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How to Build Credit without Using Credit Cards

Do you have a “thin credit file”? If you do, you’re one of the 25% of Americans who have little or no credit history and don’t use credit enough to build a sufficient FICO credit score. Since having “good credit” (and a good FICO score) is extremely helpful in many ways financially, we decided to put together a blog today to help people who want to start building their credit but either don’t want to or simply can’t get a credit card.

Indeed, there are quite a few ways to build up your credit that don’t require you to have a credit card at all, including credit builder loans, alternative credit scores and Passbook or CD loans. Let’s take a look at those options and see which one may be right for you. Enjoy.

  • Credit Builder Loans. Like a savings plan, Credit Builder loans give you a “taste” of handling credit but at a very low risk to the bank or credit union that’s lending you the money (and also to you) in. In effect what you’re doing is lending money to yourself. For example, you could put $1000 into a bank or credit union interest-bearing account. (This can be done in a lump sum or, if necessary, in 10 – $100 a month payments.) Once that entire amount is deposited you can then use it as collateral to take out a $1000 line of credit, using that money and repaying it as you see fit. You’ll be paying higher interest rates than what you actually earn but the good part is that you’ll get experience working with credit and, if you make sure to pay on time every month, that “positive history” will end up on your credit record.

In the case of a credit builder loan, both banks and credit unions report your history to the Big 3 credit reporting agencies and, better yet, this information will help to build your FICO score.

  • CD Loans or Passbook Loans. Some banks will let you borrow against a Certificate of Deposit (CD) if you have one. Depending on the bank you may be able to borrow up to 100% of the amount in your CD, but some will restrict you to a little bit less. The drawback is that you’re going to have to pay a small origination fee and more interest than what you’re actually earning on the account. You also can’t touch that CD or your savings account until the loan is completely repaid. The good part is that it will show up on your credit record as a “secured installment loan”, something that can help you to build your credit as long as you pay the money you “borrowed” back on time.

As with credit builder loans, CD or Passbook loans will be reported to the Big 3 financial agencies as well as helping to build your FICO score.

  • Pay for Data Reports. If you have always been a renter and never owned a home, paid credit reporting might be a great alternative for you. It gives you the ability to have your nontraditional payment history compiled and then reported to the big credit bureaus like Experian and TransUnion. The reason for the third-party agency is that you can’t report this data on your own and will need help from a pay for data company like Rental Karma or Rent Reporters. While it may cost a little bit of money it’s a great way to get your excellent payment history (assuming that you have one) reported to the big credit agencies.
  • Alternative Credit Scores. There are many other types of credit scores the on the traditional FICO score. Some take into account your utility payments, rental payments and a lot of other financial information that’s not regularly included in your FICO score. As a matter of fact, FICO actually has their own FICO Expansion Score, a score that uses checking account management and other nontraditional data to determine your credit score.

Since some lenders only look at your FICO score and others actually have their own scoring system, these alternative credit scores work better with some than with others. Some scores might still have value for you even if a lender might not see them. For example, an “educational score” will help you keep track of your progress, something that is always important when it comes to reaching any goals that you might set.

eCredable has such an educational score and, once you sign up and list all of your monthly bill information, they can turn that info, and your payment history, into a “score”. They can also take this data and, for a fee of between $20 and $30 per bill, provide verification of your on-time payments to credit agencies.

As you can see there are quite a few different ways that you can build credit without actually having a credit card. If you have any questions about credit, financial questions in general or just want to leave us a comment, please do and will get back to you with advice and information ASAP.

Save money now with these Home Improvement Tips

No matter the economy or what a person’s income is, saving money has those been a passion of many people and one of the best places to save money is by improving your home. When it comes to one’s home, seeing as how it’s most likely your largest investment, you don’t want to be a cheapskate here. Whether it’s adding insulation to the attic to save on energy bills or adding a deck out back to increase the home’s value, home improvement is an excellent way to save money immediately and in the future.  There are some remodeling and home improvement jobs that are DIY but many of the big ones that can really increase your homes value like a whole room remodel. These next few tips should help you to do just that. Enjoy.

Adding anything that’s ‘low flow’ to your home will instantly start saving you money on water. Not only will low flow fixtures save water, which is good for the planet, they will definitely save you money in the long run on your water bills. Not only that but they’re inexpensive and easy to install and most can reduce your water consumption by as much as 50%, something I can easily add up to over $150 per year. The fact that most low flow shower heads cost less than $50 means that it’s an excellent low-cost investment as well.

