Tips To Save Money And Get More Out Of It

If you are familiar with management brainstorming sessions, you must have heard of this simple gem of a theory: problems are opportunities. Speakers after speakers drill this theory into the attendees’ heads with numerous corporate examples from all over the world. Unfortunately, problems still remain problems for most people. Opportunities go into hiding when a problem makes an appearance. However, in these times of economic recession, problems have to be converted into opportunities for maintaining a good financial position. Otherwise, your problems will become an opportunity for loan sharks.

Adopt A Two-Pronged Strategy

There are two ways to counter the ill-effects of recession. The first option is to save more money and the second is to invest money in areas that offer optimum growth.

Let us take the first aspect – that of saving money. Either you should earn more or you should spend less. It is extremely difficult to earn more in the present economic circumstances. In fact, it is difficult even to keep the same level of income amidst the pink slips and salary cuts. If you have spare time and the required skill sets, you can try to get some part-time job or a work-from-home job. But it is easier said than done. Therefore, the most practical way of saving is to spend less. Money saved is money earned.

The second aspect, that is, getting the optimum growth for the investment, requires certain level of understanding about the financial tools and investment options. It is not rocket science. If you can spare some time and energy, you can develop a basic understanding about these aspects relatively easily.

Tips To Save Money

The first thing you have to do is to make a summary of daily expenses and income. There are software packages available for this purpose. You can make use of a spreadsheet software package like MS Excel to create the daily summary. Even writing the daily expenses in a diary or a notebook will do. The important thing is to update it everyday. This will give you an idea about the purchases that swallow your hard earned money.

You have to control your shopping instincts. A good practice is to buy any non-essential things only one or two days after the impulse for buying hit you. If it is only a passing fancy, the impulse will die down quickly. In addition, do not indulge too much in electronic shopping.

You can not only save money, but improve your health as well by walking, and not using the car, for traveling short distances and eating home-made food instead of eating out on a regular basis.

Tips To Get More Out Of Your Hard Earned Money

If you look around in the financial and investment markets, you can find plenty of options for investment. There are short-term investment options like checking accounts, savings account, and high-yield bank accounts. In addition, there are hybrid investments (which can be both long term and short term) such as money market funds, mutual funds, hedge funds, and share market investment. Then there long-term investment options such as government bonds and treasury deposits, retirement benefit plans, certificates of deposits, and corporate bonds.

There are no hard and fast rules regarding investment, as it depends on personal preferences. It is better to diversify in an optimum manner. Never put all your money in a single investment basket. As a thumb rule, the higher the returns, the higher will be the risk associated with it.

Staying out of or getting out of debt is the new after college past time. Short of finding a rich and benevolent relative or winning a full ride scholarship, the average student will have to do a little planning to save himself or herself money and the resulting headaches from becoming deep in debt.

Plan Financial Aid
There are numerous financial resources out there and available from grants, to scholarships to private student loans. One way to find them is to use the Student Aid Wizard from the federal Department of Education. Check out your school for several unpublished scholarship possibilities. Also check private and non-profit organizations in your area for funding possibilities.

After College Debt Burden
After graduating from college you can do one of two things, consolidate your loans, or refinance your loans. That will immediately reduce what you owe and probably lower the overall interest rate to a better fixed rate. Current interest rates are lower now due to the current worldwide financial crisis, so you’re almost guaranteed to get a better deal if you consolidate or refinance now. Another thing that happens is you reduce the number of creditors allowing you to keep better track of your debt.

What to do About Credit Cards
If you fell into the credit card trap then handling this debt may prove a bit trickier. But it is manageable none the less. You can roll you credit card debt into a private company debt consolidation loan along with your student loans. Doing it this way may cause you to pay a higher interest rate to the private company. Keep away from the private companies unless you have no other choice.

