Financial Advice

Credit Repair Letters

Most people do not know what to do when they discover errors in their credit reports. Here is an overview on what you should, if you discover any such errors.

· Verify. Before you accuse the bureau of any errors, ensure that you are in the right. Go through your receipts and old billing statements and check if the errors are actually errors. You do not want to spend time disputing something that is ultimately proved to be your fault.

· File the dispute. Draft a letter and send it to the bureau that sent you the credit report. Make sure you address it to the Complaints department because it will receive quick attention.

· Format. The letter should not be something like “”hey, you guys made mistake”. It should be formal and have all the right formatting. All of your contact details like your full name, current address, phone numbers and email address should be displayed prominently at the top of the letter. This way the bureau has multiple accurate ways of responding to you.

· Detail. You need to explain the dispute very clearly. Send a copy of the credit report and mark all the items that you have a problem with. Give each item a number and quote those numbers in your explanation. Attach copies of all the bills and receipts you have that are related to the dispute. Ensure that you number these as well and refer to them by name and number in your explanation.

· Civil. Even if you’re extremely angry, you need to calm down write your letter in clear frame of mind. Be very polite.

· Check up. The investigation into the dispute might take as long as 30 days. But you shouldn’t wait for that long for a response. Make a couple of calls on and off so that you know how matters are progressing.

Conquering the Couponing Mentality

In an effort to stretch the weekly household budget, homemakers turn to newspaper coupons hoping to save a few pennies from purchases. However, couponing isn’t always the best resort – in fact, it could even turn out to be wasteful. Conquer the couponing mentality by understanding what makes the practice not so practical. People get coupons in two ways – in newspapers and in products’ packages. And in order to get coupons either way, you will need to make a purchase for a newspaper, or a product which has a coupon.

Ask yourself if you really need either. Some households never read the newspaper, and end up using a coupon but not the product from where the coupon was clipped. Speaking of newspapers, these are actually a bad way to encourage more expenditure. Here’s what happens: You flip through the paper’s pages in search of coupons, and end up finding advertisements here and there, for stuff that you want to buy but don’t really need. And it’s all because you started scouring the pages for coupons. Coupon collectors take too much time clipping and organizing coupons. These aren’t stamps or butterflies. These are merely paper pieces you use to get a discount or a free item. Instead of wasting precious time clipping coupons, you’d really rather be doing worthwhile household chores or bonding with family. A coupon means either – a discount or a freebie. Ask yourself if all these freebies and discounted items are things you really need or want.

The coupon mentality is, “But I might need it someday, and it’s on sale / free now!” Then, the item simply gets stashed along with other un-usables in your home, creating more clutter and waste. Finally, coupons are addictive. They enslave you to the coupon mentality so much, that you feel bad about actually making a frank purchase. For instance, if your coupon gets you milk 50% off the regular price, you wouldn’t purchase milk if it were in its regular price. These are crippling effects of coupons. They are not entirely a bad thing, especially when they are paired with purchases, and get you exactly what you need, but always do things in moderation.

Secured or unsecured?

Loans are an inevitable part of our lives now. Although it is best to avoid being in debt in any way, it simply can’t be done. So it is prudent to be aware of the different types of loans out there. You would have seen all sorts of loan offers under different types of names or you may be using some types of loans without even knowing they are loans (like credit cards). But they all boil down to the fact that there are only two types of loans. Secured and unsecured.

Secured loans are, in a way, easier to get. The snag is in possessing an asset. It is against this asset that the lending organization will give you a loan. They are happy to do so because you are placing an asset as collateral (e.g. your house, property, car etc.). If you fail to make good on your payments, they will have the right to take possession of that asset. This is why they will easily give you bigger sums of money, lower interest rates and long periods to pay it back in.

Unsecured debts, on the other hand, possess a huge risk to the lending institution. Therefore the amount they will approve for you to borrow will be less and have a rather large interest rate attached to it. But you do not have to put up any collateral to receive it. A good example of this type of loan is a credit card. You don’t have to do much to get one, but it can get you in debt really fast and possibly ruin your credit history if you fail to pay up on time or at all.

This is a basic look at the two types of loans. If you are interested in getting a loan (and if you really need it), consult a financial expert on the matter before you proceed. This will help you avoid pitfalls in the road ahead.

Managing Your Income

The biggest problem that any working adult faces is money management. How often he we heard or even heard ourselves say “my money goes out as fast as it comes in”? This is a hallmark of poor money management.

The basic idea of managing your money is to spend less than what you earn. When you write it down like that it seems very simple, but obviously it is more complicated than that. The first step in managing your money is drawing up your budget.

