Wealth Collector

Having a solid budget is the basis of getting control over your finances, getting out of debt, and saving for your future. Putting together a good budget can be tricky for a lot of people, however. Fortunately, following these steps can make it easier to get your money under control.

Start with One Month

Start by adding your total net income for a typical month. If you get paid every two weeks, base your monthly budget on just two paychecks. Also be sure to include any other money you receive from investments, Social Security, or other sources.

List of All Bills

Include all of your utilities, subscription services, and the minimum payment that you have to make on your loans. Even if you routinely pay more than the minimums, just list your minimum payments for right now. It’s important to make sure that you can afford to meet your minimum obligations before assigning any extra money. Finally, add in a line for expenses such as groceries, entertainment, and transportation costs.

Once your minimum expenses have been listed out and added together, subtract the amount from the net salary that you recorded as income. If the result is a negative number, it’s time to start cutting back on expenses. Start by cutting back in areas such as groceries and entertainment. If you still need to cut more, consider dropping your cable television subscription or cell phone plan. In extreme cases, it may be necessary to trade in a car or find a new place to live.

Assign the Extra Money

Once you have cut your expenses down so that you have some money left over at the end of every month, it’s time to assign that extra money. There are a lot of financial advisors who have a lot of different plans for how to spend this money. Some suggest putting everything into savings, while others recommend using as much of it as possible to pay off debt. While your decision will be based on a number of factors (and will probably vary from month to month) for right now, plan to put half of it into savings, and use the other half to pay off debt.

Turn Your Monthly Budget into a Yearly Budget

After you have a solid monthly budget, it’s time to develop a yearly budget. Start this budget with your net income for the year. If you are paid every two weeks, this will include the two “extra” paychecks that were not included in your monthly budget. Take the total amount of bills that you have to pay every month and multiply it by twelve.

Next, write a list of any yearly expenses that were not included in the monthly budget. This can include items such as property taxes or car insurance premiums. Find the total of these expenses, and add them to the number that you computed in the last step. This will give you your total expenses for the year.

To pay for these extra expenses, you may want to use the “extra” money from additional paychecks or bonuses. If you have no extra money, divide these yearly expenses by twelve and add them to your monthly budget. This may require you to adjust your monthly budget.

Once adjusted, you will have a solid budget for the next twelve months. Of course, you will need to make adjustments based on life events, but this budget will give you a good basis to work with.

Author Bio: Sean Hopcraft is a frequent blogger for financial websites and does a lot of writing during tax season. He is the CEO of a car insurance company and helps management and directors with their car insurance plans.

Credit cards are an easy way to immediate gratification to spend and buy with money you don’t have and it often forces many to run into debt and even bankruptcy. Therefore, it’s crucial to weigh the pros and cons before filling out any old application for a credit card – which you probably receive almost daily in the mail.

There are several factors which should be considered before applying – I’ve tried to outline them below. But please keep in mind this is a short list to serve as a guideline only:

1. Every time when you apply for credit of any kind or a credit card, a mark is made against your credit rating. The available credit on the card you have is applied to your overall debt ratio – even if you don’t have a single dollar balance on it!

2. Some credit cards give points when you purchase nearly anything. These points can be used for further shopping and other great bonuses. Air miles, for example, is a very common bonus. Hence, if you’re a frequent flyer you should look for credit cards that offer rewards that will be a benefit to you. The points you earn come in handy for future hotels and flights.

3. Look for credit cards, which offer standard APR and low introductory rates for balance transfers.

4. Some credit cards award you cash back for purchasing at certain stores. Therefore, apply for a card which awards cash back at stores where you actually shop or it won’t be worth it.

5. Accountability: In my own situation, I have my old college roommate as an accountability partner that I talk to before making any large purchases. This is so I don’t let my emotions get the best of me. There will always be another super sale!

6. Checks and Balances: Come up with your own plan for dealing with debt before you apply. This will be something you can look back on if you run up a debt on the card. Tie this in with #5 above so that if you do begin to run a debt balance you’ll be able to pay it off soon. The majority of credit card holders run a large balance and for many this would be dealt with if they had an accountability partner to work through the debt with.

