Thoughts On Finance

The expression is opposites attract, and this is very much the case when it comes to spending plans in a marriage.  If you are a careful spender than being married to someone who is a spender can be trying and challenging especially in difficult economic times.  Whether your spouse is a person who spends to get a good feeling from it, or they overspend due to carelessness, the results are still the same, leaving you with too much debt and little savings to pay it down with.

If you attempt to solve this problem using the lecture method, then you may just drive your spouse to spend more, thus resulting in more problems.

A more effective strategy to combat this problem is to keep track of household expenses.  Accountability for household expenses may be just enough to show your spouse the areas that need work, without really saying anything.

If this doesn’t work? Then the time has come to get separate bank accounts.  And if your spouse’s spending is causing extreme stress on your household finances, then you may have to consider stronger measures.

Finally, you might consider lightening up a little. Marriage is one of life’s great blessings. If you think the occasional iToy is expensive, wait until you see how much a divorce costs.

Many people will be hitting hard times, and be left without enough money to pay even their most essential bills.  With this many people, who are without good credit, will be left wondering about their options, one of which may be to take out a payday loan.  Payday loans, as they advertise, are meant for short term financial need, and if you go in to take out a payday loan, they make you sign an agreement to that effect.  Yet, once you get into the payday loan cycle some people have trouble getting back out.  Paying off only the interest each time and hanging onto the loan.  For people who are living paycheck to paycheck, this can be a very difficult debt to repay.  Some succeed, however, even they usually return to re borrow at some point in the future.  So when should you consider taking a payday loan? If you are about to have a check bounce on the bank, then you should.  Although the banking industry will have you believe that they are above charging 300% interest on a loan, they will charge you $35.00 and up for a bounced check of even just a few dollars.  So really how is that any different, especially since, if you have ever bounced a check then you would know that once one bounces usually several bounce, and if you have a few checks bounce and your paycheck directly deposited, then that will just eat up your paycheck. Also, taking a payday loan is a better alternative to buying items from a rent to own place.  You can more inexpensively borrow the money from a payday loan and then buy the item out right.  So this is a time to consider a payday loan.

If you can avoid taking a payday loan, then by all means do it, because it is very easy to get caught up in the cycle, but if you have to do it, then don’t feel badly about it, just do it.  It may actually save you some money in the long run.

I have always loved the holidays.  Always a fun and exciting time of year filled with hustle and bustle.  Some years, though, have been more difficult than others.  Many years, we didn’t really have enough money for Christmas gifts, and it put a lot of added stress on us.  The years had more and didn’t have to go into hock to make a Merry Christmas were also a lot nicer.  I didn’t have to worry about what I would get everyone, I could relax and shop early and get whatever I idea came into my head for that special person.  On years when I didn’t have enough money I would stress and by the time Christmas day would roll around, I would be completely broke and miserable knowing that I spent money that I didn’t have to get through it.  This year, I think that with the economy where it is, we all need to take a few steps back and really look at how much money we are spending on Christmas.  There is nothing fun about buying gifts and then stressing about how to pay for them.  I know I wouldn’t want to think that anyone was getting stressed about a present that they bought me and really couldn’t afford, the gifts are not that important but the people are.  It is a great time of year to acknowledge people, but you have to make practical choices and shop for the deals.  There are a lot of good bargains out there and a lot of really creative ways to give exciting gifts without spending too much money.  This year, let’s all be smart and limit our spending of dollars and just spend time with the ones we love instead.  It is more important than ever to realize that the material stuff is just stuff.  Let’s not buy into the madness that the local businesses perpetuate, let’s take a step back and just enjoy the holidays and not go broke in the process, after all you don’t want to end up in the same financial state as our government do you?

