Why Do You Need to Make a Budget?

Make a Budget

You will say that you know where and how you spend your money and you do not have to write down every thing to keep track of it. But you are wrong, allow me to throw you a challenge. Just keep account of every cent you spend for a month.

You’ll be stunned at how big the small expenses become when you add them up. Take the sum of an amount you exhausted on just one unessential thing for the month, multiply it by 12 to get the total of the money you spent in a year and now multiply this total by 5 to get the amount you spent on this unnecessary item in 5 years .

That is the amount of money you could have saved and deposited in a bank and earned interest on it in just five years. That is why it is very important to have a budget.

If we aim at getting control of the little expenses that in reality do not effect us in general and we can live without them, we can succeed in achieving financial freedom.

The small affairs actually do matter. Bringing down your expenses on lunch from ten dollars per day to seven dollars per day on every working day for the five days that you work in a week saves $15 a week… $60 a month… $720 a year… $3600 in five year and if you add interest gained on it, it comes out to be substantial amount.

You can clearly figure out how important is to cut down on your expenses. It truly is the small thing and you still eating the lunch each day and that was just one thing to spare money in your day-to-day living without doing one thing you actually require. There are numerous things you can target and control to cut down expenses if you really look for them.

Make a particular long term plan as well as some short term goals. There is nothing wrong in planing your life and setting goals. If something is important to you, then it is important, that’s it.

If you would like to be capable of making a deposit on a house, save money for your children to put them in a reputed college, buy a new car, go on a holiday and anything else, then that’s your ultimate goal and an important reason to manage your finances and that is why you need a budget.

 

Bailout: The US Could Rebound in One Year

The US Could Rebound in One Year

According to Dr. Robert E. Pritchard, professor of finance (Rohrer School of Business at Rowan University), the US could rebound in one year (12-18 months), if things are handled properly today.

Dr. Pritchard believes that the current economic crisis in the US can be traced to 1977 when the Federal Community Reinvestment Act was enacted. This, and Carter and Clinton administration’s advocacy for encouraging home ownership are the causes of today’s mortgage and the economy debacle.

According to this professor, the US government allowed people who did not meet adequate financial requirements to get mortgages so they could achieve the American Dream of owning a home. This was done by lending to subprime applicants in the subprime lending market. However, institutions who had these subprime mortgages immediately sold them to investors on a worldwide basis. This practice, known as “Mortgage packaging” became a very popular and efficient business.

Subprime lending has been an increasingly profitable business since September 911 when lending with zero down payments and adjustable rates became the norm. This practice led to more buying and selling of homes, more construction activity, and more people borrowing without having the ability to repay.

However, when market forces started to pull down property prices the real estate “bubble” just burst. Stock and commodities prices decreased significantly and people were left without being able to repay they highly leveraged lending position. Many banks and investment firms went down badly because of the credit crunch.

Treasury Secretary Henry Paulson and Federal Reserve Bank Chairman Ben Bernanke have worked out a bailout package that will save the US from meltdown. So they think. But many just see it as a “live saver” for wall street. Professor Pritchard believes is the right step in the right direction.

He sees a big rebound of the US economy in 12-16 months if things are done properly right now. The legislation would allow US government to purchase mortgages injecting liquidity to the market. Also, the government can rapidly renegotiate mortgages so homeowners can pay and keep their home. Many families that would otherwise lose their homes could stay there. Then, a stronger and better-regulated investment and commercial banking system will emerge. The real estate market’s value will bottom and start to rebound latter.

Do you think that the $700 billion price tag is worth? You be the judge.

 

The Stock Market and Alternative Energy

The Stock Market

This is a critical time for financing alternative energy. We can keep gasoline prices affordable by investing in solar energy. An electric car, good enough for local commuters, can be plugged into house current or a solar panel. Solar panels can be protected by motion detector technologies. Most telecommuters need no more than an electric vehicle for commuting. We need to keep the Dow Jones industrial at a reasonable level in order for investors to be able to afford to purchase the solar panels, windmills, and other niceties to help make the home office truly independent.

Maybe I fell asleep at my Brother laptop computer sometime in 1998, during Clintonomics and the economic “high”. The stock market in 2008 is an iffy roller coaster ride here in the United States. We who and woke up asleep or something, need to wake up and look at where technology is going to go. We need to make our destiny before destiny makes us. The world of technology has reached a denouement right now, and someone out there has to do something to help us change it, technology is financed by the stock market, in many ways, so we need to invest in alternative energies, and invest now. A few brave individuals are now breaking even or gaining credits with their electric company by way of utilizing solar technologies. We have a lot of desert, and a lot of people who have been looking to implement silicon-based solar cells since the 1960’s or 1970’s, who could stand to benefit from the export of solar cells to other nations.

