Six Things a Great Financial Planner Should Do For You

A good financial planner is an important part of your hopes for a financially stable future. How do you judge if the service you receive from your planner is of a high enough standard? One way would be to examine how he prepares to study your case before he makes any actual recommendations. Every competent financial planner needs to go through the following steps when offering financial advice.

You should first see your planner define what exactly you can expect out of the deal

Many people aren’t clear about the exact level of service to expect when they hire a financial planner. They may believe that they are entitled to complete handholding, for instance, when some planners only offer broad guidance. People are often not clear on how exactly they will be charged for services, either.

A good financial planner will always start off with sending you a clearly-worded letter of engagement, with the following pieces of information. 

• You get an exact list of the services provided and some clarification on what is not provided. You should also see a list of fees and charges. 
• If you are signing on to a financial planner as a couple, the letter will make it clear what is owed to both and what will happen if you get divorced. If the planner sees himself as serving one spouse and not the other, this letter should make it clear. 
• The letter will make it clear what level of cooperation is expected from you. You’ll see information about what data you need to provide on your current financial position and the documents you need to provide on an ongoing basis (such as your tax returns). 

Your planner needs to find out what your goals are

The specific financial moves that your financial planner thinks of depend on the specific goals you have – both short-term and long-term. If building a retirement nest egg is all you need to plan for, your advisor will come up with a plan for investments that have an element of risk attached, but that promise high returns. If you need to plan for your child’s time in college five years down the line, a less risky strategy may be called for. Your planner should also offer advice on his own for what kind of possibilities you should plan for that aren’t on your radar, already.

Assess your current financial position

A close look by your planner at your income, savings, debts, investments and spending habits is an important part of putting you on the road to your goals. Whatever weaknesses the planner notices in your current position – perhaps you don’t have an emergency fund or your investments are noticeably out of line with your goals – he will need to correct them before going ahead with making recommendations for the future.

Prepare a financial plan for your goals

When the groundwork is laid, it’s time for your financial planner to actually make recommendations. He should advice you on how much you should be saving, what steps you should take to protect your income and savings from unpredictable market occurrences and draw up a plan with specific investment ideas.

Put the plan into action

Once your planner has a fully formed plan in hand that you approve of, he will either begin making investments on your behalf himself or guide you on how to go about making them. While it’s easier to let a financial planner make all the investments needed on your behalf, it can be expensive to use a planner’s services this way.

Finally, your planner needs to monitor progress

Financial planning is not an exact science. The investment world is a constantly changing one. Once your planner’s recommendations are implemented, it’s important to constantly monitor them for results. Constant monitoring and readjusting is important also because your own goals can change over time. A change in your job, a new addition to the family and other changes can require constant replanning.

William Dawson has used the services of a financial planner for many years now. An avid blogger, he enjoys posting on a variety of websites.

Spend Time Instead of Money: Set Your Future in Stone with a Financial Plan

It's easy to meander through life without any real goals. Lots of people do that. The problem is that a lot of people are also in financial trouble. It's no coincidence that poor financial planning is associated with a lack of financial success. Without goals, and a plan, you're just daydreaming about the life you could have. Don't dream, achieve.

Set An Overall Purpose

The first thing you should do is lay down a purpose for having a financial plan. A financial purpose could be anything, but usually involves some type of productive activity. Maybe you enjoy working at your current job. Is there room for advancement? If you hate your job, why are you still there? Should you be making a plan to switch jobs or start your own business?

Write down what you really want to do in life. Write down that one thing you could do forever, even if you had to do it for free - that one thing that you love doing even on the weekends. Your job shouldn't feel like a job. It should be fun. Sure, you're going to get tired, and you'll need a vacation, but you shouldn't be longing for the weekend and retirement.

Of course, there are other things in life unrelated to work. These could be hobbies or favorite vacations you enjoy taking every year. Make sure you write these down too.

Set Long-Term Financial Goals

Open up your favorite spreadsheet program. Once you have a long-term purpose set in place, it's time to enter in all of the information that will get you moving toward that purpose. It might even be helpful to write down your purpose in the spreadsheet.

Long-term goals are things you expect to happen over a period of 5, 10, 20, even 30 years. These might be things like buying a home, starting a family, buying a business or starting your own, moving out of the country, or retiring.

Set Short-Term Financial Goals

Once you have long-term goals set, it's time to reverse-engineer short-term goals. Short-term goals typically are derived from long-term goals. For example, let's say one of your long-term goals is to own a home. How will you get there?

Well, you might need a lot of short-term goals like "find a new job," "start a savings," and "buy life insurance." If your long-term goals involve building the home of your dreams, your short-term goals would also include "research construction companies," "hire an architect," and "build good credit for a construction loan."

Buy Financial Products

Usually, people rush into buying financial products before they ever have anything resembling a plan - big mistake. Fortunately, companies, such as jg wentworth, can help simplify the process of buying financial products. They can also buy back retirement plan payments later on in life if your plans change and you end up needing a lump-sum of cash in your old age.

Life insurance, annuities, mutual funds, stocks, real estate - all of these things are merely an implementation of a plan. Once you know what you want to do, choosing the right financial products is easy.

Update Your Plan Often

Plans change. Life happens. If something goes awry, you need to be prepared. That's why a good plan is always open to change. Review and update your plan once a year. If you unexpectedly have a child before you're financially ready, some long-term plans might need to be shuffled around. At the end of the day, your plan isn't going to be set in stone. It's a useful guide, but it's not something that should feel like a duty.

Melissa Rudd is a long time accountant and avid blogger. You can find her helpful writings on many blogs, including finance, business, technology and more.