7. One benefit of credit cards is that if you continually make your payments it looks really good to on your credit statement and may actually help your overall score.

If you’re still set on getting a card here are some guidelines to help you choose a reliable company.

1. Interest rates: Your most important factor to consider while managing credit card debt. Choose a low interest rate credit card and only after reading all terms and conditions.

Of course you’ll be way happier to just pay it off each month but like most you might run a balance here or there and high rate cards can bite you if you do.

2. Annual fees: Most credit cards now do not require any annual fee, this being driven by competition. Try for a credit card company which does not charge any annual fees. Although I’ve found in personal experience that if you’re wanting the bonuses and points plans there will be a fee in many cases.

3. Withdrawals or Cash advances: Though handy in certain situations this can sometimes be way too tempting and ring up your debt faster than you’d like.

4. Loyalty Schemes or Reward points: Cash back rewards and Air miles are used to attract you the customers. Many people chose a specific credit card for these kinds of benefits. Be cautious while buying credit card with these benefits.

5. Insurance: Choose a credit card with insurance, which will cover you from any theft or burglary. If you are a frequent traveler then choose a card which provides you free travel insurance.

6. Gold and Platinum cards: These might look great in your purse or wallet but often they are not the most competitive cards in the market. Annual charges are also applied to these types of cards. So don’t decide on designs and colors of cards. Just see their benefits and compare from there.

7. Conduct an online comparison: There are many types of online survey’s and comparison reports that have been conducted. Try doing a Google search on the term “credit card reviews”.

Of course the above is not an exhaustive list but should put you in the right direction if this is your first time applying for a credit card.

Your credit rating is like a report card of your credit history. It’s important when determining your economic status. When your credit rating is good, you can easily obtain a loan, a mortgage or credit cards, among other things. But if you have a spotty payment history with a creditor, or even went into default with one or more loans, this negative action is reported to a credit reporting agency, which keeps track of your credit report. With a bad credit rating, you will be unable to get a loan or a credit card (or at least one with a reasonable interest rate). Having a good credit history is crucial to most financial opportunities, and it’s important to monitor your credit on a consistent basis.

Most people neglect monitoring their own credit, usually because they’re not sure where to begin. The first step is to order a current copy of your credit report from the 3 credit reporting agencies.

If you’re concerned about the cost of the report, don’t be. Most people don’t know that you’re entitled to a free credit report once a year. To get one, just contact the credit reporting agency either by mail or through their website and request an application. You can also go to Profinity to get all 3 at one time.

No matter how you get it, it is absolutely necessary to review your credit report. Look for any possible mistakes in your report. If there are any, you should request, in writing, that the credit reporting agency investigate the item. After you have done this, the credit reporting agency legally has 30 days to provide you with documentation regarding the entry. If they fail to do so, the entry must be removed from your credit report.

When you request that an item listed on your credit report be investigated, be sure to send any supporting documents you might have along with the request. Agencies can sometimes make a mistake, or possibly mix up your credit information with another customer’s. You may also request that the agency note any entries being investigated on your file.

It’s absolutely necessary that you frequently review your credit report. You could be dealing with several missed payments, or only one defaulted loan. You may have just received the black mark on your credit history or the negative items could be six and a half years old and nearly ready to expire. Regardless of the situation, knowing exactly where you stand with your credit is crucial.

You start living on your credit cards, when you live beyond your means. You miss out on the monthly payment for your credit card debt, just because you couldn’t resist buying a dress displayed on the Broadway shop window. Such instances are repeated, and your credit card debt inflates. The creditors start calling you up, the collectors start knocking at your doors and you start regretting your past impulsive actions. Now, the regret is not going to save you anyway. You can make use of the online tips on credit card consolidation, and try to pay off your debts over time. However, elimination of debts is not as easy as incurring is.

Now is the time to seek debt relief. Your credit score has been affected, since you have missed out on the regular payments. You are losing sleep over the piling debt amounts. The creditor harassment is keeping you on your toes. It is better to put in your own efforts than to rely on others, since the professionals who offer debt relief services are not going to do it for free.

