personal finance

The Unconventional Guide to Holiday Spending

February 26, 2016 by penn

If you’re like most people when the holidays come around your mind goes into a panic spending mode. We don’t even think about the consequences of overspending during the holidays and if we do, we think “I’ll charge it.” Then we work the rest of the year to pay off what we bought for the holidays.

[Read: Spending Mentalities That Will Keep You In Debt]

As soon as November comes around we automatically go into spending mode. With no regard to our finances, we over spend. Some of us even plan to open a new credit card around November for the holidays. Even worse some people spend on their credit cards and know that their payments will be late due to their lavish spending. The truth is most of us don’t plan ahead and don’t put in affect a holiday budget.

Why do we lose our minds when it comes to holiday spending? There are a few reasons for this, one is guilt. Guilt because we guilt ourselves into believing we have to buy more things that no one really needs. Another is tradition; we believe it’s tradition to spend tons of money on our loved ones during this time of year.

So how can we stop ourselves from the mindlessness of holiday spending? I’m going to show you how to plan for it and cut back on the bad habits we do during on holiday spending spree.

Plan Ahead

Talk with your family and friends about holiday spending and decide who you will be buying for and a max spending amount for those people.

For example, we do this friend gift exchange where you choose one person in the group and you spend a total of 40 dollars on their gift. There are 5 of us in the group, so instead of buying 5 gifts we buy 1. That way we all leave with a gift and we all saved money.

This reduces the stress of buying for so many people and opens a door to buy quality gifts instead of quantity on cheaper gifts.

Unique Gifts Are the Best

My favorite gifts are always the handmade items I receive. I love my handmade gift basket I got this year filled with organic handmade bath products.

We so often get stuck on the name brands or the newest best thing that’s all over television. We end up forgetting that sometimes the simplest things are the ones that fill us with the most joy.

When I get that tin filled with homemade cookies sent to me every year, I can’t tell you how much joy I receive from eating those. They bring back all the childhood memories of past holidays.

Try to think outside the box and go to your local farmers market to find unique gifts or make your own cookies/ goodies. The handmade items show more thought and love then any material item can.

Make It Easy on Yourself

There are a few simple steps I follow when I do my holiday spending.

Make a list – this way you know what you are shopping for and who you are buying for
Make a budget and stick to it – this one is a simple step that we often over look
Plan ahead for big purchases– if you know you have a big gift to get, start saving for it at least 2 months ahead of time.
Use coupons and discounts – look for big sales then find a coupon to go with it that way you get double savings
Always remember Quality over Quantity– it’s better to give one big gift then to give a bunch of small cheap gifts
Shop around– always look at 3 different places before you make your purchase and remember sometimes it’s better to buy online

Less Stress

Here is a brilliant way to reduce stress on you during holiday spending, make the wise decision to plan all year for it.

My Mom starts shopping in June for the holidays. Each month she buys a present for someone. This makes it easier when the holiday hustle and bustle comes around she’s ready and now she can still shop if she wants with no pressure to buy all at once.

Another idea is to set aside a certain amount of money weekly for holiday spending. You can decide on 10 dollars a week or 20 dollars every month.

Either way this is a brilliant idea on how to have less stress for you and your holiday spending.

Here is a great savings chart from Pinterest

[Read: Ideas For Saving Money During The Holiday Season]

There are so many different approaches and options out there, but the bottom line is if we plan right and think ahead we can cut our mindlessness of holiday spending right out. Then we can become the wise holiday shopper, who isn’t panicked, and not overspending or putting ourselves in debt.

Top Money Tips for 2016: Part II

February 16, 2016 by penn

Continued from Top Money Tips for 2016: Part I

7. Educate yourself financially

If you can get a realistic idea of how finance works, and how it’s not always icing on the cake, you will understand that it’s essential to strive and hold onto your goals if you believe in them strong enough that it can lead you to success.

Even if it’s time-consuming, it is time well spent when you dig for financial information whether it’s in magazines, books, podcasts or a TV show, try to educate yourself because sources like these, they not only give the top money tips for 2016 but have various success stories and even stories of businesses and entrepreneurs who failed several times before launching their dreams and becoming wealthy.

8. Design the lifestyle you imagine for yourself

If you want to feel secure moneywise and also be able to call yourself wealthy, you need to stop spending money that doesn’t exist or spending money that exists but not for the things that you’re buying.