Our government is in high panic mode trying to fix the current financial crunch that we are in.  I am just wondering why no one saw this coming.  It only makes sense that we have been pouring out Trillions of dollars on fighting terrorism and the war and we have been doing this for the past 7 years.  It only stands to reason that over time we are slowly but surely going broke.  Honestly, if you look at things however, this really was coming to this point before September 11, 2001.  If you look at the trends in banking and in the economy, you can honestly see that interest on bank accounts took a nose dive around the mid 90’s.  Back in 1989, your interest on an average checking account was 5.14% and an average savings account was 5.5%.  Money markets and CD’s went up to on the average about 8-9% depending of course on the term.  Now you are lucky if you are getting about 1% interest on your savings.  This decline started before all this terrorism stuff came to a head.  Didn’t they see this was happening? Didn’t we? I guess I just think that better financial planning could have gone into this.  It is like our government has bounced a million checks in the past week and they are scrambling to figure out where they are going to get the money from quickly.  I just would like to think that our government had a better handle on their finances than this.  It really just seems to me that they could have planned ahead and seen this coming.  I guess with credit card companies charging exorbitant fees and banks charging equally exorbitant fees and interest rates, it seems to me that they would be doing well, but I guess not, which in essence means that the money that we think we have in the banks is really gone.  I am sure in this financial whirlwind that we are in, if we all went to the banks and tried to get our money out, our government would be in quite a pickle.  In any case, I really think that someone ought to be held accountable as this problem didn’t just happen over night, and it probably won’t be fixed over night either.

Watching the View, I got to hear Whoopi Goldberg’s take on the current financial situation in the US and I found it extremely interesting her perspective on the whole thing.  The truth is she was talking about the government bail out of AGI.  Her point was, which I thought was a good one, was that the government gave $80 billion to AGI for the bail out because we American’s couldn’t pay what we owed, and now that AGI has that money, isn’t that in essence wiping clear the money that everyone owes AGI? Yet, we are not only responsible for our personal debts to AGI, but in addition to that, our government has in fact created a deficit that in turn we the people of this wonderful country are going to have to pay debt, so in essence we now have to pay this debt twice.  It was a really good point and one I thought was worth discussing since actions like this are taken to wipe away the debt for a large corporation or for our Federal Government, however, where is the help for the actual people who are falling deeper and deeper into debt by a government that does nothing but spend, and now even when they are out of money, they are printing more money with no backing to it to bail out large corporations.  I saw on a television show recently, a man suspected of terrorism, and when asked what he had against this country, he said “this is not a country, it’s a corporation.” I think perhaps he is right as a country does not just bail out failing companies and spend it’s peoples money on wars for the purpose of financial gain, it sounds more like a corporation to me, but maybe that is just my perspective on it?

Thinking about finances, brings to mind only one person and that person is George W. Bush.  Even if you think he did right thing taking us into war, which was more of a business decision then an act to protect our country, you still have to look at the way he is running this country and ask yourself if he hasn’t created most of the economic problems we are currently facing.  Sure he would tell you that it was the terrorists that are trying to us in, and in fact NEED to be stopped, but really what has this war accomplished? In essence, it has created US control of middle eastern oil supplies, which has exactly benefited us how? At least when the Iraqi’s were controlling the oil the price was more reasonable, now that we control it the price is going up and up.  The more financial decisions and large corporate bail outs this man makes the more it is costing you and I.  Maybe not today, but in the future.  You can’t just stop companies and the stock market from crashing by printing up money with no backing to make the numbers look good.  That is what is happening here, and in the long run with each move this man makes, dollars come shooting from our pockets.  It is a little bit frightening to me that he is driving us further and further into a depression in this country and either doesn’t know it, or doesn’t care.  It is my belief that it is the latter.  In any case, as a whole, this country needs to put it’s foot down on this man hard.  About two yeara ago there was some talk about impeachment, what ever happened to that thought.  I know that we are only about 4 months away from a new president, but that still gives him a lot of time to do some major damage.  Are we really going to wait for him to completely sink us, just waiting for the new president to step up and fix everything.   Even if we pick the right guy, it will take a long time to undo the wrath of George W.  We are voting for a human being not a miracle worker.

From the rich to the low income, money and stretching a dollar is on everyone’s minds these days.  A recent Dr. Phil show reviewed some of the biggest money mistakes people make, and I found the information very interesting so I am passing it on to you.

1.  Living Beyond Your Means – One of the biggest mistakes people make is that they want more than they can actually afford.  Spending money on things you can’t afford will most definitely put you into financial crisis.  We as American’s must learn to live within our means.  We may not want to but if the math says we can’t afford it, then we can’t.  There is no magical way to afford things that are beyond the dollars you bring in, so live wise and be frugal.  In the long run, being debt free will give you much more than that new TV or car will.

