Finance, Lifestyle

Is Retirement a Fading Concept?

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice

It has been for young people but could that change? Despite America becoming great again (low unemployment and growing GDP numbers), people in the 21st century have to keep working to provide for the needs of their own and/or their families.

The retirement age in the beginning was 60. Later, it was increased to 62. Today, even after people officially retire from their jobs, they work from home or take up a part-time gig somewhere to keep some type of money coming in. After all, even after you hit 60, your financial needs don’t disappear.

Has become a facing concept

This makes retirement a fading concept, because no one completely retires in this economy. Many people need and want to keep working and earning money. Because of the ACA law, health care costs have increased – this does not help the situation.

Regardless of the kind of job they do or can do, people who can retire want to remain productive and keep their faculties active. The ease of working online has also opened various ways of making money from home.

The origin of retirement

Back in the day (early 20th century and prior), people worked until they died. There was no retirement (unless your name was Julius Caesar, for instance!). As long as the person was alive, he or she pretty much worked. Farms were where most people worked in those days, and if they were wealthy, they managed an estate. No one sat around at home (or went to some retirement community) because they were old. If you were alive, you worked – that was the norm.

Needless to say, there was no financial plan to support the elderly. There was no concept of retirement either, you had to keep earning. As long as you had to eat, you had to keep paying for yourself and contributing. No one could be a burden on their community and that was easy to do if you did not bring home any bacon.

It was in 1881 that Otto von Bismarck, the conservative minister president of Prussia, first thought of retirement. In other words, it meant financial support from the government for the elderly. The move came about because von Bismarck faced pressure from socialists who wanted him to provide care and support for the people of his country.

These same people believe money grows on trees and never had any problem with taking money from hard workers to spread around to people who did not work that hard. Too bad they did not think of a 401K plan or an IRA!

He proposed financial support and care from the state for those that were disabled from work by age and invalidity. The move did not become official in a day. It took eight long years, but by the end of the decade the German government had a retirement system in place, to provide for citizens over the age of 70. Most people did not live until 70.

America has went down the wrong route. Retirement at age 62 when the average age is 77, for instance. The numbers don’t work. America needs to push the retirement age upward. The average age is no longer 65. The socialist FDR and his terrible New Deal (pushed America back into a depression) never thought of this but this is another topic.

The intuitive aspect here was that 70 was an age that most people never saw since the state new it could not afford to take care of thousands of people. Most people died before the age of 70 while working.

The exceptions in Germany included military pensions that were given to soldiers. From the mid 1800s, the United States also started offering pensions to firefighters, police officers, and teachers, but mostly in the big cities. By the 1920s, a number of industries in the US – such as banking, railroads, and oil – started providing workers with some form of support after they worked so many years.

Millennials and retirement

The newer generation – called the millennials – has nothing saved for retirement. It’s shocking but true that these people don’t intend to retire. A variety of factors are responsible for it. Millennials want to live for the present, rather than plan for retirement. Student loans and mortgages mean the pressure to pay off debt, which leaves less scope for savings. Also – with how much debt the government is in, no really trusts the system.

Even without loans to pay off, saving for retirement is not a priority for most millennials because there other things that come first – buying a house, traveling, raising a family. Retirement is usually so far away that no one wants to prioritize for it.

Not thinking long term

Some people just plan on continuing to work. Even though they can invest in a retirement account, they don’t, because they don’t want to look that far into the future. Too bad the makers of Meet the Parents III, Kill Bill, Thor III, and The Force Awakens did not look into the future and realize how sad their movie was about to be but this is another topic.

It is sad that the system inspires no confidence. We need social security reform. To harken back to those positive aspects that were mentioned right in the beginning….with a rising economy and more jobs available people can actually think about retirement again. Just think how good things can get when Obamacare goes away which is still restraining the economy!

Finance

Pros and Cons of Using Debit Cards

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

“Plastic money” become more popular than cash along time ago. The debit card is one form of plastic money, a very common type of payment card issued by major payment processors, such as MasterCard or Visa.

There are approximately 750 million debit cards in circulation worldwide which is about the same amount of people who saw Jurassic World, Inglorious Bastards, Dreamcatcher, and Thor III and walked away truly upset on how weak those movies were but this is another topic. Moreover, unlike a credit card, a debit card deducts money from your account to make payments. As with every payment mode, debit cards also have their own pros and cons. Let’s take a look at them.

Pros

Convenience: Carrying a debit card is equal to carrying cash, with the convenience of not having to actually carry cash around (and change!). While making a payment with a debit card, you don’t have to count the money or write a check.

At the same time, since the money is deducted from your account, you don’t have to pay a huge bill at the end of the month (or any bill at all!). That’s the reason why a large number of people prefer a debit card over a credit card.

