Archive for the ‘Personal Finance’ Category

Energy Conservation Begins at Home

October 20th, 2009 Biz Man

As Americans face rising fuel prices, many are looking for ways to save money and energy in their homes.

The pressure to reduce energy consumption and costs is inspiring homeowners to challenge the relevance of old heating and hot water solutions and consider other cost-effective options, such as wall-hung boiler technology.

Wall-hung boilers have been common in homes throughout Europe for the past three decades and are now emerging as a popular alternative for heating homes and businesses in North America.

Baxi Luna wall-hung boilers, for instance, are helping homeowners throughout the U.S. cut their home heating and hot water fuel consumption in half. These boilers are fully modulating, meaning they start at a preset, high-fire position and gradually reduce fuel output until the heating demand is met. At this point, the boiler automatically shuts off.

Billed as one of the quietest boilers on the market, Baxi Luna boilers are fired by propane or natural gas. No bigger than a kitchen cabinet, a Baxi Luna boiler can be installed in the closet – saving valuable living space in homes of up to 6,000 square feet.

The boiler also is making commercial buildings more efficient. For example, this year a heating specialist in Biddeford, Maine, installed eight Baxi Luna high-efficiency condensing boilers in the City Hall and City Theatre. People living in the city expect the new heating system to reduce fuel use by at least 50 percent and save taxpayers money even in the face of rising fuel costs.

Baxi Luna wall-hung boilers are approved by the American Gas Association and Canadian Standards Association. Consumers can take comfort from the boilers’ Energy Star certification (for energy efficiency) and H-Stamp rating (for operating effectiveness).

These environmentally friendly products are quiet enough to install in the back of a large closet, even in the master bedroom. They are ideal for in-floor radiant heating systems and are compatible with any type of air handler, wall or baseboard radiators and custom radiant applications, such as heated towel racks or snow melt.

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Boost your savings

October 19th, 2009 Biz Man

It is general knowledge that residents of the United Kingdom are typically not savers. They tend to spend much more than they save; according to studies, saving money is not as popular as it once was. Saving is extremely important to the quality of life you expect to live in the future. Think about it, what would happen if your car suddenly quit working? What would you do if the heater or refrigerator within your home just decided to give up one day? Imagine a situation where an emergency occurred and you had to travel immediately for some reason, what would you do?

Saving your money within an account can be an excellent source of immediate funds for an unexpected emergency. It makes a great deal of sense to simply put away money into an interest bearing account for these types of events, instead of having to take out a loan or bill a credit card for them. If you do either of these things will result in more debt and higher interest payments. Many experts believe that you need to set your priorities in the right direction and you should attempt to, over time, save an equal to your salary over a three month period.

Many people may find this a lot of money to put back when bills need to be paid, that is fine, consider saving as much as you possibly can without setting yourself into a deeper hole. If you simply saved £100 a week over a three-month period you would have saved £1,200 (not including any interest accrued), that would likely pay for a broke refrigerator or a significant amount on a new or repaired heater. There are many different types of savings accounts that you can consider, some of which do not require substantial deposits.

Typically, a banking institution will access a tax on the interest prior to adding it into your savings account, for example a taxpayer at the basic rate level will be accessed twenty (20) percent, while a taxpayer at a higher rate will be accessed forty (40) percent. For those who do not pay taxes, no taxes are deducted from the interest. For those who are non-taxpayers, you will be required to fill out a R85 form, this will allow you to avoid the taxes and receive the total interest accrued on the account.

One thing people should definitely consider is an ISA (Individual Savings Account), the government of the United Kingdom, created these types of accounts in efforts to encourage residents to save their money. In this account, they allow you to save your money in an amount of £3,000 or less yearly, that will be considered tax-free.

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10 Tips To Make Sure Your Financial Budget Will Succeed

October 7th, 2009 Biz Man

You’ve analyzed your past expenses, put them into spreadsheets, loaded Quicken with all of your data and come up with a budget. Now what? The tough part! You actually have to stick to your budget and put your plans into action. This is easier said than done. In many cases you will have forgotten about your budget and your financial goals 6 months or a year down the road. How do you keep this from happening to you?