Adding extra insulation is definitely a no-brainer. Simply put, your home’s insulation will keep your house warmer in the winter and cooler in the summer and the more you have the better. Not only will they conserve on energy but you’ll immediately see a decrease in your energy bills no matter what season it is. A well-insulated attic is a definite must and one of the easiest areas of the home to add extra insulation yourself. If you’re having a home built, make sure that your builder is using the highest rated insulation possible, especially if you are in an area of the country that sees extremes in temperature.

Switching to the new, compact fluorescent light bulbs is a great way to save on energy. These new bulbs are purported to last from 42 10 times longer than ordinary incandescent bulbs and for each bulbs replaced you’ll save about six dollars a year on your electric bills. One caveat; the new bulbs are quite expensive meaning that you’ll probably want to change them one or two at a time rather than replacing all of the bulbs in your home at the same time.

Replacing your dishwasher if it’s more than 10 years old can immediately save you money on electricity and water. Today’s modern dishwasher uses a little less than 6 gallons of water, compared to older models that to typically use 10 gallons or more. If you have a dishwasher that’s relatively new, keeping it well cleaned and maintained is a must and can save you a few bucks as well.

Most homeowners don’t give a second thought to their thermostat but, if it’s not programmable, you’re probably wasting money. The new, programmable thermostats are much more accurate than traditional thermostats and, in most cases, can save a homeowner upwards of $150 per year. The reason is that they can be programmed to turn on and off at very specific times. For example, they can be programmed to turn on when energy costs are lower and turn off when there’s no one at home.

Placing weather-stripping on all of the windows and doors in your home is a definite must. The fact is, that drafty front door or bedroom window could be costing you big bucks due to air leaks that let out your cooled or heated air. Since weather stripping is quite cheap, it’s a quick, low-cost investment that could immediately cut down on the 30 to 40% heating and cooling lost that most air leaks create.

Long used in Europe because of their energy and water conserving features, tankless water heaters not only can reduce water bills by up to 20% but generally last up to 10 years longer than hot water tanks. Even better, tankless heaters never run out of water because they heat the water as it’s being used. Another great reason to get a tankless water heater is that the federal government has some excellent rebates for homeowners that purchase them.

Finally, unless you live in an area of the country where it’s brutally hot, ceiling fans are an excellent way to cut down on your energy bills. Opening a few windows and turning on a few well-placed ceiling fans can reduce your energy consumption, especially in the summer, by up to 5%. Most can be easily installed by the homeowner as well.

Making all of the changes suggested above could easily save you up to 30% or more on your energy bills and, since most of the changes will last for a number of years, you’ll keep getting the savings now and into the future.

7 Keys to a Sound Retirement Part 1 of 2

Did you know that there are 7 Keys to many different things in this life? For example, we all know that effective leaders have seven habits, that there are seven different types of intelligence and that there are even seven steps to get to heaven.

Now, courtesy of the Society of Actuaries, we have the 7 tips for a sound retirement.  They just released her a new 64 page report entitled ‘Segmenting the Middle Market: Retirement Risks and Solutions Phase 2 Report’. Not the most inspiring of titles, we’ll admit, but then again these people are actuaries.

In their report they say that financial planning for retirement requires a methodical approach. (Does that sound familiar?) They say with this approach you need to identify and quantify all of the important components that will affect your asset accumulation, investment decisions, income management and so forth. They also noted that this approach is increasingly important for Americans who make middle incomes and more than likely have accumulated less than $100,000 for their retirement. The 1st 2 steps that the day espouse are here in part one of this two-part blog and the others, obviously, are going to be in the 2nd. Enjoy.

The 1st Key that they talk about is quantifying your assets and your net worth. Basically this is a complete tally of all of the things that you won’t including your home, cell phone businesses and so forth. It also includes everything that you owe. Since your home is more than likely your largest asset it’s likely that it will play an important part in any of your retirement plans.

Their recommendation is that you try and create as much income as possible from your home. This can be in the form of selling it, renting it, taking out a home equity loan, getting yourself reverse mortgage, paying off the mortgage completely and also taking out a home equity loan.

Another suggestion, and something that unfortunately is overlooked quite frequently, is converting assets and income and, while you’re at it, converting income streams into assets. The simple fact is, in retirement there are many assets that can possibly be converted into monthly income and generate more spending power. Similarly, income streams like a pension should also be seen as comparable in value to an asset.

A problem that the SOA identified is the interesting fact that many people aren’t able to fully realize or think about their assets and income as having equal value and, because of this, have a difficult time translating between the two.

The 2nd Key is to quantify your risk coverage. What you’re doing here is taking stock of all of the insurance that you already have and all that you’re going to need, including health, disability, homeowners, life, auto and so forth. Considering the need for long-term care insurance is also vitally important, especially when you consider that the cost for long-term care is extremely high and there is a very real possibility that, at some point in your future, you may need some type of medical assistance.