Med School Debt
The bad news is that new doctors graduate with more than $100,000 in loan debt. More bad news is that starting salaries for new young doctors haven’t kept up. The good news is that medical schools and the organizations that license medical schools, recognize the problem and work diligently with their grads to help reduce costs and the resulting debt after they graduate.

Last year, she stepped into the ring with Primerica Financial Services. As part of her training she needed willing volunteers that she could run her presentation with, aided by an experienced representative from the company. The trainer would actually give the presentation while my sister-in-law “learned”. Even as she is telling me this over the phone, I am rolling my eyes and thinking how much I really don’t want to do this. However, I like to be supportive so I agree that my husband and I will sit through a forty-five minute presentation.

To say I was a little jaded going into it is an absolute understatement. I loathe sales people. Not people who are trying to sell in general, but sales people who are pushing the sale down your throat. I don’t like dealing with those people, and I definitely don’t like having them in my house. Nevertheless, I keep an open mind, and go on faith, that my sister-in-law, who has known me for fifteen years, would not do this to me. Boy, was I wrong.

It’s the nature of these kinds of pitches to avoid giving consumers a heads up about what to expect. If you’ve never heard of Primerica, allow me to enlighten you.
Primerica sells term life insurance, rrsp’s in the form of mutual funds and mortgages. I did some research and it’s actually a pretty solid company with a long history. They don’t advertise; they acquire new clientele from referrals and “training” of new representatives. On their own, the products offered by Primerica are quite good. The rates on mortgages are high, but the term is thirty years, which means, your rate is locked in for the life of your mortgage, no renewals necessary. In that light, it’s understandable why it’s higher, and I will admit, people struggling with a heavy debt burden would do well to pay the rate and work on attacking the debt.

The philosophy of the company is financial education for consumers. The average person doesn’t have a “debt free” date or plan. Primerica encourages this, and offers an analysis of your current situation, citing how long it will take you to become debt free, and how they can help you become debt free faster. The math is solid, the plan is solid and the philosophy itself is noble and very much needed. My problem is with the pitch. You know, that forty-five minute presentation, which turned out to take almost three hours.

I won’t bore you with all the details, because it actually is quite informative and educational and I strongly encourage anyone who is curious to call them up and ask to see someone. It’s worth the time, but have your financial and insurance information ready for review; otherwise, you’ll waste a lot of time. Having said that, I must highlight the two big areas I felt were manipulative.

1. Comparing Apples to Oranges: The sales rep had a binder filled with charts and information about investments. He showed GIC’s at an average rate of 3%, and showed what the long-term gain on such an investment would be. He then compared it to Primerica investments at 10% with an obviously higher return. It doesn’t take a genius to figure that out. The problem is, Primerica offers mutual funds, not GIC’s, and the entire proposal dances around that very fact.

   So, heads up. A GIC is a Guaranteed Investment Certificate, which means, your principle (the amount you invest) is guaranteed and safe. Furthermore, your interest rate is guaranteed for the length of the investment. Mutual funds are not guaranteed. Your principle is at risk, so you could lose what you initially invested and the rate of return fluctuates dramatically. Sometimes you gain, sometimes you lose. The 10% return Primerica refers to is an average over time, for the highest risk level of mutual funds. The plain truth they don’t tell you, any bank or financial company dealing in mutual funds can offer you high-risk mutual funds.

2. Stealing Sales from the Trainee: Our sales rep pushed us to start the life insurance application immediately. I was confused by that, since my sister-in-law was not yet licensed and I questioned how she would be paid for the sale. The rep carefully avoided a direct answer, insisting she would get something for it. My sister-in-law agreed wholeheartedly with this, so I caved, and even though all my instincts were screaming otherwise, I provided a cheque for the first payment to initiate the application.
   Now it just so happens, I am one of those people who reads the fine print before I sign. On my application, it said I may cancel anytime during processing and be given a complete refund. A couple days later, that is exactly what I did. Don’t get me wrong, the insurance was a good deal, at a fair price. I cancelled because I wanted my sister-in-law to get full credit for the sale. That was the catch. Since it was being recorded under her trainer’s name, she would get a referral fee, and he would get the commission. Therefore, I waited until she was licensed and did a new application with her.