Financial Planning for the over 50s

Whether a school leaver or a septuagenarian, financial planning is a vital part of life. However, as you grow older, the factors you need to consider evolve and change as your needs mature.

When you are younger, financial planning is all about the long-term future and putting ideas together to ensure you start edging your way to getting what you want sooner rather than later.

Once you are over 50, although you may have many things you still want to see and do, you also need to start thinking about how your loved ones would pay for a funeral if the worst happened.

We take a look at financial planning for the over 50s and run through some of the considerations which should be taken into account.

Preparing for the worst

No one likes to think about their own death but making sure that all the necessary financial preparations are in place means that your loved ones will have much less to deal with while they are grieving.

"Look after your money, and it will look after you in retirement."

If you are willing to go that one step further, you could even make the preparations for your own resting place. An increasing number of people are opting to have their memorial stone constructed by a stone mason and pick their own cemetery – and even paying for it in advance – to save their family and friends from making difficult choices at a traumatic time.

You might prefer to leave the actual wording on your headstone, but there's no reason why you can't decide on everything else. Granite or marble? Polished or pitched? The choices over your headstone can be made in advance. You can even opt for a curbed memorial if your chosen cemetery permits these.

Pension arrangements

Hopefully, you will have been able to contribute to a personal pension. If this is the case, now is the time to view what arrangements you have in place and consider whether they would be sufficient to fund a comfortable retirement.

There are many types of pension funds that can be arranged

Although the exact value of your pension fund may well fluctuate in line with the market, it can be helpful to get an annuity quote so you know exactly how much extra income you can expect to receive once you stop working. 

This will help you plan for your future and decide whether you need to keep a small part-time job or whether you can afford that around-the-world cruise you have always promised yourself!

The other factor to consider is whether your pension fund needs to be moved to a low-risk, more secure investment.

Pensions are considered a long term investment, so investing in a fund deemed either cautious or aggressive carries little real risk as there will be time to make up any losses. 

The stock market, by its very nature, undulates, but any dips will even out over time, so there's usually no need to get worried by fluctuations in your fund value.

However, once you are nearing retirement, it's worth considering whether it would be more appropriate to move your fund to a less-risky investment. 

If the worst did happen and the market crashed, you may not have sufficient time for your pension fund to bounce back before you need to cash it in. Experts recommend moving your fund to a low-risk location the closer you take your retirement.

Conclusion

Just because you are over 50 doesn't mean you don't still have a long and fulfilling life ahead of you, and free of the shackles of work, you can finally spend your time doing exactly what you want.

However, financial planning is just as important as ever. Whether making sure your loved ones don't have too much to do if you were suddenly to depart this mortal coil or bolstering your pension fund so that you can have a whale of a time during your retirement, it's vital to make the necessary arrangements.

Creating the Perfect Personal Finance Strategy for Middle-Aged and Senior Citizens

Finance (Photo credit: Tax Credits)

With the recent financial meltdown debilitating the job sector and leaving an entire generation’s financial security compromised, it’s hard to imagine the troubles faced by middle-aged and senior citizens when the younger generation is in so much hot water. Transitioning to a life with no full-time job and, more importantly, no fixed income can be overwhelming if you’re not prepared for it. 

Whether your retirement plans involve moving back to your old house in Exton PA or settling down comfortably in Napa Valley, you must have excellent dominion over your finances to help you realize these dreams. If you’re pushing 50 or 60 years of age, then here are five key questions to ask yourself in order to choose the most effective strategy for keeping your financial boat sailing smoothly under all conditions.

What Assurance Does Your Health Insurance Give You?

Blindly rejoicing under the blanket of assumed safety of Medicare may not be the smartest idea. It is imperative to be well-versed with all the fine print mentioned in the insurance policy you sign up for and back it up with another policy that covers the loopholes of the former one. It will save you the rude shock of getting a colossal medical bill you’re not prepared to handle.

Are Your Financial Records In Order?

Keeping vigilant records of your expenses and savings is the first step to developing a successful financial plan that will help you enjoy a comfortable retirement. They make it easier to identify any possible deductions such as employment costs, mortgage payments, or commuting expenses that will lower your taxable income. Consult a reputable financial planner by showing them your financial records in order to get a better assessment of your financial status.

What Are Your Tax Liabilities?

Sometimes getting a raise may not be the best thing to happen if you don’t possess the financial savvy to manage it. In fact, graduating to a higher tax bracket may do your bankroll more harm than good. That’s why it’s quintessential to keep track of any revisions in IRS and Social Security policies and adjust your financial planning strategy accordingly.

Is Social Security Really The Ultimate Safety Net?

Contrary to popular perception, Social Security isn’t always a financial guardian angel for your retirement years. If you look at the rules and laws governing Social Security policy, you’ll find out that they’re uncomfortably dynamic in nature is because the age of retirement specified in the Social Security policy keeps changing. Thus, you should maximize your income while reducing your taxable Social Security income as much as possible.

How Bulletproof Is Your Investment Portfolio?

Most financial planners agree that middle-aged citizens should focus on maintaining a growth-oriented investment portfolio with a healthy mix of blue-chip stocks and bonds. As a citizen crossing the age of 50, it’s recommended that you stick to making only stable investments with a low risk factor to ensure guaranteed returns.

Retirement: Four Tips for Getting Your Finances in Order

Getting your finances in order before you retire is a great idea for anyone who is either planning their retirement, or who has suddenly found themselves in a position where they are being forced to retire. Financing for your later years doesn't have to be scary. If you are looking for a way to get your money in order before you stop working, try these four tips.