The report noted that households with ‘limited assets’ of less than $200,000 will probably need to spend down their assets and then rely on Medicaid. Those households with an excess of $2 million in financial assets should be able to cover the cost of long-term care out of their pockets. For those households that are in between these two numbers, long-term care insurance should be included into any financial plans and should be purchased in the last few years before retirement.

Another note that the SOA gave in their report is that, in most cases, the need for life insurance is high. Indeed, the death benefit associated with any life insurance plan can be used for bequests and also to provide valuable income to the surviving spouse, if necessary. Since the premiums for life insurance get more expensive as a person gets older, they also suggest that a person continue “existing preretirement coverages during the retirement period.”. One interesting note that you need to know about is that, in the near future, policies that combine long-term care insurance with life insurance and annuities will be available.

Those are just the first two keys to the seven that were outlined by the SOA.  If you’re keen on finding out what the other five are, you’re going to have to come back and visit us very soon for Part 2. In the meantime, we hope that this important information was interesting and relatively helpful. See you back here soon.

Simple Tips for Living on a Budget

Whether you want to save money for a big trip or you have simply realized that you are living beyond your means, it is time for you to start budgeting. Now we all know the basics of budgeting, but the truth of the matter is that making a budget and sticking with it are two different things. How can you make sure that you stick with your budget without going crazy or simply disregarding it?

First, get everyone to help you. Sometimes, you are simply going to forget about that thing that you should be doing or not doing, and when you do that, it can help to have people remind you. Talking about money is quite a taboo in our culture, but see which of your friends are willing to help. Ask them to call you out on it when you are spending money that you should not, and be willing to listen to them and to thank them for helping out.

Make sure that you have an entertainment budget. There are definitely people out there who can stick with a budget with absolutely no fun in it at all, but they are few and far between. Instead, make sure that you have a bit of cash that you can use to enjoy yourself. This means that you won’t suddenly have a bad moment and simply start spending money that you should not!

Look for deals. You should always make your budget presuming that everything on it is full price, but this doesn’t stop you from being able to go shopping for deals. For example, make sure that you consider getting the right deals on car insurance for your car. Similarly, clip coupons, and make sure that your money stretches. It is easier than you think that save the money that you require, and this is where you can start.

Do not handicap yourself. Some savings are not worth the loss. For example, technically, having the Internet is a luxury. However, besides using the Internet for entertainment, you also use it to do things like hunt for work and to check your bank balance. On top of that, being able to use things like Skype allows you to keep in contact with your friends and family without needing to pay a phone bill. Some expenses are expenses because they need to be.

Look for free things. If you live in a city, there are a number of things that you can try for free if you can only get to them. In the summer, look for free concerts in the park. In the winter, look for cheap ice-skating days or free rental days. Be ready to hop on opportunities as they come and consider what they mean for you. Keep your eyes peeled for free community events, and you can bet that you will always have something fantastically interesting to do.

Remember that every now and then, chances are good that you are going to slip up. Mistakes happen, and if you want to make sure that you will be okay in the long run, accept them and move on. Simply remember to do better the next day with new purpose. The truth is that no one is perfect, and falling down today does not mean that you are going to keep on falling down.

When you are looking to make sure that you can stick with your budget, remember these tips. Be mindful whenever you go to make a purchase and make sure that everything you buy is something that you have considered with regards to your money.


The Value of a Savings Account

Savings accounts are often bashed for their low interest rates, but they in reality they provide a save haven for your hard earned money.  The economy has been in turmoil for the past several years, and despite signs of improvement most people are still unsure if the improvements are here to stay.  Inflation is always a concern, but the past couple years have been nearly inflation free, and that could very well continue into the next few years as well.  While interest rates on savings account aren’t exactly at peak levels, they do provide a return that is virtually risk free.

I still remember my very first savings account.  The bank offered a free piggy bank with signing up, which was perfect consider I wasn’t even a teenager yet.  The bank is long gone, but my pension for saving is not.  I learned at a young age about saving saving money responsibly and it has served me well throughout life.  I know the benefits between a savings and money market account, the features I want included with my savings account, and the financial benefits received.  That being said, finding the right bank now a days can be a bit more difficult than it used to be.

If you are looking for a safe haven for your money then a BM savings account would help you.  The benefits of their accounts go on and on.  They offer accounts that provide tax free havens.  Also, they provide easy access to your money without penalty, a feature that is becoming increasingly more difficult to find at other banks.  They tie their rates to fixed rate bonds, so you know exactly how much interest you will earn in advance, which takes the guesswork out savings.

