In boxing, each boxer has an ideal fighting weight - the weight that provides the best balance of speed and power. If a boxer is too heavy, he forfeits his speed. If he’s too light, he loses power. Finding this ideal weight and maintaining it is the main challenge for most boxers and their handlers. As it turns out, investors need to strike this same type of balance in their finances - particularly when it comes to making a budget.

Tutorial: Budgeting Basics

For example, if you are finding that you are not meeting your financial goals as quickly as you planned, you may need to trim down your expenses. On the other hand, if you set a budget that is too harsh, you will probably lose your motivation to follow it. Read on to learn how to measure your budget’s ideal fighting weight. (To find out why you need a budget, see The Beauty Of Budgeting, Ten Tips For Achieving Financial Security and The Seasons Of An Investor’s Life.)

Good and Bad Calories

Boxers need calories for their bodies to burn. Even when they are dieting to make their select weight groups, they rarely go below 1,200 calories a day and during training camp, they may consume as many as 6,000 calories. Boxers also pay attention to what they eat - all of their calories are carefully selected and they choose quality foods, like pasta and steak, over burgers and cheesecake.

Similarly, when you’re working out your budget, expenses are necessary, but, much like the boxer and his calorie quota, you should watch out for the quality of the expenses you incur - this can make a big difference in how much disposable income and savings you end up with.

The problem with necessary expenses is that people feel that they can go all out when buying something they really need. You need a house. The house needs furniture. The car needs a wax. But these “necessary” expenses quickly become unnecessarily expensive. You need a place to live, true, but if you have a mortgage that is eating 50% of your monthly income, that is definitely cheesecake - and too much of it.

The same is true for new cars. You may need something to transport you back and forth, but buying a new car with all the options is a sure way to reduce your disposable income and ability to save. When you are looking at buying a house or a car, you have to allow room in your budget for emergencies. If you buy the biggest house you can afford, lease a brand new car and tighten your budget to the point where your monthly expenses are leaving you with a zero balance each month, it may only take something small like a faulty water heater to break the bank. And then the credit cards come out, and the slope gets slippery. (To learn more, see Wheels Of A Future Fortune, Build Yourself An Emergency Fund and Take Control Of Your Credit Cards.)

Empty Calories

Necessary and unnecessary expenses are sometimes difficult to separate. As we saw above, within each necessary expense, there is a range of reasonable costs that you may be surpassing. There are, however, many common expenses that are more luxuries than necessities.

Whether we know it or not, we are living in a golden age of luxuries. The days of pulling potatoes out of the ground to survive the winter are over for most North Americans, especially for those who can afford the internet connection and computer needed to read this article. This is not, in and of itself, a bad thing, but it does cost you. One area where luxuries often sneak up and bludgeon your monthly budget is through the services you receive.

If someone else is cutting your lawn and cleaning your house, you may be living way outside your ideal budget. Although it is nice to have someone else cut the grass and do the dishes once in a while, using such services on a regular basis is a sure way to reduce your disposable income, savings and, ultimately, the money you have free to invest. The money you bring home to pay for these luxuries has already been earned and taxed. When you spend it on frivolous luxuries, you lengthen the amount of time you have to keep working in order to finance your retirement - is having your carpet vacuumed worth the time you spend working overtime on your 65th birthday? Spending your money on unnecessary items you could live without is a surefire way to put your savings plan on the bench.(Find out how much you need to save to retire in A Pre-Retirement Checkup, Can You Retire In Five Years? and Determining Your Post-Work Income.)

The Best Defense is a Good Offense

It is human nature to want certain luxuries. The goal is not to let those luxuries get out of hand. This doesn’t just mean the high-maintenance money holes like second homes, vintage motorbikes and rarely-used boats, but it also includes smaller items like advanced cable packages or expensive internet connections.

For example, suppose that you want the internet to send emails and keep on top of stock prices. You can get different types of internet connections with varying speeds and costs based on the amount of bandwidth you pay for every month. For people who want email and some browsing, the cheapest connection often provides more than enough bandwidth. These same people end up trying out one of the faster connections and then signing on, perhaps even spending more time on the internet than they planned or wanted to in order to justify the purchase. Cable packages work the same way: people go in looking to get the golf channel and come out with the platinum plan. The same is true for most cell phone, camera, computer and other electronic purchases. (To learn which purchases are necessary, see Patience Pays For Consumers.)

