Money Management For Life

Saving On Auto Insurance Costs

Insurance costs continue to climb with no end in sight. Health insurance is essentially not affordable for more and more people everyday. Yet we continue to try and afford what we cannot in the name of security and protection of property and lives. Nothing wrong with that, but how can you save on premiums, when insurance companies have no interest in lowering the cost of their products. Lets look at auto  insurance and see what we can do.

You Got To Shop Around

For some reason many people get attached and really loyal to their car insurance companies. All it really takes for that loyalty to gain ground is one claim. I personally was paid off from a claim from State Farm 40 years ago and still have my car insurance with State Farm. The difference is I shop the policy around once a year and so should you. Changes made to driving habits, your driving record all can produce savings at premium time. It is possible you will stay with the same company, but a little competitive shopping never hurt anyone and you may be able to negotiate a deal with your present company.

Adjust Coverage’s

As each day passes your car like us gets a little older. Your car depreciates and the need for collision and comprehensive coverage’s should be considered. A good rule of thumb is when the car insurance premium exceeds 10% of the cars value, perhaps you should consider dropping it.

Raise Your Deductibles

Much has been said and much has been written about saving money by raising your deductibles. There is a reason for that. It works and saves you money. Changing your deductible from $200 to $500.00 may save you 30 % in that collision coverage. That better than 15 minutes at Geico.

Discounts, Are You Using Them?

All car insurance companies discount their products. Safety devices, clean driving records , multiple car discounts, and there are more. Take advantage of these savings. Your credit record can even save you money. If you are one of those with spotless credit make it pay for you.

All of these tips will require effort on your part to implement them. In the end it is worth the savings you will realize.

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Debt Reduction vs. Credit Counseling

More consumers than ever are finding themselves in the unenviable position of no longer being able to make the payments on their obligations anymore.  In a world where credit offers are received daily, it’s easy to get overwhelmed and ruin your well-planned budget.  As an alternative to bankruptcy, more consumers are turning to debt reduction and credit counseling programs, but what are the differences?

1.    Most credit counseling programs insist on having all accounts closed before they will consider taking on a customer.  The few exceptions are accounts needed for business purposes or accounts with very small balances.  Debt reduction services usually allow most accounts to be kept open for future use.
2.    Credit counseling usually takes longer to complete than debt reduction.  The average time spent in credit counseling is five years.  While most debt reduction services can liquidate your debts in less than a year.
3.    The amount of money saved on reduced payments is another huge advantage of debt reduction programs.  Credit counseling requires the entire debt to be paid while debt reduction works with the creditors to reduce the actual amount owed.
4.    Credit scores can be affected in very different ways with either a debt reduction or a credit counseling service.  Credit counseling does what is called a “re-aging” of your accounts.  In other words once a few payments are made, the status on the credit report will be changed to show as current.  With debt reduction the status of the debt is kept the same.  If it’s past due at the beginning of the program, it will remain that way.  Once the program is complete it will reflect as “settled in full” but the past negative history will remain.
5.    The final biggest difference is the bargaining power the consumer gets.  Credit counseling offers a debt repayment plan but the creditor is free to reject it or accept it at their will.  With a debt reduction program, all creditors are contacted and informed of the hardship and the request that some form of agreement must be reached.

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Exactly What Is Personal Finance

Silly question? Not really ,this is a term we all know and hear daily from the news.  We all know that it’s important to have a solid personal finance portfolio.  What does that mean?  Personal finance is broken down into four areas.  If you master these things, you will achieve financial freedom for the rest of your life.

First is security.  If you were severely injured tomorrow, would that be your financial ruin?  Would the bills expend your savings and leave you destitute?  To be financially secure you need to prepare for unlikely scenarios.  Make sure that your life insurance is up to date and exactly what you need.  Ensure that your savings are sufficient if disaster strikes.  You should have an emergency cash fund as well, so that something like this won’t immediately ruin you.

Next is stability.  This is as simple as living within your means.  Don’t mortgage a million dollar estate when you’re barely making above minimum wage.  Don’t rack up thousands of dollars in credit card debt if you can’t pay that off.  Have a budget and stick with it.  If you’re already in debt, lower your standard of living a tiny bit until you can get out from under it.

