Personal Finance

If your personal financial knowledge is limited you're probably not at fault personal finance 101 isn't offered in our schools at high school and that even in the best colleges and graduate programs it should be of course if it were i would be talking to you right now people keep making the same common financial mistakes over and over again procrastinating and lack of planning wasteful spending falling prey to your financial sales people and pitches failing to use sufficient research before making important financial decisions and so on i can keep you from falling into the same traps and get your going and the best path as unfair as it may seem numerous pitfalls await you when you seek help for your financial problems of course every profession has bad apples but to many other people calling missiles financial advisors are planners have conflicts of interest an adequate levels of competence all too often financial advice nor is the big picture it's narrowly and in fact because money is and and itself but a part of your whole life kercher financial goals and challenges to the rest of your life even if you understand financial basics thinking about your finances is in a holistic way can be difficult sometimes you're too close to the situation to be objective like the organization of your desk or home or disorganization as a case may be your finances maybe fleck your history of your life you need a comprehensive plan for your future you're likely busy person that doesn't have enough hours in the day to get things done thus you want to know how to diagnose your financial situation efficiently and painlessly and determine what you should do next unfortunately after figure out which financial strategies makes sense for you chisholm specific financial products and the marketplace can be a nightmare you've literally thousands of investment insurance and loan options to choose from talk about information overload to complicate matters even more you probably hear about most products through advertising they could be misleading if matt downright false of course sum it up to advertise but sort of those more interested and could bring your heart of income or savings their profits and they're not here tomorrow when you need them you want to know the best places to go for your circumstances so i'll offer you some some specific tried unproven recommendations most americans don't know how to manage their personal finances because they were never taught how to do so their parents may before discussing money in front of the kids and nearly all high schools and colleges left even one course that teaches is vital long needed skill people acknowledge make more mistakes and the more financial errors you commit the more money passes through your hands and out of your life in addition to the enormous financial costs you experience emotional toll of that feeling in control of your finances increase stress anxiety go hand-in-hand with not mastering your money i was fortunate in that my parents instilled in me importance of personal financial financial management they taught me a lot of things that have been invaluable throughout my life and among those things there's some principles for earnings spending and saving your money parents headed noted these things because they're raising a family usually there's only one there was only one marcinko they knew the importance of making the most of what you have and passing that on to your kids the many families however money as a taboo subject appearance to level with their kids about the limitations reality and details of their budgets some parents i talked with believe that dealing with money is an adult issue and that kids should be isolated from so they can enjoy being kits many families kids may hear about money only when disagreements and financial crises bubble to the surface does begins the harmful cycle of children having native association with money and financial management in other cases parents with the best intentions pass on their bad money management habits you may have learned from a parent for example to buy things to cheer yourself up or you may have witnessed a family member magli chasing kids rich creek schemes and business ideas i'm not saying that you shouldn't listen to your parents but in the area of personal finance peasant any other area poor family advise and modeling can be problematic think about what are your parents learned about money management and then consider whether they have the time energy or inclination to research which is before making their decisions for example if they didn't do enough research or a faulty information your parents may mistakenly think that banks are the best place to invest your money or that buying stocks is like going to las vegas is still other cases parents have the right approach kids go the other extreme for example if your parents but money carefully and thoughtfully and times would you feel denied you may tend to do the opposite by yourself gifts the moment any extra money comes your way although you know that i can change with educational system and your parents did or didn't teach you about personal finance you now have the ability to find out what you need to know to manage your financial finances if you have children of their own i'm sure you agree that kids really are amazing don't underestimate their potential or similar out into the world without the skills they need to be pots by them some good financial books when they have to college or begin their first job the lack of proficiency in personal finance and management causes not only tremendous anxiety but also serious problems why do you borrow money usually you borrow money because you don't have enough to buy something you want poured me like a college education if you want to buy a four year college education you can't easily spent one hundred thousand dollars one hundred fifty thousand or more too many people have that kind of spare cash soul barring him to finance part of that cost enables you to buy the education how about a new car a trip to your family local car dealer shelves that a new set of wheels will set you back twenty thousand dollars plus although more people may have the money to pay for that a college education what if you don't should you finance a car the way you finance education the auto dealers and bankers who are eager to make an auto loan said that you deserve and can afford to drive a nice new cars and they tell you to borrow away or lease which i don't love you there i'd just say no why do i disagree with the auto dealers and lenders for starters i'm not trying to sell