Rid Yourself of Debt

The best way to make sure that you don't outlive your money, is to cut your expenses down as much as possible. Make plans to use your retirement funds to pay off any existing debts that you have. If you don't have enough in savings to cover your debts and your income will not give enough coverage, you might want to consider filing for bankruptcy. According to a chapter 7 attorney in St Louis, getting rid of any debt is the best thing you can do to avoid bankruptcy.

Know the Facts

Figure out what your income will be. There are many people who do not know how much they can expect from their pension, their retirement fund, or Social Security. Fortunately, there are a lot of ways to find this information. Several months before you retire, gather together any documentation you have about your retirement accounts, and contact each fund manager. Also start the application process for Social Security. This usually won't take long and can help you on your way to budgeting and planning for the future.

Future Planning

Decide what you want to do in your retirement. Believe it or not, very few people actually have a plan of how they will spend their retirement. Think about your day to day life, and how you want to spend it, not just a once-a-year trip you'll take. Look into volunteer opportunities, hobbies, and maybe even part-time work. This is the chance to try something new, or something you always wished you could do. Once you know what everyday life will entail, you can plan a more precise budget.

Make Cuts Where Possible

After figuring out what your income and expenses will be, it's time to make a spending plan. If you have more income than expenses each month, come up with a plan to save the money and/or carefully plan major purchases. Be sure to include every payment you might be making, and even unforeseen events like hospital visits or house repairs. If your expenses are greater than your income, however, it's probably time to make some hard decisions about where you can make cuts, or start looking for part-time work. Perhaps it is feasible for you to sell some assets or old valuables to make sure you have enough money.


With these simple tips, panning for financing your retirement won't be a daunting task. The key is organizing and making a plan that will be easy for you to follow. Retirement is a chance to enjoy the fruits of your labor, so start by preparing now to have the time of your life.

7 Ways Retirees Can Better Manage Their Finances

Finance (Photo credit: Tax Credits)

When you reach retirement age, it is very important that you manage your finances. If you won’t continue working and will stop as soon as you start to receive your state and/or company pension, it is vital that your finances are kept in order. Here is how you can stay on top of your finances.

Create a budget

It is imperative that you make a budget. By writing down all expenditures, you’ll know exactly how much money has to be paid every month. When this is compared to what your pension is, you’ll know about any spare capital. When you have a workable budget, you won’t spend beyond your means.

Pay bills within days of each other 

If you have many bills to pay throughout the month, it is recommended that they are taken out of your account within several days of each other and not sporadically. Utility companies might enable you to change when payment is taken out of your account and your local council might offer several days every month when council tax payments can be deducted. When bills are taken out of your account within a few days of each other, you’ll be able to manage your finances more effectively.

Clear your debts

If you have a considerable credit card bill or any other form of debt to pay, this should be cleared as soon as possible. Setting aside a particular amount of money in your budget every month, your debt levels can be reduced. When you no longer have debts, your credit history will improve.

Choose a credit card which charges a low rate of interest

You might have many credit cards. However, this isn’t necessary because you should only have one credit card. If you have a credit card which charges a significant rate of interest, your bill will be very high if you don’t pay back what you owe to your credit card company. If you want to have a credit card bill, you should choose one which charges a lower rate of interest. Therefore, even when you don’t pay your credit card bill on time, you won’t have to pay a lot in interest.

Pay off your mortgage quicker

Although you don’t want to have any mortgage payments left when you reach retirement age, this might not be possible. If you haven’t paid off your mortgage before you retire, you could arrange a meeting with a mortgage adviser. Providing help about how a mortgage can be paid off quicker than it is at the moment, it is in your best interests to pay off your mortgage as soon as possible. This is because you won’t be liable for mortgage repayments anymore and you’ll have extra capital which can be spent elsewhere.  

Choose an ISA

The current interest rate for savings accounts is very low and as little as 1% might be given. If you have a considerable sum of money in your savings account, you won’t get as much in interest. However, an Individual Savings Account (ISA) can help because you can take advantage of a much higher rate of interest. More than 2% can be offered and some ISA’s give a 2.5% rate of interest. It is recommended that you find out about ISA’s which are being offered by other banks than where you currently have a savings account. This is because you could find an ISA which offers a better interest rate.  

Shop at other supermarkets

You might be spending too much money on your weekly shopping bill. Many supermarkets, such as Aldi and Lidl, are cheaper than Asda and Tesco and the same quality produce can still be bought. You could discover that up to 40% can be saved when you shop elsewhere. In fact, you might wonder why you haven’t shopped at other supermarkets before.

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Technology Invades the World of Finance

In the world of finance, there have been a number of innovations that have changed the way people conduct their business. Thanks to technology, there have been a number of different advances in the finance arena. Here are a few examples of ways that technology has changed finance:

Smartphone Apps

Smartphone use has been growing rapidly in the last few years, with millions of people using these devices. With so many smart phones, there are also millions of apps being made. Many of these apps make it easy to manage your finances. Banks like Discover Bank offer apps so that you can check your account balances, transfer money, or make payments from your phone. Investment companies offer apps so that you can check your trades while on-the-go.

Investing Software

If you are an investor, there are a number of software programs out there that can help you do your job easier. For example, there are programs out there that can actually automate your trading based on algorithms. With these programs, you simply upload them to your trading platform, and then they start trading your account for you. This makes it possible for you to go do something else while the software is trading your account for you.

