Category Archives: Personal Finance

The Importance of Life Insurance in Every Family Financial Plan

Having a family can be one of the most rewarding, and at the same time, expensive things you can do. Some estimates put the average cost of raising a child before college expenses at somewhere around $500,000 US. With figures like that, it is no wonder that a solid financial plan is vital when you have a family.

As expenses rise, one of the most important foundations of a financial plan that is often overlooked is life insurance. Insurance in general can put a bad taste in many people’s mouth because they rarely find themselves actually using it. They just pay a premium every month, and nothing happens.

While this may be true for most people who buy insurance, there are a select few that the same premiums end up saving them from major financial disaster. Anyone in a big auto accident that spent some time in the hospital, or a family who’s primary income provider suddenly passed, can attest to the importance of proper insurance coverage.

What Life Insurance Covers

The purpose of life insurance is to cover the cost of replacing the activities a family member is responsible within a household. If the primary role is an income earner, then a good rule of thumb is to get 10x the annual dollars earned. This allows a family to draw part of the funds each year to cover the missing income.

Life insurance also covers the cost of hiring help in the event of a death. For example, if one family member stays home with the kids and takes care of the household chores, those tasks would need to be taken care of if that family member passed on.

Who Should Be Covered?

Any person that contributes to the family, and whose contributions would be difficult to replace should have life insurance coverage. The primary breadwinner absolutely needs to have coverage, as does a stay-at-home parent that does the household chores. Additionally, if an older sibling is the primary caretaker of younger children on a regular basis, the cost of replacing childcare should be considered as well.

What Type of Life Insurance is Best?

While every family has different needs, most would benefit the greatest from term life insurance. There are many different life insurance products out there, but most are complicated and wrapped around long-term investment products. The truth is that these other forms of life insurance are very costly and in most cases do not provide the same protection for each dollar spent.

There are a few cases where more complicated life insurance products would work well for a family, but that is typically reserved for those involved in estate planning or high net worth individuals.

Where to Get Life Insurance

Almost all major insurance providers offer some form of term life insurance, but the prices can vary dramatically depending on which company you choose. The best way to find good coverage at a reasonable price is by using an online broker that will search multiple companies for you. By entering some basic information about you, they will provide a list of companies along with their prices. Typically, they will also help with the application process.

Eric Stauffer is an insurance guru who reviews companies like eHealthInsurance and Nationwide. He also writes buying guides that help individuals and families learn the best way to shop for insurance.

Moving home – points to keep in mind

If you have bought a new home the chances are that you simply want to move in and start enjoying the new place to live. So that everything goes smoothly and that the investment of time and money you are likely to have made is adequately protected, there are a number of points that you may nevertheless wish to keep firmly in mind.

Controlling your budget

As you have probably already learned only too well, moving home may prove an expensive business. It is likely to prove important, therefore, to keep a careful control of your budget. The following may be some of the areas where careful advance planning may help to avoid unnecessary expense and enable you to make the most of competitive prices:

? Removals – once you have a firm moving date, you may wish to seek quotes from a number of removal firms in order to identify the service you need at the price you are prepared to pay;

? Connections – for many utilities, such as electricity, telephone and gas, these days, there exists a competitive market. By doing a little research and planning your connections early, you may find identify those suppliers in the area who offer the tariffs most suitable to you and your family’s needs;

? Neighbours – your new neighbours may have been living in the area for some time already and, so, be well placed to share their experience and recommendations on local suppliers and tradesmen. Not only may their advice help when it comes to keeping control of your budget, but the chance of getting to know them may help set the scene for friendly neighbourliness in the future;

? Insurance – as an owner-occupier, of course, you are likely to be concerned to ensure that your new home is adequately insured. Typically, you may want cover for both the structure and fabric of the building itself and for all your possessions that you keep in it. When making your search for and comparisons of insurance quotes, therefore, it may be worth bearing in mind that combined buildings and contents cover is typically cheaper than arranging cover for these two elements separately;

? Mortgage insurance – probably one of the most critical factors influencing your ability to move into a new home was the availability of a mortgage. The mortgage is likely to be at the heart of many home buyers’ ability to own the property. Ensuring that you do not default on the agreement and make your mortgage repayments when they fall due each month, therefore, is likely to be given high budgetary priority;

? For the same reason, therefore, you may also want to give high priority to ways of safeguarding your mortgage;

? This might take the form of mortgage protection life insurance , which ensures that your mortgage is fully repaid if you should die and thus safeguards the home for your surviving dependents; or

? Mortgage payment protection insurance, which pays out a monthly benefit to help cover all or part of the cost of your mortgage instalments if you are unable to work because of an illness, accident or temporary (involuntary) unemployment.

