A Blog About Personal Finance

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Leasing has been lauded as your cheapest ticket to keep up with the industrys hottest vehicles and trends. The jury, however, is still out on leasing: with the industry long on hype and short on detail, it is difficult to distinguish between a genuinely good deal and a downright up-selling exercise.

So how do you spot a good deal?

First, you need to find out if there are any down payments on the lease. A down payment refers to the lump sum amount that you pay upfront, either in cash, non-cash credit or trading allowance, to reduce your monthly payment. You should think twice before putting money down on a lease: not only are you getting a rough deal, as youre essentially forfeiting the general rule of leasing: not putting any cash upfront, but the money is not recoupable at the end of your lease. There is another big disadvantage: in the event of your car getting damaged or stolen, you insurance and the gap cost will not cover the loss.

Good Car Leasing
Most leasing companies allow you a limit of 45,000 free miles over the length of a 3-year lease. This may seem like a good deal at first sight, but when you consider it only comes to 15,000 miles over a 12 month period its not difficult to foresee why it might be difficult to stay within this limit. Even people working from home have little trouble putting 15,000 miles on their cars.

If you exceed the mileage limit, the penalty for each excess mile can be as high as 20 cents. This can add up quickly over the length of your lease: an additional 4,000 miles a year over the length of a 3-years lease contract, will end up costing you an extra $2,400 in excess mileage charges! Be realistic about your mileage needs, especially if you have to regularly commute over long-distances, before you sign the contract. Consider padding the miles that you expect to use since it is less expensive to contract for the extra before you sign than it is to pay the extra charges at end of your lease.

Car Leasing
Sales tax is usually capitalized and added to the monthly payments. However, some dealers choose not to include it in their calculations to drive the advertised lease payments even lower. What they do instead is state in the small print that the monthly payment excludes sales tax. Make sure you carefully read the fine print for any extra, hidden costs not included in the advertised monthly payment. Unscrupulous fees that typically slip through the cracks include sales tax, registration and title fees. More on Car Leasing Info.

A great way to save money is to be aware of the fact that one has the power to define the state of his finances specifically through a conscious effort of disciplining the way one spends and controlling one’s expenditures.

Self-Discipline And Saving Money
Self-discipline will most definitely be the key to reducing one’s debts therefore increasing the possibility of growing one’s savings. And in the long run, improve one’s standard of living.

According to money management book author Robert Hastings, “Undisciplined money, usually spells undisciplined person”. Therefore, if one notices how his hard-earned money seems to slip away so darned easy, then it is about time that he rethinks his ways and try to discipline his unpleasant spending habits.

One of the essential keys to successful money management, specifically saving money is to possess proper attitude. Self-discipline is at the topmost of this proper attitudes list, of course.

Saving Money
Only with self-discipline that people recognize that they do have the freedom and power to do the right thing over doing as their impulses dictate.

Sounds complicated? Well, not really. Knowing fully the fantastic rewards of disciplined money in a disciplined person’s hands should be motivation enough for one to do all that is humanly possible to achieve that elusive financial stability everyone hopes for.

Here are some helpful money saving tips.

1. Realize that the most convenient method of building one’s wealth is through saving money. Money is the only sensible material to save.

2. Focus expenditures on the things one needs. Live day-by-day knowing that you have enough.

3. Avoid buying on impulse. Take your time when buying, especially the expensive items. If you really need it, it would most definitely not slip your mind. Otherwise, if you go along forgetting all about it, then it isn’t really worth the money you have to spend on it at all.

4. Credit card debts hold the number one slot as the cause for financial drains these days. Control your spending by using your credit cards less. Or for unavoidable circumstances when you really have to use the credit card, consider using the ones that charge less interest. Then dump the high interest ones for good.

No matter how you look at it, saving money is so easy to do. A little bit of imagination, some creativity and a lot of self-discipline will take you a long way in keeping hold of your hard-earned money. More on Saving Money Tips.

Saving money and financial management is very crucial in one’s life. Money is very important in order to survive in this world but only a few people know how to manage their household budget properly. Many people have a hard time saving money even if it is for their own good.

How to Save Money and Avoid Temptations
Most of the time, you may be motivated to save money but there are times when temptations come your way and before you know it, you have already spent the amount that was supposed to be added to your savings account. Here are some helpful tips on how you can avoid temptations and be able to save money:

1. Try hard to avoid those things that keep you from saving. If you are fond of buying shoes even if you don’t really need them, try very hard to stay away from them. Keep yourself away from shoe stores so that you will not be tempted to buy one.