If you want to come out on top, be proactive when you absolutely need to purchase a luxury. Put limits on what you will buy before you even step into the store. Nail down what you need, and then decide how much you can afford to spend and still maintain your budget. If possible, set up your budget so that saving up for a luxury is a part of it - rather than charging luxuries to a credit card and having to adjust your budget to pay off the debt later on. You may find that saving for a luxury in advance motivates you to budget more efficiently and keeps you from overspending. (To learn how to pay off old debt, see Digging Out Of Personal Debt, The Indiana Jones Guide to Getting Ahead and Seven Common Financial Mistakes.)

Blood and Sweat in the Gym Saves You in the Ring

It is the roadwork, training and effort that a boxer goes through in the months before a fight that decides how successful he will be in the ring. Likewise, the harder you work on your budget, the easier managing your finances will become. There are sacrifices. Some of them as small as getting a connection a few bytes slower or making your own morning coffee instead of getting it from a shop on your way to work. Some are big, like passing up on the cabin in the mountains or a new car in favor of a used one. It even hurts sometimes.

In boxing, you have the choice of sweating and sacrificing in the gym or getting knocked out in front of everyone when it matters. With your finances, no one is monitoring your training but you, and, if you get knocked out by being too lax with your expenses, there isn’t a referee to step in or a bell to ring that will give you time to get back on your feet. It is better to do the hard work of budgeting and cutting down on your expenses on your own terms, rather than when a creditor is twisting your arm.

To learn more about planning your money to meet your future goals, see Life Planning - More Than Just Money, Enjoy Life Now And Still Save For Later and Ten Tips For Achieving Financial Security.

Read more about budgeting:  Budgeting Basics and Beyond by Jee K. Shim.

Source:  Budget Training

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Posted by Victor, filed under Financial Advice, Saving Money, Budgeting, Uncategorized. Date: November 9, 2011, 5:29 pm | No Comments »

What is a free payday loan?

A free payday loan is an interest-free loan granted to first time customers as long as they are able to repay the loan amount in full on the payday following the release of the loan. The loaned amount is charged against the borrower’s paycheck. Interest charges apply on the succeeding loans.

How much is the interest charged on the loan?

Interest rate varies, depending on the amount of loan and the agreement or considerations set by payday lenders. On the average, though, for every $100 loan amount borrowed, you will be charged anywhere in the range of $10-$30.

What is the term of payment?

The term of payment is two weeks from the time the loan amount was granted or released, or the next payday after the loan release.

What are the requirements to avail the free payday loan?

There are no requirements other than your paycheck and an accomplished prescribed application form. In order to qualify, though, you must be of legal age, at least 18 years old and above, and you must be employed with steady income.

Where can I apply?

There are two ways to apply for a free payday loan. One is to submit your application online where your application can get approve in a matter of 10-15 minutes. Another way is to visit your nearest local payday lending company.

What are the advantages of applying online?

There are many advantages when you submit your application online. Among these are: (1) You get your applied loan amount faster; (2) No need for queuing, or waiting for a longer time before your transaction is processed; (3) Immediate approval of loan, so you get you cash when it matters the most.

How many times can one avail of the free payday loan?

There is no limit as to the number of times that you can avail the loan. You just have to remember the following points: (1) the loan is free of interest only during your initial loan; after which interest rate apply; (2) you must be able to repay, in full, the amount you have loaned at the payday following its release.

However, if due to unavoidable circumstances, you are not able to repay the full loan amount on the appointed time, then you can arrange with your payday lender for an extension of repayment. Usually, lenders will impose additional higher charge until you have settled the amount in full. You can extend the loan repayment up to a maximum of five times.

Are there any restrictions to the loan purpose?

There are no restrictions as to the purposes by which the loan is availed. As long as you are eligible, you will receive your cash instantly no matter where you are going to use the cash for.