your car alone from which i drive a profit more importantly there's a big difference between borrowing for something that represents the long-term investment and borrowing for short term consumption if you spend say fifteen hundred dollars on a vacation the money's got you may have fun memories and some good kodak moments but you have no financial voted to show for it but you say vacations replenish my soul make me more productive when i return in fact vacation more than pays for itself i'm not saying that you shouldn't take a vacation by all means take one tent three or as many as you can afford yearly but that's the point cable you can afford if you have to borrow money in the form of an outstanding balance and your credit card for many months in order to take a vacation can afford it echoing the term bad debt to refer to debt incurred for consumption because such that as harmful to your long-term financial help you'll be able to take many more vacations during your lifetime if you save the cash in advance is again to the habit of borrowing and paying although interest for a vacation car clothing and other consumer items you'll spend more if you're of your future income paying back the debt and interest living it with less money for vacations and all your other goals relatively high interest rates are basin other lenders charge for bad consumer debt is one of the reasons your less simple to save money when using such that no it does money borrowed through credit and auto loans and other consumer loans carry relatively high interest rate but also isn't tax deductible about saying he should never borrow money and all that is that such as uh... used to buy real estate and small businesses is generally available at lower interest rates than bad debt it's usually tax deductible if well-managed these investments may also increase in value borrowing to pay for educational expenses can also make sense education is generally good long-term investment because the can increase you're earning potential and student loan interest is tax deductible subject to certain limitations calculating how much that you have relative to her annual income is but useful way to size up your debt load ignore for now the lowest unit on real estate the business an education and so on i'm focusing on bad debt the higher interest that used to buy items of depreciate in value to calculate your bad that ratio divide your bad debt that biter annual for example suppose that you on earned forty thousand a year between your credit cards in auto loans you have twenty thousand dollars of debt in this case your bet that represents fifty percent of the annual income financially healthy amount of debt that is hero not everyone agrees with me one major u_s_ crash credit card company says that educational materials which it gives the school's accused to dance supposedly some financial management that consumer had that did twenty percent of your income is just fine we have bad that danger racial starts to push beyond twenty five percent they can spell real trouble such high levels of high-interest consumer debt on credit cards of auto loans pro like cancer growth of the debt concert unless something significant intervenes how much good debt is acceptable the answer varies a key question is are you able to save sufficiently to accomplish your goals borrow money only for investments cadet for purchasing things that retained and hopefully increase in value over the long term such as an education realestate or your own business don't borrow money for consumption bad debt for spending on things that decrease in value and eventually become financially worthless such as cars clothing vacations and so on as with good food of course you can get too much of a good thing when you incur debt from that's been purposes to buy real estate for small business even your education you hope to see a positive return on your investment some real estate investments don't work out some small businesses crash and burn and some educational degrees and programs don't help in the way that some hope that a cat this alleged formula for determining when you have to watch good that in extreme cases i've seen entrepreneurs for example borrow up to the eyeballs to get a business off the ground sometimes this works and the end of financial reward it but in most cases it doesn't here's two questions of hunger and discuss with your loved ones about these seemingly good that the you're taking them argue when your loved ones able to sleep well at night and function well during the day free from great worry about how you're going to meet next month's expenses are you and your loved ones financially able to say what you like to work towards your goals given what i have to say about that figures for consumer dot you might say that um... always against using credit cards actually add credit cards and i use them but i pay my balance in full each month besides a convenience credit cards offer an extra cash and checks i receive another benefit free use of the banks money extended to me through my credit card charges some cards offer other benefits such as frequent flyer miles also for purchases on credit cards candy contests attitude doesn't stand behind what they sell we charge your credit card does not have an outstanding balance carry over from the prior month you typically have several weeks known as a grace period from the date of your to the date that you have to pay your bill it's called playing the flow best-paid for dispersed by cash you'd have to sell them money sooner if you have difficulty sending money and classic tends to bird also your budget forget the float game you're better off not using credit cards same applies to those who pay their bills in full but spent more because it's so easy to do with a piece of plastic your financial network is important barometer of your monetary help your net worth indicates your capacity to accomplish major financial goals such as buying a home retiring and was standing on expensive unexpected expenses or loss of income your financial network has absolutely positively no relationship to your worth as a human being this is not a test you don't have to compare your number with your neighbors financial that worth visit a scorecard of life your net worth as your financial assets minus your financial by abilities financial asset israel money or investment you can convert to hard dollars if you can use to buy things now or the future financial assets generally include the money you have been thinking counts stocks bonds and mutual fund accounts money that you had a retirement accounts enclosed with