2. When going to grocery stores. Always bring the exact amount and bring with you a grocery list. If you have limited money in your pocket when in grocery stores, you will be forced to buy only those important things that you need. Preparing a grocery list will also help you get organized and will help you in deciding the things that need to be prioritized.

3. Go to the malls only when needed. Do not go shopping if you do not need anything important to buy. Window-shopping will only tempt you to buy the dress you saw in the boutique even if you don’t really need it.

4. Do not bring with you your credit cards all the time. Having a credit card in your pocket will only tempt you to buy things that are not necessary. This will also help you lower your balances and have a good credit score.

5. You may want to save money in the bank or invest in time deposits. You will not be tempted to get money from the bank every time you need cash, if they are placed in a time deposit account.

6. You may also want to consider consulting a financial advisor. There are a lot of programs that offer these services for free. They may be able to help you and give you advice on how you can avoid temptations and save more money. More on Save Money and Save Money Tips.

Consolidate your loans to make repaying them easier. Having lots of loans and debt is one of the biggest reasons leading to poor credit ratings. The larger your debts, the worse your credit rating. This is how you can take care of the bad credit.

Consolidating your loans means that you take out one large loan to repay all your creditors so that you only have one large loan to repay. While the overall amount of the loan does not change - if you owed $20 000 to five different companies, you will still owe $20 000 but to only one lender - but the interest rates and monthly payments are usually quite smaller and this can help meeting your debt obligations much easier.

Debt consolidation can be an especially good idea if you have lots of high-interest debt and lots of bills that are hard to keep track of. One smaller monthly payment will be easier to remember and will help make bill time less painful.

If you only pay down the minimum amount on each of your loans, it will take you a long, long time to pay down your loans. This is because most lenders only require that you pay down slightly more than the interest amount on your debt each month. Even a debt of a few hundred dollars could take several years to repay this way.

Paying down your debts by putting down more than the minimum required monthly payment can help you pay down your debts faster and so can boost your credit score. Paying down more than you need to also shows lenders that you are in good financial shape and conscientious about your debts - two qualities that definitely make you an attractive credit risk to lenders.

If you are taking out a new loan, consider putting down a larger down payment to take out a smaller loan. Doing all you can to take out a smaller loan - by putting down a larger down payment or buying a less expensive car or home (if that is what the loan is for), for example - can help ensure that you don’t overextend your credit and can help ensure that your monthly payments on the debt will be reasonable and affordable to you.

In fact, for larger purchases, some debtors take out piggyback loans, most often for a mortgage. They borrow money for a down payment, so that they can get a better rate deal on the larger second loan they take out to pay for the purchase.

Do your math before making a big purchase - you may find that a larger down payment - even if you have to borrow to get it - can help your credit by making your payments more affordable and by ensuring that you don’t overextend your credit.

Online loan calculators are a useful tool that can help you determine how much of an interest rate you should pay, how much in monthly payments you can afford, and how much your loan will cost you in interest over the long term. This is a nice preventive tool to avoid bankruptcy.

Online loan calculators are free to use and can help you figure out how to make your debts more affordable. There are online loan calculators for auto loans, home loans, and personal loans.

You can also try to apply for government grant online that is not a loan at all and can help you to get out of the situation.

Today there is a great financial load on individuals as well as families, one which is most prominent is that of credit card debt,and a debt consolidation loan can help.If you are in the current, unfortunate position of credit card debt you may want to consider the option of consolidating all your debt and make life a little bit easier. credit consolidators offer many benefits and can be an invaluable tool in financial recovery.

Credit cards are used on a daily basis and most families make use of this facility, but it has become somewhat of a problem if one considers that the average American household has an estimated amount of debt to the value of $7000.Credit card debt has some negative aspects which can make one’s life more complicated.

People who have been in situations of debt will testify that it has a negative and stressful effect on the individuals and their families.Debt also increases, as people’s cards are continually charged high interest rates and late fees.Generally when someone is in hot water they tend to make some bad decisions, such as taking out a loan to cover the debt they have due to their credit cards.The bad news continues as the credit ratings may be very negative and it can cause problems if you want to purchase a car or even a house.If you are to the point that you are using one credit card to pay off another, you should consider a credit consolidation loan.