You can no longer rely on your respective government to take care of you in retirement.  Pensions, social security, these are becoming a safety net of the past.  Medical expenses are rising at an alarming rate, and insurance premiums seem to be going up every year and covering less to boot.  Mortgages  might always be available, but the term years and low rates won’t always be as favorable as they are now, nor will the low amounts of money that the buyer needs to be put in.  If you want to thrive financially you need take responsbility for your own finances and start putting away your financial security into a savings account today!

Some Tips on Keeping Your Finances in Order


Household financial issues can be a real source of stress for many people. It seems that some people have a knack for keeping their’s in order, while others tend to struggle. If we know how to keep our finances in order, it will make things much easier! Read this article to find new ways to enhance your financial management skills.

The effort it takes to categorize your spending is well worth it. Put all your necessary expenses in one section and your unnecessary expenses in another. Adhering to your budget will be easier when you do this. Being able to see how much you’ll need to spend makes it easier to plan your budget accordingly.

You can save a ton of money just by being patient with your finances. Many people buy just-released electronic devices without thinking about the cost. However, if you have the patience to wait a while before purchasing, the price may drop significantly. It goes without saying that the extra money saved on these purchases can be more wisely applied elsewhere.

If you have to live paycheck to paycheck, make sure you have overdraft protection. This fee may save you from a lot bigger fees in the future.

Quantity purchases at grocery stores during a sale is only worthwhile if you are going to use all of the products you buy. If you end up throwing out food because it has gone bad, you are essentially throwing out money and negating the bargains. Look for bargains that you can actually use.

Avoid, at all costs, credit cards and lenders. Even though it is sometimes necessary to do these things, being debt free and saving up money is important. Sometimes you may need to get a loan for things like a car.

Keeping an emergency fund on hand is very important for safety and security. When deciding how much to set aside, think about common occurrences that require large lump sums, such as, medical or dental procedures, automobile repairs, and common house problems, such as, flooded basements or leaky roofs.

Put some money away each day. Do your research before grocery shopping. Read circulars to find the best deals. Plan your shopping to save gas and money. Keep an open mind to choosing food that is specially priced.

Your credit score might even dip a bit when you first start working on it. This does not mean that you have done anything wrong. Once you consistently add some positive info to your credit record, your score will begin to increase little by little.

Choose several checking options in order to follow your budget. You will be able to use one account to pay for your fixed expenses and one for your variable expenses. This helps you stay on top of all your expenditures, and maintain a better idea of what you spend your money on.

Managing your money is extremely important. Sources of profit need to be safeguarded and surplus capital should go into investments. Put some of the money you earn into more capital investments, and make sure to stay on top of the process to ensure that you continue to make money. Set a standard for what you keep as profit and what is reallocated into capital.

Review the insurance plans that you have. You could discover the the amount you are paying for insurance is too high. There may be cheaper alternatives out on the market that you can use or there might be unnecessary options that you’re paying for. Cut out the extras and use the money for other things.

In summary, keeping your income in order is very important. What may have seemed extremely difficult before, might now seem a little easier after reading these helpful tips. Proper organization will help you keep your personal financial situation in order.

Wrongful Dismissal, Know Your Rights

This blog is not usually preachy, nor an advocate for any certain or specific rights over others.  However, some very basic rights granted to all of us are very much tied into personal finance.  First and foremost, the right to be gainfully employed, and a reasonable amount of security that goes into retaining that employment.  If you are unaware, then you need to brush up and learn about unfair dismissal.  With the economy still climbing it’s way out of the hole, employers tend to have their pick of the employment litter.  Thus competition is increasing, and at a cheaper rate than we are used to.

Conversely, we have people losing jobs based on gender, age, or for various other personal reasons.  These are all acts of wrongful termination, and as such they are subject to penalty from the law.  We have even seen acts of relatiatory firings in the past.  Wrongful terminations stemming from whistleblowers attempting to do the right thing.  in the UK this sort of termation is much more complicated than here in the States.  A wrongful dismissal in the UK involves a breach of contract on the employers part.  Because the employer/employee relationship is often defined in a contract for a specified period of time, terminating an employee can be quite difficult.  In fact, an employer can only terminate an employee without proper notice for three different reasons.  The first is that the employment is still within the first month.  The second is whether or not the contract says they can.  Lastly, if the employee conducts himself in a manner that will cause the employer to lose both trust and faith in said employee.

Regardless or the reason for a wrongful termination, it is just that, wrongful!  It should be prosecuted to the fullest extent of the law everytime!