your employer and the value or real estate that you won't are also included i'd really recommend that you exclude your personal residence with rigging your financial assets include your home only if you respect them one-day sell a car otherwise live off the money now have tied up in it if you plan on sunday tapping into the equity the difference between the market value many got order on the property in your home at that portion of equity that you expect to use pure list of assets assets could also include your future expected social security benefits pension payments if u employment has such a plan these assets it usually quoted in dollars per month rather than in the lump sum value consumer items such as your car clothing stereo and one collection told count as financial assets i know that adam is sincere assets mixture assets look larger and some financial software packages and publications encouraging the listings items as assets but you can't live off them unless you sell them to arrive at your financial network you must subtract your financial liabilities from your assets liabilities include loans and dats outstanding such as credit cards ampato won't it with figuring your liabilities include money you borrow from family and friends unless you're not going to pay it back include mortgage debt and your home as a liability only a few include the value of your home an asset list we should also include that all or and other real estate no matter what because you cover the value of an investment investment as an asset your net worth is important and useful only to you and your unique situation and goals what seems like a lot of money to a person with a simple lifestyle they seem like a pittance to a person with high expectations and the desire for opulent lifestyle if your name expected monthly retirement benefits such as those from social security in pensions is negative or less than half your annual income take notice you've lots of company in fact you're with the majority of americans if you're in your twenties and you're just starting to work pillow net worth is less concerning getting rid of your debts the highest interest ones first is the most important thing though the city reserve equal to three to six months of living expenses you should definitely find out more about getting out of debt reducing our spending developing tax wise ways to say and invest your future earnings some people are smart enough to realize that they're not financial geniuses so they set out to take control of their finances by reading or by consulting a financial advisor before you take financial advice for anyone examined his or her background including professional work experience education chris from an advisor writing talk show host or television financial report if it can be easily find such information that's usually a red flag people with something to hide or a lack of something redeeming to say about himself usually don't promote their background of course just because somebody seems to have a relatively impressive sound background doesn't mean that she has your best interest at hand or has honestly presented her qualifications don't assume that somebody with something to sell is getting good that's they're getting good press and good ads are going to take care of you that girl may be good press relations and self promotions certainly talk shows and the media large can and do provide useful information under variety of topics but that ags sometimes turnout these bags may not always smell bad out upfront over years before finally being exposed perhaps you know the should live within your means buy and hold sound investments for the long term and secure proper insurance coverage you can't bring yourself to do these things we all know how difficult it is to break habits that you've practiced for many years the temptation to spend money towards everywhere you turn ads show attractive and popular people enjoying the fruits of their labor new car an exotic vacation and let us home maybe you felt deprived by a tightwad parents as a youngster or maybe you're bored with life be like the adventure of buying new things if only if it had a big i want her to investments you think you can get rich to what you want to live as for disasters and catastrophes well those things happen other ppl lapses besides you'll probably have advance warning of impending problems so you can prepare accordingly right your emotions and temptations can get a better view certainly part of successfully managing your financial involves coming to terms with your shirt com shortcomings and consequences of your behaviors if you don't you're gonna end up in slave to a dead end job you can't keep feeding her spending addiction or you may spend more permit investments than your family and friends or unexpected events can lead you reeling financially disasters disasters and catastrophes can happen to anyone at anytime friday a personal emotional hurls to get a way of making the best financial moves lack of financial knowledge which stems from a lack of personal financial education consent that stand in the way of making good decisions prices some people caught in the psychological trap of blaming somebody else for their financial problems for example people believe that all our adult pro bowler rates behaviors ranging from substance abuse to credit cards to *** infidelity are supposedly caused by our roots i don't want to disregard the negative impact particular backgrounds have on some people's tendency to make the right wrong choices during their life explore your personal history and it can yield some clues to policemen we are adults we've make choices we engage in behavior is in effect ourselves as walls others we shouldn't blame our parents for all of the bill is the plan for our financial futures live within our means and make sound investments some people tend to turn their financial shortcomings are not earning more income some people believe that this only the earn or their financial and personal problems would melt away my experience working on the backgrounds has taught me that she is in financial success and more importantly personal happiness has virtually nothing to do how much income a person makes rather what she makes of what she does have and often actually wealthy people who are emotionally poor even though they have all the material goods they want likewise idle people who are quite happy content an emotionally healthy even though they're struggling financially americans even those who have not had an easy life should be able to call mumble with numerous things to be happy about and grateful