Overall, Primerica isn’t such a bad deal. They sugar coat a lot of the pitch to their own benefit, but really, what company doesn’t? We ended up with term insurance, which was already on our list of things to do anyway. There was plenty about the pitch I had to bite my tongue about. However, nothing they said convinced me they were a terrible company. The only caution I would recommend when dealing with Primerica is give yourself a few days thinking time before you sign for anything. Don’t worry about offending them, sales people always come back.

1. Make sure your travel insurance will allow you to cancel your trip right up to the time of departure and for any reason. Although it may take an emergency for you to have to actually cancel your travel plans, it could happen and you want to know your travel insurance will make allowances.
2. Read all the fine print before you sign on the dotted line or pay any money. Make sure you know what you’re getting. You may think that all travel insurances are the same but their coverage may vary. You don’t want to waste money paying for something you don’t need and miss out on something you may need.
3. Your credit card company may also offer certain types of travel insurance such as collision to rental cars or accidental death and dismemberment. If you’re already getting this with your credit card, you don’t need to pay extra for it again.
4. Rental car agencies offer that same type of coverage you may already be getting from your credit card company or your auto insurance. Check to see which one gives you the best rates.
5. If the travel insurance provides coverage to get you to a medical facility in the case of illness, check to make sure the facility is a good one. Regardless of whether it’s part of the policy or not, you want the best possible health coverage for you and your family.
6. Travel insurance often covers you while you’re on the ground using trains, buses, taxes, etc. but you may also have this coverage on your life insurance policy so don’t pay for it twice.
7. If you travel more than a couple times per year, you’re better off paying for an annual policy rather than getting a new policy each time you travel. Compare the difference before you get your next policy.
8. Make sure the coverage you’re getting is adequate and not too little or in excess. Where you’re traveling to will have some bearing on the coverage you’ll need for medical and liability. Do some research on your own to find out what the average coverage usually is for similar passengers and travel destinations. Don’t pay higher premiums for coverage you won’t need.
9. Check out specialty types of travel insurance as you may actually save money on these policies plus you’ll know you’re covered for your specific situation. Some specialty insurances may include Over 65s travel insurance, family travel insurance, winter sports insurance, gap-year travel insurance and more.
10. Consider getting a health insurance card, which will give you free or reduced-cost medical treatment in various medical establishments.

1. Automate, Automate, Automate. Take the time to set up accounts that automatically monitor your finances and monitor your credit score. At Mint.com you can access all of your accounts in one place through a single sign-on, track expenses and project your budgeting needs out into the future. CreditKarma.com offers free, unlimited access to your credit score, and useful tools to manage it. It’s also good to consider automatic bill pay so you never have to worry about missing a payment.
2. Build your credit score. Your credit score is really an important cost savings tool for the rest of your life. Not only does it help get you the lowest interest rates on your credit card purchases and car loans, but employers and landlords also check it. It affects so many components of your life.
3. Be informed. Understand the terms of your student loan and be prepared to start repaying it. You will probably get several offers to refinance your loan.Yes, interest rates are at all time loans, but do your homework. These refinancing options aren’t always a better offer. Generally students start repaying six months after graduations so be responsible, keep your address updated with your student loan providers and pay your loans on time.
4. Pay off your debt – Start your professional life on the right foot. Hold off on buying a new car or new wardrobe for a few months and start paying down the debt you racked up in college. It’s important to get yourself stabilized so you can start to save for your emergency fund.
5. Find the right credit card for the next stage of your life – Now that you are out of college, your access to credit and use are going to change. No longer will you just be using credit cards for emergencies or to buy books. It’s important to find the right cards for the next stage of your life. Do your homework. If you use a credit card and pay the balance off in full every month look for a great rewards card like the Citi Forward Card. If you carry a balance each month finding a card with the lowest APR is the way to go.
6. Save. As soon as you have can, begin to build out an emergency fund. In today’s economy with hundreds of thousands of people being laid off each month, you’ll want to set aside enough cash to get you through should you lose your job or not be able to find one. This money should be readily available at any time.

