Guide to Choosing a Credit Card.

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I know I have been bashing credit cards for the last few articles, that is because they are partly responsible for the financial mess we are in right now. But, I must admit the other side of the coin, which is the benefits a credit card can bring to your life if properly used and managed. For example, think of the inconvenience of carrying physical cash in times of emergencies or the paying bills in supermarkets etc. All the benefits of a credit card that accrue to an individual begin with choosing the right card that will meet your financial requirements as demonstrated by the following article written by Steven Lewis.

Credit cards are a necessary must have to establish any kind of credit. Many people unwillingly just sign up for as many credit cards as possible with the hopes that it will build up their credit. For others, the lure of being able to purchase a huge ticket item is too hard to resist signing up. Unfortunately, not many people take the time to choose the right kind of credit card for them. It is important to choose the best credit card that will fit your financial needs, instead of just signing up for everything that comes in the mail. Many times those are the credit cards that will get you into trouble.

Credit cards are a necessary must have to establish any kind of credit. Many people unwillingly just sign up for as many credit cards as possible with the hopes that it will build up their credit. For others, the lure of being able to purchase a huge ticket item is too hard to resist signing up. Unfortunately not many people take the time to choose the right kind of credit card for them. It is important to choose the best credit card that will fit your financial needs instead of just signing up for everything that comes in the mail. Many times those are the credit cards that will get you into trouble.

Many credit cards offer different benefits, features and rewards programs that are meant to lure you to use their card. The idea is that you will be building your credit history which will be helping you for future purchases but with rewards programs, you’ll also get discounts along the way. But don’t forget that having credit cards means managing your credit, and choosing a good credit card that offers you protection. You want to choose a company that has a good customer service record. One of the benefits of having a credit card is the protection, and insurance they give you when you make your purchases.

Credit cards also offer different incentives for signing up. You may find the same credit card is offering you 2 very similar offers within months of each other. Before you rush in and sign up for the first one that came along, make sure you read it carefully. The best way to look at what each offer is giving you, is to read the back of the offer and not just the front page that summarizes their incentives. The back summary will tell you the APR (Annual Percentage Rate), any annual fees required, fees for balance transfers, what kind of minimum monthly payment they require, and what their rewards or benefits are.

Remember, signing up for the credit cards is the easy part. There are so many companies out there just waiting to get more customers. The key is to find the one that fits your financial needs, and you understand the terms of the agreement you are signing on to. It also helps to try to find the one with the lowest interest rate as possible because if you can’t pay of the bill every month, the interest rates are where you are going to be spending most of your money.

Financial Planning Tips for Lifelong Money Success

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We are living in desperate times, and people are doing everything they can to survive just another day. Financial success is a pipe dream to many, and money has become scarce. But it does not have to be that way, if you take the necessary steps to correct what you have been doing wrong. For example, paying only the minimum amount on you credit card, going out almost every week. While these may seem minimal amounts at first, eventually they accumulate to substantial figures in the long run. What a person need is financial tips that will lead to lifelong money success as illustrated by Mindy Tidy McHorse in the following article.

If you want to get ahead financially, chances are you’re not quite where you’d like to be. No worries – as the saying goes, everybody who got to where they’re at had to start with where they were. That said, you should know that despite your current circumstances, it is absolutely possible to make lasting change regarding your financial planning habits. Let this year – in fact, let this day be the day that you step forward and initiate change. Here are some tips to get you started.

Financial Planning Tip #1: Acknowledge the importance of money

The term “financial planning” isn’t the kind of thing that stirs excitement in most people’s souls. It sounds boring, tedious, and difficult. Yet, financial planning is exactly the opposite. Financial planning is your ticket to making sure you are set up well in this world. It is the key to ensuring the safety, health, and prosperity of your family. It’s a way to get both what you need, and what you want. So start off by acknowledging that financial planning is a good, welcome thing in your life. Think of it as a hobby – something that you enjoy doing which brings you satisfaction.

Financial Planning Tip #2: Make sure you’re paid what you’re worth

It’s hard to make progress financially if you’re not bringing in the kind of money you deserve. Take the time to research the value of your job in the marketplace. Consider the contribution you make to your workplace by evaluating your skills, productivity level, and job tasks. Look at positions similar to yours both in your own company, and outside your company. If your company has a Human Resources department, visit them for a confidential assessment of the fairness of your pay rate. If you have no Human Resources office to approach, search the Internet for salary descriptions and comparisons of pay.

