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1
Jan

Automate Your Finances For New Years

share save 120 16 Automate Your Finances For New Years

personal finance 225x300 Automate Your Finances For New YearsFolks,

Getting your financial act together seems to be a popular new years resolution.  However, for whatever reason a lot of people don’t seem to follow up on their resolutions, mostly because habits, attitudes and beliefs can get in the way.  So if you want a quick and dirty way to help yourself achieve your financial goals, go automatic.

By automatic, I mean configure your accounts so you automatically move your money around.  For example if you’re trying to save up $500, set up an automatic deposit from your checking account to your savings account.  If you want to make more money in the stock market, go ahead and get your brokerage account set up so it automatically debits from your checking account, or automatically reinvests dividends.

The value in doing this is you…

a. have more time
b. are forced to do it
c. don’t have to think about it
d. remove opportunities for derailing your goals

Automating your accounts totally works.  Back in 2006 my wife set up her Roth IRA starting with $25 dollars per pay period.  Now that account has $65,000 in it.  This isn’t all from direct deposits, but it helped my wife to start small and move on to bigger investments.

Finally, if you want more details on how to actually do this, check out the following video by Ramit Sethi.

1
Jan

How Low Income Families Can Deal with Financial Emergencies

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[The following is a guest post. These programs provided in the article are specific to Australia, however similar initiatives should be available in most countries. These examples should give you an idea on what to look for in your country of residency.

Financial emergencies often occur when you least expect it and typically when you can least afford it. Perhaps you need a new washing machine, your car breaks down, or you need to make some home repairs, but you just do not have the money set aside to pay for it. While these emergencies may arise when you least expect it, they still need to be dealt with. The Australian government has set up several programs to help low-income families deal with these types of financial emergencies without the need to turn to high-interest loans and scams. Here are some ways the government can provide you with loan assistance and help you through your emergency.

No Interest Loan Scheme

These No Interest Loan Schemes, or NILS, are specifically designed for people who are receiving some type of welfare benefits. This programs offers low-income families the ability to take out a loan for up to $1,200 to offset the cost of purchasing household appliances, medical care goods, or car repairs. These are unsecured loans, but you may only have one NILS loan out at a one time. You will be required to set up payment arrangements and pay the loan back over the course of 12 to 18 months.

StepUp Loans

Unlike NILS loans, StepUp Loans are not no-interest loans, but they do offer very low-interest, unsecured loans to low-income families. You have a little more leeway about how to spend these loans and can obtain a loan for up to $3,000 to cover the expenses to purchase, new goods for you home, make home repairs, and pay for various medical treatments. Repayments will also be set up for this type of loan, but you have up to three years to pay the balance off.

AddsUp Savings Account

While this will not give you immediate money, it may provide a short-term solution to your emergency. This type of savings account is specifically designed for those who have already obtained and repaid a NILS or StepUp Loan. You must save at least $300 to be eligible, but once you reach this threshold, the government will match your savings dollar-for-dollar up to $500. This may be an options to help you save $1,000 in a relatively short period of time.

SaverPlus

Must like the AddsUp Savings Account, SaverPlus also encouraged you to set up a savings account. However, this option is available to all low-income families and not just those who have already obtained and repaid a NILS or StepUp loan.  You will meet with a financial counsellor and set up a savings plan, and just like with the AddsUp Savings Account, the government will match you contributions up to $500.

Avoid Payday Loans

Even if you have to wait a little bit to receive the money you need, you should never consider taking out a payday loan or car title loan. These loans charge an incredibly high interest rate and you will spend a lot more money paying the loan back than what you actually borrowed. In fact, you are likely to go even further into debt after obtaining one of these loans. Car title loans are extremely dangerous because you could actually lose ownership of your car if you are late with just one payment. Read through any loan contract very carefully before signing anything and make sure that you can make repayments on time before taking out this type of loan.