By following these simple steps, new graduates can set themselves up for a lifetime of savings. Saving money, paying off debt and paying bills on time all help to build a good credit score and in today’s economy a good credit score can save you thousands of dollars on loans.

Anyway, I was/am taking a small break at work and decided to check it out quick and guess what? The filter here as work blocked it! www.johnchow.com is no longer accessible.

The filter also gives you a reason for a blocked site. Like if I tried to go to a video game site, it would block me and say something like “This site has been blocked for the following reason: Video Game, Gaming News”. At least something like that. Do you know what the message was when John Chow’s site was blocked?

“This site has been blocked for the following reason: Web Ads”

There are now too many ads on the site versus content for me to view it from work. Yikes.

Shop around for auto insurance. This cannot be stressed enough. Whether you have a good driving record or a poor driving record, don’t assume that the first quote you get is going to be the lowest quote. Although many auto insurance companies offer discounts when you’ve been with them for awhile, don’t assume that you’re paying the lowest possible premium without checking around with other companies.

Check what kinds of discounts they offer. Most auto insurance companies offer a variety of discounts but don’t always offer them without being asked so be sure to inquire when checking out auto insurance companies.

Keep a good credit rating. Believe it or not, auto insurance companies charge higher rates to individuals with low credit scores. While this may not refer to you if you’ve been with a company for a long time, it will apply to you if you’re new to the company.

Increase your deductible. The deductible on your insurance is what you have to pay on a claim before the insurance will take over. For instance, if you have a $200 deductible and have damages to your car totally $3,000, you pay $200 and the insurance company will pay $2,800. The lower your deductible, the higher your premium is going to be. If you’re a safe and responsible driver, you may seldom if ever have to make a claim so don’t pay a high premium if you don’t have to. However, don’t have your deductible so high that you won’t be able to afford in case of an accident.

Check insurance rates before you purchase a car. Insurance premiums are higher on certain cars so always check with your insurance company before purchasing a new car. For instance, those that are more expensive to repair are going to have higher premiums.

Drop coverage you don’t need. If you are one of the individuals that considers yourself “insurance poor”, it may be because you are paying for insurance you really don’t need to have. For instance, if you have a car that’s older than 10 years old, the premium for collision and comprehensive may cost you more than what the car is worth.

Keep a clean driving record. Any time someone gets a ticket, the first thing they say is, “now my insurance is going to go up.” And, they are correct. Moving violations stay on your record with the auto insurance company for anywhere from 3 to 5 years so you’ll pay an increase for a few years for that one ticket.

The Basics: Credit Reports and Credit Scores
If you have a credit card, a car loan, or even a cell phone, you have a credit report. Your credit report shows the different types of debt you have, like credit cards, car loans, mortgages, student loans. You can see your account balances, payment history and the length the account has been open.

Your credit score indicates the probability that you’ll repay your loan. According to the guys at Fair, Isaac and Co. (the company that created the widely-used FICO credit score), your credit score takes into account your payment history, the amounts you owe, the length of your credit history, new credit, and the types of credit you have. So, make sure you have a strong all-around history. The higher your score, the better. Higher credit scores result in lower interest rates and less expensive loans.

What’s Credit Got to Do With It?
These days, the answer seems to be: everything. More and more companies are requesting copies of your credit report. Don’t be surprised if a potential employer notifies you that a credit check is required for employment, particularly if the job involves working with money. Car insurance companies are also checking your credit. To them, risky borrowers are also risky drivers.