Peer to Peer Lending

In the past, when you needed to borrow money, about the only option available to you was to go to a bank and ask for a loan. In today's world, you can borrow money from other a regular people who have a little bit extra to loan. Thanks to peer-to-peer lending networks, you can get connected with people who want to lend. The peer-to-peer lending site handles the details like transferring the money and checking the credit of the borrowers. This has made it possible for many people to borrow money when they need it.

Virtual Wallet

Virtual wallets have made it possible to make payments with your smartphone. Using near-field communication technology, you only have to get your phone close to a scanner and the payment is charged to your account. This makes it easier and faster to make a payment.

Technology has completely changed the way that people handle their finances. In the future, there will be many more technological advancements that have an impact on the area of finance. By taking advantage of some of these advancements, you can save time, protect your money, and get some more peace of mind in the process.

5 Smart Things To Do In January

Image via WikipediaIt's the beginning of the new year and now is the time to start your list of productive things that you and I should be accomplishing now. This month will be a busy one because the work we get done this month will set the pace for the rest of the year. You need to check over your finances to see if you are doing all you can to make this year a great one.

On the to-do list:

Automate your Finances.
Is your pay check direct deposited in the bank? Why waste time driving to the bank to just deposit your check every one or two weeks. Save time and money by setting up direct deposit.

Set up automated transfers to savings to pay yourself first. The next smart step, after direct deposit, is to get funds into savings right away so they can begin earning dividends from the get-go.

Automate your mortgage payment. Even with the typical grace period that most mortgage lenders allow, it’s always a good move to take care of that big monthly payment. Again, you’ll never have to worry about making the payment on time.

Automate minimum credit card payment or payments. The penalty for a late credit card payment is not pretty. Set up an automated payment to cover at least the minimum due on all your credit cards; you always can pay additional amounts so you retire those debts as soon as you can. Set payments a few days before the due dates to protect your credit score.

Arrange to have any overdrafts automatically covered from your savings account. Even if an overdraft is rare in your household, it can happen to the best money managers. Make sure you can cover any inadvertent overdraft with a direct transfer from your savings account and there’s another worry you’ll never have again.

Get organized.
If you're like most people, you are not organized. You have stacks of papers and mail you have been saving to look at later, but never get to. Look in your closets and try to find something to throw out. We all have things in closets that we will never use again. Why not throw away the junk and donate some of the better things to Goodwill.

Check out the garage, a source of larger clutter. Through away the junk and make room for your car. If you look at it like you are moving to a smaller home, you can see what is not necessary to keep.

Spending and savings goals.
Dig out the budget and see if there are ways to fine tune it more. See if you can squeeze a little more savings from your budget by cutting expenses. The extra money can be used to pay off debt, save, or go on vacation.

When saving for retirement, college, or other major life events it's a good idea to see if you are still on track. Checking where you are and making mid-course changes will keep you going towards your goals.

Reevaluate your debts.
If you are paying on a mortgage, student loans, or credit cards it is time to see if you can possibly accelerate the process. After making monthly payments to debt you get so automated you forget to see the progress your making. You should check to see if you are making the correct payments. You could be paying to much to one debt and to little to another. You should see if it is possible to increase the amount of the monthly payment so you can be finished sooner.

Plan ahead for future needs.
This should already be a part of your budget. The problems and expenses that will come up during the year makes it unnecessary to save for. Those things are vacations, next Christmas, new cars, educational needs for the children, and large purchases like TV's and appliances.
This list only scratches the surface of things to do this month. Add to it some of the things you will be doing.

5 New Ways to Save Money on Your Christmas Spending

Image via WikipediaThe dreaded Christmas shopping season is fast approaching. Are you in danger of overspending like you did last year. Most Americans overspend and rack up large credit card bills. It's hard to break the bad habits of a lifetime, but this year will be different.

Breaking bad shopping habits is not impossible. I was terrible at shopping for Christmas gifts. I felt obligated to make a big present filled Christmas for my family. This led to over spending and large credit card balances arriving in January's credit card bill. The money I charge usually took till at least the summer time to pay back. This was an intolerable situation and I had to find ways to stop the madness. Below are just 5 ways that I made the break back to sanity. Maybe they can help you.

1. Cut back on the Gift Cards.
When shopping for that perfect gift for Christmas most people don't know what to get. So to end the shopping adventure they go to the gift card isle. It's so convenient to just get a restaurant or store gift card. But what amount do you purchase? You budget tells you that you can only afford a $10 card but you feel it may make you look cheap. So you go for the $20 or $25 card, which you think makes you look generous.

What you just did was bust your budget. This year skip the gift cards and do some actual shopping. You can't afford to give out $25 gift cards. Make a list with the name of the person and an amount of money you want to spend. You still have time to shop sales and stay on your budget. Don't give gifts not cards this year, you will save money and look like you actually care.

2. Spend cash not plastic.
All year you should of been saving for the Christmas shopping purchases. With this cash you will go shopping, you won't be using plastic. Not even your debit card. With plastic you have a greater chance to overspend. With cash it is very hard to overspend. Leave the cards at home so you won't be tempted. You will spend less and it will force you to hunt down better deals.

3. Have a Plan.
You are on a mission to hunt down that gift on your list, pay for it and get the heck out of the mall. No sightseeing or window shopping. You have your list, cash and a plan this year. Your not going to overspend again this year. You will be tempted by all the holiday decorations and music playing. But you can't let it happen. Remember you don't have to complete all your shopping at one time. It's better to break down your shopping into small missions that can be accomplished.

4. Make more purchases online.
The online shopping experience can make your purchases more economical because it's much easier to find the best deal. Websites like Fatwallet.com has forums where members take much pride in combing the Internet to find the best deals. Online you can get some new inspiration and find some great deals. For some, it eliminates impulse purchases, but for others it's to tempting. But if you are a savvy shopper, you can grab some good deals and stay out of the malls too.

