If you’re phone is ringing off the hook, or your debt collectors are literally breaking down your door, it’s time to learn your rights and how to handle them. No matter why you ended up delinquent on your accounts, dealing with debt collectors is humiliating and infuriating. However, there are a few steps that you can take to ensure that you will not be taken advantage of.

1. Find out if they are an actual collection agency.

If it is a collection agency, then there is a very good chance that they purchased your old debt for pennies on the dollar. This means that they will be very likely to settle for a lower amount, because they make money no matter what. For example, many companies will purchase a $2000 debt for a mere 87 cents. Anything they make over that is sheer profit. This gives you a chance to negotiate for a smaller overall payout.

2. Don’t hide.

Hiding from debt collectors is never a good idea, it will only make your situation worse and you may actually end up getting sued. It is best to face the problem head on. If you need to buy extra time, you can request that the debt collector provide you with proof that you actually do owe the debt. This gives you about thirty days to come up with the money to pay it, and during that period, they are not allowed to contact you.

3. Read the FDCPA act.

You have rights, but your debt collectors are putting money on the fact that you may not know them. The first step is to read through the Fair Debt Collections Practices Act. This outlines exactly what a collection agency or debt collector can and cannot do to collect on a debt. You can get some great tips on how to handle the situation from this act and your debt collector’s won’t be able to pull the wool over your eyes any more.

4. Don’t cave to threats.

Debt collectors can be very shady. They will threaten you with criminal arrest, they’ll threaten to ruin your reputation. Legally, they cannot do this. You cannot be arrested for a bad debt, unless there is a bad check involved. Once again, read the FDCPA act to get a clearer understanding of all of your rights.

5. Don’t be afraid to report them.

The FDCPA has a reporting system in place where you can get assistance if you are being harassed by a creditor or a collector. If you are getting calls in the middle of the night, being unduly harassed or actually threatened, you do have recourse.

Do not fall prey to these pressure tactics, and stand up for your rights. Chances are when you do, the collection agency will suddenly back off. They only like to deal with people they can intimidate and once you know your rights, you will have a lot more power that you can assert.

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Originally posted 2008-08-26 05:22:40. Republished by Blog Post Promoter

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A big portion of how you handle your finances will have a lot to do with the bank that you choose. In most cities, you should have quite a few choices, and with internet banking, it’s never been easier to find a new bank. However, before you open an account, checking or savings, there are a few things that you need to know ahead of time, to help you determine whether or not a bank is right for you.

First, it’s very important to learn all that you can about the fees a bank will charge.

Whether it’s extra money to write more than a certain amount of checks, a monthly service charge, atm fees, or other little fees, these can quickly eat away at your balance. This is money that could be going into savings or that could be better spent. Never take a bank’s word for it, always read through the documentation they provide to help you figure out just how much an account will cost you. Free checking doesn’t necessarily mean free.

Next, you should also consider whether the account will grow with you.

Do the bank offer easy upgrading to a different account type or do they make it easy to transfer funds in between your accounts? Ask questions about the different types of accounts they offer to help you better determine which one will be the best fit for you not only now, but also in the future.

The question of interest is very important.

As banks get more competitive, they are starting to offer high interest bearing checking accounts as a well as savings accounts. This is an easy way to earn more money on your existing balance, but these accounts may come with balance minimums and there may be a few more charges. Once again, go through all of the documentation before you decide.

Last but not least, there is the question about availability of funds.

This is a common mistake that many people make when they first set up a bank account, and the resulting bounced checks can cost you a fortune. Make sure you know exactly what the bank’s policy is on deposit availability, how long it takes checks to clear, and how long eft’s take to clear. In some cases, it can take longer than a week, and if you are not prepared, you can easily bounce checks everywhere. Some people may open up a new account with a paycheck, only to find out that they won’t be able to get a dime of their money back until that wait period has passed.

Don’t be afraid to switch banks if they aren’t meeting your needs or helping you reach your financial goals. The process of finding the right bank may take a few tries, but eventually, you should find the one that is perfect for your individual needs. By taking the time to do your homework on your own however, you can ensure that you will be happy and that your money will be safe.

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Originally posted 2008-12-09 05:47:35. Republished by Blog Post Promoter

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The reason why it is so important for you to start saving early is the magic behind the concept of compounding and the rule of 72. People who wait until they are later to begin saving are going to have to save much more and much more quickly in order to catch up with the people that started saving much earlier on in their lives. There are two basic methods that you can use when it comes to calculating the interest that your savings will receive, one of which is simple interest and the other which is compound interest. Simple interest is generally calculated based on the initial investment that you make, but compounding interest means that are you earn interest payments on the initial investment that you made, it will be added to your initial investment and the new number will be used to determine the new interest payment.

The difference may not actually seem like a lot, but it is. The effect that compounding is capable of having over a long span of time is really astounding, especially when you are dealing with a larger initial investment or a higher return rate. Let us assume for example that you have $1,000 that you invest at 10 percent and the interest is compounded annually. What this means is that at the end of the year you will have earned a sum of $100, and you will now have $1,100. At the end of the second year, the interest is calculated based on the $1,100 rather than $1,000, meaning that you will earn $110 rather than $100, for a new sum total of $1,210.