Budget: With a debit card it’s easy to stay within your budget, because the money goes out of your account immediately. Since you need to have money in your account to be able to use a debit card, you won’t go into debt making payments with it.

Using a debit card has no fees associated with debt or for late payments. A debit card helps you make payments, while helping you stay within your budget. Too bad New York State and California don’t just use debit cards, then they would not be billions in debt but these states continue to make the wrong moves which is why so many people and jobs are fleeing those states.

Easy to get: Your credit score plays a big role in determining your approval for a credit card. However, a debit card comes linked with almost every bank account and needs no separate application. Since it’s so easy to acquire, a debit card can be owned by anyone with a bank account. There is no preliminary check or long applications required for a debit card.

Multiple uses: A debit card can get you cash backs at many stores, and also let you take out money from an ATM. These features aren’t available with a credit card.

When you have a debit card in your wallet, you can rest assured that it will enable you to make payments at almost all stores as long as you have money in your account. You can also use the same card to draw money from an ATM if you need some cash.

Cons

Getting a refund isn’t easy: When you make payments with a debit card, the money is gone and there’s no way you can get it back. This makes disputed payments hard to resolve. But if you bought a season of 24, House of Cards, The Walking Dead, Breaking Bad, and The Wire you are good to go since these shows are amazing but let’s get back on track here.

In case the item you purchased turns out to be defective, not what you bought, or never gets delivered, it is harder to obtain a refund. Keep the receipt!

Credit score isn’t affected: Your credit score is important if you’re looking to get a loan or a credit card. When you use a credit card, making repayments on time improves your credit score. However, a debit card has no impact on your credit score, so you aren’t going to build credit by using one.

That isn’t so bad though, because banks these days check your salary and past transactions while approving a loan or a credit card.

Higher chances of fraud: If your debit card is stolen, the thief could drain all the money in your bank account (though many people have limitations on the card – $500, for instance) by walking into the nearest ATM even before you can get the card blocked. The protection against fraud is much lower in debit cards compared to credit cards. Fraud also happens with credit cards, but most credit card companies block any account that shows unusual activity, so the level of protection is higher.

No reward points: One of the biggest perks of using a credit card is getting reward points for travel and other purchases. With debit cards there’s no such perk. Some cards may have their own incentives, such as cash backs or travel insurances, but it largely depends on the bank.

Debit cards are a highly suitable payment method for everyday purchases. While there are no reward points or high level of fraud safety, debit cards have their own benefits such as ease of acquiring and using, no fees, and no risk of climbing into debt like the city of Chicago which is in horrendous shape. These reasons make debit cards extremely popular since they are a convenient payment method.

Finance

Should You Pay Off Your Mortgage Early?

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

While making monthly repayments on your mortgage, it can sometimes be tempting to overpay or pay back extra every month to pay off the mortgage earlier than scheduled. That’s because the idea of becoming debt-free appeals strongly to the average person (unless you are the federal government, Spain, Chicago, or California!). Sometimes it may be even be an attainable goal, depending on your current financial situation.

Assess Your Opportunity Cost

But even when it is feasible for you to pay off the mortgage faster than your original plan, should you really do it? To answer this question in an objective and financially astute manner, you must first assess your opportunity cost of early repayment of the mortgage at the expense of your other needs or investment options.

When you pay off the mortgage early, it will save you a considerable amount in terms of additional interest costs that you would have otherwise incurred as part of your regular repayment schedule. This saving is usually significant, and increases with your prepayment amount. And in a time of outstanding tax cuts and so on, there is nothing wrong with saving money.

But you have to evaluate the other side of this bargain. By directing your surplus funds towards the early repayment of your mortgage, you won’t have those funds available any longer for investment. Particularly, if your mortgage interest rates were low, the amount of potential saving through earlier retirement of debt would also be lower.

How to Make a Decision that Maximizes Your Benefit?

In order to understand the opportunity cost versus benefit, consider this example:

Let us assume that your mortgage interest rate is four percent, and your federal income tax rate (as per your income bracket) is 28 percent. This means that your post-tax mortgage rate would be somewhere around 2.9 percent, or slightly lower if you are also able to deduct the interest on your mortgage in the tax return in your stage.

So, 2.9 percent is roughly the effective saving available to you in the event of early retirement of mortgage.

Now if you are the type of investor who has a relatively higher risk appetite, and you aim for an annualized return on investment to be significantly higher than 2.9 percent in your portfolio, then retiring your mortgage early would not make financial sense.