Be All You Can Be: Avoid These Pitfalls
If you want to make sure your credit score is as high as possible, make sure you pay your bills on time every month – particularly credit cards and other loans. Collection accounts seriously damage your credit, and they stay on your credit report for at least seven years.

You also want to keep your total credit card debt to less than 30% of your available credit, and try not to open too many new accounts at once. It makes lenders nervous when they see that you’re opening up several new accounts – to them, it looks like you could quickly balloon your debt and become much riskier.

Over the years, banks have been very secretive about credit information and what detracts or improves a person’s credit. The simple fact is, unless your banker has made it their mission to understand credit, they may not even know the ins and outs of the system. This perpetuates further misguided notions for protecting and maintaining a good credit standing. Allow me to enlighten you with a few common credit misconceptions.

1. Lowering your credit card limits improves creditworthiness. This is probably the most commonly practiced effort to improve credit. The theory is a high limit will prompt a lender to think you might go out tomorrow and shop till you drop, maxing out your available credit. Therefore, to gleam good results many consumers call up their creditors and ask for a limit reduction. Not a good idea at all. Utilization is the outstanding balance compared to the available limit. Healthy credit utilization is 25% or less. Credit scores look at individual utilization ratios as well as overall utilization. On a $4000 limit, 25% utilization is $1000. If you reduce that limit to $2000, your utilization ratio jumps to 50%. A balance of less than 25% of available credit indicates you manage spending and credit use well. It also contributes to 30% of your credit score. Therefore, lowering your credit card limits actually hurts your credit score.
2. Every inquiry lowers a credit score. Nope, not true at all. Many people avoid any kind of inquiry for fear of irreparable damage to the coveted score. That’s overdoing it to say the least. First of all, there are different ranges of inquiries, soft and hard. A soft inquiry is non-evasive, such as a consumer looking at his or her own credit report. Since there is no credit application attached to the inquiry, there is no change to the credit score. Secondly, credit reports accommodate rate shopping. That means you can apply for an identical loan at several financial institutions within 30 days, and you will only be scored for one credit check. By the way, time is a big healer when it comes to all things credit. The more time that passes after a hard credit check, the higher your score will be, and inquiries only stay on your report for two years.
3. More credit cards mean better credit. Having too many credit cards is not the best answer for stable credit. While your credit score does consider the amount of active trade lines (credit accounts), it looks for a variety of credit usage. Car loans, rrsp loans and mortgages in the mix identify a consumer with strong credit management skills, whereas a history that is largely overpowered with credit cards will suffer a lower score.
4. I never use my credit cards. Avoiding all credit usage certainly won’t help you. Credit scores rely on recent activity to articulate your ability to handle credit. Cards that never get used won’t even make it to the calculation, since there needs to be at least 6 months of activity to be reviewed. Never using your credit card means you won’t establish payment records (35% of score), you won’t establish utilization ratios (30% of score), you won’t assist length of credit in use (15% of score) and you won’t contribute to types of credit in use (10% of score). Credit scores calculate your risk based on credit use, so if you have an old card collecting dust in your wallet, call the phone number on the back. There’s a good chance that unused card has been cancelled anyway.
5. Closed accounts improve your credit score. I’d really like to know who started this rumour. Granted, an account closed by the creditor due to delinquency will hurt your score, but by that point, you`re already in trouble anyway. While too many accounts aren’t great for your score, once you’ve opened it, you’ve already made that bed. Again, credit scores look at utilization, the amount you owe versus your available credit. Closing an account only lowers your available credit making it tougher to keep the desired 25% utilization ratio. There’s also payment history and length of trade lines that diminish from account closures.

If you have read this and discovered you’ve fallen prey to one or more of these misguided credit notions, don’t despair. Time heals all wounds, so from this point forward you are armed with information that really will help your credit score ambitions. While a large part of credit scores require you to “use it or lose it”, it`s how you use your credit that determines your skill with credit.

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