2. No Emergency Back Up Plan – Families must live below there means if they are going to be able to tuck some money away just in case of emergency.  In this country, families used to only have one income, and in that case if one party was unable to work, the other party could just get out there in the work force and earn a paycheck to keep the family afloat.  Now with most families using all the income potential just to get through the day to day, it is more important than ever to have a savings plan and to keep adding to it each paycheck.  Hopefully you won’t ever need it, but it will be nice to know that if you hit a rough patch you have something to fall back on.

3. Fixed Income Is Not The Only Answer – Fixed income is an important regular, steady income and is very helpful to have, however there are other ways to make money, and there is nothing wrong with investigating other options while bringing in the weekly paycheck.  There is a whole world of business opportunities available, everything from starting your own home business, to finding a side job that allows you to work from home.  Be sure to not limit your options to just the jobs that will bring in a paycheck, sometimes your greatest earning potential may lie in a great idea you have, so don’t just dismiss all else, keep your options open.

4. Cashing Out Your 401K – Sometimes you may not have a choice.  Financially, you may absolutely have not other options, however, if at all possible keep that money in there.  It is money that you can use for a down payment on a home or for kids college, and in addition to those things, you may also need need it to supplement your Social Security Income when you are old.  If at all possible, don’t take the money, and if you need to try and take as little of it as possible.  It is not a good idea to steal from your future to pay for today.

5. Believing The Myth Of Fixed Expenses – There are absolutely no fixed expenses.  When budgeting and realizing that you can’t meet your monthly expenses with your income, it is time to cut down to the bare minimum.  A car payment is not fixed, sell the car, pay off the loan, and buy a cheap car to get you back and forth to work.  You can reduce your energy bills by being more conscientious.  There are ways to reduce just about every bill that you have, if you just work at it.  More peace will come into your life if you are living below your means.  Happiness comes directly from the peace in knowing that you don’t owe anyone, anything, so cut back now and reap the rewards, you will probably even live longer being this kind of stress free.

Honestly, when I first heard that a family who had a home built for them by the popular TV show, Extreme Makeover Home Edition, was having their house foreclosed on I honestly thought, wow what a waste. I mean you get a customized home built for you for free, and then you wind up having this home foreclosed on. Well, I heard an interview with the husband and wife who are living in the home and it changed my mind. They did have a beautiful home built for them, when they received the home, they were also given a $100,000 home maintenance fund but they did still have to pay the mortgage, which was the equivalent of what they were paying before the makeover and the taxes, which stayed the same for the first few years and then went up. This couple said that the home itself was costing them $6000 per month to keep up, and in addition to that they have a large family which also included some children with special needs, they didn’t really get into the special needs of each child. In any case, these people said that in addition to almost losing their home and being in financial ruin which is difficult enough, that they were receiving hate mail and threatening letters from viewers of the show who were angered to hear that they might be losing the home the show gave them. Honestly, I learned some things about home ownership in watching this show. I didn’t realize that there is something called a homestead protection, which says that if you own a home the only person who can sell that home out from under you is the mortgage company, however, once you take out a home equity loan, even if it is just for a very small amount, then they can come and sell your home out from under you if you don’t pay back the loan. For instance let’s say you borrow $10,000 dollars off your home, but your home is worth $500,000 if you don’t pay that loan, then that company can come and sell that home right out from under you to get back their $10,000. I didn’t really realize that it worked like that. In any case, these people did borrow money off their Extreme Makeover home, but it was really to put their kids in a rehab program and to start a new business. They didn’t just go out and blow the money and lose the home as some reports might make you think. This just goes to show that anyone can have their finances spiral out of control, it just takes a few mistakes and you can very easily find yourself in a hole without a shovel.