If you discover that you are underpaid for the kind of work you do, take action – even if the amount by which you’re underpaid seems small. Speak with your boss, and make your case for a raise. If your requests aren’t honored, consider looking elsewhere for a job. This is an important aspect of establishing your self-worth, and it’s important to go the extra mile to get what you deserve. Remember, if you’re underpaid now, the amount that you’re not fairly getting will accumulate to a loss of thousands of dollars over the years. So act, and seek your true worth.

Financial Planning Tip #3: Spend less than you earn

This one sounds simple, but it seems remarkably hard for some people to pull off. To spend less than you earn, you first need to be aware of just how much money you pull in each month. Know your take-home pay, and then list your regular monthly expenses – food, rent, utilities, etc. Be aware of exactly how much is left over. Take that amount and dedicate 10% (ideally) to an emergency savings account. The remaining money is your spending money.

One good way to make sure you don’t spend more than you earn is to deposit your monthly spending money into a debit account. Make all your purchases using a debit card associated with that account. This approach is better than using cash, because it’s safer and it provides you with a list of where you spent your money (important for tracking your spending habits). A debit account is also better than using a credit card, because you don’t risk charging more than you can pay.

Financial Planning Tip #4: Take advantage of your employment benefits

If your employer offers benefits, make sure you take advantage of as many of them as you possibly can. Any kind of employer-offered insurance is typically a better deal than paying for services out-of-pocket. Getting onboard with a flexible spending account can save you hundreds of dollars a year in taxes on your medical expenses. If your employer participates in a matching program for a retirement account, take advantage of that benefit and put as much money in your retirement account as is required to get the maximum matching contribution from your employer.

Financial Planning Tip #5: Revise your insurance coverage

Insurance companies make a killing on consumers who aren’t aware of the specifics of their insurance plans. Review your auto insurance, life insurance, and any other insurance policy you buy into. Make sure you understand every fee you’re paying. Take the time to clarify the difference between whole-life insurance policies and term-life insurance policies, and choose the one that makes the most sense for you. Raise your deductibles on all your policies to lower your monthly premiums.

While examining your insurance policies, you should also make sure your insurance provides enough coverage for your dependents should you encounter disability or death. An important part of financial planning is ensuring that those you care most about will be provided for in case you’re not able to do it.

A Quick and Dirty Retirement Plan Analysis

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Ok, now you are so ready to retire, and you can’t wait for that day. But wait a minute, have you analyzed you retirement funds to ensure that it will cover your expenses? This is the part that most people ignore, and a few months into retirement you realize that the funds will not be enough. You are forced to do something you vowed with all you heart that you will never do again, find another J-O-B. The following article by Eric Bayne shows how you can analyze yourself to determine whether you can afford to retire or not.

Retirement Plan Analysis Let’s You Know If You Can Afford To Retire. You have prudently invested your money in a 401k for years, are ready to retire, and are looking forward to a long and peaceful retirement with no money worries. But have you actually taken the time to sit down with pen and calculator in hand to figure out exactly how much of your monthly expenses your 401k fund will cover? If you haven’t, you may be truly shocked when you finally do get around to it.

The majority of workers have never taken the time to come up with a long-term money strategy for retirement. Unfortunately, for most people, doing so never seems to rise to that degree of importance. Yes, they will save a bit here and there and a few may even have an organized savings plan where a certain sum of money is removed weekly or monthly from their paycheck and automatically placed in a fund. But relatively few people go through the tedious process of writing down such elementary and relevant facts such as what age they are planning on retiring, the amount of income they’ll need when they retire, and how much cash their fund will realistically provide for them when at retirement.

And that’s a big mistake. It’s also why when the big day finally comes, many new retirees will belatedly discover that their 401K and Social Security payments will not even come close to covering their monthly dollar outlays. So, unfortunately, at the age of 65 or whatever age they retired they discover that they have to go back to work, sometimes part-time, but sometimes full-time, in order to make ends meet.

So, why does this scenario happen so often? And is it avoidable? To put it bluntly, it happens because they failed to make themselves a retirement plan. And yes, this situation is avoidable, if you don’t wait too late to start. So let’s start now.

Here’s a sensible and simple method to try in your effort to create a retirement plan. Ask yourself these questions. How much money do you presently bring in over a month? Many experts believe that you’ll need at least 60 to 80% of your pre-retirement gross earnings to allow you to remain at the same standard of living that you currently enjoy. Being conservative, let’s assume that you’ll need 80% to be comfortable. So, if you make $4,000 a month, your retirement fund plus Social Security payments would have to provide you with at least $3,200 a month.