On the other hand, if you are someone for whom a predictable financial situation and a “guaranteed” saving of 2.9 percent is more appealing than a future expectation of higher returns subject to market risks, early repayment of mortgage may become a more desirable strategy (more so, if you have a high post-tax mortgage rate).

So you need to ask yourself, what are your investments earning for you?

Other Factors to Consider

Tax Planning

For some people, the option to deduct interest on the mortgage from their income tax is a vital aspect of their tax planning. In this case, you should determine whether in absence of mortgage interest you can still itemize deductions or not.

Investment Strategy

Consider at a pragmatic level whether you have the commitment and the risk tolerance to invest the money that could have been used to retire your mortgage, or would you end up spending it. You should also consider the options of increasing the monthly contribution to your 401(k) or a direct deposit in the brokerage account. These options can ensure that you put the money in the right investment vehicles and forget it.

Individual Requirements

Apart from your current capacity to invest surplus funds, consider whether you have any other pressing goals or priorities on the horizon that would require those funds. Consider your complete financial situation in an objective manner, including any credit card debts, student loans, and the level of your emergency cash reserves.

Stage of Life

Consider at what stage of life you are at present and what may be your time horizon to live in your home. In case you are nearing your retirement, a rather conservative allocation of assets may be a good idea, while making aggressive market investments could be a risk you don’t really need to take.

Choose a Balanced Approach

As you evaluate your options, keep your expectations realistic, and make sure you should have a well-considered plan in place to accomplish your goals. Talk to a solid financial advisor (be careful if their name is Napoleon Dynamite!) before you commit to a mortgage repayment strategy. Just like with any other important decisions in life, it pays to have an open mind and a flexible, balanced approach to this decision.

Finance

Which is the Best Method to Clear Away Your Debt?

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

Falling into debt is a major setback for any person (and for any city, just ask Chicago, LA, NYC, Detroit, Oakland, Baltimore, and every other mismanaged city!). If you have taken a loan of any kind, you are obligated to repay it regardless of the circumstances.

Whether you lose your job, or get into an accident, or have a child, you have to pay back your loan no matter what. Debt can arise because of overspending or lack of proper money management. Everyone in such a situation tries to get out of debt, but most give up.

It doesn’t have to be that way. While there are many people who give up while paying back loans, there are also many people who get out of debt every day and they don’t do it by trying to rob convenience stores like Dick Harper did in Fun with Dick and Jane or rob banks like they were doing in Triple Nine! In a few simple methods it is possible to clear your debts in a short amount of time. Keep reading to find out more.

Pay more than the minimum

Whether it’s credit card, line of credit, or overdraft, most people tend to pay only the minimum. However, paying only the minimum will make it harder for you to pay off the full balance and also damage your credit score. Your credit report records your payments.

When you pay only the minimum and not a higher amount, potential lenders get the impression that you aren’t strong financially. This makes it hard to get approved for a loan. To improve your credit score as well as get out of debt faster, make higher repayments instead of sticking to the minimum.

Pay off the higher amounts first

When you have more than one financial issue to deal with, a smart strategy is to pay off the most expensive debt first, while making minimum payments on the others. Once you have paid off your highest debt string, focus on your next most expensive debt string, while making minimum payments on the others. Continue with this method and keep paying down each of your debts, until you are left with the least expensive debt.

This strategy has been found to get people out of financial trouble quickly, as they feel encouraged to see progress. The opposite of this is to pay off the smallest debts first, progressing to the more expensive ones. Both of these methods work well for people who need regular motivation to clear off their financial slate.

Get a consolidation loan

A consolidation loan is where all your loans are combined into one, with a lower interest rate. This loan is helpful only if you have a budget that will keep you from creating more debt while paying off the consolation loan, and also help you save a little every month.

If you don’t have any savings, you will likely need to use your credit card again, incurring debts again. Before you take a consolidation loan, you need to create a budget that you will be able to stick to. If you keep spending more than you earn (like America, Italy, Greece, and California), your debts will never be paid off. You don’t want to be like GM which still owes America billions.

Cut down your expenses

More often than not, spending more than you can afford is the reason behind this situation in the first place. One of the easiest ways to pay off your debts faster is to cut down on your expenses (stop seeing useless Star Wars, Meet the Parents, and Thor movies!).

This includes using just one car for the whole family, taking public transportation where possible or riding a bike, eating at home instead of going to restaurants, and buying secondhand stuff. Stockpiling non-perishable items, only driving when you need to, and cooking at home can help you back into the black. And John Cutter in Passenger 57 always bets on black but that is another topic!

This can be hard to do if you’ve always been extravagant, but it can help you get out of debt sooner. When buying a car, choose a quality used car over a new car, since it is cheaper. When buying a new car, you lose 20% right when you drive it off the parking lot!