Interest is typically compounded annually, monthly or on a daily basis. The more frequently that the compounding happens to take place, the faster that your money is going to end up growing as a result. As the balance continues to grow larger, the difference between compounding interest and simple interest is also going to become greater as well. If you put $7,000 in an account with 10 percent in interest, the numbers will astound you.

Another consideration is the rule of 72 which is a nifty little computation that allows you to estimate how long it will take for a certain amount of money to double in value based on a certain interest rate. To calculate this, what you do is divide 72 by the interest rate that you are expected to receive. So if you have an 8 percent interest rate, 72 divided by 8 is 9, meaning that it will take 9 years for your money to double with an 8 percent interest rate. If you are serious about investing your money, this trick can really come in handy because it teaches you to appreciate your interest rate and understand the investment that you are making.

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Originally posted 2009-08-13 03:40:00. Republished by Blog Post Promoter

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Although debt is a dirty word to many, the fact of the matter is that the vast majority of us are in debt in some way or another. No matter how hard we try, there are times when you simply need something and cannot afford to pay for it straight off. For example, school tuition is the most common form of debt, and most of us cannot afford to pay for our educations up front. Discharging debt doesn't have to be difficult.

So, most of us are dealing with debt in some way or another, but are we managing it correctly? Let’s look at a few signs that may indicate that your debt is taking control of you, instead of the other way around.

1. You can only make the minimum payment each month, and even that is a stretch.

This is a very bad sign, especially if you have more than one credit card. Your monthly minimum payment is only a suggestion from the credit card company and usually is not enough to pay down the interest that the account racked up for the month. This means that you are caught up in a spiral that may take years to correct.

Solution: Consolidate several cards into one low interest card. Make larger monthly payments to pay down that interest as well as the actual debt.

2. You use your cards for the majority of your purchases.

Credit cards should be used really only in times of emergencies or when you would like to take advantage of the ability to get a larger ticket item and pay it off gradually. Many of us fall into the trap of using our cards for gas, groceries or things that we really don’t need. Over time, these purchases really add up.

Solution: Only use that card for a real emergency. Set up a budget for yourself and remove your cards from your wallet if you have a hard time sticking to it. Never spend more on your credit card than you can pay off in a month’s time if you had to.

3. Late payments and over balance fees occur commonly.

Once you’re trapped in a debt spiral, late payments start to become more common as you try to scrape together enough money every month to make those payments. If you’re already close to your limit (how a credit card limit is determined), a few late fees can put you over the top, and then you’re dealing with over balance fees as well. This can quickly get out of control, especially if you are only making minimum payments.

Solution: Always send your payment in 10 days before it is due. Many card companies use 9am on the morning of your due date as a time cutoff. If that day’s mail doesn’t have your payment, you will be considered late. If possible, try to pay your payments online so you don’t have to worry about it getting delayed in the mail, but watch out for surcharges that card companies will sometimes tack on for online payments.

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Originally posted 2008-08-07 05:36:39. Republished by Blog Post Promoter

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If you have a regular, traditional type of pension plan, then your employer is responsible for making all of your investment decisions in your place. With most other types of retirement plans that are out there, however, you are the one that is in the driver's seat. Some people believe that it is intimidating to be in charge of their investment options but it really does not have to be. There are a number of different investment options that are available to you when it comes to putting together a retirement plan including stocks, mutual funds, bonds, ESOPs, annuities, cash equivalents and more.

Putting all of your money into a single type of investment is going to increase your risk of experiencing loss if the investment does not perform in the way that it was meant to. What this means is that you should make a point to spread your money out over a number of different types of investments in order to benefit the most.

Stocks, Mutual Funds and Bonds

When it comes to investing for retirement, it is important for you to look at things on a long term basis. Because your retirement earnings are going to grow in a tax deferred way and because it is going to be many years before you are going to make any withdrawals, retirement plans tend to be best suited for the most aggressive investing that you can muster, including for example mutual funds and stocks. Do not make the mistake of putting every dollar in money market funds or GICS which are Guaranteed Investment Contracts, but rather you should be diversifying your investment portfolio so that you can balance the risk with the reward, and you should definitely come out ahead in the long run as a result.

This does not mean that you should not choose your investments as carefully as you possibly can, however. If 80 percent of all of your retirement funds are invested in mutual funds and stocks, then most of it should be placed into funds that are well established and that have a history of a solid level of performance. If you are looking to become more aggressive with some of your money then you should place a very small percentage of your investments in stocks into higher risk types of funds to see how they can perform.

ESOPs

Employee Stock Options or ESOPs give you a great opportunity to own stock in whatever company you are being employed by. These ESOP plans are capable of benefiting you greatly, but there is a vitally important caveat for you to consider which is that you should never, ever put all of your eggs into one basket. There are thousands of employees that did this, and they ended losing out on all of their retirement funds because the stock for the employer eventually lost value as a result of shaky or corrupted accounting practices hiding serious problems with financials.

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Originally posted 2009-08-19 03:31:15. Republished by Blog Post Promoter

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