Now ask yourself. How much will your current 401k fund plus Social Security provide for you at retirement. Is it at least 80%? This part may take a bit of work on your part, but there are calculators all over the Internet that can help you to answer this question.

If you discover that your retirement fund as currently constituted will not provide you with this 80% of your pre-retirement gross income, you have one of two hard choices to make. You either make a conscious decision to lower your standard of living when you retire. Or, you make a conscious decision to increase the amount of money that will be in your fund when you retire. You can do this by either taking extra jobs and placing the excess money in your retirement account, or by choosing more profitable investments. Whichever decision you choose, at least you won’t be going into your retirement years financially blind.

Admittedly, this quick and easy analysis of your retirement plan does not take into account many factors that an exhaustive analysis would. For example, we’ve left out factors such as whether your home will have been paid off at retirement, whether you’ll still be supporting your children at retirement, and whether you have other significant debt loads. But it is extremely worth it to you to map out a thorough retirement analysis plan as soon as possible. And even a quick and dirty plan such as this is more than most people do, and is better than no plan at all which, sadly, is what most people have.

Keys to Financial Success!

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Financial success is something that seems a far-fetched dream to some people at the moment, because of all the debt a person has accumulated over the years. Many people nowadays are living a hand-to-mouth lifestyle, risking the possibility of financial bankruptcy, if anything was to happen to their source of condition. It might be understandable that right now there is nothing you can do, but try as much as possible to get out of that situation as soon as possible. The keys to financial success are nothing major, but making changes in a few areas of your life. The following article by Catherine Durkin Robinson, even though it was done at the beginning of the year, is applicable at anytime, and gives clears areas of ways to achieve financial success.

A new year brings with it many resolutions. You might think about dieting or exercise, but what about your financial situation? Changing bad habits and forming new ones is good to do no matter the time of year, but many people find it easier to make such changes at the beginning of a new year. Nevertheless, whenever you make the change, you’re going to need some guidance. Here are ten ways to improve your financial situation.

Know your worth and spend less

It’s simple, but true. You want to stick to this mantra more than anything else. Know what your job is worth in the marketplace, both locally and on a national level. Conduct an honest evaluation of your skills, how productive you are, most common tasks at work, how you contribute to your company, and how much others are getting paid for similar positions, whether inside or outside the company for which you work. If you are underpaid hundreds of dollars every year, this adds up over the years, and can have a significant impact on how you are earning a living down the road.

No matter your salary, you must learn to live within your means. In a struggling economy, you will find it easier to spend less, than to go out and get a job that pays more. Small cost-cutting efforts in certain areas of your life can save you big money. It doesn’t always have to mean huge lifestyle changes.

Create a budget and then stick to it

This is something everyone should do. It’s the key to financial freedom. If you have a family, get them involved so that everyone knows what they’re working toward. You cannot possibly know where your money is going if you don’t budget it. This helps you to understand how much is coming in and how much is going out each month. Creating a budget allows you to set spending and saving goals, because you can see everything you owe and prioritize which bills get paid first.

Pay off bad debt first

Credit card debt is the main reason why people find financial freedom out of their reach. It’s too easy to reach inside your wallet, and grab a credit to make impulse purchases. You might tell yourself the bill will be paid in full when it’s received, but the fact is that more often the balance is carried from month to month. Interest grows on top of the balance and before you know it, you are paying a lot more money than if you’d just used cash in the first place.

Contribute to your retirement

The best place to put your money, especially pre-tax dollars, is an employer-sponsored retirement plan. If your employer matches funds, then you really must contribute as much as possible. Find out about your company’s policy, and sign up today or during open-enrollment. If you’re already contributing, consider increasing your contribution. If you aren’t eligible or are self-employed, look into an IRA and start putting money away for retirement today.

Save your money

Pay yourself before you pay anyone else. It’s easy to put off, especially if you have bills that are piling up, but the longer you wait to save, the harder it is to get started. Start small. Put aside at least 5% of your salary and them work up towards 10%. You might even consider getting the money automatically deducted from your paycheck before you even see it. Work toward the goal of having six to ten months of savings set aside for an emergency.

Invest your earnings

A retirement plan and savings accounts are good ideas. Think about other future goals or events that will require a lot of money. College plans for your children, weddings, bar mitzvahs are all huge events that often put parents into debt. Invest wisely and plan ahead. Then you won’t have to borrow from someone else.