When you really commit to something and work hard, you can create a lifestyle where you might want to ditch the societal norms that you’ve been following daily, such as the 40-50 hours you work per week from morning to afternoon, following the same regimens over and over again, not having enough time for yourself.

Realistically you should create a lifestyle you feel comfortable with and which can stabilise your future finances. Having a lifestyle that allows you to do a happy job and make time for yourself at the same time can greatly improve your mood and add balance to your life.

Try something new if you’re able to, maybe it’s time that you don’t sweep away your ideas and start your own business.

9. Think about how to bring in more money

Whether you cut your spendings and boost your earnings by saving up or doing side jobs, it is possible to bring more money into your life.

24-year-old Brooke Saward, the creator of successful travel blog called World of Wanderlust shares some great money saving tips in one of her posts. She highlights that reducing things like phone bills, Internet subscriptions, switching to home-cooking rather than ordering take-out or skipping the expensive takeaway coffee can save a lot of money which can be an extra reserve for something else later on.

Additionally, there are many side job opportunities that you can do in your spare time or if you get time next to your other job, to bring in those extra dollars.

Anything from selling your old stuff online, pet-sitting, garage sales, cleaning or freelancing can help you to bring some extra cash to your life.

10. Operate Your Savings

If you successfully save money every other week or month, you should perhaps start thinking about trying automatic savings in your bank accounts. You can do this for example when you receive your paychecks. The earnings don’t just happen to go and get “saved” every now and then as one single payment, instead, they automatically get transferred from each paycheck to your savings account even if you only increase the amounts by a small percentage, it still makes a great difference.

11. Prosperity is not only about having money

Being wealthy is not solely determined by how much money you have. Yes, it can lead to comfort and joy but according to the famous blogger, Tim Ferriss, the value of money lies in the lifestyle you created for yourself by sacrificing every dollar to time and mobility.

Ferris himself is not only wealthy by doing a job he loves, but also because he devised his time and flexibility in a way that leaves time for other things, such as writing great books like the famous “4-Hour Work Week”, and also doing public speaking, interviewing several people and many other activities. You can learn from this that wealth highly depends on how much time and flexibility you put into planning a lifestyle that would make you happy and rich both emotionally and materialistically.

12. Don’t lose your money.

You don’t know everything that’s going to happen in the future and therefore, you may not be prepared for a possible financial crisis or certain financial factors that may positively or negatively affect your life. However, whether you want to keep the money, manage it or invest it, do it wisely because there is no worse thing than losing money superfluously without knowing the problems it may cause in your way of living.

Looking at the top money tips for 2016 may not be the shortest process and it might be difficult to go forth with a decision in terms of your personal finances.

However, if you put valuable time and energy into it and acquire the knowledge needed for managing your finances and set the necessary goals, it will put you on the right track to make smart financial decisions this year.

Ways Poor Credit Can Cost You

February 14, 2016 by penn

Ever been in debt and still feel like you need more money or need to acquire more assets? Well it happens. You may end up recovering from the bad report but other areas of your life may not. All this boils down to poor financial management and credit scores. This three digit number can either be your friend or be the worst foe you could ever imagine. Who are we kidding? Financial constraints face most of us. You might actually consider deferring payments to your credit card or a loan just to buy your kid a good birthday present or you might end up defaulting in payment all together.

[Read: When Life Goals May Mean a Lower Credit Score]

The consequence of poor credit is that you will end up paying your debts or loans one hundred or thousand fold. Want to figure out how much bad credit can cost you? Let’s keep going and find out.

Employment hustles

Employees carry out background checks on people they want to employ or consider employing. Financial check is definitely going to be one of them, you bet on it! So, is there a financial secret you don’t want to talk about? For example a couple of hundreds or thousands of dollars you spent on a night out with friends? Whichever way you spent money, an employer might worry that you may not be viable for a certain job position because of your poor credit. He or she might argue that you may easily be put in a position to carry our corporate espionage among other evils for money.

Not only can this information be used to terminate your employment, it can be used to carry out a disciplinary action on you. Federal law allows for this kind of scrutiny in some states and for those that don’t may just decline your application without stating that the poor credit scores you have was the issue.

