Archives for January 2011

Are Your Making Smart Investment Decisions

Are you a Wise Investor?

Investing for the future is a task that is best started as early in your career as possible. Although a novice investor cannot aim at duplicating the success of a market savvy investment guru, it is not an impossible task for such investors to make money in the markets. What it requires is some basic knowledge about how investing works, options you can invest in and safeguards you should establish to keep your investments safe. Here a few points to keep in mind if you are a new investor.

Avoid ‘get rich quick’ tips

No one can predict the market with perfect accuracy. Never base your investments on ‘sure winners’ recommended by brokers, friends or acquaintances. The savvy investors who have made a killing in the markets have based their investments on research and personal judgment. Invest only as much cash as you are willing to write off in such ‘sure fire’ high risk channels.
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Is Refinancing Your Home With Equity Smart

Should You Refinance with Home Equity

Many Americans who accumulated unmanageably large debts during the economic downturn are now considering using the equity they have built up in their homes to reduce their debt burden. A home is your most expensive asset and using it to take a refinance loan can give you access to a substantial sum that can cover a large number of small debts.

Getting a refinance loan using your home is a good way to consolidate all your loans into one for easy management. Taking such a loan in this low interest climate can also reduce your monthly outgoings by quite a significant amount. This, in turn, makes it easier for you to get out of debt sooner.

Before you use your home to get a refinance loan, it is very important to gain an idea of what experts predict about future interest rates. This will help you choose between a fixed rate and an adjustable rate for your new loan. A fixed rate is a good option when rates are expected to rise in future. Your fixed rate loan is protected against any such future increases. Even when rates do rise, your loan repayment remains the same.
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How To Travel On A Budget

How to Travel on a Budget

Many people who dream of traveling around the world are content to simply live vicariously through the journeys of others because they believe a world tour would be prohibitively expensive. Traveling does come with its own share of expenses- lodging, food, transport etc, but there is no reason why you cannot do all of these within your means and still visit your dream locations.

By planning and researching options through discussions with other travelers who have recently visited the place, you can get an accurate idea of how to find good deals there. Here are some more tips on budget travel you can use before you start on your journey.

Use the Internet to Make your Budget

The internet is a great resource when you need to gain an idea of costs and prices in any place on the globe. Use the many online travel guides and travel blogs to see what recent visitors to your dream locale have paid for accommodation, food and transport. Make a budget based on recent figures before you start finalizing your hotel, air or guided tour bookings.

Look for Package Deals
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How To Score Good Deals On Foreclosed Homes

Buying Foreclosed Homes Getting a Good Deal

In the U.S, the housing segment was the worst hit by the economic recession. Despite numerous shoring up efforts by President Obama through various schemes, housing values are yet to recover lost ground. Signs of recovery are being seen in some prime areas but still these prices are nowhere near the peak prices of 2007- 2008.

However, this is not all bad news especially for those who are looking to buy their dream home. With many homes going underwater, there are a number of foreclosures happening these days. Buying a ‘foreclosed’ home lets you get your dream home at price that can be really attractive.

Checking with real estate agents and brokers in the area you want to buy into often yields good results. Owners of homes that are being foreclosed typically use agents so that they can maximize the chances of finding buyers who are willing to pay a good price.

Check with some reputed real estate agents in the locality for a list of foreclosed properties in the area. Chances are the agent can even tell you which properties have recently come into the market so that you get a home that has not been standing empty for months, thus falling into disrepair.
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How To Prepare Your Home For A Quick Sale

How to ‘Dress Up’ Your Home before a sale

The collapse of the housing market has resulted in so many homes being put up for sale that it is difficult to get a good price for your property in this crowd. Even if you have prime property and hire the best real estate agent in your locality, you still have enough competition to make getting the best price a tough task. One good way to make your home stand apart from the many others on sale is to ensure that it presents a pleasing picture to prospective buyers. Here are some ideas on how you can ‘dress up’ your home so that buyers like it at first sight.

What does the buyer want?

Thinking from the buyer’s perspective is the first step you need to take when you are staging your home for sale. If you were looking at your home with an idea of buying it, what would you like to see? A sound structure, which has evidently been well maintained, crack free walls and floors, clean interiors, bathrooms, sinks and other damp areas in good condition- these are all important factors considered by buyers. Both the exterior appearance and the interiors of your home play an important role in attracting prospective buyers.

The exterior of your home

The buyer’s first impression of your home is formed by what he can see of it from the street. This is why the exteriors and the setting of your home make a huge difference to its salability. Trim the lawn, clean up the frontage and spruce up the garden before you put up the “For Sale” sign. A coat of paint to the outside walls of your home makes it stand out among the many houses on the street. All of these serve to give the impression that your home is well maintained.
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Don’t Start Stuffing Your Mattress With Cash Just Yet

Why Banks Accounts are Still Good Places to Keep Cash

Post recession a majority of Americans not just lost faith in the economy but also in the banking industry. Some huge, ‘indestructible’ banking and financial groups like Citi Group started tanking during the economic crisis. This led to fear among those who had accounts with many major banks. In fact, there were many who pulled out their savings from their local banks, preferring to keep at home even if it meant loss of interest.