Typically, cash availed from a free payday loan is used for the following purposes: (1) to cover emergency expenses; (2) home small repairs and maintenance; (3) car repairs; (4) medical expenses; (5) school expenses; (6) budgetary constraints; (7) repay other loans incurred; (7) cover home bills such as phone, electricity, water, etc. ; and (8) other urgent miscellaneous unforeseen expenses.

Read more on getting that free payday loan:  Personal Finance for Dummies by Eric Tyson.

source:  http://finance-article.blogspot.com/


Posted by Victor, filed under Financial Advice, Saving Money, Budgeting, Uncategorized. Date: November 9, 2011, 5:17 pm | No Comments »

Out of sheer curiosity, we all like to know how much others make and how much they spend, but knowing how your spending habits compare to everyone else’s has significant value.

Tutorial: Budgeting Basics

This information enables you to compare your spending habits to the average, giving you the opportunity to adjust your spending. A closer look at how your friends and neighbors are spending their cash will show you how you can trim your own expenses.

How People Spend

When you see people in your neighborhood driving a new car, at the mall buying clothes and everywhere else spending money, chances are you’ve wondered about how they are making that happen and what you can do to have those luxuries too. The report Consumer Expenditures In 2009, released by the U.S. Department of Labor U.S. Bureau of Labor Statistics, provides some answers to your questions.

This survey tracks the expenses of “consumer units,” which are defined as “members of a household consisting of (a) occupants related by blood, marriage, adoption, or some other legal arrangement; (b) a single person living alone sharing with others, but who is financially independent, or (c) two or more persons living together who share responsibility for at least two out of three major types of expenses.” Let’s take a look at how these people, or units, spend their money.

Why It Pays to Know

According to the survey, the average consumer unit spends nearly 78% of its income on just seven major categories of spending. If you aren’t a big fan of budgeting or keeping track of every cent that you spend, breaking down your expenses into these seven categories is a quick and easy way to take a snapshot of your financial situation. If you’ve never tried budgeting, comparing your expenditures to those of other consumers may be just the catalyst to get you started. (To learn more, read The Beauty Of Budgeting.)

The seven major categories of spending are listed in detail below. They are: housing, transportation, food, personal insurance and retirement, healthcare, entertainment, and apparel and services. Generally, for all costs except healthcare, the youngest and oldest among us spend the least, and numbers for persons aged 25-64 come in above the spending average.

1. Housing

Keeping a roof overhead costs the average consumer unit 26.9% of its annual income, which comes to an average of $16,895 each year. That’s the biggest single category of spending by far.

If your housing costs appear to come in on the high side, it may be time to reevaluate your living situation. (To find out how to cut down your personal percentage of this category, check out McMansion: A Closer Look At The Big House Trend and Downsize Your Home To Downsize Expenses.)

2. Transportation

At 12.2%, transportation takes another big chunk out of the average consumer unit’s income. The cost of owning a vehicle accounts for 4.2% of that number, excluding gasoline and oil, which add another 3.2% to the tab. In cash, the total average transportation expense for the year comes to $7,658 each year.

Owning a car brings with it the baggage of some big bills. If you can rely on public transportation, you can probably cut your costs in half, because purchasing a bus pass is often more inexpensive that paying for gas, maintenance, insurance and a parking pass. (If you’ve got no choice but to drive, check out Pros And Cons of Leasing Vs Buying A Vehicle, Wheels Of A Future Fortune and Shopping For Car Insurance.)

3. Food

Everybody has to eat, and doing so accounts for 10.1% of the average consumer unit’s expenses. Food at home accounted for 6.0% of that number and food away from home accounted for 5.7%. The total cost of food comes at $6,372 on average.

If your food bill comes in on the high side, you can try to cut expenses by eating at home, taking a bagged lunch to work or holding group meals like potlucks instead of eating out.

4. Personal Insurance and Pensions

Although the personal savings rate in the United States is often cited as a negative number, 8.7% of income goes to fund personal insurance and pensions. Most of that number, 8.2%, goes to the Social Security Administration to fund payments for existing retirees. The average expenditure comes to $5,471 a year. (To learn more about Social Security, see Introduction To Social Security and Avoid The Social Security Tax Trap.)