Relationship strains

Bad credit can have a detrimental effect on your relationships. CNN gives report that 30% of the women and 20% of the men would not like to date someone with bad credit. If it is supposed to be a long term relationship, this may cause constrains if you are not well enough to pay the persons debts so who would? Most marriages hit the rocks the moment one spouse has poor credit scores. The couple becomes unhappier and may start arguing more frequently, going to bed mad at their spouses more frequently and may even lead to divorce or other kinds of infidelity.

Higher interest rates

The moment you are found to have poor credit scores you will be approved for finances. When you get approved for finances with your poor credit scores yet their goal is to earn, you will end up paying higher interest rates. This is by virtue of the fact that you pose a higher risk to not pay the loan with your bad credit.

For example mortgage interest rates are based on tour credit scores. So in-case your credit scores goes south, they consider this as a risk factor and you will end up getting a higher interest rate. According to the credit scoring company, FICO, a person with a lower credit score will have an interest rate that is twice as much as the one with a better credit score.

In the case of car insurance companies, they not only check your driving record to consider how much you pay for coverage, but also your credit report. In the case of bad credit it drives your premium higher.

Lacking government clearance

In the event that individuals working for the government as federal or military personnel may want to get a promotion or get to advance their careers, the occurrence of bad credit for either of them will deter this from happening.

Stress

The presence of bad debt in your life can cause you to end up with levels of stress being higher and this may take a toll on your physical and mental health. One may end up with headaches, muscle tension, sleepless nights and even maladies. Financial constraints can negatively affect your brain. To some people, stress levels being high can cause them to avoid eating. This in general affects their overall body as they get weight drops or end up binge eating leading to weight gain thus causing negative self-image.

Your reputation

It is already strain enough that you have a bad track record of paying up your credit in institutions. When you have a seriously tarnished repayment record, you end up losing the respect of your family members and friends. In the event that you need financial help next time, this may make it difficult for them to come to your rescue in-case of emergencies.

[Read: Ways to Fix Your Credit Score]

Luckily enough, it’s never too late to improve bad credit. You can log on to MoneySavingExpert.com to get your credit score and get money tips.

Steps to Slay Your Financial Fears

February 8, 2016 by penn

With a few quick tips, even you can tackle the scary parts of budgeting, investing, managing debt, and filing taxes.

Money can be a cause of financial fears for many of us, whether it is because we think we do not have enough of it, or because when we do have money we do not know how best to manage it. But the fears associated with managing money can disappear quickly if you begin to address these issues one small piece at a time.

[Read: When We Learn Financial Lessons the Hard Way]

The First Step: Taking a Quiz

This may seem a little silly perhaps, or at the least like a strange place to start. But if managing your money causes you anxiety or fear, a good way to begin to tackle that is to figure out exactly where your fears lie. There are questionnaires or quizzes which will help you to pinpoint where your weaknesses may be when it comes to managing your finances. Look around and you can find a questionnaire with Vanguard or LearnVest, or possibly with your own banking establishment.

This will help highlight what is called your risk tolerance – basically how much risk you are comfortable living with – and can shed light on what your investment style could be. Information like this can help you to decide how to allocate your assets and funds.

(Don’t think you are the first person to be nervous about investing! Confusion is the jumping off point for educating yourself and eventually knowing all you need in order to make wise investments and manage your money well.)

The Second Step: Knowing the Difference Between Good and Bad Debt

You did not know there are good kinds of debt in addition to the bad? When you come to understand the difference you will be able to be confident in deciding when it is a good idea to borrow money, and when it is not.

Good Debt: Good debt is debt that will eventually pay you back. For example a home mortgage can be good debt if you eventually sell the property for more than you paid for it. Student loans can be good debt if the education you receive helps you to earn more money than you otherwise would without it. What it comes down to is borrowing money that will appreciate in value.
Bad Debt: Bad debt is essentially spending more money than you earn. When you live beyond your means the value of the money ‘borrowed’ is not appreciating. This is commonly understood to be the worst sort of debt.

Whenever you borrow money to pay for something which loses value over time that is bad debt. For instance if you take out a loan to buy a car, and the car immediately starts to depreciate, when you sell it back to a dealer or to an individual, you will definitely be making less on the sell back than what you initially paid for the car.

[Read: Good Debt vs. Bad Debt]

The Third Step: Writing a Will

Everyone eventually needs a will, but the process does not have to be as scary as it may sound, and it does not have to be very expensive.