Third is growth.  After stability it’s time to build your funds.  Look into converting your savings account into a money market account and earn in interest.  Look at investing some extra cash in the stock market.  Don’t rely on your pension or Social Security to give you the retirement you want.

Finally, protect your assets.  Make sure that your possessions are insured.  Ensure that your funds are in secure account or not in any highly risky investments.  If you have over $250,000 in cash, talk to a banker about a trust account.  These are much more secure and are much easier when it comes to dispersing your assets when you pass on.  Protections and security are much the same and should be treated that way.  But with all of these things in place, your personal finance will be secure for decades to come.

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Back To Basics, Saving Money

We have been told to save money. Unfortunately many of us do not heed that advice. For many people saving money is difficult. Still for others it is impossible. So what if you decide to save money , but you don’t have any money to save? The fix for some could be as easy as purposing yourself to save money. Other may require more creative measures. Here are some steps that may help you. Many people found out the hard way the last two years or so how awful a rainy day can be. Protecting yourself from that dilemma is why you should be saving money with every paycheck

Paying Yourself First

Paying yourself first is a foundational principle to saving money. We all think about paying our mortgages, making that car payment or trying to pay down those dreaded credit cards. Before you write the first check or make the first online payment, pay yourself.  How much or where you put that money is negotiable. Paying yourself first is not. Making that payment in the form of an automatic deduction for a savings deposit will make it easier.

Compartmentalize Your Money

As a youngster I was told to save money for different things I wanted to needed in brown paper sacks. Seems strange I know, but you would do worse that opening different accounts for the various expenses that you will incur. Examples include, car payments, insurance premiums, or perhaps a new set of kitchen appliances. The point is save the money by compartment or department and keep you hands off.

Protect Your Savings From Yourself

Once your compartments begin to accumulate resources the temptation to rob the bank will surface.  This is where you will need to have an accountability system built into you savings habits. Remember for the most part these are rainy day funds and unless sit is raining you would be better off to leave your accounts alone. Little things like requiring two signatures for withdrawal, or waiting a few days before the money is transferred to another account may ease the temptation.

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Choosing a Financial Advisor

The  right financial advisor can work miracles on your portfolio and successfully plan your financial future.  But with so many to choose from, there are bound to be a few that aren’t worth it.  But how to choose the right one?  Of the many factors to consider, there are four that are the most important.

Any financial advisor that is worth their price is licensed by the National Association of Securities Dealers.  This is the most important thing to check since you can then trust that they know what they’re doing.  If you can, get a financial advisor with a Series 7 license.  This opens up the opportunity for you to invest in virtually anything, excepting commodities.  This will save you trouble of finding a different advisor later.  If you already know what you want to invest in and those interests are limited to mutual funds, unit investment trusts, or closed-end funds then a Series 6 license will be sufficient.

Hire a financial advisor that has been working in the industry and been licensed for a minimum of three years.  It takes awhile to build a reputation and a good track record of success.  The longer they’ve been in the business the more experience they have and the more familiar they are with market trends.  This will ensure that you are getting the most competent financial advisor in town.

You’ll get better results with a financial advisor that doesn’t work solely on commission.  A fee-only advisor is ideal but they are few and far between.  Commission only advisors will tend to pitch you the investments they’ll make the biggest payday off of, not necessarily what’s best for you.  Working for a fee only or a fee and commission will get you a much less biased opinion.

Always ask for references.  And don’t just ask, follow up on those references.  Any competent financial advisor will have no trouble giving you a long list of satisfied customers as references.  If they can’t there’s probably a big problem that you haven’t seen yet and you should move on.

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Find A Safe Place To Keep Cash

Gone are the days of investing every available dollar you have into every available investing vehicle. Times like these call for a measure of cash reserves. So where is the safest place to keep your cash, while waiting for the markets and the economy to turn around?

The safest place to keep your cash in still a bank deposit backed by the Federal Deposit Insurers Corporation or the FDIC. The FDIC  insures savings, checking, and money markets deposit accounts, and CDs

While saving accounts offer the most flexibility, don’t expect to break the bank with interest perks. However you do have the freedom of withdrawing your money at any time. This is an important component for many people.