Here’s how. Make sure you follow some of these tips below so this doesn’t happen to you.

1. Create a budget with realistic targets – Let’s say one of your budget goals is to not eat out for lunch or dinner on a regular basis. If you are honest with yourself you may find this to be an unrealistic goal. Sometimes it’s a nice break to eat out and have a relaxing rewarding evening. In other words, don’t set the bar too high. Drastic and unrealistic goals are one of the surefire ways your budget will not succeed.

2. Budget for expenses that don’t occur on a routine basis – Make sure you give consideration to expenses that occur once a year, such as holiday presents, birthdays, vacations, weddings, car maintenance costs, etc. These expenses don’t occur every month and they will bust your budget plans wide open. Make a list of these events on a calendar and put a dollar figure to them. Place them in the month they are expected to occur so you can plan in advance how you will pay for them. The regular routine expenses are not the reason your budget will fail. It is these “gotchas” that will wreck havoc on your budget if you don’t plan for them.

3. Put your budget in writing – Take the time to write down your budget plans. Making a mental note of your budget goals is a recipe for failure. Don’t assume that your financial future will take care of itself by making a simple mental note to yourself. If you have your budget goals detailed in writing you can review and remind yourself weekly and monthly of your financial goals.

4. If you have a bad month or week, don’t give up! – Let’s say you have been reaching your budget goals for three months. In the fourth month, for whatever reason, you didn’t reach your budget goals. Maybe you even stopped trying to stick to your budget! If this happens, don’t just throw your hands up in the air and admit to failure. Everyone falls off the wagon sometimes. Your budget is a journey. There will be bumps in the road, so the key is to realize that everyone makes mistakes. This relates to a story I like about a great old time golfer named Walter Hagen. Before each round of golf, he told himself that he would have 4 or 5 bad shots. During the golf round, if he hit his ball into a bunker, he would tell himself, “There is one of my bad shots that I was expecting”, hit the ball out of the bunker and move on. It didn’t phase him one bit because he had knew there would be some bad shots in his round.

5. Adjust your budget over time – This one is a biggie! It can take months or even years to fine tune a personal budget. When you initially made your budget plans, you probably had to guess at some of your figures. They might not have been in touch with the realities of every day life. For example, you may have underestimated your monthly grocery or utility bills. If this happens, analyze all of the underlying money that was spend in this category to see if your initial estimate was unrealistic. If it was, try to come up with a more accurate number and then to stick to that new figure. It is this type of adjustment that is one of the keys to making sure you can stick to your budget.

6. Review your budget every month – This is where you will make any adjustments that are needed. Set aside the first day of each new month to review your income and expenditures and match them to your budget goals. By actively reviewing your finances and comparing it to your budget, you can adjust your spending habits. This gives you a chance to analyze areas that exceeded your budget expectations and make the adjustments in your spending habits or your budget. The goal here is to not forget about your budget. One tip that has worked for me is to put a printout of my basic budget goals on the refrigerator. That way every day, several times a day, I would notice my budget goals sheet. I may not read it every time, but I notice it and it reminds me that I need to stick to my budget. That is why tip number 3 is so important.

7. Set specific short-term goals – Let’s say one of your budget goals is to have all of your credit card bills paid off in two years. If your credit card balances total $20,000 that would be $10,000 a year. Divide that number further into quarterly reductions in your credit card bills, in this case $2,500 every 3 months. Now, this is a more tangible budget goal to shoot for isn’t it? I find that when I divide intermediate and long term goals into short-term tangible stepping stones, I am able to feel a greater sense of accomplishment and am more likely to succeed. This brings us to number eight…

8. Reward yourself – That’s right! Treat yourself when you reach your some of your short-term goals. Since your financial budget is really a journey, take some time to smell the roses on your way. Sticking to your budget should not be a restrictive, unpleasant experience. Not only should you take the time to enjoy your financial accomplishments along the way, but use part of your budget for fun things that you enjoy. Just make sure your rewards don’t end up breaking your budget!