for a family who loves them friends that laugh at their stupid jokes freedom to catch a movie or play or read a good book agreed singing voice sense of humor or full head of hair after you understand the basic concepts and know where to buy the best financial products when you need them you'll soon see that magic personal finance establish more difficult in italy by tying his shoe lace or getting to work each day regardless of your income you could make your dollars stretch further if you practice good financial habits and avoid mistakes in fact the lower your income the more important it is the most of your income and savings because you don't have the luxury of falling back on your next fat paycheck to bail you out more and more industries are subject to global competition so we need to be on your financial toll is now more than ever job security is leaning laos and retrained for new jobs are increasing putting in thirty years from one company and retiring within gold watch and lifetime pension are becoming as rare as never having problems with your computer keep speaking of company pensions odds are increasing that you work for a player that has you saved forger own retirement instead of providing a penchant for you not only do you need to save the money you must also decide how to invest it personal finance involves much more than managing and investing it also includes making all the pieces of your financial life fit together it means letting yourself out of financial illiteracy like planning a vacation managing your personal finances means forming a plan for making the best use of your limited time and dollars intelligent personal financial strategies have little to do with your gender ethnicity or marital status we called me to manage our finances wisely some aspects of financial management become more or less important at different parts of our life for the most part the principles remain the same for everyone when the wreck answers isn't enough you have to practice good financial habits just as you practice good habits brushing your teeth dolby overwhelmed as you listen to me make a short list of your finest are working away throughout your journey i hope to challenge and even change the way you think about money and about making personal financial decisions and sometimes if it about the meaning of life no i'm not a philosopher but i do know that money for better but more often for worse is connected too many other parts of our lives help financially healthy are you you may already know some or even all of the bad news or perhaps things are not as quite as bad as they see went last time you sat down surrounded by a all your personal financial documents and took stock of your overall furniture to asian including freely spending savings future goals and insurance if you're like most people you've gathered never done that or you did so a long time ago financial problems like many medical problems our best detective early clear living doesn't hurt either here are some common personal financial problems i've seen in my work as a financial counselor not planning human beings were portico procrastinate that's why we have deadlines like april fifteenth and deadline extensions yet another six months to get that tax return done unfortunately you may have no explicit deadlines with their overall finances you can allow your credit card debt to accumulate or you can leave your savings savings and lousy investments for years you give a permit and insurance coverage and even overpaid overpay for insurance products planning your finances is as much fun is planning a vacation but doing the former can help you take more of the latter overspending simple arithmetic helps you determine that savings is a difference between what you are and what she spent assuming that you're not spending more than your earning to increase our savings either have to work more or increase your earning power through education or job investment meet a wealthy family spent less you could spend less the fifty approaches a key to building savings and while buying with consumer credit even with the benefit of today's lower interest rates caring a balance month to month and your credit card or buying a car and credit means that even more of your future earnings are going to be earmarked for debt retailer repayment buying on credit encourages you to spend king delaying saving for retirement most people say that they want to retire by their mid-sixty's or sooner but in order to accomplish this goal most people eat safely reasonable choc around ten percent of their income starting sooner rather than later longer you wait to start saving for retirement the harder reaching our goal will be you'll pay much more in taxes if you don't take it back invention of the tax of investing retirement accounts falling prey to financial sales pitches happens great deals that can happen can't wait for a little reflection are often disasters rating happen a soccer may be born every minute but a slick sales persons putting something every second steer clear of people who pressure you to make decisions promise you high investment returns and lacked the proper training people not doing your homework they did the best deal you need to shop around read reviews and get advice from disinterested objective third parties you need to check references and track records so that we don't hire incompetent self-serving or fraudulent financial advisers what all the financial products available making an informed financial decision it's hard to overwhelming i do a lot of the homework for you with recommendations also explain additional research you need to do and how to do it make decisions based on emotion is not correct your vulnerable to making the wrong was financially after a major life change job loss to force uh... when you feel pressure maybe investments point of view felon value or a divorce has you feeling you won't be able to them retire the poor some a large amount of money into a product save money and keep emotions out of the picture back separating the wheat from the shaft in any field and which united expert you from the danger following the advice of someone who you think is an expert but really isn't if you look at them here you see the person who's best able to manage your personal finances educate and trust yourself expose yourself to catastrophic risk you're vulnerable if you and your family don't have insurance to pay for financially devastating losses people at our savings reserve and support network can and upholds many people lack sufficient insurance coverage to replace their income don't wait for a tragedy