If you already have a poor credit record or serious debt problems you should remember that a debt consolidation loan is not a quick fix.What basically happens if you have a dept consolidation loan it will decrease your monthly debt, may save you elevated interest costs and will help you establish a monthly budget you should follow very closely to avoid further problems.The vital aspect here is that if you strictly adhere to a budget and follow it well your credit rating will gradually become better.Over time the situation will improve and your debt problems will be written down as history.

Now if you have decided to take out debt consolidation you may wonder how much your monthly installment will be. The consolidators will negotiate the lowest amount possible which your creditors will allow.At this point, all you have to do is make the payments to your consolidating company, and the company will be responsible for distributing your money to your creditors.

Once on the road to financial recovery through a credit consolidation loan, it is best to eliminate the use of credit cards.Anyone who has had bad debt knows that it can become a wearisome situation and to borrow cash to pay off your debt is pointless.The temptation to pay with credit will be strong (it is the great American addiction, after all), but the penalties for out-of-control charging outweigh the temporary pleasure of the purchase on plastic.Learning to manage one’s finances responsibly is far more rewarding in the end.

The Fed is losing control of the financial system. The Fed is trying to hold interest rates down and prevent major lenders and underwriters from collapsing, yet mortgage interest rate predictions are still rising - how can this be? And what does it mean for you?

The most important thing home owners need to understand about interest rate predictions is how the interest rates set by the Fed and the interest rates charged by mortgage lenders are related.

Interest rates that are set by the Fed flow into the cost of funds to mortgage lenders. Banks and other lenders don’t start out with all the money they lend out - they usually borrow on the wholesale market 90% of what they lend out to home owners, at rates lower than the mortgage rates they charge.

When the Fed lowers interest rates, it lowers the costs to mortgage lenders, so you would think that interest rate predictions would fall. However, financial institutions may choose not to pass on the savings to mortgage holders.

The reason is not profiteering - there is enough competition in the mortgage lending market to ensure that no one lender can profit unfairly. The real reason is that being a mortgage lender is now a whole lot more risky, and perceived risk raises interest rates.

Lenders are increasing interest rates to offset their losses on the few who will have their mortgages foreclosed. Until the plummeting housing market levels out, the risk of default will be high, and mortgage interest rate predictions will keep rising.

The Federal Reserve can’t lower interest rates forever. The primary interest rate (called the “nominal” rate) includes inflation. To calculate the “real” interest rate, subtract the rate of inflation from the nominal interest rate.

The thing is, when you do that just now, the result is a negative number! This means that nominal interest rates are less than the rate of inflation.

We all realise that this is a situation that surely cannot continue for any length of time. In the near future, the Fed will have to raise interest rates to at least break-even levels, matching the rate of inflation. When it comes, the interest rate rise will immediately flow through into mortgage rates.

In other words, it’s only a matter of a short time before mortgage rates rise again.

Mortgage Rates Predictions

Latest Financial News

Mark Bennett is a staff writer for MoneyTalks.com, and contributes regularly to other financial sites.

The trading software is one of the more overlooked aspects of trading Forex online. For those who are not familiar with the Forex market, it is extremely fast-paced and volatile. That is why all brokers claim that their software offers the minimum latency in providing real-market updates. Unfortunately, this is a very generous statement and it does not take into account the client’s internet connection or his geographic location.

There is a difference in this aspect about dealing desk and non dealing desk brokers, but still it would be very important for you to know the following.

The client’s connection to the web is obviously the most important factor regarding receiving real-market updates from the broker. It really should be the best connection that one can afford.

And then there is geography. It is common sense that Broker X who is located in Toronto can establish contact with Client A located in Montreal much faster than Client B, who is located all the way down in Mexico City. The fact is that all internet connections are affected by distance. The farther a client is away from his broker, the more delay he will receive as a result because of the physical limitations imposed on wiring. Thus, always research your broker’s geographic location before selecting it as the right one for you. For best results, always choose a broker who is closer to you.

Any decent broker will offer its trading software for free. Some will even offer different versions of its software for traders of different skill levels. Usually, “advanced” versions loaded with extra features are available for free to those who request them.

Trading software comes in two flavors - web based and client based software. If your broker offers both kinds, great! Each has its own advantages, but it is the general consensus that web-based software is better.