9. Pay yourself first – I’m sure that one of your budget goals is to save and invest a portion of your income. One of the keys to make sure you succeed at this is to do what the IRS does with your paycheck, take it out of your discretionary income immediately. This way, the money is saved away right off the bat. Move the money immediately into a savings or mutual fund account. Many mutual fund companies can setup automatic deductions from your paycheck. Despite your best intentions to save, the hectic, daily demands of life can reduce the amount you are able to save.

10. Attitude is everything – When most people think of a budget, they picture restrictions and pain. Almost like a diet. You know what happens with most diets? They don’t seem work for long! First, if your budget is too strict, too restrictive on your spending, it won’t work either. However, you will need to limit your spending in some areas and this will take some adjustment in your attitude. I found that when I am feeling limited and sorry for myself when I can’t purchase something that I want, I remember my financial goals I set with my budget. I think about the satisfaction I feel when I reach those goals. Over time, you find that you don’t want to disappoint yourself by breaking your spending goals on a spur of the moment purchase. Now, I actually get more pleasure knowing that I am reaching my budget goals when the thought of an impulse purchase crosses my mind.

If you follow these tips, your budget plans are more likely to be a great success. By taking some simple steps you will find that living within a budget is not as tough as you imagined. It can actually be fun and rewarding!

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How To Get A Higher Credit Card Limit

July 10th, 2009 Biz Man

Almost all credit card holders are aspiring for a higher credit card limit. This is because a higher credit card limit will enable them to make otherwise unaffordable purchases. Credit card holders need to remember that to get a higher credit card limit; they must abide by the terms and conditions of the credit card company or bank.

Below are other ways to get a higher credit card limit.

• The most important thing to do to get a higher credit limit is to prove your creditworthiness. This is the number one thing banks and companies look for in giving a higher credit limit.

• Attract positive attention from the credit card company or bank by paying finance purchases once in a while. However, it is not advisable to make this method a habit and should only be done as a last resort to increase your chances of getting a higher credit limit.

• Proving credit card companies and banks that you are good borrower would definitely convince them to give you a higher credit limit. But be careful as such strategy could only serve the benefit of the companies and banks. A higher credit card limit means greater purchasing power but it also increases the potential of the credit card companies and banks to earn through you through increased interest charges and other fees.

• Always spend within your credit card limit because doing so means that you are capable of controlling your expenses.

• Use your credit card regularly. Don’t keep your cards for emergency use only. If you sue your credit card sparingly banks and credit card companies will be unable to understand your spending and pay back behavior and would be reluctant to give you a higher credit card limit.

• Never make minimum payments. Instead, try to pay for the entire outstanding amount. This would give you better chances of getting a higher credit card limit.

• Avoid late payments as much as possible. Not only do you increase your interest, you also have to pay an additional fine for not clearing bills on time. This would dim your chances in getting a higher credit card limit.

• The best and simplest strategy to get higher credit card limit is to use your credit card wisely. Always keep in mind that credit card companies keep a record of your transactions and payment pattern so always pay your dues on time and never make late payments. Your performance in the records of banks and credit card companies will determine whether you’ll get a higher credit card limit or not.

Posted in Credit Card, Personal Finance Tags: , , , , 52 Comments »

6 Ways To Improve Your Credit Score

July 2nd, 2009 Biz Man

Having a bad credit can be detrimental to your financing and places a number of hurdles in front of you when it comes to availing loans. Having a poor credit score can happen to anyone for a number of reasons ranging from not paying debts off to missing payments on bills. Luckily, there are ways that you can go about improving your credit score.

1. Pay on time
This is by far the most obvious way to improve your credit score, yet is still worth mentioning. It doesn’t matter if you’re only a few weeks late or a few months late, paying your bills late will result in a lower credit score.

2. Pay down debts
This is tricky because you want to have debts paid off almost to its entirety, but not completely. Your credit score is a reflection of how well you manage your credit, but if you pay off your debt completely you have no credit. The best way to approach this is to pay off most of your debt, but leave a little extra to manage.

3. Assortment of credit cards
Similar to paying off your debt is showing that you can manage different types of credit cards. This is not to say that you should have 10 different credit cards, but having a few different kinds will improve your credit score. Having a Visa, MasterCard, Sears and/or gas card will show that you can manage short-term and long-term credit cards.