How to Find Motivation to Save Money Every Month

Saving money is one of the biggest challenges for most people, especially when they are accustom to a certain life style.
According to the Federal Revenue Board, the average American is not saving nearly enough as they should. Statistics from the Commerce department show that back in 2010, the savings rate was negative 1% which, simply put, meant that not only were people spending all of their income but also spending part of their savings as well.
Changing ones spending patterns requires a lot of self discipline along with various other techniques and steps. Essentially, the question that most people ask themselves when it comes to savings is, how does a person find motivation to save money every month? The answer lies in setting a goal.
Goal setting is a very powerful technique that many people employ in order to reach their desired outcomes. Studies shows that people that set goals are much more likely to succeed in their endeavor as compared to an individual that has no goal. With that being said, start off by setting a goal for yourself. What is it exactly do you want to save for? Is it a new house? A vacation? A new car? Better Lifestyle?
Whatever the goal may be, it is important to write it down so that you always have your outcome written down on paper. This way, you will always be able to keep your goal in sight which makes savings a lot easier.
At this point, it is important to realize that the saving goal should be feasible. You do not want to set a savings target that you are not going to be able to achieve with ease. Setting too high a savings goal will get you frustrated really quickly. In fact, studies show that most people give up on savings because they are never able to reach their savings goal.
The next logical step is to create a budget so that you know how you will save the money and ultimately reach your final goal. Write down all of the expenses you incur in a month and then weed them out.
Remove any expense that you can do without. It is recommended that you should stop using your credit card otherwise you may just be swimming in circles (since credit card bills increase debt). Write down any and all expenses that you make and be disciplined about your cut backs.
Don’t give into the temptation to spend otherwise you will never reach your goal. Instead, think about how rewarding it will be when you reach your savings goal.
Above all else, remember that patience is the key to success. Don’t let little hiccups in the road to your savings goal distract you from the big picture (your ultimate objective).
In the end, you will find that you have reached your savings goal and you will appreciate it because you alone know how hard you worked and saved for it.

Clear off your debt issues fast while managing personal finances

Attaining financial freedom is not too tough a status to be accomplished, provided you are diligent about it. However, there is another thing that is to be considered too. Freedom in actuality is a relative term. It depends on how a person reacts to being free and what actually freedom means to that person. Moreover, with regards to personal finance; freedom or rather freedom from debt depends on the affordability and the credit limit of that person. Though, there are various ways in which you can pay off debts; like if you are in Colorado, you can opt for Colorado debt consolidation; it is better to avoid letting the debt problem grow from the beginning. It is important to take action so that you can nip the problem at the bud.

Personal finance survival

In order to be able to manage your personal finance well, it is important for you to:

1. Admit that you are in financial problem – If you are in any forms of financial hardship, you will have to admit that you are having problems with regards to your finances. Only if you can realize this, you may be able to eradicate the debt problem in the beginning itself.

2. Realize the true facts – You will have to realize the true facts; like if you are having problems because of the over credit card usage, or over expenditure or any of such things. After you realize these, you will have to work on eradicating these debts as much as possible.

3. Prioritize your needs – Prioritize your needs so that you do not over expend. While going to shop for the everyday needs, like grocery or any other such things, carry along the list of your priorities. This may help you avoid spending money on unnecessary things and manage your debt.

4. Get financially educated – In order to manage personal finance or rather finance as a whole, it is important for you to get financial education. It is going to help you manage your finances with the discipline required of you to stay away from debt.

5. Try to live below your means – It is better to always live a life below your means. This does not mean that you will have to necessarily give up all your luxuries. But, it is important for you to realize that there’s no point buying a thing you are simply longing for which you actually don’t require, even if you can afford to buy it. This way you can avoid incurring debt to some extent.

6. Use cash instead of credit cards – Rather than using credit cards at all the places you go, try using cash. This is supposed to help you not only to stay within your means but also to avoid incurring unnecessary debt.

All of these if followed together, are supposed to help you avoid debt and maintain your credit in the long run.

Business loans- Pros and Cons

Most of the businessmen prefer taking business loan with a flexible terms and condition. However, the business loan is not all about having good qualities. So, the entrepreneurs also try not to take too much business loans to avoid the bad sides of the loan. If you are planning to take a business loan, you must know the pros and cons of the loan.

The pros of the business loan:

The business loans have a lot of positive aspects. Here you get to know the pros of the business loans:

• Multiple options:
The business loans have a lot of options for different types of borrowers to meet up different needs. The business loans can be secured, unsecured, payday, SBA loans and of many other types. Also the business loans can be commercial and noncommercial. The borrower has a verity of choices to take a business loan.

• Low interest rates:
The business loans generally offer lower interest rates. Though the business loans vary from each other, you will get most of the loans with lower interest rates usually if you have a better credit score.

• Profit of your own:
You will gain profits from the business loans. But the profit is all yours. The lenders have no right over your profit. You have to make the repayments timely and maintaining the terms and conditions. But the lenders cannot claim percentage on your profit that you have got from the financing of the business loans.

• Tax deductable:
The best side of the business loan is it is capable of deducting your tax. If you make the repayment timely and accordingly it can deduct your additional taxes related to the business.

The cons of the business loans:

Well, the business loans have many negative aspects as well. Here you get to know the cons of the business loans:

• The lengthy application process:
While applying for a business loan, the borrowers might face a lot of problem because of the application process. The borrowers might find the application process lengthy and complex which is very much harassing and definitely not pleasant.