Take advantage of your benefits at work

Retirement plans, flexible spending accounts, medical and dental insurance are just a few of the many ways that your job’s benefits contribute to your financial bottom line. Don’t hesitate to maximize these benefits, and any others that save you money by reducing taxes and expenses you pay out of your own pocket.

Go over your insurance

Is it meeting your needs? You don’t want to pay too much for life and disability insurance by adding to existing car loans or buying life insurance when you have no one depending on your income. Sometimes whole-life insurance policies make sense, but other times term-life is a better choice. Do the research yourself and find out what you need. If your dependents rely on your income, it’s important to have good insurance to protect them.

Update your will

You need a will, especially if you have dependents. This isn’t something that only wealthy people need. Besides, if your situation isn’t complicated, use a software program that will answer all the basic questions for you, and help you protect your loved ones.

Keep updated records

A good record keeping system will allow the organization needed to claim all allowable income tax deductions, and credits. Create a system that works for you now and then stick to it all year. This is easier and financially more rewarding, than freaking out come tax time and finding you don’t have everything you need.

Debt Free Living.

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What you do right this minute will always affect your tomorrow, so whenever you do something drastic like cutting spending and increasing savings, don’t always expect to see results in the next few months or even a year. So whenever you make a decision to improve your financial situation, don’t give up after a few weeks, because you cannot see the result, as is the case with everything in life, be patient and let compound interest work on you money, that will be used to reduce your debt burden. In the following article, Catherine Durkin Robinson shows how different methods can be used to reduce a person’s debt burden

Here are some tips that will help you get rid of debt and move toward financial freedom.

• Stop adding to your debt. Avoid temptation by avoiding places where you might buy on impulse. Leave credit cards at home and resist shopping online. Take a break from spending.
• Cancel your credit cards. Cut them up and throw them away. If you must keep one for emergency purposes, put it away in a safe place. Do not carry it with you.
• Adjust your thinking. Like anything, you must have the right frame of mind to get out of debt. If you think you can do it, you will. The opposite is true as well.
• Stop spending so much. When shopping for groceries, replace name brands with generics to save some cash. Use coupons, and take advantage of sales to save money. Use utilities wisely to save on water, electricity and gas.
• Live a frugal life; it’s in style now after all. With a sluggish economy taking its toll on most middle-class families, it’s become trendy to save money. Take advantage of it.
• Look for ways to add to your income. The more money you bring home, the more you can devote to lowering your debt. Pick up tasks with higher commission, look into part-time gigs, volunteer for overtime every once in a while or work toward that lucrative bonus.
• Save for an emergency. You should always pay yourself first before you pay anyone else. Start with saving at least 5% of your income and move up to 10% if possible. You should work toward the goal of having at least six months’ worth of expenses set aside in case of health problems or job loss.
• Pay bills on time. You will get them paid off sooner, and you won’t have to waste money on late fees and other silly charges. So get organized. Avoid ATM fees because you can withdraw money at the grocery store without charges. Set up a payment schedule so interest rates don’t go up due to late payments.
• Transfer balances from high interest credit cards to lower or zero charges. Contact each credit card company, and request lower interest rates. If you can, consolidate all your charge cards into one, and make those payments count.
• Make a budget and stick to it. Determine how much money is coming in and going out each month. If you have a family, get them in on the action. After you’ve determined how you want to live, and where you want to spend your money, don’t deviate from the plan. Revisit it every few months to make sure it’s current with your needs.
• Reduce, reuse and recycle whatever you can. Don’t buy garbage bags. Instead, use the grocery bags to line garbage cans around the house. Don’t waste garbage space or electricity by throwing away food scraps or throwing them down the disposal. Make a compost heap!
• Share what you’re doing with others. Make sure your family and closest friends are aware of what you’re doing because their support is important. They might even copy your new and improved habits.
• Surround yourself with like-minded people. If you keep company with folks who keep spending, then it will be that much more difficult to stop spending and, start living within your means. If this means giving up people who have become a negative influence, then so be it.
• Don’t pay for something, if it’s available for free. Skip the driving if you can walk, ride your bike, or take advantage of public transportation. This will save you money on gas, insurance, and upkeep. And if you’re walking or riding your bike, you don’t need to spend money on a gym membership. Wash your own clothes instead of sending them to the dry cleaners.
• Always pay more than the minimum payment. If you only pay minimum payments, you won’t pay off your credit cards for an average of fifteen years.
• Accept help when loved ones offer it. Struggling with debt can be frustrating and lonely and if you’re doing it alone, it could feel even worse. If you have a family member or friend who offers support, temporary financial assistance, or just a hand to hold – accept it. For example, perhaps your mom offers to babysit. You can save money on daycare costs, and apply that saved money toward driving down your debt. This can only help you. If your in-laws want to loan you some money at a low interest rate, then why not take the help?