4. No new credit
Unless it is completely necessary, it is vital that you stay away from getting any kind of new credit. Every time you get new credit an inquiry is added to your report, which drops your credit score to some degree.

5. Don’t file for bankruptcy or foreclosure
Filing for either of these can kill your credit score because of the fact that they stay on your credit report for 10 years. Not only that, but they also decrease your credit score over time. The good news is the closer you get to the end of your 10 years, the less of an impact it has on your credit score.

6. Delete errors in 48 hours
This is the quickest and most efficient method to correcting any errors from your credit report and raising your credit score. There is a lot of paperwork that is required to do this, but it will save you the hassle of having to deal with much more later on.

No matter how you opt to improve your credit score, it is vital that you get a jump on it as soon as possible. Having a poor credit score can kill your financial status and will make it extremely difficult to acquire any kinds of loans down the road.

Posted in Credit Card, Personal Finance, Wealth Building Tags: , , 2 Comments »

“Using Personal Loans For Credit Card Debt…”

June 12th, 2009 Biz Man

Credit card debt is widespread amongst the average American household and seeking ways of consolidating debt usually means utilizing the equity in ones home or seeking a personal loan to service the credit card payments. Using the equity in your home to apply for an equity home loan and directing the funds towards debt management is an excellent method for getting your house in order in regards to your finances.

A personal loan without collateral may sound inviting but rest assured any financial institution or broker is going to want a higher return for the added risk. Using the equity in ones home has become a popular form of liquidity to finance and consolidate existing credit card debt, however not without its risks. Be sure you read the fine print & beware of the risks of defaulting on any repayments when using the equity in your home for a equity home loan as you could end up losing your family home to your creditors should you fail to meet the repayments!!!

Consolidating debt for some means digging into their 401K for immediate relief to the detriment of their future well being. Immediate relief from credit card debt and the high fees and interest associated with such debts is a huge incentive for some to look for the 401K alternative. The compromise to such action is that you are forgoing future savings and security for immediate relief, but if the timing is right and you are confident of repaying the loan it certainly is a viable proposition. It is a very appealing short term debt solution which has its benefits as well as draw backs.

It is always wise to stack the advantages against the disadvantages in anything dealing with your finances and when formulating a wise debt management strategy. Any unforeseen event which can disrupt your repayment schedule could mean penalties due in the form of tax installments or the fulfillment of the principal on the borrowed loan.

Tax perks when saving with a 401K account are reduced when borrowing off your retirement, as you are reimbursing the account with after-tax dollars.

Be sure to negotiate a better interest rate on any repayments with any loan whether it be a personal or a home equity loan. The higher the interest rates, the higher the repayments, the less disposable income that is left for savings or other pleasures of life so ensure you manage your credit card debts first as they carry the highest interest rates of any form of credit.

The rate you are able to negotiate your interest will be fixed for the duration of your personal loan and you will be required to make monthly installments to service the loan which will be at a rate much lower than any credit card debt you are carrying. Undisciplined habits of making late and overdue credit card payments tends to incur extremely high fees and even higher interest rates which can become a major problem to most budgets.

A savings account allows you the luxury of redirecting resources to areas of debt which have the potential to erode ones worth very quickly if left unchecked!!! When you compare the interest rate you earn on a savings account and the cost of credit card debt it makes little sense not redirecting funds from you savings account towards servicing debts elsewhere??? Be smart and service your credit card debt before setting up any high yield savings account, you will be thankful you did in the long run.

Posted in Credit Card, Personal Finance, Wealth Building, debt consolidation Tags: , , 2 Comments »

4 Reasons People Get Into Trouble With the IRS

May 15th, 2009 Biz Man

You don’t want to mess with the Internal Revenue Service. One small mix-up when handling your finances can cost you big.

For example, in recent years the IRS has increased its filing of levies, liens and wage garnishments. In fact, in 2004 alone, approximately 2.5 million levies were filed.

The experts at JK Harris & Co., one of the nation’s largest tax resolution firms, offer this list of common ways people get into trouble with the IRS.

