Oct 08

A Guest Post from Crystal –

The level of debt amongst ordinary American citizens suggests that few are really good at managing money. While no one is suggesting it is always easy there are a few pointers that might be able to help you whatever your age. The tendency for people to spend what they earn each month and sometimes more makes saving and investment alien to a whole section of the population. You should resist that and start to pay more attention to your circumstances, present financial position and the future.


Some increase their assets relying on real estate. It has been a good way to build up money though the recession was a period when values dropped, sometimes alarmingly. In the medium to long term real estate however should always be a good investment. There are other alternatives. The S&P 500 has shown average growth since 1871 of over 10%. A single dollar invested in 1871 would now be worth $2.25 million, well ahead of inflation don’t you think? The figure is even better over the last 40 years. Even if you have no financial expertise you can expect good growth if you invest, the earlier in your adult life the better.
If you had started with only $500 in your first year and put aside $250 each year for investment over the next 30 years, that $8000 at 8% would have grown to over $35,000! The amounts involved are easily affordable are they not? Compound interest produces considerable growth over a long period.
It is a message that more young people seem to be getting rather than turning exclusively to student loans and the credit cards they can first obtain at the age of 18. The picture is still poor however with two thirds of students still needing to borrow at least 25% of their education costs knowing that it can take up to 10 years to pay off the loan. Figures show that this year’s graduates with student debt owe on average $35,000.

Household Debt

NerdWallet tells us that the average US household owes $15,000 or so with interest paid on credit cards reaching a massive $90 billion. Frightening, isn’t it? The picture doesn’t look good, yet compound interest results in money growing quickly. The smallest amount set aside will grow. The secret is to get rid of debt so that you can start to set it aside.
The terms of a student loan are not onerous but the interest that is added to any balance on a credit card every month could be described as penal. Some students who have used their first card for normal daily living will be paying a high price. It is one that many US households seem to be paying as well.

Employment Critical

As the US Economy improves after the years of recession unemployment figures are encouraging. Job are being created month on month and unemployment levels are back down to the level when the economy was buoyant before the recession hit. Those people that have a regular pay check coming in each month can look for an escape from expensive debt in today’s online lenders network at realisticloans.com that look at personal loan applicants and approve loans based upon the concept of affordability rather than credit score.
The application is quick and simple. All you have to do is to decide to act to sort out your financial problems. If you don’t the chances of building up a fund as illustrated above are minimal. Online lenders deal with applicants in this completely online process within hours of the email being sent. They require employment and bank details from applicants. If the sum being sought can be justified by the figures the money will be transferred electronically very quickly. A loan that can completely remove credit card debt is good news. The caveat is that you do not build up a balance again; there may not be an escape route.

Whatever your age you must think about the future and not rely on the Social Security System as your ultimate savior. The sooner you address any financial difficulties you have the better. Retirement years should be ones of comfort not sacrifice. They can be if you are proactive and don’t simply think the future will look after itself.

written by Joe \\ tags: ,

Oct 31

Of all the potential problems life can serve up to us, money problems rank among the most stressful without a doubt. Ruminating about mounting debt, having trouble paying bills, knowing we are making bad choices can do quite a number on us mentally. If denial is no longer doing it for you, and you are ready to move towards a more ordered financial life, here are some helpful strategies to get you there.

Do a Mental Purge

One of the reasons we let our money troubles get so out of hand is our tendency to push our troubles out of our minds and go into denial mode. Obviously on some level, we are aware of the damage, but so long as we don’t fully face up, we can continue to divert our attention elsewhere.

Actually thinking about the situation for too long is unpleasant to say the least, but this refusal to think about it is just prolonging the suffering. One of the first steps in righting your money wrongs is doing a mental purge of all your worries and problems. Face them head on. This is very powerful.

So, bust out a pen and paper—this is more powerful than just typing it out—and write down all the stuff that has been floating around in your head. What money worries are you currently dealing with? What do you fear will happen now, or in the future because of these problems? Don’t hold back..just let it all out.

What Will Provide Immediate Relief?