These are all ways you can drive down your debt, and start living a more financially sound life. Start small, and only apply two or three of these rules to your everyday life. Then move on to tackle the whole list. Your money management will only improve as you practice more and more each day.

Reaching Your Financial Goals in Retirement!

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I’m sure you have been watching the news for the last few weeks, and have an idea of what is happening in France. Just to give you an idea of what is going on in that country, is that the public is up in arms with the government’s plan to change the laws regarding pensions. I hope you don’t sit in front of the TV amused by the whole idea of pensioners and college students spending weeks on the streets, because this scene will be repeated in many countries in the future due to the fact that the number of people retiring every year is increasing, and thus the demand on social security savings is growing annually. The most important lesson here is that people should stop putting their future life in the hands of individuals just because there are in government. Imagine working for all those years, only for someone to change the rules when you are about to call it quits. The following article by Catherine Durkin Robinson discusses the importance of achieving your financial goals in retirement.

At a fairly young age, you should probably decide how much money you want in your retirement fund by the time you retire. If you are already retired, you should think about your current investments and how to best manage your savings.

Putting money away for someday

Think about your goals as they relate to money management. Do you want to make more money? Do you want to increase the return on your investments? Or are you more interested in paying less tax on your savings?

Too many people look at their retirement plans, and misunderstand the numbers. They don’t do the math. Instead, they figure their money will be there when retirement comes, and let the planning take care of itself. Too many people are looking for someone to tell them how much money they will have in a few years, and then plan accordingly. There is a better way.

Adjust your life goals first

Take control of your life by first understanding the world of money. Wanting more money is not a realistic goal. Plan your retirement, investments, and money management so that you can reach your life goals. Determining your financial picture can be scary, especially if you’re trying to pull it all together so that you can live off your retirement in a few years.

Here’s how to change your thinking

Don’t get overwhelmed by thinking about all the changes you need to make. Start small, and achieve better results much sooner.

• Think about financial independence instead of your retirement. Focus on having your desired income set aside so that you can live the life you want when work ends.
• Consider the impact of your financial decisions before you make them. When considering an investment, you want to think about the impact to your income. How much income will it provide? How much income will it take to support a purchase? Remember that there are consequences with every decision and act accordingly.
• Plan your income. This is an important and the missing component to your financial success. If you are aware of what you’re doing and taking care to plan ahead, then you will have your eyes open to circumstances and strategies that will help make your retirement a successful story.
• Keep your income steady and sure. Be responsible and practice responsibility in your business affairs. After all, your future income is the foundation upon which your family’s financial security is built.
• Pay yourself first. You should put away at least 5% of your income toward a savings account that you do not touch. Build it up to be at least six to ten months’ worth of income in case you lose your job or face a medical emergency. Keep this savings account separate from your other savings plans like the account you keep for college educations, bar mitzvahs, and medical issues. When these expenses come up, you’d be happy not to dip into your retirement plans.
• Plan for financial catastrophes with good insurance. Health, auto, life, and disability insurance are necessary if you want to have financial freedom. Make sure you get insurance in good amounts so that your ability to earn an income is protected.
• Do just a little bit better every year. Inflation grinds away at your financial reserves the same way it grinds away at your spending money. You must stay ahead of the high cost of living, and remain alert for opportunities that will make your money grow.
• Prioritize your goals into two lists – short-term and long-term. Writing out what you want, and when you want it should help you to know what you are working toward. A new car or a vacation next summer is going to require different strategies than your retirement in thirty years or even your baby’s college education. Short-term strategies are usually within the next five years, anything longer is a long-term goal.
• Choose exciting goals that get you excited so that you look forward to achieving them. Be specific. Everyone wants to be financially secure. What does it mean to you? Do you want to have your house paid off by the time you retire? Or do you want a million dollars in stock by the time you hit sixty years of age? Where do you want to live and how often do you want to travel? Once you’ve determined your goals and how much they will cost, you can determine a plan with your investments to get you there.
• Write a budget. Figure out how much money is coming in and how much is going out each month. Include the family in this process if necessary so that everyone knows what everyone else is working toward. Cut back on extras like cable television and subscription radio if necessary. Make sure you are putting money away toward essentials like savings, long-term and short-term goals, as well as retirement first. Then you can enjoy some extras every month knowing that you are fulfilling your future dreams at the same time.

