make your debts disappear. Bankruptcy may result in writing off some unpaid debts, but it is a drastic step to take, with all sorts of long-term consequences. There is a fairly straightforward way of dealing with any debt crisis, which just requires some understanding of the steps to take and a little organisation on your part. Only by dealing with debt in this way will you actually take back control of your finances for yourself, and reduce the likelihood of such a situation recurring in the future.

The basic procedure is to make sure your creditors understand your situation, then take steps to reach agreements with them all to pay back only what you really can afford. The steps you go through in order to achieve this are set out below.

Contact Your Creditors

You can’t expect any sympathy or understanding from the people you owe money to, unless they are aware of your situation. You must write to them all to explain your situation, and assure them that you are trying to deal with it. Tell them exactly why you are in the situation you are in, which could be something specific such as redundancy to marriage breakdown, or just that you allowed your debts to build out of control. You should also ask each creditor to confirm all the details of exactly what you owe them, so that you have an accurate and up to date idea of each debt. Templates you can use to draft creditors letters are available online.

Prioritize Your Creditors

When you have a clear idea of each creditor and what money you owe, the next thing you need to do is to split your creditors into two groups. This exercise is about deciding which creditors are the most important ones to deal with. Each of your creditors must fall into one of two groups – Priority Creditors or Secondary Creditors.

Your priority creditors are the ones where there are potentially serious consequences if you do not repay them. Examples might include your mortgage or a loan secured on your home, unpaid income tax, child maintenance or council tax. These are all areas where non-payment can result in actions such as losing your home, imprisonment or having your assets seized by bailiffs. Your secondary creditors are basically everything else. Secondary debts might include unsecured loans, credit card debts, bank overdraft or money owed to catalogues.

Create A Financial Statement

You are going to be trying to negotiate settlements with your creditors soon, and you will not be able to do this effectively unless you can show them clearly how much money you have and what you can afford to pay. You therefore need to create a Personal Financial Statement, which is basically just a detailed list showing all your income each month, and all the things you have to pay out each month.

You can print off a Personal Financial Statement Form online to help make sure you don’t miss anything off. You will need to decide whether you break it down into weekly or monthly figures, but stick to either one of the other. At this stage you should only include your priority creditors on your financial statement, leaving off all your secondary debtors. Do remember to include any other essential living costs, however, such as vehicle or travel costs, insurances, etc.

Remember to be realistic and accurate with your figures, as all your creditors are going to be looking at and checking these. Your financial statement should show you what (if anything) you have left each month after paying your priority creditors. This is the amount you have to share among your secondary creditors.

Make Offers To Your Creditors

This is the all important stage that your other work has been leading up to. You now need to contact your creditors to make offers, and negotiate repayments that are within your ability to pay. Contact your priority creditors first, to make an offer of payment towards any arrears you have accumulated. Do this by starting with the most serious debt first (serious in terms of the consequences of not paying, not how much you owe). Don’t offer all your spare income as you need to share it out. Include a copy of your financial statement with your letter. As you get an agreement for each creditor, build that into your financial statement and keep updating it.

You then need to start negotiating with your secondary creditors. It is worth trying to see if they will write the debt off to start with, especially if your financial statement demonstrates that you have no spare income. Assuming you do have some spare income after dealing with your priority creditors, the fairest thing to do is to share it out proportionately between your secondary creditors. This means sharing out your money in proportion to the amount of money owed, rather than giving the same amount to everyone, irrespective of the size of the debt. Help is available online with how to work this out. Bearing in mind that all your creditors will see your financial statement and therefore know what you are paying other people, this system of sharing it out is by far the easiest to defend and justify.


That is basically it as far as the main approach to dealing with any debt is concerned. Clearly there is more detail around these various steps, but that is beyond the scope of this article, which is just intended to provide you with the main outline approach. I hope this helps to show that any debt can be tackled most effectively by dealing with it directly yourself, rather than perpetuating the cycle of debt by borrowing more money.

Seven Tips For Creating A Successful Family Budget.


A lot of people give up on their budget before the third month, and go back to wasting money through overspending. It has been determined that a budget will take a few months of implementation, before you can start seeing the results. So before you throw that budget away, here are a seven tips on how to create a successful budget by Andrew Bicknell.

For many people creating a family budget is an exercise in frustration. Where to start, how to set it up, should I use budgeting software? Are all questions that nearly everyone asks? And then when they do get it set up and start tracking the money coming in and the money going out, something happens. An emergency or an impulse buy that screws the whole thing up. Unfortunately the majority of people give up on their family budget, before they ever give it a chance to do what it is supposed to do. One thing everyone needs to understand is that a budget is not a rigid thing. It is flexible and needs to allow for those unintended purchases or emergencies that life is full of. And if you stick with it, before long it will be a cash flow planning device you cannot live without.

That’s all a budget really is, a cash flow plan for your money. That’s right, your money, which should be working for you, not the other way around. A budget allows you to track your income and expenses, giving each dollar a task each and every month. This gives you a good picture for paying bills, setting aside savings, and planning for the future.

If you are having trouble creating a family budget here are 7 tips you can use to make the process easier. Get a piece of paper and list out income on one side and expenses on the other.

  • Calculate your monthly income by gathering three months worth of pay stubs and averaging the monthly earnings.
  • Figure out your monthly bills by averaging the last three months worth. Do this for expenses such as rent, mortgage, utilities, phone bills, car payments or other fixed monthly expenses. You can also do this for those monthly expenses that move up and down from month to month such as credit card bills and groceries.
  • Subtract your monthly expenses from you income, and see if you have any money left over. You will start to see areas where you might be spending too much money and can cut back on. This can free up money for other purposes.
  • Now that you have everything listed out in front of you can start assigning certain amounts of money to certain expenses. As you make those payment note them in your budget to see if you are staying on track.
  • As you find ways to cut expenses you can also start designating a certain amount of money that goes into savings or retirement accounts every month.
  • Your first budget may not work out quite right. It takes most people around three months to start getting their budget working. Be patient and keep working at it, before long it will become second nature and you will have control over your money.
  • Once you have a good grasp on your hand written budget look into getting personal budgeting software such as Quicken or Microsoft Money. This will make your budget much easier to work with and they offer additional feature that can help you plan your financial future.

These are the basic steps for creating a family budget that will get you started and on your way to taking back control of you financial life. If you stick with it before long you will start to realize how much money you used to waste, and how much better it feels to know where your money is going and how it is working for you.

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