strikes to find out whether you have the red insurance coverages focusing too much on money placing too much emphasis and making and saving money can work it perspective on what's important in life muddy got the first or even the second priorities relationships friends and chris satisfaction and fulfilling interests should be more important was promptly fix overtime with changes in your behavior you may not know it or even care but you probably have a personal credit report and credit score leona's examine your credit report and score before granting q alone or credit line the crat report contains information such as personal identifying information includes name address social security number and so on record of credit account details when he's account was opened latest balance payment history and so on bankruptcy filings if you file bankruptcy news recent years enquiries list was pulled your credit report because you've applied for credit your credit score which is not the same as your credit report is a three digit score based on the report lenders use a picture of your likelihood of defaulting on repaying your borrowings as such your credit score has a major impact in weather and lenders willing to extend your particular alone and and what interest rate fi co is leading credit score in the industry was developed by isaac and company michael scores ranged from a low of thirty to a higher of eight fifty as with college entrance examination sis's s_a_t_'s higher scores are better how your credit score your predict the likelihood of defaulting on the loan rate of credit delinquency refers to the percentage of consumers who will become ninety days late or later and preparing a creditor within the next two years consumers with low credit scores have dramatically higher rates are falling behind in their loans low credit scores are considered much riskier borrowers fewer lenders will be willing to give you a given below those who do will charge you relatively high rates median fibers corridors around seven ten according to liz weston offer all of your credit score how to fix improve watch villages in alberta stretch of financial future you'll generally qualify for the best lending rates if your credit score is six twenty or higher credit scores below six twenty are not considered lenders consider these loans risky some types of loan such as home equity loans to qualify for your best rates you may need a credit score of at least seven sixty or seven eighty given the importance of your personal credit report you may be pleased to know that you are entitled to receive a free copy of your credit report annually from each of the three credit bureaus if you visit w_w_w_ dot annual credit report dot com you can view and print copies of your credit report information from each of the three credit agencies alternatively call eight seven seven three two two eighteen to date and have to report mail to you after entering some personal data at the website check the box indicating as you want to obtain all three credit reports as each report may have slightly different information you'll then be directed to one of the three bureaus after you finish verifying that you all are who you claim to be on that site you can easily navigate back to the annual credit reports dot com so if you continue to the next stage of next agency when you receive your report the best first step is to examine them for possible mistakes originally did that myself and found that minor errors and two of the three reports took me two minutes are correct one of the errors by submitting a request to the credit reporting agencies website it took about half an hour to get the other mistakes a small doctor's bill was a rodeo sleeplessness unpaid and in collections you may be surprised to find that your credit reports don't include your credit score reason for this is quite simple two thousand three la mandating that that three creations he's provide a free credit report annually to key to u_s_ citizen request a copy didn't mandate that they provide the credit score dust if you wish to obtain your credit score it's going to cost you you can request your credit score from fair isaac but you'll get whacked fifteen dollars for every request they'll set you back forty five dollars to see if i could score credit reporting bureau save your money if you're going to purchase your credit score you can do so far less from the individual credit bureau equifax for example charges his seven bucks here are the most important actions you can take to boost your attractiveness to lenders all three of your credit reports be sure each is accurate crack there's and expecially sure to get a proved if it's not yours and facial late payments or or inflection if your report includes late or missed payments more than seven years old has to have those removed ditto for a bankruptcy more than ten years ago pay all your bills on time to ensure on-time payments sign up for automatic bill pay which most companies liked phoning utility providers allow you to use be loyal if it doesn't cost you the old at the age of the loan accounts you have open the better for your credit rating closing all the council opening a bunch of new ones general always your credit score but don't be loyal if it costs you for example if you can refinance your mortgage and say some good money by all means do so same logic applies if you're carrying credit card debt at a high interest rate bounced or rate card if your current credit card if either refuses to match a lower rate you find elsewhere move your balance and save yourself some money limit your debt and data counts the more loans expecially consumer loans that you hold and the higher the balances lori credit score will be work to pay down consumer evolving debts such as on credit cards if you obtain your credit report and fine a boo-boo honored that you don't recognize is being your mistake or fault don't assume that information is correct credit reporting bureaus and the creditors who report credit information to these bureaus often make mistakes if the bad information in your report is completely foreign looking to you tell the credit bureau and explain that you need more information because you don't you'll recognize a creditor at the gridiron made a mistake you need to write or call the creditor to get them to correct the wrong this information that they sent to the bureau pure should be able to tell you how to reach a creditor if you don't know how if necessary follow up with a letter if you have a problem it's flexible and you could fix it yourself you don't need to get a company big bucks to do it