Financial Literacy!

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Perhaps, this should have been the first things I should have started with, that is, explaining the difference between an asset and a liability. Majority of the people always confuse theses two categories, for example, a car is viewed as an asset by many, but it depends. A business person uses the car for business purposes, and therefore has no problem indicating it as an asset since it is assisting in generating income for the business. On the other hand, for an individual it may be viewed as a liability since it is not generating any cash, and probably its being paid for through a loan repayment, that is, it leads to a cash outflow. The following article by Gopal D explains how an individual can accumulate assets that will ultimately help the individual attain financial freedom.

It doesn’t take a genius to understand money. Money is nothing more than a tool, no different from a hammer and nail, or even a computer. It is a means to an end, and should never be feared. Money is misunderstood by too many people and rather than being able to harness its power, they end up being enslaved by it. Financial literacy is paramount, especially in today’s economy, which is in tatters. It is terribly unfortunate that this subject is not given much attention in schools, for it is the most important one that impacts all of our lives every single day. For those who want to take control of their finances and break free of the stranglehold that our economic system has on us, the following will help steer you in the right direction:

Get your money to work for you, rather than you working for it. The majority of the population is trapped in the vicious cycle of working themselves to death but staying barely ahead of their expenses, if even that. We are plagued by this debt-ridden society created and controlled by ”The Money Masters” of the International Banking Elite. The good news is, there are numerous ways of using this venomous system to your advantage, and fairing well. What you need to do is implement strategies that offer you a return on your money with the least effort required. A combination of living within your means (NOT ON CREDIT!), and a solid investment plan in ASSETS will help you break free.

Assets are things you own whereas liabilities are what you owe. Good assets can generate income such as rental properties, certain businesses, tax lien certificates, high interest savings accounts, bonds, money market vehicles etc… We often think that a house and a car are assets, but financial experts always classify them as liabilities, since they have to be paid every month and don’t normally generate cash-flow on their own. Devote your time to “money-generating” assets which will be the foundation of your diversified investment portfolio.

Starting your own business is a great way to build lasting wealth. That’s not to say it won’t take a tremendous amount of work, dedication and sacrifice, so never fall for hype and get rich quick scams because they never work. What does work is having a solid product or service to market whether it be yours or someone else’s and implementing a solid marketing plan. Running a home-based business with very little overhead is ideal. Do your research and never gamble.

Your goal is to be a wise entrepreneur, and investor. The average small business takes anywhere from 3-10 years to turn a significant profit from which you will be able to live from, so don’t quit your day job! Use your income from your job to acquire assets and grow your business. The great thing about owning your business is that while you are building it (and not yet seeing a profit) you can still take advantage of numerous business-related tax deductions based on things you spend money on anyway such as: mortgage/rent, hydro, heat, home and car insurance, property/school taxes, condo fees, interest on certain loans, phone, internet, gas, car maintenance, restaurant bills, office supplies, furniture, and more…Saving money is just as good as making it!

The problem with people who struggle to grow their money is that they keep on working for somebody else, and don’t maximize the earning potential of their money by acquiring the proper assets. Many also don’t start their own small/home business on the side, and end up paying a good portion of their yearly salaries away in income tax. Lastly, too many live beyond their means. Exercise restraint and keep things simple and manageable! The majority of hard-working people are toiling away for others, and not for themselves. And after all that, they face the terrible realization that they do not have much, or anything at all in some cases to show for all those years.

The solution is to invest in yourself. It just makes sense. Use the rat race, banking, and taxation systems to your advantage. Build your business, and invest in things that will generate cash flow for years to come while putting the least amount you can out of your own pocket. Leverage other people’s money, and expertise (banks, renters, other investors, financial advisors, etc…) to grow your portfolio and you will be financially free much sooner than you think. Financial freedom will bring something far greater, personal freedom!

The Five Important Questions You Need To Answer Before You Retire!

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I know this is the last thing that you are thinking about right now, considering that you have bills up to your neck. But as much as we may ignore retirement, and push it at the back of your mind, the reality is that this is one crisis that you won’t be able to handle once reality hits home. The problem is because of the myriad problems a person faces when they retire, for example poor health because of your advanced age, depending on your investments since there is no more income coming in etc. So before you completely forget about your retirement, there a few questions you are going to ask yourself because the answers you give will basically dictate the kind of life you have when you retire. The following article by Eric Bayne indicates the questions a person must ask themselves before their retire.

