Using Your Credit Card--To Save Money

 (Photo credit: Wikipedia)

A few simple steps will help you get the max out of your credit cards.

Advising someone to use a credit card as part of a sound financial plan sounds like telling someone to eat ice cream as part of a weight loss plan. The truth, however, is that credit cards can be used to your advantage.

The best way is to use them as a temporary replacement for the cash sitting in your bank account, rather than for cash you don't have. In other words, it isn't about carrying debt, but about carrying a credit card that's going to pay you back for you using it, and taking advantage of an interest-free loan between the time the purchase and paying the credit card bill.

What about those of us who carry a balance some (or all!) of the time? You still want to maximize your return. The card's interest rate is your biggest concern, but these tips will help you recoup some of that interest payment, or keep you from needlessly paying more.

Never pay before the due date

Most, if not all, major credit cards come with the option to set up automatic payments every month. Unless you tend to have erratic and low balances in your checking account, take advantage of this option. And when you do, set the payment date as the latest one allowed without incurring late fee. The reason: a credit card gives you an interest-free loan during the period between the purchase and your next billing cycle.

For instance, if you buy something May 1 and your monthly billing cycle ends May 15, with a payment due date of June 1, the credit card has loaned you interest-free money for 30 days). To maximize the savings, keep your cash in a high-interest savings or checking account.

One word of warning: it's always better to pay early if you fear you'll spend the money before the due date. The money you'll earn in interest is microscopic compared to the fees charged for late payments.

Take full advantage of cash-back rewards

Many credit cards offer cash-back rewards, typically equal to one percent of your annual spending. Others sweeten the deal by paying back a higher percentage on purchases for things like groceries, gas, or from specific vendors. Sites like billshrink.com help you figure out which card is likely to pay out the most, based on your spending habits. For instance, at one time the Chase Freedom Card paid 5% percent cash back on purchases from a rotating selection of merchants (check for current offers; they change quickly). They also paid a $100 bonus for spending $500 on the card within the first three months.

Avoid balance transfer fees

We've all seen the offers--"0% Interest on Balance Transfers for 12 Months!" And, yes, it's typically too good to be true. That's because many of those cards also charge an up-front fee (often 3 percent) based on the size of the transfer. So transfer $10,000 to the card and you'll pay $300 for the privilege. If you pay the balance off in a year, that $300 fee is the equivalent to more than 5% annual interest. And if you don't pay off the balance, forget about it--the hike in interest rates after the promotional period will likely wipe out the savings in no time.

Shop through credit card sites

Many card companies have negotiated special discounts with retailers, particularly those who sell online. When shopping, check your credit card site first. The American Express Blue card, for instance, offered savings on everything from car rentals to flowers to meals.

Don't pay a fee (usually)
Contrary to evidence from recent history, banks are smart. If they don't charge a fee, they've determined that they're better off giving you a card and earning money from interest you'll pay over the life of the account. Fee-based cards still want to earn money from your interest payments, but they also think you might find their "special" benefits worth ponying up an additional $50 or $75 a year. Unless you're a particularly big spender, the no-fee cards typically will end up costing you less (the aforementioned American Express Blue has a fee-based option, which pays higher percentages of cash back--only worthwhile if you rack up big charges). If you're uncertain, compare the fee and no-fee options and see how your spending habits affect your benefits.

Matthew Malone writes for the leading Roth IRA and online retirement planning resource, RothIRA.com. He is a CBS SmartPlanet contributing writer whose work has appeared in The New York Times, Cosmopolitan, Smartmoney.com, Fortune.com, Forbes.com, and other publications.

How to Sustain the Latest Downfall in Share Economy with Real Estate Markets Overseas

Interest Rates (Photo credit: 401K 2012)

The real estate market was a great market. Amazing opportunities always presented themselves when you joined this market as a seller or even as a buyer. However, with the latest downfall in share economy, the real estate market has taken quite a beating. However, real estate market overseas can still maintain itself if a few things are done. Although the methods are not perfect, they will help the market.