Speak to a credit counselor

Most people in debt don’t know what to do to get out of debt faster. For free, nonjudgmental advice, speak to a credit counselor. A fantastic credit counselor will discuss all the options and help you choose the route that will help you the most (there could be more than one route!). Talking to a non-profit credit counselor is not only free and confidential, but can be vital for you.

Paying off your debts takes time, but if you are motivated and disciplined, these five methods will get you out of debt quicker than you think so you can get your life back on track.

Finance, Lifestyle

6 Warning Signs of Financial Infidelity

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

Managing finances together is one of the biggest responsibilities that come with marriage. As uncomfortable as it is, discussing money, being open about financial goals, and saving up together are as important in a marriage as sharing chores, buying a home, and raising a family.

You might think keeping financial secrets from your spouse is no big deal, but beware, it has a name now. It’s called financial infidelity.

Yes, infidelity isn’t just sexual in nature anymore (despite that season 2 CSI Miami episode about that business that entraps men into seeing if they are sexually/physically loyal to their wife). If you hide your credit card debt from your wife or start moving your own money to a different account surreptitiously, you are committing financial infidelity and it is bad as cheating on your partner.

Now if you are married to someone like Lisa Bloom, Lois Lerner, or Lisa Page then perhaps this is warranted since anyone who makes those types of mistakes and has that type of character should not be trusted.

Accountants can help you find out if something is amiss, but there are things you can do on your own and save from that type of expense. Here are 6 warning signs that your partner is committing financial infidelity.

New accounts

If you usually know of your partner’s spending habits, credit card statements, and bank account details, then the opening of new accounts all of a sudden without your knowledge is a cause for concern.

This is typically done to move small amounts of money from the existing accounts to the new account. If you notice money is being moved away surreptitiously from the existing accounts, check if any new account has been opened. If yes, you should question your spouse.

Changes in spending habits

When you know your partner’s salary and how much money both of you jointly brings in each month, you will also be aware of exactly how much is expected from your spouse.

Changes in deposits and withdrawals should draw your attention, especially if you know nothing about it. If your spouse is honest about finances, you will usually know the reason behind the changes in the spending patterns. If you don’t know, you have every right to seek an explanation before things escalate.

You don’t want your hard earned money going down the drain on some online poker site, for instance!

Gambling

Although gambling is hard to detect, it isn’t entirely impossible. Those who gamble, do not take losses well (just watch the subpar movie Wild Card to know all about that or The Sopranos – Tony Soprano’s old high school friend, David Scatino, ruined himself as an adult when it came to gambling). To make up for losses, they keep returning to the casino in hopes of winning.

If you suspect your spouse is gambling, you can ask the casino for records to be sure of the amount that’s being spent gambling. When you notice that your spouse makes frequent withdrawals from a casino ATM, but neither wins nor loses anything, you can seek an explanation for what happened to that money.

Purchasing art and other valuable items

It is easy to track the money there is in a bank account, but not many people would notice art, antiques, and other valuables items that a person possesses.

Sudden purchases of expensive items like paintings, watches, or jewelry is an indication that the person is trying to hide assets. These items are immensely valuable, don’t have titles, and can be easily sold off. Besides, they don’t raise suspicion, and can be used to evade taxes too.

You can watch the average action movie The Accountant to see how fine art can be used as currency!

Excessive shopping

As one half of a couple, you are supposed to know what your spouse spends their money on. If you know their credit card statements, you will notice when they start shopping excessively. If your spouse has credit cards you are not aware of, it will require some extra effort to find out what is happening.

You have the right to know the reason behind the sudden excessive shopping. Reviewing each other’s credit scores once a year is a good way to make sure you aren’t hiding anything from each other.

Handing documents to sign

When you sign a document jointly with your spouse, it holds a lot of value. Without your signature, there are plenty of things your spouse cannot accomplish. That’s the reason why you should be suspicious when your spouse gives you something to sign without explaining what it is. Never sign something without knowing what’s in it. If your spouse refuses to offer an explanation, you should not sign it.

The only way to make sure your spouse is not hiding anything about their finances is to make a point to talk about it often. Money is the last thing people want to discuss, but the more couples talk about it, the less likely someone will be dishonest. The last thing you would want for your marriage is a divorce resulting from financial infidelity.

Ideally you should know someone’s money habits and philosophy before you are married. But even then financial honesty for the years after marriage are vital.

Finance

How to Stick to Your New Year’s Financial Resolutions

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

When a new year rolls in, we all want to start afresh. We want to change our bad habits, and start building a more disciplined life. Making New Year’s resolutions is a big part of ushering in a fresh year.