Need Cash in a Hurry? Find Out How

At some point in life we are all faced with the dilemma of being short on cash, inability to pay a bill, or come to the scary realization that our bank accounts have run dry.  Since 2009, I’m willing to bet more people have faced these adversities than otherwise, some probably on a routine basis.  This begs the question, what can we do to help ourselves through this situation?

Sell what you’ve got!  Sounds simple enough, and if you have “stuff” then it truly is.  Take to Ebay, Craigslist, or even a local pawn shop to sell items of value.  Remember, if you no longer value the item that doesn’t mean others won’t.  Do a quick price check online and see what the going rate is for the item, you may be a bit surprised to know how many items of value you have laying around your home.

Apply for a personal loan.  No need to handcuff yourself to the whims of brick and mortar lenders.  Many online companies like ChoiceLoans can offer you a personal loan in minutes.  Not only can you apply from the comfort of your own home, but they also can help those with poor credit achieve the desired funding.  The best part is that the dollar amount doesn’t matter…you can utilize their services for as little as $100, or as much as $100,000!

Check out online marketplaces like Fiverr, or Freelancer.  These sites allow you to sell your services to interested buyers.  Fiverr can actually be a place for those with no discernible skills, rather people filling odd niche jobs, or high levels of mundane work.  Either way, everything costs $5, so you can’t really go too wrong here.  Sites like Freelancer can actually be used by rather large companies to fill in positions where location rarely matters.  Spreadsheet, budgeting, forecasting, and capital planning experts alike, are all in high demand on this site, and you name your own price!

Addressing the Needs of a Small Business

Some say that going into business for yourself is the very definition of the American dream, and I tend to agree.  This country affords us the opportunity to access capital, a talented labor force, and necessary tools to start our business.  Though it is important to note that one out of every five small business ventures fail within the first year, but that doesn’t mean yours has to.  You just need to be proactive and address the needs ahead of time.  With a few simple tips you could be well on your way to success.

Drafting a business plan isn’t only the most important step in starting a new business, it should also be the first one!  Many people have all the desire in the world, but they fail to plan ahead of time.  You need to understand how many people you will need to employ, how much capital you have to work with, how you will obtain that capital, and how you plan to breakeven.  The breakeven point is the most crucial point of your plan.  After all, once you achieve breakeven, you then start turning a marginal profit on whatever it is you’re selling.

Focusing on your core business is another important aspect to success.  Often times companies tend to branch out into ventures unrelated to the core of their business, losing sight of their initial goals, and ultimately leading to failure.  Consider the intricacies of accounting and payroll services.  They may seem like simple tasks at first, but they can become quite complex and lead to legal issues it they aren’t addressed properly.  Hire outside services to handle these, and you will be thankful of all the money you save in the long run.

Understand where the resources for capital will be coming from, and the overall cost of capital.  These are fundamental areas that every fortune 500 company addresses at least once every year.  Will you be privately funding the business? Will you need a bank, or family loan?  If so, what is the interest rate you will be charged, and what will you have to put up as collateral?  Considering the failure rate of small businesses, make sure that you have the necessary savings to achieve success.




Why You May Need an Accountant

Many people feel that accountants aren’t necessary anymore.  We have such easy access to lower cost ways of preparing and filing taxes these days.  With user friendly software like Turbo Tax, people don’t want to pay the extra money required by CPA’s.  These types of software walk through all aspects of your federal and state income taxes, they can be bought on CD in the store, or even accessed directly online.  In the past I often used this software prior when I filed a 1040EZ.  Now I itemize my taxes and run a small business online, and believe it or not, Turbo Tax can often be complicated when it comes to this level of detail.

Those with small businesses can actually miss a lot of deductions, or on the other hand, claim deductions that they shouldn’t.  While tax software tends to be user friendly, it can often be misleading.  This is why I tend to trust the advice of a tax accountant.  I am even able to deduct certain utility expenses, and the office space I use in my own home to run my online ventures.  The best part is that I can feel safe in case I am audited, and the accountant would be the one interfacing with the IRS, not myself.

The important of having an accountant isn’t just U.S. specific, but can be seen worldwide.  Tax law is confusing in all countries, not just ours.  Accountants London are known as accounting practioners.  In Sri Lanka, accountants are required to be members of the Institute of Chartered Accountants.  Other countries like Austria, Portugal, Canada, and New Zealand all have governing bodies that oversee the country’s local tax laws.  As the old saw goes, the only two certanties in life are death and taxes. Taxes are the governments form of pulling in revenue and they don’t take it lightly.  Make sure you have an accoutant to maximize your deductions, and to minimize your worries!

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