To get started you can:

Call the local bar association: You can usually find free or cheap help in your area if you go through the American Bar Association’s website and look for local help in your state. Some local bar associations can also refer you to a lawyer who will do a free or low cost half hour consultation in which you can quickly explain the situation and ask for advice.
DIY: Do it yourself may seem like a daunting option, but there are software options out there which can help you to write a will by yourself. These options can be found online with a quick search, or you can check your local library for books on the topic. It is up to your personal preference.

You may also want to check on whether or not it is wise to get a trust depending on the worth of your estate. Advice on this can be found in many of the same places as information on writing a will.

The Fourth Step: Minimize Your Tax Bill

By looking around just a little you can find tax breaks and deductions available to you. If you need advice or assistance in filing for your returns, the time to act is now. It is not wise to wait for the grand rush come spring time, when number crunchers and accountants are at their busiest. Finding a trustworthy CPA in the slow season is a good idea.

The Fifth Step: Keep Track of Your Expenses

For some people, probably more than would like to admit it, budgeting can be a scary concept. But you can ease yourself into it initially by simply watching where your money goes throughout the month. There are different ways to track this. You can use free online budgeting software. Or if you trust yourself enough you can do it simply by opening up a spreadsheet, which requires perfect saving of your receipts, checkbook records, and credit card payments.

[Read: Ways to Protect Yourself from Financial Disaster]

What is most important at the end of the day is to try out these different beginner options that will eventually have you monitoring your finances well and investing intelligently. Just try whatever works best for you and learn from the mistakes you will make. Eventually you will get it.

Watch this video to learn a little more about starting out budgeting:

How to Live on a Budget

February 2, 2016 by penn

It’s the dreaded B-word, only this one doesn’t rhyme with witch. When most of us think of living on a budget, what we think of is how to end up eating ramen noodles and watching the static on our tv screen. Never fear, there is more to a budget then not having a life. Here are some tips, tricks, and games you can play to make budgets more than drudgery. Some of these work best if you’re able to compare your progress with a partner, so don’t be afraid to brag about how steep your savings were on your new duds at the water cooler!

[Read: How To Stick To Your Budget]

Living on a budget, let’s count the ways

Budget Limbo – How long can you go

Save money on gas, save time on errands, and maybe even realize some things are wants and not needs. This challenge is simple, instead of dropping everything to spend money, wait a little while longer.

Instead of leaving the house the instant you run out of milk, wait until you go grocery shopping.
- You’ll save money on gas you would have spent going to the store.
- You won’t spend money on impulse buys
- You might even end up buying less milk overall
Before you buy a new set of clothes, check the back of your closet
- You may even find something that still has the tags on!
Can we say re-gift?
- If you haven’t used it all the better.

Look for hidden treasures in your house

You know that feeling when you find a forgotten $20 in your coat pocket? Just imagine what it feels like when you sell your never worn pea coat for $60 on eBay. Remember that juicer you bought, back when you were going to do a cleansing liquid diet? It’s still in its box under your sink waiting to take up space on someone else’s kitchen counter.

What makes this challenge that much better, you get to keep your New Years’ Resolution of:

Getting rid of junk
Organizing your house
Cleaning up your house
Removing clutter from your life
Minimizing your material possessions

You never know what you’ll find, or what you’ll be able to sell it for. An added bonus, by looking through your apartment and seeing everything you own, you won’t spend money purchasing duplicate items. When you live on a budget a penny saved is a penny earned.

Find free (or really cheap) things to do in your area

When most people think about living on a budget they think of no longer experiencing life. But just because you aren’t willing to play full price doesn’t mean your life is devoid of experiences and culture.

Reduced/free admission to museums and art galleries
- Check out your local museums and art galleries, many have one day a week where entrance is free, or at least highly reduced.
Outdoor movies
Self-guided walking tours
Early morning movie showinsg
- Granted this isn’t free, many movie theatres offer half-price tickets if you go before 11 on Saturdays and Sundays
Free entrance in exchange for volunteering
- Many festivals and local theatres give volunteers comp tickets. Not only will you meet new people and kill some extra time, you could score tickets for a date!

Budget Accountability Group

Who says that the only support groups need to belong to those facing emotional and psychological turmoil. Make your own group, to meet online or in person, in order to help you stick to your budget. On days when living on a budget truly is a b-word, having others that will support you and understand what you’re doing can make the hard times a little easier. Accountability groups aren’t just there when you’re about to throw in the towel. They are designed to help you when the math just isn’t working. They are also there to celebrate when you make a huge achievement, like finally paying off those student loans.