We are reaching the end of the Bush administration, during which most of us have not been planting trees as Americorps or local volunteers. This is a fun and slightly lucrative way of financing your education, should you suddenly decide to go back to school, while doing something for your community and your environment. You can even volunteer to teach inner city children about the stock market, there are teaching positions available nationwide. Right now, I do not see that much of a difference between Obama or McCain becoming the next President of the United States. Neither candidate is going to do anything about alternative energy unless a market demand from franchised Americans is noted by media pundits, and industry lobbyists; who are financed in part by the stock market, as well as by the consumer spending index.

Looking at the conventional bank failures, the banks who did not choose to invest in solar-powered paint, or solar cells, or windmills, or hydroelectric dams, or geothermal energy projects, or hydrogen fuel cells, is one thing. Looking towards getting the United States market ready for the upgrading of technologies and increased demands of oil by nations such as China and India, who are becoming consumers of energy, is what we need to do. We could feasibly begin exporting oil, rather than importing oil, if we begin concentrating on improving our energy outlook, and support alternative energy, on the stock market, as well as by our consumer purchases.

Finding the publicly held companies that manufacture solar cells and windmills has not been easy, in fact, I’m still looking. However, I have found a few companies that are ethical choices for investors. Gamesa Corp. Tecnologica (GCTAF) manufactures windmills, and Denso (DNZOF) manufactures hybrid car parts, Stantec (STN) cleans up industrial land. Zep, Incorporated (ZEP), manufactures environmentally friendly residential and industrial cleaning products, and Photovoltaic Solar Cells Incorporated (PVSO) manufactures solar cells. Geothermal energy companies such as US Geothermal (HTM) and Nevada Geothermal Power Incorporated (NGLPF) are also sensible and responsible stock market purchases.

The Schoenwalds, of New Alternatives, in Melville, New York, specialize in investment funds that have individuals investing in the environment as well as the stock market. An advertisment for this firm provided information critical to the development of this article. We need to lead the world into responsible technologies, such as wind power, solar power, and by way of financing these companies during this shake-up, we are making a statement that we are going to support technological evolution, and continue to keep the United States of America as a leader in the world economy.

4 Surefire Ways to Go Bankrupt

Bankrupt

Think you’ve got it all together? Well, so did many people who are sitting in a lawyer’s office at this very moment. They’ve got their bankruptcy papers in hand, and they are ready to file. Their thoughts? “I never thought this would happen. I did everything right. I don’t know where I went wrong. Mama told me not to marry him. Daddy told me never to get a credit card.” And so on and so forth.

That little thought dialogue there encompasses just some of the reasons why people go bankrupt. But you might go bankrupt for reasons that are less obvious. Again, I ask do you think you have it all together? Read on to find out why you just might want to think again.

You’re married.

You’re married and you’re happy, but watch out. Many marriages that turned into divorces put people in a bankruptcy lawyer’s office. If you’re a stay home mom, have a little bit of savings stashed aside. Either that or make sure you work on loving your husband every single second of the day so your marriage can stay strong.

You don’t believe that things happen.

Let’s face it. This is life. I’m just learning this myself. I came from a family who made me feel like I was always protected, and I went to a cushy college that I didn’t have to pay a dime for (at the time). I got out of school and let’s just say I got a little reality check. In life things happen.

Chapter 7 and Chapter 13 Federal Bankruptcy Rule Information

CHAPTER

Because of the long-term affects of up to ten years on a debtors credit report, bankruptcy should be used as a last resort. If bankruptcy is the only available option for personal debt reduction, is Chapter 7 or Chapter 13 a better option? This article looks at the different rules for filing personal bankruptcy.

What is a Chapter 7 Bankruptcy Discharge?

Chapter 7 is often referred to as straight bankruptcy because it can discharge all personal debt. Certain personal assets may be forfeited to help satisfy debt. Generally personal assets like certain home furnishings, vehicle used to travel to work and work related assets might be exempt from forfeiture. Retirement savings like a 401K or IRA are also exempt.

Congress passed legislation that makes it more difficult to file for a Chapter 7 discharge. Income limits have been established by state for a straight bankruptcy discharge. If personal income exceeds the established limits, Chapter 7 cannot be filed. The legislation passed by Congress also extended the amount of time between filings. Chapter 7 cannot be re-filed again until 8 years after the first filing.