5. Alternative gift giving.
The usual gift in a box will fulfill you Christmas obligation. But why not try something a little different this year. Instead why not give an experience. Get together with the whole family and plan a vacation. Your own family and extended family all plan on taking a little trip. You can rent a multi bedroom home at a lake or oceanside resort and split the bill. Make it a week together no TV or video games, just each other. Make a memory you will always cherish.

Giving experiences is a lasting gift that won't end up in the closet or the return counter. Do you remember what you received last year for Christmas, I know you don't remember. Most people don't because it was a meaningless gift. An experience won't break or get returned.

The holiday season is not about spending money or material gifts. It should be about celebrating Christmas and family. Don't get wrapped up in the material. Change the direction away from the usual and start some new traditions.

Should I buy the iphone 4S or wait till next year for the iphone 5

Image by Witer via FlickrThe iPhone 4S came out on Friday are you going buy one? Already millions have been sold. The market for Apple products seems unlimited. But is it really smart to keep buying a new iPhone every year.

Some people with older iPhones have been waiting for this new release to upgrade. If you have the original iPhone or the 3g or 3gs it makes sense to upgrade. Your phone is at least 2 years old and probably starting to slow down. Apple upgrades its OS fairly regularly and the upgraded software is getting more advanced and is having a problem running on the older hardware. This planned obsolescence forces you to upgrade just to get a phone that runs correctly.

Should I upgrade if I have an iPhone 4?

The iPhone 4 is almost identical in looks and function. The only difference is that it has the new voice recognition software and a better camera. If you have an iPhone 4, the benefits of the new phone aren't reason enough to upgrade. The new iPhone is really aimed at the people who have an iPhone 3 or 3G. They need to upgrade. Still have iPhone envy, according to Apple's track record, The new iPhone 5 should be released next summer.

I want a new iPhone but I am short of money.

If you are short of cash and still want to own an iPhone, AT&T is selling the iPhone 4 for $99 with a two year contract. Want it even cheaper, the iPhone 3gs is free with a new two year contract.

Mobile Home Becomes Vacation Home Becomes Retirement Home

Image via WikipediaNear my home there are many mobile home parks filled with retiree's. It's a great place to live because the weather is great most of the time and it's a ten minute drive to the beach. Many people chose manufactured homes because of the lower costs when compared to apartments, condos, homes, and townhouses.

Friends from Illinois come down to visit us often and they stay in their manufactured home. Whenever they visited they had to pay for a hotel. Over the years spending money on a place to stay got pretty expensive. Through the grapevine we learned about a manufactured home nearby that was being sold. We went over to take a look at it and recommended it to our friends. They fell in love with it, the rest is history. For them it works out great because they save on hotel and restaurant expenses allowing them to stay with us longer. When they finally get around to retiring they will sell their Illinois home and move permanently here.

Manufactured homes are often overlooked as an answer to the affordable housing problems we have in the country. An idea like this would work out for newlyweds, students,and people just starting out in the work force. It would save them a lot of money over more expensive alternatives like apartment rentals. It's something to look into.

Credit card delinquency rates at a record 17 year low

Image via WikipediaCredit card users have gotten serious about their debts, this new found responsibility has driven down the credit card delinquency rate to a 17 year low of 0.6%. This according to credit reporting agency TransUnion.

"National credit card delinquency rates have fallen to levels not seen since 1994 as consumers continue to tighten their spending," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

              Link to TransUnion's Infographic Of State By State Delinquency

The 0.6% delinquency rate, which reflects borrowers 90 or more days past due is down from 0.74% in the prior quarter and 0.92% a year earlier. TransUnion also reported that even though the average credit card debt per borrower rose 0.42%, it still is down 5.1% as compared to one year ago.

Of all the states, Alaska, North Dakota and Iowa showed the lowest delinquency rates. The highest delinquencies were in Nevada, Georgia and Florida.

Why does Florida rank at the lower end of the scale?

Like Nevada, Florida has more of a problem with it's real estate market. Residents have found themselves more devastated by the real estate bubble bursting. With home values rising the highest and in result falling the farthest, many homeowners find themselves either in foreclosure or without a job. This explains how the average household is juggling between the paying of their mortgage or their credit cards. 

TransUnion's explanation for the falling delinquency rate is people are treating their debts more seriously and paying them off more quickly. Also lenders are more selective to who they give credit to.

Still Florida's stagnant real estate problems are a big drag on the local economy.The construction business is as important to Florida as it's tourist business which is also stumbling. Much of the population counts on these businesses for their livelihood, along with the supporting businesses. These statistics are not going to change until we can get people back to buying homes and spending money.

Florida has grown by a constant influx of people who wish to live in our great climate and vacation here. The climate is not broken just our economy. Florida is like the tail on the dog, get the country back to work and Florida will be where they spend their money.

The TV is Broken Should I Repair or Replace?

Image via WikipediaThe picture on our TV went out the other day. The sound is OK, but no picture. The repair man came over and said it was a bad X-Sustain board. It would be only $350 to fix it. We spent $1100 for the 42" plasma TV 5 years ago. The question in my head is should we repair or replace the TV.

A new TV the same size could be purchased for $500 today. With the $150 difference from repairing it, I have decided to buy a new one. This decision was pretty easy to make because of the age of the TV and the probability of other things breaking on the set in the years to come.

Sometimes the decision to repair or replace is not so clear. I did have to give this one a little thought and a trip to the store convinced me that the TV's today cost 50% less than when I purchased my TV and the high cost of repair was not encouraging.