Ways to pay off debts quickly

Consistency and determination matters a lot, if you want to become debt-free in the quickest way possible. Apart from that, you’ll need to have the money as well, for debt repayment. The following ways might be able to help you pay off your debts gradually:

1.   Increase your income – If you’re not working, try to seek some source of employment. And if you’re a working woman, try to increase the income. You can set up a business at home or give out cooking classes online. If you think that you can write well, you can even work as a web content writer. You can build a website or blog, and become an affiliate to other merchant website. You can take part in online surveys and get paid in return. You’ll just need to put in some time and effort to increase your revenue. The more you earn, the easier it will be to make the payments on your credit card debts.

2.   Reduce your expenses – You can try to reduce the living expenses as being the homemaker yourself. You can get rid of your brand obsessions, and make use of the low-cost options available in the market. Take advantage of the sales and discounts to buy what you need. You can borrow books from your neighbors for your children, and reduce the educational expenses. Help your children with their homework and cut down on private tuition costs.  Try to resist those temptations which you might regret later on. Practice frugal living and save by every means possible to pay off your debts comfortably.

3.   Negotiate with creditors – You can make use of your negotiation skills to try and convince your creditors about your financial condition. Negotiate to reduce your interest rates, payment amounts etc. for your debts.

4.   Make regular payments – Regular payments will help you avoid the extra charges, late fees and penalties on your debts. It thus prevents your debts from increasing.

5.   Consolidate your debts – You can consolidate your credit card debts, to combine your monthly payments into one. You can take out a new credit card, and transfer your existing credit balances into it. The low or zero percentage of interest on the new balance transfer credit card will make your payments more affordable. The tips on credit card consolidation will be able to help you, if you want to consolidate your credit card debts in this way.

Credit cards are extremely alluring, and will make you spend more. Whether you are a working woman or a home maker, debts will affect you in the same way. A bit of restraint will help you save even amidst your daily expenses. You’ll never be able to get out of the debt mess if you pay off two credit card balances, and then start incurring debts on the other three.

For something so important, there seems to be a great deal of misinformation about what can hurt or help your credit score. Here are three big things we’ve heard, and the truth behind the fiction.

1. Close Extra Accounts to Improve Your Score

This is a huge misconception that is all too frequently dispersed. Did you know that closing accounts can actually hurt your credit score? It can. Now, it’s true that too many accounts can negatively affect your score, but once you’ve opened them it’s best to keep them in good standing. Credit scores are measured by comparing your available credit against what you’re using. If you close accounts, your available credit decreases—which can actually bring down your score. There are exceptions on closing accounts. Do some research pertinent to your particular situation and go from there.

2. Peeking at Your FICO Score Will Hurt Your Credit

Again, not true. Let’s clear the air about what inquiries harm your score. Applying for new credit can have a negative impact on your score. Requesting a copy of your own credit report or investigating your score does not. But it’s all about timing. If you’re buying a house, your FICO score will treat all inquires in a 45-day period as just one inquiry. Keep that in mind when shopping for a mortgage and you’ll be no worse for wear. Check out www.Myfico.com for more on your score.

3. All Unfavorable Blemishes Can be Removed

By all means, if there’s inaccurate information on your credit report, dispute it! Credit agencies are required to investigate inaccuracies or remove information within 30 days of notification. That said, be wary of so-called credit-repair agencies that can remove unfavorable, yet accurate, strikes on your credit report. Credit agencies see these scams from a mile away, so don’t be taken in by someone preying on your desperation. Fixing your credit is like getting fit; it can be a slow and arduous process. Remember, if it sounds too good to be true, it usually is.

Nobody wants to pay more cash for a car than is necessary. Other than the purchase of a new home, buying a new car is one of the largest purchases a person will make in their lives. So it makes sense that you would learn how to save money on your upcoming car purchase. There are several different steps you can take to ensure you don’t pay more than necessary on your upcoming purchase.

You should understand that a new car purchase involves several different costs. The first expense is the cost of the vehicle itself. Whether buying a new or used vehicle, take time to do some research. Explore prices being offered by numerous dealers or used car sellers. You can also research prices on Kelley Blue Book, Craigslist, Ebay and other similar sources. This information can then be used to negotiate a reduced sales price when buying the car. You may find that negotiating from a distance, such as over the phone or via email, and pitting two different sellers against each other in the negotiations process may work in your favor. For example, a smart idea is to call a dealership and tell them another dealership is willing to sell you the car cheaper. This will force them to make a decision, and often time it is in your favor.