What is a Chapter 13 Bankruptcy Discharge?

While Chapter 7 is designed to absolve all personal debt, Chapter 13 bankruptcy filing is more like a monthly installment plan. The court trustees establish a monthly payment amount and the money is distributed to pay off debts. The repayment plan is generally from a period of 3 to 5 years. Once the predetermined time expires, debts are considered satisfied, even if the debt paid is less than what’s owned.

Debtors that cannot file Chapter 7 due to income levels or other factors may still be able to file for Chapter 13 bankruptcy. This repayment type filing usually allows for the debtor to keep the majority of their assets. Chapter 13 bankruptcies also allows for shorter filing period between filings. In some cases it could be as short as 2 years between filings compared to the 8 years for Chapter 7.

Chapter 7 and Chapter 13 Filing Fees

Individuals can file for personal bankruptcy without the assistance of an attorney. Bankruptcy can be somewhat complicated and the advice of attorney is recommended. The following are the filing fees as of this year

  • Chapter 7 filing fee $299
  • Chapter 13 filing fee $274

The above amounts reflect the federal court fees; attorney fees are separate.

Bankruptcy is filed in federal courts and many of the rules are governed at the federal level. There is however some rules that are governed at the state level that may be different from state to state. A qualified bankruptcy attorney will look at the debtor’s financial situation and advise on the best course of action. Other options may include personal budget control, debt counseling services or debt consolidation.

Capital Protected FTSE Tracker — Pros and Cons: Using a Stocks and Shares ISA to Maximise Tax Free Savings

Finance

Many investors wish to benefit from positive movements in the FTSE 100 index, but they worry about the downside. Nobody wants to lose all their money on a stock market investment, but tracking an index of blue chip stocks is very different to purchasing penny shares.

According to an article about FTSE trackers in the Motley Fool, “Over the last 80 years, there have been only seven five-year periods where you would have lost out and in only two of these cases would you have lost more than 10%.”

Advantages of a Capital-Protected FTSE Tracker

  • Capital protection. No matter how badly the FTSE 100 index performs, it is impossible to lose all or any of the investment capital;
  • Stock market growth. An investor benefits from investment returns linked to the growth of the stock market;
  • Low and falling interest rates. Bank of England base rates are the lowest in decades. Fixed-rate bonds and cash ISA accounts aren’t providing savers with the returns they once did so guaranteed equity bonds provide a more financially rewarding alternative;
  • Can be put in an ISA. It is possible to benefit from tax-free savings by investing up to £7,200 in a stocks and shares ISA.

Disadvantages of a Capital-Protected FTSE Tracker

  • No dividends. A FTSE tracker only follows the value of the index. This means that an investor can lose out on receiving 4% per annum in dividend payments;
  • Capped gains. As the investment is capital-protected, potential gains are usually capped meaning that only modest returns are possible;
  • Long-term investment. All investors in a capital-protected FTSE tracker are locked in for a period of 3 or 5 years;
  • Taxation. Any money made isn’t subject to capital gains tax, it is subject to income tax. Worse still, the income all comes in a single financial year which could cause an investor to become a higher-rate tax payer.

Using a Stocks and Shares ISA for Tax-Free Savings

It is possible to put a capital-protected FTSE tracker in a stocks and shares ISA. Inland Revenue rules permit someone to invest up to £7,200 in this source of tax-free savings. This affords an investor considerable advantages, especially if a higher rate tax payer.

The reality is that those who invest in the FTSE 100 share index after a decline will do well. A simple FTSE tracker fund is definitely the way to go, but not everyone has the constitution for this. If this is the case, put a capital-protected FTSE tracker in a stocks and shares ISA to maximise tax-free savings.

Debt Collection Agencies Not Helping Borrowers: Are Personal Debt Repayments Set Too High?

Money

Excessive, unmanageable personal debts have resulted in a growing demand for Debt Management Plans. The Times recently stated that 700,000 consumers had already turned to debt repayment plans where a lower repayment is made based on affordability. Struggling borrowers are now complaining that debt collection agencies are failing to co-operate and placing them under undue pressure.

Debt Collection Agencies Rejecting Debt Management Plan Proposals

Individuals struggling with financial difficulties claim that debt collection agencies are proving less than co-operative once missed or late payments have become an issue. This is despite the fact that they purchase full collection rights with respect to defaulted accounts- often for less than 30% of a loans value. Instead of helping borrowers to make realistic monthly repayments, there are complaints that:

  • Borrowers are being pressured into making unaffordable monthly repayments.
  • County Court Judgements (CCJ’s) are being taken out against a borrower so they can pursue a Charging Order at a later date.