Live on a Budget, virtually.

Pen and paper can’t be taken everywhere. Spreadsheets almost never leave your computer. But with an app, all you have to do is whip out your phone. There are some free, and helpful apps like

If you’re in need of a reminder of what you’re sticking to your budget for; Urge helps you see what all of your “No’s” have added up to.

[Read: Why a Budget Really Matters]

When you don’t want to live on a budget anymore

Remember why you have chosen to undertake this endeavor. Most people do not choose to live on a budget just for the fun of it. Many of us want to pay off our debts. Others want to save up for a home. We all want to have money there when we retire. Remember what you’re doing this for.

Main Money Mistakes to Avoid in 2016

January 24, 2016 by penn

With 2016 finally here, you need to ensure that you are looking at money mistakes to avoid in 2016. For many people, the New Year means making new resolutions, and often these resolutions are meant to help them financially. With this being said, here are some common mistakes people make that could be putting a damper on their financial resolutions for the New Year.

[Read: Avoid These Mistakes When Trying To Save Money]

Money Purchases to Avoid

There are several money mistakes to avoid in 2016 that deal with purchases that you may be tempted to make throughout the year. Two of the more major purchases that people often consider is:

Buying a new car
Buying a new home

These are big expenses, and while it may be great to have something new, think of the overall cost. For example, buying a new car means losing 9% once you drive off the lot. Plus, since this is a brand new car, chances are you are paying interest on a loan for this car. Instead, consider buying a well maintained used car if a new vehicle is needed. When it comes to the house that you live in, do you really need to splurge on a new home? What is the reasons for moving? If there is no reason other than you are ready for a new home, be sure that you consider the financial implications that this decision is going to have.

Your Debt to Money Ratio

A huge money mistakes to avoid in 2016 is going to deal with your debt and money ratio. IN particular:

Not paying off your debt
Living from one paycheck to the next

Too many people do not realize the huge mistake they are making when they are not serious about paying off their debt. This debt will continue to accumulate, and can cause greater issues later down the line. Instead, people should have a plan for how to deal with their debt and ensure this does not become an issue. In addition, not dealing with your debt can result in living from paycheck to paycheck. If this is the case, and you want to ensure that this not a money mistakes to avoid in 2016 battle, consider:

Putting at least 1% of what you earn in a savings account
Look at long term investments
Use your money wisely to get out of debt
Pay with cash rather than credit

Another important money mistakes to avoid in 2016 associated with your debt and money ratios is tracking your expenses. Too many people do not do this, and at the end of the month they are surprised to see that they do not have the funds that they thought they would. It is best to ensure that you writing down what you spend, right when you spend it. This will allow you to have a more accurate look at your spending.

Your Financial Goals

It is best to write down the financial goals that you have for 2016 so that you can know a game plan for how you need to proceed. Too many people do not write down their financial goals, thus they are easy to forget when the times comes for a major purchase or the like. It has been shown that in order succeed at any financial goals that you have, you should write these down. This makes you more conscious of what you need to do in order to succeed with these goals. One of the biggest money mistakes to avoid in 2016 is not realizing and implementing these financial goals.

A huge part of your financial goals should be your retirement. Do not put yourself into the place in which you have no retirement. Sadly, this is what is happening to many people as they are not taking advantage of the matching feature their employer may have for their 401k. You should be sure that you are taking advantage of this benefit. It is estimated that there are around $24 billion in unclaimed funds per year that were meant to be put into 401k plans to match. This is a huge amount of money that people are losing out on. Therefore, be sure to check with your company to see if they match and if they do, sign up for this.

[Read: Avoid 4 Common Mistakes to Save Money]

To make the most of your financial new year, be sure that you are abiding by the rules. Money mistakes to avoid in 2016 can ensure that by the end of the year, you are more financially stable, have less debt, and that your retirement plan is up to par with where you want to be come 2017. Too many people do not look at the mistakes that they are making, and in the end they are sorry. They may have more debt than ever, and be looking at what they can do in order to make their lives better, but this can be avoided.