Another cost associated with buying a new vehicle is the cost of financing. Most people do purchase their new car with loan proceeds, so it makes sense to shop around for best loan possible. Many will focus significantly on the interest rate of the loan, but other factors such as loan fees and the loan term affect the overall cost of the loan. When in doubt about what the best deal is, consider looking at the total interest charges of the life of the loan coupled with loan fees. A lender will be able to provide you with this information upon request. One common mistake is people often get a loan that in the long run will put them in debt. For example, there payments will only be going to interest, so in ten years when your cars value has depreciated you will owe more then it is worth. So, my advice is to think logically know what you can afford and assure that you won’t be negative in the long run.

You may also find it helpful to shop for insurance before you make your purchase. Insurance is not a cost of buying a car, but rather a cost of ownership. However, the make, model, year, and safety equipment loaded into the car will affect this cost. It can help you to save money over the long run if you get insurance quotes on a few different models before you execute your purchase. In some cases, even choosing a certain engine size in the same car model can alter insurance prices.

Lastly, probably the most noteworthy advice do not be afraid of waiting to purchase a car. Rushing into buying a car is a horrible mistake, if you wait around your chances will be higher of finding the right car at a better price.

Keep these tips in mind as you shop for your new car today. By following these tips, you can save money on your upcoming new car purchase.

Post submitted by Craig: Craig has been working in the automotive industry for over twenty years. He currently blogs for cashforusedcarssandiego.com a company that will buy your car in San Diego.

Gadgets can help you save a considerable amount of money. These gadgets pay off their own cost in a short amount of time and after that, the savings are tantamount to freebies.
Here are 6 gadgets that will help you save money on a regular basis:

1. Power Strips

This is an extremely popular device that can help you to reap tremendous savings. It costs around $35 and pays off its cost in just 2 months. This is especially beneficial when used with a desktop as it will allow you to plug the main unit into a designated control outlet and the peripherals will be connected in other outlets.

This device will control the peripherals through the control outlet. This means that when the main unit will be turned off, it will automatically power off all the peripherals and hence save power. Furthermore, it will also act as a switch and therefore saves money by not allowing any phantom charge to be drawn.

2. Compact Fluorescent Light (CFL) Bulbs

If you are still using traditional bulbs, it is time that you shift to CFL bulbs. They consume less electricity and produce less heat, which means that you will also save money on cooling. You can realize savings of around $100 each year by replacing ordinary bulb with CFL bulbs.

3. Efficient Shower Heads

These highly efficient shower heads minimize the amount of water that flows from the water heater. You can save up to 15,000 gallons of water each year, which means that less water has to pass through the electric heater and thus you save energy cost as well.

4. Programmable Thermostat

This is a must if you have a central A/C system. It will allow you to keep precise temperature control and it can be programmed to automatically lower the temperature to a cost effective level when you are not home. It is an extremely convenient device that will make your life easier and will enable you to save considerable amount of money.

5. High Efficiency Washing Machine

This high efficiency washing machine will help you to do fewer laundry loads each month and each time the amount of water required will be lesser. It will enable you to save $10 on water usage each month and since this machine is equipped with a large load, you will be able to save a considerable amount of time.

6. Solar Outdoor Lighting

This is an excellent option to light your garden and patio without spending money on electricity. The solar powered lighting will charge during the day and will provide adequate light during the evening and night. They provide a beautiful soothing low light that creates a nice ambiance.

If you have a large amount of credit card debt, you may struggle with the ability to pay your minimum monthly bill. Even if you are able to pay the debt, bills can become overwhelming, with much time and effort spent assuring the right amount goes to the right lender by the appropriate due date.

Credit card debt doesn’t have to be so stressful. There are a few options for people with overwhelming credit card debt:

1. Debt consolidation

Debt consolidation is a particularly good idea if you’re making many payments to several different credit card companies every month. In essence, debt consolidation is just another credit account, but it is one large loan used to pay off all of your credit card accounts. Instead of paying three, or five, or ten accounts every month, you’ll be making one payment to one lender every month.