Buyer’s Confidence is Everything

When you are worried about a particular product or market, you will not buy it or get involved; it’s common sense. This is known as buyer’s confidence and in the real estate market; buyer’s confidence is everything. If a buyer is not confident in the real estate market, they will not buy a house. In a weak economy, low buyer’s confidence could spell disaster.

In order to improve the real estate market, you have to get buyers interested in purchasing homes. Any fear they may have about it must be dispelled. When it comes to overseas real estate, the task is even harder. However, it is not an impossible task either. You have to make homes appealing to international buyers that they won’t be able to resist.

There are a number of ways buyer’s confidence can be increased. These Include:

• Low Interest Rates – If you have ever looked at the real estate market carefully, you will notice that interest rates grow with the market but also go down with it when the market does. These fluctuations in interest rate are due to the market itself. For international buyers, lower interest rates may determine their purchase. This is particularly true due to exchange rates.

This helps homes sell faster and, consequently, improves the real estate market. However, online estate agents state that interest rates drastically increase when the market improves. They state that lenders should increase the interest rate very slowly as it nurtures continuing buyer’s confidence.

• Better Mortgages – One of the biggest deciding factors during the property acquisition stage is negotiating a mortgage. If the terms of the mortgage are not to the borrower’s liking, they will not take it. For example, when a high interest rate, short payment plan and harsh penalties are in the contract’s terms, no international resident will buy a home.

International clients need to be assured that they will be able to pay off the mortgage. One small hiccup and they won’t buy a home overseas. To sustain the real estate market, it is imperative that lenders provide better mortgages. Reduced interest rates, softer penalties, better penalty periods, refinancing and better payment plans are only 5 ways through which the real estate market can sustain itself.

When international residents are happy with the terms in the mortgage, their buyer’s confidence will significantly increase and they will buy homes on foreign soil.

One of the easiest ways to improve mortgage terms is by removing any down payments. Most down payments range from 10% to 15%. This is usually high for most people, especially international buyers (due to the exchange rate).

They can pay off the house over the contract length but are unable to pay the initial down payment. By removing the down payment, more people will be able to buy homes.

• Improve the Neighborhoods – Nobody wants to live in a ‘bad’ neighborhood. When a potential buyer learns of a bad neighborhood, they are automatically deterred from buying a home in it. International buyers are deterred faster.

Online estate agents state that although real estate prices of ‘clean’ and ‘good’ neighborhoods are high, people still buy homes in them because of the neighborhood.

Affordable Refinancing

When the share economy is unstable or has gone, one easy way of improving it is by offering better refinancing. For those who don’t know. Refinancing is a process by which you replace your current mortgage with another, more flexible, mortgage. When a better mortgage surfaces or interest rates go down, you can refinance your home.

When the share economy suffers a downfall, it is not easy to maintain any market. Maintaining the real estate market in particular is a difficult job. However, that does not mean that it’s impossible. When lenders and the government work together, anything is possible. Even though the share economy may not be exceptional at this time, real estate market overseas can help sustain the economy.

About the Author:
The above article is written and edited by Shannen, who is a freelance writer for various blogs and communities related to finance. In her free time she writes articles related to online estate agents, real estate properties, debt relief etc.

Coffee Consumption Linked to Delayed Alzheimer's Onset: Study

Coffee cup (Photo credit: @Doug88888)Now and then on this blog I like to relate interesting news about my other favorite subject, coffee. I have been known to be obsessive about it but I believe there are many unknown health benefits. We have been told over the years to moderate our coffee consumption but I know how many people enjoy their morning jump-start. I have been trying to tell my wife how great coffee is and now here is the proof. The little brown bean is responsible for delayed onset of Alzheimer.

A group of researchers from the University of South Florida and University of Miami have found that higher caffeine consumption is linked with a delayed onset of Alzheimer's disease, even in older adults who already have mild cognitive impairment (thought to be an early sign of Alzheimer's and/or dementia).