Open a spreadsheet (or use a piece of paper if you like) and start putting down your fixed expenses down one column. These can include rent, loan payments etc. Anything you know is a definite cost that you have to pay regardless of whether it is used or not. Then on another column put down your income. This could include your salary, any extra jobs, interest from fixed deposits etc. Now compare the two; hopefully there should be a positive difference where you are making a fair amount more than you need to pay off.

Now this difference is what you have to play with. This is the amount you have to pay for your food, entertainment, shopping etc. So now you can plan out exactly how much you can spend. When you are doing this, don’t forget to set aside some money as savings. When you are in tight spot, savings are what will help you out of it. Do a budget ever month and keep track of your expenses, this is the tried and tested method that has help generations in managing their money.

Things to Know About Property Finance

If property finance is something you are interested in getting into, then here are a few important facts you should know first. The field of property finance is very competitive and challenging. Getting yourself into it well enough to be successful and gain profits can be daunting. It is quite easy to get into property finance and then lose yourself and then end up in the red. It is important that when you decide to make the advent towards this field that you ensure that you are no kind of financial debt. This is very important, otherwise you are sure to find yourself in hot water soon enough.

Another important item is to always obtain a warehouse receipt. Ensure that it indicates the date, required quantity and quality of goods delivered to a specific warehouse. This is important to discourage unwanted competition and also to bar the entry of others. You could opt to go for pay day loans, however; you must be warned that they are quite insecure and not recommended.

Collateral of any kind is usually not demanded upfront, as this kind of loan is fixed for a very short time period. Nor does it demand a lot of money for investment purposes either. With regards to property finance it is important that you take the time to research and learn the varied methods that countries trade in and the values gained. This kind of knowledge is valuable when choosing to get into property finance.

Likewise it is important to be well updated about property values, have good contacts with new dealers and most importantly, have an excellent customer base.

The Importance of Having a Family Budget

Some families breeze through month by month minus any kind of financial planning. It is important to keep track of family expenses and income, and thus having a family budget worked out has its benefits. It always makes financial matters much easier if you have an idea of how much money is being earned and spent per month. Having a budget set down also keeps tabs on expenditure, ensuring that you do not overspend. A family budget is also great to have, especially when planning a family vacation.
Here is how you can put together your family budget:

1. Calculate the total income per month. If you receive any child support or alimony, include that as well. Remember to only include income that you are sure you get every month. Otherwise you will end up basing your budget on money you will never get.

2. Next, add up the total household expenses. You need to take into account items such as utilities and any other bills you pay monthly. Transportation, groceries, entertainment, fuel, etc should all be added to this list.

3. Variable and irregular expenses – these are expenses you do not have to pay monthly, but it would help if you include them in your budget and set aside that money. This way, when you have to pay it, it does not feel like you suddenly lose a whole chunk of money. If it is an annual payment, then divide it by 12 and so on.

4. Net income – the best possible scenario is to have your net income at 0. This is the figure you get when you subtract your expenses from your income. If you get a negative number, then, it means that you have overspent, and would need to cut down on some items. If you get a positive number, then all is well and good. You should consider putting the extra money into your savings.

5. Savings – it is very important that you make it a point to save. You will need to save for college funds, retirements, vacations, etc. A good idea is to include savings under your family budget. This way, you make sure you save every month.

6. Keeping track – it is important to review your spending patterns every month. Check if you have kept to the limits in the budget. Remember, if you do happen to overspend, this would mean that you are unable to meet all your financial obligations, and might have to cut back on something else.

3 Mistakes Not to Make When Retiring

Going into retirement not only requires meticulous planning, but also a clear plan. Not only should you be financially sound, but you should also have a clear idea of your lifestyle and spending patterns. Most people make these mistakes when going into retirement.

Underestimation of healthcare costs – this is one area that is commonly overlooked when ambling towards retirement. Long term healthcare must be accounted for. Ensure that you have some form of healthcare coverage otherwise your financial plan will be heavily affected. If you are not adequately covered, then it is important to invest in a long-term healthcare insurance plan right away.

Your life expectancy estimation and your spouse’s – when retiring, you are assuming that you have enough to live for as long as you live. You need to overestimate your life expectancy and that of your spouse’s.

Presumption of working longer – do not overestimate working long into your retirement. This can be one of the biggest mistakes to make. In the US, the average age of retirement is 62. However, the Employee Benefit Research Institute Retirement Confidence Survey of 2007 indicates that 28% of employees had to retire earlier than planned for varied reasons. These include layoffs, disability, family reasons. Therefore, when planning out your retirement, take this into account as well.

When planning your retirement, it is best that you work with a professional and have a detailed plan drawn up. Take into account every possible snag that you might encounter on your way. It is always best to be prepared than sorry.