A few years ago My roof was in question. Should I repair a 30 year old roof or replace? The repair cost was 25% of the new roof cost. Also the maintenance on the old roof was high compared to the new roof which is negligible.

So how do you decide?

I put together a check list of common things that could be repaired or replace around your home.

Your Roof: 

There is a time in every roof’s life when it needs to be replaced. But, do you really need that new roof now? It’s a difficult decision given that a new roof can be costly. Just because the roof is leaking a bit does not necessary mean it needs a full replacement.

Replace it if:

• It is 20 years old or more. The average roof life is 15 years.
• There 1/3 or more of the shingles are damage, missing, cracked or curling.
• You see sagging roof boards or mold in your attic.
• It was significantly damaged by a storm. Your insurance may cover this

Repair it if:

• You see minimal water damage in your home. Most water leaks can be repaired.
• You are only missing a few shingles. Repairing a few shingles may only cost $75 – $250.

Your TV: 

It’s a sad day when the tube stops working. It’s usually very high on the list of priorities, but a decision has to be made to fix or replace first

Replace it if:

• There is a recall for a defective TV. Sony is replacing certain models of their TVs for a great discount because they have defective parts.
• It’s old. New technology is better than ever and has become more affordable. You will likely get a better TV at a lower price than your previous one.
• The repair will cost more than half the price of a new TV.

Repair it if:

• You bought the extended warranty.
• It’s a really big expensive TV. It will not be easy to afford to replace this and will be worth the cost of a repair.

Your Business Copier:

 An office copier can be an expensive investment. What do you do when you your copy machine isn’t working properly.

Replace it if:

• The cost of repairs over the last six months adds up to more than fifty percent of the cost of the copier.
• It’s not reliable and you are losing money on your business without it.
• Leasing a copier is cheaper than your monthly repair bills.

Repair it if:

• Your warranty has not expired.
• You can purchase the broken part on the cheap and replace it yourself.
• It doesn’t break down very often.

Your Gutter System:

 Gutters carry out an important function for your home: Carrying water away. It’s important that they are functioning properly, so action needs to be taken when you notice something is wrong.

Replace it if:

• You notice that the system is rusting out or the nails are pulling away from your home.
• Water is pouring over even when the gutters are clear of debris. The system may be too small for your home.

Repair it if:

• They simply need to be cleaned. Some gutters leak because they are full of leaves. Gutter cleaning only costs $150 to $300 per day.
• Less than 2 or 3 sections are damaged.

Your Hardwood Floors:

 A hardwood floor can hold up for more than 100 years! Refinishing your hardwood floors can make them look like new again in most cases, but there are a few exceptions when you will need to replace them.

Replace them if:

• You want a different grain or much lighter color.
• There isn’t enough material left to refinish it again. It has been sanded many times and the nail heads are showing at the seams.
• Water damage has caused the floors to warp or buckle.
• They have very deep holes or cracks.

Repair (or refinish) them if:

• There are scratches or traffic wear, but plenty of material left to sand.
• You found them underneath your old carpet or vinyl floor. Old hardwood is very valuable and a refinish will take off any material left from the carpet or vinyl.

Would You Like To Have A Financial Tsunami Happen To Your Life?

Image via WikipediaI have been watching the videos coming back from Japan depicting the devastation. Peoples whole lives completely erased. Seeing pictures of cars and houses going past in the oncoming waters. Then seeing them as they come back and go out to sea. What do they have left? The house is gone so is their cars, clothes, furnishings, and every physical thing they have.

What if this happened to you? Would you want it to happen to you? I believe there are some people who would want this to happen. Not the tsunami, but a financial tsunami. Imagine no more mortgage. No more car payment. No more bills. Your totally free to start over. Your financial tsunami has given you a clean slate, a fresh start. Your getting a do over to get it right this time.

Think about it for a minute. You still have your job, your income. What would you change this time around? Would you buy the big house again? Or get something more affordable so you can save more for retirement. What about the expensive car, would you get another one or a good used car this time. Would you save more in your 401k? How about living within a budget and not going into credit card debt.

Many people are doing the money thing right, but many of us have screwed it up big time. A fresh start sounds pretty good. Getting a fresh start can still be done without a tsunami. It takes a little discipline and a plan.

To make it happen you must be sick and tired of being sick and tired. You must be ready and determined to turn your finances around. Without this complete commitment you will not succeed. Are you fed up enough to make it happen this time?

If you are ready then the first thing you must do is make a spending plan, in other words a budget. At the top of the page you write your income and list down the page, in priority, what you need to pay. You pay each bill with the money and when the money runs out you don't spend anymore. Of course credit cards are cut up and thrown out. No more added debt. This time you will live within your means and no more debt.

For further information on budget creation read this post on making a budget. Here.

This is the first step on a journey that will take you on to be financially successful. You won't need a tsunami to clean your life up. You are capable of doing it your self.

Would You Move To Another Country If It Meant You Would Prosper?

Image via WikipediaFamed global investor Jim Rogers says if you want to prosper in the 21st Century, move to Asia. You may not know that Jim Rogers has put his money where his mouth is and did move to Singapore in 2007. He is raising his two little girls there and making sure they learn Mandarin. He is very bullish on Asia and says it's the place to be for the 2000's. He says it's not only for the success of his own assets. But for positioning his heirs for success.

He stated:

"In 1807, if you had moved to the U.K., you and your heirs would have been much, much better off for the next 100 years. If in 1907 you had moved to the U.S., you and your heirs would have been much better off for the next 100 years. 