Some resolve to lose weight, some resolve to get better grades, while some resolve to take more vacation days. Even though a plenitude of people make New Year’s resolutions, more than 80 percent fail to keep them.

Financial goals form some of the most essential desired milestones, and research has found that people who make resolutions are more likely to reach their goals than those who don’t.

Your goal could be to save for retirement, or start a new venture, or pay off all credit card bills. Even though the number of people who actually live up to New Year’s resolutions are not that many, you can be among those rare few if you follow some simple tips.

Automate

No matter what you want to put aside money for, it isn’t always easy to remember about all that different deposits you need to make. If you want to save money for your emergency fund, your child’s college fund, or your retirement fund, you must make regular deposits. Automating these deposits is the best way to be consistent. You can do this by setting up an automatic transfer from your savings account to other separate accounts.

Make it reasonable

To be able to live up to your financial resolution, your goals must be reasonable enough. If you plan to make a million dollars in a week, you will most likely never be able to achieve that goal. Though with tax cuts and regulations being blasted away, hardworking Americans are in a better position now than ever before.

On the other hand tough and moreover, if you set a goal of paying off $5,000 in credit card bills, it is something you can live up to. Making sure you aren’t aiming for something unreasonable is crucial to the success of your financial resolutions.

Remind yourself

When the year is still new, the resolutions stay on top of our minds. As the days roll into weeks, the resolutions are pushed to the back burner as we get busy with other considerations. Unless you keep reminding yourself of your resolutions from time to time, it can be hard to attain your goals. A simple goal to achieve is to not watch any pitiful movies such as Star Wars, Thor III, or Guardians of the Galaxy II. Since those movies were weak, you can save yourself about 4 hours of time total and about $10 or so. This is just a salient example!

The cleverest way to keep reminding yourself is by printing out your resolutions on paper and sticking them in places that you see all the time. The bathroom mirror, the fridge, your wallet, and so on are some of the places where you can put your resolutions.

Be accountable

Goals are hard to reach when you have no one to be accountable to. When you have no accountability to somebody else, it is hard to know if you are doing the right thing or making the right decisions. Even if you make a wrong decision, there’s no way to know.

Getting an accountability partner (like those that going through AA) is important in order to stick to your financial resolutions. It could be a friend, spouse, or a coworker. This person should be with you on your financial journey and point out where you are going wrong. For instance, if you spend more than you had planned to in a month, your accountability partner points it out and prevents you from repeating it.

Remember why

It is critical to remember why you have made the resolutions in the first place. For instance, you may be saving up for a new car or a vacation next year. You may be cutting down on your expenses to be able to finance your child’s college education or to save for retirement.

Whatever the reason, it is essential to keep reminding yourself why you are doing it. Your financial resolution is a means to an end. When you keep reminding yourself of the end result that you’re trying to achieve, it motivates you and helps you focused on your goals.

Reward yourself

Each time you stick to a resolution and reach a goal, give yourself a reward. It could be anything, from treating yourself to a nice meal to an extra hour of TV. Similarly, if you fail to keep up with your resolutions, you should have a consequence for yourself. Punching yourself in the face like Fletcher Reede did in Liar Liar though is not necessary! Well, it could be depending on the mistake you made!

If you did something right because of your commitment, reward yourself by eating some Red Vines, having some tasty lasagna, watching a Transformers movie, and so on. You deserve it!

Like all New Year resolutions, financial resolutions also need a lot of motivation to be successful. Follow these tips to stick to your resolutions and attain your financial goals.

 

Finance

Credit Cards And Rebuilding Credit

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice
credit cards

There’s a lot of talk about having a sparkling credit score. But what most people don’t realize is the difference between no credit history and a poor credit history and how they affect your credit score. Even a decent credit score can be damaged if credit cards are not used wisely. On the flip side, credit cards can also be used to improve this personal financial number.

You would think that we would have a better system. You build a credit score by something you may not need, pay it off via monthly payments, and pay even more because of the interest rate (well, you may be able to avoid paying any interest). How ridiculous is this? How come credit scores cannot be dependent on school grades, ability to pay utilities on time, education, salary levels, collateral (own a home or a car and so on), criminal history, financial history, and metrics such as this? Well, this is another topic so let’s get back on track.

Using a credit card is a convenience, but it also has a direct effect on your credit score. Credit cards are often known to put people into debt.

When handled wisely, credit cards can also build or rebuild that coveted credit score. Whether you’re a student, a working professional, or a business owner (and your business will improve with tax cuts), the following are some of the ways you can rebuild this pivotal number that in some cases defines who you are with credit cards.