Web based software operates completely on the broker’s server and is interfaced through a web browser like Internet Explorer or Mozilla Firefox. This creates a lot of flexibility for the client, as he can access his Forex account anywhere providing he has access to an ISP and a browser. Security with web based software is not an issue, as all exchanges between the client and the broker take place over secured sockets and are heavily encrypted.

Client-based software is downloaded onto the computer and executed from there. It is faster and more convenient to access, and is more “homely” in the sense that it will blend into your desktop environment. However because client based software resides on your computer and stores sensitive information like name and passwords locally, it is very vulnerable to hackers.

If you are just starting off with Forex investing, be sure to take these factors into consideration when selecting the best broker. Analyze the features of the provided software to make sure that they’re right for you. So with all that said, good luck and happy trading!

Who created accounting principles? Who sets and revises accounting standards? What if you don’t follow all the rules, do you go to jail? Is there an accounting police force that investigates and arrests violators? Here is how it works:

Mainly, it’s all voluntary and it works pretty well. First, double-entry accounting originated in Italy in the 1400’s, so its been around awhile. Accounting principles have evolved over the years just as have accounting standards. The reason why the financial accounting system works is that the business community could not function if there was not commonality and consistency in financial statement reporting.

A body of experts known as the Financial Accounting Standards Board (FASB pronounced Fasbee) was established in 1973, which superseded another board called the Accounting Principles Board (APB). What is FASB? The FASB members go through a lengthy process of analyzing and reviewing problems in the accounting field that are brought to them. After much thought, they will make a pronouncement as to what they think the new or revised way of approaching the treatment of an accounting issue should be.

They are a non-governmental organization that has private financing. A big supporter of FASB is the American Institute of Certified Public Accountants (AICPA). Many Certified Public Accountants (CPAs) belong to this prestigious organization and are obligated to abide by its guidelines and principles of behavior of business. Other countries no doubt have similar organizations that require high levels of accounting professional conduct.

FASB established an accounting code called “Generally Accepted Accounting Principles” or (GAAP). The assumption is that if a business financial statement is prepared according to GAAP, then the user of that financial statement could rely on. Those businesses that deviate from GAAP, and many smaller businesses do, cannot say that their statements are prepared under GAAP; in fact, they should inform the reader that they are not. However, let the buyer beware.

One governmental body that has a policing function is the Securities Exchange Commission (SEC). It is primarily concerned with public companies because their job is to protect investors from unscrupulous acts. Recently, the SEC has gotten into the act of establishing accounting standards. It has its hands full today.

Since most businesses use their financial statements to prepare their required income tax returns, the Internal Revenue Service (IRS) may audit those tax returns and review the financial statements upon which the tax returns are based. Not following the rules can get you in trouble with this governmental body.

You can see that in many ways compliance to the principles and standards is a mixture of voluntary and regulatory behavior. Currently, there is an effort underway to set international accounting standards due to the inexorable globalization process. This is a massive undertaking that will take years, but it is obviously necessary and inevitable.

To help with retirement preparations, the U.S. government has released an extremely helpful and easy-to-use retirement savings calculator to help you calculate and understand your IRA and other retirement finances. To learn more about it, why it works and where you can get it - keep reading.

Background

The calculator’s accompanying guide is titled “Taking the Mystery out of Retirement Planning.” It was produced by the Department of Labor’s Employee Benefit Security Administration branch. Essentially, the booklet provides a series of scenarios along with several easy-to-follow worksheets that help you calculate how much you need to set aside in long-term savings. The online worksheets are automated.

How to Locate It

Previously, you could only obtain a copy of the guide and worksheets by calling and requesting a printed copy. However, it’s now available online and can be viewed for free or printed off. The site includes a simple retirement savings calculator that even lets you store your information for up to one year.

If you prefer to order a free printed copy, you can do so by calling the Department of Labor at 1-866-444-3272. To access the website though, simply visit dol.gov/ebsa - the calculator and booklet can be found under Publications and Reports.

Why It Works

Probably the best feature of this retirement planning guide is how simple it is to use. The text is easy to read, the graphs are easy to understand and it’s actually interesting to read through - not a chore. Another great feature is how diverse and versatile this small publication and calculator really is. It talks about portfolio diversification, at-home children, split families and more.

The next feature that makes this online retirement calculator stand out from the competition is its ability to make very complex assumptions. An example of this is how it treats health care inflation. Other retirement calculators simply assume that all expenses will inflate at a rate of about 3.5%, however this calculator knows that healthcare typically rises at about 7%. That potentially major discrepancy is accounted for.