In 1907, if you had stayed in Poland or China, you would not have had a great future, nor your families. Had you moved to America, [your descendants] would have had a much better future. Who knew what they would do, if they would become doctors or what, in the next 100 years. But whatever happens to them, they were better off. They spoke English, which became the world's language. 

My view is that the 21st century is going to be the century of Asia, of China. If I'm right about the future, you are going to have a better life [if you move there], better opportunities, and better everything going where the action is, where the assets are."

In my view, moving to Asia in 2007 means my heirs are going to be much better off in the next 100 years.

A thoughtful explanation of the last 2 centuries of history. But will it happen again in Asia? Jim Rogers is wealthy enough to move wherever he wants. Also he can do business from any part of the world. But Asia is where the action is for the 21st century, he claims.


Think for a minute, would you leave the U.S and move to another country for financial gain? We know millions that have left their country and traveled to the U.S. They did it for a better future for their family. It's the same idea Jim Rogers is talking about. Is he so wrong to do the exact thing?


Could you pick up and leave the U.S. Many already live abroad and are happy doing it. At first it seemed I didn't think I could make the leap. If offered an enticing job abroad, would I go for it? I don't know. What do you think? Would you ever leave the U.S.?

She's Buying a Car, What's Better a Rebate or Low Interest? Help Dad.

My daughters car finally went to heaven. After 10 years of life, 200,000 miles and puddles of oil on the driveway, she needs a new  car. I advised her to use the $5,000 dollars she has saved and buy used. But no. She wants a new one. She's just not going to listen to the old man. 


She's been looking around for a while because her car has been on life support for the last 3 months. I went with her down to the dealer for technical and moral support. 


Now if you know me, you would know of my absolute love of going down to the dealer to talk to car salesmen. Talking to car salesmen or getting root canal, which would I rather do,  I think the later. Our salesmen was an elderly gentleman, his fire had long gone out, but he was interesting to talk to. Everything went well for a while until he had to throw a curve ball. He advised us there was a rebate. Then he said instead of the rebate she could have 0% interest. What to do? 


When buying a car you have a choice between low or no interest and a rebate. How do you know which is better. It's a matter of doing the math. Huh! Do math? I know. Why not get some online help!

Several websites have online calculators that will help you decide. AutoTrader.com and Cars.com each have one, as does Bankrate.com . It's simple, just enter the loan amount, the rebate amount, and the interest rate if you take the rebate, and the interest rate if you don't take the rebate.

Lets put in some numbers and try it out. Say you have a 48 month loan for $25,000; the rebate is $3,000, and if you take the rebate the interest is 6%. If you leave the rebate you get zero percent financing. The answer: "It's a Wash", the calculator tells us. But if the interest rate was 8% instead of 6, you would come out $1,000 better by taking the zero percent loan and no rebate. One other deciding factor is if you are short on a down payment, you can use the rebate to help with that.


Now we had the facts to make an informed decision. I thought finally we were going to be done with this car hunt. Yet it was not to be. My daughter was starting to get cold feet, thinking about that long commitment of payments every month. We went home to think it over. To be continued........

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Before You Marry It's Time To Get Financially Naked

With the statistics of divorce in this country, more than ever we must better prepare for the big step of marriage. There is a lot to do before the big day. The list is long with all the things that need to be arranged. The preacher, the hall the church, the caterer and on and on. Lots of time is needed to get all this done. We can't forget to be sure we are preparing our financial lives together, also.

With all the rushing around be sure you give yourself the time and space to talk frankly about your financial philosophies. With financial conflicts still among the chief reasons for divorce, it's critical.

You need to talk over all the obvious questions like, How are we paying for the wedding? Should we combine our accounts? What if one of us gets laid off? Those are the easy questions to ask. You need to dig deeper into philosophical questions. Is your future wife a clothes maven with a hundred pairs of shoes? Is the husband a car freak that will only drive a BMW? These things are cute when your dating your future spouse. But if your future love has spending problems, you need to know before the big day.

A thorough pre-marital counseling is imperative to work all the bugs out. You owe it to your future spouse to expose all your crazy spending habits, turn over all the cards and get financially naked.

There are so many facets of life to touch on during counseling you will only be able to touch on the very important ones. One of them being your future home together. Does one person want a small 3 bedroom house and the other want a lavish 2 story McMansion. When the kids arrive is it public or private school. Religious school or home school. What about vacations? will it be Hawaii or North Carolina?

Counselors ask piercing questions to get an answer from your soul, for example:

Imagine the Best. You have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything?

Life Cut Short. Now the doctor says you have only 5 to 10 years to live. You won't feel sick, but you'll never know when death will come. What will you do? Will you change your life? How?

Regrets. Now imagine that your doctor says you only have one day to live. Ask yourself: What did I miss? What did I not get to be or do?

With these sample questions, your philosophy comes out. You really get to know how your future spouse ticks. Today people are more careful with their money. If they don't know their future spouse well enough an anxiety about their future behavior arises. This leads to mistrust. A sign of this mistrust is the use of Pre-nup agreements. They are used to protect assets in case of divorce. This is a big red flag that your marrying someone you don't trust.

The action that needs to be taken is, if your engaged to marry,  get a good financial marriage counselor to help you better prepare for the big step your about to take.

Related articles

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5 Easy Steps To Start The Financial New Year Off Right

The New Year is always the calendars way of saying here's another chance to get it right. We make resolutions to eat better and exercise more. Trust me, I have tried that resolution every year. But there has been one resolution I have been successful with and that is getting my financial life in order. You have to much debt and are not saving any money. It's the result of sloppy managing of your money. Get out a pencil and paper, its a lot easier than exercising and eating right, I know. Here are 5 easy steps to get you going.