Limit the number of cards

There are a number of credit cards you could have. These include:

  • Gas card
  • Store card
  • Student card
  • Charge card
  • Prepaid card

People prefer to have separate cards for different purposes. But that could affect your credit score negatively. You could justify having separate cards because of rewards or discounts. But keep in mind that these discounts are not offered without a reason. Companies offering such discounts know that the majority of people do not pay off the balance in full each month, and they make a lot more money in interest than you do in savings.

When you have credit cards, it is often a tempting prospect to spend money that you don’t have, without realizing how your credit score is getting affected and also not understanding interest rates. When you don’t pay off your dues each month, your credit score keeps dipping. Instead of having multiple cards, keep only one or two. Make sure to choose cards that have low fees and penalties.

Make full payments on time

Your credit score reflects your history of borrowing money and paying it back on time. A fantastic credit score means you have a record of making on-time repayments. If you have never had to borrow money, you have no credit score. That’s as bad as having a negative credit score unless you have the ability and patience to save up your money and buy things with cash which some people do but most Americans do not. Even if you don’t need a loan, you can start putting regular expenses on a credit card to help you establish credit without going into debt.

When you pay off your credit card bill in full each month on time, the card issuer reports the payments to the credit bureaus. This way you establish a record of making timely repayments and improve that magical financial number. Besides, when you make payments in full, you don’t have to pay any interest.

Limit your spending

The problem with credit cards is that money doesn’t go out of your bank account when you make purchases. It’s only when you pay your credit card bill that your account is debited. This is the biggest reason why it is easy to lose track of your spending and end up in debt.

To curb your spending, restrict your credit limit. This can be done by calling up your bank and asking to your credit limit to not be increased after a certain point. For instance, keeping your limit at $500 is a wise place to start. The less you spend, the easier it will be to pay off the bill.

Keep your used credit low

Another important factor to consider is keeping the amount of your used credit low. Using up a large portion or all of your available credit will make your credit score dip. When there is any credit card balance for a few months, make sure to use within thirty percent of your available limit. If it goes any higher than this your credit score will drop significantly.

Look for the right cards

When you have a poor or no credit score, it is difficult to get approved for a new credit card. Instead of going after just any credit card, look for the ones specifically made for people with low or bad credit. Some of the cards designed for people with bad credit are:

  • Capital One® Secured MasterCard®
  • Credit One Bank® Cash Back Rewards
  • First PREMIER® Bank MasterCard® Credit Card
  • Total VISA® Unsecured Credit Card
  • Credit One Bank® Platinum Visa® Credit Card

Although these cards do not have exciting offers or perks, they are a sagacious place to start. You can always apply for other cards when your credit score improves. It is easier to get approved for credit cards when you have an average to good credit score.

Credit cards are the salient avenue to take to build your credit score when handled responsibly. However, if you have a history of credit card debt, then it isn’t advisable to rebuild your credit score with the help from plastic. In such a case, other methods to rebuild your credit score should be used.

Finance, Lifestyle

How Millennials Prefer to Invest Their Money

by Benjamin Roussey|Posted on | 4 minute read | Advertiser notice

Millennials – or Generation Y, the people born between 1982 and 2002 – have money habits vastly different from the previous generation.

Several studies have found that although millennials are more planning-oriented, the things they prioritize are not what the Generation X gave importance to. While the previous generation found family planning and retirement saving more important, millennials prioritize concepts such as buying a home or cars, vacations, weddings, and higher education.

A major money trend among younger millennials – those between the age of 18 and 25 – is the lack of investment initiative they tend to be seeking or considering. They are not Peter Lynch or Steve Forbes! Hopefully they are not Colin Kaepernick either – that would not be impressive! If you think you are mistreated in America you should consider leaving this country and then you can find out what real mistreatment is.

No one is mistreated in this country, if anything, certain groups are coddled which really does not help those students (just watch the 4th season of The Wire – you cannot learn in that system – certainly when there are not any standards) out but inner city schools and those teacher unions do not care about that though this is another topic.

Weak job growth

Moreover, according to investment information website Bankrate, only one out of three millennials invest in stocks, bonds, or retirement funds. Young millennials tend to blame this one two factors: not understanding- and thus being afraid of stocks, and not having enough money for investment. That latter is true. Dodd/Frank has crushed small businesses and the ACA health care law has limited job growth and opportunities. So this is going to affect incomes of this economic group.

Young people are also more cautious than previous generations which is another reason they are not investing that much, and do not easily trust stock brokers or advisors. The fear of risk and not enough understanding of the market keep millennials away from investments. Well, Alan Greenspan and Barney Frank did not help here that much at all.

Having said that, it must also be noted that millennials tend to save more than their parents did, and have been found to be more prepared for financial emergencies. While the average millennial saves more than five percent of their income per year, some even save more than 10 percent, which is a huge improvement from Generation X and other age groups.