Getting the best cd rates is not all that difficult, but you might pay a penalty if you need to take the money before the fixed term is up. Many banks are hungry for new deposits and are extremely competitive with cd rates. Remember as long as the account is FDIC insured, the bank offering the cd matters less than the interest rates it is paying. You’re looking for safety.

Alternatively while money market funds are not FDIC insured and carry a measure of risk on their own, many investors are committing a portion of their cash portfolios to these funds. Money market funds are mutual funds that are required by law to invest in lower risk securities,

The last couple of years should have shown us all, where there is money there is a  risk of losing it. While these investing vehicles may not seem attractive, they are generally safe. Investing money requires risk. One would be wise to spend some time to understand the risks and make decisions accordingly. The economy is in reset mode, and many investors should be as well.

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Preventing Identity Theft

You’ve spent a good number of years perfecting your credit, so that your financial record reflects what a great consumer you are.  If you watch television they’d have you believe that there is some guy with a genius IQ sitting behind a computer somewhere waiting for you to come online so he can steal your information.  They’d have you believe there’s nothing you can do to prevent it, just pick up the mess, but that isn’t true at all.

The internet is not the biggest threat here, only 10% of cases are internet related.  Almost half of all reported crimes are committed by someone you know, a relative, friend, coworker, housekeeper.  Another third of cases result from a stolen wallet or purse.  Credit monitoring is not a failsafe, it almost never catches identity theft in the act, and identity theft protection only helps you after the theft has occurred.  But what can you do?  Be proactive and assume that you will be a target, because if you have a credit card and a social security number you are a target.

First, put an initial fraud alert on your credit reports.  This will make sure your information is never sold for solicitation.  Further it will ensure that no one can be approved for credit with your name unless the credit bureau calls you personally for your approval.  Keep in mind that these initial alerts only last 90 days, then you have to write to the credit bureaus to extend that up to 7 years.

Establish a security code with all your bank and credit account.  This will mean that you must provide this information to use the cards, but so will anyone else.  These two simple, free steps will make you virtually identity theft proof.  Someone can steal your wallet but they will never be able to get credit in your name, making your information worthless to them.  Even after you have done this it’s always advised to check your credit reports regularly and keep a list of all your accounts in a safe place.

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Understanding The Loan Modification Process

The loan modification process can be difficult to understand and manoeuvre your way through if you do not understand it fully. What exactly is a loan modification process anyway? A loan modification process is a modification (change) that alters one or more terms as they relate to a home loan. This change is a permanent one. Going through the loan modification process will make it possible for the home loan to be reinstated if a problem has arisen. This will lead to monthly payments that are affordable to the homeowner. It will also provide some much needed peace of mind.

If you are thinking about applying for a loan modification then what do you need to qualify? The most important criteria for a loan modification is how able the homeowner is in terms of paying the modified payments both now and in the months and years to come. If the lender can see proof that you are able to live up to the loan modification agreement then you should not have a problem in being granted the modification.

Be prepared to provide the lender with your proof of income on a monthly and annual basis. You will also need to provide a complete and accurate financial statement that clearly shows your income and all of your expenses. The payments you may be seeking through loan modification may be lower but you still must be able to pay them in order to justify going through the process in the first place.

A loan modification process is sought if a homeowner has found themselves facing a hardship situation in their life that has led to problems in paying their home loan in the right manner and on time. The most common reasons that homeowners apply for a loan modification include the death of a spouse, a separation or divorce, an illness, a loss of income, relocating for another job, or military service that has taken a person away from home. When you apply for loan modification you must include a hardship letter. The more compelling your letter is, the more likely you are to be successful at being granted the loan modification.

The goal of the loan modification process is to help the homeowner to hold onto their home. The person is suffering enough from other problems and does not need to lose the roof over their head as well at this traumatic point in time. Work with your mortgage lender to figure out a loan modification that will work in your best interests. In this way, your loan can be brought up to date without suffering penalties and foreclosure will not happen.

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