Although the economy is not exactly booming even now, it is certainly more stable and the banking sector has managed to find its feet once again. If you are one of those people who keeps all your money at home, then here are a few good reasons why you should reconsider your decision to avoid banks.

Extended protection to bank account holders

As part of its economic improvement program, the U.S government is allowing an extended protection to bank account holders to cover losses in case of bank failure. The standard $100,000 FDIC (Federal Deposit Insurance Corporation) insurance on accounts now stands increased to $250,000. This limit will be in force until the year 2014 when the $100,000 insurance limit will come back into force.
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What Exactly Is Your Credit Score

Your Credit Score What is it and Why is it Important

Your credit score is perhaps one of the most important numbers in your life and chances are you don’t even know it. Many Americans are waking up to the fact that every late payment, every unpaid loan and every repossessed asset they have is causing long term damage to their financial health.

All of your major financial dalliances are recorded in your credit report and reflect on your credit score so that anyone wanting to engage in financial transactions with you can have a measure of the risk that you pose. Most often, it is the lenders who make use of your credit score to get an accurate picture of your financial capacity and repayment ability before they approve a loan you have applied for.
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Is A Short Sale The Right Option For You

Short Sale A Win Win Solution for Unmanageable Home Loans

Millions of Americans who have huge home loans to pay off are now finding themselves in a no-win situation. This is because their repayment capacity has been eroded by reducing salaries and interest rates. On the other side, home values have dipped to all time lows. For those who find themselves struggling to repay home loans that are far bigger than the actual resale value of the asset, a short sale is a good solution.

What is a short sale?

Simply put, a short sale happens when you sell the home for an amount that is lower than what you actually owe to your home loan lender. Clearly, your lender needs to approve the deal before you can go ahead with this kind of sale. Once the sale is completed, the proceeds are transferred directly to the lender instead of you, the seller. The difference between the actual loan amount you owe and the sale proceeds may be written off by the lender or he may require that you pay it off within a specific time period.
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Improve Your Credit Score For A Better Job

How Bad Credit Score Affects Your Job Prospects

Many Americans may not be aware of this, but quite a large number of employers check credit scores when they are screening applicants for an employment opportunity. Surveys have suggested that more than 40% of employers conduct this ‘credit check’ on job applicants.

This is definitely an unpleasant revelation to many who have lost jobs during the recession and as a result fallen behind on repayments. The problem is that unless you can find a job that gives you a regular paycheck there is no way to set your finances in order and improve your credit score.

But if more and more jobs begin to hinge on your credit score, you may need to improve the score first to even get a job. While the debate goes on in Congress about whether credit checking by employers should be prohibited, let’s see why employers consider your credit score so important.
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How To Avoid Big Credit Card Bills

Tips on Avoiding Huge Credit Card Bills

Credit card debt is one of the biggest problems that cash strapped Americans have are facing today. With salaries taking a beating and uncertainty about jobs preying on their minds, many Americans use their plastic to buy things because they do not have to pay for them right away.

Although users conveniently forget that credit card balances have to be paid off sooner or later, the issuers don’t forget to send the bills at month end. Instead of running up huge bills on your plastic that will wipe out your entire savings to repay, it is far better to keep a check on how you are using your card.

Monitor Your Card Spending

A great way to ensure you always have the cash to pay back credit card dues is to keep a list of purchases that you make using it. Update the list diligently whenever you use the card so that at month end you know exactly what you owe to your credit card company. This list will also help you detect any errors in your billing.
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Practicing Good Money Management

The Importance of Training your Kids in Money Management

Although giving kids an allowance is ok, we rarely realize that it is also very important to teach them to spend it wisely. Merely giving purchasing power in the hands of children does not ensure that they gain the maturity to use it responsibly. It is necessary to train your kids in money management right from an early age.

This helps them understand when and why to save and when and where to spend. By understanding the value of money and the way to use it judiciously, the children grow up to be financially responsible adults.

Teaching the Importance of Spending Within Means

By getting kids to keep track of their spending you help them understand the importance of budgeting for different expenses. With budgeting comes the awareness that spending substantially on one item will mean less or no money for another. The limits on spending that are established in this way inculcate a habit of spending only within the means.
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Advantages and Disadvantages of Cash Back Credit Cards

Cash Back Credit Cards – Advantages and Disadvantages

If you are addicted to spending with your credit card, a cash back card may be a good option for you. While a cash back card helps you earn as you spend, it is important to understand how it works before you sign up for one. Here are some advantages and disadvantages of this type of card – read on to learn how to use it wisely.

How Does it Work?

When you use your credit card to buy something, the merchant pays a commission to your bank or service provider. On a cash back card, your card issuer shares some of this commission with you when you make certain kinds of purchases.