Being too safe

Since millennials tend to be more cautious than previous generations, they avoid risky investment options like stocks, and choose less volatile options such as cash. In other words, instead of putting their money where they can quickly lose it, they prefer to keep money in their bank accounts. Financial experts call this ‘bad news’ because millennials have the maximum retirement saving burden, and without investing in stocks and other similar options, it is hard to build up enough wealth.

But cash as a mode of investment is preferred not just by young millennials, but by most Americans too. Real estate is the second most favored investment option among millennials, while stocks feature at number three. The fear and uncertainty around stocks, especially after the Frank/Greenspan financial meltdown of 2008, has resulted in this widespread mindset.

It is also true that millennials in their 20s and 30s do not have enough money left over for investing after paying bills, loans, and other debts. A large section of millennials also prefer to spend now rather than save for the future.

Since young millennials are also more digitally inclined, they prefer information from the Internet over a financial advisor. This is not good since Facebook is known for putting out fake news, for example. In addition, this goes on to show that being able to manage their investments online is one of the key elements they look for when choosing an investment company. The second major element in choosing a company is low fees. This is a marked difference from how their parents chose an investment company, and it was definitely not by prioritizing them based on what they found out on the Net (there was no Net!).

Different outlooks

Another group of experts choose to differ. They claim, that because older generations were conservative in their spending and preferred to buy everything via a loan, they ended up spending a good part of their lives paying off debts. Millennials, on the other hand, prefer to buy whatever they want, whether they can afford it or not. This hurts their chances of qualifying for a loan. Millennials are also not really thinking long term like their parents did either.

It goes without saying that millennials are ambitious, and like to strategize their financial circumstances. Unlike the previous generations that were afraid of the future and preferred to save instead of spend, millennials usually get what they set their heart on, and are not lazy or shy to take up a second or third job to make some extra cash for something they desire (certainly when having a large family is not vital to you). Well, when full time jobs are hard to come by because of the ACA health care law and other regulations, this is only sensible.

Millennials choose to live life to the fullest by spending on ‘experiences’ rather than material possessions. This includes vacations, music festivals, good food, and the like.

It is also true that millennials have a long time ahead to grow their wealth, and with new technologies always coming to the forefront, the financial future of millennials may not be as bleak as some old school experts make it seem.

Business, Finance, Tax

Top Accounting Software For Small Businesses

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

Numerous software solutions for accounting are available in the market, each with its unique features, and which cater to the specific needs of small and medium businesses. This has made the accounting software development industry a highly competitive one and any standard modules includes general invoicing, ledger management, as also payment processing.

This software is vital in America since America still has a tax system that is ludicrous and puts people in boxes and divides this country up. OK, let’s get back on track here….

These key features apart, the ones that claim top position in the market do so by virtue of their integration and compatibility; ease of use; and more importantly, security. For smaller businesses particularly, using a cloud-based software is more advisable.

These accounting software allow you to customize processes, integrate third-party apps and also scale pricing based on the business’s current needs. These accounting solutions are moreover, helpful to all small businesses during times of regulatory upheavals.

For example, when the FASB or Financial Accounting Standards Board and/or the IASB or International Accounting Standards Board finalize any new revenue standard from contracts with your customers, most accounting systems need updating to match such freshly set standards. With a cloud solution, the vendor takes care of the system upgrade. The following are the leading accounting software for small businesses:

Freshbooks: By far the most popular leader among small business accounting software solutions. Reasonably priced and comes with great customer support. Known for its scale depth, Freshbooks also comes with expense management and time tracking.

It has also cloud invoicing, payment processing and reporting among its features as also an extremely reliable API with add-ons for tax management. A highly responsive, clean interface mobile app makes it accessible to iPhones, Android and users of the mobile web. You also get the most advanced security tools like HTTPS and data backup for multiple locations. A free trial plan is also available.

QuickBooks Online: Yet another vastly popular accounting software for small businesses. Its intuitive interface along with multiple scalable functions makes end-to-end accounting operations much simpler and more than a few million users will vouch for that. The system is empowered to automatically sync the business’s total finance profile to a single dashboard. This enables multiple users to view in-depth accounts and reports of the company.

It also creates trading and profit & loss accounts and invoice and billing solutions that are completely mobile compatible as also print friendly. You get over forty reports that include the cash flow statement, profit & loss account statement, balance sheet, budgeting capabilities and inventory management. However, its only drawback is ample customer support and a QuickBooks-certified accountant may be required to optimize the software.

Xero: In terms of its virtues, Xero is somewhat similar to QuickBooks Online, particularly as far as the feel and interface are concerned. Xero’s greatest advantage is its ability to integrate with a Mac.