"These intriguing results suggest that older adults with mild memory impairment who drink moderate levels of coffee -- about 3 cups a day -- will not convert to Alzheimer's disease -- or at least will experience a substantial delay before converting to Alzheimer's," study researcher Dr. Chuanhai Cao, a neuroscientist at USF, said in a statement.

Researchers cautioned that the study doesn't mean drinking coffee is guaranteed to save someone from Alzheimer's, but rather coffee may help to lower the risk of Alzheimer's.

They don't want to go out on a limb here but they also say with all good things take in moderation moderation is key. Excessive coffee consumption is associated with cardiovascular problems, including an increased heart rate or blood pressure and irregular heartbeats, Harvard Health Publications reports.

So when enjoying your daily coffee coffee take comfort in the fact that you are not only self medicating your coffee addiction but also you can tell your friends your keeping Alzheimers at bay.

How To Pick A Financial Adviser

(Photo credit: Jo@net)

This week I went to see my Certified Financial Planner (CFP) for my yearly face to face meeting. Over the years I have been seeking help with my finances. I really believe in having a planner look over your shoulder in your financial life. Even if you do some of your own planning, having a second opinion can give you peace of mind that your doing the right thing.


Many people just don't feel comfortable sharing their financial life with anyone and I can understand that. I highly recommend you get some help if your just beginning to save for retirement or even an old pro.

How Do You Get Started With A Financial Planner?

BEST FIRST MOVE: Ask trusted friends whether they would recommend their own financial advisers. If so, listen to how they describe these advisers—they should paint a picture of a trusted partner who is dedicated to understanding them and how they make financial decisions.
If your friends do not strongly recommend their financial advisers, ask your lawyer or accountant for referrals, If this doesn’t pan out either, ask other members of your community whom you respect.

QUESTIONS TO ASK...
When you meet with a candidate, be sure to ask...

What professional certifications have you earned?
Make sure he/she is a Certified Financial Planner (CFP), a Certified Investment Management Analyst (CIMA) or a Chartered Financial Analyst (CFA). These designations ensure that the adviser receives ongoing financial training and has passed a difficult exam. Titles such as “investment adviser” or “financial adviser” do not have the same guarantee.

If he had been your client in 2008 and lost a lot of money, what would you be telling me now?
The answer should include some basics—such as how to rebalance your portfolio following stock losses and how to sell securities that have declined in value to offset taxes—as well as suggest a long-term perspective. 


The adviser also should understand that his job is about managing a client’s emotions as well. The amount of risk that a client is predisposed to take does not often correspond with the amount of risk that makes sense for his situation, and the adviser must be able to steer clients into an appropriate portfolio in a way that still allows them to sleep at night.

I’m retired, and my portfolio has lost a lot of money. What can I do to get my savings back on track? It’s an excellent sign if the adviser’s suggestions include spending less and saving more and/or taking a part-time job during retirement. A financial adviser must be willing to provide painful advice when necessary just as a doctor must be willing to tell a patient to “lose weight” or “stop smoking.” You should be extremely wary if an adviser suggests some aggressive strategy to “make it back.”

What should I be doing to manage my financial risk? 
Many financial advisers will discuss asset selection and diversification. That’s fine, but it’s a bad sign if the adviser doesn’t also mention insurance. 


Insurance is crucial for risk management—if you don’t have enough, one mishap or lawsuit could cost you everything you own. Types of insurance to discuss could include homeowners’, umbrella, business, auto, life, health, disability and long-term-care insurance.


Note - ( This question on insurance through me on my first visit. But later I understood how important it is to protect the assets you already have.)

I’m worried about the ever-changing economic forecasts on the news. What should I do?
The adviser should encourage you to turn off the news and spend your free time thinking about more enjoyable matters. Becoming wrapped up in the endless recovery coverage wont help you make informed decisions—it will lead you to make knee-jerk emotional decisions that are likely to be detrimental to your mental and financial health.