There are several different types of debt consolidation loans:

- Unsecured debt consolidation loans are loans made without any collateral. These are most accessible to people with good or excellent credit, and may carry a higher interest rates than secured loans for people with less than excellent credit.

- Secured debt consolidation loans are loans that are guaranteed by property you put up as collateral. This can be jewelry, furniture, or electronics. Secured loans are usually available to people with anywhere from poor to excellent credit, as there is something backing up the loan. Use caution with secured loans, however; failure to make payments will result in your property being repossessed.

- Home equity loans are lines of credit that are based on the equity you have built in your home. Similar to secured debt consolidation loans, home equity loans can be risky as your home is your collateral. Failure to make payments can result in foreclosure, so make sure you can make your payments every month.

Consolidating your debt can save you money if you are able to find a consolidation loan that carries a lower rate of interest than the average of your current credit card accounts. It is important to shop around for a low rate, and pay attention to any fees that may be assessed. Many loans do have fees, and these costs could eat up any money you’d be saving by consolidating your debt.

2. Negotiating your credit card balance

Often, credit card companies are willing to negotiate your balance if it is understood that you are having trouble making payments and may default on your debt. Basically, the company would prefer to receive a lower, negotiated amount than nothing at all. Draft a letter explaining why you want your balance lowered, and the reasons for the amount you want the balance to be lowered to.

There are a few cautions when using this method:

- The amount you “save” on your credit card bill is considered taxable income. This could push your tax bill higher, and even push you into a higher tax bracket.
- Generally, credit card companies require the negotiated amount to be paid in full immediately. This is not a debt you can make payments on.
- There will be a note on your credit report stating that your debt was negotiated for a lower amount, which can negatively affect your credit score.

3. Stop charging immediately

This won’t lighten your current debt load, but it will stop it from growing. Stop charging items immediately if you have more debt than you can handle. Once you have caught up with your credit cards and zeroed out your balances, you can begin to charge small necessities and pay off the balance on time and in full every month.

If you are applying for a loan, you should expect the loan provider to perform a background and credit check on you. It is a standard procedure. That is why before applying for a loan, it would be best if you would first check your credit rating. If your score is high, you could be sure to get an approval easily. If not, you may take some time to improve your credit score before applying for a loan to ensure approval.

There are many factors that lower your credit score. The biggest factor would be a bankruptcy. Being bankrupt is like suicidal in terms of your credit rating. That is why as much as possible, you should avoid it. Lenders want to make sure their borrowers would not bring about risks. Of course, loan providers have to make sure their borrowers would be able to repay their loans.

Credit records could indicate the financial condition of an individual. A high credit score means a person is financially okay, while a low credit score says otherwise. Understanding the credit rating system for individuals may not be as difficult as some would think. Here are four usual factors that could lower your credit score.
1. Delayed payments. Making bill or debt repayments on time could reflect on your credit score. Every time you make delayed payments or miss payments completely, negative scores would be deducted from your current score. Your payment history would be tarnished, which would be a turnoff to any lender in the future.

2. Default. Not being able to repay any loan is like eroding your credit standing completely. It would be a major dirt on your record. No lender would want to take risks in lending money to an individual who has a record for not paying a financial obligation. As much as possible, default on any loan or debt should be avoided. It would not do any good.

3. Debt solutions. Getting into any debt solution service may bring about a major setback. That would be negative credit scores. Debt solutions could help and guide you in clearing your debt but at the same time, it would pose an impact to the credit score. That is because it would mean you are unable to keep up with repayments on debts as originally agreed to.

4. Repossessed home. An unpaid mortgage could lead to home repossession. This is like getting into a default. Foreclosures strike twice at the same time. First, the homeowner is evicted from his own home when the ownership is transferred to the loan provider. Second, the credit history gets a major blow because of the financial and risk implications of the process. If you have a home loan, you should intend to make repayments regularly to avoid any hassle.

These factors should be avoided if you intend to generate and maintain a high credit score. There is no need to worry. Avoiding these would not be difficult. Keeping financial discipline intact could be a key to achieving a good credit standing.