County Court Judgements (CCJ’s) and Charging Orders

A County Court Judgement (CCJ) may be taken out by a lender when a borrower has defaulted on a credit agreement. A Charging Order can then subsequently be pursued which turns an unsecured personal debt into a loan that is enforceable against the borrower’s property. A CCJ needs to be issued by the court before this can ever happen. Always attend court and present the judge with a full budgetary breakdown; it is unlikely that the court will then agree to the Charging Order taking place.

Northern Rock Is the Least Helpful with Personal Debt Problems

Borrowers with financial difficulties may be surprised to discover that recently nationalised Northern Rock is amongst the least supportive with regard to personal debt problems. Chris Jary, a debt counsellor for Action for Debt, stated that: “Northern Rock is one of the worst for harassing borrowers. They do not listen to people’s individual circumstances or take into account the customer’s other personal debts.”

Pay What Is Affordable with a Debt Management Plan

Tom Howard, of the Consumer Credit Counselling Service (CCCS), stated that: “A borrower can repay only what they can afford. If a debt-repayment plan has been properly devised by a debt charity, and the creditor still refuses to co-operate, the borrower should continue making the monthly payment outlined in the plan. Do not be bullied into paying more.”

If personal debt is a problem, never agree to offer debt collection agencies more than can be realistically afforded. It is a sure-fire way to fail, thus increasing the likelihood of a County Court Judgement (CCJ) or even a Charging Order being issued. Talk to a qualified debt counsellor before proceeding with a Debt Management Plan.

Who is an IVA Most Appropriate For? Individual Voluntary Arrangements – A Debt Solution for Serious Debt

Man

With spiraling levels of personal debt in the UK, it isn’t surprising that the Individual Voluntary Arrangement, also known as the IVA, has grown in popularity as a debt solution. It provides the most viable alternative to personal bankruptcy for dealing with serious debts.

What is an Individual Voluntary Arrangement?

Provided that 75% of creditors, in terms of value, agree to the Individual Voluntary Arrangement, it becomes a legally binding agreement. Unlike a debt management plan, an IVA is a way to write off debt and become completely debt free once 60 monthly payments are made. It also prevents creditor harassment.

The Individual Voluntary Arrangement and Home Owners

A home owner that declared personal bankruptcy would almost certainly lose their family home. An Individual Voluntary Arrangement allows someone with serious debts to keep their property, provided that payments are maintained for the entire duration.

Should an insolvent fail to meet the terms of the Individual Voluntary Arrangement, the Insolvency Practitioner would use the proceeds paid into the IVA to declare them bankrupt. Those who keep up with payments will be expected to get a remortgage for 80% of all available equity at the end of year 4. However, this will be based on affordability.

Personal Bankruptcy and Involvement in Speculative Activity

Insolvents who have lost money from personal loans or accrued credit card debt through an involvement in speculative activity should think carefully before declaring personal bankruptcy. Those involved in gambling or share trading can be held accountable for up to 15 years under a Bankruptcy Restriction Order (BRO).

Finances aren’t nearly as heavily scrutinised with an Individual Voluntary Arrangement as is the case with personal bankruptcy. Whilst a 5 year IVA term may seem like a long time, personal bankruptcy could prove far more punitive in certain circumstances.

The Individual Voluntary Arrangement and Protecting a Professional Status

Those working as a professional, such as an accountant, financial advisor or solicitor, would lose their status immediately if they declared personal bankruptcy. It is argued that an Individual Voluntary Arrangement allows someone to maintain their professional status.

Personal Bankruptcy and Publicity

Whilst personal bankruptcy results in the news being printed in a local newspaper and the London Gazette, this isn’t the case with an Individual Voluntary Arrangement. However, the IVA is put on a publicly available insolvency register.

An Individual Voluntary Arrangement can be an excellent debt solution for a homeowner. Although the term is longer and more has to be paid into this debt solution, an IVA allows someone to live a normal life and provides a defined term when that person will become debt free.

Hardship Grants Provide You with Fast Cash: Free Government Funding for Those in Need

Gov

From time to time, individuals experience things in their lives that leave them wondering where to turn for help. Hardship grants provide financial assistance for individuals who really need it – whether because of a natural disaster, illness or medical condition, loss of work or something else. By understanding how hardship grants work and how to obtain them, hardship grants can help one get through difficult financial times.