How To Stick To Your Budget

December 24, 2015 by penn

So you just got paid, but unlike any other payday you decide it’s time to finally make a budget plan. First of all take a minute to silently congratulate yourself. You are already ahead of the game by making that plan. Some people don’t make a budget, thus not really knowing where their money is going. Now, with that being said, you got your plan all made up, can you stick to your budget? Well lucky for you there are some things you can do to help yourself succeed and stick to your budget. Having a budget plan is not only helpful but necessary to show you where you money is going and how much you have left to spend on what. It just keeps things more organized and helps you run the finances a little more smoothly. First lets take a look at why most budget plans fail and go from there.

[Read: Common Budgeting Mistakes]

Feel deprived of their money. Most people don’t give themselves the opportunity to spend a little on themselves.
Impulse buying.
Don’t have a concrete budget plan. There’s room for error.
Not having a back up fund and end up cutting into budget money.

How Can I Stick To My Budget?

Now that we have went over how budget plans tend to fail we need to go over what you can do to help yourself stick to your budget. There’s lots of tactics you can use to help yourself stick to your budget. The most important thing is to take it seriously. If you make this plan you need to give yourself no excuses to stray away from it. Let’s take a look at some of the things you can do to set yourself up for success.

1. Carry What You Need.

The first thing on this list that might help you stick to your budget is to carry only what you need on you at all times. For those of us with impulse buying issues this is a great way to avoid spending over the budget you have just formulated. Now, this takes careful planning every morning before you leave the house to go to work. Get up a little earlier whole having your coffee go over what bills need to be paid what you will need for gas and everything else that requires money and leave the rest at home. This way there’s absolutely no way you can spend over your budget plan.

2. Be Good To You.

The next tactic that may help you stick to your budget is to be good to yourself every once in a while. Leave a little extra money in there to grab that cup of coffee you look forward to every morning. This way you won’t feel so deprived and give up on the budget before you even begin. Make some room to budget yourself in there and you most likely will stick to your budget.

3. Pay Bills First.

One of the most important things you should do to stick to your budget is pay all of your bills first. This way if you do slip and buy something on impulse atleast you won’t have to worry about not being able to pay the bills. If you pay your bills as soon as possible the most important part of the budget is taken care of. That burden is gone, well until the first of the month comes around I guess.

4. Think On It.

Okay so you find this beautiful couch, it’s on sale at the local furniture store and you need a new couch and have been looking for a while. Okay, stop right there, walk away and think about the purchase for a while. Often times when you force yourself to walk away from buying something you don’t regret making that decision. Our later find that purchase wasn’t as good as it sounded at the time. But if you have taken some time to think about it and you decide it’s a good buy, take some time to put that item into your budget plan. This way out will avoid impulse buying.

[Read: Affordable Travel Tips That Can Help Minimize Your Vacation Budget]

5. Set Money Aside.

To succeed and stick to your budget it’s always a good idea to set aside some extra money in case of an emergency, or you need something at the last minute. Let’s face it, no matter how hard we try to be prepared we always have to expect the unexpected and part of that means setting aside extra money so when something does go wrong you aren’t completely broke afterwords. Maybe take out twenty dollars, that will buy a small package of diapers in case you run out and have already been to the grocery store. You can never be too prepared, you won’t regret it when you do need something at the last minute and you don’t have to dig into the money you already have budgeted out for other necessities.

Better Credit Envy

December 16, 2015 by penn

Your friends seem to be able to afford whatever they wish. You, with a budget that allows only a very limited amount of fun, just can’t figure out how they do it. The fact is, there are a few things they may do that allow them a better credit score:

Payments on time, and more than the minimum
No new cards
Rotating cards
Keeping purchases within budget
Monitoring credit scores, and
Paying back bills

[Read: When Life Goals May Mean a Lower Credit Score]

Nothing that you don’t think you’re doing, right? But take a closer look, and make sure you are actually not making problems for yourself. The best way to a better credit score is self-honesty, and looking at the finances, when you are not under exceptional stress, is a good place to restart.

Payment habits

These are the two areas where credit can get out of control so easily. Making only the minimum payment does avoid problems, but it also keeps the debt alive as long as possible. If you make the minimum payment, plus even a few dollars more, you will reduce the fees, and the length of time that you have that debt. Start with the largest interest charge first. If you can, add extra money to another charge that is close to being paid off.

Not using your cards to the maximum means not only smaller payments, but you have a cushion of credit if there is a sudden need for car or home repair. Making charges that you are positive that you can pay off, in full, every month is a sound way to better credit.