1. Filing too many exemptions. An exemption gives you a major tax deduction, and some taxpayers can’t resist the temptation to report more exemptions than they’re entitled.

You can only claim exemptions for yourself, a spouse and for all “dependents.” Dependents have to meet specific criteria, however, so make sure you follow the IRS guidelines so that you don’t mistakenly file an extra exemption.

2. Being unaware of taxes levied for early withdrawal from certain retirement plans. If you withdraw from a retirement fund such as a 401(k) or IRA before you’re 59 1/2, you may face a 10 percent federal penalty on your investments, as well as a state penalty and an income tax on the money withdrawn.

3. Not paying enough taxes when self-employed. Many people who own their own businesses don’t know how much they have to pay in taxes. The tax structure for a self-employed person – what to pay, how to pay and what can be deducted – is decidedly complex, so it’s easy to become confused.

4. Not paying taxes on winnings. It is necessary to report all gambling winnings, including winnings from lotteries, casinos and horse races, as income.

For people who are in trouble with the IRS, there are various programs available that can provide debt relief if a taxpayer qualifies. JK Harris helps its clients determine if they meet the requirements for one of these IRS programs. Its staff includes former IRS agents, certified public accountants, attorneys, enrolled agents and other experts that offer tax services, financial planning, small business services and other assistance.

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Posted in Personal Finance, Taxes Tags: 2 Comments »

Early Distributions From Retirement Plans

May 2nd, 2009 Biz Man

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience. Fortunately, there are exceptions to early distributions.

Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal. Some of these exceptions apply only to IRAs, some only to qualified retirement plans, and some to both. IRS Publications 575, Pensions and Annuities, and 590, Individual Retirement Arrangements (IRAs), have details.

In addition to the 10 percent tax on early distributions, you will add to your regular taxable income any distributions attributable to “elective deferrals” that you contributed from your pay, your employer’s contribution and any income earned on all contributions to the account. If you made any nondeductible contributions, their portion of the distribution is not taxed, since you’ve already paid tax on this amount.

There is a way to avoid paying any tax on early distributions, however. It is called a “rollover.” Generally, a rollover is a tax-free transfer of cash or other assets from an IRA or qualified retirement plan to an eligible retirement plan. An eligible retirement plan is a traditional IRA, a qualified retirement plan, or a qualified annuity plan. You must complete the rollover within 60 days of when you received the distribution. The amount you roll over is generally taxed when the new plan pays you or your beneficiary.

If the early distribution from an employer’s plan is paid directly to you, your plan administrator will normally withhold income tax at a 20 percent rate. If you roll over the distribution to a new plan, you must replace that 20 percent of the funds that were withheld and deposit that amount in the new plan or you will owe taxes on that amount. To avoid the inconvenience of this withholding, you can have your old plan’s administrator transfer the rollover amount directly to the new plan or a traditional IRA.

All early distributions must be reported to the IRS. You will report tax-free rollovers on lines 15a and 16a of Form 1040 along with any taxable distributions, but you will enter on line 15b or 16b only the taxable amounts you don’t roll over.

Early distributions from retirement plans can involve complex tax issues. Make sure you understand the issues or get competent tax advice.

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Posted in Personal Finance, Taxes Tags: , 1 Comment »

The Simple $10 Debt Elimination Solution

March 15th, 2009 Biz Man

Ask a friend what resolutions they made for the new year and your bound to hear them reply “Pay off my credit cards.” Ask them how they planned on reaching that goal and many of them will not have a clear cut answer.

The obvious first step to paying off credit card debt or paying down credit debt load is to cut back or eliminate the use of your credit cards. For some people this first step can often be the most difficult. If you’re used to spending freely with plastic and worrying about the consequences later, it’s difficult to break free from this “buy now, pay later” attitude.

To gain control of their careless credit card spending habits, some people cut up their credit cards therefore making it impossible to use them. Others lock up their credit cards or hide them in a safe place and vow to use them only in an emergency.