How much income do you need when you retire, and will you have that much money at retirement time? The best way to know for sure is to begin the process of putting together your retirement spreadsheet today. Before you start your spreadsheet, however, you are going to need to answer the following five critical questions:

What is your annual desired retirement income in today’s dollars?

In other words, if you were to retire today, how much money a year would you need to keep you living in the fashion to which you are accustomed. Most retirement spreadsheets and calculators will have built into them projected estimates for inflation, and will be able to use this figure to calculate roughly the amount of annual income you will need at retirement.

What number of years remain until you retire?

This is crucial as it’s the number of years that you have left in which to contribute funds to your financial portfolio. The computer worksheet will take the value of your present investment portfolio, and add to it any anticipated donations up to the retirement date. The computation will predict approximately what amount of income you can expect to have when you retire. If this dollar amount is less than what you require, you will have to ether add more money to your portfolio, alteration of your investing strategy, or lower you expected standards of living at retirement.

What is the sum of all your sources of expected retirement income?

This includes your expected Social Security income as well as any of the following investment plans – 401k, 403b, 457, Keoghs, SEP, IRA, and pension plans. It’s important to get as much concrete figures as you can, and put them on paper. This helps to avoid the rose-colored glasses scenario where you think you have more money than you actually do. A major cause of people getting to retirement, and being shocked that they don’t have enough money to live at their current lifestyle level, is their failure at an earlier age to take a hard look at their financial situation when they had plenty of time to do something about it.

How many years will your retirement funds be expected to last?

This is a sensitive question as it gets into life expectancy, and mortality issues. Once you begin to collect Social Security, your income from it will be relatively constant. But Social Security will most likely cover less than half of your desired income. And in many cases, it will cover much less. This means that your remaining investments have to supply the rest of your income. In the best of circumstances, you will be able to live off of a combination of the interest and dividends from your investments, and not have to touch the principal. If, however, you are forced to start drawing against the principal, your annual income from it will continually decrease until gone. Knowing how many years your retirement funds will be necessary to will help you make the decision as to whether you should start to draw the principal down, or accept a lowered standard of living.

How is your health?

For many retired people, their medical bills are their biggest out-of-pocket expense when they retire. Even with Medicare, you may have deductibles to pay for. We can’t look into the future, and say for certain what our health will be at retirement. But if you already are taking medical treatments for a disease such as high blood pressure, diabetes, cancer, and so on – you can be almost certain that those bills will increase significantly as you reach retirement age. Many people when making their retirement plan, forget planning for future medical bills. But now, before your retirement, is the best time to do this.

Seven Ways to Pay Off Debt and Recession Proof Your Money

Hello,

We are all trying to make ends meet in these times of financial turmoil, but the debts are driving almost everybody nuts? People have reduced their expenses to the last coin they have, and still the debt keeps rising. This makes you wonder whether there is something wrong you are doing. Accumulating debt is the easy part, paying for all your debts is the basically a living hell. The following article by Melanie Fine, CPA, hopefully will shed some light on how to pay off your debt, and ensure you have a constant flow of money even in times of recession.

Debt, debt, debt… That is all that we are hearing about these days. Governments, corporations, families and individuals are struggling with debt. To make things worse, people are losing jobs, money and homes. And to top it all off the governments are asking us to go and spend money. But wait a second – we don’t have any money. It’s a vicious circle – are you ready to get off of it? Do you wish you were recession proof?

Take on these 7 steps and you will be on the road to being rid of debt forever ,and being recession proof in the future.

1) Make a choice right now to be debt free.
Sounds too easy? Well it is. Just make the choice and keep reminding yourself every day of that choice. Then tell everyone you know that you have made that choice and give them permission to remind you of that choice. Every time you go to buy something that doesn’t line up with your goal of becoming debt free – make the choice again – to be debt free.

2) Stop using your credit cards and lines of credit NOW – live on cash.
If you stop using your credit cards right now – guess what? You wont’ be accumulating anymore debt. So stop using them now – cut them up or give them to someone you trust. Whatever you choose to do – just stop using them.

3) Figure out how much debt you have and get help if you need it.
Work out how much debt you actually have. You could be surprised. You may have less then you think. You may have more. Whatever the case you can’t get out of debt until you know how much you have. If it is overwhelming for you, then get help. Call a money wise friend, read a book or call an expert.

