Here is how it works: The method requires you to take out a low interest loan which usually stretches out your payments for longer than your current payments. You use this low interest loan and pay all your current debts and now you only have one low monthly payment.

Here is what you should know: The universal first rule of becoming debt free is to stop acquiring more debt. The new loan you just took out with its low interest, just broke to first rule. Interest is the sole reason your debts take so long to pay off. The longer it takes to pay off any loan the more you pay in interest. If you owe $10,000 on all your debts combined and it would take you 5 years to pay off at your current rate of payment. Getting a loan for $10,000 at an interest rate even half your current interest rate will cost you more and take longer to pay off. On top of all this you will not gain the knowledge required to stay out of debt once you do get out.

Here is what you should do: Take the time to learn real debt eliminating methods such as the debt snowball method and building up an emergency account. These techniques will not only get you out of debt faster and completely, it is more likely you will stay out of debt forever. Non profit debt consolidation companies have there place, but 90% of people in debt do not need them.

In many cases when you borrow money you sign a contract agreeing to settle your debt through debt arbitration instead of through the court system. This is much cheaper because court fees and attorney fees can be avoided for both you and the lender. You may still find yourself in court depending on your situation, but still have the option of arbitration if the judge sees fit. You will need significant proof that you have been making payments on your debt and both you and the creditor has to agree on this as a solution.

Over the years debt arbitration has gained popularity among creditors, even though its main goal is to help debtors. The reason for this is because creditors usually recover more of their money than other debt collection methods. This does not mean it is not a great solution for you, actually it works great for all parties. Debt negotiators already have relationships with creditors making it easier for them to negotiate a lower percentage on your debt, you end up paying much less on a debt you want to pay off while avoiding filing for bankruptcy and creditors get to collect on the debt without all the expenses. If you have a huge outstanding debt and is on the edge of bankruptcy credit card debt arbitration may be the solution you need. Consult a debt negotiator and find out what help he/she can provide.

You will need pen and paper, a text editor or Microsoft excel if you have it. For the sake of this article I will show you how to make your wedding budget spreadsheet using a text editor, simply because every computer has one.

1. Create a new document and name it “Wedding spreadsheet.”
2. On the first line, type Vendors, Estimated cost, Actual cost, Phone number and Completed.
3. Skip the second line an move to the third. Under vendors type every service you plan to use to put your wedding together such as transportation, printer, flowers, entertainment and so on. Try to keep your list organized so you will be able to easily scan an find what you need.
4. Next to each vendor on your list put the prices your were quoted when you call and their phone numbers, when you go and actually make your payments, put the amount you under the “Actual cost.” Once everything is delivered and approved by you, mark it off as completed.

It is that simple to make a wedding budget spreadsheet. Try not to forget to put anything new that comes up later on your spreadsheet. This one will be tailored to your wedding, but you can find some already made if you do a search in Google. Congratulations and do not forget to practice you vows.

Many companies now offer 401(K) as the primary retirement plan. Which is a great thing if you know how to make it work for you. But how can you tell if the 401(K) plan a company is offering is top notch or bottom shelf. Well, I will list 6 of the features you should look for when considering joining a companies retirement plan. Please note that even if the plan does not have most of these features, 401k is still the best retirement plan you will come across any time soon.

1. The company match 70 cents to every dollar you put invest. There are only a few companies that do not offer to match a percentage of what you contribute, these are usually small companies. Large companies that are looking to get and keep talented employees are willing to match at least half of what you invest. Some companies will even match you dollar of dollar and a few rear companies will one up you.

2. If you can contribute up to 14% of your salary. Obviously the more you save the faster you will reach you goal, but not all 401k retirement plans allow you to invest such a large part of your salary.

3. The plan allows you to take a loan or allow withdrawal for hardship. Taking money out of your retirement plan is never a good idea, but sometimes it is unavoidable. Many companies will allow you to use some of your investment when you are in a financial crisis, but you will have to prove that it is your last hope and you will have to the pay taxes.

4. If you get updates and the ability to transfer money among funds daily. One of the best features of any 401(K) plan, is that you are in control of your investment. Having these features give you great flexibility to put you money where you see fit.

5. Speaking of flexibility, a top notch plan should have at least 10 investment options. Most companies offer at least 6, but the more options you have the better.

   These are 5 features that some of the best 401(K) plans offer. Your company might not offer all of them, but even a few is better than none.

Have you ever locked your self out of your car? How about lose the keys to your house? If you have, then you know how much of an inconvenience it can be, not to mention how much money it can cost. With a little preparation you can save yourself the headache and a few bucks. Having spare keys is simple, inexpensive and should only make sense.