You didn’t get into a financial mess overnight, and you can’t expect to clean it up this quickly either. But, don’t focus too much on the whole picture—it will just make you feel super-bummed, and your motivation will drain very quickly. Think about what you can do immediately to provide some relief.

Perhaps there are some inaccuracies with your credit report that need your attention. If they are bigger issues, or you don’t have the time to stay on top of the process, it might be a good idea to find a reputable credit repair company to assist you in correcting these errors. If you haven’t filed your taxes, do so, and once the bill comes, call the IRS to discuss a payment plan. If there are any expenses you can cut immediately that will put some extra money in your pocket, do it.

No matter how small the step, it is a good thing because it moves you out of a place of feeling powerless.

Visualize the Improved Situation

There is a lot of power in visualization when it comes to making positive change. It gives us something to focus on. When we get into a space where we can see and feel the more ideal circumstances of a particular aspect of our life, it motivates us to make this our reality.

What would a better financial life look like to you? Do you see yourself making regular deposits into your savings account? Do you see yourself truly enjoying nights out because you truly have the money to spend on a nice dinner or concert? What does this life feel like? It probably feels pretty good. Think about the lack of anxiety and fear that comes with having all bills paid on time, budgeting properly and managing debt responsibly. How much more peace would you feel if you had a nicely padded savings account, or the oft-talked about ‘emergency fund?’

Visualize yourself as being responsible with money and financially savvy—this may seem challenging from your current space. But, it is important to realize your situation now was not borne of some DNA defect that made you bad with money. It was borne of bad habits, lack of education and awareness and poor decisions. All of that is of the mind and can be changed.

Where you are now probably feels really uncomfortable. Facing up to our money troubles is scary, but this willingness sets a very powerful intention. So long as you commit to following through, and taking things a step at a time, you can turn things around.


written by Joe \\ tags: ,

Dec 03

Today, A guest Post From Joy –

There are many things that can have an impact on your life. How much money you make and where you live are a couple of them. But there is one in particular that can affect your life no matter who you are or what you do for a living — your credit score. Having a good one is extremely important. It can influence many things in your life that you may not have ever realized.

Ducks in a Row (concept to put everything in order/ to complete

Value of a Good Credit Score

You may know it, but your credit score can influence several different areas in your life. By taking care of your credit score, you can improve everything from your job to your love life.

  • Employment.
    Many employers are now checking your credit score before agreeing to hire you for a new job. They want to be sure that you are taking care of your own personal finances. If you have a good credit score, they can usually expect that you are self-managing and pay attention to detail.
  • Insurance.
    Your insurance rates are directly tied to the health of your credit score. If you have a low credit score, you will be stuck paying higher premiums. A good credit score will help you qualify for better insurance programs that offer great rates and benefits.
  • Credit.
    This is perhaps an obvious one, but your credit score has an immediate relationship to your ability to get loans, incredibly low interest rates, and the best terms available. Having a good credit score is essential to getting a decent mortgage at an affordable rate.
  • Romance.
    It’s a reality — some potential dating partners may want to know about your credit score before agreeing to go on that first date. Maybe they will wait for the second date, but you shouldn’t be surprised if he or she pops the question early on in your relationship. Many consider a good credit score as just as important as appearance and personality.

How to Get a Credit Report

The best way to see what your credit looks like is by ordering a copy of your credit report and credit score. You can go to any number of sources to get this information. You can order credit reports from each of the three national credit bureaus – Equifax, Experian and TransUnion. You can also order a 3-in-1 credit report which allows you to view all three of your credit reports at the same time. It is a good idea to keep your credit reports monitored periodically throughout the year.

Once you’ve received your credit report, you need to review it to make sure the information it contains is accurate and up-to-date. Be sure that it gives the correct address and contact information. You should also look over each of loans or credit cards you have to make sure that they reflect your current payment status. Having inaccurate information about your credit history can be a real problem.

What Affects Your Credit Score

There are several factors that affect your credit score, but there are three in particular that weigh heavily when calculating your overall creditworthiness. Problems in any one of these three areas can have a significant negative impact on your credit score.