The total cash you can receive in this way is either mailed to you as a check or added to your total credit at year end. You can get back as much as up to 2% of your total credit card spending in this way. Currently, credit card issuers are competing with each other to get more customers and you may even find some 5% cash back cards in the market.
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Different Between Chapter 7 and Chapter 13

Bankruptcy Basics- Chapter 7 vs Chapter 13

According to the American Bankruptcy Institute, in the year 2010, more than 1.3 million people filed for bankruptcy. The reasons for the bankruptcies varied from loss of employment to salary cuts. With not much hope of a boom in the economy in the near future it is too much to hope for any dramatic changes in these figures in the current year.

For Americans drowning in huge debts, declaring bankruptcy may appear to be the only recourse. But before you do so, you should know some basics about the different kinds of bankruptcy that can be declared.

Chapter 7 Bankruptcy

Also called straight bankruptcy, the Chapter 7 bankruptcy is an option for debtors who have no significant assets to lose. With exception of exempt assets, all others are handed over to a bankruptcy trustee. The trustee liquidates these assets and distributes the proceeds among the various creditors in line with order of precedence. A period of 4 months usually elapses before the bankrupt debtor can claim to be discharged from all his debts.
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Is Debt Consolidation Really A Good Option For You?

Is Debt Consolidation a Solution to Debt Reduction?

Many financial experts suggest consolidation of debts as the solution to reduce your debt and become more financially secure. But is this true? Debt consolidation can lower your monthly payments and help you better organize them. But consolidating debt may not be the best solution for everyone. Some things you should keep in mind before going for debt consolidation as a solution are discussed here.

Taking out another loan can be risky

If you are taking a second loan against your home to consolidate your debt, you put your property at risk and may even lose it in the event of a default. There is the possibility that you might consolidate your entire loan amount only to realize that you are unable to pay back the loan, making your financial condition murkier.
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Stock Investing Tips For Beginners

What You Should Know Before Investing in Stocks

Stocks have always been right at the top when it comes to choosing good performers among different investment avenues. Historic statistics show that those who have steadily invested in stocks have been better off than those investing in bonds, mutual funds and other investment options.

But stock market investing is also fraught with risk, especially when it is difficult to predict how the market will move. To invest successfully in stocks, it is important for you keep some basic rules in mind.

Never Invest for The Short Term

To an outsider it may appear that it is possible to make incredible gains by investing in stocks for very short periods. In fact, day traders do make a killing in the market when they know exactly how to time purchases and where to invest.
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How To Save Money On A Home Purchase

How to Buy a Home Cheap

The housing market is the one most affected by the economic downturn that caused savings of many Americans to dwindle down to nothing. The recession wiped out the asset values of existing home owners and also made finances extremely tight for prospective buyers through lay offs and drastic salary cuts.

The net result was that although home values were dropping like stones, there were not many hopeful buyers who could afford to make an investment. There was no way to predict where the housing market would bottom out so there was also no way for hopeful buyers to identify the right time to invest.

Much shoring from the government in the form of tax credits and easing of loan preconditions and returning confidence in the economy have now served to put the brakes on the falling housing segment prices. If owning a home is a dream of yours then this is the time to fulfill your dream with minimum outlay.

Improve Your Credit Score

Your credit score tells your lender how much of a credit risk you are. The interest rate on your loan rises when your credit score is low. Make sure you pay bills on time, keep unpaid balances on cards low and pay off long standing outstandings well before you apply for the home loan. These acts will boost your credit score so that the lender can see you are credit worthy.

Foreclosed Homes are a Bargain

During the recession, several home owners were unable to repay their mortgages and were forced to foreclose on their homes. Such homes will typically sell for prices that are much lower than prevailing market prices because both the lender and the home owner want to recover as much money as possible from the asset as quickly as possible.

You can simply take a walk through the neighborhood where you want to buy a home and look for homes with “Foreclosed” signs on the lawn. A local real estate agent should also have a list of foreclosed properties for you choose from.

Hire an Agent

Experienced real estate agents have a good number of links with agents and lenders in many locations. These links ensure that your agent will be aware of both sellers as well as home owners who cannot afford to fully pay off their home loans. Also, an agent will have a good idea of existing prices in different localities and he can negotiate the best rates for you.

Most home owners find that the money they save in their agent-enabled home purchase far exceeds what they pay to hire him/ her. Of course, making sure that you find an honest, experienced agent is a basic criterion for this.

Understanding How Home Equity Loans Work

Understanding Home Equity Loans

Loans involve intricate terms and conditions that you have to follow very carefully if you want to get a good deal. Of the secured loans available to homeowners, home equity loan is a good option. To help you better understand home equity loans, here are some basics.

What does equity mean?

Equity can simply be defined as the amount of your share in your home. If you have taken a loan against your home, then equity is calculated as the difference between the total value of the house and your outstanding debt.
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