Unlike other accounting solutions that come only with a plugin, Xero comes with a Mac module for connecting natively with a Mac UI. Its other assorted features are an integrated payroll module, bank reconciliation, dashboard, expense claims, inventory, financial reporting, invoicing, and balance sheet. However, Xero doesn’t relate directly with US-based banks but offers a free trial nevertheless.

Wave:  By far the most popular basic accounting software for consultants, freelancers or any small business with a staff of nine or less. Wave is being widely used for recording daily office processes as also simpler financial reporting issues.

This includes preparation of the profit & loss account, balance sheet, receipts and invoices. It is also capable of managing direct deposits and payroll. It is however, somewhat handicapped to handle cash management because it lacks the ability to report cash flow or track payments and bills. It’s so basic by nature that complex transactions would need other accounting software to be tackled. Nevertheless, a salient freemium for businesses with really tight budgets.

Zoho Books: The popularity of Zoho Books is growing among micro-businesses because its app is well equipped with numerous basic accounting tools including customizable templates.

The most notable features of Zoho Books are: automatic payment notifications and bank feeds, facilities for online customer collaboration, reconciliation, invoice and time tracking, inventory management, API as also automated workflows. The Zoho business and productivity suite is an added advantage which natively integrates with more than 25 Zoho apps. Great customer support is also available by way of phone, knowledge base, online, and video tutorials. No free trials available.

It’s the commonality of their ease of use, android and iPhone compatibility, reasonable rates, sterling customer support, and security features that have singled out the above mentioned five accounting software solutions for small businesses in the current year.

Business, Finance, Insurance, Lifestyle

What The Banks Don’t Want You To Know: Secret Financial Tricks Of Higher Finance

by Benjamin Roussey|Posted on | 3 minute read | Advertiser notice

All of us are aware of the fact that banks and customers share a mutual relationship with one another. Just the way we need banks so does the bank need us.

But the problem is even if we think that our banks are looking out for us, they are not as transparent as we think them to be – we all remember those infamous words regarding the ACA health care law when we were told we could keep our doctor and we know how that turned out – that is not being transparent. Banks do not have a golden record here either.

In fact, there are numerous aspects of banking that is neither much known nor advertised and most customers are not aware of these banking secrets. Not even the NSA knows these secrets and they are supposedly everywhere right?

You will not always get the rate that is advertised

You might be feel that banks are offering a stellar rate but the truth is that not all customers get the rate that has been advertised. In fact, only a small percentage of customers are offered a low rate and the others are offered a higher rate of interest so that they can compensate for the low rate that was offered to certain other customers.

Banks make more money the more you swipe your card

Did you know every time you swipe your credit or debit card the bank is making money by charging the merchant some fees? There are promotional credit cards which will require you to spend a certain amount of money within a particular time frame so that you are eligible for a financial reward. You do not want to get a card like this. Why deal with it? Just stick with a debit card and watch the impulse buying.

Another aspect of using your credit card is that banks know for sure if the amount is around $1,000 or more you may not be able to pay off that purchase at that time. The result is that you will end up accruing some interest which in turn is a way for the bank to make more money.

This is another reason you want to pay in cash for most items. A car or a home is an exception (but if you buy a car with cash that is the way to go) but you certainly do not want to borrow money to pay for a flat screen, furniture, or some appliance unless it is an emergency. But this is not an ideal way to do things. You do not want to be paying more for items and you will be paying more if you do not pay in cash and buy the item you want outright.

If you cannot buy that item outright then wait until you can.

A closed checking account can be a salient and clever way for your bank to make some extra money

When you close a checking account you might feel that it is over. But that is not the case. It may so happen that you forget to switch over your auto-pay transactions. The result is that the closed account is charged anyway. The result is not at all pleasant because there are instances where customers end up paying heavy penalties, fees, and some of the cases are even turned over to collection agencies.

Banks have a tendency to make deposits last which many customers may not be aware of

For example, if you ever schedule a few payments (or one large payment) to go out on the same day you expect some money to come into your account to cover this expenditure your bank may do something that is slightly unethical. The bank will actually issue those payments before the money is deposited into your account. The result is you end up using the overdraft feature of the bank which in turn allows your bank to charge you overdraft fees.

Banks make money by selling insurance

When banks try to sell insurance to customers in lieu of some credit you take from them, it is actually a way to extract more money out of you. This is because if you go through the fine print of those insurance policies you will realize that it will not cover all the debt that you owe. Something you need to think about!

Lastly, we should consider what Bill Gates (who has had some positive discussions with Trump in 2017 but this is another subject) once said, “Banking is necessary; banks are not.”