Credit scores are calculated on the amount of credit you have available. A card with a high limit will affect your score negatively if the account is closed because it isn’t used for a long time. Keeping cards, that you are sure you can pay off, in rotation will help keep your better credit rating. You are showing that you can handle having large amounts of credit, without overdoing it.

New credit

Patience is a needed thing, when trying to build or rebuild a credit score. Paying off debts, especially those that have gone to a debt collector, will help rebuild credit. Adding the payment amount to another debt will quickly bring you to a point where you have many fewer debts. This will allow you to start a better credit habit. If you save the funds you have been spending on back debts, you will have a savings account that you can build on. You have not had that money available, so there is nothing you need give up to save.

Applying for new cards is not a good idea, unless there is a solid financial reason to do so. The old card stays open on your credit report, increasing the amount of credit you have available on paper. The new card looks at your credit report, and sees how much credit you have available, and what you have done with it. If you apply for new cards, because all of your other ones are at their limits, you will do double damage to your score, with both the higher payments possible, as well as inquiries into your credit worthiness on record.

How long has it been since you looked at your credit score? There are several places to get a copy of your score, as well as an annual free credit score report. Some cards now offer a monthly look at your credit score, making it easy to spot any financial activity that is questionable, and get it taken care of. This can be a long process, so catching any errors quickly will save you effort in the long term, as well as insuring better credit for you now.

Purchase sense

Even if you don’t see it, your friends may have been quietly saving for months to afford a larger down payment on a car, or for the vacation that you envy. Being able to plan in advance is one thing a budget should allow you to do, and your friends may have given up something that you can’t see to be able to afford these luxuries. Better credit planning will insure that the payments these items cause are not barely affordable, but can be easily fit into the budget with either the larger down payment, or the savings for specific items.

[Read: 12 Surprising Ways You’re Sabotaging Your Credit Score]

One other thing

Your friends may not have the best of credit! They may be living without a budget, closing their eyes to the consequences of not saving, and building a pile of debt that will take years of hard work to pay down. Your impression of their credit scores may be influenced by things that actually will hurt them in the long run. Better credit isn’t a contest, but something you do for yourself, and your future.

Need a Small Business Loan? What Aspects to Consider

November 23, 2015 by penn

A small business loan is a must have for any small business these days. Whether this loan is to help you with building credit, purchase items for your business or the like, there are not many business who have not at one time or another utilized a loan. A loan can come from several sources. Some business choose to allow investors in order to get the money that they need. However, more businesses turn to banks or credit unions for their loan. For those who are looking into a small business loan, the following aspects can help you to decide which the best option for your needs is.

[Read: Credit Card Loan Consolidation Can Be Useful]

The Business Loan Terms

Never sign something, such as a loan, without reading all the fine print. This is one of the biggest mistakes that a small business owner could make. With this being said, there are numerous aspects you are wanting to look for when reading over paperwork concerning a small business loan. These aspects include:

The interest rate you will be paying for said loan
The setup of payments and how these are structured, take into consideration the late fees or interest that may accumulate
Are there prepayment fees if you were to pay off the loan early?
Look at the factoring fee or APR

You will want to do the math to ensure that you are getting the best deal that is possible for you.

The Response time for Funding

There are several situations in which you may need a small business loan as fast as possible. If this is the case, you are going to want to look at lenders who are known for providing fast responses and even faster delivery of the funds. There are many lenders who provide same day or next day lending. In these cases, this is often going to result in a higher APR, thus you must weigh the option as to whether this is the best route for you or not.

How is your Credit Worthiness Determined

With each lender that you may consider for your small business loan, look to see what their credit worthiness guidelines may be. What most people do not realize is that not all lenders are equal. For example:

Some lenders may require that you be in business for two years, while others are fine with startups that are not established yet
Some lenders will require that you show an income that has at least six figures, while others do not put this as a requirement
Some lenders will give you a loan based off of your revenue, while others give based off of what you need

It is these facts that are going to determine if you are able to get the loan, as well as how much you are going to qualify for. So it is best to shop around and do your research before committing to a certain lender.

The Lenders Customer Service

Customer service should be one of the main aspects as to how you determine which lender to go with for your small business loan. The customer service team that you are working with will be those who you call when you need advice or information. You should do your research thoroughly about the lenders customer service. You should:

Consider reviews that are written about the lender
Contact customer service yourself and see how satisfied you are with the way they handle questions
Ask around to other business owners you may know for their insight into lenders they have used in the past
Be sure to look at not only how you are treated during one call, but how you are treated for a few different times in which you call. Many business owners tend to go the institution on different days to see if there is a difference in their customer service.