I learned this the hard way a few years ago when I lost all my keys. I was out shopping when it happened and could not get into my car, house, and a few other private places I needed keys to open. The taxi ride home, a locksmith to open my house, and taxi ride back was over $100 and I still had to buy spare keys to replace to ones I lost. Needless to say it was not a good day. I have since learned my lesson and am ready if this was to every happen again.

A little safety advice: Don’t hide your spare key above the door frame or in one of those fake rocks as this is one of the first places a thief would look. Instead trade keys with your spouse, family or trusted friend. I keep the spare key to my car wrapped in plastic and taped to a metal rod under my car and it has come in handy more than a few times. You would really have to be searching for it to find it. I am sure you can come up with better places to keep your spare.

It is not just about having spare keys, but how being prepared can save you money in many aspects of your life. I guess the lesson here is to try and be ready for life’s little hurdles.

]]> http://www.jinij.com/spare-keys-can-save-you-money-or-being-prepared-for-lifes-hurdles/feed/ 0 http://www.jinij.com/teaching-kids-money-early/ http://www.jinij.com/teaching-kids-money-early/#comments Sun, 03 Jan 2010 23:35:57 +0000 Daniel http://www.jinij.com/?p=589

I have mentioned a few time about how most of us were never taught money management at a young age. So I wanted to talk about teaching your child how to manage their finances. Since I do not have children and hate talking about things I have not experienced first hand, I will point out the importance of teaching them in a different way.

The reason Americans are so bad with money is not because we can’t save, It is because of two things…

1) our parents never taught us how.

2) There are a million things to spend money on.

The fact that our parents never taught us money management, only shows that they did not learn it themselves. Once you learn the benefits of personal financial management, not passing it on to your children should not be an option. As a parent you should want your kids to be successful in life and being independent is a sign of success. It does not matter how much they end up earning for a living, if they know how to manage it, they can live very comfortable and stay out of the number one pitfall in America…DEBT! Just think of all the time you said to yourself “If I only knew”. Well, now you do and have a chance to break the cycle.

We all depend on money in one way or another, some of us use it to better our lives and some of us get used by it. Some of us work hard for it and some of us put it to work for us. By social standards the ones that use it to better their lives and put it to work for them are the successful ones. It becomes very easy to make your money work for you if you understand how money works. If at age 20 you knew the basics of saving and planning for retirement, it is most likely that you would have started saving for it then. Worst case scenario, when it come time to retire you would have enough to live of the interest. Best case scenario you would have an island next to Angelina Jolie with a private jet to swoop you anywhere you want to go.

The second reason we do not manage money well, is there are so many companies trying to get it out of our pockets. These companies have the best advertising minds and years of research working to get us spending. I have nothing against buying what you want and need but, there are ways to get everything we want. The problems is, we do not want to wait or save for these things. Children’s minds are copy machines, they usually end up doing what they see us do and continue that pattern all their lives. There financial future depends on what they learn from a young age. I was taught by my mother at a young age how to manage my money and because of this, I have always been good at saving and spending. If she did not take the time to teach me, it is a good chance I would not have the skills and patients that I have today.

My rule in life is the save for everything over $10 and before I had a handle on it, I had what I called a $10 sub-savings account. I would keep it at $100 and when I used any of it I would replace it $10 at a time. It is little things like these that I will teach my kids when I am lucky enough to have some. If you do not have good financial habits, start developing some now and teach them to you young ones as you learn them.

I think I went on long enough this post, I hope you got the point and take actions to make it work for you.

I was reviewing some of my future articles and realized that I constantly tell you to start a budget, but never explain how. Well, today I will explain the steps to creating a budget designed just for you… by you of course. You will need pen, paper, copies of all your bills, and to make a list of everything you will spend money on in the next 3 months. It is important to remember that a budget is not meant to restrict your spending, it is to help you become a better spender and a better saver of your money.

Making the list:

The first thing you need to start doing is to make a list of everything you buy over the next 3 months. This is not required to start your budget, but you will need it to help you fine tune your budget later. This will provide a visual of where all your money goes and help you to cut spending. Take a small notepad with you and write down everything you buy and how much it cost. Do not leave anything out, you will only be cheating yourself.

All That You Make:

Now you will need a list of all your income. If you are paid on a weekly or bi-weekly basis, try to add it up so you can view it as monthly amount. Make sure you list all your income, if you leave out any it will throw your budget off. Include your online auctions, stock trading, Adsense, and any other source of earnings you have.