Problems With the Guide

The main drawback for the guide is that it appears to be written for people who are about 10 to 15 years from retirement. The online tools can help and assist recent retirees, but the main focus is on planning and saving in those last few, crucial years.

The other drawback is that there is little advice for people who suspect they may incur extra health care costs or the expense of dealing with potential dependents.

However, as a retirement savings calculator, it’s a great tool that’s extremely comprehensive and yet easy to use and understand. It understands government protocol, offers helpful suggestions and the best part about it - it’s completely free.

Self Certification mortgages are available for remortgaging, when moving home, for Buy to Let mortgages and for First Time Buyers. Self Certification of income provides provides a mortgage solution for a range of people, such as the self employed and contractors, but also for the employed who find themselves among the growing number of people whose working styles now differ from the norm, and where proof of income has become complicated. Self Certification mortgages allow you make a declaration as to what your income is, but without the need to provide documentary evidence such as accounts, P60s or payslips.

However, in today’s market Self Certification income is widely misunderstood. Self Certification does not mean that no income has to be stated, and neither does it mean that any income which is stated will be ignored; these were features of mortgage schemes known as “non status” mortgages, and have been unavailable for a number of years. With today’s Self Certification, the lender will assess the income stated on the application form in the normal way, but will not ask for proof of the amount.

Self Certification mortgages

This type of facility can be a useful tool where an applicant’s true income differs from their provable or taxable income. The lender knows that the reason the application is on a Self Certification basis is because the applicants don’t have documents to prove what they earn, and therefore will not ask for them.

Obviously, by not seeking documentary evidence of income, the risk for the lender is higher than it would be for full status mortgages. This is often reflected in the interest rate to be charged which is often 1% higher, and with the requirement for a larger deposit.

A Fast Track mortgage on the other hand, is where a lender offers the facility to “fast track” a mortgage application by dispensing with the need for documentary evidence of certain things such as income. This facility is offered when the lender feels the credit score achieved by the applicant is sufficiently high, and they are at no greater risk by dispensing with the requirement for documentary proof of income.

The lenders would like applicants to understand that the ‘Fast Track’ facility is offered solely to streamline and speed up the process, and not to provide an application facility for those who cannot prove their income. As a result most lenders that provide a fast track facility randomly sample a percentage of their applications, and ask for proof of income to be provided.

Fast track mortgages should not be applied for by those for which there is no prospect of being able to supply documentary evidence of earnings within a reasonable timescale.

Self Certification mortgages

The confusion between Self Certification & ‘Fast Track’ is primarily created by the lenders and their criteria changes over the years. Whilst the lenders might “like applicants to understand that the facility is offered solely to streamline and speed up the process”, a shortening of processing times is seen by many as simply a by-product, and not the real reason at all.

Prior to the statutory regulation of mortgages by the Financial Services Authority in October 2004, the terms Self Certificationified and fast track were almost interchangeable. Mortgage Lenders such as Abbey and Halifax would advertise a “fast track” policy, but when their representatives came calling they would discuss their new “Self Certification” facility. Northern Rock, produced announcements denying that they offered Self Certification, whilst all the time listing fast track cases as Self Certificationified on their internal systems. The simple truth is that most lenders want the extra market share which comes with offering a Self Certification style product.

Since the credit crunch in the UK mortgage market, lenders have been far more specific in what their schemes are. Mortgage lenders offering a fast track service are now actively sampling a proportion and asking for evidence of income, and some, like the Woolwich are asking intermediaries to confirm that they have seen the evidence in all cases.

The Woolwich requirement for intermediaries to confirm sight of evidence demonstrates that a faster process is secondary to the real reason for offering fast track. If evidence has to be produced for the broker, it might as well be sent to the lender anyway; as the work has been done and the time already spent.

Self Certification mortgages

The bottom line is ‘Fast Track’ rather than Self Certification is offered today because it saves costs, and all other benefits are secondary. Statistically Lenders have come to realise that their computers make the right decision more times than the human they have replaced. However, checking paperwork is still something which has to be done by a human, and therefore, if the number of pieces of paper can be reduced, so can the number of people needed to check them.

The lenders would probably say that the savings they make allow them to offer cheaper and better products and keep fees down. In the current economic climate this would appear to be doubtful, and many would disagree.

Find out more about Self Certification and ‘Fast Track’ mortgages by reading more at the links in the article above.