What financial decisions will you make for me?
This is a trick question. The adviser should answer that he will provide guidance on a wide range of financial decisions but will not make your decisions for you.
The adviser might take the lead in making decisions about specific investments if this is what the client wants—but he still should discuss these decisions and what they mean with the client before proceeding. The best financial advisers have a collaborative approach but are also likely to have strong opinions.

What words would your clients use to describe you?
Most advisers will cite words such as intelligent, experienced, trustworthy and prudent. Make sure the list includes “accessible—it shows that the adviser understands that being available when needed is part of his job. The list also should include a word like “confidant” to show that the adviser stresses a personal connection with clients.

How many clients do you have?
If it is more than 250 (for a solo practice), it’s unlikely that he can give each client the time and attention that each deserves. If you’re investing millions of dollars, anything more than 100 clients is probably too many, unless there is a strong support team. Large portfolios tend to be more complex and time-consuming for advisers, and if you have this much money, it is worth it to pay a little more for one who can give you extra attention.

Note - ( This can be a highly subjective view and I may get a different opinion from CFPs)

How often will we meet?
You should have at least two face-to-face meetings per year. If your assets are well into the millions, you should probably have four meetings. Phone conversations can be useful, but most people feel more comfortable when they have in-person contact with the adviser who is handling their money...and this gives the adviser a better chance to learn his client’s goals and fears.

How do you charge?
Select an adviser who charges a fee for his services, not one who charges commissions. Don’t make a decision based on price. Base it on your sense of an adviser’s competence, perspective and “fit.” Chemistry is vital. (Fees often are based on the amount of assets under management even though the adviser should provide guidance beyond investment advice.)

What is your typical client’s net worth?
This adviser might not have much experience with the financial issues most important to you if his other clients have significantly more or less money.

QUESTIONS A FINANCIAL ADVISER SHOULD ASK YOU...
During an initial interview, a financial adviser should seem like a doctor trying to diagnose the source of a patient’s problems—not a salesperson trying to make a sale.

QUESTIONS AN ADVISER SHOULD ASK...
• Have you lost sleep over the markets recently? This helps the adviser understand your risk tolerance, which will help him design your portfolio.
• Which of your financial goals is most important to you? Most clients have a long list of goals. They want to buy a second home, retire at a certain time, travel, help pay the grandkids’ college bills, leave an estate, etc. These days, few can afford to achieve them all.
• What is your history with money? Did you grow up rich or poor? How did your portfolio fare in the last bull market? The last bear market? Good financial advisers understand that the way money has affected your life in the past will have an effect on how you react to financial issues in the future.
• What do you want from a financial adviser? The adviser should understand that financial planning is not one size fits all. It is his/her job to adjust the services provided to fit your needs and desires.


Opinion - I have been lucky to know advisers who have had the heart of a teacher. They really want to help you be successful with your finances. Most advisers are great people with a zeal for helping their clients. Find one that can help you with your financial planning.

Should You Charge Your Grown Kids Rent?

Cover via AmazonThings sure are different these days. With the bad economy and lack of jobs more kids are coming back to the nest to let the parents take care of them. I guess I was lucky, I moved out at 23 years old and have been supporting myself ever since. 


In my house we have 5 grown kids and one 12 year old. The oldest has been out for several years, three are in college, and one is just bumming around. With the 3 in college, one lives at home and the others away. The ones that are away love their freedom and do not want to come back. But the one resident child we have has no intention of leaving for the near future. His failure to launch or even prepare to launch is frustrating us.

It has crossed our minds to charge him rent. Financially it is our plan to downgrade in house so as to cut down our expenses and save more for retirement. Plus the large house takes a lot of money for maintenance, which could be used for savings and fun. With no plans to leave the home we are getting anxious over the problem.