Bills Bills Bills:

You will also need a list of all you monthly expenses. Mortgage, insurance information, car payment, entertainment, utilities etc…. Do not forget to include things that you do not get a bill for, such as church offerings, Starbucks coffee, trading software fees, Itunes and Iphone apps. It is very important to include entertainment expenses, this is a part of your life and should not be left out.

The moment of truth:

After you have all these listed, total the amounts and subtract you monthly expenses from your total monthly income. If your income exceeds your bills, use the extra to pay off your debts faster or add to your retirement. If your bills exceed your income you will need to cuts some expenses. Try starting with the things that you can live with out. If you are paying for things you do not use cancel them and redirect the money towards other bills. The 3 months list of your expenditures will help you to find other places you can cut expenses as well.

Once your income and your bills are equal the next step is to automate the paying of your bills. This will keep your bills paid on time and your savings growing without you lifting a finger. I will get into automating your bills next post, I try to keep my posts short, so they are quick easy reads.

It is a part of our genetic make-up to feel a sense of urgency when we get motivated. When most people realize the need to do something to fix their financial situation, they usually want to take action immediately. Since most of us are not educated about managing personal finance, we seek to get educated when the motivation hits us. They usually head to Google, the book store or find a financial manager if we can still afford one. It does not take long for motivation to fade and by the time they finish reading the book and doing research, they tend to be less motivate than when they started. I have put together a small quick start list to get you moving when your motivation is peaking.

1. Go and get a book on managing personal finance. I was not saying not to read or do research. This is just a list of things you can do to get the ball rolling now, you will need to learn as much as you can about managing your personal finance and as the saying goes… education is fundamental.
2. Gather all the information you can. How much debt you have, your monthly and yearly income, investments, bills, credit debts, Church tides and offerings and especially the money you spend on miscellaneous things. List them by category and be honest. You will only be cheating yourself.
3. Make a list of everything you buy for at least a month (three months is better). It will surprise you what you spend you hard earned money on. This will confirm where every cent of your money goes and where you can start to cut back.
4. Start saving now. Make positive that you put at least %10 of your income in a saving account of some kind. This might seems impossible, but think of the alternative. Not having anything saved at all leaves you wide open to falling right back down. If you get sick, you will have something to fall back on until you are well. Live for today an plan for the future!
5. Saving sooner rather than later is extremely important. Say you just had a child or are planning on having one soon; you’ll want to start putting money away for their education as soon as possible. Open an account like an RESP (a Canadian tax-free savings account that can be used to contribute funds for a child’s post-secondary education) as soon as possible – you’ll definitely thank yourself later.

Get started with this quick list, while you read and do research to gain knowledge. Learning to Manage personal finance will not happen over night. Stay consistent and apply what you learn when it fits your circumstances. Like I have said before, the best tip I can give is to stick with it and it will pay off.

I also subscribe to the financial section of the  New York Times, Financial Times, LA Times, CNN Money, and a few others to keep up on fresh credible financial information. The reason I’m telling you this, is to make a point about how what we don’t know can hurt us.  I have gathered some great information that has helped me make some very successful decisions with my money, some small, but helpful and some have saved me thousands.

Which brings me to the question. How much do you know about what is going on around you in terms of money? Yes, you might save some money on double coupon days or at the Macy’s one day sales, but how much do you really know about saving, investing, banking and the likes.

When large banks like Washington Mutual went bankrupt last year I knew the same day they filed chapter 11 papers in court, some people banked with them did not know for weeks and when they found out they did not know what to do. The point is, information is important and your money is also important, so why not take the time to keep up with the world and some very savvy financial experts.

I’m not saying you should learn how to decode the hieroglyphics of the New York Stock Exchange or the ins and outs of guaranteed unsecured loans, but to read a few news sites and blogs. Some of my friends spend hours on FaceBook and Twitter Tweeting the day away.  I know some of you are guilty of it too and there is nothing wrong with doing what you like but, I see a huge problem when you rely on Tweets to get news about your money (Not saying you do, but I know people that do). Take some of that time and do something that will benefit you and your future, read CNN Money, find a good credible blog that gives good advice and make it a part of your daily read.

One of the blogs I read is Money Saving Mom , this woman provides a great public service to anyone who is willing to read her posts. She shows you how she balances her life on as little as she can, where to find deals, and where and how she shops to save money.  Her blog might not fit your lifestyle, but there are hundreds of blogs that will, just Google “personal finance blog” and a million will pop up.

I’m not a financial expert in any way, I never went to school for it or even took a class about personal money management, but I do stay proactive and keep up with the world of finance to help me with my money and I believe everyone should, including you.