If all else fails and you cannot take out a governmental loan or wait for funds to build up in your savings account, try several local charities. Many churches and the Salvation Army have special funds set aside to help people who are going through a financial emergency. They may be able to help you with home repairs, pay for repairs to your car or help you find a second-hand household appliance that works great. There are many options available to low-income families who are struggling with an emergency situation. Be sure to explore all of your options to see what may work best for you and your situation.

30
Dec

Make Raising Your Credit Score Your New Year’s Resolution

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happy new year color 300x262 Make Raising Your Credit Score Your New Years Resolution

Happy New Year in sparklers by christmasstockimages.com

Are you still trying to think of a good New Year’s resolution? You should consider making raising your credit score your resolution for the new year. Having a higher credit score can benefit your life in many different ways, including making it easier for you to be approved for financial products, employment opportunities and housing. Raising your credit score is simple once you know what you should do. Here are some techniques that are effective at increasing your credit score.

Bring Past Due Accounts Up To Date

Having past due accounts can be devastating to your credit score, as 35% of your credit score calculation comes from your payment history. If you have any accounts that are past due, make a plan to bring them up to date as quickly as possible. Start with the accounts that you have been putting off for the longest time, as these ones have the biggest effect on your credit score. Even if it takes you several months to catch up on the payments for all of your accounts, you will be in a much better position with your credit score when everything is up to date.

Request A Courtesy Adjustment

If there are only one or two past due payments on your account, you may be able to get the creditor to remove the delinquencies from your credit history by asking for a courtesy adjustment. Many creditors will remove the late payment from your credit report if you’ve been a good customer and only have one or two late payments on your account. Having these items removed from your credit history will give you an immediate boost to your credit score.

Reduce Your Debt To Credit Ratio

Reducing your credit to debt ratio is another effective way to increase your credit score. Your debt to credit ratio accounts for 30% of your credit score calculation and the lower the ratio is, the higher your credit score will be. There are several ways to approach reducing your debt to credit ratio. You can pay off your existing debts, apply for additional credit, or transfer expensive credit card debt to a personal installment loan. The method chosen will depend on your current financial situation and your perception of the best course of action to take. Some people find it easier to focus on using a single technique while others uses a combination of all three methods.

26
Dec

The Many Ways Inflation Affects Your Life

share save 120 16 The Many Ways Inflation Affects Your Life

In the news recently, there have been many stories about the impact the inflation is having on communities across the nation. While these stories generally focus on the widespread effects of inflation on entire segments of society, they rarely focus on the impact that inflation is having on the average individual. There are many different ways that inflation can affect your life and learning how to recognize the effects is the first step in being able to limit the amount of damage that inflation does to your finances.

inflation sign The Many Ways Inflation Affects Your Life

Reduced Purchasing Power

The most common effect of inflation is reducing your purchasing power for goods and services. When inflation raises the cost of goods and services, it takes more of your money to purchase the same amount of stuff that you were buying before. When I first got my driver’s license and began driving my own car, the cost of regular unleaded gasoline was around $1 per gallon, meaning I could fill up my Dodge Neon for around $10. Today, the price of gasoline is nearly three times that amount, resulting in my paying $30 or more for what I could obtain for $10 a decade and a half ago.

Fluctuating Values

Another common effect of inflation is increasing the value of certain types of possessions. This is typically seen in homes, investment properties, stocks and other financial accounts that tend to increase in value the longer that you hold on to them. This type of inflation is great if you purchased the item before the value rose, but these values can decrease as well, leading to financial trouble for those who depended on these assets for financing other area of their lives. For example, during the financial crisis of 2008, the deflation of home prices resulted in many homes losing around 30% of their value, pushing many buyers that had purchased their homes in recent years underwater on their mortgages and resulting in a significant loss of equity for those who had been living in their homes for a long time.

Difficulty Planning For The Future

Inflation brings a lot of uncertainty to financial planning, making it much more difficult. Because there is truly no way to know for sure whether a particular item will increase or decrease in value, you must make an educated guess and rely on past trends when making financial decisions that will affect your future. When making plans for the future, you should include an inflationary formula in your calculations to ensure that you are close to your financial targets. It is better to have more than you need than to struggle financially because you failed to account for inflation in your planning.