When financial worries start to take over, and your income no longer meets your expenses, the first things that wind up sitting unpaid are those credit card bills.  Many people mean well and really want to pay their debts, but the money is just running out and their survival unfortunately is relying upon them not paying those bills.  Well, most people do eventually begin to catch up, find a new source of income, or a way to cut expenses, but unfortunately by that point it may already be too late.  You see damage to your credit score can sneak up on you really quickly, with just a few payments behind, you can quickly send your credit score plummeting and the thing that you have worked so hard to maintain your whole life, goes down the drain and you find yourself back at square one.  The best thing that you can do to bring your credit score back up is to keep paying those bills, on time.  Paying your bills on time will help you start to bring that credit score back up, but at the same time you need to be finding new ways to cut back and make more money simultaneously.   The best way to make sure that you get on track and stay on track is to start paying your bills and keep putting money into savings at the same time.  If you are living paycheck to paycheck, then you are in fact setting yourself up for failure.  If you don’t have a back up plan then you are just a bump in the road away from the next crisis.  There is potential to be injured, use a job, get ill, something that may prevent you from working, and if you are already banking on the paycheck that is coming on Friday, then this is risky business.  The suggested savings plan means that you have enough money set aside for your family to live for an entire year, I have heard some people say at least 6 months, but the time to start saving is not when things are better, it is right now.  Please don’t wait any longer to start making a good and secure financial future for you and your family.  The economy may not be in good shape but that doesn’t mean that you can’t be.  Start bringing down your expenses today and you will begin to create not only a savings plan, but a feeling of peace of mind and security that your whole family can enjoy for years to come.

Currently, the ‘financial health’ of the average American is less than wonderful. Layoffs, cutbacks, downsizing — call it what you want, but many of us are in financial trouble. We want to pay our bills on time and stay out of foreclosure, but at times it is a struggle. At these times, many people turn to credit cards to get them through. Now there’s a potential nightmare of a problem.

Credit card use is totally out of control and creating problems for thousands and thousands of people — actually, it is credit card misuse that is the problem. Credit card companies have made it far too easy for us to have credit limits beyond what we should ever need and the other thing is, we sometimes forget that using our cards is actually making a loan. We tend to think in terms of a temporary advance until we can pay the bill next month. But then, we don’t pay that charge off when the bill arrives and the interest charges begin to mount and so on and so on.

If you are in a position that you are using your credit card for some of your daily living expenses out of what seems to you like a necessity, then you are either already in trouble or you are headed for it shortly. If you are already there or if you can see it looming in the very near future, now is the time to head it off and get yourself some help.

The media is flooded with advertisements for companies that can help you eliminate your debt. They claim that they can lower your interest rates, get rid of late fees and consolidate your debts. Well, they can. You will wind up paying them a fee to help you with it, but if you find a reputable company, it may be the single best thing you ever did for yourself.

This is a brief summary of what happened to a friend of mine. She was in her forties, went through a bitter divorce, found herself in financial trouble when she wound up with one income and continued to try to live as if she still had two. Raising children is expensive and not all dads are forthcoming with child support. She began to use her credit cards for everything from cash advances to cover daily living expenses (food, lunch money, clothes, gas) to mini-vacations for herself and the children because she felt so guilty that they didn‘t have as much as they did before. Before she knew it… WHAM! She was borrowing from one card to keep the other one at bay. When there were no other answers, she sought out the help of a debt consolidation firm and put her problems into their hands. They reminded her that she was only one of thousands in that position and with all of her information, they set up way for her to pay them one lump sum, they took their portion out of that and then they dealt with her creditors. Meanwhile, she had to tighten her belt quite a bit, as well as take on any odd jobs she could to make a little extra money and then she and the children began finding amazing things to do right there in their community that were free and fun. Most likely within about three more years, she will be debt free. And as important as that, she can hold her head up and she’ll never be afraid to answer that telephone again for fear it‘s another bill collector. She used what she had available to her to turn her bad situation into a good one. If a single mother of two can find a way to make herself whole again, I think anyone can.

If this is in any way a familiar situation for you, do not hesitate. There is no harm in admitting you have a financial problem. The harm comes in thinking if you ignore it, it will just go away. It won’t, it will just continue to grow until you will have the Godzilla of all problems. Next time you see one of those advertisements, whether on television or magazines or newspapers, take down that number and give them a call. A consult is usually free and then you can determine whether or not you want to go forward with their program. Let me know how it works for you.