4) Track your expenses.
You don’t know how much you can pay each month toward paying down your debt unless you know how much you need to survive. Take what you earn and subtract your necessities. That is what is necessary – your housing, food, transportation etc. Not the latest DVD that just came out or the boots that are on sale today. If you don’t have enough income to cover your necessary expenses and your debt repayment , then you must cut those expenses or increase your income.

5) Create a plan to pay your debt off.
Now you know how much debt you have, create a debt schedule and a plan to pay it off. Pay the minimums on every debt each month. Then with what extra money you have, pay it to the debt with the highest interest. Once that debt is paid off take that amount and apply it to the debt with next highest interest rate. Find ways to pay off your debt in chunks – what can you sell to pay off chunks of your debt?

6) Once your debt is paid off, start saving.
OK, so you have paid all of your debt off. Yes this is a time to celebrate. But not by going out an buying something. Now you have to start saving about 6 months to 1 years of expenses. This will recession proof or job loss proof you until you can replace your income if you lose it. Many people pay off their debt and feel good, but forget about this part. This is your contingency fund. It will give you a cushion to survive without accumulating more debt.

7) DON”T USE CREDIT CARDS OR LINES OF CREDIT ANYMORE
Yes, I used all caps. Because this is the most important part of the recession proof plan. Live within your means. That means don’t spend more than what you earn, and save. Put a plan in place to save for that vacation you want to take. No more buy now pay later. It’s that easy. Just keep remembering that choice you made in step 1.

Just think about how freeing it will be when the next recession comes around and you don’t feel the effects of it. While the doom and gloom is going on around you, you can say to yourself “You know what – we are going to OK – we planned for this!”

React Positively To Redundancy!

Hello,

One thing that is lacking in today’s employment scene is, the security of one’s job. Gone are the days when employment was a sure ticket to make long-term financial planning, knowing that your source of income was more or less guaranteed. In today’s economy, you could be talking to a colleague in one minute, and the next you are being given dismal letter by your employer. The good thing is that no matter how bleak the future looks, there are some things you can do to turn this  whole situation into a positive affair as demonstrated in the following article by Alan Gill.

Unemployment is a difficult thing to deal with at the best of times. With the challenges now facing the world’s economies, many are going to face this emotional rollercoaster for the first time in their working life. It is therefore important to realise that you are not alone, and by acting positively you will improve your chances significantly of finding new employment. You therefore need to recognise it for what it is, accept it and move on. Taking each of these in turn.

Recognise for what it is; a period of acute stress. There are various contributors to this stress, including….

• A journey into unknown territory – “what is going to happen to me?”
• A feeling that you are letting people down, particularly your immediate family. This feeling can be stronger if you have financial dependents, and younger children. Your family dreams may be interrupted.
• A range of completely new practical challenges, like trying to understand the benefits system.
• Worry about mounting debts, including, in some cases, concern about having homes repossessed, if there is a mortgage involved.
• Difficulty in adjusting to a new life style with a different income – “how will we keep up with our friend’s social scene”.
• Worry about how other people, friends and former colleagues will view you.
• A reduced level of self-worth – “how did I fail?”
• Anger at former employees or circumstances leading to the unemployment
• Lack of motivation “what is the point?”

Accept the situation. This may be hard to do, but once it has been achieved in a meaningful (not superficial) way you can get on with repairing the damage. Move on positively and swallow your pride. Changes will have to be made, and the financial damage of lost income will have to be managed. Do not hide from decisions. Some of the things to put on your agenda to consider include:

• Make sure that you access any benefits that you are entitled to straight away. It can be difficult and the means testing may feel intrusive, but it is important not to waste time. It is very difficult to get any form of benefits paid for the period when you should have claimed, and did not know how to. You can seek further help with this online at direct gov UK.
• Review in detail your budget. When you have completed this, do it again taking out the bits that you can live without. Make every penny count by finding ways of saving money.
• Speak immediately to your bank and other financial relationships before any damaging situations arise. They are professional and should give you some breathing space, particularly in relation to your house or mortgage.
• Don’t hide from the world. The best way to get back into employment is to get out and speak to people, so find out what friends and previous colleagues are doing. Go to social events, sports clubs, business networks etc and tell people that you are looking for work. Word gets around and generally people are willing to help. You will quickly discover that you are not alone.
• Turn the unemployment into a long-term opportunity. What do you really want to do? Update your CV and start thinking where you want to be in the future.