Step 1: Admit that you have a financial problem. Admitting that you have a financial problem, whether it’s charging too much on credit cards or acknowledging that you own too many credit or store cards is the first step. You can’t begin to erase debt until you are able to admit to yourself (and maybe others) that you have a issue.


Step 2: Make a list of all your debts. You can’t know where to start until you have some sort of blueprint in front of you. And that blueprint will be your list of debts to attack. List out every debt you have (you can even put down your mortgage if you’d like) but list EVERYTHING! You cannot forget, by accident or on purpose, any of the debts. Many people will purposely not add a debt to the list on purpose because it’s a way of ignoring the problem. Part of your success in erasing debt will be how well you acknowledge each and every debt you have. List your debts starting with the smallest debt to the highest. Place them all in a column, one above the other.


Step 3: CREATE A BUDGET. The dreaded B-word. Everyone has a story or excuse or reason why they can’t create a budget or stick to a budget or a budget doesn’t work for them. I’m here to tell you that a budget does work if done properly. I’ve done it wrong and I used all of the excuses in the book to avoid creating one. But a monthly budget that is constantly reviewed and updated is the KEY to erasing your debt. Oooh, that sounds like work. Well, yes it is….


Step 4: Maintain Your Budget. You cannot create one budget and then think that that one budget is going to be the same budget used, month-after-month for the next few years until you get out of debt. If you do that you’ll be frustrated by month two and your budget will go down in flames as a miserable failure as most budgets do. A budget has to be modified every month to meet the needs of your family’s life style. Maybe even updated every week until you feel comfortable with it. And then even when you are out of debt, you will need to continue with a budget. The one guarantee I have for you if you stop doing a budget is that once you stop doing a budget, I guarantee that you’ll be back in debt again. Once you get use to managing a budget, it shouldn’t take up a lot of your time.


Step 5: Include Everyone in the Budget. Be sure to communicate with everyone in the family (spouse and kids) about the budget. Everyone needs to be on the same page and rowing in the same direction. You can’t have a wife following the budget and the husband off buying tools that weren’t budgeted for. It won’t work. EVER! Even tell the kids about the family budget. Now a nine year old doesn’t need to know all the finite details. But make them aware that there is only so much money. And that money is allocated to certain things. And some things are “not in the budget.” They will catch on soon and before you know it, they will be telling you what is not in the budget.


Bonus Step: Start living on a budget. It’s all fine to create a budget and talk about it. But if you don’t implement it, it will never work. What’s the worse that can happen if you go on a budget. You finally may actually start to understand where all your money is going. That may be scary at first but eventually it will feel liberating and you’ll soon erase that debt and start saving.

We are still not done yet. You need encouragement from friends and family for sure. You also need to keep on educating yourself in this money adventure. You must read books and keep reading blogs about personal finance. Also get some of Dave Ramsey's books. His "Total Money Makeover Book" is what you need to read again and again. Find other authors to read and learn all you can. You will be successful if you have a plan and follow it.  I Promise.

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7 Youtube Channels That Teach You How To Handle Money.

Image via Wikipedia

In our quest to learn what to do with our money we seek information from friends, family and also professional financial planners. Some of the things we need to know are: Are you saving and investing enough? Do you know how to save and invest? How do we plan for retirement? We need information to make decisions. A lot of us go to the web. We read blogs and information websites. What else can do to get the information needed? A lot of good information is on YouTube. YouTube is great, just sit back, watch and learn. I'm listing a few of my favorites. Check them out.

Kiplinger

Kiplinger on YouTube has hundreds of videos covering a wide variety of subjects. It has something for all ages and  knowledge levels. It's brought to you by the people who publish the Kiplinger Magazine.


Morningstar

Everyone has heard of Morningstar, the people that publish the great information on mutual funds. This page concentrates a lot on investing subjects. There is a good amount of interviews with the industry leaders. You will find the interesting Morningstar lead financial planner Christine Benz. She has a lot of good financial planning information to share.

CBS MoneyWatch

Here you will find good advice concerning Real Estate, Investing, Banking, and Personal Finance. This channel has the backing and resources of CBS News. You will see CBS reporters filling their network stories and web only financial stories.

Sound Investing TV

Sound Investing TV is produced by Paul Merriman founder of Merriman Investing. Paul is dedicated to teaching and giving good information about investing and finance. He is a big advocate of the Lazy Portfolio theory of investing through index funds. You will find Paul's homespun style of teaching very informative. I highly recommend this channel.

The Saving and Investing Channel

This channel is run by Michael Fischer, author of "Saving and Investing". This channel has Michael teaching the concepts his book describes. He covers all subjects from banking, no-loads, shorting and mutual funds. He really covers the entire gamut of investing and financial information. His videos usually run about five minutes and are concise and informative. A good reference source for all you new investors.

Money Talks News

Money Talks News has hundreds of quick 2 minute videos with the most variety of topics of all the channels. From foreclosures to Thanksgiving tips, this channel covers it all. You will be kept busy for hours watching all these videos, but you will definitely learn a lot.

Cambridge Credit

Cambridge Credit Counseling focuses on credit, debt, and saving. They cover other things like banking and budgeting. They try to help people through their offices with debt problems. Their videos teach people to save and budget as a way to get out of debt. They have a very informative channel.

You will find a lot of other videos scattered all over YouTube concerning financial teaching and information. These channels put it all in one place so you don't have to go all over searching for that needed information. So sit back with a nice cup of coffee and enjoy some videos

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