Related:

• How Do You Help Your Grown Kids Financially Without Hurting Yourself?
• Baby Boomers Spending More Cash On Their Family, Than On Their Own Future

There are two sides to this issue. Many parents see it as their duty to continue to care for their children no matter how long it takes for them to become independent. They may feel as if they are taking advantage of their children by taking rent money from them, especially if the child is living at home to save for a house of her own.

On the other hand, many parents believe that charging rent helps their children mature and learn responsibility.

As this chart depicts there is a increasing trend of the so called "Boomerang Kids" coming home more and more. 

Under 35: Living with Parents vs. Homeownership rate

I think when a child reaches 23 years old and up they have an obligation to contribute to the family home. Is $50 per week so much to ask? Some parents believe and I do to that you are teaching that it's OK to depend on mom and dad when things are not going to well. Being able to come back to the nest may get to be a habit if the grown child is given free room and board. Are we as parents teaching are children well by making it easy for them. Free rent can encourage an entitlement sentiment in your children. For their sake charging them rent teaches many lessons. 

Now if there is some financial hardship for the child not to pay, then letting them stay for free is giving them necessary help in time of need. 

Strike a Balance

If you feel bad about taking money from your children then I propose you take it anyway and save it for when they move out. It can be used as a deposit, money to cover moving expenses, or to buy furniture. Your conscience can be relieved with this option.

However, the decision is ultimately yours as a parent.  You should make your decision based on what is best for your child. Does your decision move them forward or just enable them? Just make sure when your adult child moves back in that the ground rules and financial expectations are clearly outlined.



Related:

• Loans To Your Children - Great Idea?
• Top 3 Ways to Help Your Adult Children Become Financially Independent

Top 6 Ways to Get Your Spouse Out of Credit Card Debt

 (Photo credit: Wikipedia)

Credit card debts can be a big problem both for you and your spouse. No matter who is actually responsible for piling up the huge debts on the cards the other has to bear the burden of it too. At times it may get difficult but you just cannot leave your spouse to suffer alone. Stress, tensions and heated arguments will only make matters worse. It is better that you keep your calm and find a way out by which you can help your spouse resolve his/her debt issues instead of fighting on it.

A helping hand from your end is all that your spouse can ask for! The rest of the things are sure to fall in place. So here are some quick ways to deal with the credit card debts of your spouse without affecting your relationship:

1. Know the problem in details: You need to know how grave the financial situation is and how much debts you actually have to deal with. Ask your partner to be honest about the debts and to share all the necessary information with you. Analyze your financial situation well and deal accordingly. Assure him/her that together you can resolve the problem and there is nothing much to worry about.

2. List down your debts: It is also important that you make a list of all that debts that you or your spouse owes. It will help you to have an idea of the money that you need to save in order to pay them off completely. You can thus design your budget plan better.

3. Design a monthly budget plan: It is important that you make a monthly budget plan and stick to it. You need to reduce your monthly expenses as much as possible so you can save some money to pay off the debts at the end of each month.

4. Follow the budget plan: Just designing a plan will not help. You need to make a realistic plan that you will actually follow. Make sure that you stick to the budget as much as possible and follow a lifestyle accordingly.

5. Keep track of expenses: You need to be extra cautious of every penny you spend. Keep track of expenses of both your own and that of your spouse. Do not buy things that you don’t need. Impulsive buying during such time is not a good idea. Before buying an expensive item make sure that you both agree on the purchase of that particular item.

6. Note your credit report improvement: If you start paying off your debts every month, your credit report will slowly show some positive changes. Take a note of it and make sure that the paid off debts are marked and your negative points are removed accordingly.

You also need to make sure that you handle all of it calmly. Keeping a grudge against your partner or making a relationship sour will not be a fruitful solution. You need to maintain proper understanding in order to resolve such a situation.

Author bio: Jonny is a financial advisor with EasyFinance.com. He helps people to resolve their credit card problems and also problems related to home equity loan, personal loans, and other loans.

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