• Qualifying for a business loan:
This is actually difficult to qualify for a business loan. The banks require a lot of things to lend you with the business loan. You will have to submit papers of income, job, credit report and other papers to the bank and if the bank is satisfied with the qualifications of yours, you will get the loan, otherwise not.

• Risk:
Taking a business loan is sometimes risky. You may lose your assets if you fail to repay the loans. In fact you may lose your business and even file as bankruptcy in cases of failure of the repayment.

• Collateral:
The business loans generally requires colorectal as a security. And you may have lost the asset if you are in a problem in times of repayment. Even you may lose your business, home, assets and even file as bankruptcy. So, you have to be very careful to apply for a business loan.

An overview of small Business Credit Cards

Those who are running a small business may have received several offerings regarding the small business credit cards. One may not know the pros and cons of this kind of offering have and whether this card may be different from the other types.

Statistics from a survey that was conducted proved that owners of small businesses have utilized this type of credit as a form of business finance. It is the fastest and simplest method of fulfilling the short term financial needs of the business. The business credit cards also boost the buying power of the organization. On the other hand, the business should be ready to bear some costs in the form of interests and hence should be very careful when using them.

The small business credit cards are useful while making big transactions and keeping track of money. Built in software will enable it to keep a record of the transactions that are made through it. In the situation that the full payment is not done within the required time interest will be charged on that amount. There are creditors who also have varying rewards such as discounts and hampers.

The advantages

There are some benefits of using this type of credit for business purposes.

• In case your business has not been established, and you do not have a credit history that is satisfactory enough for taking up a loan, a small business credit card would be most ideal.
• Small business credit cards are extremely convenient when it comes to financing a business. It becomes easy to access the cash in the situation that you would want to make any kind of transaction.
• In the case that your account receivables have not been recovered yet, or you are getting much lower sales or facing some complications with your finances, the business credit cards will provide the much needed financial cushion.
• Today, most of the business transactions are done online. Having the business credit cards is helpful in making online purchases.
• Some of the business cards come with rewards and discounts, which the business can enjoy.

Disadvantages of the Small business credit cards

In case you would like to use the small business credit cards, it is important for one to understand some of the drawbacks. Below is a list of some of the main disadvantages:

• The business cards are simple to use but they is a point where one has to pay. Such credit is usually high interest as compared to the bank loans and the consumer credit. The interest rates will accumulate in case a repayment of the full amount is not done on time.
In majority of the cases, one’s personal security would be needed to pay off the debt. In the situation that paying off the debt becomes challenging or there is some delay, it can affect the credit history of the business, which makes it hard to get credit in the future. In some situations, it is vital to pay a high interest rate.

• One of the main setbacks of the business credit card is the interest rate that keeps changing.
In a nutshell, business credit cards act as financial tools for business people.

4 Things To Know About Home Insurance During a Bankruptcy

Bankruptcy is something that no one wants to think about or discuss. It is one of those hidden things that are kept from friends and family. However, in painful times and your debts are way out of control, this may be something actually to consider. After seven to ten years, you can start all over as the bankruptcy was long in the past. Most of the times you can choose which debts you need help with. If your house is paid in full or you are still making payments, how will this affect your bankruptcy? Additionally, will you still be able to maintain or buy extra home insurance?

1. Before you file for bankruptcy, obtain home insurance. Once you file and are granted the bankruptcy, your credit history is shot. Home insurance companies run a credit report right away when you apply. Some will not go further with you if you have poor credit. Others will want a large down payment as well as a higher premium each month. If you obtain the insurance before the bankruptcy, the company probably will not raise your rates. Especially, if you have a good standing with your insurance company.

2. Improving your credit score. As stated previously, depending on the bankruptcy you file, the judgment will stay for between seven to ten years. During that time you can start refining your credit score. Several ways to accomplish this such as buy an used car, receive a low balance credit card or purchase an item from a rent-a-store. Always pay more than the minimum payment. Also, pay on time. While you are waiting for the bankruptcy to fall off, you can begin receiving a better score, which will help you receive lower premium payments on your home insurance.

3. Wait for at least two years. Your home insurance premiums could be lowered two years after your bankruptcy claim. Keep all your records during those years. Be sure to make all payments on time and file your receipts in a safe place. Once that time elapses, speak to the home insurance company to reevaluate your coverage and premium.

4. Shop, shop around. Some home insurance companies will work with bad credit, low income and bankruptcy clients. Never settle for the first quote. Show records, receipts and even the items that were included in the bankruptcy. Your premium from one company to the other could be as different as night and day. It is important not to give into one company without exploring all your options.

Bankruptcies are a difficult time in your life. You do not need the added stress worrying about the things that matter most, your family. Be protected with home insurance for your piece of mind. A bankruptcy does not have to stop you from getting the things you need. Be diligent, straightforward and look for the correct solution. With these steps, you can keep your costs down when unfortunate circumstances happen.