  • Payment history.
    Having problems regarding your payments and your record in making payments is critical. Thirty-five percent of your credit score is derived from your payment history. Failure to make timely payments can lower your credit score quickly. Missing payments will guarantee a lowered credit score.
  • Credit utilization.
    How much credit you have impacts your credit score. Lenders compare how much credit you have used with how much credit you have available. The higher the ratio, the greater your credit utilization is. Considering that credit utilization is worth 30 percent of your credit score, the lower you can keep it, the better off you will be. Most credit consultants suggest keeping your utilization ratio at less than 30 percent.
  • Length of history.
    How long you have had your credit accounts is also very important. It helps lenders see how you’ve done with your payments over a several years. If most of your credit is limited to recently opened accounts, your credit score will be lower. The length of your credit history can account for 15 percent of your overall credit score.

Your credit score is extremely important. Because it can affect so many areas in your life, you need to monitor it regularly to ensure that it is accurate and up to date. Adopting wise credit-management behaviors can help keep your credit score healthy. Failure to monitor these things can cause you to have a negative credit score, which can adversely affect many areas of your life.

Joy Mali is a staff writer on The Washington Times and Examiner. Her work is also published on Lifehack, DailyFinance and other mainstream sites. She likes to share interesting tips to help people manage their personal finances & credit.

written by Joe \\ tags: ,

Nov 14

I had an experience I was planning to share and after writing about Student Loans and Your First Mortgage, today is the day to do it. In that article, I wrote that a couple earning $100K could afford a house worth as much as $465K if they had a 20% down payment saved up. I actually think this is on the high side, but given how low rates are today, the numbers work.

If you’ve not read the article earlier this week, I used two ratios, 28% of monthly income to go towards housing cost, and 36% to total debt servicing. This is how responsible banks qualified borrowers before the mid-2000 bubble that nearly destroyed the economy.

On a personal note, I am taking the state mandated 40 hour class that will let me sit for the real estate salesperson exam. (Note – the word Realtor is trademarked, one has to have the license to become a Realtor, but not all real estate agents are Realtors.) That said, the class is offered over 4 consecutive Saturdays, a long day, 10 hours of stuff we’ll never use after taking the test. We were honored to have a guest speaker join us, a Mortgage Broker who talked a bit about her business. When she got to the qualifying ratios, it wasn’t 28/36, but 43/50. To compare to my numbers from the prior article, 43% is just about 1.5 times 28%, so this broker is saying this couple can borrow not the $372K I calculated, but rather, $558K. She was also pushing loans with as little as 3% down.


She was quick to point out that Real Estate Agents are not supposed to offer financial advice to clients, and that since she knew more than everyone in the room, we should just send our customers her way. (She literally said, “I know more about mortgages than any of you.” I decided it would be pointless to challenge her. We all just wanted her to leave so we could get through the material.)  It’s interesting for me to see that these mortgages are even available, the bubble and crash aren’t even 10 years behind us. I can understand the downpayment is tough, and if a buyer with good income can qualify for a mortgage with a decent debt to income ratio, that’s fine. But the thought of selling someone a mortgage that will put their debt service to 50% of their gross income should be criminal, in my opinion.

I’ll leave you with one final thought. Say this $100K couple gets in too deep, and for 30 years skips the 401(k) matched deposit of 5%. $10K each year for 30 years will grow to $1.1 million at an 8% rate of return. I know, it’s not that simple, but when people get in too deep, something has to give. Would you be comfortable if the Mortgage Broker told you not to worry about having half your gross pay going to service your debt? I don’t think I’ll ever refer anyone her way.

written by Joe \\ tags: ,

Jul 31

My friends at Credit Karma enlisted the help of Harris Interactive (the famous “Harris Poll” people) to take a look at how people prioritize their financial health and their physical health. The results were a surprise to me. With money at the top of the list of things keeping people up at night, I’d have thought being debt free would rank pretty high. Check out this infographic, and click on it to be taken to the full article at Credit Karma.


Why not leave a comment? Tell me, what’s more important to you right now, your weight, or your debt? No cheating, you can’t say, “both!”

written by Joe \\ tags: ,