Customer service is important, as you will find that poor customer service can lead to a poor total experience, which is going to make the entire loan process even harder on you.

How much do you need

Once you have a narrowed down list of lenders that could provide you with a small business loan, it is time to figure out just how much funding you are going to need. This is going to allow you to narrow down your list of lenders even more as you will automatically be able to throw out those who do not loan these large amounts that you need.

[Read: What You Need To Know About Payday Loans]

For small businesses who need loans, it is possible to find these. However, with all the lenders that are out there, you must do your research and find those lenders that are going to fit your needs. And find the lender that is going to lend to you on the terms that you accept.

Common Budgeting Mistakes

November 4, 2015 by penn

A budget is nothing more, at first, than a list of what you need to spend money on. At first, I made one, and then ignored it, spending money where the desire was, not where it was needed. Looking back, I see many budgeting mistakes, and how they could have been avoided.

[Read: Avoid 4 Common Mistakes to Save Money]

Why do I need a budget?

You have a budget right now, even if it isn’t written down. You spend money on things, and people, and pay bills. This is where you can start. A budget simply makes sure that you have money for all of the needs (rent, payments, and groceries), plus a portion of the desires and wants (eating out, new clothes, and that new game)! Without a budget, bad habits can develop, and if the worst happens, may leave you without the ability to pay for anything while you get back on your feet.

An honest look at where money is going surprises many people. They simply did not realize how much they spend, and where. This is something that can be brought under control, without sacrificing too much of what you do now. So we start with where we are, and see if there are any budgeting mistakes we can correct!

Setting up a workable budget

The first stage is getting records of what you have spent money on the last three months, plus any annual or every 6 months bills. I mean:

Food. Yes, fast foods count, as does the dinner that you splurged on to impress someone.
Bills: any place you spend money to keep going. Gas, insurance, and a small loan of $10 from your best friend goes into the budget.
Other items: This is where budgeting mistakes can happen easily. People forget things like haircuts, garbage bags, and the weekly share of lunch in the office. These all have to be accounted for.
Annual/bi-annual bills. Yearly car insurance, plates, roadside assistance, gifts, and inspections and taxes all need to be counted, as well. Game memberships, too!

Now, look over your bills. Make sure that you have exactly as much as you have made in those three months. If you have a savings account with fees, or returned check fees, these need to be figured in. You can now average what you spend each month. Write this down (spreadsheets can bereally useful for this!), and see where you are at.

If you have everything under control: a slowly-building savings account, no returned checks, and all the bills paid, plus money for fun, congratulations! You are a budgeting master. However, I suspect most will not be that lucky. This can be where even more budgeting mistakes creep in.

A common reaction to making the first budget is to start slashing expenses. This isn’t bad, and one of the reasons a spreadsheet helps. Lock what is being currently spent, and make all the cuts on a second column. A cup of tea, a walk, or a hug from a friend helps you be able to look at what might be too excessive.

Things may be bad, yes. You may have to cut spending money, for now, on less-vital items. Looking at the cuts, you may see another common budgeting mistake; cutting expenses too far, too fast. A slow change – so you don’t feel like you are giving everything up – works best.

Methods for budgeting

There are many methods of budgeting; locating the best one to avoid your personal budgeting mistakes may require a few tries. Moneycrashers as well as others to be great places to find effective ideas. They show you how each budget method works, and you can choose the best system for your own style.

If you are in a relationship, or have a roommate, you need to work as a team to get a budget and still enjoy what you deserve. A huge budgeting mistake (almost as common as not having a budget at all) is not communicating and working as a team to get a budget that is good for everyone. A switch of gym memberships or internet providers can improve your budget without giving up something that you need, but everyone has to agree to it.

[Read: Don’t Let Your Hobbies Eat Up Your Budget: Earn From It!]

Planning ahead is a needed skills for a successful budget. If you are paid twice a month, or weekly, I personally find these the hardest schedules to budget. “Oh, I’ll have money next week” is a statement that can bring ruin to your hard work and planning. You can divide the bills, so you don’t feel broke when all of them are due, and still have some fun money, which is needed.

The comfort you will have in a few months time of knowing that money is there, waiting, is really worth it.