5. Healthcare

Despite the high, and rising, cost of healthcare, this category only accounts for 5.0% of the average unit’s income. The cash outlay comes to around $3,126 each year, but this category bucks the trend. Naturally, the costs rise as you age, with those over 65 paying nearly a third more than those under age 25. (Find out how to take action against one of the biggest financial post-work worries in Fighting The High Costs Of Healthcare, Failing Health Could Drain Your Retirement Savings and Common Concerns For Retirees.)

6. Entertainment

Everybody likes to have fun, but interestingly, paying for that fun accounts for just 4.3% of the average unit’s income. That works out to $2,693 a year for the average consumer.

If your budget is really tight, this is the one spending area that you should initially trim as it is the one expense that’s easiest to forgo. For example, cutting unnecessary services or staying home instead of going out can potentially put a few hundred bucks a month back into your pocket. (To learn more about saving your disposable income, check out Sneaky Strategies That Fuel Overspending, Define Your Personal Debt Redline and Squeeze A Greenback Out Of Your Latte.)

7. Apparel and Services

Keeping clothes on your back (on average) will cost you 2.7% of your income. For the average consumer unit, that’s about $1,725 each year.

Shopping for bargains, avoiding the latest fashion trends, purchasing quality items in classic styles and shopping the seasonal sales can help you save a few dollars under this category.

Factoring in Location

Everybody knows that it costs more to live in some areas than others. The survey subdivides the data by geographical location, splitting it out into four regions. Overall, costs in the West were the highest in nearly every category, while costs in the South were the lowest.

To get a better idea of the costs for your region, particularly if you live in a pricey city like Los Angeles or in a small town, such as Addison, Alabama, you can use an online a cost-of–living calculator to compare your expenses to those in other areas of the country.

If you are looking to move, it pays to consider the geography. Simply living in the right location can significantly trim your costs.

Put Your Knowledge to Work

Knowing the average consumer numbers gives you a chance to see how you stack up against the rest of the country. While the specific dollar figures will change from year to year, the categories are unlikely to exhibit much change. Comparing your spending habits against these categories provides benchmarks to gauge your personal financial situation, and the opportunity to implement reductions in spending. Ideally, these reductions should result in freeing up some of your money, which can then be used to increase the amount you dedicate toward saving and investing.

To get started on the road to improving your financial scenario, read Personal Finance for Dummies by Eric Tyson.

Source: http://www.investopedia.com/articles/pf/08/average-spending.asp#axzz1Y7TWeF7H


Posted by Victor, filed under Financial Advice, Saving Money, Budgeting. Date: November 9, 2011, 5:04 pm | No Comments »

Whether you’re in major credit card debt, seeking debt reduction or just need credit debt help, we’ll see what it takes to get debt free. Debt consolidation loans, debt negotiation services, and debt relief have all become popular, but are they right for you? We take a look at the keys to getting out of debt.
The number of Americans that are in debt continues to grow at a rapid pace. Using credit cards to finance flat panel TVs and $6 caffe lattes has become the norm. According to recent statistics, some 43% of all American families spend more than they make each year. This “spend first and save later” mentality can be equated to some of the worst of addictions, with similar consequences. Much like curing a dependency, the first step to eliminating credit card debt is admitting that you have a problem. It may sound like a typical cliché, but if you can do that, you can take the most important step of all—action.

Once you decide to take action to eliminate your credit card debt, you can start planning for a debt free future. Doing so will require much more discipline than what got you in debt in the first place. There is no magic or easy solution to credit card debt elimination; it takes sacrifice. A steady plan with some determination can get you there, but you have to want it. Are you tired of being a slave to debt? Are you truly ready to do what it takes to eliminate debt? Are you ready to make it happen? If so, read on.

Stop using your credit cards
The first step you should take is to stop using your credit cards. This should be done at just about all costs, effective immediately. Purchasing things like gas and food with your credit card sure is convenient, but debt reduction is about sacrifice. Your credit card isn’t a free gift card, so don’t treat it that way. Start using your debit card or cash for these purchases. Individuals tend to be much more frugal when they see it as their money that’s being spent. You’ll find that you spend much less with this method. And if you can’t afford to put it on your debit card, you probably shouldn’t buy it.