Check out Victims of Natural Disasters Hardship Grants

There are hardship grants available to victims of natural disasters, typically through FEMA. FEMA or the Federal Emergency Management Association helps victims recover from natural disasters by partially replacing the things they’ve lost and providing financial assistance for housing, food and clothing. Contact FEMA via their website at FEMA or find a local chapter.

Seek Veteran Medical Hardship Grants

Some veteran’s affairs offices offer hardship grants to their veterans when difficult times come calling. This includes medical hardship grants, such as medical bills the veteran isn’t able to pay or surgery or other procedure that might need to be done for the benefit of health. Learn more at ND GOV or individuals can visit their own veteran’s affairs office to determine whether a grant like this one is available to them.

Look into Student Hardship Grants

Students who are attending college should speak to their counselors, as many colleges have their own hardship grants for their students. The purpose of these grants is to provide help to students who are experiencing difficult times or those who are from low-income families. Funds like this are also available in general for students who are having medical hardships or other hardships that may interrupt their education.

Seek Additional Grant Information

Typically, in order to receive a hardship fund, individuals will need to provide proof of the hardship, income, number of individuals living in the household, information about previous grants received, social security numbers and more. It’s important to have these things gathered before proceeding with hardship grant applications. Applicants may need copies of medical bills or other bills to provide with the grant application.

Check out Grants.gov

This website is very helpful and lists all government grants available for any kind of situation or need. To find hardship grants via this website, use the keyword search tool and click ‘submit.’ A list of grants relevant to the search will appear and individuals can check the details of each grant to see if it is a relevant grant that they would be eligible for. Applications are also available via this site. It’s a great resource for anyone who is searching for grants – hardship or not.

Contact Individual Companies

Individuals may also be able to receive hardship grants by contacting certain companies they are having trouble with. For instance, hospitals often have their own form of hardship grants that can be used to help individuals who cannot pay for their medical bills. Lots of companies do volunteer work and therefore have funds that can be used for hardships. Electric companies, water and sewer companies, hospitals, clinics, colleges and even typical businesses often have some form of hardship funds that can help in difficult situations.

The Four Golden Rules to Managing Debt: Beating Debt Before it Spirals out of Control

Finance

Debt can creep up unawares and cause a lot of misery. What begins as a small personal loan can get bigger until it spirals out of control. Following four simple steps can help resolve the problem.

1: Claim all Benefits

It is surprising how many people do not receive all the money which they are entitled to. Before taking any steps, check entitlements to benefits and tax credits. Directgov has an online benefits adviser, which calculates via questionnaire whether someone is entitled to certain benefits and tax credits.

2: Work out a Budget

It is a good idea to work out a monthly personalised budget. This involves adding up the total income and deducting the total outgoings.

  • Annual Income: Adding wages after tax with benefits and interest from savings.
  • Annual Expenditure: Adding all the annual household bills (not including the debt).

Disposable Income

The monthly disposable income is ascertained after the annual expenditure has been deducted from the annual income and divided into twelve. A clear picture will soon emerge on how much nonessentials needs to be budgeted, for instance, nights out. Martin Lewis offers excellent advice on money management, tips on how to increase earnings and to make the most of the disposable income.

3: Establishing the Debt

This is the unpleasant part, but knowing is better than avoiding the issue. This involves adding up all overdrafts, hire purchases and personal loans.

4: Contact a Debt Management Company

With the monthly expenses and the total amount of the debt worked out, it is time to contact a debt management company. Some charge for their services and should be avoided. Payplan, however, is a charity run service, subsidised by the credit industry. They will discuss the situation over the phone and work out a Debt Management Plan (DMP).

Debt Management Plan

A Debt Management Plan is an agreement between and individual and the creditors on an affordable way to pay off the debt in manageable monthly instalments. As soon as the DMP is in force, creditor’s fees and charges are stopped and interest rates frozen, and in some cases, suspended. It depends upon the circumstances and the discretion of the creditor. It must be noted that hire purchases and personal loans cannot be included in a DMP.

National Debt Line (NDL) is a charity-run service that also helps find solutions and work out DMPs. For further advice, the Citizen’s Advice Bureau is a free service that provide further useful contacts.

The bad news is that an individual’s credit rating will be affected.

The good news is that debt can be faced and overcome before it spirals out of control.

Become Free of Debt

Facing debt is better than putting it off. Claiming all benefits is a good start. This can be used to work out the monthly disposable income and work out a budget. Importantly, establish the size of the debt. By contacting a debt management company, a DMP can be worked out.