The second step to paying down credit debt is to pay more than the minimum balance due. Most credit card companies require a minimum monthly payment of 2.5% of the outstanding balance. For example, if you have an outstanding balance of $1100.00 on a credit card charging an Annual Percentage Rate (APR) of 18.9% your minimum monthly payment would be $27.50. It will take you 66 months or 5.5 years to pay off your balance of $1100.00 making the minimum payments. The credit card company will make $676.94 in interest from your use of their credit card.

Monthly payments are purposely kept low by the credit card companies so that they can earn as much as possible from the interest rate charged to you the consumer. Paying just the minimum payment will keep you tangled in credit’s web for years and years to come.

If you’ve been paying only the minimum due month after month, ask yourself this question, “Do I have an extra $10.00 I could apply to this month’s payment?” I’m sure that most of us could find some way to come up with an extra $10.00 for the month. Try cutting out a few cups of coffee or lunches at your nearby fast food outlets and in no time flat you’ll have saved up the extra money that you need.

Now, it’s time to unveil “The Simple $10.00 Debt Elimination Solution.” Take that extra $10.00 and add it to the minimum monthly payment above, therefore making a payment of $37.50. By adding just that $10.00 a month to your minimum payment, you’ll trim 23 months or nearly two years off of that credit debt! On top of that you’ll save $277.00 in interest alone! That’s money you can put toward savings or paying off other debts. Imagine how much you’d be able to save if you applied this same simple strategy to each of your other credit card debts!

Paying down credit debt doesn’t always mean having to make huge monthly payments or sacrifices. It just takes some basic planning and a simple effective strategy to make it work.

Posted in Personal Finance No Comments »

How to Save Money on Your Energy Bill

March 10th, 2009 Biz Man

Is it just me, or have energy prices just been going up and up lately? Unfortunately, this results in significant increases in our home energy bills.

Fortunately, there are a lot of relatively inexpensive (sometimes free) changes you can make around the home that will save you money. I’ve put together a list of twelve tips that cover heating and cooling, lighting, appliances, and home electronics. These areas all tend to be notorious energy hogs. Let’s get started.

Heating and Cooling Tips:

1. If you haven’t already, switch to a natural gas water heater (electric water heaters use twice as much energy).

2. Whenever possible, cool your home naturally. For example, you can plant shade trees around your house (especially on the east and west sides). Their protection keeps the sun from beating on your roof and siding during the summer, which can naturally keep your home 4 degrees cooler. (Trees also help insulate your house against cold winds in the winter.)

3. Seal your house to protect against heat loss in cold weather. Seal the ductwork, close the fireplace damper when it’s not in use, and install a timer on the bathroom exhaust fan.

Money-saving Lighting Tips:

1. Use dimmers on all your bulbs, and only keep lights as bright as needed for your work. Instead of turning on big watt-sucking overhead lights, use task lighting when appropriate.

2. Use timers and motion- or heat-sensing lights outdoors.

3. Make the most of the natural light from outside. Consider skylights and well-placed mirrors, which can reflect more light into a room, thus reducing energy costs.

Home Electronics Energy-saving Tips:

1. Unless you really need ten clocks glowing greenly at you day and night, unplug TVs, DVD players, stereos, etc. when not in use (you can plug them into a power strip with an on/off switch to make this easy). 60-80% of the electricity used by these devices is sucked down when they’re idle.

2. Unplug chargers when you aren’t actively charging your cell phone, iPod, battery charger, etc. Why? Because as long as the plugs are inserted into an outlet, they’re drawing electricity.

3. Unplug or turn off your computer when it’s not in use. And in case you forget, set the system to lapse into sleep mode after a certain amount of idle time (sleep mode draws 60-80% less energy than full-power mode).

Tips for Saving Energy with Appliances

1. If your refrigerator was made before 1993, replace it. It could be sucking down $140 a year in electricity as opposed to newer models, which require significantly less. Today’s Energy Star-rated refrigerators only use about $20 of energy a year.

2. Do all your laundry on the same day, and dry the loads back-to-back. This makes use of residual dryer heat.

3. If you have a top-loading washing machine, replace it with a front-loading model. These generally use 50% less energy and 1/3 less water.

That’s all the advice for this article. Apply these simple energy-saving tips, and you’ll soon be looking at smaller bills.

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