It’s convenient to have a credit card set aside for emergencies, but an emergency fund can be
accomplished by putting a small amount of savings away. So, when your car breaks down or that inevitable emergency strikes, you’re not tapping your cards. Adding to your debt is the last thing you want to do when fighting the credit card battle. If you have to cut up your credit cards to stop spending, then do so. This is a fight.

Reduce your interest rates
Many credit card companies charge in excess of 20% interest rates. These excessive rates can often be negotiated down to lower rates. Call your credit card company and ask for lower rates. They’ll often work with you to lower these rates. Getting rates down to 10% to 12% is not unusual when seeking debt help. If they give you trouble tell them you’ll have to transfer to a credit card company with more attractive rates. There are plenty of decent credit card offers online that would love to have your business.

Don’t just pay the minimum balance
When you just make minimum balance payments you’re barely keeping your head above water, if at all. This is what gets most people into trouble and where the credit card companies get rich. Most of your minimum balance payment goes to interest and not principal. Making just the minimum balance payments (calculator) is a losing battle. If you have more than one credit card, focusing your efforts on paying off one card at a time while making minimum balance payments on the others is fine.

Should you pay off your highest interest rate debts first?
Many financial planners will advise a steady payoff method, which recommends that you pay off your highest interest rate credit card debts first. While it’s the most logical approach, resulting in the lowest interest paid when followed strictly, it’s not always the best solution for all. Psychologically, some individuals are more productive when utilizing the “bottom up” approach. By paying off the lower
owed amounts first, regardless of the interest rate, these individuals get the gratification that comes with progress. Also, it’s not at all uncommon for your largest debts to have the highest interest rates. Paying off these amounts first can be particularly discouraging for some, since progress is often slow. Choose the method that best suits your personality and will help you reach your goals, as
the critical thing is paying off the credit card debt.

Consolidate your debts?
If you have some high rate credit card companies that won’t budge and don’t seem to have your best interest in mind, it often makes sense to transfer to one of your existing low interest rate credit cards. This assumes that you haven’t maxed them out and you have the room to do so. Debt credit card consolidation can be helpful, allowing you to consolidate debt at long-term low interest rates.

When it comes to debt consolidation loans that involve lines of credit or home equity loans, you should tread with caution. Many families who took home equity loans to pay off credit cards over the last few years ended up with even more debt. To make matters even worse, some of these families are doing all they can to stop foreclosure. By taking on a home equity debt consolidation loan, you’re just adding another creditor and spreading out payments. Adding creditors and paying minimums over time is what got you in this mess to begin with.

Spend less or make more
Spending less takes discipline, but it puts you at a big advantage when it comes to paying off credit cards. Chances are you’re like many of us you spend money on frivolous items you really don’t need. A bit of frugality won’t make a drastic change in your lifestyle, but it will help you reach your debt relief goals.

Obviously, making more money will allow you to speed up the credit card debt reduction process. This may sound a lot easier said than done, but you don’t need a huge raise or a winning lottery ticket to do so. Whether you get a second job in a vocation you enjoy or you sell your old baseball cards on Ebay, every bit helps. Just do something to increase your income. Any surplus of income or lower spending can be applied to a rigorous debt elimination plan.

Debt negotiation
You’ve probably seen the commercials: Debt negotiation claims of debt elimination for just pennies on the dollar. The age-old law applies here, if it’s too good to be true, it often is. Many debt negotiation or debt settlement companies will cost you much more than just pennies. These debt services charge rather large fees with the real cost being the destruction of your credit. Debt negotiation or debt settlement is often pitched as an alternative to filing and avoiding bankruptcy. But, you’re often better off claiming bankruptcy, as debt negotiation services can result in lawsuits from your creditors, a ruined credit score and fraud from the debt settlement company. Fortunately, the FTC has put a stop to many of these unscrupulous debt negotiation schemes.

Don’t be tempted by quick or easy solutions in paying off debt. Getting out of debt takes hard work,
planning, and sacrifice. If you’re truly willing to give it your all, you’ll not only better yourself, but you’ll achieve your debt free dreams. Few thing in life are as liberating.

Source: http://www.themoneyalert.com/getoutofdebt.html

Posted by Victor, filed under Debt Relief, Financial Advice, Saving Money, Budgeting. Date: November 9, 2011, 4:29 pm | No Comments »